The persistence of scarcity in virtual worlds

There is no reason to believe that the role that virtual worlds like Second Life will play in the economic, political, and cultural innovation will be anything short of monumental, but it is imperative that we keep in view the ways in which such spaces,while transforming how many resources for us are arrayed and available, do not fundamentally remove from human experience the kinds of human exchange that inevitably produce both possibilities and constraints, and we must be ready to see how the accumulation of interests, along with attendant and counter-to-innovation practices of exclusion, may nonetheless appear within them, no matter the
promise of geography’s wane.

Essay: Thomas M. Malaby. Contriving Constraints. The Gameness of Second Life and the Persistence of Scarcity. Innovations, Summer 2007

Interesting contribution to the more fine-tuned thinking about abundance and scarcity in ‘real’ vs. ‘virtual’ worlds.

The text is a response to another interesting essay: Collapsing Geography (Second Life, Innovation, and the Future of National Power), by Cory Ondrejka.

Thomas M. Malaby:

“Being and acting in SL thus feels like play, and this helps us to understand a crucial point about what is at stake in virtual worlds. Ondrejka identifies the play-like quality of SL when he writes (p. 32), “The safety that comes with mentally classifying an activity as play leads to a free exploration of design space.” While it is instructive that users often report their actions in SL as play, it is too much of a leap (and one that obscures some important features of virtual worlds) to account for users’ incentive to explore by reference to a lack of stakes (safety).

This is because while there are understandable reasons why we might look at virtual worlds and see them as places that have so radically reduced certain kinds of costs that they are effectively consequence-free (and that it therefore accounts for why people do creative things there), this is an error. Instead we should be ready to look more closely and recognize how the stakes in virtual worlds are not eliminated but instead radically reconfigured as compared to most offline domains, and it is this realignment of resources and constraints that may account for the remarkable emergent effects that virtual worlds have generated.

Ondrejka’s case study is deeply (and usefully) informed by attention to a core insight about virtual worlds: they transform and vastly reduce material costs, those associated with production and distribution in the market. But there is always a temptation, upon seeing the ways in which virtual worlds seem to collapse geography, to make two errors. The first is to see this reduction as removing constraints altogether—the radical reduction in material costs can lead us to think that we are in a “zero marginal cost environment” or a “post-scarcity economy” (p. 44). The second is to take this reduction of constraint and its remarkable effects as confirmation that constraint of any kind (such as the geographic) is an impediment to human innovation. An answer to this second, and larger, issue is one that very probably lies outside the scope of this response, but here I would like to address more directly the question of economy, cost, and scarcity.

We are in the habit of thinking of the economy as constituted and bounded by the market—more specifically, by market transactions. This is the result of many decades of academic treatment of the market as set apart from other aspects of our lives, with their other kinds of human commerce and exchange. But scholarship has slowly come to reflect more closely the human experience of the economy and has developed a picture of it that incorporates not only the ways material resources (cash, commodities) accumulate and move about through market exchange, but also through other kinds of human exchange, such as reciprocity, the source of social capital (trust), and learning, the source of cultural capital (competencies). What is more, and as most social actors recognize, we frequently parlay these kinds of resources one into the other.As examples, we may invest market capital in learning (tuition), or social capital to find a job, or cultural competence to establish networks of reciprocity (through hosting a dinner party, for example).

What does this mean for virtual worlds? The first thing we must notice is that their structural characteristics of persistence and open-endedness (contingency) make the accumulation of all these forms of capital just as possible within them as they are elsewhere. All of these resources accumulate over time; human effort congeals in these various kinds of capital that then become the resources available to us as we seek to accomplish our daily objectives. Goods (with vastly reduced production and distribution costs of course), human relationships, and skills all can be created and obtained in virtual worlds as a result of the expending of effort over time. Ondrejka is thus correct in a broad sense when he writes that time continues to be a scarce resource for people engaged in virtual worlds, but an understanding of virtual world economies requires that we keep a more fine-grained level of analysis at hand, to see what more specific scarcities persist, however reconfigured. When we do this, we see immediately that trust and competence continue to be scarce commodities. Establishing and maintaining a network of trust and obligation does not become a trivial exercise because many of the material costs of communication are lowered. Similarly, gaining competencies that can be applied toward innovation is also not a costless (or even near-costless) transaction. This is because reciprocity and learning, as forms of human exchange, have always required time in a way that isolated market transactions, over and done with as they often aspire to be, do not.

What this means for virtual worlds is that, while Ondrejka rightly shows enthusiasm for the vast reductions in the costs associated with (offline) geography, it is overreaching to see this as creating a landscape that is essentially unconstrained. Instead, we may be better able to account for the excitement that is sparked by these worlds by seeing them as radically reconfiguring the relationships between these kinds of resources. It may be that it is more accurate to say that, over much of human history, market capital has dominated other forms of human exchange precisely because of the high costs of producing and transporting material gods, and that therefore virtual worlds bring this situation more into balance (at least for those with the material resources to access them!) by elevating the impact of reciprocity and learning, so that all these forms of exchange are on a par with each other.”

1 Comment The persistence of scarcity in virtual worlds

  1. Avatarrightasrain

    I think the scarcity issue will not persist actually. It is a ploy mainly by “virtual land” sellers to propagate the myth of land increasing in value over time. Even with the types of expensive digital goods that we sell (some more than $50 USD for an art piece)these are in fact more abundant over time. So really the issue for virtual environments is dilution. You are citing old materials which were written in the sugar rush of SL over-heating. It is old news and out of date.

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