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Tuesday, November 22, 2011

The Virtual Economy - Boon or Bane?

Second Life, as we all know, has a working virtual economy.  Thousands of stores sell virtual goods; land is bought, sold, and rented.  Millions of linden dollars change hands every month.  A small percentage of residents play the business game so well that they show a profit, and a few even manage to make a full time, Real World living by their activities in this on line "game".

I've always been in favor of this.  The Linden Dollar is a de facto micro-currency (if not de jure), because unlike most game token systems, $L can be both bought and sold, in exchange for "real" money.  In my opinion, the implementation of this virtual economy is Linden Lab's most brilliant invention, after the Second Life world itself.

The prospect of making a profit drives the creative engines of SL.  Artists and programmers spend hundreds or thousands of hours in creating exciting, beautiful things for us to enjoy.  Whether it's in the real world or the virtual one, it has always seemed to me that it is only right and fair that we should compensate people for their labors.  The SL economy, and its permissions system, provides a way to do this.

But there is a downside to this, too.  Because content has value, some people steal it.  Because it has value, some people cannot afford it, and envy those who can.  Creators compete for market share...in fact, they sometimes squabble violently over it.  By placing a monetary value on virtual goods, we also create the incessant atmosphere of advertising that pervades SL.  One resident of OSGrid (a free, open source virtual world consisting of thousands of interconnected user-owned and supported servers) stated he'd left SL precisely because of the endless exhortations to spend $L on this, that, and everything else in sight.

What it comes down to is the old adage, "Money is the root of all evil".  By introducing a monetary incentive into SL, we also open the door to all the evils money carries with it -- greed, envy, jealousy, hatred, and anger.

User-owned, open grids like OSgrid avoid this.  Their content creators are much more likely to give away their creations.  They create for the pleasure of it, and for the pleasure that they get from others recognizing their talent.  I'm delighted for them, and I'm very glad that the creative urge is so strong in some people that they will create content with no expectation of monetary reward.  (I confess to this myself; I've given away a number of things I've made to friends.)

As I see it, the problem is that not all content creators are satisfied with that, and of the ones that are, most will probably not put as much effort into content creation as they would if they were paid for it.  The enormously popular writer, Robert A. Heinlein, stoutly maintained that the only reason he wrote was for money.

Alternative grids are growing in popularity.  OSGrid, in particular, has almost 7,000 regions.  That's far fewer than SL, and the number of users is miniscule compared to Second Life.  But the sense of shared community, of building a world together, exists in these places as it has not in SL for several years now.   That's a good incentive.  I like that feeling, and I miss it in SL.

But I don't think that it's enough.  Second Life's economy may seem crass, commercial, and money-grubbing -- but it's an immensely powerful force to drive the engines of creation.  As Liza Minelli sang, "Money Makes the World Go Around".

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