The SL economy, explained

Not quite. The difference is that in RL, that dollar bill is a dollar bill all the time. In SL, it turns into a L$, which isn't a measure of value accepted by the outside world, and is in fact subject to an exchange rate, so measuring the transactions in US$ is wrong.

For example: I buy US$10 worth of L$ to buy a skin. The skin maker holds onto the L$ and later cashes them out, but by the time they cash them out, the L$ exchange rate has dropped dramatically and they are worth only US$7. So, how much value was transferred when I bought the skin? Where did the US$3 go?

Also, remember that not all the transactions were necessarily exchanges. I run a sim where some friends pay me their share of the tier regularly. One person's share of the tier is US$100. Technically they are exchanging that US$100 with LL in exchange for half a sim. But because the tier is charged to me and the others give me the money in L$ to pay with, an extra US$100 exchange is recorded that is just empty arbitrage.



In practice, that's true, but the culture of SL is such that those who cash out US$ are far more greatly respected and seen as successful than those who do not. This even goes so far that I have known some venue builders to create alts, so while they own the land, the venue itself can be owned by an alt with "no payment info on file" - because others will presume that, if such a user owns a build, they must have gotten someone to sponsor them or succeeded in business; and this gives them, and the venue, a pedigree that a paid account wouldn't have.

Ok.. I mean.. I tend to think that isn't quite the same because all of the modeling things happen outside SL, or even if they happen inside the SL client they are not really part of the interactive world (when building on your own, you could just as well be connected to an OpenSim). So within the interactive world, the added value is the money. That's not accusing you of not being passionate about horses, it's just that I'd think of the interactive world fulfilling your passions more if you were making horses in order to get to run gymkhanas.

Pork pies!

*plonk*

By your reasoning, to a European, the dollar only has value when it's converted to a Euro. The fact that they can spend it in the US is irrelevant (in your view).

If a European comes to the US on vacation, exchanges Euros for dollars, and the exchange rate drops, when those dollars are exchanged back for Euros, where did the missing Euros go? Or in the other case, where did the extra Euros come from?

You, like the OP, are concentrating purely and exclusively on the final transaction, and nothing that happens inworld has any value to you except as a conduit to the person who cashes out.

You said that when friends pay you tier, it's not an exchange. Does that mean they give you money and you give them nothing in return?

If, on the other hand, you mean that you haven't found a way to make renting land profitable, is that LL's fault?

If you're breaking even with your rentals, do you regard that as failure? It sounds as if you do.

John Maynard Keynes said, "In the long run we are all dead," by which he meant that reasoning like yours is self-defeating. If you only look at who is clutching that dollar bill at the end, you lose everything that comes before it.

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No, it's not irrelevant because you can live and survive in the US on those US$. You can't in SL. All of these real economy analogies tend to ignore the simple fact that SL IS NOT REAL. "In the end" in the real world we are all dead, but "in the end" in SL, you have to feed your real body, which you can't do with L$.



I don't try to make that land rental profitable. We are a group of friends who decided to split a sim. Essentially, we all benefit from paying the lower whole-sim tier even though none of us individually want that much land. However, the point is that the people involved, other than me, only pay the L$ to me because of LL's insistance that the island fee be paid by one person. Ultimately, they are paying US$100 or so to LL and I'm only facilitating that. However, the economic statistics show that adding US$100 to the value of the economy, which is false. It's like saying that if you split the bill at a restaurant, the value of the economy increases because everyone gave their share to the person who hands it to the waiter.

You're right about the sim.

But for the rest of it, we really ought to have a economist come, read this thread and straighten us out (after he or she stops laughing).

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Money, whether it is dollars, euros, lindens, or wampum, is only a means of keeping score. Tokens.

Money is worth...whatever the collection of people who agree to use it says that it is worth. Because different collections of people use different currencies, the group-derived relative value of dollars vs. euros vs. yen changes from day to day.

The creation of money and the later invention of the ideas of "credit" and "interest" are arguably the greatest invention of the human mind after writing. The invention of the linden dollar, exchangeable for $US in either direction, is arguably THE defining feature of Second Life.

I"m a bit sympathetic to Yumi's commentary, insofar as there's "being right" (I believe Argent to be "right" and then there's that sort of hopeless, overwhelmed, iamnevergonnamakeit feeling you get as a noob. If there was any mountain to climb, that's the big one.

I remember it was... I want to say, 2005 or something when I had a 512m patch next to Magellan's Crash Site in Heterocetera. At that point I think I had made... a chair, a table and a bit of a stairway for a house. Nobody knew me and nobody cared.

Well there was some sort of prize giveaway gridwide thing, and as it turned out one of the 'treasure chests' was hidden at the Magellan Crash Site right next to me. I clicked on it, and got $L 100. Yay!!!! Not bad!!! I was absolutely thrilled and it made my day.

In the grand scheme of things, finding thirty cents worth is... nothing. But wow did I cheer up!

I think the important missing element is some degree of... recognition, of progress, of getting somewhere. In real life we get this via grades in school, or by getting a three percent raise at a job, or other little 'markers' that tell us that our efforts are valued.

But in SL, *everyone* is held to an entrepreneurial standard. Only about 1% of the world is that kind of person, the rest are worker bees. And I'm honoured to be around worker bees ~ generally those who prefer jobs to business are deeply honest, no bullshit, reliable and sane people. I sadly can't say the same for entrepreneurs, as a group.

Perhaps the magic will be for some truly enterprising entrepreneur to monetise what most folks do... for themselves, for the people doing it. As much as 'camping' is reviled, or profile picks advertising, these are ways that a regular user can monetise their presence, made possible by entrepreneurs. I'm not a huge advocate of these solutions, mind you, but there have to be others in a similar vein. In that way, perhaps we can spread some of the magic around that Yumi and countless others are looking for.

Jasmine's in SL, I think. Part of Brigid Yoshikawa's group if I recall correctly; Brigid moved to Winterfell last I talked to her. Due to the arcane 'name names' nonsense it's probably not wise for me to say what artist is who in SL, but they don't hide their identities.

Munches quietly...

To an entrepreneur it must look that way.

If that's the scale, I don't even register. I don't make things. I buy them, and if I don't buy them, I visit them and admire them. I'm proud of that, proud of supporting what other people do.

What I wish I could have said was that the discussion of "the economy of SL" was flawed. It wasn't really about economics. I think I'm smart, but not smart enough to really understand how it works, but I'm sure that the way the OP and Yumi look at it is missing something. NOT something emotional or experiential, but some economic reality. A real economist, I think, could glance over the first post and say, "yes, but see this and this? they aren't on the same scale. They're apples and oranges. Also, you're not taking into consideration the blah blah blah." We all (myself included) would say, "oh I see."

What I think the thread is about - and your last comments - are about "success" in SL for people who count success as making money or being well known. That may be a goal for many, but it is not something everyone in SL longs for.

Maybe too because of my personality and the way I came into SL, I never felt that "hopeless, overwhelmed, iamnevergonnamakeit feeling" and so I need to be more sensitive to it in others.

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I'm a worker bee. SL is cool because it rewards me without my having to get out of that worker-bee suit again (been there, done that, still recovering).

I make stuff in SL because it's cool, and I sell it because people want to buy it, and that pays for my little plot of land... and that's plenty of reward for me. Yumi has the same kinds of skills and has apparently made stuff in SL that's sold, but she doesn't seem to care about that kind of reward. She wants to be a performance artist as well (which is something I'm occasionally successful at), or something like that... I'm not sure what exactly she wants (she's unaccountably coy about her goals).

But after a couple of years of trying to come up with ideas that might help her, and getting knocked back because I'm not specific enough, I just can't handle it any more.

The picture was just the most Goth thing I could find with ferrets in it.

BS. Sure you can. You're on the brink, don't give up now. What kind of example would that set?

Well, I had that position for a while.. but I think, from what you've described, that you do have an extra reward. You have cool stuff you can show to people, you can nip people's ankles when you want to, and so on.

As I mentioned above, when I log in.. there is emptiness and silence. I can script something, maybe, and put it up to sell, and maybe it'll sell, and I can spend the money on keeping the empty, silent, land. Nobody cares about anything else. If I complain, people tell me to stop complaining, but when I do, they stop caring too. Sometimes people ask me to do some scripting for them, and I do it and they pay me and walk away. Sometimes I run a show and tell, which people turn up to, and leave afterwards. There is no interaction or engagement other than answers to complaints, and no care that I might some day want to have the experience of being something other than a script writing robot.

I have to be "coy about my goals" because if I named a specific thing, the next messages I got would be "oh, well, you just want that one specific thing and you're complaining because you can't get exactly that, deal with it". So I have to keep things generic.



I think I actually have that character as an av (made by Brigid Yoshikawa).

LOL

Better you, than me.

you are being very unfair to at least one person who tried very hard to be your friend.

We just didn't meet each other. That's not a criticism of you, it's just a problem with the nature of SL and of timezones.

okay.

If the stuff that you're scripting isn't cool, then script cool stuff.

I'm not scripting stuff to sell, I'm scripting stuff because it's stuff I want, that I think is cool.

And some of it sells. Some of it doesn't sell. That's not the point. The point is that it's cool.

you're cool.

Well, there's no point me scripting "cool" stuff in that sense, because there isn't any scripted item that I particularly want to use amidst the silence and emptiness.

and very patient.

BTW: my slogan, I got that from something Stephen Brust wrote in the back of one of his books. He wrote that he's got this big sign on his wall, and it says "And now I'm going to show you something really cool." And that's how he writes.

Show who?

The reader, who he always has in mind to inspire, I'm guessing.

And when there is no reader?