Space Travel

In July 1978 Paul Krugman published a paper on The Theory of Interstellar Trade in an attempt to understand how "interest charges on goods in transit be computed when the goods travel at close to the speed of light?".

Though this paper applies theory to space travel and the economics of space, it is important to point out the similaries of space and the Internet. One is an outer world hostile to one that does not have a space suit, and the other in an inner, invisible world capabile of being accessed only through terminals and browsers, the digital equivalent of space suits.

We already have space travel. Goods fly at near the speed of light.

In the abstract, Krugman points out that in his paper a "solution is derived from economic theory, and two useless but true theorems are proved".

How useless are these theorems today in a world where virtual goods do fly at the speed of light? An analysis of the paper and an application to the current economic and digital climate might lead us insight into an answer.