The Shoe Event Horizon

This segment ranks among my most favorite moments of the Hitchhiker’s Guide to the Galaxy – Secondary Phase, Fit the Eleventh, to be precise (the BBC radio series is the True version of the Guide, without all that tedious mucking about with printed pages).

Part of the brilliance is the twisted, yet straightforward, logic of the economic theory itself. But what makes it gold is how the narrative is presented in a teacher-student context, with a rather.. twisted… take on academic incentives. I’ve decided to waste 15 minutes of my life and transcribe the good bit below.

The Hitchhiker's Guide to the Galaxy BBC Radio Series - The Complete Collection

TEACHER: Good morning, lifeform!

STUDENT: Hi teach!

Are you sitting comfortably?

Yes!

Then stand up. Harsh Economic Truths, class 17. Are you standing up?

yes.

Good. Posit. You are living in an exciting, go-ahead civilization. Where are you looking?

Up.

What do you see?

The open sky… the stars… an infinite horizon.

Correct! You may press the button.

Thank you! (tinkly music plays) Oh! That feels nice.

Posit. You are living in a stagnant, declining civilization. Where are you looking?

(subdued) Down.

What do you see?

My shoes.

Correct! What do you do to cheer yourself up?

Um. Press the button?

Incorrect! Think again. Your world is a depressing place. You are looking at your shoes. How do you cheer yourself up?

I buy a new pair.

Correct!

Can I press the button?

All right.

(twinkly music plays) Oh ho! So nice!

Now. Imagine everyone does the same thing. What happens?

Everyone feels nice?

Ah, forget the button, concentrate! Everyone buys new shoes. What happens?

More shoes.

And?

More shoe shops.

Correct.

Can I?

No.

Aww.

And in order to support all these extra shoe shops, what must happen?

Everyone must keep buying shoes.

And how is that arranged?

Manufacturers dictate more and more fashions and make shoes so bad that they either hurt the feet or fall apart.

So that?

Everyone has to buy more shoes.

Until?

Until… everyone gets fed up with lousy rotten shoes.

And then what?

(plaintive) Why can’t I press the button?

And then what? Come on!

Massive capital investment by the manufacturers to try and make people buy the shoes.

Which means?

More shoe shops.

(insistent) And then we reach what point?

(sullen) The point where I press the button again.

(exasperated) All right!

(twinkly music plays) Woo hoo hoo! Ah! That’s so nice! That’s really nice!

And then we reach what point?

(sighing with bliss) The Shoe Event Horizon! The whole economy overbalances! Shoe shops outnumber every other kind of shop! It becomes economically impossible to build anything other than shoe shops, and bingo! I get to press the button again! (twinkly music plays) Wooooo hoooo!!!!

(angry) Wait for permission!!! Now, what’s the final stage?

(distracted) Um. Every shop in the world ends up as a shoe shop.

Full of?

Shoes no one can wear.

Result?

Famine, collapse, and ruin… any survivors eventually evolve into… birds… and never put their feet on the ground again.

Excellent! End of lesson! You may press the button!

(twinkly music plays) Woo hoo hoo! Yee hoo hoo hoo! Oh ho! Oh, that’s nice! Thank you teach, goodbye!

Ahem, aren’t you forgetting something?

What?

Press the other button.

Oh. Right.

(twinkly music plays) Ooh ho ho ho! Woo hah hah hah! Wha ha hah ha ha ha!

hepped up on goofballs

I find this sort of thing fascinating.

With candy sales banned on school campuses, sugar pushers are the latest trend at local schools. Backpacks are filled with Snickers and Twinkees for all sweet tooths willing to pay the price.

“It’s created a little underground economy, with businessmen selling everything from a pack of skittles to an energy drink,” said Jim Nason, principal at Hook Junior High School in Victorville.

This has become a lucrative business, Nason said, and those kids are walking around campus with upwards of $40 in their pockets and disrupting class to make a sale.

the candy black market thrives!

via Freakonomics blog, naturally.

the economics of interstellar trade

Paul Krugman may be known as a fire-breathing liberal economics professor today, but back in the 70s when he was just another aspiring junior faculty, he wrote one of the coolest things in economics since.. well, Freakonomics. Namely, a short treatise on the economics of interstellar trade (PDF). Here’s the title and abstract:

The Theory of Interstellar Trade

This paper extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest charges on goods in transit be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.

The tone of the manuscript itself was even more light-hearted – for example, here is Figure 2, reproduced in its entirety:

Impressive, no? (Krugman notes that readers who find Figure 2 puzzling should recall that a diagram of an imaginary axis must, of course, itself be imaginary).

But the main contribution of the paper were Two Fundamental Theorems of Interstellar Trade, both truly proved with genuine rigor (or so I assume, the math seems fine to me but the theory is beyond my expertise). These theorems are:

  1. When trade takes place between two planets in a common inertial frame, the interest costs on goods in transit should be calculated using time measured by clocks in the common frame, and not be clocks in the frames of trading spacecraft.
  2. If sentient beings may hold assets on two planets in the same inertial reference frame, competition will equalize the interest rates on the two planets.

It occurs to me that this is a rich field to mine for speculative fiction. Consider the case where two planets are not in the same inertial frame, like the homeworlds of the Pierson’s Puppeteers? Could someone on either world then take advantage of the violation of the Theorems above and make a fortune?

Of course, there are less sophisticated ways to profit as well:

Hi my name is Prince Valtor Tazalutium the Third from the distant planet Nigeron 7. I have dispatched the fastest cargo ships in my fleet to Earth filled with the rich treasures of my home planet. However because of the vast distance between our two planets my ships will not reach Earth until I am long dead and therefore will not receive a return on my initial investment. As I have no heirs I am looking for one trustworthy stranger to buy these ships and their cargo en route to your planet. I am willing to sell them for $50,000.00 US DOLLARS. If interested please contact me at valtorlol@aol.com.