Nanofabricators, DRM and Forced Scarcity

[Ulzgoroth]

Originally Posted by jeff_wilson

Fast money is cash and other liquid assets that can be redeemed for face value or nearly so in short order, like mature bonds and home equity. IIRC, medium money is longer-term investments like multi-year bonds and ownership of private companies, but still in-system.

That's the description, yes, but those assets don't behave much like money, and aren't normally hard to swap for 'fast money'. And what would be the unit? What is the 'medium dollar' if medium money is actually assets?

[jeff_wilson]

Originally Posted by Ulzgoroth

That's the description, yes, but those assets don't behave much like money, and aren't normally hard to swap for 'fast money'. And what would be the unit? What is the 'medium dollar' if medium money is actually assets?

They're not hard to swap for fast money if you want to take a 50% haircut, no. Posthuman economic actors apparently are seen as introducing greater volatility in futures trading, and rightly so.

I think re-using the labels dollars and cents for three different kinds of "money" is Charlie practicing a bit more Heinlein pastiche; the hero of JOB complains about the ridiculously inflated currency of the alternate timelines he is forced to visit, because he knows that a dollar ought to be a significant amount of money, and a meal shouldn't run $15.72 instead of a nickel. "I would have had less trouble adjusting to economy in this strange-but-familiar world it its money had been described in unfamiliar terms-- shillings, shekels, soles, anything but dollars. "

[Ulzgoroth]

Originally Posted by jeff_wilson

They're not hard to swap for fast money if you want to take a 50% haircut, no. Posthuman economic actors apparently are seen as introducing greater volatility in futures trading, and rightly so.

Some of those assets are trivial to liquidate at present value right now, and the ones that aren't largely aren't because they are sufficiently unique or seldom exchanged that there is no ready market.

Originally Posted by jeff_wilson

I think re-using the labels dollars and cents for three different kinds of "money" is Charlie practicing a bit more Heinlein pastiche; the hero of JOB complains about the ridiculously inflated currency of the alternate timelines he is forced to visit, because he knows that a dollar ought to be a significant amount of money, and a meal shouldn't run $15.72 instead of a nickel. "I would have had less trouble adjusting to economy in this strange-but-familiar world it its money had been described in unfamiliar terms-- shillings, shekels, soles, anything but dollars. "

The name is an irrelevancy. The existence of the unit does not go well with the purported meaning.

[Seneschal]

Originally Posted by Ulzgoroth

Have you read Neptune's Brood by Charles Stross? I bring it up because it is a book with pretty hard science, plentiful nanofabricators...and space pirates.

While getting into all their schemes would be telling a bit too much, their major interests in boarding ships appear to be inspecting them and their cargoes, partly for insurance reasons (they are technically an insurance agency branch office) and partly so that they can engage in commodity futures trading using inside information about any cargo that hasn't been publicly disclosed. (Actually physically stealing bulk cargos would be a waste.)

Ooh, I'm checking it out now. Nothing better than having an entire book's worth of ideas to shamelessly pilfer! Though, it says it's the second part of a series. Will that be a problem?

The idea of two-tier money sounds interesting. How does it work, do you receive a double salary? Can medium-money be spent on some things directly?

[Ulzgoroth]

Originally Posted by Seneschal

Ooh, I'm checking it out now. Nothing better than having an entire book's worth of ideas to shamelessly pilfer! Though, it says it's the second part of a series. Will that be a problem?

Not really. It's in the same universe as Saturn's Children, seemingly much further along in time, but there's no plot ties I could pick up and Neptune's Brood doesn't seem to require remembering any of the technical details.

Originally Posted by Seneschal

The idea of two-tier money sounds interesting. How does it work, do you receive a double salary? Can medium-money be spent on some things directly?

It's a three-tier system, but what 'medium money' means is in my opinion unsatisfactorily explained and never explored. Notionally medium money refers to natural resources, solid capital, and (puzzlingly) long-term debts, but how that can be used as money is not made clear. Only fast and slow are of much relevance to the plot.

A salary would usually be paid in fast money, probably, which is your basic money like we've got today and what you'd normally use to buy things from people in your general vicinity. Slow money is a highly prized financial medium primarily used for interstellar transactions, a sort of bit-coin verified and assured by speed-of-light communication with banks in other solar systems in a civilization with no faster-than-light capability. It's essential if you want to send money to other systems for any reason, and pretty stable over long timescales because the financial system involved is very slow, very big, and way too big to fail. It's horribly cumbersome for any other purpose, but the nominal value is very high.

[ClayDowling]

Long Terms Debts are negotiable. Their value depends both on the size of the debt and the credit rating of the debtor. Currently bonds are the most recognized form, but commercial debt from large companies is also used (referred to as the Commercial Paper market), and if you were old enough to have investments or own property in 2008, you have heard of Collatoralized Debt Obligations, which are typically aggregated mortgages.

Long Term Debt is the dodgiest of all possible items for exchange, because it's very hard to acurately assess the value of such things. Their use has been at the root of most of the financial debacles of the last century. There's no good way to get away from that though, because they're also the mechanism by which financial institutions generate profits.

[DangerousThing]

Originally Posted by Ulzgoroth

Honestly, I was more impressed with Stross' SF economics in the Merchant Princes books, but those seem not to have caught on as much.

I thought the banking system was developed entirely too little for the importance of its role in the book. What was the medium-money/fast-money split supposed to actually constitute? What is medium money really? Slow money was fairly well covered, but slow money was a serious contender for primary character of the novel.

In most of his stories economics has a strong part in the background. However, in Brood, it was part of the science.

As far as I can tell, medium money is infrastructure and fast money is cash or equivalent. In other words if it costs me money to liquidate it right now, then it's medium money; for example my house or an office building. Fast money is something one can immediately use.

I would guess the terms come from fast, medium, and slow investments.

[Ulzgoroth]

Originally Posted by DangerousThing

In most of his stories economics has a strong part in the background. However, in Brood, it was part of the science.

Merchant Princes wasn't called that by accident. It wasn't about high finance like Neptune's Brood, but how to leverage a unique trading situation was a central issue, at least on the occasions that center stage wasn't being stolen by matters of not getting killed.

Originally Posted by DangerousThing

As far as I can tell, medium money is infrastructure and fast money is cash or equivalent. In other words if it costs me money to liquidate it right now, then it's medium money; for example my house or an office building. Fast money is something one can immediately use.

I would guess the terms come from fast, medium, and slow investments.

Doesn't the main character, in her enumeration of financial resources early in the book, mention a certain amount of medium money?

[Langy]

Originally Posted by DangerousThing

There will probably be a lot of legal open source hardware to begin with from various programmers who do that sort of thing, just like in the real world.

...

With open source hardware I could picture research costs being lower because most complex devices could be made of low-level components that are freely available. Open source object oriented hardware!

Open source hardware may not exist if there's only one manufacturer of the nanofac with a monopoly on the process, or the government mandates the draconian DRM measures.

[Agemegos]

Originally Posted by Seneschal

I didn't consider this a problem at the time, since I thought that information, ideas, media, and art becoming the only valuable commodities might make for an interesting setting.

You have discovered for yourself the first problem with this fantasy, which is that economics is about scarcity and these things aren't scarce. The price (and marginal value) of a commodity in competitive equilibrium is equal to the marginal cost of its production, and the marginal cost of production of copies of abstract designs and compositions is very low. You need to create artificial scarcity to make these pseudo-commodities valuable, and that is working against the grain of nature.

The second problem is this: if IP is the only valuable commodity, what do the consumers pay for it with? What do the IP owners screw out of the consumers to make it all worth their while? If real, material products are available very cheaply even to people who have nothing to sell except their worthless labour, then why not give away your IP?

If something other than IP is important and scarce, then it makes sense for the IP owners to pervert the government into making IP pseudo-scarce so that they can use that scarcity to get a big share of X. But if IP is the only significant valuable commodity, why bother? Everyone would be better off to just give up.