Stable Economy:Land Barons Stop Dumping Millions on the LindeX

Stop dumping millions on the Lindex to the lowest bidder. End of Story.


Thanks.

You forgot the </sarcasm>.

Eboni:

Thats capitalism baby.. Get used to it...

So, if I read you right... capitalism is the deliberate destabilising of currency?

Ah, so devaluing the Linden, by dumping large amounts at low values isn't the major inflationary problem on the lindex, its Stipends
damn those stipendy stipends.

I see your logic now RSB.... not

Actually it's more then just stipends, but thats all that seems to be talked about, it's also dwell bonus's and other incentives where money is printed, but from what I saw in the last news letter, I have a feeling it's all about to come to an end...

"Lindenomics: Whither Stipends?

Entitlements have been a facet of the Second Life economy since its inception. Initially, there were Stipends and Reputation Bonuses; today, we have Grants and Traffic (or Dwell) Awards. Only occasionally has the logic of entitlements been examined – and the usual question is, “where's mine?”

There are plenty of sound reasons for retaining entitlements in Second Life. New Residents are arriving at an unprecedented rate - our population is increasing by about 15% per month - and new Residents need to have some money in their pockets. Further, the creative efforts of Second Life Residents are causing the quality of goods and services, along with the number of transactions in a given time period, to rapidly increase – meaning that Residents are increasingly interested in purchasing more.

Based on these growth factors, Linden Lab must actively increase the money supply - basically print new money and somehow get it into circulation. If we didn't print new money, the existing money would become scarce, making Linden Dollars increasingly expensive in US dollars (see How It Works).

However, if printing money sounds like a bad idea – that's because it can be! Long the last economic refuge of African dictators, printing more money than the world needs can be devastating. In an economy as hot as that in Second Life, infusions of new money balance the rapid growth of the economy and keep the currency exchange rates fairly stable. But, as the economy begins to slow (Second Life's economy will cool down; if it continued at this rate it would be the largest in the world in only a couple years!) Linden Lab will reduce the amount of money that we put into the economy to keep the Linden Dollar from becoming worth too little!

This means that stipends, traffic incentives, money given to new Residents and other forms of entitlements will be steadily reduced. This will happen carefully, and over time, all in an effort to preserve the value of the Linden Dollar – making it a constant, reliable currency in Second Life."

Yup it sure is - hope you get used to it

We'll have to remember this gem for your next rant on the 'broken economy'.

One however has to keep in mind the societal effects of the different kinds of entitlements.

Stipends are a 'reward' for merely logging in once a week.

Dwell however is a payment for actively doing something - providing something that the residents of the Grid enjoy enough to hang around and do.

It would be interesting if we could get stats from someone trustworthy as to whether or not camping chairs are actually profitable in that respect. (Everybody seems to assume that they are - but we have no numbers.) An analysis of DI made in December showed the money didn't go to camp chairs - but to land barons and venue operators. This makes sense when you think about it - many chair operators have a single (smallish) location. How can they compete against Anshe or Ravenglass or Fairplay or the Barbie Club?


The solution isn't to remove stipends entirely - but to wean them from the breast. Stipends should reduce steadily and gradually from your first week inworld onward.


I didn't think DI should be eliminated, nor do I think traffic incentives should be reduced or eliminated. Like the tax breaks RL goverments provide businesses - these provide incentives to provide jobs and increase the tax base of a community. Or, in SL terms, they reward the designers and venue operators who provide places to be, things to do, and things to buy for the rest of the residents.

Deflation is poison to capitalism, because it makes capital less valuable than hoarded currency. Capitalism requires a certain amount of inflation.

I'm not sure that capitalism is really practical in SL, because there's no capital goods... there's nothing that you can buy and manage to improve your efficiency of production of goods and services other than, to a limited degree, land itself... but Linden Labs has been systematically reducing the ability of land itself to provide a return on investment.

SL isn't really a capitalist economy, it's a service economy. There really can't even be a capital market in intellectual property because you can't transfer "information capital" other than by transferring an entire business. You can't, for example, earn royalties from the use of intellectual property in production... because there's no miminum resale price or commision rate mechanism in the rights system.

Didn't say I believed that capitalism would result in deflation, only that that's what RBD said...

No actualy that's market fixing. Something that is highly illegal in the real world and would get you a fast visit from the SEC...( in case you don't know, as I am sure from reading your posts that you do NOT, that's the Securities and Exchange Commision )...and probably a subsequent visit from the IRS and Treasury depts as well. You only do it because you can. Remove the ability to do so and the L would not only stabilize quite nicely it might actually increase in value.
The only ill effect would be on you, since it would also limit your ability to prey on others while lining your own pockets.

No, he said that it would result in inflation (I think) and I was pointing out that (a) that's true, but (b) what we're dealing with isn't really capitalism.