Behold, it is time to discuss the taxation of trade routes to outlying star systems! That’s right, this week we’re talking about economies. That means currencies, taxes, trade, and post-scarcity utopias. We talk about how weird it is for heroes to be against payment for their work and how it’s difficult to write completely money-free societies like Star Trek. Plus, the only teeth-based economy we’ve ever heard of. Also, we are entirely wrong about the practice of biting gold coins.
Generously transcribed by Innes. Volunteer to transcribe a podcast.
Chris: You’re listening to the Mythcreants Podcast with your hosts Oren Ashkenazi, Wes Matlock and Chris Winkle.
Oren: Welcome to the Mythcreants Podcast. I’m Oren and with me today is
Oren: And today we’re talking about the taxation of trade routes to outlying star systems!
Chris: So exciting.
Oren: My day has come!
Wes: Oh boy…. You’ve been training, Oren, for years.
Oren: My body is ready. Okay so today we’re talking about fictional economies, and to be clear, I’m not an economist, I’m just an economics nerd. I just think economies and economics are cool, so I want to talk about them in fiction. First of all, pet peeve: central currency is worth more in poorer areas, not less. This whole [imitating Watto, from Star Wars] ‘I won’t take the Republic credits,’ no, Republic credits would be highly sought after because they are stable and always have value.
Wes, sarcastically: But Oren, what other possible way could they have gotten Anakin off that planet?
Oren: I can’t imagine any other way. That’s the only way that it could work. Also, second pet peeve: barter economies are fake. They’re not real. We have a post on it, look it up. The short version is that before currency, we would have small communities where people would just work on the favor system, and once the community gets too big for that, you basically always see some kind of currency emerge. It’s not always gold and silver; it can be a lot of stuff, but the idea of a barter economy is just too unwieldy. Can you imagine? Try to imagine how that would work and how you could possibly have trade where you would have to barter specific things. I don’t need any chickens. Sorry. No trade.
Wes: Could you imagine reviewing those budgets? “Alright, so this is our budget for the next fiscal year.” I mean, how would you? You couldn’t go about that. “Okay this is what we have left over from last year and this is what I think we can trade it for.”
Oren: To show that I’m not all doom and gloom, I want to talk about my absolute favorite fictional economy that I’ve ever read. It is from the humble Gorkamorka. Are either of you familiar with Gorkamorka?
Wes: All I can think about is Ankh-Morpork and that’s not it.
Oren: No it’s not. Gorkamorka is a small offshoot of Warhammer 40K where instead of being a giant war game, it’s what’s called a skirmish game, where you have five or six models that have much more detailed stats than a traditional Warhammer game. I’m pretty sure it’s discontinued. I don’t think they make it anymore. The premise is that some orcs crash on a planet and they start fighting ‘cause they like fighting and they add more Dakka and they add more Choppa, and there’s some Necrons or whatever. But the economy of the orc planet, the orc colony on this planet, is all based on teef, which are orc teeth, and that’s the currency. ‘Cause orcs regrow their teeth like sharks. They have conveyor belts of teeth. Also the teeth rot after a while, so that means that all orcs always have a little money but no orc can ever hoard all the money.
Oren: Because it’ll just rot. It’s a naturally recycling currency system. There’s no need for a centralized bank or anything like that. I just thought it was great. I have no idea if it would work in practice. I just thought it was hilarious.
Wes: Oh my gosh that’s fascinating. That’s so cool. I’ve never heard of anything like that and that’s just great. Why isn’t there more stuff like that? That’s so fun.
Oren: Of course it doesn’t matter, right? It’s just the background of the skirmish game. But I was reading and I was like, “this is great! I love this economy.”
Wes: So often the currency and stuff doesn’t really play a huge part in a story. Attention isn’t really drawn to it unless you say that your [Watto voice] “credits are no good here,” or whatever. I don’t know, that’s such a good option. That says volumes. It’s just very neat.
Chris: At first I’m like, “okay, what is the effect if you can’t really have savings because these teeth decay?” Then it occurs to me, they’d probably just come up with a banking system.
Oren: Yeah. I mean, that’s probably where it would actually fall apart. Once you start representing money with numbers on a page instead of actual coins or bills, then everything changes.
Wes: You’d have orc dentists that are actually more like money sharks as well. “I can get you some teeth real fast, but…” you know.
Chris: Think how many things you would need loans for if you couldn’t just save money. You’d have to have payment plans for everything.
Wes: If you were a successful warrior, could you just get teeth from battle or something?
Oren: Yes. That is one of the things you can do in the game actually. When you defeat orcs in melee combat, you get more money cause you knocked some teeth out of them.
Oren: Just to be clear, in most stories, it’s fine to not go into detail about how your economy works, even if you’re doing a high fantasy second world story or a far future story. For the most part, it’s fine if the economy is in the background. Most stories don’t need to know a whole lot about it, but if you want to use it, there are some interesting ways that I think are a lot of fun. One of my favorites, as a plot device, is where a country has to retool its economy, to go from one mode to another. I almost never see this in fiction, but I find the concept fascinating. Because, in World War II, the UK was originally set up for a trade based economy. They imported a lot of their food because it was much cheaper and more efficient to do that. Then suddenly there were a bunch of German U-boats and they were like, “aw damn.” They had to have this whole really in depth change in how their farming worked so that they could grow enough food to be, if not self sufficient, at least more self sufficient. It wasn’t a question of is there enough land? But rather can we switch over in time? I just find that fascinating. That’s a really cool idea. That was what the book The Collapsing Empire promised me it was going to be about it, and then it didn’t, and I was very upset. It wasn’t actually about that, but as an economics nerd I just find that concept fascinating.
Chris: I would say that the Victorian Farm series has a War Farm season/show where they go into what happened there in detail. Where the government sort of came in and mandated what they should grow and how they should grow it for the war effort. There was lots of rationing and how all of that worked.
Oren: Yep. That’s a really good source. You can also do stories of economic justice that are particularly important right now and just resonate a lot. Stop hoarding the money, super rich people. Stop it. Pay your taxes. It’s a good story. Everyone likes it.
Chris: I mean, this is not a bad time to have a look at what the purpose of taxes are. I want to see a main character who is an IRS agent just because it’s interesting. There’s not very many of them. There are a few.
Wes: Is that Stranger than Fiction?
Chris: Yup. Stranger than Fiction, he is an IRS agent. At the same time nobody wants to give up their money, so it’s a hard thankless job. But at the same time, if we want to, for instance, pay for schools, we do need people to give the government money. Unless we want poor people to not be educated and not get any kind of assistance or not have any libraries or what have you.
Oren: Yeah. Hot take: public spending is good.
Chris: Public spending does good things for people.
Oren: Here on the radical left Mythcreants Podcast.
Chris: Honestly, the most important economic principle that I see violated in a lot of fantasy is that people want money. Money is considered desirable, and people want it. If they have magic they can generally get money.
Oren: This is a huge problem in role playing games, especially modern ones, but fantasy ones too, where it’s like, “players, you guys are going to be playing poor, struggling mages.” “Hang on a minute, here are 50 different ways we could use magic to make a ton of money.” And it’s like, “Oh. Uh Hmm. Hmm. Oops.” That’s a problem. Just in general, there’s a weird thing about how characters are portrayed as noble for not taking money and it’s bad to want money. In most cases fair pay for fair work is a good thing. Unabashed greed is bad, exploitation is bad, but being like, “Hey, I would like to get paid cause I did the adventure and I was promised to get paid.” That’s not a bad thing. You have a lot of stories where like Xena gets really mad when people offer to pay her for stuff. It’s like, “Xena, how do you get food?”
Chris: We don’t know.
Oren: Do you not pay for the food? Do you just take food from people? I mean, you could.
Wes: She only accepts payments in food.
Oren: Xena is the barter system.
Chris: She doesn’t have a job, right? It feels like the hero gig is the only thing that she does. How does she get paid to pay for any food at all? We don’t know.
Oren: Maybe she hunts. I dunno.
Wes: That is kind of a funny idea though about your party leader is just so noble and you’re like, “No, you need to take some money. We don’t have anything anymore. This is the fifth job you’ve turned down payment for. Our business is collapsing.”
Oren: That was one of my favorite parts of Rising Tide, one of the RPGs that I made, where my players would be “Okay, so we want to do this good deed, but our ship’s not going to pay to fuel itself. We need money for coal.” Ah, I have done it. I have succeeded in my goal. I have crushed all of the glory and wonder out of adventuring, and it is now a banal economic simulator. Yeah!
Wes: You did it. Good job.
Chris: Going back to the people want money thing. Harry Potter is my case and point where there’s no trade. If one group has a commodity that the other group would want, trade will happen because people want money.
Wes: Are we supposed to believe no wizards are selling services to muggles?
Chris: This is the big issue with a lot of masquerades. You have to remember that if it’s in your interest to the point where you would get money, it wouldn’t be a few people doing it in hiding. It would be everyone. How could you compete with the people doing it if you’re not going to do it?
Oren: You could say that well, maybe the government bans it and they might, but hey, if everyone wanted to do it, governments will typically fold eventually.
Oren: Governments like money too, right? They want to tax that sweet trade, or get lobbied by the muggle trading industry or whatever. So you know, that’s gonna happen. Even in places where there are bans on certain kinds of trade that people want to do, people still do it. Smuggling some smartphones from one economic zone of China to another is very popular and they do it all the time. The idea that just no one would ever is, is bizarre.
Wes: People like money. Chris keeps telling us this.
Chris: People like money. Money is really important. The other thing is to remember that- so we’ve got this thing with the orc teeth, which is a really fun idea, but the more I think about it, the more that somebody has orc teeth, the more they are invested in switching to some other system to track their wealth that is not going to decay. Which means that all of the most powerful people and that society are going to be invested in changing the currency, which means that the currency will change.
Wes: Because if you accept payment in orc teeth, you know that with each exchange, they’re losing value because they’re that much closer to rotting, so somebody eventually gets nothing.
Chris: Basically, when everybody who has the most assets is invested in a different system, it’d be really hard for that other system and not catch on. You’d have to have collective action by everybody else at a massive level to stop the most powerful, the richest people from creating the systems that they want.
Oren: Maybe the orcs have a really powerful collective bargaining system. I dunno, I can’t say they don’t have one. It doesn’t seem super likely, but you never know.
Wes: So, Oren, what are your thoughts on hard currencies as opposed to- What do they call them? Faith-backed currencies?
Oren: Well, okay, so there’s a couple of different things there. A faith-backed currency or fiat currency is just any currency that has value because the government says it does or someone else. For the most part, that’s most currencies to a certain extent. There are some differences, like if it has to be made of a precious metal that limits how much of its value is based on faith, but it’s all based on faith at some point. Gold is inherently pretty useless. It’s only valuable because we all think it’s valuable.
Chris: Doesn’t gold have actual properties that are scientific? That are useful? I mean, maybe it’s not as useful as it is pretty.
Oren: Yes, but not a lot. There are things you can do with gold. It’s not completely useless, but a lot of those uses are for advanced electronics, so medieval societies don’t have a lot of those, and the other uses would require a lot more gold than there is. I’ve talked before that if gold was common, we could use it for roofing because it’s very thin, you can make it really thin and it’s very corrosion resistant, so it would make a really good sheath for your roof. If there was a lot of gold, it could be used for that. In actuality there’s very little gold, so it doesn’t exist in quantities to be practical for that. The only reason it has value is because we’ve all decided it has value because it’s pretty and rare enough. Your currency can be basically anything as long as it meets a few criteria. One, there should be enough of it around, so you probably aren’t going to use uranium to make your currency just because it’s so rare that you wouldn’t be able to make enough of it. Then it has to be fairly sturdy cause you don’t want your currency made of spiderwebs because it’s just not going to survive transactions. It helps if it’s pretty, but that’s not required. A lot of cultures use currency that’s not particularly shiny or pretty in the way we would think of it. You can have some fun novelty creating currency out of odd things.
Wes: If all currencies are fiat then why do people advocate for trying to get on some kind of precious metal standard?
Oren: Cause they’re bad at economics is why.
Wes, laughs: Okay, good.
Oren: I mean it’s because they don’t trust the government is what it is. They think that a precious metal standard will keep the government honest, as it were, because they are freaked out by the idea of deficit spending. But deficit spending is, of course, a very important economic tool. We also deficits spend when on the precious metal standards, so it’s pointless. There’s a reason everyone abandoned the gold standard. It just doesn’t work. I should say it doesn’t work anymore. It worked for awhile, but it has a lot of problems and we’re better off without it. I’m not well versed enough to tell you exactly when in your civilization’s development it should have a precious metal standard. It depends on the time period and how advanced economic theories are. It can be disastrous to try to introduce paper or other kinds of complete fiat currency into a system that is used to precious metal coins and doesn’t know how to handle paper money. That can be a real problem.
Chris: Is this because people wouldn’t have faith in the new money?
Oren: They wouldn’t have faith in it. The people who print it wouldn’t understand that you can’t just print all of it that you want. This has happened before. The first couple of times various European countries tried to switch over to paper money, it ended in terrible disasters because they didn’t really know how to do it properly. It requires a certain amount of understanding of economics to have a currency that is based completely on government fiat as opposed to gold, whose value is more collectively assigned. Governments don’t tell us that gold is valuable. We all just want gold for various reasons. Generally speaking, the more advanced direct economic policy, the more central authority is required. That’s just the way it usually goes.
Oren: One economy that I can’t stand is the Fallout economy where they use bottle caps as currency. I’ll accept it and Fallout 1 because in Fallout 1 the bottle caps were basically markers for water. It was a water standard. They were created by a bunch of water merchants who had all the water but weren’t a government. Okay, fine. As an ad hoc trading system this kind of makes sense. And then in Fallout 2 the NCR was like, “Oh, hey, we’re introducing dollars because we’re a government and that’s what governments do. We have fiat currency.” Yes, that makes total sense. And then in the later Fallout games, they were like, “no, actually we’re back to bottle caps.” What? Why are we back to bottle caps? “It’s because of some backstory stuff.” No, it’s because of branding, isn’t it? It’s because the bottle caps are cool and people wanted more of them.
Wes: I just love the thought of you have to have a separate backpack for all your bottle caps.
Oren: Oh man, the bottle cap economy is so vulnerable to mass inflation because- and this is actually a problem with gold and other precious metals too, is that if someone opens up a new gold mine, it can completely wreck your, your currency rates. This has happened. One of the reasons China had so many economic problems around the same time that Spain was colonizing South America was that Spain was flooding the world market with silver, and China’s economy was based on silver and so suddenly China’s money was all worthless. This can happen to not-fiat currencies. With bottle caps, it’s so much worse because every single scavenger is going out into the wasteland and bringing back huge bags of bottle caps, bags and bags of them, I say!
Chris: Did they actually show that in the game?
Oren: I mean, everywhere I go there’s bottle caps. Like constantly. We know there are other scavengers; scavenging is a profession in Fallout. I suppose it’s possible that due to the magic of narrative, I am the only one who ever finds these bottle caps, but it gives the impression that there are bottle caps everywhere.
Wes: Did you guys know you could just pick this up off the ground? It has value!
Oren: Bottle caps aren’t hard to make, which is another thing about currencies is that they’re supposed to be hard to forge, which is one of the reasons why precious metals work pretty well, it’s harder to get a hold of precious metals. It’s just not something anyone can do. Which is why paper money needs to have all these complicated designs on them so that they’re harder to forge. Whereas bottle caps are very easy to forge. In fact, there’s an entire quest about making sure that you destroy the one remaining bottle cap press. Okay. So you know this is a problem, Fallout people, but you’re still doing it because of branding. Which sure, I guess you’ve got to sell games, but for dollars not bottle caps.
Wes: Hey, Oren, with forging hard currency, it just seems like such a trope that somebody bites onto the piece of money. Is it real if it’s not soft or is it the other way around?
Oren: To be honest, I’m not actually sure. My understanding was that the only reason you would do that is if it was supposed to be made of a certain amount of soft metal, like gold or silver. In theory you could tell that this was a forgery because it was hard. I have no idea how accurate that is. I honestly haven’t looked into it.
Chris: My impression was that it was gold specifically because gold is soft and so you can tell it’s gold if you can make a dent in it with your teeth, and if it’s harder then that it can’t be gold.
Wes: That sounds right to me. You guys convinced me I’m on board with this. Soft means real.
Chris: We should do a fact check, but obviously not all precious metals would have that property.
Oren: Various coins at different places in different times have had different gold contents. Not every coin that anyone uses is 100% gold. Governments would often cut how much gold was in a coin sometimes without telling anybody, cause they needed more gold, which is fun.
Wes: Yeah, for their roofs.
Oren: I can tell you that actually one of the main ways of counterfeiting metal coins is actually called coin clipping, which is when you take a coin and shave some off the sides and then you melt that down and make more coins. So that’s a thing people do.
Oren: They don’t really do that much anymore because actual coins now aren’t very valuable. But when coins were the standard unit of currency, then that would happen.
Chris: It’s based on the value of the actual metals in them that would give more incentive to do that.
Oren: Another economy that is terrible in a hilarious way is Galt’s Gulch, which is also hard to say, from Atlas Shrugged. I love it. I love it so much because even though it’s based off of- The whole concept of Galt’s Gulch is based off the idea that John Galt invented a perpetual motion machine that provides infinite energy, but, even then it doesn’t work. Even if you accept that he has a magic energy generator, who makes the stuff? There’s one guy who apparently knows how to make machine parts and is he making that all by hand? Every time someone needs a tractor, he has to make every single part. How does that work? Where’s the labor coming from? And the answer is “I dunno.”
Chris: All of these leaders of industry go off and live by themselves without their workers, but then they somehow have all of the things. The idea that a bunch of CEOs would be in paradise if they didn’t have any workers doing the stuff that they don’t want to do. [Chris and Wes laugh]
Oren: It’s also great because throughout the entire book, Rand is all about how nature is bad and should be exploited and leaving nature alone is bad. And then we get to Galt’s Gulch and it’s so beautiful and pristine. Wait a minute. Hang on. What, what’s all this undeveloped nature doing here? Hmmmm?
Wes: We should exploit it. What’s going on?
Oren: We should be. Then everyone in Galt’s Gulch will be living in coal dust. I mean, I do love that image. I do love the idea of a bunch of billionaires going to some secret valley and then finding that it’s just a hellscape of industrial runoff. That sounds amazing. Oh, can we talk about trade? Speaking of trade, I like trade.
Chris: Yeah, sure. Follow up with trade like they should be doing in Harry Potter.
Oren: Yeah, absolutely. Okay, so here’s the thing about trade is that typically you get it when it’s more efficient to import something than it is to produce it locally. That’s generally how trade happens, and sometimes that can be because you don’t have the ability to produce the thing at all, if you need copper and you don’t have a copper mine, “Oh, hey, that guy over there has copper, I will give him a coin for some copper and then bring the copper over here.” This is how Seven Wonders works, which is about the understanding of trade that I have.
Chris, laughs: Is this the Seven Wonders drafting game?
Oren: Yeah, yeah, yeah! That’s what taught me everything I know about trade.
Chris: Where you can automatically pay your neighbor for their resources and they don’t actually lose any resources.
Oren: Right. Also they can’t refuse to sell to you apparently.
Chris: That’s how trade works.
Oren: This can also happen when you could produce the thing domestically, but it’s just not efficient to. A lot of countries import grain from Canada and the United States, or at least they have in the past. I haven’t looked into this recently. Most of my knowledge is from the World War One and Two era. They could produce it domestically, but it was just cheaper to produce it in Canada and the United States cause we have a lot of land that is really, really well suited for growing crops. Even with the cost of transportation, it was cheaper to import the grain for a lot of countries than it was to grow it in their homelands. That’s sort of the basic thing that you need for trade. This gets kind of complicated when you’re looking at things like interstellar empires, for example, because space travel is probably expensive. We don’t know exactly; it’s all based on magic, but in theory, a spaceship is probably more expensive than just a car or an airplane. Planets are very big, so they can produce a lot of stuff on a planet. I don’t know if you’ve ever tried to walk around Earth, but it takes a while. The idea of needing to get trade from another planet is kind of complicated cause you would either need space travel to be really dirt cheap or you would need to be trading in super high volumes. I’ve always thought it was weird that even in Firefly, Serenity is a cargo ship and it’s carrying 20 cows between planets. Really was it efficient to import 20 cows from space? You couldn’t buy those cows from someone else on the planet? Now, of course in Serenity the place where they go with the cows is one town, so maybe that was the only town on the planet. I don’t know. But I always imagined interstellar trade would be more like what we saw in Alien with the Nostromo, which is this giant space castle full of stuff. That’s what I imagined interstellar trade looking like.
Wes: The Firefly thing makes sense only if the fuel for traveling- The commute would have to be cheap.
Oren: I mean, maybe space travel really is that cheap? But if space travel is that cheap, that creates questions of why is local transport so much more expensive? Even if space travel is cheap, you’re still crossing a huge distance. It gets weird. I understand that people who write space opera need there to be space trade so that they can have their various Serenitys and their Millennium Falcons and what have you, but if you really want to dive into the economics of it, you could come up with some interesting results.
Chris: It reminds me of Jupiter Ascending, this cheesy space opera movie where the only real thing that’s valuable because it’s basically post-scarcity is asubstance that makes people live longer. It’s considered time. It’s the only thing valuable. When they trade, it’s entirely in that, only this substance because it’s super, super rare and hard to get. They have entire planets devoted to producing it. I guess that could be another thing besides bulk, if you have a super rare, super valuable commodity, maybe that would be a reason.
Oren: I mean, if your planet doesn’t have any dilithium on it, you’re going to have to bring it in from somewhere else. Speaking of dilithium, we’re almost done, but I want to complain about the new Star Trek show cause that’s what I do. That’s my whole gig. Mild spoilers for Picard, which I mostly like, but I’m very confused about the Federation’s economy at this point in the future. Okay, this is hardly the first time that Star Trek has messed up the idea of a post-scarcity currency-less economy, but it’s a little odd to me that like now in the Federation, they’re like, “okay, we need to hire a pilot.” With what? What are you paying him? Is it wine? Have you beamed up a bunch of grapes from Picard’s estate? Is that what you’re paying him or is there just money now in the Federation, which I think would be kind of disappointing. I get writing a currency free economy is hard, but I like that about the Federation, that they don’t have any money. I think that’s cool. Also Picard’s friend Raffi is mad that he has wooden furniture. Could you not replicate some? Do they not have replicators anymore? That’s a thing. That was a pretty big deal. I don’t know. Maybe she was mad that her furniture wouldn’t be antique. It needs to be actually a hundred years old.
Chris: That wouldn’t be very sympathetic. I think the issue is that depicting a post-scarcity society like the Federation has always been tough, and now Star Trek is going through its grimdark phase. They extra don’t want to depict a utopian society. Too bad though, because that’s what they have. It was a big point that there’s not currency, or money specifically.
Oren: It’s also weird that in this future, space public transit doesn’t seem to be a thing, or at least they don’t think it’s worth mentioning because when Picard wants to go somewhere, he immediately thinks that he has to hire a ship. They don’t talk about maybe taking the space bus. There are reasons he wouldn’t want to, but it seems like it would have been worth bringing up. But no. He’s like, “no, I need to hire a private ship.” I assumed that the Federation has space buses. I don’t know.
Chris: Yeah, I mean they could just clarify that it doesn’t go where he wants to go.
Oren: Or he doesn’t want to take it cause there are Romulan death squads after him. That’s another good reason. All right. Well, speaking of Romulan death squads, one may have come after us because it is time to end this podcast. I hope you all enjoyed this discussion of the taxation of trade routes to outlying star systems. If anything we said piqued your interest, you can leave a comment on the website at Mythcreants.com. Before we go, I want to thank a few of our patrons. First, we have Kathy Ferguson, who’s a professor of political theory in Star Trek. Next we have Ayman Jaber, who writes urban fantasy and knows all there is to know about Marvel. Finally we have Danita Rambo and she lives at therambogeeks.com. We’ll talk to you next week.
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