The Best Depiction of the Benefits of Free Market Exchanges in Popular Culture
Star Trek: Deep Space Nine is my favorite Star Trek series. It depicts the socialist Federation in a far more honest way than other Star Trek series. The Federation is not always depicted as the altruistic benefactor of all downtrodden peoples, and is often unable to manage resources efficiently. While the Federation benefits from high technology which has eliminated most resource scarcity, it is still held back by the lack of market exchanges and inflated government. In most other depictions of the Star Trek universe, we never see the Federation held in comparison to other societies, so this is less obvious. We are just as in awe of the Federation in comparison to our own lives as people a thousand years ago would be of even a relatively poor nation in the world today.
Deep Space Nine, however, takes place on a space station which is simply administered and not owned outright by the Federation. Despite being located in a remote area ravaged by war, it has a thriving economy. Even Star Fleet officers engage in monetary exchanges for non-replicated food and clothing, which are generally considered to be superior in quality. The Ferengi play a prominent role in the economy of Deep Space Nine, being one of the few races engaging in trade throughout the region.
The Ferengi bid for contracts awarded by a monarch called the Nagus, who takes a percentage of all profits. Their society is largely focused on the accumulation of precious metals, gold and a fictional element called latinum. They are less focused on the use of capital than its basic accumulation. Their economy is heavily regulated by an agency called the Ferengi Commerce Authority, or FCA, but they are free of the financial manipulation caused by a system of fiat currency, and are actively disdainful of such practices.
In short, they are not, as they are often described in the series, free market capitalists. Their economy could, however, be accurately described as Mercantilism. Mercantilism was the dominant economic theory from the 16h to 18th century in Europe. While not an ideal economic system, it did provide the economic growth associated with the Renaissance and European Imperialism. In spite of the draw backs of their economic system, the Ferengi illustrate the advantages of free economic exchanges in many ways, as well as offer the most cutting criticisms of the Federation.
My favorite example of this is an episode from Season 5 of DS9 called “In The Cards”. In it, a young Ferengi named Nog teaches his best friend Jake a “little something about incentive-based economics”. It may be the best example of how free exchanges benefit everyone that I have ever seen in popular culture.
At the beginning of the episode the senior staff is having dinner with Captain Sisko, the station commander. Everyone is depressed about the possibility of war with another society called “The Dominion”. Chief O’Brien says “did you hear about the Tiananmen?”, referring to a missing starship. I can’t help but wonder if this throw away line is a reference to the massacre at Tiananmen square in communist China. Security officer Odo is concerned that the theft of medical supplies and food rations is up by 75%, though the senior staff clearly has no such worries about food shortages. In short, it is a typical dinner for military officers and bureaucrats in a Socialist society.
Sisko’s son, Jake, is troubled by his father’s mood and the general depression of the people on the station. He decides to buy his father a present, a baseball card being sold at auction by Quark, a Ferengi. As a socialist with no money, he is unable to purchase his father a gift without playing on the sympathies of his Ferengi friend, Nog.
Nog scolds him for his attitude, saying “it’s not my fault your species decided to abandon currency-based economics in favor of some philosophy of self-enhancement” and “if you don’t need money, then you certainly don’t need mine”, but agrees in the end to back Jake in the auction when Jake points out that his father was the one who got Nog into Starfleet. Only candidates from established families or with the backing of a high ranking member are admitted into Starfleet, but that’s another episode.
They are outbid at auction by a strange man with schemes of developing a device to make him immortal by entertaining the cells of his body. He agrees to sell them the card in exchange for a list of items available on the station. The two friends are forced to make a series of exchanges to procure the items requested. Since Nog is the exception in terms of members of Starfleet who engage in commerce, they can’t simply buy the items. They must provide services to various individuals.
While this barter system happens without money, it does show how monetary exchanges benefit both parties, as well as how black markets grow and operate under Socialism even without a medium of exchange. O’Brien is over worked, and is happy to trade some junk parts for some leisure time, so Jake and Nog offer to help him finish his work early. Doctor Bashir wants help getting his teddy bear back from his ex-girlfriend. Worf wants help improving the sound quality of his Klingon operas. Kira Nerys needs help writing a speech. All of these exchanges happen voluntarily and leave both parties happier than they would have been without an exchange.
By the end of the episode, the socialist Federation officers have overcome their depression by engaging in market exchanges. Making trades with Jake and Nog has increased their quality of life, and allowed resources to be redirected to their most efficient use. The affects of each individual exchange go far beyond the people directly involved. The entire station benefits as a result. Even a Dominion representative is benefited and uplifted by an external exchange with the arguably insane auction bidder for the use of his “cellular regeneration and entertainment chamber”.
At the end of the episode, Sisko describes his confusion at the change in the mood on Deep Space Nine, though the viewer is perfectly aware that this is the result of free market exchanges.
“Captain’s Log, Stardate 50929.4. Two days ago, this station felt like a tomb. I’d never seen so many of my crew depressed at the same time. But for some reason it now seems as though a new spirit has swept through the station, as if someone had opened a door and let a gust of fresh air blow through a musty old house. Why this is happening, frankly, is a mystery to me. After all, nothing has really changed. The Dominion is still a threat, the Cardassians are still threatening to retake the station, and I can still see the clouds of war gathering on the horizon. So why do I sense a new-found sense of optimism in the air? But maybe I’m over-thinking this. Maybe the real explanation is as simple as something my father taught me a long time ago. Even in the darkest moments, you can always find something that’ll make you smile.”
By Ross Ticknor