@ AJ: You should try playing EVE Online, then.
While there is a universal currency, ISK, players are free to trade goods between each other. There is no universal auction house, either; instead, each space station has prices based on whatever that market allows for: those that are further away from “secure” zones tend to be more profitable, but the risk is that your ship gets 'jacked or you get destroyed by pirates.
Check out the website: EVE Online
Re: Mises Pieces
Gotta start somewhere. Just a basic trading company, chain of item shops, bodyguard service, etc. would be enough to make things interesting. It wouldn’t be a “real world” economic system, but it could sure show some important economic (and political) principles. Many of these games have already shown a lot about inflation, central planning, Gresham’s law, etc. The better the model, the more can be learned.
Thanks, ricarpe. The game makers have an economist on staff, and he said this in a BBC interview:
"Eve is a very competitive game and is happening in a super-capitalistic environment - corporate espionage is a very big part of the game.
“Everybody assumes there must be one spy in the ranks. There have been examples of corporate thefts, where people have earned the trust of others for months before attacking that corporation.”
But the game’s architects are not automatically moving to stamp out such practices.
“We are discussing this with players. To what extent should we provide protection for players.”
So here, I’d be thinking in terms of what the market could do about the spy problem. If any entrepreneur could provide a service to reduce espionage, that entrepreneur could become very wealthy in-game. Instead they are “discussing [it] with players” to see “what extent we should provide protection.” Well of course players are going to ask for protection, because that is more expedient - if the game designers are willing to provide it. But less fun, less market-based. Again, the game designers aren’t getting the point that the players love to be beaten down, as long as there is a way to solve the problem, preferably by individual ingenuity.
EDIT: I just spent some time learning about EVE Online’s economy.
http://www.tentonhammer.com/eve/guides/business/basic_trading
http://www.tentonhammer.com/node/87093/page/2
It occurs to me now that the reputation needed to be able to, for example, start a trusted bank, takes several years to build. Perhaps better reputation tracking could help. But in any case, that’s a long time in a game world, so that may explain why there are no private banks in EO (that I know of). There are apparently financial markets and some private lending, though. It sounds a lot like what I described above, at least somewhat.
I played WoW a few years ago. I noticed when I was playing that it was almost an-cap. 100% free trade and zero tribute (“tax”), the one exception being the forced alliance/enmity. I made some mad money just flipping stuff on the Auction House using a mod for statistical analysis and solving the price patterns. My observation was that low level goods were virtually free due to the ease of mass killing low level bots and lack of any use other than levelling professions. High level items were elevated in price when there were more raids. A longer running server would have more high end guilds doing end game, creating a vacuum of high commodities.
That’s Auctioneer. It’s very useful, yes. Its model is of course simplistic in the end, but it’s fun to watch how rapidly prices adjust in the system.
Every MMORPG I have heard of has had massive problems with inflation, distorting the value of all the ‘fixed’ prices and fixed rewards in the game. Game designers had to introduce the concept of “money-sinks”, basically high priced luxury items to suck money out of the system.
I agree with the earlier poster that there should be no official currency. Aadditionally, you must eliminate all fixed prices. Also, ALL consumption good would need to be ‘manufactured’ and ALL commodities harvested from the environment. (even if “harvesting” meant doing fun stuff like killing baddies)
Then, you could fix the quantity of all commodities (ore, lumber, etc) and market demand would determine what percentage of each commodity was used to make what consumer goods. Once these goods were consumed, the material used to make them could recycle back into the system. Thus, there would be no economic growth and ‘stable’ prices.
OR, you could slowly increase the supply of commodities over time and simulate economic growth. If the market-selected money-commodity were held constant, this should bring about deflation. If it were increased faster than other commodities, it should cause inflation.
AND/OR You could make some commodities more abundant than others, some heavier than others (encumbrance), some spoilable, etc. to see what characteristic make for a good money commodity.
I’m surprised no one has mentioned Second Life, yet. It’s got to be one of the “games” (it’s less a game than it is just a virtual world) closest to what’s being discussed here.
There is money, though not free market money. More money comes into the system from people purchasing it with real U.S. dollars, so there is inflation.
Users start businesses, create games for others to use free or for money, create/sell in-game clothes, build things for people, etc. They even hire employees. I’ve not seen anything close to what would be considered manufacturing, however.
You can build nearly anything you can think of. I’ve seen giant spider-like robots, mansions, etc. A problem is that the materials themselves are not scarce. The only scarcity I can think of is in time, money and land (additional land can be created, but it costs money). Once you create something you are able to create copies with just a couple clicks. Even though you can have something like a “copyright” on it, the system cannot stop other users from using a hacked client that can take the information that draws the object on the screen and then uses their own character to replicate it. So once a specific good is produced for the first time, the good is almost practically no longer scarce. All of the objects you create are programmable, though computational resources are limited for this (only so many objects within a certain area can run at a time, and the amount of code that can be used on an object is limited, etc).
There are gangs or mafia-like organizations, though they violate Second Life rules.
There are obviously some problems with it when compared to an an-cap virtual world. And the amount of resources they need to run this centralized virtual world is enormous. There’s probably a lot more relevant info about second life that I’m missing, but I’ve never used it much, and haven’t even looked at it in a long time, so I’m kinda out of the loop on that stuff.
There is also another option for building a decentralized virtual world, using the Croquet Project or Open Cobalt (which is built on the Croquet Project SDK; also see wikipedia - http://en.wikipedia.org/wiki/Open_Cobalt). I don’t know how many users these systems are capable of supporting, or whether that’s even a relevant question for them. But this would certainly lower the barrier to building a virtual an-cap world, due to not needing so many resources. They use the Squeak programming language (based on Smalltalk), which I am not at all familiar with, though. Maybe us mises.org users should create a “mises virtual world” with one of these systems and see how realistic we can make a virtual world (despite the obvious limitations pointed out in previous posts).
The more I look into EVE Online, the more impressed I am. Here are two player-owned corporations that apparently provide very valuable services. What I like most about this is there’s actually a player-created enterprise that solves the game company’s problem of not having a good enough system for educating players on the game’s intricacies. These in-game entrepreneurs have even managed to add value and real profits for the game company itself.
(From http://www.tentonhammer.com/eve/guides/politics/helpful_corps)
Red Frog Investments
Sure, hauling large amounts of material around high-sec space can be done en masse with freighters or orcas, no problem. But it’s a drag, especially if you have other stuff that you would prefer to be doing. Indeed, the human labor required for transporting goods is often the sticking point in an otherwise sound business plan. That’s where Red Frog comes in.
Red Frog Investments has a host of pilots whose sole business is moving things around for other people. They are courier specialists, with set fees, established reliability, and an amazing turnaround. Things usually take hours to move, if they are sent to Red Frog, rather than days.
For a large-scale industrialist, this is a godsend. For people that have a market character in Jita but live elsewhere, this is essential. Especially if their main character lives in low-sec or null-sec.
While you can likely get away with paying less for a public courier contract, Red Frog specializes in rapidly moving freighter-loads of goods between sites in high-sec space, and this specialization is what keeps the industry of EVE Online running. So many pilots rely on them that it is difficult to do them justice. If you suspect that Red Frog might be what you are looking for, go ahead and check out the Red Frog web site
#2 EVE University
For more than half a decade, these guys have been taking clueless EVE newbies and putting them through their paces. Their curriculum includes a thorough grounding in game mechanics, an amazing wiki that is available for use by anybody whether they are a member or not, and recorded lectures on various topics from EVE Online experts.
Thousands of players have already gone through EVE University’s curriculum. Without this corporation, thousands of players would be worse off. More than anybody else, they enrich the game by populating it with educated, interested players. They provide their members with organized, reliable information, and as a result EVE Online retains more players rather than those people flaking out and quitting out of frustration with inscrutable game mechanics.
Nor is the University solely for new players. Veteran players join as instructors, and pass on some of what they have learned. Graduates return and give their alma mater donations to help fund its ongoing operations. Really, it’s a big love-fest.
Basically, I cannot sing EVE University’s praises loudly enough. If this sounds up your alley, check out the EVE-Uni web site.
As you said, EVE is a very good example of ingenuity and Austrian Economics in action.
The problem, of course, is that it is a MASSIVE time sink. Seriously, to become anything important you need to spend at LEAST several months building up your money, getting better ships, and making contacts among the various people you meet. Also, once you get out of high sec. areas (and if you want to make any real money, you HAVE to get out of high sec. areas) you will almost certainly be ambushed and destroyed by space pirates unless you happen to have a bunch of friends nearby (a good idea, as a corporation formed up by a handful of friends can do pretty well if they play their cards right) or a very good war ship. Also, there are a handful of super-corps that control parts of space and may very well blast you out of their area if you pass by (I know there used to be one called Band of Brothers that controlled a HUGE chunk of the Eastern part of the world, but I think they are gone now and Goons have taken over).
Erepublik is a pretty good game for economic matters, though the monetary system is a bit fucked up. Admins sell gold for Euros, which leads to inflation, but the gold is put into “strength boosters” and so on that is basically destroyed, leading to deflation. It is quite irritating, really. Also, war really does benefit the economy because the only thing that kills players is starvation but war actually gives out experience points and so on (if you reach a couple certain levels, you get given a bunch of gold). On the plus side, Erepublik has an actual stock market.
I’ll look into that server Sieben. It’s been a while since I played and i’m feeling a bit nostalgic, though I probably wont have a lot of time to play since schools about to start soon.
Sounds like im gonna have to check out this EVE online. I had only vaguely heard of it prior to this thread.
I really only play sports games, but I think something that could make these sorts of games more realistic would be if you were limited to one life. Not just that if you died you had to start over from the beginning, but that you could only play it once, and that you would have to buy the game again if you really wanted to play. Would also introduce the concept of having every new player being a child of another to introduce the idea of family, and would also have the concept of old age, so that a great player would not be able to accumulate wealth in perpetuity.
I was a full time speculator. I rarely did any grinding for money. I kept a reserve of gold, bought any commodity with decent trade volume with under mean price and kept probably thousands of gold worth in storage waiting for a short supply sometimes for months.
Would also introduce the concept of having every new player being a child of another to introduce the idea of family, and would also have the concept of old age, so that a great player would not be able to accumulate wealth in perpetuity. - So, does this imply you support a death tax of some kind?
Although modeling a life-death cycle is a cool idea, I don’t think it is necessary to make useful economic observations.
Even if man discovers Immortality, he must still make choices as to how to use scarce resources to achieve his ends, and must still seek to move from lower levels of satisfaction to higher ones. Even Q from Star Trek faced choices with uncertain outcomes and various possible “pay-outs.”
I think all new players should come into the game as an adult with nothing. People are born with nothing. Many people immigrated to the “free world” with nothing. But also like the real world, family, friends and strangers can give you gifts in the game after you join.
I’m not sure if I think virtual aging is necessary…each player’s time is already scarce in real life, which will have an effect on their actions in the game. But I do like having the concept of injury and death in the game, and that once you die, you are done unless you want to pay to play again.
People can use violence, and the threat of injury or death will result in players protecting themselves and others. A potential problem is that players may be more aggressive in the game than people tend to be in real life, due to the practical anonymity, though at the same time, by being aggressive they put themselves at risk of dying, too, which will likely counteract this to some degree.
As far as what happens to your property after you die in the game, that’s up to the players to decide. At some point before the player dies, they can make arrangements for inheritance or donation of their property upon their death, and other players could specialize in providing these services. A potential problem here is that the player might arrange for others to hold the property after his death until he rejoins the game and can take the property back, minimizing the problem of death and making the game less realistic.