The Real Economics of Time Travel

Following on from all of the talk of interstellar trade, Glen Whitman explores the economics of time travel [HT: Tyler Cowen]. His argument is that if wages rise in the future, future society will use time travel to import cheaper labour from the past. So there will be intertemporal migration and wage equalisation. Really? You think that is what we are going to get if someone invents a time machine. This is about as convincing as Michael Crichton’s continual plot line that inventing things like time machines or dinosaur resurrection would be funded off the basis of theme parks.

Let’s get serious, for a moment, about the possibilities of time travel. When it comes down to it, the primary reason for someone to spend money inventing a time machine is to go back into the past, possessing future knowledge, and to exploit that knowledge either by inventing something (e.g., MS-DOS before Bill Gates) or trading on financial markets (e.g., airline stocks before late 2001). That is, on the face of it, a sound commercial rationale especially if time travel is Terminator rather than Back to the Future style.

The question is: if you think about the full equilibrium, will the investment in a time machine pay off? You see, you go back in the past and make a fortune. The problem is, even if you can patent or keep secret your time machine, someone in the future is going to duplicate your innovation. It only takes time. Then, they will target the maximum wealth generating opportunity in the past. If that was for you inventing something in particular, it will likely be the same for them. They will just go back in time and pre-empt your investment. The end result will be that you will find yourself going back in time but with the past already altered. All cost and no return. You would then have to go into the future to work out what you need to do but, and you can see where I am going here, that would have to be pretty much to the end of time at which point, the knowledge you need may not be so transparent.

A savvy (potentially evil) would be expropriator of future knowledge cannot possibly recoup all of the R&D costs on inventing a time machine. Hence, it won’t be done.

So if you are wondering why we haven’t seen time travellers from the future, you don’t need some elaborate theory of physics whose main purpose is to make science fiction really fiction. All you need is some economics: there is no incentive to invent time travel (unless you want to stick to historical theme parked tourism that is). That said, didn’t someone invent MS-DOS before Bill Gates?

9 thoughts on “The Real Economics of Time Travel”

  1. A couple of points to your delightful post:

    (1) Such labor transfer might be happening already, but you’d need to do an analysis of employability and adaptability of the current missing persons register to assess the probability.

    (2) The cost of retraining (robots would compete for low-skilled jobs) and minimizing the trauma of future shock may exceed energy costs, or the energy costs might be prohibitive for reaching too far (say more than 100 years and time machine invention happens in 200 years).

    (3) As reported in New Scientist recently, time travel to the past may require some minimal level of technology in the target time: and that such a precondition may be met when the Large Hadron Collider at CERN comes on line soon, when enough energy is used to create a minor wormhole that can be expanded and stabilized by a future technology.

    (4) You say: “When it comes down to it, the primary reason for someone to spend money inventing a time machine, possessing future knowledge, and to exploit that knowledge”. I’d argue that an easier primary selfish reason is to bring back information (not matter) from the future to profit now – like knowing Saturday’s Lotto numbers by reading Monday’s news on the previous Friday. That bookmakers and lotto companies make a profit refutes the idea that this (or mere precognition) is happening.

    (5) Time machines may be invented in the future, but business ethics at that time preclude such exploitative practices … ok, fat chance of such a change.

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  2. I’m surprised you’re not a South Park fan — they dealt with this in a South Park episode. Refugee workers from the future used one-way time machines (that is, Terminator style) to come and work cheaply in the present, investing their money for their relatives in the future. Basically a South Park take on cheap immigrant labour.

    They attempted to solve this by everyone in the present turning gay, so there wouldn’t be anyone in the future.

    And Bill Gates didn’t invent MS-DOS – he bought an operating system called QDOS (Quick and Dirty Operating System), a knock-off of CP/M. So maybe Bill Gates *is* the one who went back in time, making his wealth from buying the right thing at the right time…

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  3. That game has a fundamental flaw: why just race back to the opening of the Patent Office? Instead you want to go back and move that opening earlier.

    Of course, that pre-supposes that IP protection is critical here.

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  4. I knew that Bill Gates didn’t invent MS-DOS but who did in the multi-verse?

    Also, wasn’t there some airline stock trading in Sept 2001. Do di do do. Do di do do.

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  5. I’m glad someone mentioned South Park, as it’s the first thing that came to mind reading this.

    As to the first commenter: “That bookmakers and lotto companies make a profit refutes the idea that this (or mere precognition) is happening.”

    I’m not sure I buy that. All is shows is that whoever is accessing such time technology to bet on Lotto numbers is not sharing their gift widely, which would make sense.

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  6. Sorry about the double commenting. And Joshua, good thinking! You should write to the publishers with a proposal for a spinoff game (“US Patent Office #1”).

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