Exchange rates for an alien economy

[ArgonV]

Here's something I've been wondering about for a while: Say friendly aliens land on Earth tomorrow. Three years later, we've got a trade agreement. How would we establish exchange rates for currency with these aliens. Let's just assume they've got a single global currency.

Here's how I'd do it: I'd compare their prices for a range of necessities, commodities and luxury items. So I'd compare the average price of their equivalent of foodstuff to the average price of foodstuff on this planet. Then the average price for gasoline/oil/uranium/whatever and lastly their price for jewellery and cosmetics.

Average that and it gives you a ratio of alien credits to euros (or dollars), which you could then use as an exchange rate. But that's probably too simple, right? I have no economic knowledge whatsoever.

[DrSir]

If we traded with them, it'd probably be because we wanted some of their stuff, and they wanted some of ours. So assuming we have a trade agreement instead of war , it'd probably be based off of supply and demand between us. Foodstuffs could be harder for us to find than them, and vice versa - remember they just landed on our planet, other than our cultural goodies and technology, they probably don't need much from us .
If that happens, the world would probably band together pretty well, and I think we'd find a world currency everyone's willing to back. With our floating wage system though (as the governments of Earth can adjust it a bit here and there), they may just want to barter for awhile...

[Izawwlgood]

Yeah, my guess is the only thing of any value to aliens who are interested in a trade agreement would be fairly intangible and difficult to fix a price to. Art, literature, that sort of thing. An alien race coming from [anywhere else] isn't going to want our precious metals, they'll what the one thing no planet in the known universe can offer;
Survivor. Wife Swap. James Joyce. Lovecraft. Pollock. Autobiographies of interesting people.

Probably some genetic material as well, I imagine any peaceful alien species would likely be interested in exploring life in all it's facets.

[GeorgeH]

Here's how I'd do it: I'd compare their prices for a range of necessities, commodities and luxury items. So I'd compare the average price of their equivalent of foodstuff to the average price of foodstuff on this planet. Then the average price for gasoline/oil/uranium/whatever and lastly their price for jewellery and cosmetics.

That'd only work if the relative values of the items in both economies was reasonably similar. Unless your aliens are pretty boring it's doubtful that's the case, meaning any exchange rate agreement would be akin to instantly randomizing the supply and demand values for goods in both economies.

What would probably happen is whichever side had a dominant position would set up a single-item exchange rate and exploit the weaker side for fun and profit. If the dominant aliens want titanium and pave their streets with gold, they'd offer to trade titanium for gold (because why not, gold is worthless) and then use that favorable titanium-gold trade to pillage whatever else they wanted. In other words 3 Zzybas would buy you the entire island of Hawaii or a cup of coffee on Zizz.

[Charlie!]

Probably some genetic material as well, I imagine any peaceful alien species would likely be interested in exploring life in all it's facets.

If you know what I mean.

[KrO2]

I'm going to guess it would stick with barter for quite a while until there's a lot of traffic between the planets. A euro on Zizz would be as worthless as a Zzyba on Earth or an American Express card after the Earth is destroyed. If they set up a permanent trading post somewhere on earth, Zzybas might have some value to the humans immediately in the area (and maybe collector value to other people on the other side of the planet--"hey look; I've got a piece of alien currency"), but probably not as much trading value as it would on Zizz where there's more competition between sellers of the same goods. And of course the gold-titanium result happens regardless of whether or not there's an exchange rate or what it is.

[Zamfir]

The idea of trade with aliens deeply, deeply underestimates how hard interstellar travel is. If they can send a probe or anything across light years, they have a resource base back home that could copy our entire economy just for funzies. If they are interested in human art works with mass, it might well be more cost-effective, and faster, to just build a few hundred million humans back home and maintain them for a few centuries until you collected enough art.

Of course, they might be interested in intangibles, but you don't need to trade for those. You need a bittorrent client.

[Solt]

Like Zamfir said, it takes far less energy to acquire something at home than to travel all the way here, give us something in exchange for it, and ship it all the way to their home planet. NOTHING costs that much. Most of what they'd want could probably be shipped home in a few dozen hard drives in one trip.

Of course, if their spaceflight is actually developed enough to be economical, then it's a different story. But if that's true then they would be generations ahead of us in technology and we still wouldn't be giving them anything worth their while. On the other hand they could deliver very valuable things to us, but I see no way that it would become worthwhile for a theoretical alien interstellar trade ship captain to do so.

One method of creating a quasi-economy would be this: ship owner takes a complete schematic for some alien technology and brings it here. He sells it for billions of dollars to the highest bidder. He takes his billions and retires on earth like a king, whereas on Zizz he would have retired as a middle class peon. Company takes the technology and writes the cost off as R&D, money paid to ship captain eventually finds its way back into economy as he builds his alien palace in Antarctica. Still not something he can start a true trade system with, but a monetary exchange nevertheless.

If we BOTH had economical space travel, then I think the exchange rate would come down to the cost of energy. It would become worthwhile to transport something that requires more energy to make than it takes to power the whole trip. This would be some crazy shit, like pure platinum antimatter or something. Still, what would they trade for energy, other than more energy? A thousand interstellar trips worth of energy is equivalent to a x percent improvement in the efficiency of some technical process? I have no idea.

Or maybe if we had technologically competitive economies we could exchange ideas directly. I'll sell you our method of synthesizing chemical x in return for your latest database search algorithm. In that situation both worlds would benefit massively from the trade without hurting competitiveness between companies in their relative local economies.

[Zamfir]

One method of creating a quasi-economy would be this: ship owner takes a complete schematic for some alien technology and brings it here. He sells it for billions of dollars to the highest bidder. He takes his billions and retires on earth like a king, whereas on Zizz he would have retired as a middle class peon.

I still don't think so. The difference between us and aliens with routine interstellar travel is like the difference between insects and us. You could call the relation between a beekeeper and his bees "trade", where the beekeeper gives them an excellent home and they give him honey in return, but that's about the best we could do. Only a seriously troubled beekeeper would imagine themselves king of the bees instead of peons in the human world.

To go further on the bee analogy: we keep bees because they happen to make something we like that is hard to replicate at the same quality through industrial means. So we keep bees, and let them live something that resembles their natural life so much that they act normally. Except we tweak it to maximize their productivity of the thing we like, while minimizing the effort it costs us.

This might be a decent model for potential economic relations between us and space-faring aliens. If we are uninteresting they ignore us, but perhaps we do something interesting or amusing (perhaps beings as smart as us are rare enough), and then they tweak our world to maximize our interestingness, without interrupting it so much that it distorts.

If you like watching the antics of simple beings on planets, a good strategy might be to send an intelligent agent to them on a one-way trip who secretly encourages them to build the infrastructure necessary for high-power radio, and then tweaks their society to make them produce lots of shows of their behaviour and broadcast those to the aliens. If you do it right, the simple beings will never understand, and think they are just doing it for their own.

[johnny_7713]

Like Zamfir said, it takes far less energy to acquire something at home than to travel all the way here, give us something in exchange for it, and ship it all the way to their home planet. NOTHING costs that much. Most of what they'd want could probably be shipped home in a few dozen hard drives in one trip.

Of course, if their spaceflight is actually developed enough to be economical, then it's a different story. But if that's true then they would be generations ahead of us in technology and we still wouldn't be giving them anything worth their while. On the other hand they could deliver very valuable things to us, but I see no way that it would become worthwhile for a theoretical alien interstellar trade ship captain to do so.

Well its always possible that they develop a taste for Earth spices and that for some reason its impossible just to buy some seeds and cultivate them on Zizz. Or perhaps genuine Earth pottery, made by genuine earthlings (unlike the cheap imitations sold by my competitor) could become some kind of status symbol. Another possibility is regional delicacies / specialities. People in Australia drink French wine, even though wine can also be grown locally, because of taste differences. In that case some kind of barter system would probably emerge (akin to the trade between Europe and the rest of the world in the 16-18th centuries). If trade develops enough a currency exchange rate might emerge based on the agreed barter rates. E.g. if two crates of Zizzberrry wine is seen as worth one box of Bordeaux and two crates of Zizzberry wine is worth 2 Zzybas, whereas one box of Bordeaux is worth €20, then the initial exchange rate will be 1 Zzyba = €5.

[Izawwlgood]

People in Australia drink French wine, even though wine can also be grown locally, because of taste differences.

Well, to be fair, they probably don't drink it because it tastes differently, but because they get to brag about purchasing an imported French wine instead of a locally grown variety. But, same concept.

[SlyReaper]

Like Zamfir said, it takes far less energy to acquire something at home than to travel all the way here, give us something in exchange for it, and ship it all the way to their home planet. NOTHING costs that much. Most of what they'd want could probably be shipped home in a few dozen hard drives in one trip.

Of course, if their spaceflight is actually developed enough to be economical, then it's a different story. But if that's true then they would be generations ahead of us in technology and we still wouldn't be giving them anything worth their while. On the other hand they could deliver very valuable things to us, but I see no way that it would become worthwhile for a theoretical alien interstellar trade ship captain to do so.

Well its always possible that they develop a taste for Earth spices and that for some reason its impossible just to buy some seeds and cultivate them on Zizz. Or perhaps genuine Earth pottery, made by genuine earthlings (unlike the cheap imitations sold by my competitor) could become some kind of status symbol. Another possibility is regional delicacies / specialities. People in Australia drink French wine, even though wine can also be grown locally, because of taste differences. In that case some kind of barter system would probably emerge (akin to the trade between Europe and the rest of the world in the 16-18th centuries). If trade develops enough a currency exchange rate might emerge based on the agreed barter rates. E.g. if two crates of Zizzberrry wine is seen as worth one box of Bordeaux and two crates of Zizzberry wine is worth 2 Zzybas, whereas one box of Bordeaux is worth €20, then the initial exchange rate will be 1 Zzyba = €5.

That's a good point actually - the aliens might well be huge decadent snobs. They may actually fly light years to acquire something exotic just so they can show it to their friend's at dinner parties and bore their guests to death by talking about their genuine Earth artifact. "Oh darling, you simply must see this quaint little "laptop" thing I picked up on my visit to sector ZZ9 Plural Z Alpha last year. Isn't it just gorgeous?"

[Zamfir]

In that case some kind of barter system would probably emerge (akin to the trade between Europe and the rest of the world in the 16-18th centuries)

I'd say that is not really a good historical analogy. At this moment, interstellar transport is so far beyond our means that it is hard to imagine a visiting alien who has a star ship, but for the rest a very similar society and economy to ours. The Europeans were the ones who wanted to join the main trade networks of the world. But a visiting alien would be bringing the wider world to us, not the other way round. Another complication is that the main European stuff to barter was American silver, at a time that silver was the main currency of China. It's not really barter if you are accidentally bringing money.

That's a good point actually - the aliens might well be huge decadent snobs. They may actually fly light years to acquire something exotic just so they can show it to their friend's at dinner parties and bore their guests to death by talking about their genuine Earth artifact. "Oh darling, you simply must see this quaint little "laptop" thing I picked up on my visit to sector ZZ9 Plural Z Alpha last year. Isn't it just gorgeous?"

This was (besides silver) one of the main imports of Ming China: weird stuff from faraway countries for rich people to brag about. But for the most part, they didn't spend much effort getting them, the faraway countries would bring them. Perhaps it would work that way too if for snobbish advanced alien societies: you don't build space ships to collect Earthian wines, you wait until the Earthlings bring you wines in return for favours. If they don't, too bad for them.

[gmalivuk]

For the sake of argument, I'm going to assume that the aliens are approximately our technological equals, and we've just both discovered something like stargates that make the travel equally simple for both of us. (Otherwise, yeah, I think the beekeeper analogy is much more apt than the human commerce one.)

I agree with others that it'd most closely represent a barter economy for quite some time, unless and until there are enough goods and people going back and forth for any kind of currency exchange to be worthwhile. (If most people people aren't going back and forth, then there's probably no point in exchanging currency at all. Why do I need to know anything about zzybas if I can pay dollars to get valuable Zizzian items brought by someone who got them from Zizz in exchange for whatever Earth goods they like there?)

[LaserGuy]

Well, it depends...

If the aliens are much more advanced than us, then the only things they probably would want from us are raw materials or territory. While it might be prohibitively expensive and time consuming to ship such things back "home", wherever that is, it is possible that the civilization's spacecraft could well be their home--that their planet, for whatever reason, is no longer usable and they've moved on. In this case, they might well be desperate for certain materials that are generally difficult to acquire--what they would be is hard to say, since anything that can be found on Earth could rather likely also be found in an inhospitable place like on an asteroid. They might also be interested in a planet that is suitable for life, which would be a bit more of a problem for us. It's also possible that they might have an interest in animals, plants, or other wildlife for study, since such things would generally be unique to this planet. Despite science fiction's claims to the contrary, however, it's extremely unlikely that they would have an interest either in eating or in mating with any species on this planet--we would almost certainly be so genetically dissimilar that attempting such things would probably be impossible, and both species would probably be at extreme risk of transferring deadly diseases to one another.

If both species were, for whatever, reason, relatively equal in terms of technology and resources, I think that a barter system of some kind would be the only way to go. If there's enough trade, a currency system could be devised, but in order for a currency system to work, you really need an integrated economy.

[Jplus]

Despite science fiction's claims to the contrary, however, it's extremely unlikely that they would have an interest either in eating or in mating with any species on this planet--we would almost certainly be so genetically dissimilar that attempting such things would probably be impossible, and both species would probably be at extreme risk of transferring deadly diseases to one another.

Inconsistent. Either, the Zizzians are so genetically dissimilar that something like mating is guaranteed to be impossible, and they won't be at risk of transmitting deadly diseases (cf. animals vs. brown algae), or they would be more similar and have some risk of transmitting diseases (though problably still not able to mate; cf. mammals vs. reptiles). In both cases, eating isn't necessarily problematic although there is always the possibility of poisoning.

On the assumption that the Zizzians are organic, carbon- and water-based lifeforms, of course.

On topic: I'm quite optimistic about johnny_7713's wine scenario.

[Novae D'Arx]

Yeah, J; I think you're getting closer to what the keys to exchange are...

Now, with the assumptions that we set up SOME kind of trade (And it might be a weird lightspeed-lagged interstellar trade if we start contact via transmission instead of by, um, actual CONTACT.), and that each party has something the other wants, which is the basis of the entire question, we can give a few answers.

Regardless of what the trade is for, exchange will be set by a number of factors, just like on Earth... But pretty much it's set by what people agree it's worth. We agree by the rough current average of how much currency buys how much product/service/other currencies, and this is (these days) done by microsecond trades by rather smart algorythms. Markets shift constantly, of course, but the trading "smooths" out some of the swings in the valuation. So, um... The currency will be worth what people agree it's worth for as long as it's worth that. Until it's not, and then people will hash out what it's worth again. No, seriously. That's pretty much how it works; the rest of the financial leet-speak is just about modeling and applied theory, essentially.

As for the separate discussion of whether or not we'd be able to have any kind of trade or what have you, it depends on a LOT of things. However, even if the aliens are pretty far beyond us in tech, we've still got an ace in the hole - we know our own biology and how it works far better than they're likely to; I'm sure that if we found any aliens, we'd be chomping at the bloody bit to compare our various biologies to see what different forms life can take. The further apart, the more they'd be interested in purchasing proprietary information and study techniques from our various companies and governments. Also, we may or may not have figured out some tricky nooks and crannies of physics, material science, quantum/M-theory or mathematics that they haven't yet. Basically, it'd be an enormous "I'll show you mine if you show me yours" comparison of what we've got and what we don't, once we figure out each others' number and math systems and so on.

Heck, there'd probably also be a lively trade in neuro/psychological models as well; learning how alien life thinks and the possibilities of truly alien thought are also worth their weight in gold, once you think about it. If we're lucky enough that we're not the only two species around and they have this info on other races, we might even be able to start working on a generalized theory of intelligence and thought, since we can start comparing others - not unlike being able to understand the basis of language on Earth better by comparing dissimilar languages.

But I'm getting off-topic. Essentially, your ideas on determining valuation by comparing various prices of (whatever) are just an economist's method of trying to determine if a currency's current value is above or below it's "true" value (as in, if it's likely to rise or drop soon) and, if taken over time and compared to prior trends, is likely to correct soon. Now, if you're wanting to develop a tool for determining the value of an alien currency... Ugnh. You need more assumptions than "They're just alien". It'd be like back in the ol' world explorin' days - we weren't sure what we'd find when we crossed the sea, but we could make some safe assumptions: they'll have something we want, and we'll have something they want. After that, all bets were off.

In some scenarios, it might be a few one-time trades and that's IT. The currency values would spike up, then drop to... Whatever collectors are willing to pay, then pretty much flatten forever at that level. If there's an ongoing trade, then you'd probably see some INSANE swings as market optimism and (probably) limited alien money supply at first caused fluctuation all over the board. Over time, as we got a better idea of what they wanted and could give, and as more of their money made it onto the market, we'd see a more normal fluctuation like with modern currencies.

However, without a more specific scenario we can only talk generalities. There's no way to set up a useful generalized model for that which I'm aware of.

[Turtlewing]

supply and demand would determine the value of the alien currecny relative to any given earth currency. the primary driving force being how much interest humans have in doing buisines with the aliens and how much interest the aliens have in doing buisnes with humans.

One thing to remember is that curency exchanges are not equivilence relationships (So if 5 USD = 1 euro, and 1 euro = 20 yen that doesn't nesesarily mean 1 dollar = 4 yen). This is why your conversion system would not work, as you'll never get consistent results amoung existing curancies that way let alone an alien one.

In actuality curencys are always compared in pairs so there is for example a market (in the same sence as the "stock market") for USD vs Euros, and one for Euros vs Yen, and one for Yen vs USD. These markets also come with all the trappings of financial constructs like indexes, futures, and options.

In short, if you want to buy space beads, you're going to have to get space bucks from an alien who needs euros to buy german beer. However once capitalism gets into the mix there will be institutions (banks) willing to sell you space bucks for euros and euros for space bucks (they likely make a profit on both of those sales by the way). Those intitutions will set the exchange rates based on their esimation of demand and how much other institutions are charging. Those can be averaged to get an aproximate "exchange rate" which can be used as an indicator of trade interest between humans an aliens.

[BlackSails]

One thing to remember is that curency exchanges are not equivilence relationships (So if 5 USD = 1 euro, and 1 euro = 20 yen that doesn't nesesarily mean 1 dollar = 4 yen). This is why your conversion system would not work, as you'll never get consistent results amoung existing curancies that way let alone an alien one.

They usually are, otherwise you just make money from the arbitrage.

[Turtlewing]

One thing to remember is that curency exchanges are not equivilence relationships (So if 5 USD = 1 euro, and 1 euro = 20 yen that doesn't nesesarily mean 1 dollar = 4 yen). This is why your conversion system would not work, as you'll never get consistent results amoung existing curancies that way let alone an alien one.

They usually are, otherwise you just make money from the arbitrage.

that depends on what angle you're looking at the exchange from. Sure if you go into a bank and ask to exchange curency they'll do so at rates which maintain equivilence. However the market rates (the agregate exchange rate over many banks) don't have to maintain perfect equivilence.

[BlackSails]

If bank A is selling dollars for 10 Xs and bank B is buying them for 11 Xs, then I can go buy dollars from A and sell them to B for no risk.

[DrSir]

If bank A is selling dollars for 10 Xs and bank B is buying them for 11 Xs, then I can go buy dollars from A and sell them to B for no risk.

That's why they charge a bit, usually they end up ahead.
But yeah in the times where you do this or take advantage of (hopefully) increasing interest rates over time, or really find a way to make money that way...congratulations!! You just participated in the foreign exchange market!
http://en.wikipedia.org/wiki/Foreign_exchange_market

[Orangutanlibrarian]

In Charles Stross' Lobster series the aliens use sentient (sapient) beings as currency.

I have considered the problem of exchange rates from the point of view of invaders. While we might have lots of stuff they want to collect -art, music and so on- there is only one thing we have they need and cant get cheaply elsewhere: a habitable biosphere.

I propose a the mm² currency. In exchange for one (nonlethal) alien laser pen I deed them 400mm² of my garden. This works great for us, "Hur hur. Stupid alien gave me this flashy pen for a bit of useless dirt". But better for the aliens in the long run as they end up legally owning the whole planet in exchange for labour saving devices.

[iChef]

I think you are underestimating humans ability to mass produce plastic crap. Once the shock of meeting the aliens wears off we'll have them hauling back star freighters of 5-legged blue jeans, electric joy buzzers, and the new Mc Space Burger (only for a limited time, while supplies last). We will have them signing over the deed to their planet and deeply in debt in no time.

[DrSir]

It would be interesting to see if they would even have a universal currency for their own species, as ours presently doesn't.
If this were to actually happen, I could probably see a new joint currency being made, which is produced through agreements between us, to balance the control of supply.

[netcrusher88]

We need to return the interstellar dollar to the arsenic standard.

[Cynical Idealist]

We need to return the interstellar dollar to the arsenic standard.

I don't think arsenic is a great basis for currency. You'd want something that's solid (for easy storage) and non-reactive (for long-term storage), so gold is a pretty natural choice. Ideally, it'd be non-harmful to people, although I'm told that doing otherwise can be wonderful for the velocity of circulation.

[blademan9999]

The idea of trade with aliens deeply, deeply underestimates how hard interstellar travel is. If they can send a probe or anything across light years, they have a resource base back home that could copy our entire economy just for funzies. If they are interested in human art works with mass, it might well be more cost-effective, and faster, to just build a few hundred million humans back home and maintain them for a few centuries until you collected enough art.

Of course, they might be interested in intangibles, but you don't need to trade for those. You need a bittorrent client.

I think you mean economically send a probes of light years at relativistic speed.
Some of are probes we've sent out if given enough time will travel light years, and maybe even land on another inhabited planet... or something like that.

[blademan9999]

One method of creating a quasi-economy would be this: ship owner takes a complete schematic for some alien technology and brings it here. He sells it for billions of dollars to the highest bidder. He takes his billions and retires on earth like a king, whereas on Zizz he would have retired as a middle class peon.

I still don't think so. The difference between us and aliens with routine interstellar travel is like the difference between insects and us. You could call the relation between a beekeeper and his bees "trade", where the beekeeper gives them an excellent home and they give him honey in return, but that's about the best we could do. Only a seriously troubled beekeeper would imagine themselves king of the bees instead of peons in the human world.

To go further on the bee analogy: we keep bees because they happen to make something we like that is hard to replicate at the same quality through industrial means. So we keep bees, and let them live something that resembles their natural life so much that they act normally. Except we tweak it to maximize their productivity of the thing we like, while minimizing the effort it costs us.

This might be a decent model for potential economic relations between us and space-faring aliens. If we are uninteresting they ignore us, but perhaps we do something interesting or amusing (perhaps beings as smart as us are rare enough), and then they tweak our world to maximize our interestingness, without interrupting it so much that it distorts.

If you like watching the antics of simple beings on planets, a good strategy might be to send an intelligent agent to them on a one-way trip who secretly encourages them to build the infrastructure necessary for high-power radio, and then tweaks their society to make them produce lots of shows of their behaviour and broadcast those to the aliens. If you do it right, the simple beings will never understand, and think they are just doing it for their own.

Not quite, there are many people in absolute poverty, i'd say the bees have a higher standard of living then them. Maybe not everybody there will be rich, maybe there's quite a lot of corruption. And this said alien will likely be able to bring along some of his favorite objects, so now he can live with his favorites tech and have stuff that even on his or her planet (regular one hour massages done by experts.) awesome entertainment, not needing to do ANY work.

[blademan9999]

Like Zamfir said, it takes far less energy to acquire something at home than to travel all the way here, give us something in exchange for it, and ship it all the way to their home planet. NOTHING costs that much. Most of what they'd want could probably be shipped home in a few dozen hard drives in one trip.

Of course, if their spaceflight is actually developed enough to be economical, then it's a different story. But if that's true then they would be generations ahead of us in technology and we still wouldn't be giving them anything worth their while. On the other hand they could deliver very valuable things to us, but I see no way that it would become worthwhile for a theoretical alien interstellar trade ship captain to do so.

Well its always possible that they develop a taste for Earth spices and that for some reason its impossible just to buy some seeds and cultivate them on Zizz. Or perhaps genuine Earth pottery, made by genuine earthlings (unlike the cheap imitations sold by my competitor) could become some kind of status symbol. Another possibility is regional delicacies / specialities. People in Australia drink French wine, even though wine can also be grown locally, because of taste differences. In that case some kind of barter system would probably emerge (akin to the trade between Europe and the rest of the world in the 16-18th centuries). If trade develops enough a currency exchange rate might emerge based on the agreed barter rates. E.g. if two crates of Zizzberrry wine is seen as worth one box of Bordeaux and two crates of Zizzberry wine is worth 2 Zzybas, whereas one box of Bordeaux is worth €20, then the initial exchange rate will be 1 Zzyba = €5.

No, 10 euros.

[idobox]

I can see two other interresting scenarii:

Trade occurs with a small group of aliens that are near the Earth, ie an exploration ship or settlers.
In that case, the cost of interstellar travel is not a problem, and even rather abundant or low-value goods can be interresting, because the aliens don't have (yet) the facilities at hand to get them alone.
For example, chemicals like polymers, exist in with a crazy variety, and alien settlers on Mars might be interrested in buying batches of a few tons rather than building a hundred different factories. At least until the colony develops.

The second option, is not to send goods, but specialized workforce to their homeplanet.Let's say they are particularly interrested in a human skill, like potery craftsmanship, or our crazy pilot skills. they could establish a human colony in their system, and hire humans, or buy their goods, locally.
Likewise, we could hire them for their insane coding skills, or the quality of their music intruments, and establish a small colony here.

[tomandlu]

I needed some vaguely believable space trade - I went for complex organic compounds, art and cultural artifacts, complex manufactured items, travellers (e.g. specialised workers), luxury food and drink items*, a fictional rare form of matter required for FTL, and information**.

* i.e. for the specialised workers - food machines can produce acceptable food, but some luxuries from home never go amiss

** I have FTL, but not FTL comms, so info is carried by ships rather than a carrier wave

[Quizatzhaderac]

Lol at the concept of us being youtube cats to them.

Assuming alien society is comparable to ours and magical transportation:

Set up a barter of human and alien goods. Just one at first.

The price of earth goods will have a know dollar value. The price of the Zzyzian goods will have a know zzyba value.
Set that dollar value equal to that zzyba value.

Limit trade so that the volume of trade increase gradually. This will give the exchange rates chances to be fine tuned as the stakes of trade become larger.

[Actaeus]

Even if they can produce everything more cheaply than us, trade would still be worth it to both parties: http://en.wikipedia.org/wiki/Comparative_advantage

Of course, that analysis doesn't take into account trade costs, which would (in all probability) be massive on an interstellar scale.

[WarDaft]

If we are talking about a more advanced alien species, then it comes down to (as mentioned) entirely to the cost of energy(or insert other most valued alien commodity), and just how much of an energy advantage they can extract from our less efficient economy. After all, while we like to think we are close, we do not actually have a ToE, so there is no telling just how much use an alien civilization could extract from our economy.


Actually, I had a somewhat practical interpretation of this exact phenomenon which lead to an interesting but not overly interventive relationship between humanity and aliens which would lead to a fairly close to traditional romanticized space opera future of 'people'. I won't explain now because I just finished 9 pints of beer. It's a miracle I can even type. I may delete this post. I may also forget to do so.