Is LL Subsidizing Our Exploitation?

You might have a point if we were talking about arbitrage, where a person buying in bulk received a discount.

In this case it is not a discount for a purchase but a reduction in "taxes" by a factor of 10 relative to what you and I pay. This is not a free market, rather it is a system with a staggering (not 10% but 1000%) subsidy. For every US$10 someone on the bottom tier pays in taxes (land-tier fees) Anshe (including her developer incentive) pays only US$1 in taxes. Because costs to LL are constant for users, this means those on the bottom are subsidizing the taxes (land-tier fees) of those on top.

Specifically with regard to land sales, this not a free-market system. It is a system which pays massive subsidies to large land holders direct from our pockets. Land barons exploit this massive 10-to-1 difference in taxes to dominate and profit from the land market at our expense.


While I understand that it's required by law in some countries to always post contrarily , is there anyone out there who is surprised that those who are selling us land are subsidized by our RL US$ or the huge difference in tax rates (land-tier fees)?

~Ulrika~

exactly the point I was attempting to make. My own poor math offered a glimpse of it --but you've now hammered the nail square into the board.

Beat me to the punch of starting a new thread. (This really belongs in Land and Economy but I'll bite.)



This would seem to run contradictory to what LL has said about selling bigger plots being better for them, although other people have been right to point out that there's other costs involved.

The short story is that if
Ammount one owner pays for a whole sim (Initial cost estimated from average land price on the webpage converted to $US at $L1000=$4: $1549.44??? Meep, that seems high, although one sim did recently sell for about that much this week. $700 is probably a more sane estimate judging by current auction prices for near-full sims.)
Plus monthly tier ($195 -I'll go out on a limb and do this calculation for a year, so multiply that by 12 months=$2340)
Minus credit card fees and setup fees(Unknown, I think it's calculated as a percentage, like 2 or 3%, of each transaction? Someone correct me.)
Minus value of the time a Linden took to set up the auction and set up the property line(because they get paid to do that ya know...but in this case, its minimal)

Is greater than:
Initial cost of 512m^2($0: first land is sold in $L and 512 plots are not generaly sold at auction)
Plus monthly tier(Varies, $9.95 if it's first land to get the premium account, $5 if it's not, times 141 people. Assuming 50/50 distrobution between first land and non: 1053.98. an all-first land sim = $1402.95, all non first land = $705. Multiply be middle figure by 12 months =$12,647.76)
Minus credit card and setup fees (Unknown, but greater than in the previous instance)
Minus time value of the Linden who divided up all that land and listed it for sale (much greater than in the previous instance, plus the value of any money they might hypotheticly loose by not being able to take care of more important things with the time they spend on that)

Then the Lindens will continue to offer the better deals to the larger buyers. It's not subsidization because LL is a business, not a government entity.

...Ya know, those numbers still don't make sense, untill you consider that most wholesale buyers split the land up and resell it. Assume it's all split into 512 plots: add nearly $12k in monthy tier over one year for one sim to the Linden's profit margin, more or less depening on which of those lands are bought togeather/joined, the current tier of the new people buying it, etc, etc. So the Lindens get the best of both worlds by letting players buy wholesale.

In the other thread, Urika also mentioned dwell bonuses. I noticed something curious about that: Small land owner have the potential to recive proprotionaly *more* benifit from dwell than larger land owners, developer incentive bonuses excepted.

The amount of $L one recieves in dwell is farly small: for a place with a fairly average dwell of 2000 (I'm using Montmartre Island as my baseline, which gets that on a day without events between casual visitors and 10-15 group members (out of a group of 50) that may be found on the island at any given time). The figure I've gotten quoted for that is about $L80 a day (which only goes to the island owner, its not shared with the group).
L$80 times 30 days in a month = L$2400 = about $8 and change in $US

$8 is a drop in the hat for someone who owns an entire sim, but for someone who only owns 512 or 1024m^2, that's the greater part of their monthly tier fee.

The trick of course is being able to build something on a small plot of land that attracts that much dwell. I do suspect it's at least theoreticly possible, however.

I could not disagree with you more strongly on this point. I currently have a group that is holding 110,000m of land, 10k of which is the bonus for land tier donated to it. That is not an insignificant amount of land, and not one I am willing to give up. Any solution you propose to penalize large land holders because you want to affect land barons is also going to catch many large land holders in the same wide net, which is both unfair and counterproductive. I can think of many people who hold large amounts of grouped land who would be negatively affected by this change, and none of them sell land. If you want to focus on limiting the purchase or selling of land in a time period, fine, but leave the group bonus alone.

I think we should do it. Imagine that we get together a group of 40 players that pays $5 per month to me (or another point of contact) by PayPal. I then tier up a single player and pay the land-tier fees for an entire sim. Assuming we are all contributing 1638 m^2 (the 1024 m^2 tier plus 512 m^2 and the 10% group bonus), this would reduce our payments from $13 to $5! This is a savings of 62% -- more than half off.

If it spread it could have a huge impact on LL's income. I assume they use a regressive land-tier fee only because it benefits them (and unfortunately allows the small player to be exploited). What would happen if it instead benefitted the common user and exploited LL?

Would this be as ethical, less ethical, or more ethical than what the land barons are doing? Discuss!

~Ulrika~

Some sort of separate land baron auction house/real estate agent organization has been mentioned before, by both SLers and a Linden if I remember correctly. I see that as a possible fix, albeit a very tough one to regulate. Although I see Ulrika's point on the disparity and wish there was a way to fix it fairly, I am with Cris on the non-reseller large land holders being unduly affected by playing with the group bonus. Beyond that, I am afraid I have no good solution to offer. This is a tricky, touchy topic which gets people riled up quickly.

When I read your post again, I realized that you might be suggesting that the 'extra money' they make off of 512 m^2 plots might be being given to the larger land holders through dwell bonuses. That or the money made by the 512 m^2 is really being spent to cover the cost of the larger plots. Because the larger plot don't cost as much.

If that is the case, i'd just like to point out sims cost less then 200 a month to run. It's probable along the lines of 50 dollars. No matter what LL is making a profit. it's just a question of how much profit. 512 m^2 plots maximize profit. The only real subsidy going on is covering the cost of band with for the free accounts, and the life time memberships

The elite speak! Do you agree that the same mechanism which allows you to hold huge amounts of land is the very same mechanism that makes land baroning possible? By standing in the way of tax reform (flatting of the land tiers) are you not enabling the exploitation of the common man?

To stop this problem all of us will have to make sacrifices, including the elite. If you cannot part with your massive tracts of subsidized lands, would you at least agree to a progressive tax on large and rapid land sales?

I'm so happy you joined the conversation. But double rats I have to leave to go out to dinner right now and I won't be back until late late. Cristiano, could you argue my point until I get back?

~Ulrika~

No. I don't like Socialism.

-AP

How do you feel about massive tax subsidies paid from your pocket to support land baroning? It's like socialism except instead of paying the people we pay the land baron.

~Ulrika~

I think you're understating the impact. Collectives of 141 players is well within the realm of do-able. The advantages it offers are enormous -- as a collective can be on-going (with a waiting list) whereas your usual individiual "land baron" is limited to their own personal resources.

Real-Estate by third party subscription at a near 2/3 off savings??? Offering low tier players land at "Land Baron" prices?? If you're looking for a way to undermine the "upper-tiers" in a fashion that doesn't involve relying on Lindens to change their tier structure this would seem to be it. I'd be highly interested.

No it's like capitalsim in that those who purchase wholesale resources pay less than retail sales of the same resource. If the land barons have to pay more overall for land, the increase will be passed along directly to the retail market. That's how it works.

The Lindens provide the land resources on an open market (the auctions). Anyone can participate in these. Many take the risk of buying lots of land with the expectation to make a profit. That is, they buy large wholesale blocks & sell them on the retail market. There is no guaranteed profit and it requires money up front. While it is true that with larger purchases & tiers, there is a lower overall price per unit, it is also true that by purchasing that much the amount of up front money risked is greater.

It's a free market and a perfectly good example of capitalism working as it should.

-AP

Sorry to burst your bubble, but its not a question of ethics. Your free to do whatever you want with your money. Everyone already realizes that they pay more for land than larger land holders... If you don't, you havn't read the billing page like you should. Volentary economics are never moral or immoral... They simply are. Don't like it, do something else, or just don't get involved.

There's nothing sensational here, Ulrika. Sorry.



I'm not paying land barons. Neither is anyone else who doesn't buy from them. Your logic doesn't mesh with reality here.

Volume discounts just are. This has been pointed out to you countless times, and yes, it does apply to the SL model, the same way it does to server space anywhere else, or bandwidth, or, well, basicly anything else.

I figure they make money by selling land - so I choose not to buy land from a group of people...

The current price structuring just enabled my wife and I (who have very different interests in SL, and uses for land) to consolidate and drop our monthy bill by 10 bucks, while enabling us to both continue doing what we like...

These suggestions sound a lot like cutting off your nose to spite your face.

Land Barons make money from selling Linden Dollars -- if we abolish money in SL we can put a really abrupt end to it all... but I don't think a lot of people will find that too popular either

If people were *REALLY* serious about stopping those few people who's business practices are distasteful, they wouldn't feed them.

I'll repeat:

<a href="http://dictionary.reference.com/search?q=subsidy">subsidy</a>:
n. pl. sub·si·dies
Monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest.

Nor is it a <a href="http://dictionary.reference.com/search?q=tax">tax</a>:
n.
A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.

Rather, land tier fees are technicaly <a href="http://dictionary.reference.com/search?q=rent">rent</a>.

Arguably, LL does serve, to a limited degree, some of the functions of a government by controlling the money suply and administering enforcement of the rules. But LL is a corporation. And regardless of any predictions that the world of the future will be governed by corporations, we're not there yet.

That's a very important distinction. Governments and Corporations, as entities (whether they should be entities is another story) have different expectations of "fairness" that they ought to live up to. Governments ought to be impartial, with all of its citizens equal under the law. If LL was a real government, you might hear me arguing that land tier ought to be completely flat across the board, for example.

A corporation has expected standards of fairness too: they can't break contracts, invade our privacy, charge people for things they didn't buy, break their own terms of service, etc, but they are allowed to do things like offer special deals to select customers. In this case, they're also sort of "subcontracting" to the larger land buyers in a way, which frees them up to think about more interesting and important things related to running the game.

I reject Ulrika's arguments at root. Whatever the logic of the math and the premises about regressive fees, the spirit of the arguments is made with the Marxist-type analysis that views value as a kind of finite good that is only legitimate when it is tied to poor laborers, i.e. players paying $9.95 a month with only 521 or 1024 in land or tier allocations, but when it is multiplied and becomes the property of a "land baron," it becomes illegitimate. Ulrika suggests that the way to combat this "evil" is to create Soviet-style collectives of 40 players, each to put in their $5, so that they can "break the backs of the exploiting class" and control land that otherwise rich individuals will control. Sounds good, eh? The Bolsheviks had an argument like this. But usually what happens when you run this type of movement, the "advance guard" of those "clever enough" to have figured out all the theory and practice of this exploitation get to speak on behalf of the collective. Yes, it is about power, don't sugar coat it.

I guess Ulrika has never tried to do something with land when she had to agree with 40 people? Or deal with the "everybody has a story" problem as 40 people pull their tier in and out, or go off in a huff, or argue in endless political meetings about "what is to be done"? Perhaps Ulrika has never looked at the difference between what 40 people of "the masses" accomplish in the game (clubs, sexay av contests, sex escorts) versus what one bright individual accomplishes?

Ulrika celebrates the collective over the individual, but doesn't allow for the individual entrepreneurial spirit in creating *new value*. In the Marxian world, value is always something I may only add, by taking it away from someone else. I can never *generate wealth, I can only *redistribute it*. Everything in this discussion boils down to the essentially religious issue of whether you believe that wealth and value are finite and have to be cut up like a pie always and everywhere, or whether they can be generated anew.

And I use the word religion knowingly, because IMHO, this is an ideologically fervent issue where people either assume the posture that there isn't enough to go around, and scarcity dictates taking away from one to give to another, or they believe more can be generated if you apply yourself. It's essentially the difference between Europeans and Americans these days, between Red and Blue, between old and new civilizations.

It's a difference in belief and perception that shapes everything a player does in SL, consciously or not, and keen awareness of this essentially doctrinal difference must be acknowledged.

At root, it is the difference between, say Christianity and Communism. Christianity says I give up my cloak to my neighbour who has no cloak. Communism says I take away your cloak forcibly in the name of the good of neighbours who don't have it, but more often than not, then keep it myself. And that's it in a nutshell.

So if I get rich in SL, or I buy a sim (which I did, for $1501), then I've "exploited" 40 players whose "backs I am on" by getting a deal, whereas they sit their ploughing their 512s by the sweat of their brow! Hilarious! Nothing of the sort has occurred, everyone should go back to their sexay avatar contest. As Cristiano says, bulk purchase discounts is something even the Soviet Union can approve. And what Ulrika's analysis overlooks entirely is AMOUNT. Somebody who pays $9.95 pays $9.95 and gets 512 land. Somebody who pays $1501 and $195 gets $1501 worth of land (58,000 plus acres), overpriced or not, and pays the hell out of the tier.

Is there anything you don't understand about the difference between $9.95 and $195?

AMOUNT AMOUNT AMOUNT. There is a hella big difference between $9.95 and the $205, used in your example, even if that $205 resulted from a "corporate welfare". The person willing to shell out $205 is assuming a risk, taken on additional work, cost, headaches, and is managing land. Have you ever hovered over a whole sim in the middle of the night trying to sub-divide it? It's hella hard as you keep slipping and struggling to work it out. Capitalists are viewed as evil people who exploit others, but for my money, capitalists are people who *work* -- and boy do they work hard in this game. Does anybody think Anshe's day is a job at the beach? She must have a staff of 20 to handle all that business, if not "no life".

The philosophy of corporate welfare -- the moral equivalent of Ulrika's philosophy that land barons "exploit" us -- tries to incite anger among the masses -- as Ulrika is trying to incite envy and hatred of "the rich" with the idea that they are being "exploitative". The anti-corporate-welfare bunch say we should stop fussing about welfare moms and worry about these ebil corporations that suck up all this "corporate welfare" in the way of tax breaks that would otherwise ostensibly go to the public weal, or in the way of incentives or "gifts". Well, baloney. Again, there is a supreme difference in the character of the welfare. Money given to the welfare moms, as necessary as it is in any society, is a cost sink. It sinks into necessities. Worse, in some places it sinks into expensive bodegas and drugs. Corporate welfare goes to encouraging business, jobs, and movement of the economy. Give $100 to a corporation, maybe you think that's just cronyism and rewarding insiders who contributed to your party, but let's see where it goes -- does it purchase? Or pay for a salary? or pay for research and innovation? Whereas welfare given to the individual -- as it is in SL -- *may* go in bulk to innovation if new products are purchased, but it might just as well go to the equivalent of bodegas and drugs in RL you find in SL, which are casinos, etc. These things are debated endlessly in RL. What's key to establishing something reasonable about them is BALANCE and LIBERAL DEMOCRATIC PARTICIPATION that adjusts to changing realities not a HARD-LEFT IDEOLOGICAL APPROACH that tries to apply a set Marxist formula to every human transaction -- such as this eat-the-rich notion that innovation and investment of capital is a negative instead of a positive.

OK. Let's see if all you socialists will put your money where your mouth is. You all say you hate land barons, you hate all these huge land purchases, you hate scarring of the land and building of ugly malls, you hate, hate hate. Me, too.

OK. I'm burning with curiosity to see if it is really possible to make a grassroots, bottom-up community (as distinct from a Soviet-style collective that gets exploited by some Bolshevik anyway) which assumes the cost burden. Somebody has to pay -- you can't get the Lindens to continue their socialist welfare forever! It's supposed to be "starter fluid"!. I don't mean Neualtenberg, a community that is devoted to complicated structures of government and governance and endless discussions and arrangements about same, I mean a garden-variety, plain-vanilla community of people united by only one overriding interest, who may have widely diverse lifestyles or beliefs, but just have that one interest in common FREEDOM FROM UGLY BUILDS NEXT DOOR DEVALUING THEIR PROPERTY AND THE WHOLE SIM. That's it. They may disagree what is "ugly," they may not care about ownership, but if a group of like-minded people who know what is esthetically pleasing to them can get together and share tier and plan their community, they can be relieved not only of tier, but the horror of waking up the next morning to find some ugly giant purple monstrosity built on their doorstep.

Example: Will any people get in a group and rent or buy my land in Ravenglass and take on the collective cost of the tier of running a beautiful commons for the community? It's because I'm gambling on my belief in that possiblity that I'm quite likely to lose my shirt on this deal.

Or will a group of people assume the collective cost of an island? This is the experiment I'm running. Looking at some other planned communities, I see they are running on the strength of one or two individuals sinking in all the tier. Is it really possible to organize people in a democratic way to pool their tier usefully in this fashion, to push back against baronism? I don't see it happening, except with very closeknit groups of friends in the game or people working on a specific technical joint project. Even so, they run to the Lindens for tier relief, or a few assume the burden.

Let's see if people will really get in a group and pool their tier! Think of the power of their joined tier! Think of all the unused tier lying around that no one ever thinks to donate out to the common good! Let's turn this around in a positive way, instead of pissing and moaning about ebil capitalist land barons who suck up land and get breaks from the ebil corporate game company. Let's see if when you flip it to the positive, rather than punishing the land barons by elevating their costs, or inserting taxes on group land ownership (socialism! blechth!). Let's see if you can empower people democratically to pool their tier and acquire clout, to obtain an island they could all own and run without anyone having to go to the poorhouse on tier.

What's their draw? Tell me what their incentive is? They can get the 10 percent discount on the group land arrangement, yet why don't they do it in this world? Answer: bugs, hideous problems with group arrangements, including accidental doubling of tier (boy, did I get burned on that), horrors like "release land" buttons and squabbling among people over who is supposed to return the stray prims. And I"m sure I'm about to find out that's only the beginning of it.

Any sober reflective player would have to concede: Land barons bring energy, efficiency, mass organization, innovation in city planning, pricing mechanisms, and a lot of money to the Lindens -- all things that *the players themselves taken as a mass don't provide because they aren't organized and don't care* -- or maybe they do? Show me. It does no good blaming the land barons or the Lindens and starting a jihad against the wealthy. Make your own joint community, pay the tier, give relief to those willing to pony up all that money to buy pristine sims, and push back against the malls and the squalls of ugly builds. If you're not willing to do that, please don't talk to me about why I need to start a jihad against a land baron.

Like Jacek Kuron used to say, don't burn down Party Committees. Build your own.

Ulrika, sweetie, you've met your match : ) I will argue the hell out of this one.

Ulrika,

Care to address the arguments I posted on page 1? I'm anxious to hear your rebuttal.

Not to hijack the thread, but I'm curious, where did you get those numbers?

Does that factor in colo fees, bandwidth, hardware costs, electricity, and service/support salaries?

LF

Really? Most groups in SL over ten members fall apart in usefulness after a month. How would you coordinate 140 other people?

LF

The mechanism you are focusing on is not the problem, and doing away with it causes more harm to legitimate land users than it does to the reviled land barons. Caps on land purchases and turnaround times on land would have more of an effect than unfairly punishing those who are legitimately paying to use a resource, not just extracting wealth from it.

Hope you had a nice dinner

who care

Well I don't know about addressing all the points, as I have a bit of a cold and need to get into bed, *sniffle* but I do I agree with your points above.

~Ulrika~

Finaly someone understands what the hell I have been shouting about for the past few months! Thanks Ulrika for writing out all the figures! If nothing else maybe ppl will see the cold hard facts.

Its very understandable to me how this has been done in the past. 17+ AV's was not out of the question when there was no limit of 5 av's per cc. Gaming the system sucks only for those of us who are not. Again locks are just to keep honest ppl honest.

Looks over the figures again.... wow paying out over 125 a month for what i get compared to 205 per month for what others get sucks. I am going to do some serious thinking about that...
Cat

You too? Meh, I'm stuck at work.*snuffle*

I'll keep an eye for your response tomorrow.

p.s. check your private IMs in about 15 seconds.

Sadly, I don't think she really cares about that. She posts no figures on how many large land owners participate in the rape and pillaging of the poor in SL. My guess is about 3.

So, for a handful of exploiters, the rest of the contibuting community is supposed to suffer? Ya, right.

Ulrika, you really should factor in other costs to give a slightly more accurate picture of the per/m2 cost of land. A sim with 128 residents owning 512m2 of land each will produce much more overhead for LL than a single player owning 65536m2 of land.