Economics in space is a tricky subject. Here on Earth every market has an ability for parties to externalize their costs. Participants in the market also have a "do nothing" option.

Externalized Costs

I live in the United States, and here employers generally get away with hiring and firing at will, and complaining to the Government when they can't find enough skilled workers. An employer is generally not concerned with how much it costs to train their employees, they assume an employee him or herself (or some benevolent party) covers the cost of their education. Employers are also, generally, blissfully unaware of the cost of living for their employees. They simply pay as little as humanly possible until enough employees leave that it becomes a problem.

Do Nothing Option

When I go in to a grocery store, I can look at the price of something and decide not to buy it. If bananas have dramatically risen in price, I can buy apples. If fresh fruit is too expensive, I can buy canned or frozen. Or if everything is too expensive I can just do without. (And risk scurvy.)

The Sealed Environment of Space

Even with robust trade, lines of communications between space settlements, vessels, and ports on Earth will be of finite capacity, and have a small (several day) to extremely long (several month) delay between departures and arrivals. Even in a post-scarcity environment (which my world is still only on the border of), one cannot simply pick up stakes, book passage on a ship, and expect to shack up in whatever port is on the other side of that journey.

Spacecraft and settlements are of finite capacity. And supply is extremely inelastic. Building a new housing block for newcomers is a major construction project. Having a large population of vagrants sleeping wherever they can find a flat area is a recipe for disease, crime, and discontent. People eat. People need a place to sleep. And there is no such thing as one sick person in a sealed environment.

Even if a place decided to go shanty town, there are genuine problems trying to pack more people into a life support environment than the environment was meant to support. Carbon Dioxide needs to be filtered out. Oxygen needs to be added. People use water to drink, bathe, and defecate. Fresh water needs to be produced, and waste water treated and recycled. You even need a system to clean up farts.

None of these systems is amenable to the wild west model of "build it and they will come". These are all billion dollar investments that really require a planned economy to roll out efficiently and keep operating.

Different Flavors of Planned Economies

In the Etoyoc Universe I plan on showing three different space based economies for the three different factions.

And one slight bit of vocabulary. Throughout this blog I keep referring to settlements and vessels. Really, every space port or moon base is really a space ship. They just have puny or non-existent engines. So from here on out I will call everything a "Vessel". Space ships. Space colonies. Space stations. All Vessels.

Circle Trigon: Free Market / Strong Government

The Circle Trigon (Cirocals) are a crime syndicate with a space program. Their government is a top-down system with the "Big Boss" at the top. Every transaction requires wetting the beak of the people above you. And the people at the top have to cover the capital costs of keeping the Vessels of the Circle Trigon operating.

Each Vessel has it's own "family." Operations in that vessel pay the vessel's family first. That vessel then pays up to the organizational unit it is part of. Like a vertical marketing scheme. "Taxes" on vessels are based on their take minus their expenses. With a threat of kneecapping for those who attempt to pad expenses.

The "Don" of each Family sorts out the priorities for his family, and if a large capital improvement requires more than that family can afford, he or she can petition the Circle Trigon for a "favor." Favors are generally not cheap, and require a business plan to show how it is worth the while of the organization to grant it.

Behind the scenes the Circle Trigon employs a sophisticated accounting system to track transaction and flag tax dodgers. The quality of life on board vessels varies considerably, depending on the fortunes and foresight of its management team. There is a pecking order of "families" based on the size of the economies they control. The Circle Trigon itself is a government structure that resolves disputes and prevents one party from externalizing their costs on someone else. They act as a kind of an underworld court system.

Kraznovia: Planned Economy / Facism

Kraznovia was founded in a crises where central control of resources was essential to the survival of all. Kraznovia has a planned economy, with a market based supply and logistics system.

At the top of the pecking order are the Planners. They are scientists, engineers and entrepreneurs who have risen through the ranks and demonstrated their competence. Or... managed to stab all of their competition in the back (sometimes literally.)

Planners operate individual industries, and employ planners below them. Industries have a commission to provide a certain core service or product. But anything they can make above and beyond they core service or product can be used to feather the nest of that industry's planners and the workers. (With Planners and the Union negotiating the exact ratios of how those spoils are divided.)

Workers in Industry are represented by "The Union". Each plant nominates its own foreman who takes the concerns of the workers to the planners of that plant, or if need be, to the Enforcers. The Union may veto any decision of the Planners if they run counter to any one of a number of Byzantine safety, environmental, or ethical regulations that the Government has produced.

Outside of the Planners and the Workers are the Enforcers. Enforcers are the police, the fire department, the armed forces, the medics, and the state religion. Enforcers defend Kraznovia from Danger, be it insurrection, invasion, or disaster. They employ a complex intelligence gathering operation that monitors all communication in Kraznovia. Divisions also operate outside of Kraznovia for intelligence gathering and political interdiction.

Enforcers also provide dispute resolution services. A kind of a civil court system. Criminal complaints are handled a bit less gently.

Vessels in Kraznovia are all operated by the state. The ship's master and flag staff are Planners. The ships officers, damage control parties, and marines are from Enforcement. Workers comprise the professional crew.

ISTO: Planned Economy / Socialism

ISTO began as a mutual defense agreement for the outlying colonies of the solar system. But that defense role requires a lot of government control of capital project development.

The ISTO Navy owns every vessel that is registered to the ISTO. Every vessel is operated by Naval Officers. The rank of the commanding officer depends on the number of people on board the Vessel.

As it is prohibitively expensive to keep a standing Navy, ISTO liberally leases its vessels out to private interests. Those contracts include a contingent of Naval Officers to operate the propulsion and navigation (and defense) systems, why the lessee provides all of the other staff. The lessee reimburse ISTO for the use of the vessel, as well as for any excess wear and tear. Proceeds above this "usage tax" are the Lessee's to keep.

Utilizing ISTO Naval personnel indemnifies the Lessee from having replace the vessel if an accident results in the loss of the vessel.

For certain low-profit, strategic, or experimental enterprises, ISTO operates as its own lessee. It maintains a shell company to keep those operations at arms length from actual Naval deployments.

It is agreed by all that in the event or war or other emergency, the Navy can claw back any ship it needs. There is a set rate chart for reimbursing the Lessee for lost productivity if a ship is taken mid-lease.

Businesses who wish to lease a ship must submit a business plan to the ISTO. Vessels are doled out based on availability, soundness of the submitted plan, and reputation of the particular business. A thriving finance system exists to facilitate business lending, as well as provide credit to allow a business to continue operating through lean times.

A similar "lease" system exists inside of vessels to control portions of its economy. Many vessels have farms, store fronts, and fabrication facilities. For every critical resource or service ISTO provides a "public alternative", with state trained and operated staff operating at cost (though, keep in mind, that's GOVERNMENT cost).

Most vessels end up utilizing the "Public Alternative" for Medical care, Engineering, Education, and Logistics. Fabrication, Agriculture, and Entertainment industries tend to be dominated by the free market. Though many ships also employ multiple providers. For instance, with food service, the ship may employ a state-run cafeteria to provide baseline nutrition (and round-the-clock coverage) with private business providing specialty foods and operating only during peak hours (when it is truly profitable to operate).