Economy, L's and stipends....

(emphasis mine)

Whoa cowboy, settle down

First of all, you need to go back and read my posts, I have read and considered every post in this thread carefully.

Am I discriminating against you? no

Am I proposing to end basic stipends (roughly 200 Linden per month per active basic acount) ? Yes, absolutely I am, for the reasons that I outlined previously.

I am sorry, you can not expect something for nothing, regardless of your real life economic situation. If you want to spend L you can buy 200 L dollars for less than 1 (ONE) U.S. dollar. On an individual level, removal of the basic stipend (outside of the psychology of it) will not really hurt anyone, on the economic world-view it will help our current economic situation.

Here is a question, what will you do when designers begin to raise prices? When rent goes up? These are foregone conclusions in an inflated economy.

I am sorry you are taking my view personally. But, the basic stipend is LITERALLY, getting something worth U.S. dollars for nothing. I am on a basic account too, and the L I need, I go to the lindex and buy. You can not expect to get something handed to you for free forever. That one time $9.95 fee allows you basic access to SL, in my opinion, it should not entitle you to 200 Linden per month for life. That is a major part of the economic problem.

I am sorry you feel that I am stepping on your toes, but I am entitled to my opinion too.

Jessica

I don't get money for free. I work for it by creating new things. and I work very hard at it. I do however know that if Linden kills basic stipend those basics will leave and I will earn nothing as employers in SL do NOT pay. They do NOT keep thier word. I have gone through this and I know. again if income is taken away then income has to be provided for adn that means REQUIRING a minimum wage or commission for work and enforcing same with stiff penalties for those employers who do not pay it.

I'm basic. I work my ass off making things for sale. I do not use camp chairs. Are you going to punish me along with the other basics that work thier assess off for something others do? I'm chewing up bandwidth? Hey! so are you premiums that don't bother to make anything for sale. Why pick on just the basics? Why not go after the premiums who just have fun and don't bother to work thier asses of trying to make it in SL?

I am against the idea of changing the stipends in any way shape or form. Like many of the low tier/basic account, I pretty much need the L$ to be able to upload and work in my own little shop. Frankly, I can't afford to buy the L$ either, so cutting the stipends would mean, bye-bye hobby. *gasp* Yes, this is a HOBBY! I just happen to like the flexability of this hobby, is all. But cutting stipends would only mean that they'd lose my monthly mad money, as I've done it before, and I'll do it again, selling the plot of land I have to a land baron and walking away from the word premium. (Last time was due entirely to RL issues, though.)

There are far better ways of "sinking" the L$ into a black hole, but cutting stipends isn't one of them.

TY Vasudha. The problem is not a lack of awareness of those issues. It's a lack of taking action in putting a stop to unfair practices within SL. True the upper echelons may want it taken care of but in world is a different story by far. Very few of the in world ppl who are supposed to enforce things will take an active roll in doing so unless someone who is a well known..shall we say rich..player is the one IMing them..then they jump. For the little guys like me we get directions on how to send reports about being shot and we get to continue being shot at, griefed, pressured, hassled, preyed upon, and generally ran out. If LL is so aware of such things then why is nothing being done about the in world sales at high prices of freebie items? Or griefing to get property by running ppl off by some land barons ( note..no names and I said some not all). Why is nothing being done about rigged gaming and there is no enforcement in place in world? Well I should rather say why is enforcement against unfair practices only there for a chosen few. LL handed you a mess Vasudha, and I don't envy you. You want to know what ppl really think then don't talk to the ones selling or sitting on huge amounts of L's. Come in world and talk with the hairy unwashed masses and see how we feel about this creation of a world where only a chosen few are allowed to make it. Talk to the major players who have tiered down in disgust and ask them...WHY.

They say History is the best teacher. For a comparission (From the Real World)



Source: http://www.usagold.com/GermanNightmare.html

I am not just making crap up to spew on the forums. There is historical evidence for what is going on right now with the economy in Second Life.

Now, SL is not issuing a 'flood of money' at one time, however, they are issuing an excess of money over time so that the end result will be the same, it will just take longer. We are seeing those effects now. Look at any basic introductory economics text and look under inflation and make up your own conclusions. Don't take my word for it, and don't give an off the cuff, "Don't take away my stipend" emotional response either. Look at the facts, do some research, and draw your own conclusions. There are only a few that can be drawn.

Jessica

If you had really read my posts you would know that I do what I can to earn Ls since I can't afford to keep buying them. What part of working my ass off did you not understand?And if paying that initial 9.95 is tantamount to getting something for nothing then why did I have to pay it in the first place? If I am getting something for nothing then why am I even bothering to make anything to sell? I earn that 50L stipend every single day I am in SL and I am in SL every day working my ass off!!

It's not just my toes you are stepping by advocating stipend removal for just the basic accounts, you are also stepping on the toes of others like me.

Or is this really a case of let's keep SL only for those who have lots of money to spend on buying Ls whenever they want to buy something in world?


And since you don't feel YOU should be getting that 50L a week are you giving it back to LL or are you spending it along with whatever Ls you buy on the things YOU want?

Although i am impressed about what you typed, you are wrong.
Yes you can play SL for free, no problem with it. Play SL.
If you need L$ to have fun there should be two ways:
1-> buy from lindex.
2-> work at in-world jobs.
But there is an alternative way: wait for free weekly stipend.

I am paying over $1500 / month to the SL for only tier,paid total over $15.000 in last 23 days with land buy costs.(Transactions, texture upload, classified fees are not included.)Yes it is true.Some people pay more, some people pay less. But this is how LL finds money to fund SL. Now in one way or another(500/week, land buy-sell, upload textures to produce things), i(and other premium members) am/(are) paying this money to get L$ (in)directly. But LL is giving over 5 million L$ for free to basic members. And this 5 million is lowering the value of L$,which is a loss for me. so i am paying some of this $12500 to fund basic members' stipends indirectly. In summary, it is not LL who pays your stipend. It is premium members.
Yes, it doesnt sound right to me, but i have no problem with stipends, ok if people need it to have fun, keep it, but find a way to stop the devaluation of L$.Create new services to take money from the world. Or find another way.

Selene,

You are being irrational, not because you disagree with me, but because you won't even discuss your ideas and thoughts, muchless why you feel that way. You have your view and anyone who disagree's with you it's a "how dare you" or a "this [is] really a case of let's keep SL only for those who have lots of money"

We will have to agree to disagree. If I may suggest that you do some basic research on economy and inflation, perhaps it would help you to understand our current state, how we got here, and what we can expect to see in the future.

Good day & much love,

Jessica

Let me start by saying I am not an Economist. The one Economics course I took 22 years ago was largely forgotten the day after the final exam

But here is something I wonder.

Everyone says we need to kill stipends and add sinks. One alot of levels that seems to make sense after wading through numerous threads on this topic.

I just wonder if there isn't another problem happening here too. One of human nature on the part of L$ sellers. I am not talking about the big traders. I am talking about the uninformed and occasional people that really have no clue about the market.

I personally have had several occasions where I had one heck of time explaining to someone that at rate of 300 was WORSE for them as a seller than a rate of 290. Many people seem to get it stuck in their heads that a higher number by definition is better.

Sinks and stipend removal aside this is going to continue to be a problem and we will see this group of sellers consistently listing at prices that hurt sometimes for very large sums of cash.

Once that happens then the bandwagon of people that want to sell fast takes over and the rate gets worse and worse 1L$ at a time.

One thing that might be considered is a way to make it more obvious to sellers what the rate means to them in terms of RL$ in a way that circumvents what I described above.

ANyone have any ideas how to do this?

I'm a premium account holder too. Does this mean I'm entitled to the free L$ while the basic accounts (who are the ones that SPEND THEIR L$ in your stores/clubs/etc, by the way) are to recieve nothing for the value of the time they spend here? I always looked at it less like a stipend and as a way of saying, "Hi, thank you for doing business with us. Please, pass the word along."

Nothing worse than telling a person that they need to get a job in the game to support their spending in the game...... Riiiiiiggghhhttt... How about this? This is a game. If you need the RL money so badly from it, get a RL job.

Sounds bad that way too, huh? So, find another solution and leave the stipends alone. The Lindens already have some sinkholes in place, but they aren't used/can't be used properly or just aren't doing their jobs. I think they should start charging a fee on the sale/buying of land. Sure that would hit me, but it would 'sink' some L$ off the market.

That is my point. I and many others don't sit around and wait for stipend. We do work at in world jobs and we do other things to make Ls. We don't just sit in camp chairs. I rent land for my stores. I recently found a parcel that although didn't reduce my rental fees but still gave me the same amount of land and prims all in one parcel rather than having to rent more than one. Where do I get the Ls to pay for all this? In world. I play tringo, I work, I bust my ass to earn the Ls to pay my rental fees. My 50L stipend may not go far towards paying for rent and uploads but there are times when it makes all the difference. Just as the 500Ls you get every week help to make a difference for you.

By keeping the Ls I earn and spend -in world- it is indirectly helping you to pay for your tier, etc. Just as I am helping (directly I might add since I am paying rent) others to pay thiers. Without the basic accounts paying rent and that 50Ls helping to pay it, landowners would suddenly find themselves with alot of empty rentals. Which obviously means a loss of income. Loss of income for them means they buy less in the way of products which means a loss of income for the creators. When the creators suffer a loss of income they spend less on uploads, etc. The end result is they look to buying Ls but they can't or can buy less than what they need because, due to the reductions in income, the amount of Ls being sold has been reduced, simply because people have fewer Ls to put up for sale because of thier loss of income.

Here is something else to think about. How many basic accounts are alts for premiums? Think of the connotations of the answer to that question. It means alot of the basics out there are (in the same sense you described) being paid for by the premuims that own the alt basics.

I agree a way needs to be found to stop the devaluation of the L, but, cutting baisc stipends is not the answer. Cutting basic stipend removes a large inflow and cutting basic stipend will result in less outflow, thereby devaluing the L even more.

1-> i never cashed out money from second life(yes i did once to paypal but bought L$ with it again) So it is not a "RL" job for me.
2-> i have a (very good) "RL" job.
3-> Making money in SL is a part of game for me. As i said, i didnt cash out,earning money in SL is playing monopoly for me.
4-> Already told same thing: "Yes, it doesnt sound right to me, but i have no problem with stipends, ok if people need it to have fun, keep it, but find a way to stop the devaluation of L$.Create new services to take money from the world. Or find another way."
5-> I am not suggesting to remove stipends, but if it is creating a disadvantage for game's economy, and decreasing my fun, one must find a way to compensate it.

I admit I posted -somewhat- in anger. I'm finding it very frustrating that those who advocate cutting basic stipend -appear- to be thinking more of themselves rather than the people of SL as a whole. I have discussed at least some of my ideas and thoughts. Maybe not on this particular thread but elsewhere.

As for the reasearch... I'm 46 years old and have had plenty of experience with RL economy and inflation. I understand completely the current state of things, how it got there and what the future may bring. It is a complex situation that not only involves SL, it also involves real money and those who earn the real money to spend on SL. I just don't think it is right for those who don't earn as much as others in RL to be penalized for it by removing something that helps them to stay in SL and be productive, all the while doing thier fair share (or even more than thier fair share) of the work to keep the Ls flowing.


However, I will agree to disagree and move on.

--
Keep the sources open... and dial the sinks up to compensate.
There's more at stake here than just the value of the L$.

Your first two points are excellent.
Your third point, I am not sure I understand. That would still hurt the value of the L$ against the U.S. dollar, wouldn't it? Yes, LL Would see profitability increase, at the sake of the value of the L$. If I understand your third point correct, it would lead to inflation and would not be good for the economy, nor profitability for LL in the long run as the L Dollar collapses.

However, in light of your first two points, I think I should change my stance somewhat. Active Server Population is just as important as the economics involved. While I do not personally think that a Linden Dollar giveaway (as is the case with the weekly stipend for basic account holders (myself included)) should be sustained in the long term it might be that it is necessary to increase the population. However, the protection of the SL economy is vital to SL's success.

As such, I am going to change my stance somewhat and argue for more effective monetary sinks in world instead of eliminating the basic stipend (for reasons of marketability). However, there will come a point in the future that the elimination of the basic stipend should be seriously considered.

With that stated, what are some ideas for sinks in world that could remove the surplus L out of circulation?

Prim Tax?
Oh! Here is one, everyone used to complain about prim hair affectionately known by a friend of mine as 'hoochie hair' *smiles at Cris* what about a tax if you have more than X number of prims attached to your avatar?

I know that I personally could not rez all of the things I wear on a 512 plot of land *laughs*

Jessica

One is an input, one is an output.
That's one problem.

The thing is that there's a big difference between eliminating the source and creating sinks.

Economic activity, the thing that makes the Linden Dollar worthwhile, is the result of consumers buying things. Of it was just a matter of land rental you wouldn't need a Linden Dollar, you could simply rent land for US$ from a Land Baron.

So what makes the Linden Dollar worthwhile is the fact that there are people making stuff that you can buy in-world with Linden Dollars. And there are people making stuff because there's customers buying stuff. And there's customers buying stuff because there's lots of people with Linden Dollars.

If there's not lots of people with Linden Dollars, then there's less economic activity. There's less people buying stuff. There's less people making stuff. There's less stuff to buy. So there's less demand for Linden Dollars.

If not for the stipend, Linden Dollars would tend to gravitate to people with capital. That happens in the real world, but it's mitigated by the fact that people in the real world need workers to make things to sell. So without the stipend, you'd be limited to people who bought Lindens on Lindex, and people who earn Lindens in game.

And the people who earned Lindens in game would have fewer people buying stuff, because they'd mostly be selling to people who were already content creators, and there's only so much of taking in each others washing that you can do.

So, you need some mechanism to keep the money circulating. Either you place costs on doing business that require you to "employ" people to create wealth, or you create costs on doing business (sinks) that are fed into simulated income from employment (stipends), or you use inflation as a kind of capital tax to fund the simulated employment.

Or you can say "we're not going to try and have a healthy internal economy, we're going to depend on the external economy to provide wealth" and let your capitalists become bankers through Lindex.

Which is the option being pushed here, but it's not necessarily the best one.

It's not "free money forever".

It's 20c a week for being an "extra" in the movie of Premium Accounts Second Life.

That's way below actor's guild rates.

When people are getting the basic stipend without socialising with paying customers, that's a problem, but that's a problem that's really only BEEN a problem since camping chairs took off.

Let's change that. How about... you only get the basic stipend if you get at least one positive rating from a premium member that week? And each additional one gets you another L$10?

I'd agree with that but I see a couple of problems with it. Using my self as an example...I spend most of my SL time working on projects and doing very little socializing because of it. I interact with my customers when they show up where I'm working (usually at one of my stores). People have stopped rating others because of two things. 1) the cost of rating someone else (it has gone up since I've been in SL) and 2) they no longer get anything in return. Even when the rating system was still in place the cost of it was enough of a deterrent. I've been in SL for 6 months. I've been rated a total of 3 (behavior), 2 (apperance) and 1 (building). Unless they bring back the rating system and a lower cost to the one doing the rating (or eliminate the cost) and people actually use the rating system honestly (and not just to make thier friends look better), your proposal will not attract more users or encourage them to upgrade to premium. One of the biggest attractions of basic accounts is the stipend. If a basic account manages to become successful enough then they are more likely to upgrade to premium.

The sad fact is people can be and are stingy with giving ratings. Especially since they have to pay to give them. Sometimes it is because they never think of it and sometimes it's because they flat out don't care. The ratings, before and after the change, really are not any kind of accurate indication of personality, looks or building ability which renders them moot.

However, I do give you full credit for trying to come up with a solution that is agreable to everyone. You gave it a good try.

Jessica- You rock. Thanks for hearing me out and giving my points consideration!

And yes, you are right. My 3rd point was exactly that. L$ may continue to slide... but as long as LL's LindeX revenues increase they probably won't have much motivation to address the issue.

And, of course, long term, stipends will only go so far when it comes to their effectiveness at recruiting new spending players. More marketing gimmicks will be needed to keep SecondLife's population growing enough keep commerce healthy. Until then though, they do appear to be a necessary crutch.

Prim tax? Noooooooo!! please no. =)

My vote goes to stipend lotteries ... waive your weekly stipend for a chance at a big lump sum of L$'s.

Personally I think it should cost more to post an event than it does to list a classified, perhaps even auctioned. (one per category per time slot, so commercial events aren't competing directly with educational events for example)

Premium players should have the ability to waive their stipend for a boost to their land allocation if they want.

Bring back the popularity boards, they were an excellent sink =)

I kinda hate to suggest it but: in-game interest rates. If too many people are selling their L$, pay them not to. Doesn't benefit LL in that it will bring the volumes traded on the market down and it still creates a new source but it could decrease the number of L$ in active circulation and bring the value up.

Or, (and this will really annoy money changers): income tax. 10% of profit (non-source income - non-sink expenses) goes towards LL. Settled per transaction that's L$10 or more. Heavy losses would create tax credit that prevent taxation until the credit is used up.


--

Actually Kazanture, this wasn't aimed at you, even though it came after your post. Sorry, it was general response because people tell us in game to "get a job," if we want to buy their goods. I vote, Boycott, but that's just me.

I'm glad you look at it exactly for what it is.. a game. And as such, I'm boggled by the fanatical scrabbling over a game's economic system. Just because one can sell their money for real money, it shouldn't be the madhouse that it has become. If the USD is any indication, it won't matter in the end, because we're gonna get left holding the short end of the stick eventually.

I love how every one of your 'solutions' is a restriction on someone else.
You do realise, that if someone rents land, they are in fact still generating revenue for LL? It's just indirect.
Every account holder should be able to trade on the Lindex.

No, they wouldn't. They'd end up in the hands of premiums via a black market, and back on to the Lindex.

Dammit. We agree one something. Let's hope we don't make a habit of it.



Just kidding. I'd rather us be able to agree on some things versus disagreeing about everything.

If they're selling they're renting, if they're renting they're paying, same as you.
The issue is the scale at which the money supply is being increased by stipends. We don't have to run around restricting every one to address that.