Anyone Know Enough About Economics?

This is the economy of my interstellar, utopian empire which fell due to infiltration by a demon worshipping cult and a religious, genocidal crusade by a neighboring species along with internal infighting, indolence and moral corruption.

"The Imperial Covenant was the guiding economic philosophy by which the Terran Empire was governed in which the State guaranteed a basic income to all citizens in exchange for the citizen’s service in various orders ranging from agriculture, arts and manufacturing to the military and legal professions. In practice, the Empire had a healthy and robust free market economy though one much smaller than the public sector. It was in the Terran constitution that no one could be forced into a profession so participation in the Covenant was voluntary.

It was not unusual for a youth to serve in an Order throughout their teens and twenties before retiring and opening a small business. Other planets had almost full participation in the Covenant. These tended to be resource poor ones which required state support.

Homelessness was a crisis on some worlds due to overpopulation and soaring rent prices combined with their being limited desirable living space on some worlds. This was ameliorated by relocation programs by which homes and land were assigned to homeless people. Terraforming projects were mostly staffed by these individuals, but terraforming projects were halted by territorial conflicts with other interstellar empires.

Some blamed the Imperial Covenant for the stagnation and listlessness characterizing the Imperial Twilight. However, the Terran Empire in its golden age-particularly during the early days of colonization-was characterized by vitality and creative brilliance as can be seen in the great cities on Solar Pax. The stagnation was more a fault of the Na’kar War that cut off the Terran Empire from interstellar trade and further expansion."

 

What's the question?

Also, you should really break the OP into paragraphs. It's a bit of a wall of text that makes it hard to read.

 

I meant to ask if the economy could function. How do you edit posts?

 

My guess would be no.

Take North Korea ... please.

 

Sounds like you're asking if you can have a large state sector, so - sure, why not. Plenty of governments around the world have fairly large state involvement in the economy. Regardless of whether it'd actually work at an interstellar scale, you can certainly make it believable that it's working, and that's all that matters for a story.

I think the more interesting part is how that economic setup affects the society. No economic system functions without some form of social buy-in people need to want, on the whole, to be part of the Covenant rather than doing their own thing; they need to not feel jealous that the homeless had all this stuff given to them. That's something we've seen here already: there have been a ton of studies that have shown that the easiest and cheapest way to reduce homelessness is to just give the homeless people houses, but it's hard to make that work because everyone who worked for years to buy their house feels cheated. If your homeless aren't so much given a house as sent to an uninhabitable planet and made to fix it up so they can live there, maybe that won't be perceived the same way - people will feel like they're also working for their houses and therefore it's OK. Or maybe you'll adjust societal attitudes so that people just don't care so much about someone worse off than them getting free stuff.

That's all detail that may or may not have any bearing on your story, but I find it's a good thought experiment for stuff like this. Not asking 'will this economy function', but 'what does my world need to look like in order for my economy to function'. Having that kind of foundation make sit easier to believe your system works.

 

One thing I don't understand is how no profession can be compulsory while "the State guarantees a basic income to all citizens in exchange for the citizen’s service in various orders ranging from agriculture, arts and manufacturing to the military and legal professions." What happens if I and eventually a large number of people refuse to do their service? Do we just stop receiving our basic income? Well, that is ok but how then is this 'basic income' any different from a regular income i.e. the thing you get in exchange for work? And if it is an actual 'basic income', one could argue it risks to disincentivize people to work in general. It's an argument that is frequently thrown around when talking about basic income, essentially making the case that a basic income, if any, would have to remain quite low (same thing with minimum wages).

However, sci-fi has been used to depict socialist as well as libertarian utopias and dystopias (Heinlein and Rand come to mind), so I'd say you can do pretty much what you like with the economics of it as long as you stay coherent with yourself.

 

Click Edit at the bottom of the post.

 

Everyone's analogizing this to Earth's economic history, which I think is a mistake. An economy of the far future which spans multiple star systems probably won't be very relatable to much that we're familiar with. Also, the OP references only a very few specific topics, I think we need some more information. I assume there's FTL travel/communication--what does it need to function? Are dilithium crystals or tibanna gas or whatever the equivalent of petroleum in our economy? If so where do they come from, how are they shipped/processed, how are they paid for and distributed etc. How much work is automated, instead of being done by people? How much is done by advanced AIs, and are they advanced enough to be treated like people, or treated badly, or still just thought of as machines? You mentioned terraforming, how does that work and how long does it take? A year, a lifetime, multiple generations? Also important to note that economic changes are never even in their effect, or even the direction of their effect--you say the Empire is in decline now, but I guarantee you someone, somewhere, including within the Empire, is benefitting from it. Are there smugglers? Pirates? Tax evaders? Robber barons making a killing by snatching up formerly-state-owned enterprises because the government has to start privatizing things?

Those are some of the things I'd start thinking about, anyway.

 

What's the point of asking people if they know about (human) economics then?

 

Hi Charles, and welcome to the forum! I'm a former Mod, so I'm not totally up to speed on the editing issue. But I believe that a brand new member can edit posts (as @Naomasa298 suggested above) but only for about a half hour or so after making the post. If you tried to edit and it didn't work, that's probably why. I THINK ...and this is where I'm not sure ...you must be here for 14 days and make 20 posts to become a full-fledged member before you are allowed to go back and edit your posts at any time. It's an anti-spam measure, if memory serves me right.

If you want to know for sure, contact one of the present Mods and ask. You can find them at the bottom of the Community page. Their names will be in Yellow (Selbbin, Lifeline, EFMingo, Homer Potvin), and the Adminstrator (Big Soft Moose) is in Bright Red.

 

The OP may not be asking the right questions or not asking it the right way. I think the point is valid in that the OP would need to determine what economic concepts are universal (no pun intended) and extrapolate what the consequences would be in their system. At its heart, economics is about scarcity. There's only a finite amount of resources, so how do they get allocated? Things like supply and demand/equilibrium price would probably behave the same way in the OP's world, same for utility, etc. If the government tries to control prices, then the consequences would be what you'd expect - likely shortages or oversupply. Would there be trade between star systems and if so, would it be similar to international trade here on earth? Who knows? I haven't finished Dune but it seems to do a good job of explaining trade between planets, or at least why Arrakis is so valuable.

I don't think the OP needs to go too detailed, it just needs to be something that makes some sense based on the backstory/rules of their world.

The makes sense, but this sounds more like a guaranteed job with pay than guaranteed income, but this may be semantics. Today the 'universal basic income' that is usually proposed does not require any employment at all, either with the government or private sector (in fact, that is one of the arguments for it - it gives people the flexibility to switch careers, etc.)

 

Is there a need to explain how your economic system works?

 

Or what happens if everyone chooses to be a doctor, a lawyer, or an architect, and nobody wants to be a farmer, a mechanic, a plumber, or work in a factory?

 

Is there a need to explain how your politics work? Or how your religion work?

It's worldbuilding and might influence plot/narrative.

As for the OP's question, easiest is to see how someone would game the system to input less than others but gain far more.

What if I laze around all day and do nothing?

Contradicts the above and below.

What prevents 90% of the population from refusing any covenant other than "Twitch video game streamers" and become paid neets? Would they still get basic income?

What is the basis of this assignment? Can I refuse to join a covenant and wait to be given free land in a new world?

Honelessness implies basic income is not enough for housing. What is it enough for? Food?

 

Depends on whether technology finds ways to exceed what we already knew was impossible. Every generation prior thinks the next thing is impossible until it isn't.

Back to the OP's question:

The problem when you go into topics like politics or economics is that they are so broad and impossible to predict with certainty because they depend on human error. So all you can do is say whether something is possible and whether something is nearly impossible (I say nearly because there's nothing really impossible in human behaviour).

So is it a plausible economy that you have designed? Yes. Is it probable? No one knows, not even economists. Is it improbable? Some will always argue with you.

Outside of these 3 questions and answers, I dont think you'll get a better one.

 

@Bruce Johnson is on-point. In all of human history, there's only been two true economic systems: pure barter (I give you chicken, you cut my hair) and fiat exchange (I cut you hair, you give me some sort of an established currency, and then I got get my own chicken). Both of these are examples of trade, grounded in the scarcity of resources (many chickens, one barber).

What you've described is pretty much the political and social structure of a feudal society. In a feudal social structure, you have the seat of power in the castle, then the honor guard and court with all the fancy educated folk, then you have the servants of the court, the supporting staff within the city walls, merchants, and the soldiers on the walls. Outside the castle (but still part of the kingdom), you have the monastery, which is really its own fortress, and the peasants/villagers. The peasants/villagers are semi-autonomous, but still have to abide the castle's rules and pay taxes, but they can better their lives if they either join the monastery or enter service at the castle.

A feudal society is pretty much sustainable in an isolationist bubble. You've mentioned war. War bursts bubbles. And drains funds. I find it difficult to imagine that the Empire now has enough funds to rebuild after the war and to sustain the sociopolitical order. War leaves holes for opportunists, like @Robert Musil aptly mentioned. How is the Empire making enough bank to pay its basic income to employ so many? After all, there are only so many floor sweeps you could have... Moreover, why does the Empire engage in social welfare activities like terraforming? What's the return on investment? Social welfare activities like this contradict the fact that the Empire only pays basic income to those who enter service. There are some contradictions that need to be addressed.

 

For new members I think editing privileges only last for like 15 minutes. After you've been here for a while and got a certain number of posts it increases until eventually you have the ability to edit anything you've ever posted.

@Charles Neal you could ask a moderator to edit in some paragraph breaks, though it isn't that huge of a wall of text. At least there are little attempted breaks that didn't quite happen, that helps.

 

Thanks, @big soft moose . I couldn't remember for sure exactly how much time a new member was allowed to edit, and I couldn't find the information in the places I looked. Glad I sent him to the present mods...

 

The idea of a “robust and healthy free market economy” where the private sector is dwarfed by the public sector doesn’t make any sense to me at all. How could it possibly be healthy and robust? Clearly it’s not. The system is so top heavy that everyone is working for the government? What drives innovation and growth in the economy if all the labor and people (in some worlds at least) are being siphoned into inefficient government jobs which exist solely for the purpose of giving them an income? There’s no way those guys are working hard under those conditions. How do the economies of those worlds rise out of poverty if there is no involvement in the private sector? It’s a
command economy at that point. I’ll take bread lines for $500, Alex.

yeah no kidding

 

How do you know the government jobs are inefficient? Government jobs did build the Pyramids. Not to mention the public highway system.

 

Using slave labor.