Why end stipends?

I don't understand why everyone is all fired up to get rid of stipends? Do they think that people will stop buying things if there are no stipends? Or do you think that stipends are whats driving the price of Lindens down?

No stipdds cause i qit da game if stipn stopes case i NEed De stipn to LIVE

... for everything else, there's Lindex.

Lewis

It's not the amount of people that cash out - its the amounts that a few cash out that destabilise the economy.

Stipends are not the problem, and as they are one of the reasons that people get a premium account - and subsequently pay LL money each month - then I don't think removing that income is a smart move.
Lewis

In my opinion LL needs to provide more incentive to developers in order to raise the value of L$. (i.e. removing dwell would be a bad mistake)

Agreed...

I was thinking though, mostly about the supply and demand of L$. As simple as it sounds, I think it's pretty obvious that the supply of L$ is far outweighing the demand. However, I do not see a fix by dwindelling the supply (mostly because with less available there is less to invest in and less to invest for).

But really coudl some of you who want to end stipends tell me what your reasoning is behind this?

I'd sell lindens to get that guy tutored. Or pay for a doctor for the english he butchered.

Its quite simple... to stop the growth of the already ocean-like money supply.

"But why do people want to end stipend? No one can explain this to me.

(truncated)

But really coudl some of you who want to end stipends tell me what your reasoning is behind this?"

Okay, simple economics for you:

You have a country. Let's call it Lindenland.

In Lindenland there are limted resources (land, materials, man-hours, information, etc), just like every other country.

These resources are what create wealth (materials + man-hours + information = wealth). This wealth only grows when the resources grow (we find new materials, or we find a way to use them more productively, or we learn new production techniques and technologies, or we work longer hours, etc).

To measure wealth, we take it and divide it into a paper representation. We'll call them Linden dollars.

Now, for the important part:

Now, our wealth is a definable number. Let's call it X. If we divide our wealth X into 10 Linden dollars, each Linden dollar will be worth one tenth of X. If X grows, but there remains only 10 Linden dollars, each Linden dollar will remain at a value of one tenth of X.

However, if we then print 10 more Linden dollars, we are now splitting X into 20 Linden dollars. That means that each Linden dollar now represents one twentieth of X. Each Linden dollar in circulation has halved in value, even though the wealth X has remained the same.

Effectively, it's the same pie, but you've cut it into smaller peices.

The problem is if I purchase something when a Linden dollar is worth one tenth of X, then the Linden dollar halves, when I sell that object I will have to sell it at twice the amount of Linden dollars I bought it for to get the same value X.

That is called inflation. Inflation is caused when the number of Linden dollars (currency) goes up, but X (wealth) does not go up by a corresponding amount. Or, if the wealth goes down, but the currency does not. This occurs often when a population rises, but the resources to supply that population does not (such as in our case: the resident population has gone up, but the amount of land hasn't gone up as quickly, so the demand for land outstrips the supply, driving the prices up as people have to "outbid" eachother, causing the value of the money to drop as you have to pay more for the same amount of land).

Now, SPECIFICALLY:

Stipends represents a massive dilution of the currency, by dividing our wealth into larger and larger amounts of Linden dollars. If stipends double the number of Lindens in circulation, the Lindens you have halve in value. Quite simply, unless the amount of available land in SL increases, or the content in the game increases in amount or quality (and that's down to the residents), putting more Linden dollars into the economy is damaging, as it just devalues the money everyone has and drives content creators to charge more for their goods...

..WHICH MEANS HAVING L$50 or L$500 A WEEK IS POINTLESS AS EVERYONE WILL HAVE TO UP THEIR PRICES TO GET THE SAME VALUE, MEANING YOU CAN'T BUY ANYTHING WITH YOUR STIPEND ANYWAY.

OR, EVEN MORE SIMPLY:

If I give you a dollar, but then I make the product I'm selling to you one dollar more expensive, then you haven't profited. "You" represents the recievers of stipends in SL, and "I" represent the people making purchasable content or selling land.

Understand now?

"My view is, there is no reason to remove the stipens, they are useful for those that don't make any L in world."

It's three to four bloody dollars to get L$1000. People pay upwards of $15 a month to play other online games.

Musuko.

If I give you a dollar, but then I make the product I'm selling to you one dollar more expensive, then you haven't profited. "You" represents the recievers of stipends in SL, and "I" represent the people making purchasable content or selling land.

It's three to four bloody dollars to get L$1000. People pay upwards of $15 a month to play other online games.