Why the economy can't be fixed...

An economy is based on more than supply and demand. The individuals governed by that economy need to have options.

Currently, every paying customer gets a stipend. They get a small amount of free money that everyone else gets. They do nothing for this money. If someone wants to improve their financial power, there are very few options.

There is no need for employees for the vast majority of businesses in SL. Unless you actually need a body, say in the case of an escort service, everything can be automated. You don't have to hire people to run your store, stock the shelves, serve you food, etc.

You have two choices:
1)Start your own business
2) Become an escort

Lets face it, number 2 isn't for most people so lets focus on #1:
When starting your own business you need to look at what you want to do. Most people end up selling stuff, they make some art, make some goods, maybe write a couple interesting scripts, and try and sell it.

Problem is, its what everyone else is doing. What businesses are really viable?
1) Construction - Unless you're making something particularly complicated or time consuming, most people can make it on their own. There's enough "basic" stuff out there to choke a horse.

2) Art - Unless you're creating original art or other such stuff, anyone can upload a texture and toss it on a prim. Making complicated sculptures might be something viable.

3) Clubs - They're all over the place they seem. Not sure how anyone expects to make money off them. People don't "need" to drink, and now club owners get no income from having people on their land. They'll have to start charging admission, and unless all clubs do, its quite likely the bulk of the people will drift around to the clubs not charging admission.

4) Scripting - There's a lot of there.. and in order to break into the scripting market at this point, you're going to need skill and an original idea to do something interesting.

There are some other "jobs" or businesses that can be run, things like landlords for malls, apartments, etc but thats a pretty saturated market and most places I go have spare spots in most things, so not exactly something thats screaming for another one.

Whats that tell us? In order to really do anything, you have to have something original, and it often needs to be something time consuming that someone can't just go whip off themselves.

Problem? Most people aren't that original. Its why we're not all business owners or artists in real life. There are no jobs for people who don't want to be original or spend hours creating something so that it can be sold. Its all taken care of. You can't have an economy when there is no real way for most of your population to really accomplish anything.


Can it be fixed? Possibly. It would take a lot of work, it would piss a lot of people off, but it would make the L$ worth something. If you want to mess with real world money you can't just play at having an economy, you need to create a fully functional system.

This post is long enough at this point, but I do have ideas in mind for solving the issue which I'll post.

"Why the economy can't be fixed... "


... too many people feel entitled to linden handouts

There are no jobs for people that don't want to work.

And you'd make no money otherwise.
Did you bother to read the entire post, or are you just trolling to get the ball rolling?
Without the handouts, no one would have any money to spend on your items. So they'd all have to learn to make stuff on their own in the hopes of making money to spend on the stuff you make. Except most would learn they can make most of whats out there easy enough and not buy your stuff anyway.
The system would grow completely stagnant and money would stop changing hands almost entirely.


Feel free to bring them up then for discussion then. Actually, I'll help you out:
a find all for "job" results in about a dozen results. Some are people who've written "I accept custom jobs" in their profile, a couple are escort services, a couple are casinos, and a couple for something called "job finder". Job finders first job is "handing out job finder"

I see two jobs from a lounge, one for an event planner, one for a DJ

one for an instructor

one for a strip club

one for a DJ that works for tips..

a new place opening that is looking for host/hostess/event planner

another lounge looking for a host/hostess

some guy begging someone to script for him who can't afford to pay anyone much..

and someone looking for designers for their mall...

thats it..

we have how many thousands of residents? Good luck building an economy off that.

Of course people feel "entitled" to "handouts."

If you pay money for a service that will dole money out to you and that service quits giving you money after you've paid... will the casual user pay again?

Stop the entitlements at this point and kill the world. One big virtual ghost town. Of course some of us who enjoy the creative aspect would stick around and play as long as it lasted.

Hmmm.

*thinks about this*



Well.

I do like $L. It enrichens my experience.

But what to do? Only two options, really.


*thinks some more*

*sound of rummaging in junk drawer, sawing, hammering, paintbrushing*

.
.
.

*hangs brand new sign on door*


"Desmond Shang - Sensitive Problems Solved Discreetly"

"Please Enquire Within"

I didn't realize everyone was a premium level customer.

I totally disagree with you.
If your desire is to make money in SL, the opportunities are still there.

Fortunately for you, LL had the foresight to plan for people in your situation, https://secondlife.com/currency/buy.php

Of course not everyone is premium level, but the free accounts don't keep the lights on -except for showing interest level to investors. How much money do you think people who aren't willing to pay for their account are spending?

and "free" accounts would contribute to the world how?
They receive a tiny stipend compared to premium accounts.
with no stipend it would be extremely hard for them to do anything in the world at all.
Since there are no real jobs
they can't own land

With no stipend they couldn't even rent if they wanted to try and make a go at making some money.

Were there readily available jobs, I could see dumping the freebie stipend (other then an initial amount to hold them over), but again, you have a broken unfunctioning economy thats slowly going down the tubes.

Do we even know how many active free accounts are in the world? or what their average shelf life is?


Then actually bring something to the discussion.
its easy to run into a thread and say "you're wrong" its much harder to defend your position.

The free accounts are the ones that become the premium accounts.



Free accounts do, indeed, contribute to the world. You seem to equate no available jobs to be the same as no available jobs that you want to do.

I made you a list of the readily available jobs, how are 10-15 jobs going to support an economy? I'm still waiting for your answer on that.

There is no reason that a person with a free account can't contribute a great deal to the world. There is no reason that they can't make as much money as folks with premium accounts, albeit premiums get a L$450 head start every week.

You don't need to own land to host events, build, script, sell, organize, or anything else that I can think of. Of course, some land owners will be less willing to let others use their land, but I think all things being equal most people will still want as many things going on in near their stores and clubs as possible.
I'm scaling back my plans for land, and I'm wondering what incentive there is to keep people (other than real estate brokers) interested in owning land. This is important because land sales and tier are what pay for everything.

I'm not saying free accounts can't contribute, however without the stipend to get them started, it would be very hard for them to set up a shop since employment is extremely limited, but you're still looking at everyone becoming entrepeneurs and business owners, which honestly I don't think bodes well for the stability of the economy. People need a reason to buy your goods, and if they can make it themselves, they're going to do so I think.

Its not hard. BUY LINDENS to start your business and invest in yourself. God knows they're cheap enough these days.



Again, no: if you want money, you don't have to earn it - you can buy it. Those of us running businesses and who convert $L to $US like you just as much when you buy our Lindens off the LindenX as when you buy our goods in our store.



Nah. I can build virutally anything at this point, from a tea pot to a taj mahal to shoes, and I cannot be bothered for daily items. Why spend 30 minutes torturing tiny prims to make a tea pot - a tea pot I'm not planning to sell, that's just for my own use - when I can buy one someone else has sweated over for $150L? Given how much it would cost to buy $150, its not a very good use of my time to expend it making a teapot instead.

Shoes take ages. I hate making them. I don't sell them. But boy do I buy them! Same for clothes. And I suspect for most people, same for furniture, vehicles, etc. Its a "my time vs my money" thing. If I want something totally unique, sure I'll buildit just for me, but that's rare. Mostly I am happy to shop for items

This segregation of basic from premium bugs me.

The distinction between Free/Non-Free accounts is what they give TO LINDEN LABS... not what they give to SecondLife, and what Linden Labs gives them in return within SecondLife.

What do 'free accounts' give to the people of SecondLife? Patronage primarily.

The distinction between a basic account renting a parcel on which to build a business or residence... and a premium account that buys land for the same purpose is that a landlord middleman receives rent and pays tier.

Relatively few small businesses in RL own their shops, most lease.

Saying that basic accounts contribute less or premium accounts contribute more is an absurd notion that devolves into meaningless statistical debates. Any basic account is just as capable of making a difference in SecondLife as a premium account.

Regardless...

SecondLife is very much a tourist/leisure based economy. It depends on outside peoples bringing money in with them as they explore, tinker, play and experiment.

Does the quantity of job types really matter? Entire towns have been built around single systems, from college towns to mining. Most of the people do a few things, a few of the people take care of the rest, and so long as the 'institution' brings in revenue it continues.

Merchant, entertainer, contractor, teacher, broker, manager. 6 job types that encompass a huge amount of variety and various business models. (I include land barons under broker and landlords under manager, your definitions may vary)

That's not enough diversity to base an economic model on?

lets all pray for more people like Sabrina; people who don't mind spending their L$ and their other currency. Without them, the world itself could just become one big virtual MLM... suddenly in-world RL advertising is sounding really good.

Only if such jobs are readily available with enough demand to actually employ the population.
When the bulk of the population has to rely on starting their own business and hoping someone else just doesn't make it for themself, then no its not enough.

In the real world those professions are often required, among many others that keep an economy going. here they aren't.


You're missing the point of how an economy functions...

Its not that people don't want to earn money, its that in order for the economy to function people need other ways to earn it beyond starting their own business. Because really if we're not going to really move the money around in game, just transfer it from one side to the other Linden should close the exchange, and set a static rate for purchasing money.

"This segregation of basic from premium bugs me."


-Nobody is picking on freebie account holders. It's just a matter of economics. Financially, there is a difference between the two. The survival of LL does in fact depend on peolple who are willing to invest their finances as well as their time in SL.



"SecondLife is very much a tourist/leisure based economy."


-It certainly should be.

I don't understand a few things.

First of all, if everyone has a job and is being paid by an employer, are we still not just shifting money around in game?

Also, why do people "need to" earn money at all? I know plenty of people who are happy to throw quite a lot of US$ at this game because it is their primary form of entertainemnt and delivers good value for money for them. I mean if you chuck $50 or $100 a month at SL, its still cheaper than being a movie buff or a CD collector. I'm pretty sure my parents spend more than that at Blockbuster every month, and my dad def spends that on CDs.

I am not one of these people, I hasten to add. I am here to earn money, not spend it, and even with my shoe buying problem, I'm still taking money out and converting it to US$ each month. Woot. Yes, I built a business to fund my Second Crack addiction, but if I'd had the $50 or $100US a month to throw at SL, it probably never would have occurred to me to even bother.

And I think that's fine too - for most people it is a game. For developers its a platform, but for most McMembers, its a game. They're here to enjoy it, without the stresses or obligations of jobs or businesses or anything other then playing house in a virtual world. And long, long may these people play.

This is the real goal of the anti-stipend crowd. They really don't want you to be creative and compete with them, they want the $L stabilized so they can convert the $L made in-world into dollars. They have the odd idea that people are going to pay real money for their virtual creations. I just don't see it happening that way.

As Second Life becomes more complex, it also becomes more specialized. The person who builds a dance floor may not be able to do the animations, and the person who does the animations may not be able to script the dance machine.

Sure, you don't need to buy anything in Second Life. But being able to buy stuff makes it more fun.

That is no different for premium or basic accounts.

As for everyone having to go into business, that is not so. A lot of people are valuable just because they are willing to sit down and have a conversation.

There are tens of thousands of players in game, how many do you know that are willing to just endlessly toss money at the game? I think you'll find most people aren't willing to toss $50 to $100 a month at SL. I do have it, but I'd never toss it at SL.

Why do people need jobs? Because the money needs to flow both ways, thats how an economy works. If it only flows one way, guess what? Inflation goes through the roof, and the money becomes meaningless.. All that money you take out every month will shrink if the economy degenerated into that.

Just because you feel the need to try and get rich off someone's back doesn't mean they need to put up with. Initially when I joined I got the idea a functioning economy was in everybody's interest and since it was being traded with real money it was the intent of the game.

What I do see is a few greedy individuals trying to manipulate the system solely to benefit themselves. As time passes you'll find that ship will have sailed. SLs reputation will fail, and it will be gone, because of that greed.

Thats not a job unless people are paying them to be a counsellor or a psychologist. I'm talking about jobs people can do to earn money in game, its the basis for a functioning economy. They're non-existent in any amount.

I think that the number of people who don't want to work, who come to sl to do thier own thing and have absolutely zero interest in having a job far outsrips the worker bees. Now there is nothing wrong with the worker bees making money there is something wrong with the worker bees thinking they have a right to make money at a rate of $250L to the dollar.

Now some people like doing things in SL liek build, and they don't care about making money. $500L a week means that they can up load some textures, buy the occiasional shirt, hair or shoes, and have a pleasant time in SL.

Casual account holders will purchase linden for big purchases, like skins, or land. Some stuff, like houses, they might try on thier own. however $500L a week means that you can pretty much buy a couple things each week and not have to to the lindex. I almose never spend my entire stipend, and after a year, I am hording about 15,000 linden. Foa while now this massive sum has covered my rent on one store and my liting in the parcel directory fee, as well as some texture uploads. I am happy. Take that away from me, make me think about having to be sure each week that my linden balance cover my expenses and well, SL will feel even more like work, and I will simply sell the land and go play dnd online. Yes its lazy, but then SL was sold to me as entertainment and not work.

Now in that year I have made 15,000 linden. About $54.00. Now I am a hoarder, but lets say I am trying to break the economy with stipends, and I save everything. Well that means that I would make about $96 bucks (assuming a rate of 275L to $1USD-about average.

Now I pay $22.00 per quarter for my account, which is a pretty good deal. It works out to about 88 dollars a year. So assuming I hoard lindens I can make $8USD per year. Ah but then 512 land is not enough, not really. You can't do much on 117 prims unless you a zen monnk. So now for the last year I have paid about $40 a month in tier which works out to $480.00. Thus on me alone LL made $384, assuming I am a hoarder, and not considering that a lot of my stipend went back into a money sink. I think that LL made a good deal on this.

Now. In order to own land have skins, buy some clothes, and spend huge amount of money supporting the jake is a pimpdaddy lifestyle, being generous as I can and furnishing 3 homes, I purchased about $150,000L over the course of the year. At our assumed exchange rate that is over $555.00. So even If I hoarded all that money I get in stipend, I still would have purchased a hell of a lot more lindens than I was given. $500L a week is like a tax refund, not an entitlement.

I know a lot of Basic acount holders holders who spend much more than I do, because they don't have to pay land, they just pay rent. These people don't work, and yet they shop, buy linden, and gernerally sit around and take money they earn from jobs in the real world and line a lot of SL pockets. Hell fucking yes I am entitled to $500L a week. so which has more impact on the value of the linden..me getting $500L a week or me buying $150,000L a year?

For some of them, who work a long day, or long nights, the time thye can get inot this world and just hang out is a gift. No why would thay want to sit around and host tringo for $10L an hour.

Now this assumes they do nothing else, and in no way contribute positively to sl in any way that cannot be quatified by Lindens made or sold. We are reducing a persons value to SL to money. this is saying that nothing that is not sold has any value.

Now lets see, there are people out there making 10K linden a day which is not really a lot for some. Times 365 days in a year is 3.65 million Linden. Now assuming they reinvest even 50 percent back in the business and SL (which is a ridiculously large sum) that means they are still dumping 1.825 million a year back on the economy to cash out. lets say they are investing 20 percent back into the business, they are still dumping on the market 2.92 million or so each year, or they are taking $10K USD out of the economy. Now which tdo you think affects the price of linden on the lindex more?

The problem is, that if you only consider the lindex, you are not looking at the state of the SL economy on the whole. You are not really seeing how stipends impact the economy, because my guess is most stipend money stays in world, and is never cashed out. We have no economic data regarding in world pricing, which has remained relatively constant over the past year, and which should reflect the availability of money in terms of price of goods. In SL the availabilty of money in world does not translate directly to the market, which uses only the exchange between buying out and buying in. If I never hit the lindex, my effect on the market is zero. Well My guess is more people are selling than buying, and that is why the lindex is dropping.

More people selling than buying means there is a drop in the market, it could also mean that despite the growth rate, we are not seeing long term customer retention, or conversion from basic to premium accounts. If this is the case why?
We don't have any data regarding spending patters between premium and basic users on the lindex. I have not seen the new economic data, but does it break the lindex down by transactions? Remember price is about how much is availble, not just how much is purchased. Secondly we have seen nothing like the sort of data we would need inworld to even guess the a amount of impact the stipedn has on the economy.

We also do not really have an understanding of player expectations, and the retention factor. We have 180,000 registered residents and less than 10 k on at any one time. are people coming and staying and buying L? or are they coming, looking around and deciding SL is not for them?

Ultimatey what I have said all along is that we don't have the data to be making these decisions, and I wonder if LL does. They might, but we haven't seen it.