I grew up watching "Star Trek: The Next Generation" (easily the best of the Star Trek shows). There's one big, obvious thing missing from the future society depicted in the program. No one is doing business. There is almost no one buying and selling, except for a few species for whom commerce is a form of traditional religion. Food and luxuries are free, provided by "replicators" — machines capable of creating essentially anything from pure energy. Recreation, provided by virtual reality, is infinite in scope. Scarcity — the central defining concept of economics — seems to have been eliminated.
Is this really the future? Is it possible? Is it something we want? Periodically, economists and economics writers struggle with this question. Back in 2013, Rick Webb and Matt Yglesias theorized that as society gets richer and richer, capitalism and free markets will still exist, but will simply recede into the background. Others have described Star Trek not as a socialist paradise, but as a libertarian one. A writer named Manu Saadia is even writing a book about the topic.
So let's think about the economics of Star Trek. What we're really thinking about is how to get to economic utopia. It's an important question.
The first thing to consider is how to distribute the fruits of plenty. If we can harness renewable energy to ward off a collapse when fossil fuels run out, then it's a good bet that increased automation, virtual reality and other technological advances will provide us with a world of plenty unimaginable in previous times. Current world annual gross domestic product per capita, in purchasing power parity terms, is only about $13,000 – enough to put food on the table and a roof over one's head. What happens when it is $100,000, or $200,000?
It would seem ridiculous to limit this incredible plenty to a few people. When the world gets rich enough, a trivial tax on the rich would be enough to provide everyone on Earth with a basic income that would allow them to lead lives of leisure. Or, as Yglesias suggests, voluntary giveaways by the rich could support the rest, since we might get more altruistic as our lives become more comfortable. Who cares if the robots put us all out of a job, when we can create paradise with just a tiny dash of redistribution?
Of course, this depends crucially on the number of humans being limited. As economist Thomas Malthus pointed out in the 19th century, exponential population growth will eventually bring back scarcity no matter how rich we are. Fortunately, it looks like that won't be a problem — global fertility rates are converging to replacement level, meaning that world population will level off. It is unlikely that a population bomb will threaten the leisure society.
