Case Study of Neualtenburg and RFC

Through the Neualtenburg Projekt, one group of SL residents are experimenting with residential self-government and land use management. Their goal was to recreate the look and feel of a modern Bavarian city that preserved medieval architecture and a functional urban center and also allowed residents to build modern architecture of their choice.

The structure they developed might be adaptable to to support other goals, such as for-profit business organizations or common theme play spaces. Not only does it allow citizen control over its governance, it also allows private land ownership and the risk/reward of changes in the market value of virtual land. Plans to expand the "footprint" of Neualtenburg will test its scalability going forward.

The following summary analysis of its structure was meant as an objective description of its "polity" or governance formula. It was posted on the Neualtenburg Projekt group forum for comments, and those received have been incorporated into this edition as of December 11, 2005. Our purpose here is to share it with a larger audience and to use it as a learning opportunity to explore ways of organizing group work and property management in SL generally.

Request for Comment: Please consider the structure and comment objectively on issues you see with it, both strengths and weaknesses. Please suggest ways it might be simplified for other goals, or aspects of it extracted to be used elsewhere. Make your comments in a reply to this message.

Consolidated comments will be collected with this summary and compiled into an addition for the Law Society Library to be available to Law Society members. You can support the development of the library by joining the Society today.

Frank Lardner

* Join the "Law Society of Second Life" -- dedicated to the objective study and discussion of SL ways of governance, contracting and dispute resolution. *
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Summary:

Note: The following is the author's understanding of documents publicly available on the website of the Neualtenburg Projekt and does not represent the position or views of Neualtenburg. The author is solely responsible for its content.

"Neualtenburg Projekt" (www.neualtenburg.org) is a private land cooperative formed in 2004 now occupying one entire simulator or "sim" of 64 virtual acres in Second Life (SL) acquired directly from Linden Lab in May 2005. It attempts to simulate the look and feel of a functioning Bavarian city with residential, commercial and public spaces. The cooperative has a democratic republican government with three branches and a constitution. The simulated city is open to the public, but participation in the government requires the acquisition of virtual land in the city. Acquisition of land constitutes agreement to abide by various specific standards of building and activity in the city.

Title to the entire sim is actually "owned" (licensed from Linden Lab) by an avatar as "Estate Owner." This status allows the Treasurer to "Deed Land To" ownership groups and to "Reclaim Land From" those groups. For its convenience, Neualtenburg has chosen to appoint the "alt" of its Treasurer to accept title to the land as Estate Owner on behalf of the municipality.

In return for a one-time payment, resident's ownership groups receive Grant Deeds to particular parcels, allowing them rights to use specific parcels of virtual land as long as they conform to the city's land use regulations and payment of monthly land use fees in the nature of property tax. Residents' rights may be terminated and their virtual property reclaimed by the city for breach of the various covenants and agreements. Residents in good standing may sell their virtual land rights to third parties approved by the city.

A detailed set of documents on the cooperative's public website at www.neualtenburg.org includes a Constitution, Terms of Service modeled on those of SL, a Grant Deed that is electronically delivered, signed and publicly filed, a Declaration of Conditions, Covenants and Restrictions, regular financial statements and a public record of deliberations of the governing organs.

Selected government details:

The Constitution provides for three branches of government:
· a Representative Assembly composed of representatives of political factions that makes laws,
· a self-selected Scientific Council that reviews and enforces legislation and resolves disputes, and
· an Artisanal Collective representing a Guild of Master content creators and their apprentices.
The three branches each have limited powers over the others in the nature of checks and balances through procedures described in the Constitution.

Selected land details:

The virtual land is divided into several commercial, residential and mixed use zones. Each zone has different standards for allowed structures and usage, designed to achieve a particular "look and feel" for the resulting city. Those standards are subject to change through the governmental process and are specified in writing on the public website.

Residents receive a written Grant Deed reciting a consideration of a one-time payment plus the obligation to pay recurring Land Use fees as from time to time set by the municipal government. That Grant Deed incorporates a written Covenant that specfies compliance with the esthetic restrictions set by the municipal government on property structure and use.

Deed exection and delivery is accomplished using a Notecard containing the Grant Deed terms. A sample Grant Deed is on the public website.

SL rules require intended residents to create or nominate a group (possibly including alts of the resident). This Grantee's group will hold the virtual property, subject to reclaimation for cause.

An alternative avatar of the Treasurer delivers the Grant Deed to the Grantee in the form of a digital notecard containing its terms. The Grantee then electronically "signs" it by making a no-mod/no-copy copy of the document. This causes the Grantee's name to become the "owner" of the document and makes its alteration difficult and possibly unlawful.

The delivered and signed notecard is then deposited in a Central Deed Repository in the City Hall or Rathhaus, and publicly accessible to anyone who clicks on the name "DeedKey" located near the Repository. This serves as public notice of lawful possession and Grantee's acceptance of the terms of the Grant Deed.

The Grantee pays the one-time purchase price and first month's Land Use fee to the Treasurer , either in U.S. Dollars using PayPal or by in-world payment of Lindens.

Transfer of title is accomplished by the Grantee adding the Treasurer as an officer of the Grantee's group. The Treasurer performs the transfer then leaves the Grantee's group.

Selected Details of Municipal Finance

The Treasurer provides monthly financial reports including balance sheets and income statements denominated in U.S. Dollars and Lindens that are posted on the City's public website.

A 11/30/05 balance sheet shows, in part (US$):
· An initial land investment of $980
· Gain on sale of land of $236.
· No asset item is shown for unsold or public land
· Current assets of $458
· Bond debt outstanding of $277
· Current liabilities of $289 (current ratio: 1.5
· Retained earnings of $167.
· Equity of $169

A 11/30/05 income statement for eleven months shows, in part (US$):
· Property revenues of $1,312
· Other revenue of $431
· Land tier payment to Lindens $1,414
· Paypal transaction charges of $69
· Interest & bank charges of $33
· Other expense of $67
· Net income of $160
A note to the financials identifies a $123 item representing a 30,000 Linden gift by a founder as non-recurring income.

The municipality has borrowed some of its start up money, on which it is paying interest. Conversion of this debt to municipal Bonds has been proposed and the legislative body is considering ways to establish terms of future bonds, to fund adding a second simulator. Proposed bonds would be issued at a discount with monthly fixed coupon payments coinciding with due dates of land use fees. A monthly put feature would allow the routine application of part of the principal and all of the coupon to pay the holder's land use fee. Proposed bonds would be non-callable and have a six-month maturity date.

The organization of the study looks useful and appropriate. The analysis focusses on mechanics, and avoids subjective assessment.

Since this group forum is being used for discussion as well as for reference studies I'll add a few subjective impressions that lie outside the scope of the study.

The Neualtenburg project has been a successful group project for longer than most of us have been in SL. Their system has been discussed in forum threads and outlined on their site for fellow residents to study. If you enjoy this kind of system Neualtenburg does it well. Now and then I attempt to find out how the system actually works in practice.

Apparently there's a lot of everyday problemsolving that occurs in the form of private communications, so that suggests the need for good personnel to make the system work.

In SL it's hard to get good people together in one team, because most want to run their own show. The non-profit nature of the Nburg experiment looks like a good way to recruit and retain personnel. And it doesn't seem to hurt the finances of the sim. Most sims are run at a loss right now, because rentals do not cover tier plus expenses. In fact rental income plus developers incentive still doesn't cover tier plus expenses. That makes the Nburg financials look good.

My only criticism of the system comes from my outsider's perception of the Scientific Council/Philosophic Branch. These plum positions seem to confer status and privilege consistent with an elite. Who wouldn't want to be in the esteemed Scientific/Philosophical group whose members are self-appointed on the basis of high merit! According to the descriptions on the Nburg site this branch functions somewhat like a Senate: '...to review policies before they become law...'. The other branches have to do what amounts to volunteer work for the sim as their service role in the Nburg government, but this branch serves by telling people what to do! They '...provide law and contract enforcement, as well as mediation and judicial services.'

Those snippets come from from the source document on the Nburg website (www.neualtenburg.org) Here are the paragraphs from which they were excerpted:



These paragraphs provide some context, but I recommend taking the time to read everything on the Nburg site.

The SC is much closer to a "supreme court" than a Senate, although it does have executive branch-like veto power. In practice,the RA holds a good deal of power over the SC through the ability to override a veto, and the ability to impeach SC members. (Also any nominees must be confirmed by the RA.)

Basically, the counterbalance to the SC becoming an "elite" is the democratically elected RA throws the rascals out.

Full disclosure: I'm on the SC.

Thanks for the clarification, Aliasi. As you've probably guessed, my commentary is not aimed at getting the Nburg folks to tweak their own system. It's aimed at new people who might be thinking about copying the Nburg system as a governance model for their own group.

Presumably those new people would read the case study, read the full source document on the Nburg website, and maybe read commentary by outsiders such as myself. Then the new people could customize the original model to suit their own group.

I think they'd ask the same question that interests me: how does the system work in practice? This shifts focus from the qualitative assessment of a specific codified system to something potentially quantifiable. Personally I'd be interested in a metric for success at recruitment and retention of participants who share the tier burden. Some form of tier-sharing is often critical to making a land-based group work in SL, and you can apply that metric to both non-profit and for-profit groups. If you have any thoughts in this general area they'd be welcome, however it might be sensitive information not intended for disclosure.

If it's at all helpful I can point out where I get puzzled when reading the source document.



Having read the part about 'self-selected' earlier in the document, I go looking for checks and balances, then find this paragraph about a vote of confidence. But it's not clear whether the result of this vote can veto a candidate.

That is unclear, and one big reason we have a constitutional convention planned to tighten up the document, now that we have a reasonable assurance that we can keep the bills paid.

However, it is my understanding that a vote against a candidate by the RA, if not an automatic veto, would be a sure sign that the RA would impeach the candidate if truly confirmed. So it works out the same, really.

The vast majority of Neualtenburg's dealings are totally open, by design. In this case, Neualtenburg works in a manner not unlike other private sim rentals - you "buy" the land, deed it to your group, and keep your payments current each month.

The main metrics are the net income of the sim (which has been steadily increasing) and number of citizens (likewise, with only 3 to leave so far, if I recall correctly).

This is quite a slow rate of growth compared to, say, Dreamland, but we started off small and many people, I imagine, are put off by the theme - something I hope will be mitigated as we expand.

Our system works, but (at this stage) it's as much mutal understanding as it is "the weight of law". The true test will be when we get a bit larger yet.

As Traxx indicated, this study and thread are designed to help see the components of an organization and how they work, in the hopes that others might see applications in a different context. Neualt's structure has modular components, and you can choose from them like ala carte items on a menu. Perhaps most importantly, this shows some of what is possible given the existing tools provided by LL.

The use of a covenant to which land purchasers commit is common, from what I hear, to private sims. It allows individual customization, but within limits. The esthetic scheme is secondary; it doesn't have to be Bavarian. The documentary forms are workable examples from which another implementation could draw ideas and useable structures.

Other communities have tried to maintain "fixed" prices for transfer, such as one Linden per acre (e.g. Dark Wood). Neualt's structure does not attempt to fix land prices on resale, and this may affect the interest that owners have in making the community attractive to others for resale. If creating a really unique, desireable build or community means that the land values skyrocket, the residents benefit financially, but new people "buying in" may bring different values. Folks in quiet communities sometimes see developers draw "new money" in, and they can completely change the culture, and generate resistance among the old-line folks whose children can no longer afford to live and buy property where their grandparents grew up.

The governance set up is also detachable. Here, we see a tri-partite set up, with checks and balances that are still being adjusted. Another sim might have a corporate set up in which stakeholders simply elect a board of directors or a panel of executives which operates without the political machinery in Neualt's polity.

The financial format is also detachable. Neualt provides a monthly balance sheet and income statement that is simple and easy to understand, and reflects the elements that provide residents and potential investors with information that they may need to consider risking a stake in its future, or in valuing the "fair" price of the purchase/sale of a parcel. This format could be used in a "for profit" enterprise in which investors were not residents (such as a rental island or an entertainment island), or in a "non profit" residential covenanted community like this. The disclosure could then be made only to investors, and not to the public generally.

For example, the transferability of land to third persons, subject to approval of the community leadership, is also detachable and opens the door to many other possibilities. This community or third party control may enable something that has been needed for enforcement of contracts: fixing an asset and protecting it from easy transfer out of reach of creditors.

As any creditor in First Life knows, land is the best asset against which to loan money or upon which to execute a lien or attachment. That is because you can not take it out of the jurisdiction, and the existence of land records and transfer restrictions enables you to nail it down and prevent its sale during the period while your dispute over a debt is resolved.

A structure like Neualt's creates the possibility for residents or investors to put up their stake in the land as collateral security for the performance of various contracts or agreements. It also creates the possibility that the "borough government" with the power to reclaim the land could be in a position to execute on judgments it renders or judgments of others that it recognizes. In so doing, it opens many doors to creativity in collaborative activity that do not exist without some constraint on property transfer.

Let me start with the disclaimer that I'm a Neualtenburg citizen.

I don't think anyone has mentioned what I believe is Neualtenburg's greatest strength -- its transparency. Consider that Neualtenburg:

1. Posts transcripts of public meetings in its forum - viewable by any SL resident.

2. Has a public web site, the contents of which include:

Governance Documents

Foundational Documents (Constitution, Covenants, etc.)

The identities and roles of all members of the government

Financial Documents

Monthly balance sheet and statement of income and expenses

the identities of all land holders, descriptions of their parcels(including most recent sales price), and amount of their monthly land fee

I can think of no other project which provides anything like this amout of information. In a typical situation, learning about governance of a themed build would go something like this----

1. Visit build
2. Look for largest land parcel
3. Mouse over to find land owner
4. IM this person and hope he/she is willing to answer questions

OK, so it's an overgeneralization. Certainly some project leaders are very willing to share governance information, although rarely financials.

In this respect I do think Neualtenburg is a model (in the sense of something others ought to emulate). The key to building confidence in SL and particularly its economy is to put everything meticulously above board. Neualtenburg doesn't have all the answers in this area, but I firmly believe it's farther along than most in asking the right questions.

The core residents of Neualtenburg have gone to great pains to create a balanced political structure with accountability and transparency. Their publicly published financial accounts show an operation with a balanced budget. Several aspects of it suggest challenges to be overcome, either in Neualtenburg or in another experiment with self governance.

One is the dependency upon volunteer labor to perform the governmental functions, combined with the significant "transaction costs" or "friction" required to operate the functions of the sim. for example, a detailed website provides extensive information about the features and operations of the sim, and creating and maintaining it requires a fair amount of skilled work. The financial reports show a number of expense items, but nothing for the administrative cost of operating the government. In any long-term government, admin costs are a significant part of the budget. Failing to provide for them may make the income statement look better than it is. How long will that labor be available without some tangible compensation?

Another is the deliberate absence of retail or other commercial activity on the sim. Some urban planners suggest that combining retail spaces with residential and recreational spaces provides for a more dynamic social environment. Whether lack of retail is the cause, my occasional random visits to and peeks at Neualtenburg suggest that its traffic is low enough to make it difficult for it to be a center of social activity. Compared to several full-sim or multi-sim affinity groups such as the Elf Clan and the various Gorean cities and outposts visited or examined, its traffic count is very low.

These low traffic counts have an impact upon the image of Neualtenburg when residents use "Find" and make some evaluation of the attractiveness based on traffic count. Because Neualtenburg's parcels are broken up into many small parcels, entering "Neualtenburg" in Find-Places produces 9 instances, The highest traffic count is the the Marketplatz with 37. By comparison, entering "Gorean" in Find-Places produces about 65 instances, with 11,324 traffic on the most visited, over 25,000 total in the top three combines and 17 having traffic in excess of 1,000.

These may have impact upon the desireablity of the land in a resale circumstance, if the land cannot be used to "pay for itself" through retail sales or dwell rewards, and offers few opportunities for socialization with like-minded residents, it may find a limited resale market. At the end of 2005, at least one long-time resident was looking to sell their parcels in Neualtenburg, and time will tell if they were able to get their investment out through a third party sale or if the community choose to buy it back out of financial reserves.

Residents of Neaultenburg have made a conscious decision to build and sustain an environment not targeted at what is widely popular, and to put extra time and effort into a governmental structure that provides us with a valuable experiment. Time will tell if its appeal is sufficient to be sustained in the long run.

Its members are discussing opening a second sim that will include some commercial applications. That may have a significant effect on its characteristics and target population that will be interesting to observe as it evolves.

Others' thoughts?

An interesting question. On the other hand, I feel there's something to be said for the idea of a "volunteer government". It ensures the people doing really do have some interest beyond monetary.



Well, Neualtenburg is not totally without commercial activity. Many people use their houses as shops, and we do have a general store any citizen may place a vendor in. But it is true enough that Neualtenburg is primarily a residential sim; you'd do better to compare us with a random Dreamland, Azure Islands, or mainland sim with no businesses than Elf Clan or a Gorean sim. People spend time at their "homes", but it's generally small-scale events and entertaining, not the full on "lifestyle" of the other groups you mentioned.

Also, I'm unconvinced that dwell matters all that much in any sense. It's a very poor barometer of worth and with the coming end of the Developer Awards, without any real compensation for the effort.

This is interesting to me in light of my experiences in Neualtenburg. It seems clear that Neualtenburg as a project could never exist without the extremely hard (volounteer) work of several individuals (mostly those I mentioned in my leaving Nburg thread), and as I also mentioned in that thread would clearly have failed several times if not for this essentially volounteer labour.

I feel in this particular case, as in other private sims it is the degree to which individuals like that can be made to be enthusiastic about the project of sim building which directly affects the success or failure of the "group sim" project. In Neualtenburgs case, I think it is it's own "fame" and the "cult of personality" associated with the project that keeps people believing that it is a goal worth following; worth doing all that work for. Governnmental structures aside it is always a strong leader combined with a strong sense of community that keeps a group going. As evidence I would point to the afore-mentinoned Gorean and Elven sims that also have a "monarchist" sort of structure to them and a strong sense of self identity as a group. For this reason, the choice of "theme" to the sim or the project is crucial and the fact that Neualtenburg chose to be a medieval bavarian themed sim is likely one of the key reasons for it's moderate sucess.

I would argue that this might not always be the case in that to be German themed, (but yet not attract germans), and to have a theme based on representative government (but not have that government operate failry or efficiently), is a questionable long term strategy. Also, to exist (to whatever degree it does) by feeding on "fame" and personal renown of it's leading figures is also faulty if those figures are irreplaceable.

This is also very interesting in that this "deliberate absence" is in fact entirely unintentional. Nuealtenburg is a bad place to do business for many reasons, but none of them are intentional. In my view it is the intense focus on govenment and planning combined with a real lack of power given to the main descision making body (the RA) that are at fault. Almost all city planning was accomplished previous to the setup of the working government, and any zoning of retail vs. residential spaces similarly decided almost unilaterally, by a few of the cities founders.

Since in the interim, more time has been spent dickering about minutia and worrying about the percieved power of the citizens vis a vis the fonders or "monarch figures," it is not surprising to me that retail spaces, and retail activity is poor. In particular, the placement of all commercial and monetary decisions in the hands of the Guild, (over seen by the Scientific Council) does not allow for any modern planing to take place or for anyone elected to "government" in Neualtenburg (the RA), to guide the commerical development of the city. This is Feudalism in practice from my point of view and while not faulty for that fact alone, it is the pretense that an actual "government" is underway that gets in the way of any decision making on that front.

In short, the Guild which has the power, is hamstrung by the perception of a Government and the need to include the RA, yet the RA cannot plan (nor act) like a modern governmental group should be able to, because in essence it has no power.

In my analysis, the RA are the "clerks" or the beaurocracy that carry out the many day to day tasks of running the sim, yet they are locked out to a large degree from any real power-sharing with the other two branches. The fact that this labour *is* volunteer labour means that it is crucial that this illusion of participation must be maintained. If ever the RA manages to see that the "emporer has no clothes," the will to donate their labour will evaporate (as it has in individual cases already several times) and the whole structure is in danger of collapse. It's a very clever solution but not a long term one to my mind.

I agree that volunteer government is valuable and important. But in FL, no one depends on volunteers to pick up the trash, drive the snow plows or suck leaves out of catch basins. My main point is that to the extent that the revenue and expense statement has no provision for admin services cost, it may be incomplete and vunerable to loss of volunteer services.

Fair enough. As Dianne pointed out, the non-commercial nature is not mandated, but just evolved. Expanding my comparisons is part of the long-range plan. One challenge is that the private residential sims have a very simple landlord-tenant structure, making comparison to Neualtenburg remote, compared to others that at least intimate that they have a participatory element.

The end of Developer Incentives is likely to have a dramatic effect. I've already noticed that the laird of the three sims of Ar has bemoaned the change, saying he'd have approached the expansion to the third sim differently if he'd known the change was coming.

I'm unconvinced that traffic does not matter and hope you'll expand on your view. Clearly, if dwell payments go away, it won't pay directly. But I see traffic as a barometer of the potential for social interaction.

Let's assume a sim without the artificial traffic generators (e.g. camping chairs). If it has traffic of "0," no social interaction is happening there. If it has traffic of "10,000," something is drawing the people, and it is difficult for that many people to visit the same sim without interacting. Perhaps it is just a dynamite shopping mall where people sit and camera zoom about, checking things out, without ever speaking. But many times, that traffic reflects the fact that people visit and talk, play live music, help each other craft, and build relationships.

My visits to the Elven sims and the Gorean sims have been marked by social interaction. I've not had that experience visiting the purely residential sims or the "zombie camp chair" sims.

The traffic statistic alone does not tease out the interaction from the passive shopping or zombies, but provides some indication that something may be happening there. A live visit can quickly discern which is which.

Dianne, thanks for your insight.

It has been said that cities are the physical memory of a society, in that they grow and persist where transportation, commerce and residence concentrated and persisted. The great and small cities of FL history have evolved rather than being planned. By studying the structure of a city (including its predecessor structures, often buried under yards of overbuilding) one can see its history. Having visited ancient European cities such as York and Edinburgh and viewing the excavations under the existing structures has made me appreciate that. In the cellar of a bake shop in York one can see (for 50 pence) hundreds of years of layers of construction from different civilizations dating back to the Normans, Romans, and Vikings.

One can see similar history in the older cities of the US. In the "old" sections of Manhattan and Boston, one sees the narrow, curved streets that worked for people on foot and horseback, radiating from the seaport which was the center of transportation. The financial and insurance centers arose there and may persist through tradition (and ownership of the land), because they too evolved from the transport and trade based on shipping. Excavation in those areas turns up old, forgotten relics even today.


That a city was laid out before its commerce evolved presupposes the social life of its inhabitants. And a SL city has different needs and requirements than a FL city. Creating a recreation of an ideal post-medieval Euro city in FL may make a lovely diorama, but it may not be the best model for a working SL social environment.

They've tried to capture the sense of an evolving town in Neualtenburg. Looking under the sim edges reveals typical SL type foundations, but the walled Bavarian town certainly evokes a sense of history. The town has half-timbered houses, a more modern looking church and a dirigible hovering overhead. Outside the walls are some contemporary structures, mostly houses. Not sure what era the Schloss will evoke, but it sure looks like a fun project : )

One thing a private island offers is the chance to build an environment with a sense of place based on an imaginary history. When I began the reconstruction of Paradise sim I invented a colonial past for the island, imagining coastal batteries and a protected deep-water harbor for naval vessels. The massive arches of ancient fortifications were textured to suggest a rough stone. These remnants served as foundations for more modern buildings. The limestone villas were tinted to suggest some exposure to the elements, but the most modern shops used untinted limestone to look as if they had been built quite recently using stone from the same quarry. All of this disappeared when the owner left SL for WOW, and sold the island to a land baroness who subleases commodity residential lots on her subcontinent, but it was a great project.



The idea behind the Paradise reconstruction was to encourage visitors to linger and explore the sim, which would be beneficial to all retailers just as holding events helps with sales. For Neualtenburg I can see the layout encouraging people to think of the sim as a functioning community. There's a building with land deeds prominently displayed, for example. The deeds show the person's name. It's a great idea.

One downside to Neualt is that not everyone wants to fit their builds into the context of a Bavarian town and countryside. That might act as a disincentive to potential residents who enjoy the self expression of building in SL. In FL most of us are obliged to make sure that our homes are in compliance with zoning ordinances, building codes and architectural guidelines that we did not frame. In SL we can frame our own. That's not a freedom to give up lightly.

The Neualtenburg folks are hoping to start up a second sim, and Aliasi has mentioned some unspecified departure from the existing theme. In my experience theme ideas are a dime a dozen, but certain fundamental problems keep tripping up sim owners. A sim theme must be more than 'this is my great idea for a cool build'; it must present a solution to problems such as the empty sim problem (cool builds, but no visitors), zoning conundrums, or my personal favorite: how does a sim owner get the land to generate enough profit to cover tier. Neualtenburg's current formula attracts sufficient numbers of financially contributing residents to cover tier, but there's a price to be paid in volunteer hours spent at meetings and bureaucratic tasks.

*Unsolicited advice* (skip if easily offended!): If the Neualtenburg folks really do intend to vary the theme for the next sim, how about basing it on a revised set of operating procedures designed to lighten the bureaucratic taskload on the core residents? Consider a theme like 'RAW ANARCHY -- see how long you can last here!' Market the sim to select individuals who can handle an environment very much like the sim equivalent of a Thinkers discussion. Marketing could be by invitation only or prospective residents could be assessed for psychological sturdiness. Being a resident of this sim could confer immense cachet. : P

Referring back to Frank's original quote -- -- the built environment of RAW ANARCHY could be: Resident A builds anything he wants within elevation band 1 (say minus 20m to plus 10 m) of the entire island, up to the prim allotment subleased by that resident. Similarly, resident B builds anything he wants within elevation band 2 (say from 0m to 30m to encourage overlapping strata.) Successive residents build to the limit of their own subleased prim allotment. You might want to explore a prim halflife (a function with a random factor) or simply allow residents to delete all their builds within a given elevation band, and build anew within an unused elevation band whenever they got bored.

In the Neualtenburg Projekt group forum "Economics and the Projekt Future", this thread has been cited as a a source that is part of the basis for re-evaluation of Neualtenburg's future. The contributions by the posters in this thread have been described as "wonderful" and "spot on."

Thanks to the kind remarks of those in the Projekt and thanks to all whose thoughtful comments in this and other threads have enabled the Law Society of Second Life to make some small contribution to the objective study of governance, conflict resolution and contracting in Second Life.

A couple of people have suggested that the development of Neualtenburg wasn't 'organic' enough. However, if you want to see what highly organic development looks like, check out an unzoned mainland sim. Things are quite often messy and haphazard, evidenced by a lack of paths, streets, or other places to walk between plots - for example.

Also, the "let it grow organically" approach bags the question, "What do you do for the first few months when there's nothing there?" That's a lot of tier payments while waiting for 'if you come, they will build it' to happen.

Someone else (can't find the thread), said that people come to SL to build what they want and escape the zoning they face in FL. Given the strong libertarian streak among many residents, I think there's truth to that, but it certainly doesn't apply to everyone. I was drawn to Neualtenburg first by the political aspects, but I also liked the theme. In FL, I live in a small town in the southern USA. My community lacks mountains, doesn't have any notable architecture, and is anything but a dense build. Neualtenburg gave me the opportunity to inhabit virtually the kind of community I may never live in in real life. I suppose everyone has their own fantasies.

A currently running debate between leading Neualtenburgers illustrates the downside of doing extensive development work without an express agreement as to when or if there will be compensation for time and effort, or what entity controls rights to maintain or destroy the work. "Compensation for Guild Efforts"

Those who argue that written agreements are unnecessary and that reliance on trust networks is sufficient may wish to study not only the substantive issues in the controversy but also the extent to which the controversy itself has affected interpersonal relationships between the principal parties.

One strand of commentary in this thread concerns the apparent power of the SC relative to the two other branches of government in Neualtenburg. A new thread in the Neualtenburg group forum here contains many posts that attempt to dissect this issue.

Gwyn's 'what-if' projections of a scenario in which all members of the SC are simultaneously turfed is particularly startling. I found myself reading this post with a bit of skepticism since it seemed to merge the notion of initiating impeachment proceedings with the outcome: all SC members impeached. However the thread is recommended reading for its detailed analysis.

The discussion of amendments to Neualtenburg's constitution has been quite involved! It continued in this thread.

Neualtenburg is a really interesting place to study at the moment. It appears to be in a transitional phase following the departure (and then sudden return!) of one of the project's founders. In addition power in the legislature appears to have shifted towards a faction with an open agenda of constitutional and legal reform. You can read their platform [post=829517]here[/post].

The kind of discussions taking place touch on the following themes (among others):
*how to defend minority rights in a democracy
*whether unelected bodies have any place in a democratic republic
*the role of referenda in a representative democracy
*the appropriate pace of change
*the role and status of the founding documents i.e. how open are they to amendment and interpretation, who should have authority over interpretation
*how does a democracy preserve itself and prevent a descent into tyranny

All quite interesting stuff! I'm clearly going to have to go and reread the Federalist Papers!

I've become involved in the discussion as a participant rather than an observer and am considering applying for citizenship.

Hopefully the members of the Law Society will forgive me for pointing them to this thread, where stands a record for the first legal procedure to have taken place formally inside Neualtenburg and strictly inside the boundary of Neualtenburg Law.

You will see the extremely difficult procedures to try to comply with a Code of Law that has roughly only around 40 laws, some of them not properly recorded (actually, Neualtenburg now employs a "civil servant" for the purposes of recording the laws that have been passed in the past but only posted to forums). On this case, to further complicate matters, there were three serious handicaps:

1) The Scientific Council (the body that has the duty to interpret the Constitution and deem acts illegal according to the Neualtenburg Code of Law, as well as providing moderation, arbitration, and advise) was judging on a case related partially to forum moderation, in a situation where the forums were de jure under its jurisdiction, but de facto impossible to moderate due to technical limitations on the Linden Forums.
2) The case involved a non-citizen, which makes any attempt at applying the Code of Law next to impossible. Non-citizens can opt-out easily from compliance with Neualtenburg Law, since they cannot be sanctioned (except through limitations to access to the sim, or to acquisition of citizenship).
3) Neualtenburg Law can be viewed as "city ordinances" inside a country (Second Life), or, if you wish, state laws relating to federal laws (the Linden ToS and Community Standards). This means that while Linden guidelines have precedence over Neualtenburg Law, and Neualtenburg has to comply with "Linden Law", Linden Lab does not acknowledge Neualtenburg Law (or even the right of Neualtenburg to make its own legal system binding for its citizens).

Under 1), it means that enforcement of any rules is next to impossible, unless total cooperation (an utopian dream!) is voluntarily provided by all forum participants (posters and moderators). This is similar to a country passing laws to protect citizens from side-effects of nuclear power, while the access to a nuclear power plant is not in the hands of the government. If the nuclear power plant blows up, who is to blame?

Issue 2) is the well-known problem in the whole of SL. If someone leaves a group, how can the group pass judgement upon that person's acts? Can a trial be done in absentia to someone who you can't arrest? Since this is done every day iRL — how effective is such a trial? If the accused is deemed guilty, what sanctions can you apply — except for declaring the accused persona non grata?

Last but not least, if a serious offense violates Neualtenburg Law, and is deemed punishable through sanctions, but does not violate Linden ToS/CS, how can a self-elected government enforce sanctions through its own Code of Law, if the citizen found guilty can ask Linden Lab to prevent any sanctions? Imagine an extreme example: a self-governed community that proclaims that all buildings inside the community are the community's property by laws defined by an elected body. Someone found in transgression of those laws is sanctioned by having no access to that land. But this person now complains to Linden Lab because their access is being prevented, which could be considered a violation of ToS/CS, and Linden Lab would "overrule" those sanctions by temporarily banning the remaining members of the community.

The whole issue of enforceability of a community's laws is questioned here, when there is always a risk that Linden Lab can, at their whim — and through appliance of their own ToS/CS — revert decisions of a democratically elected body. Is the lesson learned here that you can't have "bubbles of democracy" inside a vaster "benign dictatorship"? Where are the boundaries between "local law" and "federal law", and how much "power" can really be delegated from the "federal authorities" (the Lindens) to the "local authorities" (a self-governed community)?

Definitely it gives us much to think and discuss about!

Thanks for making this link available to Law Society forum readers, Gwyn. I appreciate your taking the time to post, especially now when the challenges to the Neualt judicial system appear to be multiplying rather than being resolved by the hearing you describe:


I also appreciate the invitation to sit in on the hearings as an interested observer.

Having followed the ruckus in the Notices and Well Wishes forum (now bulletin board) and the Neualt group forum, I've noticed that my own perspective differs from those posted. If I accepted the shared view of the involved participants I would find myself agreeing with your analysis, Gwyn, but my personal opinion is that the process was fundamentally inappropriate. For what it's worth I'll try to explain this as concisely as possible.

Warning -- biased observer. I'm friendly toward Neualt, not detatched. Also, I try to brush off emotionally charged altercations on the forums as 'bickering'. This fails to capture real differences in culpability between individual participants, but that aspect of the discussion doesn't belong on this forum.

During my time in SL the Neualt group forum has seen outbreaks of flame war activity, sometimes spilling into the regular forums. The current flare-up simply continues this pattern. Some participants may feel that this current flare-up is qualitatively different due to a triggering action -- deletion of a post. My personal opinion is that the deletion was an over-the-top action that continues a long pattern of over-the-top bickering.

By over-the-top I mean it needed to be curbed a long time ago. Allowing the highly visible emotional excesses to continue unchecked has always damaged the project's credibility as an experiment in governance. I'm sure it's brought in a few members who noticed a drama fight, investigated, and discovered a group worth joining. But there may be others who decided against joining because the forum rampages were making the group look dysfunctional, not very solid, and not capable of using any mechanism of governance to reduce the severity of the problem to limits acceptable to the community.

Naturally there are other groups with equally over-the-top drama, but Neualt has an uphill battle to recruit new members due to widespread attitudes about government in SL. Furthermore the type of personality that seems the best fit for Neualt is the civic-minded type -- people who are inclined to do volunteer work, and who research candidates and issues before voting. A hotbed of unchecked drama might be perceived as not a good place to invest volunteer hours and committment.

This long running problem needed to be dealt with by the group, perhaps by invoking the legal machinery of Neualt to examine the general pattern within the guidelines of policy established by a deliberative process. The legal hearing might have been a bit awkward and tenative as first efforts often are, but it might have been worthwhile in the sense mentioned in that referenced thread:
A successful outcome might have been the legal machinery setting precedent by helping to define where the limits of acceptable vehemence lie. What happened instead was different, and the difference matters.

What really happened is that a judicial hearing investigated he-said/she-said specifics, elevating them to the status of evidence in a formal determination of culpability. This was inappropriate. You don't invoke a government's legal branch as an extension of your will to put the smackdown on an opponent in a specific forum altercation. Specific exchanges of insults and even post deletions are on a par with squabbles between siblings. If little Johnny pulls Jane's hair the appropriate dispute resolution method does not involve calling the police.

I realize that this is rather strongly worded, but the hearing is over, and yet the out-of-control bickering shows no sign of abatement. In fact the big change is that now the participants are inclined to reach for the new weapon of legal process as a substitute for tone in a shouting match to show each other that they're mad and they really mean it. Looking ahead we see the potential for endless flame wars triggered during the non-terminating process of negotiating ownership of the name Neualtenburg.

This prospect stands in stark contrast to the good work done in recent months by many constructive people who sincerely want to improve the system of governance. I'm particularly impressed by the wide ranging discussion about restricting the powers of the SC relative to those of the other two branches of government in Neualt.

My first recommendation is to halt the process whereby the legal machinery is being hijacked for use as expressive power in he-said/she-said bickering. A small scale ruckus should be dealt with by front line workers with delegated authority, not by the supreme court judges.

My second recommendation is for the city of Neualtenburg to divest itself of every bit of intellectual property in dispute. This includes the name. Get a similar replacement name; it's better than getting locked into endless negotiations with associated drama. I believe that one of the outside posters in the Neualt forum suggested doing the paperwork to establish ownership of IP. That sounds like a sensible suggestion applicable to the new replacement IP.

Another poster mentioned how Neualt was being put in an untenable position with respect to lawsuits between citizens and non citizens. That was a good point, and there are many other suggestions there that sound helpful. Good luck!

Gwyneth correctly identifies some of the real limitations in creating a legal system in what is essentially a volunteer community. This is exacerbated by the technical limitations in the Linden forum structure, which prevent the exclusion of the non-member from moderating duties.

Within a voluntary structure, there are only three unilateral sanctions that can be imposed (as compared with ones that are voluntarily accepted). These are removal from a position, ostracism, and removal of membership. When none of these will achieve the desired result (removal of a person from a position of control) that is a very sticky situation.

Traxx is correct to suggest some wholesale changes and cleanup are required. For the forum moderation role, it would be better to end the current forums and create an entirely new forum structure excluding the individual in question. Since there are issues of property rights and IP around names and other components of Neualtenburg, it is likely necessary to make wholesale changes to remove these issues and get it over with.

However, it does seem to me that the specific offense in question was quite minor, and could have been dealt with in another manner. If one moderator can remove a post, can another one restore it? Eventually even the most stubborn individual will tire of pointless, repetitive activity. Once the point is made, it may not be necessary to make it again.

Hello Frank and Traxx and Ferren,

I read this forum religously because I feel this is where the big ideas are. I'd like to go read the background papers recommended by authors here. I have a few semi-practical questions as a newly minted member of the Neualtenburg RA:

1)What additional structures/changes do you think we need to be able to enforce contracts?
2)What kind of IP protection regime would you recommend for the city?
3)Do you have any new thoughts on compensation for guild efforts?

On a personal note, I've tried to develop processes for advanced financial services in this thread: /130/81/103335/2.html
I'm hoping the lack of response is either due to its length or abstractness, not because of obvious flaws or lack of market interest. Can anyone here please take a look and critique it for strengths/weaknesses?

Posting mainly to keep this group's forum alive under the new Group Forum Rules.

In order to keep this post on topic, while trying to be neutral, I note that Neualtenburg has split in two: 1) Port Neualtenburg and 2) the City of Neufreistadt.

Thanks for your post, Salzie. The new group forum rules make sense of course, considering the number of moribund groups, but I'd hate to see the Law Society group forum disappear too.

The problem is that everyone who was a serious poster here is also serious about other projects in SL and RL. Some of these projects can be time critical, such as the situation I'm in now with another two full-sim development jobs.

I also appreciate your neutrality. As I understand it the original participants have split into two groups. One is engaged in a project characterized by the organizers as an artisan's collective (hope I got that right). The other has been described as the City of Neufreistadt, an experiment in democracy in SL. However, a glance at the official Neufreistadt forums here discloses a glamorous new definition. : )


Isn't there a book by Jane Jacobs... Systems of Survival, I think...with the central premise being the necessity for separation of civic duties and commercial enterprise? Jon's glamorous description seems to mash those together.

There, hopefully that'll make him mad, and he'll post, and our forum won't die out! : P