A freemarket SL

Here is a radical solution to SL's economic problems: a total economic freemarket.

What this would involve:

The Twelve Panther Principles

1) Elimination of stipends.
2) Elimination of developer's incentives and things like DI such as dwell.
3) Elimination of land tier.
4) Elimination of basic account fees.
5) Elimination of Lindex conversion charges.
6) Introduction of income tax based on real-world models.
7) Zero Linden interference with this basic model.
Establishment of a high-profile stock exchange.
9) Establishment of a bank of LindenLand.
10) Removal of all restraints on commerce within reason.
11) Establishment of a paid police force to protect SL from griefers.
12) A hands-on system of contract and enforcement to regulate the business world.

Now, I know a lot of you will hate this idea. It would make SL much uglier, much less fun, and turn off a whole load of recreational users. I'm not sure whether this would be a good thing or not. What it undoubtedly would also do, would make some people very rich. I mean RL millionaire rich. That is a massive draw-the place would explode with RL immigrants and the economy would grow exponentially.

SL is currently a radical socialist state. Even the most left-wing economies in europe and the old Soviet Union don't and didn't pay all their own citizens just for existing. Moreover the benefits they do pay are mostly for the desperate. In SL no one is actually starving. They might be homeless, but that doesn't really matter.

Now, I'm left-wing as hell in RL, but I'm also a reallist. As others have pointed out, most of what is fun in SL can be done in SL can be done better elsewhere. The unique selling point is the ability to create, and therefore have an economy that can be as vibrant as RL. I was attracted to SL by the prospect of making money. The other functions of SL are not unattractive but they are icing on the cake.

This would also be an incredibly interesting political simulation. It is politically impossible to achieve a true freemarket in the real world. The imposition of a true freemarket in RL would mean that poor people ended up starving to death-fortunately in SL that can't happen.
It would be fantastic to see whether this would really work or not.

Now I'm not stupid. I know there is zero chance LL will see this post and think "hey! what a great idea! Lets do that funky thing!". However, it is just possible that somewhere down the line enterprize zones might be set up on an experimental basis to do something like what I suggested. If it works it can be extended to the main grid or split to form a third SL. And then I can flap my arms and fly to the moon (oh wait, you can actually do that in SL).

Ok, tear the concept to pieces....

If they cancelled stipends, I would sell my land and quit premium

They lose money

if they quit land tier, they lose money

and heres the clincher:

I work 40+ hours a week real world

the 500 a week I see as a paycheck for 'work rendered' on sl..what my persona does while I am at rl work..stocking dwellget maybe?

Your model might be great but its got one serious flaw- LL would be shut down with bankruptcy. that means no more SL..and no more platform for your experiment.

Really..I don't normally say things so rudely.. but your average monkey could type a better plan on a typewriter within 20 minutes.

Sorry, but in RL a government who tried to impose land tier in place of a tax based on the ability to pay would go bankrupt overnight. I don't think it is accidental every government on the planet has income tax.
In a capitalist society, you don't make enough profit, you go to the wall. That is a good thing. It means inefficient industries go to the wall, and stop dragging the rest of the economy down with subsidies. So, yes, of course, you'd quit. I don't see why you think this should be different from RL.

This "load of recreation users" is the reason why people are able to make money. What do they do with their stipends? Buy things. What do they do when they want more L$ quickly? Buy it.

As a business owner, I completely believe that this would be a bad bad thing. I watch my sales, I know who is purchasing what. I do not know who this unbelievably terrible idea would benifit.

Would comment on the rest but I didn't go any further than that.

We DO pay land tier in RL. It's called property taxes.

And not every government on the planet has an income tax. Whatever gave you that idea?

P2

It SHOULD be different because of one major aspect. Linden Labs is a COMPANY making money through their product and services.

This system would make Linden Labs inefficient. This would cause SL to close. Proving your system experiment a failure.

As a player in SL with a premium account I'm broadly in favour of a linked ditching of stipend and tier. Except that it would probably never work. It costs real money to run the servers and the savings made by eliminating stipends would be negligible compared to the loss LL would see from stopping tier. The only other option would be imposing income tax on individuals and corporation taxes on businesses. Easy on paper, but hell to enforce... and imagine all the kicking and screaming that would result! In the end I see a fudge that pleases no-one except the LL bean-counters coming about: that basic stipend will go, premium stipend reduced and tier going up.

Dude(tte). I'm not an industry.

I am capable of making money in SL, but I don't want to. I want to put on funny clothes and make scripts that do weird impossible things and talk to people from all over the world and fly around in balloons and build intricate clocks composed of millions of prims for no reason apart from the fact that people like looking at them, or I like looking at them.

If your idea of fun is playing stock markets and building up business empires, fine, but my interest in stock markets stops with making a virtual ticker-tape machine, and maybe dressing up in a suit and lighting cigars with L$ bills. I don't think I'm in the minority here either. If you want to try to persuade LL to build a world only enjoyable by wannabe entrepeneurs, and even then only by a few of them, go ahead, but I don't think they're going to listen.

Well, 90% of businesses seem to be losing money on SL. The people who benefit under the current system are a)stipend-hoarding freeloaders and b) land baron big cheeses, whose earnings far exceed that of maximum tier. The system rewards both the lazy and the plutocrat. That isn't a terrible idea, it is an obscenity.

With an income tax, all those loss-making businesses become profitable. People who work hard would be rewarded. Not freeloaders and land owners.

If you want to run a business at a loss, fine. I don't.

I wonder what's some people's fascination on trying to turn Secondlife into Real Life.

Please repeat after me:

SECOND LIFE IS NOT REAL LIFE.

repeat after me:

PEOPLE WHO USE BLOCK CAPS ARE USUALLY STATING THE BLINDINGLY OBVIOUS

Of course it isn't real life. But that is the only comparison we have. Any mathematical or economic model is going to be based on the nearest available comparison.
Saying "oh it isn't real life" is not an excuse for a suicidal business strategy which runs contrary to common sense.

phoenix is exactly right. Texas, for example, has property tax and no income tax... or didn't when i lived there 10 years ago for a bit.

and a "high profile" stock exchange and bank of SL is worthless without regulatory oversight... RL has proven that enough times. Sames goes with a police force... if you want a paid police force you are going to need checks and balances and some sort of due process. So what you are talking about is a government, although sounds like you want an invisible hand, low-key one.

Ain't gonna fly in a system such as SL ... not until people can create their own grids where they get to make all the rules.

As opposed to your suicidal business strategy that runs contrary to common sense?

seriously.. your system would bankrupt Linden Labs, guess whats not going to happen?

Good kitty heres your treat.

Where did you get that figure? 90% Don't just make up numbers, please. The cost of setting up a business in SL is tiny, and the potential profit is quite large since production costs are nil. I would find it very hard to believe that 90% of business are losing money in SL.

ok.. so that 10% are stipend hording freeloaders and land barons. Hrm. My business makes money. I work my arse of making animations and I make money. I also buy more content a week then my stipend is. I don't even own land. I rent. I make enough in a week to pay off rent then the rest is profit. That 10% has got to be a lot of people since there have to be many that make as much or far more then I do.

Stipends don't equate to much compared to what a little work and creativity can do. So if I'm being rewarded for my hard work, and so are many others where's your made up stitistic for that?

As to that 90% of businesses loose money. Um. No. I have made a profit every week since I began animating. First mall rental payment was made back in a day. It has to be rare to loose money. Is everyone making loads of money? No because the world, RL or SL doesn't work like that.

free market
n.
An economic market in which supply and demand are not regulated or are regulated with only minor restrictions.

A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sells are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.

Lemme see. No one tells me how many animations I have to make, nor do they regulate me with what sort I should make. I sell more if they are what the demand wants. How is SL, by deffinition, not a free market?

A strange initial post...as I believe that SL is already a free market...in fact, less regulated than anything I know of in RL.

Not only that, but SL is about the easiest free market in the world to enter. We have virtually no regulation, no labor-unions, no shipping costs, and no "watch-dog" groups to scream for recalls of toys that might choke 2 year-olds.

Negatively, there is little/no advertising opportunity, insufficient means to determine quality from junk without serious research (esp. in scripting), and very intense competition (due to low cost of entering business). Finally, you may value your work, but someone else may have a similar product they'd rather give away for free...essentially nulling out any value you thought your work held.

We do pay "income-based" taxes, they're called tier fees. Anyone who is "rich" in SL is able to purchase large tracts of land...for which they must pay a monthly tax. Sure...you may choose to remain a welfare recipient for your entire life and go with a basic acct. that collects L$50/week...but many "successful" SLers don't actually do that. They build homes, stores, clubs, retreats, etc.

I also strongly disagree with your 90% of businesses lose money in SL. From day 1 in SL, I have never spent a dime on this metaverse, and yet I hold over 16000 sq. m. of land on my premium account. The reason I don't have to spend money on SL is because from the outset I have successfully earned L$ through business ventures...all of which were very, very, very easy to make a profit from.

While I do complain about things from time to time (I'm currently very disappointed in the complete lack of value held by the L$...esp. 'cause I'm sittin' on way too much "fake money" but can't bring myself to sell at such a low value), I find that there are really only two factors that contribute to complete economic dissatisfaction with SL:

1) You're lazy

2) You expect to make a RL wage off this environment.

If you're lazy, you won't profit...period. It's the same in RL. Laziness never accomplished anything.

If you expect to make a RL wage off SL...stop. Just stop. If it happens, great...but chances are that it won't and it's a good idea to hold a real job instead.

This is an incompatible statement.

You lay out a program more right-wing than any RL government in history has ever had the temerity to attempt and and then claim to be a left-winger?

HAHAHAHAH

Sieg-Heil baby!

Well, quite a lot of lazy people profit in RL, and loads of hard-working clever people never do. SL is actually more of a meritocracy, I think, with way fewer entrenched economic and social barriers.

But it's not a reality in the same way as RL. People come to SL for reasons. They have a choice. Some sort of ideological insistence on the application of certain politically correct economic principles to a situation where even their flimsy RL bases have little or no relevance is daft. Just because we have the L$, does not mean that it works like a real world currency beyond a few basic gross principles. The concept of money in SL is just not the same as it is in RL. Just because we have people "making things" and "selling things" in SL, does not mean that that is actually the same as people making things and selling things in RL.

Until such time as we are all consciousnesses uploaded into the global ubernet, what happens in SL is not going to work in the same way as it does in our everyday lives. It's like calling copyright breach theft - it's just not the same.

SL could be so much more.

SL needs to be something for everyone... that's it's allure.

IMHO, the economy here needs to be robust enough for those who have an attraction to capitalist pursuits to be sated, while not overbearing enough to stifle those who have an attraction to socialism or artistry.

(From the "I can't resist replying to this one" gallery)...

Everyone is entitled to his/her opinion. But the 12-point plan presented would be a sure-fire way to not only ruin every single business on Second Life and totally disrupt the economy-- it would also bring Linden Lab to financial ruin and shut down Second Life.

Not only are these ideas anarchistic in concept-- the current LindeX "stock market without regulation" concept is already doing enough to damage the economy through devaluation of the L$. The last thing we need is a free-for-all stock market and banking system without any restrictive controls.

Like you pointed out, it would result in a very few people becoming rich. Millionaires though? Doubtful. And their wealth wouldn't last for long, because the cash cow would quickly dry up and die.

In other words, bad bad bad bad bad plan.

Then add another bad.

Whatever the system, I shall adapt.

The primary concern is for the health of the Company; if it survives so shall I.

Me too.

Epsecially since, with no customers, where would the entrepreneurs get their money from?

Land tier = property tax. Not every government on the planet has income tax, many US states don't. A number of countries don't. And SL is different from real life, it is completely and vastly different. So, I don't see why anyone would think it should be made to be the same. So many real world models are absent in SL, no police, justice system, no way to enforce contractual agreements, no way to protect intellectual property, no way to ensure truth in advertising. A free market economy, despite the myriad of posts to the contrary, is reliant upon a stable, transparent government based on rule of law. We don't have that in SL. We will have to find models that do work, and they can't just be copied and pasted out of RL into SL.

Evening Green,

Though some of your ideas have merit (and in fact one or two have been implemented), all of them together are not feasable.

I have looked at the other end of this extreme - There.com - and find it complicated and frightening. The no-IP-rights thing aside, to develop in There you have to pay them! Quite a bit too! No thank you, though I can go in and spend a minimal amount for socializing purposes.

Also, as someone who works RL in Finance, the absolute *worst* thing you want is full-on regulation. Sure, a minimal amount is useful for overall preventative maint, which LL is doing already and may add a small item or two. But you'd think again about True Regulation if you saw the stranglehold the SEC and friends have had to place on the markets (albeit needed, but that's *RL* not SL) - Sheesh, it can encompass an entire bookcase shelf, maybe two.

Agreeing with Travis and Wayfinder here, need a slightly more flexible economic system, simple for all but powerful so anyone can do what they'd like. *And* also allow LL to make money from the model in a consistent manner to keep them alive. Thats a tall order, and my hat's off to folks like Lawrence trying to work on it.

I also agree with those regarding making US$ out of work here - I *always* warn those I meet about that, to be ready to spend the appropriate time and money as if you're getting into a RL business. Sure the US$ outlay is a bit less than a brick-and-mortar store, but about the same as an online one.