Do people not understand how economies work?

Thinking on it a little more, another cool addition to even things up a bit -

The ability of land owners on the main grid to deed land to a rental group, without the risk of losing it. This would make management of rentals on the main grid just as easy as on private sims.

Should also apologise for the hijack Sorry Dark!

I don't care if people think I'm smart. I just wish people would learn that they can't make themselves richer just by getting the Lindens to give them more money.



They have the monopoly on the original sale, true. I do realize land is rather different on SL. Land normally doesn't increase like it does on SL. My main gripe is with people that think they will be better off if everyone was given land or more money. There still can't be more land then there are servers to hold the land, so more land will still end up costing people in the end. Land is definatlely odd on SL. Like I said, it is not normal for land to go down in price or stay the same like it does on SL.



I don't care if SL turns into communism, supply and demand always effect people's trading. People will always value the lesser supplied and greater demanded items more than they do the greater supplied and lesser demanded items. It does not matter if money is measured in 1000's of lindens or 10000000000's of lindens. People will always eventually give a certain amount of their lindens based on how much they value something. You don't need examples. This is common sense. I'm not trying to prove capitalism as the best system. I'm just trying to state that people can't fix wealth just by making more money.

Hiro - I need a bit of help here, I can't quite follow your logic. Surely leases can currently be sold and transferred, albeit with the landlords help. Surely the AnshChung organisation is doing it every day ? If you mean that it is outside the rules, I thought LL had accepted, even encouraged it so long as it was not advertised as a land sale. Surely anyone who has rented out their sim, if they would prefer to recover the selling price by selling a lease, could wait till the rental period ends, then offer a lease to the tenant, or a new leaseholder willing to replace him? Is it that you regard the practice as nothing more than taking a rental deposit so high that the tenant is locked in, and must find a tenant to replace him when he leaves ? You find this morally dubious? Please explain - I dont understand your quoted paragraph, and I feel it important that I do.

There are practices that are taking place that I strongly disagree with, yes. It has been extensively debated already, so I will not open up that can of worms again. I don't think there is anyone who charges a 'rental deposit', there are a couple of people who are 'selling ownership' of deeded plots.

I would be interested if you could direct me to where LL have encouraged this.

I wasn't trying to sound smart as someone put it, and I'm not sure why the person that says they don't care bothered to read the thread. This was nothing more than a rant out of frustration from all the votes I see from people for raising the stipend and all the posts I see about not enough cheap land. I wasn't meaning to give an exact analysis of how SL's economy runs. I simply am frustrated with people that either think they can fix an economy just by making more money, or by people who feel cheated by an economic system that doesn't seem unfair to me. I already know it seems unfair to others.

That said, what I am curious about is these differences people speak of in SL from a normal economy. I enjoyed reading the comment about some of the observances about land. As I've said before, I'm fairly new in SL. I wouldn't mind hearing some of these observed differences, just for curiousity's sake.

Hiro, I don't mind the hijack. I don't see a reason why someone should be forced to stay with the topic that a conversation started with.

I was using the term "rental deposit", because LL says what Anshe and others are doing is actually "rental". Not sale, not lease, but rental. If so, what can we call the "selling price" but a "rental deposit"? Which is why I used the term.

My view is that the best word for what they are doing is something in between, ie "selling leases". But all this is besides the point. LL chose not to step in, and even allowed the advertising of these deals as "land sales" to continue in "find" until they stopped it technically with an update. As Lindar Lehane, I posted deploring this whole sequence of events as misleading the punters, and seizing unfair advantage over more law-abiding landlords. I got little support, as you may remember.

If I remember correctly, a Linden stated in the hotline (was it to Blaze or you?) that these things should not be advertised as land sales, but this ruling was ignored in certain quarters. Not just ignored, but openly defied directly in words, without response.

As for the encouragement of the new form of "private-but-deeded" arrangements, and their use to expand themed sim availability, yes I'm sure they encouraged it, though they hadn't anticipated their little deeding change would cause it. I'll try to find the post, but it may not be easy.

Quote:
Originally Posted by Jake Reitveld
Also people propounding free-market economics and economic darwinism who cannot provide a single examble of a successful major world econony that operates on a completely free market (aside from Tijuana and some other Zona Frontera cities).



There are many examples of virtually uncontrolled free market capitalism with little political interference, nearly all of them from 1713 (the Wars for Empire between Britain and France) through 1933 (the end of Wiemer Germany and the beginning of the New Deal model in the American economy). One of the best examples is the United States from 1793 to 1901, and again from 1919 to 1933.

How successful were they? Depends on your definition of success. However, in all cases, without exception, they were not as generally successful as the mixed economies that followed them.

But the word 'deposit' implies a full return of the sum paid. I know of one resident who will 'buy' back the plot from the 'tenant', but far from the price paid. Not only that, the word 'ownership' is used to 'sell' the plots.

What one arrogant self-serving rubbish. We have informed Linden Lab weeks before SL 1.6 patch about our plans. Our trading of land deeds in Dreamland is 100% within rules and has been going on since more than 3 months under constant observation by Linden staff.

You are just unhappy that you have not been able come up with one model yourself that allows others invest in your sims. Our continent is growing fast, can afford whole sims of parks, sandboxes and other common areas and has no waiting lists for land. Instead of just throw cheap islands into the ocean we are building one new grid of already 38 sims, with themes, cultures and communities. People love it, people enjoy be part of it as investor and owner of land, as real citizen.

I think SL community would be better served if you would spend your time to improve your own sims rather than trying to label your competitors as "rule breakers". Your crusade of "shouldn't we be stopping the breaking of the rules", how you call it, is nothing more than your despicable attempt of damaging another more successful businesses opportunity.

You are right, of course, on both counts. Don't know what to call it if we must call the overall practice "rental". Isn't it perhaps a sort of non-returnable deposit you have to recover from your successor tenant?
In fact, its designed to look as similar to a land purchase price as possible, precisely so that the words "land sale" can be used. My view is that it is ownership, not of the land, but of a tradeable lease. I deplore any attempt to confuse the two in the customers mind, and I think the use of inapplicable words can do that, whatever else is said. It is the Lindens who have ruled any word but "rental" inapplicable, and I believe their authority should be respected, even though I personally think the word "lease" communicates it better.
I think we are united in our disapproval of several aspects of this, Hiro.

Anshe, not sure if you missed it, but the rule of the forums these days is to be polite to one another now.

Hiro has been careful not to direct his attack directly at any particular individual, you probably should try to do the same, at the very least.

As for the discussion - rentals should not be different than rentals with lease right purchases (my phrase). In fact, in some ways, rentals are far more dangerous to the economy than rentals with lease right purchases.

Rentals have probably done more to undermine land prices and the economy as a whole by creating a quick and rapid devaluation of land.

At least Anshe was trying to keep up with the status quo (and perhaps profiting from it), whereas rentals with full land rights completely throws a new and unstable twist on things.

Also, allowing rentals and not lease right purchases would be an unfortunate (and truly pointless crippling.. doesn't help anyone - Linden or Landlord) as people could not pay more for a better plot.

I guess you could up the rental price, but that makes thing more complicated technically and that would be pretty much the same as the value of land fluctuates constantly depending on your neighbours and what not. Better to let the market decide in a liquid way (you could do auctions, but auctions require bidding times and are illiquid).

Ellie / Lindar (thought it was you proposed a great idea and I completely agree with it. Lets create a third type of SIM that is auctioned off. Grandfathering in Anshe may seem like it gives her an inordinate advantage, but then she did take a very massive risk and therefore rewarding her is wholey appropiate.

Please refrain from making insulting attacks Anshe.


You are right, I would have never ever considered doing what you are.


So your islands are cultured communities and mine are just cheap islands thrown into the the ocean? Maybe you should talk to some of my residents Anshe.


I am doing quite alright ty. I have 100% occupancy, can you say the same?

Thank you Blaze.


I know the economy is one of your fave subjects Blaze But you can't suggest that each individual is going to create their business plan on what is best for the economy are you? It's just not going to happen.

Anshe,

Just because I diagree with something, it doesn't make me arrogant. And fear of responses like yours are not going to silence me either. I did not come to this thread with the intention of bringing this up again, it just went that way.

I ask you to please refrain from making attacks and describing my communities the way you have. I think the work you have done on the sims is great, I just disagree with certain aspects of the way you 'sell' them.

It's not about you being successful Anshe, and there is no doubt that you are. It's about what I believe.

So boys and girls now you have got to it again... we can all read between lines - some get angry some see it all and dont say a world some do others..... some plant a things clever and then play non guilty... ok... as IRL...

There are plenty off space in SL... and more can be added easy by putting in more servers.... so I think you all can do what you like and want and need...

No one are better then the other so pls.. stay with your diff ideas and try to develop them in diff ways and some day we all will se who do/did it best... and then I dont want to measure it in money...

Pls..... let us live in this nice and wonderfull SL and have it nice... I myself live in a Dreamland.-)))

It's not about who does it best, it's not a competition. How can you even measure what is best anyway?

I prefer to be straightforward and honest. What you are attempting on this thread is completely unethical. You are trying to discredit one competitor and you are pushing for changes in the system/policy to hurt that competitor's business. It doesn't matter if you mention my name or not because everybody know who is meant and who is affected by your proposals.

I thoroughly despise such tactics. I believe in growth and success by hard work and innovation. I don't believe in intrigue, politics and half-assed attacks on your competitor's business environment.

I never mentioned your name Anshe, In fact I not only directed it anonymously, it was in the plural, not singular. I'm trying to dicredit no one. I also didn't intend the thread to go this way.

I am pushing for changes in the system? Oh come on Anshe, I was not the one that asked for there to be a third category of sim, I only asked that if things were changed, that it was done in a way to not dump people (like myself) in the crap. In fact, if I remember correctly, it was you asking for there to be a change allowing the sale of plots of private sim straight after Robin informed us LL's position was that they are rentals and nothing more. Is that not a more apt example of something you are claiming to depise?


I despise such tactics too Anshe, but I'm sorry I am not guilty of them. I also believe that the opposite extreme is ridiculous too though. It seems tat if you have a vested interest in something, it's wrong to voice opinions on what others are doing. And I certainly don't refute the hard work you have put in Anshe.

Ad Hominem is neither straightforward or honest, in fact it's deceptive and manipulative. If Ad hominem were allowed than co-opting the agenda would be a lot easier by just getting a lot of friends to help increase the emotional atmosphere.

But if we try to avoid anything which inflames, critical thinking versus clear logical fallacies becomes much more apparent and the ideas with merit will win day.

It might be easier to vent and rant with insults but it's never more productive.

However, one thing I don't get. Hiro, you acted smart in the same way that Anshe did - how could you possibly be negatively affectd by anything?

LL made a statement informing us that they didn't support teh sale of plots, they viewed them as renting only. Well I worry on 2 counts.

1. If something bad happens which causes bad feeling with these 'sales', it could ruin it for everyone. Someone has already suggested in this thread it may be a good idea to remove the ability to deed plots with private estates.

2. If the current sims are changed to allow sale of plots, it's unfair on those who have set up their businesses in a way to play ball and play by the rules. That's why I think if change was to be made, changes shouldnt be made to the current private sims. That way, there is NO one that can cry fowl, and new investors have the same opportunities that established ones do. If the SL community wants a private sim with deeded plot transfers and sale enabled, this could be a new type, leaving the current one unchanged.

And maybe there could be an option to have your old sim converted to this new type (with a fee equivalent to the difference in price, should there be one), so that those who have bought many sims with the hopes of selling plots are not left up shit creek with out a paddle.

To me that seems fair enough doesn't it?

Well, what should be done is find improvements to the system that are fair to all stakeholders and community at large.

It may surprise some, but sudden and unexpected introduction of land deeding feature was economic desaster for our business (and for all other land barons). It suddenly and dramatically devalued all our investments in SL. For ANSHECHUNG.COM this meant booking losses of 5 digit US$ figures. Building Dreamland was embracing the desaster and riding the Tsunami that ruined mainland land market. Dreamland is successful and profitable, but sofar in no way compensates what happened on mainland.

Such sudden changes should be avoided at all cost, they should at least include fair migration paths for those effected. This of course includes your investment, Hiro, as well.

The idea of auctioning off sims where land can be resold but still zoning rules can be enforced by one "admin" or "ruler" is something we already suggested to Philip in November last year. It would make what we are doing on Dreamland easier and less cumbersome. At same time it would be more healthy for land market to let auctions decide the sim price.

But of course we have one dilema here: there are people who bought sims already. In Dreamland 40000$ were invested in sims. Hiro and Schwanson also invested big amount. If now you suddenly introduce better sims all current investors are holding trash bag again, like investors on the mainland were holding trash bag this spring. To avoid this Linden Lab could offer one upgrade option, possibly for one reasonable fee.

To accomodate Hiro and others, there could be one rental feature in sims. It is overdue anyway, isn't it? It could work like land deeding, but with L$ deducted daily, weekly or monthly. Maybe Hiro can make some suggestions here, I still not completely understand the negative impact auctioning such sims would have on his business model.

One other important feature, to make sustained management of these sims viable, is to continue to allow tier arbitrage business model: one person pays Linden Lab for the whole sim, several people pay that one person.

Because of zoning rules in those sims and the fact that people need to tier with the person managing the sim, land sales can not be 100% automated: there must be one approval step. This could work like this:

1. Land owner sets land for sale
2. Land appears for sale in land finder, on world map etc
3. Prospective buyer inspects the land and one popup appears providing all information such as who manages the sim, zoning rules, how tier payment works etc.
4. The buyer clicks on "BUY". Money is taken from his account, but it is not give to the seller yet, but withheld by the system
5. The admin of the sim has to APPROVE or REJECT the transaction. Reason for rejection would be that the buyer did not subscribe tier, is one known griefer etc
6a. If sale is approved money is forwarded by the system to the seller and buyer is new land owner
6b. If sale is rejected, money is returned to the buyer and land is set for sale again

This would deal with sims that allow subdividing and renting/selling/deeding etc. But how about cheap and unlimited 980$ sims?

Lets look at current private island sims. And lets be honest: how many of them are used for great non-profit projects? I see malls, clubs, more malls, more clubs. Some private luxury estates. Even before land deeding the cheap private island sim land was used for business and competed directly with mainland land market. If the idea is to subsidize beneficial projects, then criteria would have to be more strict. If the idea is that private island sims are less work for Linden Lab, then clubs and malls don't belong there because they are *more* work for support. Now you take deep breath and sit back: it was indicated to me that, with the exception of Dreamland and a few others, average private island sims are *more* work for Linden Lab than mainland sims. People move sims, people have 100 questions about sim functions, people crash their sims with club events and so on.

This is why I think best way is just completely do away with non auctioned sims. Auctions are fair to everybody. For beneficial projects I would rather give away sims in contests. Why not make game developer contest and give the winning team one sim for one year to host their game? Let teams compete to provide compelling content and let residents vote whose content they actually want!

I rent land on one of Hiro's islands having sold my own land. Why? because they are beautiful islands, well laid out, no clubs or malls or events, therefore no lag.

Why did I choose Hiro to rent from? I did not know of him before investigating the rental market, however, I was aware of others (no names please note) who were advertising their rental islands under Land for Sale which I thought was underhand and unfair to those who did not do that. I also did not want this thing of spending money on buying but not actually buying the land. I thought it was unnecessarily confusing.

If I decide in the future that I wish to move to another of Hiro's islands, it's as simple as advising him, packing up my items and moving. End of story. Simple and open. He is an excellent landlord, if there are any issues, he deals with them immediately and in a pleasant way.

I am really pleased he has purchased more islands and wish him every success in building up his own continent.

Alexa

Nice post Anshe. I agree with most of what you have said. I do think that the hit on mainland sales will, if it hasn't already, reach a natural state of equilibrium. When the ability to deed parcels in private estates was introduced, many main grid residents who would have gone for this kind of land when it wasn't available rushed in to grab what they didn't have the option of before. The main grid, what we have now on private sims, and what you suggest above, are all very different and will each have their niche.

As far as the method of purchase of this kind of new sim goes, I am undecided, I will have to think on that a little more. I do think that current sims should not lose any of the tools they have now. I also think the option to upgrade the current sims to a new type with a fee is a an essential ingredient in introducing such a major change,