How to reconcile the cashless human/Federation society with human traders and merchants

Question

From a variety of sources, including this great question, we know that the Federation (or at least the humans) don't use money. This raises the problem that humans frequently visit worlds where there is currency, and, in the case of DS9, operate a station that has currency frequently in use (for example, Federation personnel frequently attend Quark's bar). Additionally, we see human traders.

My question is, how do humans get "money" (credits, latinum, etc.)? How would a human even get the resources to purchase their own merchant ship or the resources to fill its cargo holds with merchandise? If Federation personnel can simply be given money for the asking, why haven't they poured so much money down Quark's throat that he chokes on it?

Answer 1

I'll answer the second part of the question:

If Federation personal can simply be given money for the asking, why haven't they poured so much money down Quark's throat that he hasn't choked on it?

Since Ferengi are not members of the Federation, any trade with them would require either forceful imposition of "no cash" by federation (in other words, armed robbery of Quark's drinks) or as an alternative, normal economic exchanges.

If Federation had some internal devalued/inflated/worthless currency, Quark would merely refuse to take it (would you take payment in Zimbabwe currency?) - or require payment in currency that is either common between them (commodities - e.g. gold-pressed latinum) or something that has officially Federation-backed exchange rate. As an example:

• 1 portion of "Kai Winn" chocolate soufflé is estimated by Quark to be worth X units of gold-pressed latinum. Federation agrees to exchange 100 Federation credits for X units of gold-pressed latinum. So Quark will charge 100 Federation credits for the portion.

  How Federation allocates 100 credits to the personnel/population is irrelevant - all that's relevant is that they must have enough resources (latinum) allocated to cover entire budget of Quark, and any other entity doing the trade in Federation-denominated currency.

  If they set the exchange rate too low (because they allocated too much credits compared to ForEx-allocated gold-pressed latinum reserves), Quark starts losing money on the bar and stops running it.

A closest alternative would be a Kibbutz or some other cashless commune on Earth. While the members of the commune have cashless relations, when they interact with those OUTSIDE the commune they pay standard money. How they allocate that standard money between members of the commune is irrelevant to the outside world - but they can't print "monopoly money" and then use that to pay to people outside the commune.

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As far as the first part of the question - i'm not aware of an explicit in-universe explanation but for Starfleet officers it might realistically work the way expense reimbursement accounts work for corporate workers who travel today. You get allotted X money for travel, Y for living expenses, Z for food.

One thing is 100% certain - latinum they use is not replicated because latinum is not replicatable

Answer 2

In Encounter at Farpoint Beverly Crusher clearly says to a Bandi merchant "charge that to my account". Benjamin Sisko once mentioned that when he joined Starfleet he went home everyday for dinner and used up all of his transporter credits. We see on Voyager that they use replicator rations and have time allocations on the holodeck.

While Voyager is probably a special case, I think it probably still reflects how the economics of the Federation work. From the above examples we (and by we I mean I) can assume that at least Starfleet officers and probably all Federation citizens are given allocations represented as credits for differing types of systems. I don't know about the TOS and ENT era but by the time of TNG they have replicators that convert energy into matter. Energy allocations is probably the basis of their economy, combined with some sort of logistic limitations, like transporter credits.

I believe Beverly's account used on the Bandi shows how it works. When dealing with traders outside of the Federation you just have a Federation account, the purchasing power of which was probably negotiated by some diplomats. When purchasing stuff outside of the Federation the credits are just funnelled through their account rather then through the replicator, so to speak. I think that when we see them playing poker on the Enterprise they're just playing for fun and probably aren't betting any real thing, except just chips for fun.

DS9 is not a Federation station, so it is outside of the Federation system. So same thing - they each can just convert their account to stuff at Quark's, or just use the replicators. HOWEVER I'm sure that Federation folks can acquire latinum and other currencies by bets and trade and services and stuff. But to them those currencies are about like the poker chips on the Enterprise, just used for fun, because they know the Federation system will still provide them with everything they need. Traders and merchants within the Federation probably don't do it for the money or anything but just to travel through space and for the sake of a job well done.

Answer 3

The humans run a cash-less society. That doesn't necessarily mean it's a "valueless" society.

Gene Roddenberry's vision of a future Human race was built on the absence of what Roddenberry saw as the root of all conflict between factions of humans: greed. Whether that be for money or power, Gene saw greed as the fundamental human flaw that holds the human race back from its true potential.

In answer, Star Trek TOS was, in part, an exploration of how the human race would fare if we had developed a society where everyone had enough and didn't desire more. Call it "ideal Communism", where Marxism ("from each according to his talents; to each according to his needs") now works for three reasons:

• Because greed doesn't lead people to try to game the system in their favor,
• Because the entire human race now buys into it, so although we've gone Communist we're not spending the majority of our time/resources developing weapons to fight each other, and
• Because technology has progressed to the point where we can provide in abundance to every man, woman and child of the human race; between people not wanting much and getting all they do want, technology really doesn't have to do much, actually.

Even in such a society, there still has to be some form of currency to regulate trade, both within and between factions. We just don't see much of it in TOS because they spend most of their time in places where there's not a whole lot to spend your paycheck on. We see more of it in TNG, and then DS9, with the introduction of the Holodeck, Ten-Forward, Quark's bar, and general interstellar commerce.

After Gene's death, the Deep Space Nine and Voyager series deviated slightly from this idealism, although the TNG series and movies remained primarily true to it. The introduction in DS9 of the Ferengi as a race idealizing the laissez-faire capitalistic model meant that money simply had to exist, while the overall story arc of the Federation/Dominion War explored the remaining dark sides of the human psyche. Even without greed, humans still possess a will to survive that can drive us to do some pretty terrifying things in the name of continued existence.

Answer 4

In order to reconcile the "not using money" bits with the obvious retention of private property and occasional use of "credits" and various other currencies, you need to wrap your head around just how ridiculously wealthy the Federation really is.

In many stores where I live, there will be a "penny jar" on the counter. A penny is worth so little these days that people don't find them to be worth the effort of carrying around and toss them into the jar when they get them as change. Later, someone who is short a few pennies, or who has a bill such that adding an extra penny makes counting the change easier can use them to make up the difference.

Now, take that concept an apply it to a society where a common freighter consumes more power than our entire world does today...

The amount of resources needed to feed, clothe, and shelter a human being for a year is so insignificant by comparison, that you can support an entire planet off the penny jar of the Utopia Planetia shipyards.

Why then do people still work in coffeeshops and restaurants? And then give their product away for free because it's not really worth much? Well, because economics is all about scarce resources. In the absence of modern-day scarcity, it rises to a higher level. The food is practically worthless, just like air is today. But having a reputation as the best chef in the city? That is worth something. Housing in general is practically worthless, but a particular house in a particular place is unique and may, therefore, be valued by a particular person who keeps ownership of it. For the average apartment building though, a reputation as a good landlord is more valuable than the land and the buildings ever could be.

The really scarce things still involve currency. A trip to another world may require payment. Rare and unique artifacts are still bought and sold. Places where wealth is not as abundant still use currency in everyday life. The Ferengi have an obsession with physical goods that cause them to prioritize differently and not really comprehend the Federation system. (Although Quark starts to get the idea in one DS9 episode when he's gone bankrupt with the incredulous line, "My friends are my assets?!")

The translation between reputation and physical currency would be pretty easy. A person within the Federation with a good reputation could easily convince others to part with physical resources (albeit it would likely cost them some of their reputation in the process.) A trader who routinely brings in valuable physical resources will earn a good reputation. "Credits" are probably much like reputation points on this site. Imagine a whole society run that way. It's not that there's really "no money". It's that physical goods just aren't that important anymore.

For a good book that focuses more on the details of a "post scarcity society" like the Federation (but on a smaller scale) I'd heartily recommend "Voyage From Yesteryear," by James P. Hogan.

Answer 5

in RW cashless communities the community (village, e.g.) usually has a shared cash deposit from which all external trade gets paid, and that gets filled by selling products created by the members of the community to the outside world. Individuals can draw on these funds in relation to the amount they contribute, with a percentage being earmarked for things that benefit the entire community.
E.g. in a village in Uzbekistan I visited earlier this year the village had come together and used funds gained from selling the parts of their agricultural production they didn't need to buy a generator, some cars (to transport tourists and their belongings over the steep mountain roads), and build a small hotel to receive tourists, bringing in more money to pay for further improvements to the village.
As a result, they're not less dependent on their orchards and herds.

A similar system can be envisioned for Federation interaction with outside civilisations, though of course infinitely more complex given the far larger number of individuals, goods, and services involved.
Either each officer and rating gets access to a specific amount per diem from a general fund, or each gets paid into a private account such an amount to use as they see fit.
In case of dealings with Quark and other non-Federation staff on Federation property, it's of course also quite possible that they're not receiving actual money at all but some form of tokens in exchange for goods and services, each person on the station receiving a number of tokens per diem and those goods being drawn from Federation stores. The person (like Quark) would be in Federation employ, his pay being in part in goods to be sent home for sale and in part in board and lodging. This is similar to how some companies and universities control use of cafeteria menus. Each person allowed to use the facilities gains a number of credits (either in the form of physical tokens or credited on some account) and can use those as desired to purchase food.
In all reality, our current economy with its fiat money, not backed by anything except numbers in a computer system, is no different from that. While you can exchange some of those credits for physical tokens (in the form of banknotes and coins), those have no real value anywhere except as agreed upon by the users themselves (and enforced by laws, just as a university canteen operated on tokens would have rules about not making copies of those).
Whether we call those things "dollars", "euros", or "latinum credits" is irrelevant.
Ergo, the star trek society isn't free from money at all, it's merely free from asset backed cash, but that's been true of much of the real world economy for several decades now :)

Answer 6

One factor that allows Latinum to be used as a means of exchange, without running into the replicator problem:

Latinum is a rare silver-colored liquid used as currency by the Ferengi Alliance and many other worlds. It cannot be replicated.

Combine this with Federation credits, which seem to allow for the use of recreational transport and other trade goods.

It seems that there is no monetary system within the Federation itself, but that for the sake of exchanging goods and allowing for the use of high-energy-consumption devices, there is an exchange rate.

Also note the last entry in the Federation Credits page:

Quark accepted credits in his bar when doing business with Federation citizens. (DS9: "Body Parts", "Take Me Out to the Holosuite"; VOY: "Caretaker")

Answer 7

It could work the way Modern military soldiers' food/housing stipends work:

Most Soldiers above E-2 have the option of either living on-base for free, or receiving a stipend and procuring housing on the open economy. Same with food, they can either be issued a meal card that allows them free well cooked, nutritious meals 4-5 times daily for free at any military dining facility in the world, or opt to receive a $255/month food stipend and procure their own groceries and prepare their own meals.

Starfleet and other Terran employers may offer something similar: either utilize Starfleet facilities and eat for free - free of worry and trouble - or receive monetary compensation and arrange your own accommodations.

Answer 8

One could make the argument that when Picard said that cash didn't exist, he might have been being facetious. The various arguments in this thread alone make it clear that SOMEthing exists that passes for cash - simple barter isn't enough when dealing with other people and cultures. There must be a standard currency, one that can be converted into other currencies and forms of trade. It's very likely that an average person may never use or need such currency if the live in a major Earth city, but the government or businesses running the city likely did to obtain raw materials, works of art, etc.

If there's any facet of the concept of cash that may be gone from human culture, it'd the desire to hoard or amass it. Everyone has Enough, that for the vast majority of people, they don't need any more. People seem to see Ferengi as being culturally backward, being so mercenary in their attitudes. The guy with the Honus Wagner baseball card was seen as quite the odd duck.

So the (formerly) wealthy guy from the episode from whence comes the quote was going to be quite up a creek - while he was a businessman, it seemed much more that his skill was in making (and amassing) money, a skill which is virtually unnecessary in the time of the Federation.

Answer 9

Ronald D. Moore addressed this. In short, the Federation covers the bar tabs of its officer. Presumably if one of them spent too much, one of their superiors would have a quiet word about being too extravagant with the Federation's money.

Our assumption is that gold-pressed latinum cannot be replicated for whatever reason and that's why the Ferengis are still in business. Starfleet evidently honors tabs run up by its officers and where the Federation gets its latinum is anybody's guess. (Personally, I think they're running a numbers racket.)

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Answer 10

While not needed internally, credits do exist for external use.

One possible theory is that a certain number of credits can be spent in a given period of time. The amount allocated might not even be related to rank but is spread evenly or by special request. To push this even further, I would expect that credits can't normally be saved or exchanged internally. [This last part isn't necessary but it makes credits even less like money.]

I don't have any specific evidence for the above but it seems consistent with the idealistic nature of the federation.

Answer 11

Federation credits do exist and they do trade with other powers. Everything within the federation is free so no money is needed. You go to siskos fathers restaraunt and you eat for free etc. Replication makes most material goods free anyway. Star fleet personell and others who do shipping work etc get paid starfleet credits into their accounts that they can use outside the federation if they want.

Answer 12

To answer the question of "How do Starfleet officers on DS9 earn latinum?" (because we do see them spending it) we have to remember that replicators are free... for Federation citizens/personnel.

Guests are invited to use the replicators, but the amount of energy and matter required for a replicator to make, say, an XBOX One is high enough that you don't just give that access away. Otherwise, why would Quark be running a bar? He could just plop himself down in front of a Starfleet replicator and keep yelling "Self-sealing Stem Bolt!" at it.

Federation citizens live in a post scarcity society, and like most kind, rich people they're willing to share the benefits of their livlihood, but for most of the people transiting the station, they have to pay hard cash for their goods.

So, how does a Starfleet officer get Gold Pressed Latinum? By trading access to their magical thingmaker box to people with latinum. Sell a music chip player to somebody in exchange for a few slips of latinum, now you have latinum. Or, put some replicated knick-knack down as collateral for a loan to invest into a business. Or, be a hot female Trill and sit down to play Dom Jot with some Ferengi and take 'em to the cleaners.

Whatever asset allocation system is used to manage magical thingmaker box access for Starfleet citizens is still in place (probably, as mentioned in other answers, the simple fact that having any object you want at your fingertips pretty much destroys the fun of accumulating stuff; for an example see how little value people place into real money items in Free to Play games, or how the Real Money Auctionhouse in Diablo 3 decimated the community because items were just auto-botted and bought with cash). But whenever they need some cash, they replicate up some isolinear chips, or bottles of wine, or whatever, and ply the marketplace for slips of latinum.