Job guaranteeing and MMO economy.

gotha

I was thinking of something we could learn from MMO economies and one of the things i think is most important is the aspect of job guarrentees in the form of missions as seen as eve and pre cu swg.  Hell even if you fall flat on your face in 0.0 space you can always go back and run missions until you get back on your feet.  Imagine if the real economy worked like that and there was always a job you could go back to.

Money in MMOs works in the same way as it does in the real world.  Out of thin air.  Its a construct by banks and a printing press.  Even during the era of the supposed gold standard we pretended we could exchange money for gold but there never was a direct collalation.  

This is nothing new i know,  Modern Montary theorist have been pushing it for years,  but MMO economies show that it can function and work.

 

Cleffy

I really like projects or defined missions on the job.  I hate it when I am filling out my resume and I cannot point to a hard project I contributed to.  With a defined project its very easy to list your achievements.

The problem with the mmo economy construct and a real world mission based system is thats not how the real world economy works.  Only Keynesian believe that money is produced out of thin air.  It is not.  Money is the faith people have in the value of the currency.  This faith is derived from the goods produced verse the amount purchased.  If you live in a society that produces little goods, yet has a high amount of currency, then the purchasing amount goes up.  Conversely if society produces alot, then the purchasing amount goes down.  What affects this primarily is available resources and the necessity of said good.

Now there is an aspect I like.  Even if you fall on hard times you can accept another project to earn more money.  The problem with this is modern society has been working for a century to make this not possible.  In the early 20th century you could do this.  Just go to a business and pick up a day job.  Now we live in a society that requires the employer to provide alot of services to its employees, and requires the employeer to keep track of how much they give each employee and how much they are taxed.  This in turn has eliminated the ability to quickly acquire a job.  The employer now has to verify the employee, and determine the risk the employee may bring to the employer since the employer will have to fund alot of upfront expenses for the employee.

Cleffy

I think the difference lies in Consuming verse Producing.  To me consuming or printing money does not make an economy.  Its producing goods that makes an economy.

gotha

To be honest Modern Economiic theorist and new charlitans have  far better understanding how the economy works under a fiat system than Austrians do.  They rely to much on barter and do not put money and debt into the equation.  EVen during the gold standard their was money create from banks which they did not have deposits to cover.  You basically relying on the reputation and trust of the bank.   In 1900 70% of currency was banks notes not back by anything but the banks word.   While this trust is related to goods and services produced it is very subjective and flexable.  A gold standard will not grow as the economy grows and has horrible potencial for deflation.  It also can jump around insanely.

Cleffy

Never said the gold standard was a good form of currency.  Just said the problem with an MMO economy is money is created from thin air.  In essence printing money.  The stance is very similar to Keynsian economics of inflating the economy during recession to increase demand.  Just like in an mmo, in the real world when you create money out of thin air it increases prices.  It does not increase overral production.

Conversely Keynesian Economics shows to depromote economic growth.  However, I am not sure anyone can consider what the fed and government is doing right now as Keynesian economics.  They lowered interest rates to 0% and are printing trillions per year in order to keep up consuming for products.  However, this undermines savings which creates lasting economic power since at 0% interest rates why save when you can borrow?  It also ignores the fundamental principle that economies are not determined by spending power.  They are determined by production.

Grahor

 >>The stance is very similar to Keynsian economics of inflating the economy during recession to increase demand. <<

 

*rolls eyes*

 

How about actually reading something about Keynesian economics? You don't "inflate economy to increase demand", you "redistribute money mass to money-starved strata of society to increase demand".

 

>>Conversely Keynesian Economics shows to depromote economic growth.<<

 

You mean, they've been shown, again and again, to promote economic growth; there are downsides to Keynesian economics, but being wrong is not one of them.

 

>>They lowered interest rates to 0% and are printing trillions per year in order to keep up consuming for products.  However, this undermines savings which creates lasting economic power since at 0% interest rates why save when you can borrow?<<

 

The reason I'm posting here at all, despite having one of my posts already deleted, is because the author of the post I'm replying to is using relatively long words, for this site (or for many other places) so that some people unaccustomed to long words may take him seriously.

 

>>It also ignores the fundamental principle that economies are not determined by spending power.  They are determined by production.<<

 

While production is determined by demand, which is determined by spending power of the population. And thus we have a division by zero in our logic. Like the Uroboros of fundamental principles, we bite our own tail here...

 

In short: for MMORPG economy to be viable money sources have to be equal to money sinks. The bigger money sinks there are, the more money sources there are, the more money moves from money sources to money sinks, creating big, robust and healthy economy.

 

In real life terms, it means high spending and high taxes build the most robust economies with the highest productivity (of course, other modifiers apply; we are not on scientific conference here, or even in an actual discussion forum.)

 

Incidentally, low taxes, high spendings lead to inflation, low taxes, low spendings - to stagnation of the economy, high taxes, low spendings - to both stagnation and deflation, worst of both worlds, so to say.

Cleffy

I think we all can take a stage in history when the government took in a high amount of taxes, and spent a large amount of money.  That stage ofcourse being communism where all the income was taken and spent on what the government deemed a necessity.  With the logic that a healthy economy requires this, at the most extreme form Communism should have exploded with production and a happy citizenry.  This ofcourse was the opposite of what happened.

Maybe if we were to go to a middle-ground like Socialism this would be possible.  Too bad it did not happen in countries like France who have had a stagnated manufacturing center and new businesses avoid.  This is the real issue here.  When you redistribute capital towards goals that the government deems to be a necessity, it poorly utilizes a nations resources towards the goal of economic growth.  It also poorly meets the needs of its citizenry.  Now with low taxes, this gives the citizen themself the power to determine how resources should be allocated and more properly deal with their own needs.  This is why I find high taxes and spending = economic growth to be a fallacy, because the geniouses who think they can manage an entire countries needs pales in comparison to every person in the country determining their need.

Now if we talk about budget surplus verse budget deficits.  A surplus does 2 things.  It increases the outlook for the central banks currency as stable.  It increases investor confidence in the country that it will not collapse.  The opposite is true with budget deficits.  Budget deficits also lead to inflation.  In the case of Zimbabwe and Japan it leads to hyper-inflation with a generational loss in economic power.

Now we are to believe that printing money to increase demand in a recession will alleviate the problem of reduced consumer demand is a good idea.  At this time we increase deficits to meet these demands.  I have given a case were government spending is usually poorly targeted towards the needs of its citizenry.  So the government is now going to spend blindly instead of having any idea of targeting the nations needs.  They will also increase deficits that will reduce business confidence, reduce currency stability, and create inflation reducing the purchasing power of the currency.  This all on borrowed money that will have to be gained in the future by reducing the ability for future consumers to spend.  This to me is the hole in the logic.  Make the future worse to make the now a little bit better probably.

Now, you make some valid points as even in laissez faire capitalism there have been several points in US history where the currency collapsed.  Deflation is a concern.  However, the concept that demand can be determined effectively by a governing body to create meaningful production by borrowing against future purchasing power just does not add up.

Also Production is the key to strong economies because the value of money is based on faith.  But that faith is determined by Production.  In a country with alot of currency but no one doing anything, would it be any surprise that a cup of water that one person got from a river would be worth the entire currency in the nation.  At the end of the day, the value of currency is just bartering what you value a dollar at vs what someone else values their goods at.

Grahor

I'm not going to start on that pile with a showel. Honestly! If you want to see high-tax, high-spendings situation, look no farther than US in its prime, or, say, modern Sweden or Germany.

 

Good gods, the things I'm reading. I have to stop reading freakin forums, or I'll get myself a hemorrage in the brain. Commies my richard!