Economics of time travel

[martin878]

I did a quick search for this but couldn't find anything - apologies if there is. I know it could be one of those hot topics that comes up over and over.

• Invest money in a bank
• Fly near the speed of light away from Earth, then back again
• You experience a week or so, the bank experiences say a year
• So you get loads of interest in a short time (for you)

The question is - would the interest rate be lowered to discourage this? Or would people just get so rich that there's hyperinflation? Is there any way the system can be stabilised?

I'm sure there are sources on the net about this, but don't just post links. I'm interested what you each think.

[SlyReaper]

Interest rates tend to hover at around the rate of inflation, so the money you get out will be worth exactly the same as the amount you put in. The more sensible option would be to go so far forward in time that post-scarcity society is achieved. That way you can live like a king without any money at all.

[martin878]

But I like my friends! I can handle missing out on one year of their lives but not a thousand.

Fair point about inflation though. We need something that will beat inflation such a valuable commodity to take with us in the ship. Ideas?

[Izawwlgood]

What about investing in a company that went up in value... I mean, didn't you watch Primer?

[martin878]

Nope, but I should do. From what I skim read (no spoilers please) they went back in time, rather than forward. Investments aren't such a great idea for going forward unless you take it with you otherwise it could lose value while you're away.

[gmalivuk]

In that case you're not talking about the economics of time travel, but just those of time dilation.

[SlyReaper]

In that case you're not talking about the economics of time travel, but just those of time dilation.

Eh, it's pretty much the same thing, just monodirectional.

[andyisagod]

This didn't work out so well for the guy in The Sleeper Awakes

[Turtlewing]

Investing with time dilation is essentually the same as without (only you have less ability to moniter your investments). Since no information from the future is available you still have to make speculative choices that could either be right or wrong. Given the increased time of the planned investment and the lessened ability to "bail" if things go bad I'd expect near-light investing to be higher risk than normal investing.

[GeorgeH]

Interest rates tend to hover at around the rate of inflation, so the money you get out will be worth exactly the same as the amount you put in. The more sensible option would be to go so far forward in time that post-scarcity society is achieved. That way you can live like a king without any money at all.

Grabbing historical CD rates from here, the average rate between 1993 and 2008 was 4.775%.

Using this compound interest calculator with that average, $1000 USD deposited in 1993 would be ~$2000 in 2008.

According to this website, $1000 1993 USD would be worth:

$1,490.00 using the Consumer Price Index
$1,390.00 using the GDP deflator
$1,640.00 using the value of consumer bundle
$1,580.00 using the unskilled wage
$1,600.00 using the Production Worker Compensation
$1,850.00 using the nominal GDP per capita
$2,170.00 using the relative share of GDP

Averaging those out, we get ~$1700. Working backwards, that means your 1993 self just added ~$200 to their initial $1000. Not too shabby, although we haven't included taxes yet.

[DrSir]

Investing with time dilation is essentually the same as without (only you have less ability to moniter your investments). Since no information from the future is available you still have to make speculative choices that could either be right or wrong. Given the increased time of the planned investment and the lessened ability to "bail" if things go bad I'd expect near-light investing to be higher risk than normal investing.

True, but it also allows a long time period to pass by quickly. It's high-risk and little time needed to pass make it more like betting than a normal investment I think.

[thoughtfully]

Well, if you've got enough money, it's straightforward enough to hire somebody to manage it for you. Lots of people do. You would also presumably spread it around some to limit the risk of losing it all when something goes funny for one piece of it.

[gmalivuk]

Grabbing historical CD rates from here, the average rate between 1993 and 2008 was 4.775%.

In addition to the fact that that's already higher than inflation over the same period, it would be silly to invest in a series of one-year CDs if you're planning to sit on your investment for 15 years, since rates are higher for longer terms. For that same period, the average rate for 5Y CDs was 5.405. And if you happened to first invest in 1995, in 5Y CDs that were automatically reinvested twice more at the new average rate, then you'd have made about 7.67 APY for 5 years, followed by 7.595, followed by 4.957. Which amounts to a total average accumulation factor of 2.66, which is even less shabby than a "mere" doubling of your money.

[Glass Fractal]

Is there any way the system can be stabilised?

Just factor in the cost of accelerating up to such a ridiculous speed.

[Asphias]

wouldn´t Cryopreservation be a lot cheaper then having to accelerate to near-lightspeed and back?

[SlyReaper]

wouldn´t Cryopreservation be a lot cheaper then having to accelerate to near-lightspeed and back?

Except we don't yet know how to do that without killing the preservee. We do at least know how to brute force an object to high velocities.

[GeorgeH]

We do at least know how to brute force an object to high velocities.

Yep, and if you want to do it in a reasonable timeframe you'll only need to make 12 easy payments of the combined European GDP.

[Diadem]

wouldn´t Cryopreservation be a lot cheaper then having to accelerate to near-lightspeed and back?

Except we don't yet know how to do that without killing the preservee. We do at least know how to brute force an object to high velocities.

We do? Have we even breached 1/1000 of the light speed yet? Not counting particle accelerators.

[edit]
Oh, wow, we did. Our record is 70.22 km/s which is 0.00234c, set by the helios probes. At 0.00234c you've reached a time dilation of 1.00000274. You save almost ond and a half minute every year. Cool.

[Robert'); DROP TABLE *;]

We know what to build, but have nowhere near the resources to actually build it.

[Diadem]

We know what to build, but have nowhere near the resources to actually build it.

That thing uses antimatter enginges. That's not just a matter of not having the resources to build it. We have no idea how to produce that much antimatter in a feasible amount of time, and we have no idea how to store it if we did.

[thoughtfully]

There are designs that utilize modest amounts of antimatter, which would get you something "in-between". You can balance the feasibility of production/storage with acceleration/dilation.

[gmalivuk]

Keep in mind that even 0.9c doesn't get you anything like the kind of time dilation you'd really want to take advantage of economics in this way.

[Zamfir]

Paul Krugman wrote an article on the economics of interstellar trade, focusing on the right discount rates to use if time dilation is significant:
http://www.princeton.edu/~pkrugman/interstellar.pdf
His main conclusions are that you have to work with discount rates as measured in the frame of the start and destination, not of the trader, and that interest rates between start and destination will be equal, even though capital goods cannot move between them faster than the speed of light. Mostly, the paper is an exercise in bad puns. "I do not pretend to develop a theory that is universally valid, but it may at least have some galactic relevance". He did in the end get a Nobel price for his work on the effects of geography and distance on economics.

[SlyReaper]

There are designs that utilize modest amounts of antimatter, which would get you something "in-between". You can balance the feasibility of production/storage with acceleration/dilation.

I was actually thinking of a simple system of hurling weights out the arse end of the ship at near light speed, to impart momentum to the ship. Yes, this would require massive amounts of energy, hence "brute force".

[Technical Ben]

We know what to build, but have nowhere near the resources to actually build it.

That thing uses antimatter enginges. That's not just a matter of not having the resources to build it. We have no idea how to produce that much antimatter in a feasible amount of time, and we have no idea how to store it if we did.

That's easy. Just make the entire ship out of antimatter then. It can hold it's own fuel. It will work perfectly safe. Just open the cabin door and...

[gmalivuk]

I was actually thinking of a simple system of hurling weights out the arse end of the ship at near light speed, to impart momentum to the ship.

In other words, a rocket? (Granted, the size of individual weights is typically quite small, but it's the same principle.)

[SlyReaper]

A rocket than can shove propellant out of its backside at relativistic velocities, yes.

[gmalivuk]

A rocket than can shove propellant out of its backside at relativistic velocities, yes.

Which would be much much easier to do if the propellant was in plasma form rather than "weight" form.

[charonme]

The technology needs to be accessible only to few, otherwise everybody would try it, leaving no one to actually work and produce that new wealth (perhaps except for waiting for crops to grow or solar energy to accumulate etc.) So it leaves you with a unique technology that no one else has... I think you would make much more money selling or renting it.

[HungryHobo]

I suspect that if it were easy to go into deep freeze or on a long voyage then the return on long term investments would simply go down as people would be more willing to invest in them.

[Meteorswarm]

I suspect that if it were easy to go into deep freeze or on a long voyage then the return on long term investments would simply go down as people would be more willing to invest in them.

Why? The money's still just as useful to the borrower.

[MrConor]

• Invest money in a bank
• Fly near the speed of light away from Earth, then back again
• You experience a week or so, the bank experiences say a year
• So you get loads of interest in a short time (for you)
  
• You make no profits, accounting for the price of travelling at light speed for a year.

Ignoring the obvious problem that is the final point (and it's fairly substantial), where else is there a problem? You accrue interest on money in a bank account because the bank is profiting from lending that money to other people. Why would the bank care whether you've only experienced a week of relative time to their year? If anything, the banks should encourage it - it means they get to hold on to your money for longer, since if you'd been on Earth for the same relative-year then you're far more likely to withdraw that money. The only problem would emerge if a large number of people did this and planned to withdraw their money at the same time - which is a problem for any bank, should it occur. A bond with a fixed payout date would be the simplest way to work around such things, however.

If we ever got to a point where the 'profit' you made from interest was greater than the cost of a year of faster than light travel, either the world's economy has moved beyond a point where 'rich' has any meaning to people presently alive (consider modern wealth in terms of energy consumption and compare it to the energy consumption of travel which you can apparently afford as a regular human being in the hypothetical future) or you're already incredibly rich anyway.

[Technical Ben]

That is an interesting take on things. "Donating" your money to the economy. As your not going to need it in deep sleep/suspension/time travel. However, as said one of the problem is, you could get back less than you invested if the rates are no good, or prices increase.

[bigglesworth]

I have a much better idea. Be the first to do the cryopreservation/relativistic speed thing, then make loads of money on interview, product endorsement and media rights.

[Zamfir]

Why? The money's still just as useful to the borrower.

If the supply of people willing to lend long term funds goes up and demand for such loans stays the same, the interest you need to pay if you want to borrow goes down.

[zmatt]

why not use a large mass driver and a capsule large enough to hold just you. Fling said capsule (assuming we have some way to prevent the massive G's from killing you) and at the other end of the trip have another mass driver to send you back to earth. Repeat as many times as necessary.

[Levi]

I can't remember the name of the book right now, but I read one once where there was a class of people who lived outside of time and facilitated trade between times. So, for example, times with lots of trees could trade with times that had huge industrial complexes.

Would this work at all? It seems like weird things would keep happening, but I can't really wrap my mind around it enough to figure out exactly where everything would go wrong.

[mmmcannibalism]

I can't remember the name of the book right now, but I read one once where there was a class of people who lived outside of time and facilitated trade between times. So, for example, times with lots of trees could trade with times that had huge industrial complexes.

Would this work at all? It seems like weird things would keep happening, but I can't really wrap my mind around it enough to figure out exactly where everything would go wrong.

Besides every time travel paradox possible?

[Technical Ben]

That and you would soon realise your time travelling Sales person seems to have found the exact resource that is missing from that "hole in the ground where the tress use to be".

[charonme]

governments already use a kind of "time travel" economics: it's called deficit financing (or deficit spending). They "borrow" (effectively tax away) money from our grandchildren (ie. from future economies) and spend them today. Moreover, our grandchildren in the future (will) have the illusion of not missing the "borrowed" money, because they (will) do the same (and in larger quantities) to their grandchildren.