She looks up at the rings and spends about half a minute contemplating the structure of society before she says,

"Okay, I think I understand. What were you going to say about how it works in practice?"

"I was going to say a bit about how we set the right prices for people to pay for things, and then talk about auction insurance," she replies. "Those aren't details you necessarily need to care about most of the time, but they might give you a more complete picture of what people actually pay under this system and why."

"That makes sense. I'd like to hear about that, then."

[Author's note: After discussion with some readers where they kindly pointed out several flaws in this system, I no longer think this is how it works in the Fixipelago. The overall goals of the system from above remain unchanged, but the specific price-discovery and payment mechanisms are no longer a solution I endorse.]

"Cool! So almost all prices for things that go towards UBI are set using Vickrey auctions. The idea is that you want an auction structure that incentivizes people to say what their real price is -- if people put in bids lower than what they're really willing to pay for something, then if somebody else wins the auction they'll regret it, because they would have been willing to pay more. If someone puts in a bid higher than they're willing to pay, that's no good either, because then they might lose more value than they gain, and why would anyone participate in a system like that?"

"So the trick is to find an auction structure where everyone's best chance to win is to put in a bid for whatever the item is really worth to them, without distortions. One way to do that is to have everyone who is competing for something put in a sealed bid. Whoever put in the highest bid wins, but they only have to pay the amount of the second highest bid. This has a few nice properties!"

"For one thing, it means if you're the only one bidding, you don't have to pay. Or in other words, if you want something that nobody else wants, you can just have it without needing to compensate anyone. It also means that there's no reason to systematically underbid your real price -- lowering your bid doesn't save you money, it just means there's more of a chance of losing out to someone else."

Her tone of voice has gotten increasingly excited as she explains. Economics is really fun.

"And that works pretty well for one-time purchases. But for something like renting a house, there are other things people care about beyond just getting a particular house -- like being able to predict when they'll need to move, or being able to just live for a while without worrying about auctions. We could hold all the auctions periodically -- like once a year -- and some towns actually do that. But that means that new people can't get a house without waiting for the auction to come around, among other problems."

"Fortunately, this is a problem that can be solved with insurance! What you can do is run the auctions very frequently, so it's easy for people to enter and exit the market on their own schedules, but provide auction insurance. Instead of paying a variable price in every single auction, and having to worry about losing them or not being able to budget, you pay a (slightly higher) flat rate across the whole duration to buy auction insurance from an insurance company. In exchange, they promise to pay however much it takes (up to a given limit) to win the auction for you."

"So the actual experience is -- you find a house you want, and say how much you would be willing to pay for it. If that's enough, you get it. If it isn't enough, you at least increase costs for the person who is using the house instead, get paid slightly more, and have a chance at winning the bid when the current occupant's term of insurance runs out. Nobody pays more than a space is worth to them, there's no need for a centralized schedule, landlords can't collude to raise prices, everyone can set how long they want to rent for, and prices are mostly stabilized by insurance."

She realizes that she's been monologuing and coughs into her fist again.

"It's not a perfect system -- sometimes it can be hard to get into a neighborhood that becomes popular very suddenly, for any price -- but it works fairly well for most things. There are places where it works differently; the community as a whole pays for the entire area, and then subdivides it according to their own rules. But that's the usual system."

"It... sounds like... this is a system where... no one can own things?" she says tentatively.

"I mean ... yes? Sort of? It depends on what you mean by 'own'," she replies. "You can pay everyone else for an exclusive right to a place for some term, and during that term you can control what is done with that place. Whether that is the same thing as 'owning' a place is something of a philosophical point. People often refer to places they've won bids on as being their property, but you could argue this is a linguistic quirk instead of a literally correct assertion."

"I think... what I am used to the word 'own' meaning... is something about other people not being allowed to take something away from you? And in this system other people can always take your house away from you, they just have to pay you for it."

"Yes, that's true," she agrees. "There are still sometimes problems with mobs of people trying to run someone out of their house. Once the insurance markets got established those sorts of problems mostly died down, though, because most people don't get targeted like that, so insurance against it is pretty cheap, and you can get a good payout if you're forced to move. If it still ends up being a problem you can move to a community that uses some other method to allocate houses, or move to a space-station that can easily shift orbits if someone buys up the orbit you're using."

"...but what if someone buys your community's land? Or—I'm not sure I understand the part about space stations."

"So yes, a mob of people could pool resources to buy a community's land. But this is, in some ways, less of a problem for a whole community at once. You can just pick up everything and move together, with no need to miss your neighbors or anything like that," she explains. "Teleports are cheap, so you can often just move your entire community in a single go somewhere else. There are some towns that do that as a matter of course -- popping around to different destinations as a unit."

"As for the space station -- if you're in an apartment, or something like that, you can move all your things out of the apartment, but you can't really move the apartment itself, because it's part of the building. Even if you have a normal house, it needs a certain kind of spot to move to. But a space station can move as a single self-contained unit, and it can go anywhere. Space is so big that even if every other person in the world was trying to bother you, they still wouldn't be able to outbid you on every reasonable orbit simultaneously. And if that did happen, you'd be rich anyways. So if you choose to live in a space station, you can pretty much just ignore this problem."

"...hmm. Okay, I think I understand. So the thing people can take away from you is... the land your house is on, but not the physical structure of your house itself? And if you aren't in a place where other people own things that your home is attached to, like the land under it or the other homes above and below it, then you can really own your own home, because other people can't buy it from you without your agreement?"

"That's a reasonable restatement, yeah! The auctions are for the space itself, not the things you put in the space. And while both are important to people, and the system isn't perfect, it seems to work pretty well in practice."

"What other kinds of things are there that people pay for but other people can buy it without the agreement of the person who has it?"

"Hmm. Let me think. There's broadcast rights to slices of the radio spectrum. Computer time on public servers, although you can also buy and run private servers outright. Some places, although not everywhere, auction off rights to make certain amounts of noise in public places. Technically digital storage is auctioned as well, but digital storage prices are so low as to make that not really relevant. Visual occlusion of stellar bodies, I think? Although that's another one where prices go very low because space is large."

She looks up other categories of stuff listed on the market.

"There are other things that you can buy in the same way, but they don't already belong to anyone. Like teleports, or time on the fabricators -- all of it is auctioned, and there isn't really any stable ownership because most people only need a few microseconds from one fabricator at a time."

"Does that answer your question?"

"...I think so. I don't understand what all those things are but I think I understand enough."

"I'm happy to explain if you're interested, but I think none of those are as ... fundamental ... as space is. Although computer time and digital storage are kind of like space for uploaded folks?" she muses.

"Eh, not really," Teak disagrees. "As you mentioned, digital storage is really cheap. I'm stored in a distributed storage cluster spread throughout the Oort cloud, and I pay something like 1.4 millistars per year, because mostly nobody else cares about cold Oort objects. But I do still pay for an apartment on Pluto because sometimes I need to host non-uploads. So uploaded people definitely still participate in the land market in a way that is pretty different from the experience of buying server storage or time."

"...you're stored in a... um, what?" says the doll, blinking in confusion.

"Oh! Sorry, I'm an upload. I don't have a physical body. My brain is simulated by a distributed physics simulation running on a network of computers, and then I project an avatar here by manipulating light."

Teak turns of her tactility and waves a hand through Sandalwood's shoulder.

"I can touch things in the same way I can manipulate light, but it's all 'faked'," she explains, making fingerquotes. "Some people are a bit disconcerted by it, which is why I don't go around wearing a t-shirt flaunting it, or anything like that."

"...so... you're a person, but you're not really here, this is just an illusion of you and your... not your soul, your, um, not-soul... is elsewhere, or maybe nowhere?"

Teak wiggles a hand in a so-so gesture.

"Yes, I'm a person. Whether I'm 'here' is something of a philosophical question. I'm paying attention to a shared sensory experience with you, so I'm 'here' in that sense. But it's true that this form is an illusion. I don't have a physical body, unless you count the computers simulating me, but that's kind of a stretch because they're also simulating a bunch of other people, and running unrelated programs. The computers I'm using right now are located here," she says, pulling up an illustrative diagram of the solar system. She highlights a cloud of a few hundred different objects orbiting well outside the outermost marked planet, and also puts a label showing where Saturn is in relation to them.

The doll looks up at the diagram, and studies it quietly, tracing its lines with her eyes. She looks out at the sky, and back to the diagram, trying to find landmarks she could use to find her orientation on the map, but space is big and has few things in it.

Teak dismisses her little hologram and makes her computers twinkle directly in their vision, drawing labels on the sky. They'll all be teleported to new random orbits when she's done showing them (security mindset), but helping the alien get her mind around uploads seems important.

"...it's pretty," she says, smiling slightly.

That's a perfect opening to flirt with the alien. She should probably not flirt with the alien.

"Thanks!" she says instead. "It's not for everyone, but it suits me. I like the idea of floating between the cradle of civilization and the unexplored darkness between the stars."