In my previous post, I discussed why Star Trek’s Federation, despite its calls for peaceful diversity, fell just a bit short of their aim. In this post, I switch gears from culture and ideology to economics.

In the Federation, most goods and services are produced via replication. The need for production and trade via the division of labour is greatly diminished (though there is demand for luxury artisanal, non-replicated goods, as shown by culinary enterprises like Chateau Picard and Sisko’s Creole Kitchen, as well as physical books and other objects). Thus, the Federation seems to have overcome much of the knowledge problem around satisfying dynamic, subjective preferences and efficiently allocating scarce resources with competing uses. It is an economy of abundance beyond even the dreams of most economists or sci-fi writers. This is coupled with egalitarian values and the self-important assurance that the Federation is populated by virtual saints only interested in self-actualization and universal brotherhood.

By contrast however, outside (and sometimes within!) the Federation’s utopian core of planets, people often fight over insufficient replicators, scarce machinery, food, medicine, and other resources. Supply ships are vital for bringing scarce items to distant worlds, and for transporting goods that can’t be replicated, such as dilithium and rare medicines. Mining seems to be an important industry across the galaxy. 

As Benjamin Sisko bitterly admits:

On Earth, there is no poverty, no crime, no war. You look out the window of Starfleet Headquarters and you see paradise. Well, it’s easy to be a saint in paradise, but the Maquis do not live in paradise. Out there in the Demilitarized Zone, all the problems haven’t been solved yet. Out there, there are no saints — just people. Angry, scared, determined people who are going to do whatever it takes to survive, whether it meets with Federation approval or not!

Notably, while replicators can recreate almost anything, it appears that replicators themselves cannot be easily reproduced. Trek never tells us if creating replicators is costly. Yet it is apparent that replicators cannot be provided easily for all. Contrary to Jean-Luc Picard’s assertion that “…the acquisition of wealth is no longer the driving force in our lives” the Federation has not overcome self-interest, greed, or other constraints of human nature. It has simply changed the transaction costs of conflict by exploiting technology that severely reduces scarcity. When scarcity returns, so does conflict over resources.

Job allocation adds further support to the view that the Federation relies on advanced technology more than it does a sci-fi version of the New Soviet Man or Rawlsian ideal theory. It is unclear how the Federation incentivizes people to take on jobs that are less desirable or whose social importance is less well-understood; given that job choice is meant to be driven by whatever an individual perceives to be public-spirited, as well as whatever they think will help them self-actualize (two goals potentially in tension) without adjudication by the price mechanism. 

And it is never explained how people (especially non-Starfleet civilians) are incentivized to choose menial, relatively unfulfilling work that is also socially necessary, like cleaning. But it also remains a mystery why such an advanced technological and egalitarian society needs professions such as bartenders or janitors in the first place. Notably, Starfleet employees’ devotion to duty does not prevent them from looking for ways to limit their workload or evade unpleasant tasks, whether through trading duties or by creating buffer time


A (Qualified) Defense of the Ferengi

Here the Ferengi have advantages that the Federation rarely acknowledges. The Ferengi are routinely portrayed as a venal, selfish species and are a comic-book caricature of capitalists (as well as being genuinely virulent misogynists). However, their single-minded pursuit of profit and appreciation for the economic way of thinking opens them up to possibilities that are otherwise closed to the Federation and Starfleet.

Consider Quark’s resolving of conflict between the Maquis rebels and the Cardassians with some simple game theory, offering a solution that was opaque to his “rational” Vulcan interlocutor. His attentiveness to profit and loss allows him to recognize that a successful end to any conflict is about the relative price of peace over war:

Quark: You want to acquire peace. Fine, peace is good. But how much are you willing to pay for it?

Sakonna: Whatever it costs.

Quark: That’s the kind of irresponsible spending that causes so many business ventures to fail. You’re forgetting the Third Rule! Right now, peace could be bought at a bargain price, and you don’t even realize it.

Sakonna: …I find this very confusing.

Quark: [sighs]  Then I’ll make it so simple that even a Vulcan can understand: the Central Command has been caught red-handed smuggling weapons to their settlers. So every ship that approaches the demilitarized zone will be searched. Without the support of the Central Command, the Cardassian settlers won’t be so eager to fight.

Sakonna: You forget the weapons they already have.

Quark: They have weapons, you have weapons, everyone has weapons; but right now, no one has a clear advantage. So the price of peace is at an all-time low. This is the perfect time to sit down and hammer out an agreement. Don’t you get it? Attacking the Cardassians now will only escalate the conflict and make peace more expensive in the long run! Now, I ask you: is that logical?

For Federation citizens, thinking about the opportunity costs of their choices is not a regular exercise. Pampered by material abundance and an idyllic form of deliberative democracy, they further restrict themselves from thinking about tradeoffs by adhering to simple and inflexible rules such as the Prime Directive. When they do choose to violate an ordinance like the Directive, rarely do they follow up with the society in which they had involved themselves, leaving whatever massive social changes they have wrought for the natives to deal with (this is particularly evident in series like TOS, but also in TNG). The Directive’s non-interventionism may in many instances reflect a kind of implicit Hayekian or Austrian school wisdom, but rarely are different kinds of involvement given a thorough comparison by the Federation. There is a big difference between trade and cultural engagement and the disestablishment and reconstruction of native institutions by elites from above.

The Federation is also not well-equipped to recognize costs and tradeoffs in those areas where scarcity has not been eliminated, particularly of one’s time. This is where the Ferengi save the day. When Chief O’Brien is unable to get the stabilizer he needs, Nog manages to acquire it for him by creating a complex system of barter across Starfleet. Similarly, Nog leads Jake in a series of trades that allow them to acquire an antique baseball card for Captain Sisko. In doing so, they take over the disliked duties of (supposedly work-happy, purely altruistic) Starfleet employees, improving everyone’s lot in the process. Unlike the Federation, the Ferengi are entrepreneurially alert to meeting people’s preferences and making efficient use of resources. The Ferengi dedication to profit even pushes them to ditch their sexism, in the true spirit of Gary Becker. As the Grand Nagus points out, discrimination is bad for business and wastes valuable human capital. 

The Ferengi were also well-placed to help Bajorans during the Cardassian occupation. Ferengi served as arms dealers to the Bajoran rebels and offered Bajoran workers employment opportunities comparatively better than what they were forced into by the Cardassians. Though driven by profit, the Ferengi’s status as neutral merchants allowed them to engage in entrepreneurship that improved the Bajoran situation, at least on the margin. By contrast, as enemies of the Cardassians, the Federation was unable to do much and took time to even recognize Bajor’s plight, despite the valiant efforts of Ensign Ro and others. 


Between the Federation Constitution and Ferengi Rules of Acquisition

The Ferengi arguably exemplify humanity’s long-standing cultural antipathy to merchants, businessmen, and economic middlemen, positions often held by the despised minorities the Ferengi seem to resemble. How we think about the Ferengi reflects how well we understand the challenges of cooperation, especially with outsiders, and the costs and tradeoffs inherent in all parts of life. Of course, the Ferengi have many deficits, ranging from their sheer love of greed a la Gordon Gekko to their ugly sexism and speciesism. Yet they often provide a useful corrective to the Federation’s excessive idealism and failures to coordinate. The Federation may dislike the Ferengi, but the Ferengi have many useful lessons to impart. 

However, the Ferengi also have something to learn from the Federation. The missing core of Ferengi values is the Federation’s respect for the equal freedom and dignity of people as sentient beings. While the Ferengi are good at recognizing the costs and benefits of their actions, a mercantile culture without a larger philosophy of how people should be treated is, in Deirdre McCloskey’s words, “soul-destroying.” As McCloskey points out, a worldview focused only on self-interest and costs and benefits has a very real danger of reducing people to crude calculating agents, perpetually seeking to exploit and cheat one another, both in theory and in practice. We are not, and should not be, simple profit-seekers in our relationships with others, the character McCloskey calls “Max U” or “Mr. Maximum Utility.” 

In this respect, Trek may teach us something important about the inherent limitations of different worldviews. The Ferengi’s chief fault is that they are selfish utility maximizers even to the point of gross immorality, while the Federation has not fully reckoned with an imperfect world full of self-interest, scarcity, knowledge problems, and tradeoffs. Ferengi relativism results in Quark’s dilemma about whether there really is anything wrong with being a weapons merchant (thankfully his conscience wins the day). Federation absolutism results in Starfleet failing to save billions of lives because nothing can sanction breaking the Prime Directive, (thankfully certain officers’ conscience sometimes overrides their obedience). In a world of deep complexity and competing values, we need both the Ferengi Alliance and the United Federation of Planets. A messy mixture to be sure, but one better in tune with the universe we actually inhabit, even in fiction. 


Akiva Malamet is an M.A candidate in Philosophy at Queen’s University (Canada). He has been published at, Liberal Currents, Catalyst, and other outlets.