It is the next morning, and I managed a good sleep after all. I also seem to be having some kind of writing binge. So be it.
Game economies are rather marvellous because by definition they exclude portions of reality. You can set them up so the rules of economics are not obscured, and watch what happens, though it would make for an abysmal game. What happens is the game devolves to the equivalent of unrestrained crime. At some point it even dawned on free-marketers in the real world that regulatory activity is necessary for the market not to kill itself, and a lot of people in the process.
Predictably some people haven’t figured that out, and even more predictably some people pretend it’s not true in order to benefit from ignorance, yelling “Free Market” in the same voice that should be reserved for holy things. Just like the phrase “work ethic” attempts to raise work to the status of a virtue. It is not, work is morally neutral and a means to an end. The exchange of time and energy in return for resources that allow you to survive and prosper has no innate religious or moral value. It is a trade, pure and simple. How you do that trade might involve your morals but that’s about the extent of virtue you gain from it. Doing work does not make you a good person. It hopefully makes you an economically effective one. The unregulated free market is not holy, it is a system whereby exploitative people kill off everything else and then die themselves. It works alright, but it’s not acceptable.
Game economies in fact explode many favoured notions.
I have been trying to get gaming people to think about this more than they do because if we all think it gets like the Wurm forums at their best and issues are chewed through, and we’ll have more interesting trading games. What I find though is that the vast majority of people don’t know squit about economic theory and are too much in awe to challenge or debate it. They parrot stuff and puff up and try to do the monkeys on an island jumpy jumpy thing about it. Problem is economics isn’t particularly tribal. As noted before, even free marketeers eventually conceded that without regulation their free market will simply kill itself off. Or some version of that. The ideas often overlap.
So then, zero unemployment in-game. Why is it there? How is it there? And what sacred notion does it debunk?
The answer to “Why is there zero unemployment in the game?” is that it’s a step in the process of earning the game equivalent to foreign currency. Games are set up to allow players to trade time and energy for items/in-game currency that will allow them to survive and prosper in the game. The game itself requires foreign currency (irl money) and imported items (actual bought with real life money hardware for example) in order to exist. In order to acquire “foreign currency” (real life money) the game requires as many players as possible and they need to be able to survive and prosper within the game (otherwise they will leave). A mechanism for parting them from their irl money can only be effective with that in place. So there is always gainful activity for a player to engage in. Zero unemployment in a game is fundamental.
And it turns out to be a lot easier to achieve zero unemployment within a game than you’d think if you listened to politicians and the media too much. You create quests and other things for people to do and give them some ingame stuff back. It’s sort of (but not quite) like stimulating the domestic economy by building useless things. (note: stimulating the economy by building useless things and then not paying for the labour isn’t it, sorry. And here’s worse news – inequitable wealth distribution resulting from centralising the contracts for building useless things is also not it. Money to the few does nothing for anyone except those few. Lordie do get it right. Tram… Edinburgh…. grumble….) In other words, work is deliberately created and renumerated at a level which makes it desirable to engage in it.
That leaves the foreign currency/real money input required. Which also turns out easier to solve for a game than you would think. In order to earn ” foreign currency” (real money to pay to the game), players need to give up some game time and and engage with the real world to acquire some real money.
In the larger economy of a country that is like workers (I’m pretending they’r all one amorphous blob for this one sentence) being able to use some of their time and energy to create goods and services which can be used to sell to other countries (after this point we’re into exchange rates which I don’t fancy tackling over breakfast). Economic activity cannot be entirely domestic because stuff you don’t have in your country needs to be imported (bought). Economic activity cannot be entirely global (it’s been tried, it’s still being tried, we still haven’t learned), because it needs a domestic infrastructure to support it and that includes people who are more than barely alive. Similarly game economies are not only about in-game money, they need irl money in order to exist at all too, but without that inside activity they would experience the equivalent of unemployment, and players would leave.
The sacred notion this all debunks is that pure market forces (actually these forces are heavily weighted against the individual) should be used to determine wages. In fact you need people to be able to survive and prosper in spite of the market value of their labour in order to have surplus time and energy to trade for foreign currency. That seems counter-intuitive until you think about how foreign trade actually happens. To put it more accurately there needs to be enough domestic support for exports to be effective. Infrastructures like roads and telephones must be there, homes must be maintained, feeding needs doing, people’s grannies need looked after, someone must actually provide whatever it is you are selling, which is by definition something the country doesn’t need to reserve for itself, and which therefore would normally not be produced. A nation directing every moment and ounce of energy to survive it’s own domestic economy is not in a position to earn anything outside of itself. Period. It doesn’t have the capacity, drags on all efforts to balance it’s global books due to its own needs, and will run into debt. As we have.
It doesn’t even get all that complicated from there. You can twiddle with ceilings and floors (eg the minimum wage), you can allow people to generate their own domestic economic activity (start small companies) – or not (prevailing fad is to pander to big organisations and strangle small ones – how stupid can you get, but there you go. Big companies might look easier to administrate but turn out to be extremely adept in avoiding both regulation and taxation). Governments also cannot create anywhere near enough useless projects to sustain their population. You basically need a large proportion of people scattered about doing their own thing and selling their goods/services for their own benefit on a small scale in order to keep things moving throughout so that money does not endlessly coagulate and become dormant in the same few huge localised collectives.
The relationship between in-game activity and in-game coin likewise needs to be set up in such a way that nobody is unable to survive and prosper in game terms, and nobody has to play to the exclusion of real life, where the desirable irl coin and irl hardware comes from. You can make useful definitions such as what it means to survive. In life and game the whole thing can be fancified, but at the bottom line a dead internal economy cannot support the earning of foreign currency.
If foreign earnings are achieved distribution of wealth becomes the issue to tackle next. In-game this is handled in a variety of ways, most crudely we see the big irl contributers rewarded heavily. But that backfires pretty fast. You actually need ordinary players far more because without them the game founders – not on lack of cash but through trending to only having very small, priveliged population. Which then leaves because there’s “nobody to play with”. Game over.
Better to actively promote a more equitable distribution of the goodies than overly rewarding big payers and the hardcore (big payers in terms of time). You want things happening fairly evenly and everywhere, not it little hotspots.
And finally in order to get an income from your players, the equivalent of taxes is required. Some form of payment in coin that is of value outside the game is what is usually exacted. Irl money.
Governments of course face the problem that they levy taxes in their own domestic coinage. It therefore behooves them to make bliddy sure their domestic coinage is worth something in the global economy so that they can sell the stuff if the need arises and get best price for any goods the country sells too, which brings us back to exchange rates (veer) and more importantly to the effectiveness of that internal coin in purchasing, which would be inflation and purchasing power territory (again, not now)
For now, and to wrap up, the glaring point of interest is that games need to have a population, and to make sure that that population is well catered to in-game (which they do with varying degrees of success).
Overpopulated games are (yay) in a position to expand, which needs yep, irl currency. And it works out because the more players you have, the more you can tax them in irl coinage. And that eases the overpopulation unless the fools get greedy. Squishing too many people on a server = crash. A lesson yet to be learned in real life. It would seem that a well cared for population drives expansion. But, you need to think it through to iterate to that conclusion (and squish malevolent opportunism). But in general yes, a non-impoverished population encourages economic growth, and for the purposes of economic growth a large population is desirable – irl we forget that because we take our numerousness for granted.
Our shard irl (earth) is clearly overpopulated and getting worse, and it’s just about taboo to mention it. Market forces are unrestrainedly also allowed to drive down the price of labour, and it rapidly becomes a too many people not enough work and not much taxes gathered situation. Regressive taxation follows (we’re there) and finally tax levied in labour from those who have no money (we’re there, and in fact it’s a double tax as the worker is liable also to pay into a national insurance scheme to cover their survival costs when working for nothing.) Quite alot is going wrong outside the in-game world.
We have reached a point where countries, through lack of intervention, have allowed a situation where their (over) population cannot support itself and is already taxed as much as possible. The money thus gained isn’t particularly valuable globally either. Games, faulting in the other direction are inclined to demand, as a right, time that their players need to earn the valuable stuff, real money. So they shoot themselves in the foot that way still. See my problem with taking a break from Wurm.
Where games can manufacture more territory, given irl money, countries cannot do so and will at some point just have to face up to the fact that earth can’t sustain more people. It can economically, but economy isn’t everything. We also need air to breathe and stuff.
But yes, we can definitely expand economic activity at any time. There is such a lot of it, after all. Just about everything can be convenienced up and sold to others, if they want it and have money. We can expand economically at any time provided we are alive that is and not expending every moment and calorie staying that way – and have sufficient raw materials. It’s a given that our consumption needs to better reflect our resources because we only have the one earth, no alternatives. Even sustainable resources are only sustainable if the population is in balance with what can be renewably produced as a raw resource. And all that.
Using overpopulation to justify a dirt-cheap labour resource (invoking pure supply and demand) only leads to underperformance when that labour force cannot find work, cannot pay taxes, and have nothing to spend, and no money to set up their own enterprise either – which in turn means even less domestic activity. That’s one of the famous downward spirals and we’re in one. I can’t believe I’m seeing this labour devaluation being wilfully made even worse by the introduction of workfare and the attempt to make a living wage a two-person effort, but yeah…
Economic health begins on the inside of a game (and country), with variety and granularity of activity, ability of ordinary players (and people) to survive and thrive, and above all regulation to prevent crime from swamping everything and to prevent the market from being strangled by large operators – a huge, huge point which is extra obvious in the rarified economy of a game. Too many corporate/collective parasites and not enough tree is what we have in both right now. And the global price of mistletoe going through the floor too! Tch!
Although games have grasped that rewarding players adequately promotes the growth and profitability of their game, they have yet to figure out that the pyramidal last-man-standing version of trade has the opposite effect, and gosh wouldn’t it be nice to see some alternatives tried out for a change!
And now I’m off to play my own part in the real domestic economy or what’s left of it. Laters.