One of the first economists to seriously examine virtual worlds (Edward Castronova) makes the observation that scarcity is fundamental to the environments that thrive. Utopia is boring. That’s a common theme of a lot of subsequent academic studies: The underlying patterns of human behaviour and motivation don’t fundamentally change from the physical to the virtual.

We have to “exist” in the real world (“eat, drink, breath”). We are highly likely to continue to “live” in it too (that is, perform social/economic/spiritual functions, in addition to biological existence). But it is not necessary to rely on it quite as much as we do now. Critically, living in virtual environments opens up some avenues for society’s development that may otherwise close.

Start at the “peak oil“-type resource analysis. The idea that up to this point, western culture (in particular) has assumed increasingly easy extraction of resources, but from this point forward will have to start dealing with the implications of increasingly hard extraction of resources. It follows that any “standard of living” (social status, economic income, etc) that is based on rampant consumerism and resource use, is likely to become highly unstable.

The fact that telecommunications and computerised technology is generally much more resource efficient than physical networks and products is almost a secondary consideration. The most interesting thing for me, is the creation of a sustainable socio-economic environment largely based on nothing.

That statement sounds like nonsense. But it has already mostly happened in highly developed western economies. Some examples:

  • The majority of a city like Edinburgh’s economy is tertiary (service sector). A significant proportion of that economy is knowledge-orientated (finance, research), where people never need deal with a physical product. Ever. Their work is often defined by their minds and their interaction with other minds.
  • The British “High Street” retail trade doesn’t really sell products, it sells “the experience of shopping”. In a broad economic sense, the actual sale of the products isn’t what makes most shops profit. Rationally, if they were only selling products, those products would be far cheaper.
  • Of a typical physical product made in somewhere like China, the minority of the cost is resource and manufacture. Much of the cost is in areas like the intellectual property rights of product designers, who typically live in the west.

So the most advanced types of work (which are also the ones generating a disproportionate amount of wealth), and the crude capitalist motivations of most western societies (the accumulation of stuff we don’t need) are already mostly based on “nothing”. It isn’t such a quantum leap to move those processes into a virtual environment.

We will never leave behind the physical world. But consider that once almost everyone in western society worked in agriculture, and now a tiny proportion do. There has always been a logical progression of society’s development which have led to progressively fewer people working in older sectors of the economy. This may simply be the next iteration. We are unlikely to understand it any better than an 18th century agricultural worker being shown a steam engine. As Charlie Stross’s Unpacking the Zeitgeist demonstrates, the present would be hard for us to have understood 30 year ago. Indeed, his description of the present is still a mystery to most of those living now.

But “our” children seem to embrace it. Many of the kid’s virtual worlds (such as Gaia Online) allow their young customers to buy virtual collectables using real money – these items don’t physical exist, but still represent something “of value”. These are not geeky male niches. Barbie Girls gained 3 million online users in its first two months – which from a discrete market of US teenage girls, probably numbering less than 20 million in total, is impressive.

There is still a big gap between making trivially small payments for virtual goods on glorified online social gaming/networking platforms, and the integration of these concepts into mainstream society and economy. However, these children are now developing some of their life skills in these virtual environments. Perhaps they will naturally accept what we will struggle to comprehend?

This topic evidently requires a lot more research and consideration. I’ve posted it here as a record of my current thinking only.

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