EconomiesInVirtualPlaces

There was a thread at the AltMoneyTribe on TribeNet which I started in response to a recent statistic on the size of the market for game stuff. It's long gone, now, of course. But it spawned a debate on the morality of this where I agreed there was something sick about the time and energy spent in the MMORPG economies. That triggered a defence from Sean. And my attempt at a nuanced response turned out to be quite long and (in my opinion :-) interesting. Here it is (though I recommend you look at the whole thread)

Sean : "I guess what it comes down to is all things in moderation. No technology in and of itself is inherently evil, but dependant entirely on how you choose to use it."

Phil :

I think there's a kind of paradox. Clearly for any particular piece of art or entertainment, it's always possible to say "why the hell did we spend the money on that splodge of paint, or this useless concert hall or these unproductive hours slaying virtual dragons, when we ought to have prioritised fighting this disease or social problem"
But in total, a humanity without culture would no longer be humanity in any meaningful way. We must waste some of our resources on art and entertainment (and, I'd say, blue-sky science for it's own sake) or life would be unbearable. (ArtAndBread)
At the same time, we ought to be able to identify when cultural works go beyond a "reasonable" limit. (I know, that's hard and contraversial) Some buildings or mmorpgs or manned missions to Mars really can't be justified (though that last hurts me to say, I'd love to see a manned mission to Mars in my life-time)
And we should be aware what's going on when there's a market in mmorpg stuff. As buyers we're voting for more of humanity to spend more of it's time sitting in front of the computer "playing" the game. The situation is little bit different from, say TV. Nothing I buy directly increases the incentive for people wasting their lives watching the boob tube. (Maybe a longer feedback loop though, by supporting companies who advertise on TV I feed more money into TV programming)
Perhaps it's not so different from the situation where, by buying useless novelties and tatt I incentivate people to work in factories that churn this stuff out.
So I definitely agree that gaming isn't especially guilty or problematic. And it certainly has positive aspects. It does create community, stimulate the mind, teach problem solving, encourage us to dream etc. All of which are essential.
But at some point, we should be able to look at our world and notice this is NOT in "moderation". The dynamics of the market system have spun us, way out of the zone of sensible balance between how much we spend solving real problems and caring for each other, and how much we spend pandering to our slightest cultural whims. And that's precisely because there is a positive feedback mechanism whereby the succesful mass cultural industries like the media, Hollywood etc. can influence what we like and buy. (Denying people are influencable goes against the results of all the psychological research of the last 100 years) Any system with positive feedback can "runaway" ie. accelerate out the the stable zone until it crashes into some external limit like the energy supply running out or revolution or the various ills of modern life from obesity to stress to crime and terrorism.
But I'm pretty confident that's going to go away. Over the next 100 years, we'll see global, mass civil disobedience against "intellectual property" (sampling, file-sharing, burning CDs etc.) which will leak from music to the movie business, news, photography, games etc. And this will effectively destroy the mass-media as a major industry. With luck it will also take down all "mass brands".
At which point I think we'll return to more local, individualistic cultural production within our communities. We'll still have mmorpgs, we'll still have markets associated with them, but the markets will be for more custom, individualized items and services.
Rather than people bidding hundreds of dollars for a standard magical item, they'll pay to have a personal guided tour to an architectural fantasy in something like "Second Life". And this will also help to restore the balance. Because you can't obsessively consume services the way you consume mass-produced objects (not even in virtual worlds). You'll spend less money encouraging sweatshops of gamers to repetitively kill dragons, and more money on supporting and building relationships with specific "local" artists who are responsive to your community's actual cultural and symbolic requirements.
Wow, that turned into an essay. Might as well add a bibliography, or at least some interesting links.
http://secondlife.com/
BlobJects
ThePlayEthic
ClubNeverdie