250 l$ = 90 cents and the SL Depression of '04

When you state that a command economy is not an economy at all, I've got to wonder how familiar with it you really are. Besides, you'll not earn my respect unless you've survived reading The General Theory of Employment, Interest, and Money. I think Keynes' ideas are far more applicable than Adam Smith's. After all, not a single free market economy as Smith describes exists today. The invisible hand was arm-wrestled into submission by Alan Greenspan.

Then explain why the TOS was recently tightened to make it crystal clear that they are not gearing themselves up for any support to investment in SL. The Second Life site also says you can build in space, but I've never found out where it is. There's a line that has to be trodden between hyped marketing and false advertising. I believe in some instances it's close with Linden Lab's wording but they probably get away with it. But just because the site says you can make money, it's not saying that you should, will, or that they give any support to investment is it.

Central planning a complete given?!? Absolutely not!

LL has said they'll increase money and land at a rate equal to the growth in subscribers. That is the extent of their central planning, and I wouldn't want anything more. Everything beyond that is up to us.

Markets going up and down, and citizens reacting and adjusting their economic activity in response is a beautiful thing. Let's let this thing play out.

- Ace

Ace, adding more land to the grid is a result of central planning. They planned that from their central HQ. They are planning to add a new payment system. They are planning to add a new IP protection system. They plan everything.

The question is not - does central planning exist. The question is - are they going to better communicate their plans?

The influence which the Lindens exert on the market is strong, Ace, since land cost is so closely linked to the value of the Linden. However, I was wrong in saying that this is a command economy, as their power certainly isn't that absolute. The Linden role is really similar to that of the federal reserve, though.

(Let this serve as my apology for the horrid Soviet car joke. Sorry.)

Actually Second Life bears little resemblence to a command economy or a free market economy. Comparisons to the Soviet Union or Adam Smith's materialist fantasies fall short of reality.

Second Life is an inhouse, semi-isolated, corporate economy. When you sign the contract and start developing and selling content, you are a semi-autonomous contractor for Linden Labs. LL may seem to exercise less controls over you than most corporate contractors, but this is a question of degree -- ultimately, decisions on content and overall guidance of the corporate economy are in their hands. In controlling land, lindens, and interpretations of the ToS/EULA/CS, and in mainstreaming what is acceptable and what is not in SL, LL weilds a definitive influence over the economy -- but it's structured along the lines of corporate resource extraction rather than an all-in pattern of system-building.

To treat the present "depression" as though it were representative of some similar phenomenon in the real world is to take the reality a little too far into Second Life. It's a game economy, it's a corporate economy; the similarities to real life are interesting but much too simple.

ed.sp.

Where did I say a command economy is not an economy? Perhaps you could give me a quote?

There is no pure form of everything. All things are a balance and compromise of many different models discovered and undiscovered.

Yes, the US and even the most free market economy is centrally planned. Anything else would be anarchy. However, there are degrees and bias, and I believe that SL should tilt and bias and leverage free market economics as much as possible.

The Lindens have shown poor fiscal responsibility. They continued to grow the outstanding Linden Dollars in circulation instead of reducing supply and allowing demand to hold up valuations. Now with over L$120,000,000/million in circulation, the economy is flooded with cash, making it worthless. Thus the decline in its valuation.

There are only 2 fixes and 1 major change to resolve this issue:

Major Change: Stop all Stipends and Dwell payments

Choice 1) Reduce outstanding circulation with destruction of dollars from land sales and such.

Choice 2) Break out the Marketing Budget and increase the SL population


If the population doesn't grow or the dollars in circulation are reduced, the Linden Dollar will continue this decline against the USD.

The Linden Reserve Board needs to act now....

Hmmmm... Let's see... Town Halls every month or so, where they clearly communicate their vision. The one with Cory concerning IP protection even asked for and initiated a lot of community feedback. It was at a Town Hall last summer where they announced their intention to quickly bring more land to auction.

Philip has a blog where he shares his vision. Cory has a blog where he shares his vision. They communicate quite often in these forums.

I dunno, blaze... It seems to me that they're doing a fine job of sharing what they got cooking.

Just like first life, Second Life is filled with uncertainty... Deal with it.

- Ace

Alby, this may or may not be the right move. It's debatable and I believe beyond the scope of this thread.

What the lindens need to do is keep their population abreast of what they are going to do. Without that, intelligent people are not going to plan out extensive projects when they could suddenly be cut off at the knees.

The way to do this is simply to have a webpage with a list all upcoming changes. A master task list.

When items skip about in the priority queue, then an alert could be sent to everyone on a mailing list.

I've been a developer and I've run dev teams. We've always had this sort of thing in house. Exposing it to your community would only be beneficial.

Ace: the plans right now are a mess. It's hard to track them down and they are randomly strewn across different resources. How do we know everyone is bought into these plans?

You don't manage processes and teams with blogs. They must have an inhouse task list. Why not just expose it?

People create when they can profit. But when the LD you earn is devalued by half 2 days later. It takes away the incentive. LL needs to reduce LD supply to pump up valuation. Just like they need to reduce land supply to increase land prices. Bring back L$20/meter

linden lab has no responsibility for the value of the linden. the only mistake that's been made has been philip getting everyone hyped about a virtual economy that is based on nothing. virtual land is nothing to invest in with any expectation of a return. virtual items are nothing to invest in with any expectation of a return.

believing that is like believing that computers are easy to use because "all you have to do is push the START button." stop listening to all that and pay to play the game.

actually, it's not even a game yet. it's a test. okay okay we can call it an experiment. people get really bent out of shape when faced with the fact that second life is not in production. it's still in an extended testing and development phase. it'll be in production when it's actually a useful business, development and educational tool. all that is being bandied around now, and radically, though necessarily, altered with any given release.

i'm digressing. my point is that i agree with the people that say "play the game." treat this like a casino. you have so must money to spend on entertainment. draw the line, spend it, and enjoy yourself.

i don't have a reply to this. i just think it's hilarious enough to post over again. ha ha ha

awww, did you get stuck w/ too much land hehe?


If 1 more person tells me to give him money today...


I agree an ETA for features would be nice but you have asked for this every which way from sideways and you should just email LL.

I wish SL was an OS so I could fire up a text editor and a browser and work on web pages and then when my boss wasnt looking I could go script some LSL Then it would no longer be a game.


Blaze, I _insist_ you watch "The Corporation" (2003).

Kahmon, Life is a game. For me, business has always been a game.

So it's my move and my move is to post a message asking for better communication on the SL roadmap. Feel free to play the game your way.

Jack - no, I sold all my land about a month ago. When they released the whole flood of land on the east coast I just bailed. Also, Jack, you'll notice I said *not* to stop reducting land value. If I had land, wouldn't I be against that?

Excellent thread and nice analysis

Of 120 mio L$ "in circulation" you find:
- 11 mio on IGE
- 6 mio on GOM
- ca 13 mio piling on the accounts of top 40 L$ owners

This alone make for 30 mio L$ being horded by people who own more than 200000 L$. I have not even start counting the millions of L$ being horded on account of middle class residents.

30 mio L$ is about the trade volume of GOM in more than 3 months. Including the buying and reselling between currency traders for pure sake of currency speculation. GOM trade about 100 mio L$ during past year.

If you assume this pile built up during one year, then you have about 500000 L$ going to speculation pile every week. 500k L$ that has been artificially remove from circulation every week because investor had trust in future of SL economy. But this is money that may suddenly come back when those investor loose confidence in future of L$ value.

Who will buy 30 mio L$? Who is going absorb 500k L$ every week now that IGE stop stockpiling? Trust of investor in SL economy is what stand now between success and complete crash of system. You destroy this trust and you can watch valuation of whole SL economy continue fall fall fall fall until it hits ground with big painful SPLASH. Continue flame and harass people who were willing to invest in SL, continue create climate that label the attempt to earn money as "greedy", "immoral" and so on and you will receive what you call for: a mediocre game with close to worthless currency and less and less incentive for skilled people to spend effort to grow it. But maybe that is what some people here want: back to beta!

Beats me what the collective freakout is. L$3.60 is the historical low, scaled to reflect the new blocksize. If we go below that, then yeah, wow - that would be interesting. But right now its just a cycle. If you're on the wrong end of it, I guess its a learning experience too.

Not a big deal really. The true artists will keep creating, some have said so already. Those that preferred to be middle-men/women will be edged out as there is nothing to really do down here but wait.

I'm not complaining, I just go and build and create just like I did when I first joined.

Anshe, you were doing fine until you started feeling sorry for yourself again. Can we hear more about the 500kL$ artificially removed from the economy each week? I think that may mean something interesting. Seriously.

Edited to remove a comment.

Maxx:



Well, they'e breaking business models so people aren't going to bother doing business anymore.


Chage:

Donovan:

What is that you do in SecondLife? What service do you provide the SL economy?

I didn't want to start a new topic for this, so I hope it's okay that I'm asking it in here.

On GOM under the For Sale area, I see listings like such:

1 (1K) $100.00 ($100.00)

Why is the price there so ridiculous? Is this some kind of mistake, a trick, tactic or what? I've always noticed grossly high asking prices for really small blocks of Linden cash. What's the deal?

Maybe someone "hoping" that a US$ millionare in RL will take pity on them?

Some people to loose out:
- people who rely on stipends because drop at GOM will lead to in world inflation
- people who were hording L$
- people who invest time and money in hope to make RL profit
- people who enjoyed those people's service and creations
- Linden Labs because of slowed growth and investment

Possible winner:
- consumers who buy L$ at GOM and spend it in world
- public domain artist/creators

Mmmm, this is what come to my mind. Did I forget any groups?

Blaze:

Go to the sim Enceladus and see for yourself. You can't miss it.

And don't mistake a difference of opinion for the other person being worthless. Overall, you'll be happier.

Blaze:

Go to the sim Enceladus and see for yourself. You can't miss it.

And don't mistake a difference of opinion for the other person being worthless. In the long run, you'll be happier and more productive.