Thirty years ago I was an oppressed assistant professor, caught up in the academic rat race. To cheer myself up I wrote — well, see for yourself. Joshua Gans of the University of Melbourne scanned a copy of the thing I wrote — back then academics did their work with typewriters, abacuses, and stone axes — and was good enough to send me a copy. Ladies and gentlemen, I give you The Theory of Interstellar Trade.
Wow! It looks like you indeed to “publish or perish” very seriously!
“This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics.”
Love it! (And so true)
That and the baby-sitting economy … Professor K is a serious contender for world’s funniest economist.
Good read. . . is there a NAFTA-esque extension or perhaps a galactic Fed?
Something tells me the interstellar currency will be petroleum.
Professor, what are the potential consequences of the First Planetary Bank of Trantor now owning my neighbor’s subprime mortgage?
Delightful! I recommend submitting this brilliant and amusing essay to Analog:Science Fiction/Science Fact.
That was brilliant! Trantor, the final frontier, the weighty discussion of inertial frames…beautiful and hilarious. I particularly loved your reference on faster-than-light travel – from the future.
Sharing with my sci-fi writer friends, who may end up referencing you themselves :-)
You wrote this in 1978 but your reference page notes a paper you wrote in 1987. Typo or time machine?
wtf?! this seems profound. what is he missing?
“The author of this analysis used a DOW starting value of 8.42 for the year 1924. Since then, that value has increased at an inflation adjusted annual rate
of 1.64% per year. Yes, you read that correctly”
//www.itulip.com/realdow.htm
Boy, you sure had fun!
“the reverse of the usual in Economics”!
Since it is past 1987, please publish your referenced article.
I like your mixing of mythologies – it had a strong foundation!
> back then academics did their work with typewriters, abacuses, and stone axes
You mean LaTeX? Academics still use that, last I checked.
Oh, haha, me complaining about LaTeX when you guys had to format equations on typewriters. OK, hat’s off.
You should check this article: Problems of Interplanetary and Interstellar Trade
in
Starship traders //blog.foreignpolicy.com/node/8348
The closest you’ve been to being a psychohistorian? Barring your early assessment of the Bush Administration ofcourse.
WOW!
I think you actually handrew Figure I. ! Nice work.
But, Figure II. seems to be missing?
Figure II involves an imaginary axis. Therefore, it must be an imaginary figure.
This made my day.
Reading this serious analysis in my office, I just could not suppress my laughter (with my door open) when I got to your Fig. II!
How come you didn’t do some more along these lines? Oh wait… I think the answer is in what is slated to be a most quoted line: “…the opposite of what is usual in Economics!” And this quote, like any other famous ones, is already beginning to morph (compare comments #2 and #9 above)!
You’re all missing his point!
The absurdity of releasing this 1978 paper in the midst of the Fed firing their last silver bullet and stock markets in a highly unstable 415 point explosion (to be followed by a collapse) is that the game is over.
The reset of subprime markets will peak in August. We now know that lowering interest rates won’t work. The Fed has now leveraged up to 50% of its balance sheet with junk securities. German bunds started trading today at a lower risk premium than US Treasuries.
There’s not much more the Fed can do. And we haven’t hit the worst of the subprime/financial system crisis yet.
This is like the orchestra playing on the deck of the Titanic. Why not have some fun; the ship is going down.
Is there a citation for this that I can use? I’ll have to work it in to something.
How can this theory be extended for faster than light travel when time goes backwards? Would it be deflationary?
Wonderful! Just one quibble: the parenthetical remark on page 3, paragraph 2 is wrong. Physicists routinely ignore ubiquitous but very embarrassing infinities in Schroedinger’s equation. They call it “renormalization.” How’s that for a name? I should think economists would love it.
“To conclude this section, we should say something about the assumption that the trading planets lie in the same inertial frame. This will turn out to a be a useful simplification, permitting us to limit ourselves to consideration of special relativity.”
Yeah, so, the above statement is wildly inaccurate. As long as the planets are each located in their own respective inertial frames, the approaches of special relativity can still be applied. They can be moving with a constant velocity with respect to one another, as most intragalactic objects are with respect to the Earth, no problem. It is only when one or the other planet happens to be undergoing acceleration that general relativity needs to be brought in.
Anyway, I just wanted to tell you that were wrong in some obscure paper written a decade before I was born, which is something that, as a physicist, and therefore a better person than all of you, I happen to like doing.
Also, anyone heard the one about the underperforming physicist? He switched from physics to economics and, in the process of doing so, raised the average IQ of both fields.
Actually, you don’t need to know any general relativity to treat the case where the Earth and the other planet are at rest in different (but nearly inertial) reference frames. But the approximation of a common reference frame is probably reasonable for systems within our galaxy, whose velocities will differ by no more than a few hundred km/sec.
If there are any more oppressed professors out there, a theory of GR economics in the presence of stable wormholes might be fun to speculate about!
You’ve made it onto slashdot:
Academics may have upgraded from typewriters and abacuses, but the stone axes are still going strong.
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