Trade

Trade at a personal level is the transfer of goods and services from one person to another. Trade can be loosely called a commercial/financial transaction. A network that allows trade is called a market.

Barter was the original form of trade. That is, the direct exchange of goods and materials from one to another. Later, most civilisations started using metals, usually precious ones, as a currency, then progressed onto coins and paper money and lately into non-physical money (credit etc). This kind of currency allowed trade to be simplified and improved for many.

Trade existed in the past due to specialization and the division of labour as most would concentrate in a small production line, trading for other needed products, this therefore increases the nations productivity and efficiency. Trade existed between regions because different regions had a comparable difference in certain tradable commodities (hydrocarbons and ores etc). Thus, trade at market prices between locations benefit both regions buying and selling.

Interstellar trade was born due to the advent of Stable Exotic Materials (SEMs). As even the most industrious planet only has the industrial assets and capacity to create one or two types of SEM, planets inside an empire must specialize in certain types of production and must trade with other planets that create a different type of SEM. For example, a word that creates Pripyium intending to create starships would need to purchase or trade for Aetherium for insulation and Necronium for structural reinforcement. This therefore creates a balance of supply and demand as no one planet and even nation has an absolute monopoly on the SEM Trade.

Many economists estimate that without SEM's, Interstellar trade would be absolutely defunct, as naturally occurring elements would be far too widespread around the universe to be worth transporting around the Galaxy. Trade in Manufactured goods would be equally pointless as it would be far cheaper to transport the blueprints to create the finished product.

Interstellar trade is very difficult to be made subject to Mercantile policies as no one star-nation can create an impenetrable net around their territory. Most trade around the galaxy is usually between private traders and even with the attempts at Government intervention, Economics is largely Free Market. There are distinct types of Interstellar Trade however:

Planetary Trade

This kind of trade is the easiest to perform as sometimes simple land transportation is needed for the transportation of goods, services and money. Planetary Trade can mean trade within a planet between cities and settlements, or trade between planets close by to each other, usually but not always in the same star system. With the advent of SEM's and due to the varying levels of manufactory capacity between planets, there are no planets that are truly economically independent. This weakness has lead to the 'blockading' of planets by a group of starships, usually by means of firing upon trade vessels that approach the planet in question. This act is seen as aggressively Mercantile and can constitute an act of war but the benefits of applying it to an isolated, weaker opponent as a low-damage means of forcing surrender have left it a common tactic in frontier conflicts. Planetary trade often includes non-SEM raw material trade, as resource extraction costs between locations can vary enough to make transport profitable.

System Trade

System Trade is the step-up of trade that usually requires some form of FTL to perform efficiently, consisting of trade between one star system and another one in close proximity to it. System trade usually occurs when organized by a central Government, but in developed regions is done equally often by private organisations, either by comission or free market. System Trade is one of the most common forms of Trade as Star systems have large demands on SEM's and Specialist manufactured goods and will pay good money to get the needed commodities to sustain their populations, while larger scale forms of trade often involve too much travel to be profitable.

Regional Trade

This sort of trade is quite common in 5500CE, as Faster Than Light Travel benefits shorter range, system to system travel, as such kinds of transportation may take mere hours. This cuts the costs of trading in materials and means certain items can be traded in bulk so as to maximise efficiency. Because of new, faster travel methods this has led to system wide industrial changes, as it is no longer necessary for a whole system to create enough food, raw materials and luxury materials to keep a working economy and post-industrial society. It can easily afford to buy what it lacks and maximise it's productivity by creating a specialism (Ie, a system may focus on the production of agricultural goods, and may well trade frequently with a system that specialises in industry and the production of luxury goods, so as to keep a balance of technology and goods).

Sphere Trade

Since the discovery of the wormholes, trade between the spheres is possible. This generally involves shipping items of cultural, historical or technological value, as well as particularly rich tourists and diplomats. Due to the nature of wormhole travel, the organisations controlling a particular wormhole nexus can greatly influence what goods can and cannot be profitably traded with their sphere by means of tariffs, tolls and embargoes.