Trade, Commerce, and Economics

Although Federation citizens had long been freed from the concerns of market economics, commerce remained an important part of people's lives. An extensive system of trade and commerce underlined the Federation's economic utopia.

As of the 23rd century, the Federation abandoned the normal use of physical currency, favoring a philosophy of self-enhancement for all. (Star Trek IV: The Voyage Home; and Star Trek: First Contact, DS9 episode: "In the Cards")

Despite this, the Federation retained a currency based economic system, involving the use of computer-based "credits". (TOS episode: The Trouble with Tribbles)

By the 24th century, the majority of non-Federation worlds in the Alpha and Beta Quadrants adopted a monetary system backed by gold-pressed latinum. The Federation government eventually adopted an exchange rate between credits and latinum, so as to further encourage free trade between member and non-member worlds.

Legitimate Trade

Replicator technology did not end the need to engage in interstellar trade. Some crucial commodities, such as medicines and certain trace minerals, could not be replicated at all. Other products remained more desirable when manufactured through traditional means. IN short, demand for nonreplicated items led to interstellar trade in exotic foodstuffs, raw materials, and finished, nonperishable goods. Trades in services was an even more important economic activity.

Costs of Goods

While Starfleet personnel rarely fretted over monetary concerns, non-Federation colonists sweated over prices every day. Just how much could a Ferengi bartender overcharge before his customers went elsewhere? The following chart lists typical costs (in Federation credits) encountered on frontier outposts. Note that prices varied greatly with circumstances: wartime shortages - resulting from shipments or siezed cargoes - raised costs, while peacetime surpluses tended to lower prices as a result of mercantile competition.

Item	Cost
Average drink at bar	5
Average meal at a restaurant	15
Gourmet meal at a restaurant	30
Replimat meal (any)	5
Jumja stick	2
Holosuite rental (per hour) Typical program Premium/illegal program	100 150 +
Suit of clothes, average	40
Suit of clothes, fine	100
Suit of clothes, very fine	200+
Jewelry, costume	1-10
Jewelry, fine, small	50-500
Jewelry, fine, large	500+

Currency and the Individual

Within the Federation territory, people had little need for money. For some citizens, the only cash transactions they engaged in during their entire lives took place in holosuite simulations. Federation citizens actually found money somewhat vulgar. Every Human child leaned how the naked pursuit of material wealth deformed societies prior to the great expansions of the Federation's early years. No one wanted to be regarded as greedy or unduly concerned with material possessions. Most people avoided the use of any form of currency by engaging in barter whenever possible--trading services for goods or other services.

However, on the frontier, when Federation citizens and Starfleet personnel engaged in commerce, large or small, with non-Federation species, they had to use actual currency. Starfleet commanders received a budget to use at their own discretion. Colonists earned money through a variety of means. The money provided (or earned) was usually latinum, but sometimes a local currency (Gorn tokbars along the Gorn frontier, for example). Although the Federation was extremely wealthy during peacetime, Starfleet preferred to keep its discretionary budgets tight. Its supply of latinum and non-Federation currency, though great, was not infinite. More importantly, Starfleet economists took care to avoid flooding local or developing economies with outside revenues; they did not want to interfere with the economies of other species.

A ship or station used its budget not only for purchases of goods and services essential to its operations, but also for the discretionary spending of individual crew members. No hard and fast rules determined the spending allowances each crew member received. Commanders allotted personal funds based more on need than on rank or privilege: A young ensign raising a child typically warranted a higher allotment than a high-ranking Vulcan officer with a spartan lifestyle. Crewmembers could transfer some or all of their allotment to their colleagues. Such transfers were submitted to the officer in charge of disbursements, where they generally received routine approval. This formality was put in place to prevent extortion of funds, an extremely rare offense among Starfleet officers.

Since the overall budget took care of necessities like foodstuffs ad fusion reactor fuel, crew members used their personal allotments for the small luxuries that made life more enjoyable - a jumja stick, a piece of jewelry, a fancy drink at the local watering hole. While no specific regulations restricted personal spending choices, there were Starfleet customs to think about. Most Starfleet personnel, who prided themselves on their frugality, tried to spend less than their allotment. Use of personal spending to benefit others, especially locals in need of assistance, was commonplace.

Holosuite time was considered a necessity on a station or starship, and as such was allotted by the duty officer. On some installations, a local merchant owned and ran holosuites. In those cases, the commander bought holosuite time in bulk, which crewmembers could book through the duty officer.

Some personnel used their allotments to keep score in gambling games. While Starfleet had no problems with hobbies or games, or even the occasional game of chance, it frowned on extensive gambling, which goes against regulations. This didn't stop informal betting pools or games from springing up as a source of recreation (and profit for the lucky winners).

Starfleet personnel who collected rare or valuable items items were encouraged to pursue their hobbies, as long as it remained focused on appreciation, rather than material consumption. A collector of Japanese netsuke carvings, Bolian rhythm boxes, or transgalactic sports memorabilia was admired if he shared his knowledge and collection with others, increased appreciation, and committed to leaving his items to a public institution. Other crew members could even transfer their allotments to him to help him find pieces important to his collection. If he fell prey to collector's mania and coveted items in a greedy, unscholarly way, he'll be diagnosed as suffering a personality disorder and recommended for counseling.

Federation citizens on the frontier could be traders or entrepreneurs who deal entirely in currency transactions. Eventually they transferred their profits to the Federation treasury, but until then the funds they managed were entirely in their own hands to do with as they will, provided they obeyed Federation laws.

Non-citizens could engage in business, keeping the profits or reinvesting them in their business operations, as they desire, bound by the commercial rules and customs of their own cultures. Ferengi engaged in in the sort of unfettered, underhanded capitalism that was a distant memory for most Federation worlds. Klingon traders were scorned, but recognized as necessary by their fellow Klingons. They worked for the profit of their Houses. Romulan business owners turned over a large percentage of their profits to higher-ups in the government-monitored commercial hierarchy. Cardassians likewise gave a substantial chunk of their profits to their government in one way or another. Orions kept money within the immediate family. Breen generally pooled their funds within their voluntary social units.

Exchange

The basic unit of exchange in the Federation was a virtual currency, the Federation credit. It was designed to harmonize rates of exchange for the varied currencies of UFP member worlds. The native currencies of many of these planets fell out of everyday use as the credit established itself as the most convenient and secure unit of exchange.

Currency exchange became an issue when trading with cultures outside the Federation. A precious metal, latinum, constituted the basic unit of exchange for most intercultural trade throughout the Alpha Quadrant. Liquid at room temperature, latinum was typically suspended in ingots of gold, which came in standard sizes for ease of trade. The smallest unit was the slip. One hundred slips carry the same value as a strip. Twenty strips equal a bar. Unlike Federation credits, latinum leaves room for cheating. The carful trader always conducted a tricorder scan to make sure that ingots were the right size and contained the requisite amount of genuine latinum.

Other cultures maintained their own currencies for internal dealings, if not for intercultural trade; all were difficult to convert to Federation credits. The Klingon darsek fluctuated in value with the martial fortunes of the Empire. The Bajoran lita holds relatively little value off that planet at the present time, but as Bajor's economic fortunes improved, so did the value of its currency. The Cardassian lek was nearly impossible to exchange since the advent of the Dominion War.

The baroquely complex currency system of the Ferengi included forty-nine different units of exchange which followed no consistent progression, decimal, or otherwise. Although Ferengi took delight in the complexities of their system, it was likely intended to fool unwary outsiders into making mathematical miscalculations. Ferengi traders pointed out such errors only when they were not in their favor. For all practical purposes, the Ferengi, whose economy depended on interstellar trade, used latinum as their main currency: Even their myths were laden with latinum imagery.

Some interstellar moneychangers made their living exchanging one sort of currency for another. Some acted as independent operators; some worked as agents for vast corporations such as the Bank of Bolarus. One such firm maintained a network of automated banking machines on frontier starbases. It allowed electronic fund conversions between most of the currencies listed in the table below, although certain currencies may at times become unavailable for political reasons. The table gives an average value (or range of values) for the basic units of exchange of a number of non-Federation currencies.

Culture	Currency	Value (in gold-pressed latinum slips)	Value (in Federation Credits)
Bajoran	Lita	0.15	15
Breen	Mitondrium Sakto	1.3	130
Cardassian	Lek	0.17	17
Dominion	Lateral	1.2	120
Federation	Credit	0.01	1.0
Ferengi	Nondoran Bongan Komax	0.1 to 20 0.1 to 15 0.1 to 10
Gorn	Tokbar Szeket	4	400
Klingon	Darsek	0.5 to 1
Nausicaan	Chiv'vig	0.18	18
Romulan	T'chak	1.7	170
Tholian	Doleen	1.5	150

Trade Routes

Freighters handled the vast majority of interstellar trade in the Federation. The merchants who operated them were known as free traders. They registered their ships with the Federation, often chose the trade-friendly Rigel system as their home planet of record. Traders operating inside UFP territory routinely filed flight plans with Federation authorities as a safety measure. If they failed to appear at their destination within a reasonable period, the Federation dispatched a Starfleet vessel on a search and rescue mission.

According to the Ferengi 8th Rule of Acquisition; "The shortest distance between two points is a trade route." The most desirable trade routes were so well traveled that the branch of Starfleet responsible for overseeing interstellar traffic worked to prevent collisions between vessels dropping out of warp near popular destinations.

Federation Trade Routes

Plenty of merchant traffic ventured outside of established routes. Adventurous traders were more likely to forge their own routes rather than stack up at one end of a trade hub waiting for warp clearance. The routes were important to Starfleet because the entire economy of the Federation would suffer if they were disrupted for more than a few days at a time. The UFP had been fortunate in that none of its enemies had attempted a sustained campaign against any of these routes.

Bolarus IX was a popular trading destination. It was one of the few core worlds which boasted a sizeable deposits of valuable minerals, and the Bank of Bolarus was one of the financial giants of the Federation. (Most core worlds had long since exploited their mineral resources, and relied on shipments from the frontier colonies.) Bolarus shipped large cargoes to EArth, still the primary manufacturing base for Starfleet. Traffic along the Bolarus-Earth corridor increased during the Dominion War, as heightened shipbuilding activity increased the demand for Bolian minerals. Several of its traffic control starbases experienced sabatage attempts. Disruption of traffic in this corridor would have constituted a strategic advantage for the Dominion.

Tellar served as the commercial hub of the core worlds; what Earth was to the Federation governance, Tellar was to trade and economic administration. It was ringed with a network of space stations, most privately owned by large merchant firms. These served as warehousing and transshipment points for manufactured goods from the core worlds going out to the fr0ntiers and colonies. At these stations, cargoes were broken up and loaded onto freighters for shipment to individual destinations. Tellar itself was a major center of civilian manufacturing, and is also a hungry recipient of Bolian mineral shipments.

The heavily populated Rigel system, with its five inhabited planets, was home base to many merchants, who enjoyed its congenial lifestyle and appetite for luxury goods. Consequently, it had built up a sophisticated infrastructure to serve the needs of commerce, with extensive warehousing facilities and highly efficient civilian shipbuilding firms. The most heavily trafficked trade routes from Rigel connected it ot the manufacturing centers of Tellar and nearby Andoria. However, freighters regularly departed Rigel enroute to nearly every destination in the Federation - and beyond.

Starbase networks supported regular shipments of fresh foodstuffs from agricultural worlds like Visan IV, Ourobouros, and Sherman's Planet to Earth, Tellar, and Rigel. Trade stations ringed each of those planets, serving as transshipment points for manufactured goods ferried back to the area by returning grain-carriers. Though they contributed to the Federation economy, these "carbohydrate corridors," as they are known, were deemed nonessential by commerce officials; with replicators, fresh food was a luxury, not a necessity.

Non-Federation Routes

The Tagra Passage was a trade route from the Klingon homeworld of Qo'noS to Federation space. The Federation colony of Kodos III served as its terminus within UFP space. Klingon products enjoyed a vogue within Federation space. A proposal to build starbases along the Tagra Passage to make it safer and more efficient, was shelved when the Khitomer Accords were abrogated in 2372; it remained on hold while both governments focused on the Dominion War. Under the Martok chancellorship it became a priority.

Before the Dominion War, Bajor was on its way toward becoming the trade hub for the frontier with the Gamma Quadrant, with heavy regular traffic to both Tellar and Rigel. The war brought commercial traffic in the region virtually to a standstill, and Starfleet directly managed the provisioning of regional outposts. Fast-moving Ferengi vessels, whose crews overcame their fear of enemy vessels by concentrating on the considerable returns of wartime profiteering, managed what little private trade remained in the region. In the wake of the Dominion conflict, Bajor had slowly returned to its pre-War trade levels, and many trade routes ended at or passed by the planet.

Many new trade routes were established by the Ferengi. Unlike Federation merchants, the Ferengi preferred to avoid obvious trade routes, and only grudgingly filed navigation plans with the authorities. The Ferengi distrusted any action which might bring their activities to the attention of competitors, and the Ferengi head of state just happened to be many Ferengis' biggest competitor. Each Ferengi had his own preferred routes into Federation space, and guarded his destination and cargo manifests as much as possible. This approach to interstellar navigation made it next to impossible for rivals to disrupt Ferengi trade. Ferengi prefered to deal with colonies and backwater worlds, where deceptive sales techniques were more likely to find a naïve audience. Still, the sheer size of markets like Tellar and Rigel demanded a certain Ferengi presence.

Merchant Vessels

Merchant freighters were slower, less advanced, and more poorly armed than Starfleet vessels. Still, most of them did posses some basic weapons and shields to deter pirates and raiders. Because cargo ships were optimized for cost-efficiency, travelers on all but dedicated personnel transports could expect fewer amenities than they'd find aboard a Starfleet vessel or civilian passenger liner. The typical trader took pride in the spartan conditions aboard his ship: The carpets were worn, the odd door stuck, and some areas may have been in need of a fresh coat of paint. Sleek design seldom became a priority for most merchant vessels. But even the most efficiency-minded trader was unlikely to neglect critical systems.

Merchant ships required minimal crews, except in cases where the cargo required constant maintenance of some sort in order to keep it in saleable condition. A cargo ship the size of a Galaxy-class starship might have had a crew of thirty or fewer.

The size of a merchant ship depended on the type of merchandise it carries. Ore-haulers and grain-carriers stretched the upward size limits of warp-capable vessels: the bigger their holds, the better. At the opposite extreme, dealers in gems, art objects, or other collectibles often made do with fast, runabout-sized vessels.