From Welfare State To Laissez-Faire Capitalism

Trotsky’s, a bar in NeufreistadtLinden Lab, when I was very young in Second Life (that’s mid-2004), had a policy of subsidizing content, since the world started “empty” and LL expected that residents would indeed fill it up, from corner to corner, with exciting and alluring 3D objects. This was already a third phase; during the first phase, there was no real “economy” (except for barter); the second phase followed up with the introduction of the Linden Dollar, and having the residents pay L$ for every prim rezzed. This soon proved catastrophic as people “hoarded” prims disallowing others to create content, and Linden Lab quickly changed to the current model: prims are tied to land, and people buy land to get an allotment of prims.

To promote more content, while still maintaining a solid business model, Linden Lab introduced two interesting notions: weekly stipends and (generically) ratings. The stipends apparently were as high as L$2500 per week; in mid-2004, basic accounts got L$50 (if they logged in once per week) and premium accounts got L$500; as time went by, basic accounts don’t get a single L$ from LL, while premium accounts now only get L$300, and, very likely, will get nothing at all pretty soon. A subsidy was also given out to anyone hosting an event (which naturally was very abused); later only to educational classes; today, none at all. “Ratings” included not only people rating each other and getting an increase in their weekly stipend (the idea being that better producers of content should get a higher weekly allowance) but also the notion that parcels attracting a lot of people (due, hopefully, to better content) should also give people a higher weekly allowance. Both systems were so much abused that Linden Lab slowly and over time got rid of them, as well as of the “leader boards” where the statistics of the richest people and the highest rated ones were publicly displayed.

Linden Lab, at the beginning of Second Life, acted indeed as a “welfare state”, providing avatars with a minimum amount of money to freely spend in SL, and actively promoting content with a subsidy (either through sponsoring places attracting more people or encouraging people to host events). This modelled not only the beginning of the SL economy, but also generated some expectations on how SL should “look like” and what role LL was to have in the Metaverse. Everything changed since then.

The Linden Welfare State

What was the cause of the increasing enthusiasm about Second Life in 2004? The early days of glamour and glory, when both residents and Lindens rubbed their noses in a common environment, where everybody knew everybody else by name, were long gone. The “Spirit of Beta” was long over. Lindens were remote entities, seldom seen, except for their occasional intervention here and there on the grid – to launch ideas, to settle disputes arising from Abuse Reports, to do technical support (Liaisons hung around on the Welcome Areas). So people focused on producing content (building, scripting, and events) and establishing the groundwork of the society and economy of Second Life; there was something like the “spirit of Second Life”, where people generally helped each others, griefers were quickly dealt with (they always existed), and creativity, communication/socialisation, and commerce were just starting.

People started “poor” but not “hopeless”. You got some money to start with. Most new users were very curious about the potential of SL, and the usual path was to start on the Orientation Island, spend hours tweaking your avatar, arrive fresh at the Welcome Area, get greeted by a lively and happy crowd, absorb as many freebies you could take, and wander to the nearby Sandbox, where you finally met the “work in progress” of everything that was being built. Day-old newbies stumbled upon week-old ones, as they exchanged tips and tricks, gave bookmarks to the immortal areas like the Ivory Tower of Primitives, the Particle Laboratory or simply Yadni’s Junkyard.

You also saw your first shops pretty soon, and wasted your money buying things you had no idea what they were good for. The next weekly stipend was, well, possibly a long time in the future (there was noboy around telling you that the grid historically started on a Tuesday, so payday is still Tuesdays since then). So what was there to do? Well, you could try to build, to script, or to design clothes while you waited. In the worst case scenario, you’d have those items for your own self (instead of waiting to have money to buy them); in the best case scenario, you’d be able to sell them to the next batch of newbies, and spare them some trouble.

Tons of people started this way. Many simply found out that things took too much time to do and just wanted to enjoy themselves. They found the Search > Events and attended those, in search for contests that gave huge money prizes (since they were Linden-sponsored, every event tended to give at least half the sponsorship back to the “winner” of the contest). “Rating parties” were also popular, since they increased your weekly stipend. In effect, money was rather easy to get; a basic account would be able to quickly get L$1000-2000 per week by basically doing not much more than ratings and attending contests. Since you had a way to convert those L$ in US$ (through the LindeX’s resident-run predecessor, GOM), this would mean that effectively Linden Lab paid you to test their platform. Also, if you had a place that attracted a lot of people continually, Linden Lab would give you a real money prize, the Developer Award, that was planned to give an incentive to creative content creators to design something extraordinary and get a monthly stipend that would easily cover their land fees.

The market also regulated the prices. The reason why currently most items are in the L$10-1000 price range — with L$200-300 being a good average for, say, outfits and furniture — is because the weekly stipend was L$500, and it was reasonable to assume that an user would buy something every week or so when getting the stipend.

The fundamental source of information on Second Life were the official Linden forums. The SLogosphere didn’t exist yet, although the Herald was around. About 6% of all residents read and wrote on the forums, so it was the best way to get some recognition, search for tips, and promote your work. If you wish, SL was at the “small town stage” — large enough for anonymity, small enough to allow everybody to be aware of what was going on at all the time.

The consequence was mostly a booming, happy economy. Money and items quickly exchanged hands. New users coming in asking the dreaded question: “how do I make money in SL?” had as an answer: go to the contests to win some money. If they tired of attending contests, they started running their own events or bought some land (it was still reasonably cheap – even on the days before First Land) and set up a shop there to sell their content. Good, talented creators would make fortunes; but even reasonably amateurish work would earn enough L$ to allow you to pay for your semi-professional work.

This was still the days of Philip’s “I’m not building a game, I’m building a country.” There still was the sense of belonging to a society and a community. Even the anarchic mainland had some order: people could not teleport everywhere (just if they got a teleport offer from a friend), but went to a telehub first and had to fly the rest of the way. This gave the landscape some order: commercial areas were deeply concentrated in a circle around the telehub, and residential areas were as far away from it as possible. This encouraged casual browsing and exploring, since you had always to travel a bit (imagine a city connected by an undergound /subway, where you needed to go “the last mile” by foot or flying). It also regulated the land speculation market: telehub plots became insanely expensive, but so were the residential areas very far away from any telehub for the ones desiring some privacy.

Still you expected Linden Lab to settle the differences; Abuse Reports were handled for all possible cases (except business-related ones) and often commented publicly on the forums.

Now, the “good old days” are always golden and perfect; at each step where every tiny little bit of this “welfare utopia” was removed, there were uprisals and protests.

So, why the changes?

From ten thousand to ten million

We’re now close to 7.3 million users, and Linden Lab’s Second Life is being closely watched from all corners. Perhaps a thousand (if not more) real companies are using SL as a media to create their virtual presence on the metaverse, which was predictable (but not really believed in) 3 years ago. The grid has grown so much that it’s impossible (do the maths) to view it all. Content has grown to an (estimated) 1.2 million GBytes of data on Linden Lab’s servers. And over 1.5 million US$ are transacted per day on LL’s L$-to-US$ money exchange, the LindeX.

This shows that Second Life is now big. It has become an idea and an expression that flies around the media in the world. People might not log in to it, or still ignore it for a while, but they’re aware that Second Life is where they place the finger and say: “here is where it all began”. In 5 years, very likely there will be no human being on the planet with an Internet connection that didn’t try it at least once; and in ten years, Second Life will be “part of your online routine”, like web browsing, emailing, or chatting on MSN/Yahoo/AIM/Gtalk is part of your current online routine.

This meant mostly that Second Life had to change.

Not a single community any more

The first recognition, made publicly over a year ago, is that Second Life is not a community any more; instead, it’s a mix of communities, with completely different goals, and ethics or morals. Many huge communities don’t even speak SL’s lingua franca, English, and were never seen outside their “corner of the virtua world”. Others simply move in to a community they like (which, having grown, slowly becomes self-sustaining and independent, providing their own specific content and events targeted for their community) and remain there voluntarily. This has been described by many as the “balkanisation of Second Life”: “many communities, one world”. I believe it might have been foreseeable, since, unlike a “real country”, which, through education, provides a cultural environment for their citizens, Second Life is the reverse: it promotes diversity and different cultures, and allows them to pacifically co-exist (well, most of the time, at least…). The result, of course, is a “fragmentation”. Last year people still clamoured for “the lost predominant culture of Second Life: an environment where people were helpful, friendly (or at least polite), communicative, and tolerant”. In 2007, we all became pragmatists. The “Second Life Culture” does not exist. Instead, we have many cultures, many socities, many local norms and uses, and it’s up to each and every one to adopt the ones they like, and tolerate the rest.

It’s the latter point that is more controversial, as more and real-world Puritanism enters Second Life, and everything adult/mature starts now to be seriously attacked from all corners. On the other hand, excepting for that sensitive area, you’re still welcome to do whatever you wish — provided you’re on the “right” community.

No more welfare

This was seriously debated for years after years, but at least Linden Lab saw it coming, possibly as easly as 2003, and most definitely by the end of 2004: the value of the L$ remains stable as long as money is not injected at a faster rate as it is removed from the economy. “Removal” is provided through money sinks: money you spend that does not circulate any more. We still have a few, like the cost of creating textures/animations/sounds; creating groups; getting a partner. These are not big enough to allow a lot of stipends to be paid (money created from “nowhere” and injected into the economy). So Linden Lab adjusted the system, and removed all inentives, stipends, extra bonuses or any other external source of money, except for stipends for Premium users, which have been reducing gradually. The economy’s flux of money is regulated at the LindeX: if too many new users come in at a single day, this means that Linden Lab can safely inject a few more L$ (the market grew organically, ie. with more users in it, so it can handle a larger amount of circulating L$), but these are sold now at the LindeX and not “given away to users” as before.

This naturally changed radically the landscape in Second Life. Although you can get a reasonable weekly allowance with a handful of US$ exchanged for L$, most people still want money for free. New users always ask “how do I make money?”. In 80% of the cases, it’s their first question; in 50% of the cases, it’s the only question they ask the volunteers during their stay at Help Island.

Without making money somehow, new users are not active participants in the economy. Camping chairs or dancing pads (or windows cleaners, which I always found cute and imaginative) are just gimmicks to allow the landowners to get higher rankings on LL’s Search engine, but they also provide cheap jobs to the new users. However, we start to see the landmark of a move from a welfare society towards laissez-faire capitalism: instead of getting L$50 “for free” every week, people now have to slave away for hours and hours (well, they have scripts to allow them to stay online while doing other things) to be able to earn those L$. People eagerly stay around to catch a free spot on a camping chair site, waiting for someone to crash, nudging each other, sometimes insulting others and breaking out on a fight when someone managed to grab an empty spot just in front of you (in a sense, these people waiting for a chair are even better for the landowners: they also contribute to traffic calculations, but they’re unpaid workers).

While the events list still feature prizes and opportunities to earn L$ for free (and, in absolute numbers, there are more than, say, last year), it’s clear these are not enough. What seems currently to be the case is that there is an obsession in earning free money, which was not so intense a year ago, and practically unknown of two years back. We had “money trees” back in 2004 and 2005, and probably earlier than that; they would not give away such a huge amount of money to be worthwhile (people would move towards prize-giving events very quickly). Now people fight for a camping chair. How strange that might sound!

Talking to relatively new users after “a few months” gives you a very interesting perspective of the change. They’ll tell you things like “I used to be a dancer or an escort, but now I’m lucky enough to sell some furniture or a few T-shirts instead”. The new users very quickly are engaged in the lowest level of work in SL, and accept it as “the right way to begin your road to success”. In RL, when moving to a new country, I would be hard pressed to start to work as a prostitute!… but in Second Life, there might not be any other option for a job, if you’re not willing to do anything creative. What a strange world this is; what a strange morality has emerged.

In 2004, one sixth of all users were Premium users. This was pretty much constant for almost two years. Now it’s just 0.1%. Although LL makes their money mostly from leasing private islands these days, you can see a huge gap between the resident’s classes. 99% of the world is owned by 0.01% of the population or thereabouts. The next layer, Premium users, own the remaining 1%. The rest are landless owners; although several have enough money to rent or pay for plots on private islands without being Premium accounts, I would strongly suspect that not even 1% of all users buy plots on private islands; and perhaps 2-3% rent land (or shops) from others. All in all, it means that while perhaps 5% of all residents are active participants in the economy and generally are able to pay their land fees/rentals and contribute to the overall content, the remaining 95% are completely out of the loop.

This is a drastic change between producers and consumers. During Beta, all consumers were producers. When SL launched, it was about 50%/50%. In 2004, it was about 75% consumers/25% producers. I predicted that the ratio would come closer to “real life”, which is about 90% consumers and 10% producers. I’m afraid I was an optimist — the ratio is very close to 20:1 these days, if not more. And I’m not talking about the quality of the products (it takes a thousand producers to get one that is extraordinarily good; but all thousand have to exist), just the quantity.

The gap between both worlds — a world of people with a comfortable income, or even making a living out of Second Life’s content creation, who engage in the economy every day, both by contributing new content (event hosting is also content!) or by consuming regularly content; and a world of people fighting for that camping chair — is growing huge. The big question is what will happen when Linden Lab removes the last artificial metric in SL (as they have semi-announced they would), which is traffic. Then the landowners will not have any incentive to pay people to come to their premises to get a good ranking on Search; they’ll need to figure out what to do next. What will that mean for SL’s economy then, if 95% of all users have no money to spend and have no idea on how to get it?

Imagine a city as large as Paris where 95% of the houses are owned by someone, but that almost all its inhabitants are unemployed and live by begging on the streets.

Second Life’s residents overall have been notoriously good at adapting to an ever-changing world, but the truth is that the mainstream resident is drawing the short straw. They’re not creative or social enough to be able to think of alternatives (the ones that are have already moved on). They’ll take what is given to them. But without a drive to “give people a job”, where will these people get money from?


No more Linden Lab intervention

Let’s be clear on it; Linden Lab cannot possibly “solve” the ‘unemployment issue’. An interesting idea would be to give, say, L$5 upon every day that a user logs in to SL (this would be even lower than the old Basic account weekly stipendium). Now consider: this is L$35 million per day, or close to US$130,000/day (US$34 million per year!… and the number will grow and grow every day). Obviously, Linden Lab could constantly devaluate the L$, and create a staggering inflation by continuing to commit to weekly stipends, but as you can see, we’re not talking peanuts any more: a very low stipend for all Basic accounts is perhaps equivalent to half (or at least a third) of LL’s overall income.

True governments, of course, have alternatives to stipends. Obviously a mostly jobless economy, where the overwhelming majority of all residents is unemployed, is impossible to control just with stipends. Artificially creating jobs (and that’s what camping chairs and dancing pads are… but they’re sponsored by business owners, not the “Second Life Government”) is a possible alternative. Many people have suggested low-paying jobs like returning prims from Linden Land or any similar “useless” tasks but that would have at least some value (ie. not requiring Linden Liaisons to spend time on those issues). Technically difficulties aside, it’s obvious that these things would immediately be heavilly gamed, and it’s almost impossible to devise a “low-paying” job that can’t be easily abused.

Linden Lab, however, went the opposite way. Instead of being a “regulatory” force — imposing a model for the society — they’re withdrawing totally from intervening in Second Life. This was also expected, as Second Life grows way beyond the ability of Linden Lab to take care of millions upon millions of non-paying users. Technical support is now “tiered”, and Basic accounts just get access to the bare-bones (ie. browsing through documentation), which makes sense — only paying customers get access to privileged support, which is expensive to maintain, and the better customer you are, the higher your level of support. Abuse Reports will slowly be “phased out” as well — let the “local authorities” (owners of private islands) deal with abuse locally. Adult content, at least on the beginning, will be flagged by residents themselves (just like YouTube, MySpace, or any other online community that allows the users to flag “offensive behaviour”). All things money-related — ratings, traffic, stipends, awards, etc. — have been slowly removed. Let the market pay for what is needed; unlike what the doomsayers predicted, Events did not disappear (although, obviously, we have more yard sales and silly contests giving away prize money). Educational classes are taught by organisations that managed to pay their teachers through advertising, sponsoring, and funding. Things like the Foundation For Rich Content allowed cultural events to establish themselves initially; now, the artistic and cultural environment in SL pays for itself. There is hardly a gallery/museum that doesn’t make a profit, and live concerts always hit sim limits. All these are good reasons for having as little intervention by Linden Lab as possible: the market self-regulates, and we can’t even make a point about having few “interesting” or “cultural” events either — both of the latter cases have, indeed, improved quality and managed a successful business model that allows them to compete with the “mass market/mainstream” low-quality events. In fact, one may even make the case that the high-quality events are better attended than the others these days; since they always hit sim limits, it’s hard to say what would happen if a sim could hold a thousand avatars instead of just the usual 40-100.

Volunteering has always existed to help new users, but the next step will have Linden Lab remove all Orientation Areas and Help Islands. Why? Just because commercial or resident-run areas are much better than Linden Lab’s own. And we’re not (yet) talking about IBM-sponsored welcome areas, but things offered by Anshe Chung’s Dreamland, Azure Islands, or New Citizens Inc. They’re all better thought and planned, are run by paid teachers/trainers, and are economically viable (people will very likely begin here and stay there, since the quality of the surrounding content is very high). So this will be an area that Linden Lab will certainly drop as well, as quickly as possible, and just offer new residents the opportunity to select which of the commercial orientation areas they want to begin with (according to Meta Linden, roughly 15% of all new users already come through third-party sites), since through the Registration API, Linden Lab even allows these entrepreneurs to register new avatars and have them land directly on a private orientation area instead.

So what is missing? While residents have shown they’re perfectly able to replace very effectively the incentives for social events, create high quality content, manage land, and provide much better technical support than Linden Lab, there is an area that defies control: fraud and vandalism. We’ll address both below.

Technical issues

This is also an area that Linden Lab will take 18-24 months to strengthen. Currently, it’s quite clear to anyone — both new and old users — that a technology designed for roughly a hundred sims and that even managed to deal with 250,000 users (back in mid-2006) is totally inadequate to deal with 10 million users and less than 50,000 simultaneous ones during the whole day. The assumptions that people will “mostly live and stay on their own sim” has been completely underestimated; in fact, people are drawn to the places “where things happen”, and these are always stressing the sims to the upper limit. 40-people-events were a dream of 2002 (when rarely 40 users were online at the same time), but this is the best that LL’s technology can deal with. We now require a much higher density of avatars on a single place: perhaps up to a thousand, but in 5 years, it won’t be very surprising to get, say, ten or twenty thousand people attending a live concert given by a popular band in SL.

Now this was definitely unforeseen and totally unplanned for. LL’s architecture cannot deal with 10,000 avatars in the same sim, period. The proposed change — which is under way, but will probably not see the light of the day before 2009 — will allow 400,000 simultaneous users, but we don’t have the slightest idea of how many will be able to be on the same sim. I would predict that LL will possibly give landowners an intermediate solution: paying US$1200/month for a physical server (instead of sharing a server with three other private islands) and allowing 400 simultaneous avatars on that physical server, on a 256×256 sim with 60,000 prims. Technically, it should be possible. Commercially, it might even attract a thousand customers that require much higher numbers of attendants than the usual “40-100” residents. But still this will not scale much beyond “a few hundred avatars”, even taking into account that computer power will increase in the next few years (on the other hand, the SL viewer will also evolve to handle more content at the same time, ie. avatars with higher polygon count, more complex sculptie-based meshes, shadow maps, etc.).

A lot of “side issues” are also not yet taken care of. Inventory loss is a recurring nightmare; Linden Lab will probably allow sim owners to backup their content offline (they have mentioned this often), and this will certainly be the case when the server code is open sourced. But what individual content owned by a user? With the open source client, it’s at least conceivable that this could somehow be replicated.

However, one thing is clear. Right now, the open source client is not a panacea to all Evil Bugs, and it cannot do magic. People have been tweaking with it, helping Linden Lab a lot by submitting corrected bugs, and even launching one or two projects like OpenMetaverse and “alternative” clients, but this is all yet on the beginning stages. The point is, we can’t fix what LL breaks — yet. This requires a complete overhaul of what the “Metaverse” is going to be. While we all know that LL thinks on this every day, what we don’t know is when it’s going to be addressed! Expect a long wait, again, 18-24 months at least, until LL will effectively delegate “subgrids” to third parties.

These will naturally engage the society and economy by providing value-added services that LL cannot afford (or has no ability) to do. Things like SL Brazil show what will happen in the very new future: companies creating high quality content and providing the whole range of services that LL refuses to do: a special client, a logging-in system, a welcome area, high quality content to visit, thematic builds targetted to a specific language/culture, in-world patrolling, technical support, teaching/training, events, and land rentals. Think of these as “private condominiums” — where you’re safe, are treated as a customer (and not simply a number on the statistics), and willing to pay premium for it (to the company setting it all up, not to Linden Lab). However, what you will not get is a better Second Life, since the technology will be the same — only the services will change. In 2010, however, this might be completely different. Some entrepreneuring companies (like IBM or Dell or Sun) might deploy 8 CPU-servers to run single sims with 100 MBps bandwidth each and allow you to enter a grid where “hundreds” of avatars can meet in lagless sims. They will also be able to charge you, say, US$10-20 monthly for the privilege of running on a “smoother grid”, and allow you to use as many scripted attachments as you wish on your favourite event. Again, Linden Lab cannot justify the costs of these options; but a different business model most certainly will be able to capitalise on Linden Lab’s technology and employ it more successfully.
The result: free-for-all capitalism?

Ginko Financials Offices (Interior)

We thus come to the state of things today. On one hand, we have seen how Linden Lab has mostly dealt with the social issues. By bringing more and more freedom into Second Life, and allowing residents not only to create content, but effectively to run most of what would be LL’s traditional business (like orientation and technical support), new business opportunities were created. In fact, basically everything leads to “business” in the end. And here is where we find the first flaws of the model.

In Second Life — unlike real life — business is completely unregulated. The only “protection” granted to consumers and producers are the IP rights and the successful transactions (which only fail due to technical difficulties, and although they can be hacked by experts, the horror stories about these are largely myth and urban legends). From there on, it’s a “free-for-all” system — laissez-faire capitalism like on the 1850s in the US and UK.

There are no central regulatory authorities. You cannot file abuse reports for fraud. You have no way to know if someone is a known fraud or a reputable businessperson. Although word-of-mouth helps to spread the reputation, that’s all there is. There are also no taxes. And until very recently, there was no control on the kind of content that you could sell.

Some communities established, locally, a way to deal with frauds and abuse from either producers or consumers. On a mall, for instance, it’s customary to kick out a fraudulent merchant; but they’ll simply move to the mall next door, defame the previous mall owner, and business goes on as usual. There is no way to file a suit against someone. Consumers have no rights and no way to enforce them, even if they managed to band together to protest (which they do, but are mostly ignored); producers can be ripped off using several techniques, and they have no way to legitimately claim for justice.

Prices vary wildly, of course, and they’re not curbed in any way. People buy things on one place of the grid, raise the price tenfold, and sell it on the other side of the grid — with the original content producer being utterly clueless of what goes on (the new “acquired” flag on objects will at least allow the buyer to understand if they’re getting an original product from the content creator). The discussion of if this is “allowed” or “ethical” goes on for ages and ages; in effect, legally, it’s definitely allowed and there is no question about it.

Is this in effect so “bad”? Actually, a case can be made that, overall and in general, the aggressiveness of the SL market, which is highly competitive, definitely benefits the merchants, and indirectly, through competition, it tends to favour the consumer that will get more things with higher quality for a lower price. A typical example is a skin or an outfit that hits the market for, say, L$1000, gets “stolen” due to a permissions bug and/or hacked by someone, and then gets redistributed in a digitally identical copy all over the grid for L$100. The consumers are happy to get the novelty for a tenth of the price; the original creator has no choice but to lower the prices as well to continue to be selling those items. However, in real life, a serious crime has been commited – akin to assaulting, say, a Nike factory, stealing all the sneakers there, and distributing them world-wide for a tenth of the price.

Linden Lab does not interfere at all with this practice. They don’t approve it, but they also know it’s far less important than the SL media tends to estimate. It doesn’t happen “every day”, and definitely not to everybody. And on the other hand, very successful businesses — like Ginko Financial — who have a spotless track record for several years now and not a single unhappy customer are targetted with envious and jealous competitors as being a fraud. Ginko’s owner, Nicholas Portocarrero, is tired of fighting for his reputation, and this is shown on the few interviews he has ever given. He can’t legally defend himself from his competitors from libel and defamation. Linden Lab, again, is not interfering.

World Stock Exchange

Similar examples can be seen around the huge drama surrounding the World Stock Exchange (closed temporarily while I was typing this paragraph), which managed to transact corporate shares of SL businesses, around US$20,000 per day, which is impressive. However, depending on who you’re trusting, either all these corporations are fake and a fraud, a few are legitimate but not all, all are legitimate but get defamed in public, or people are just envious about their success and spread lies about them. I can’t figure out “the truth”, and the same applies to the public in general. These organisations report to no one, they are not liable to any code of laws, and no auditing is done by third parties. They can be as pure and white as your favourite charity next door, or they can be as dirty and corrupt as Dicken’s “Anglo-Bengalee Disinterested Loan and Life Assurance Company” on his novel Martin Chuzzlewit. The public has no way to know. And certainly we won’t get answers from Linden Lab.

A side-effect of this laissez-faire attitude is the very high tolerance of griefers. Griefers are just cyberbullies, an illegal activity in several countries, and even the US National Crime Prevention Council advertises

strongly against them. However, in SL, they’re rampant, and there is almost nothing that can be done to prevent them, beyond a temporary parcel ban. Private islands fare a little better, if they’re able to deal with 24/7 supervision by an Estate Manager. But this is just prevention, not dealing with the issue. Linden Lab’s Abuse Report system is totally unable to deal with this kind of situation, since it requires effective policing, which they’re not doing. After all, who cares if your account gets banned?… you can get a new one in 3 minutes, get a friend to deliver you the “griefer pack”, unpack it, and attack the next victim again. It’s so easy tha a child can do it — and that’s why childs do it at all.

Is there a way to prevent it? Well, adult validation will in a way minimise things, but some people, fearing a loss of customers, will allow unvalidated avatars. The only effective way to deal with this kind of crime and vandalism is making an example: get the FBI to arrest a few cyberbullies and make a huge press release as an example. Getting ten years in jail for attacking a live concert with live penises floating around until a sim crashes is sure to make a point — “remember, you can be the next one”. Right now, you can only temporarily remove a single alt here and there, which just has the cyberbullies laughing at LL’s backs and prepare the next big attack.

Freedom is not lack of control

Nobel Prize winner Amartya Sen or Rudy Rummel both write on the merits of democratic institutions — Amartya pointing out the positive economic consequences of a well-run democracy, Rudy (who was a resident in SL for several months before his sudden illness) more worried about the social consequences. Both, as well as many other authors, from law students to professors of economy, philosophers and politicians, slowly paint us a very important picture, taken from the lesson of History.

Across the ages, we were thought that as the State became less and less interfering with citizen’s doings, people lived better and better. The philosophy of Libertarianism is still on the roots of the US Constitution and served as a model for several societies. The idea that citizens, given free rein, would very likely be able to self-regulate and generally get along, is something that is still hard to shake off: the State should encourage this kind of mental discipline but not much more. Government, in effect, was supposed just to be a final arbitrer when people simply didn’t manage to “get along”, but this would be a very exceptional case.

Nothing like the optimism of the late 18th Century!… Our contemporary thinkers, however, are much more moderate in their optimism. The major difference is between libertarianism with absolute freedom, and a democratically organised society where the Government is afraid of their citizens and has to provide for them or simply get voted out of the office. Modern thinkers tend to mistrust the “illusion” of the “wisdom of the crowds”; the usual example being quoted is that “a mob has the IQ of its lowest member, divided by the number of members”, although, if you look up “wisdom of the crowds” on the Internet, you’ll see it’s still as popular as ever. The notions of “code is law” (programming code), emerging from the very same Internet, allowed a new class of libertarianism to emerge: one where the function of the State is effectively removed and replaced by programming instructions. Government is always labeled as being oppressive and manipulative for its own purposes — the less government, the better, and in the ultimate utopia, there is no government: just computers programmed to deal with all the issues, and we can forfeit government and taxes.

Just by reviewing the above paragraph it’s pretty clear that this is very much aligned with Linden Lab’s own internal philosophy, which is also widespread in Second Life: give people the tools to govern themselves, and they will generally do an effort to settle all differences among themselves.

As everyone who was griefed, conned, defrauded, or publicly defamed knows, things couldn’t be further from reality.

It pains me to repeat, in a crude and uninformed language, what specialists, philosophers, politicians, economicists, lawyers, and professors of all academic areas have published on the subject; I encourage you to take the two authors listed before as examples as a starting point to further discover what the issue here is. In a nutshell, however, the misconception lies in the notion that “absolute freedom” means “no rules”. In effect, as these very thorough researchers and thinkers have painfully demonstrated, freedom, as in the exercise of your privileges and the protection of your rights as a free-thinking citizen, will only be observed as long as there is a body that enforces your rights and makes sure that your privileges are guaranteed. Contemporary researchers demonstrate that the best (not in the sense that there can’t be anything better; but just that nothing better has been devised) way is to have a democratically elected body to act as arbitrator and fundamentally guaranteeing that your rights and privileges are never trespassed upon. The reasoning is actually simple to follow and comes from a basic trait of human nature: we’re selfish, and we can’t avoid that — eons of natural selection has made every organism as selfish as possible, and this is still hard-coded into our genes, even if our intellect can counter-act our in-built emotions. So the only way to make sure that our rights are not trespassed upon is having the ones doing the enforcement subject to public scrutiny: in effect, voting them out of the office if they abuse their powers. This means that a democratically elected government with proper rotativity is always at the mercy of the public opinion and their voters; lying towards the citizens will gain you a temporarily advantage, but in the long run, you won’t be able to lie all the time — you’ll have to accomplish at least something to keep yourself in power.

None of the above authors promotes one form of government over the other; in fact, they only agree upon the need of having “as little government as possible” and that every citizen has the right to vote and to get elected, and that elections, obviously, should have relatively short terms (large enough to accomplish a plan; short enough to allow public scrutiny to demote people from their offices and get the next batch in power). Furthermore, this is the only way to guarantee freedom of expression and a critical opposition to emerge and speak freely about what they don’t like. Any other model so far devised by Humankind will fail here or there to allow these rights and privileges to exist.

Let’s see how Second Life fits into this model. Linden Lab, during their “welfare state” epoch, were mostly viewed as a benevolent dictatorship: they wouldn’t interfere much with anything. They wouldn’t, however, allow people to decide for them in the sense that the residents had any right to make a decision that would affect the whole community. So while as a resident everybody had the right to free speech, as Linden Lab’s position as “rulers of the Metaverse” was solid and unassailable, your “desires” and “wishes” would simply get ignored. People could yell as loud as they wished; the doors at LL were (mostly) closed.

The current system seems to be the reverse: we can argue as loud as we can, but LL will simply say: “organise yourselves and implement whatever you wish; we won’t interfere”. This mostly means that you’re free to create your own system (as long as you’re able to, ie. from a technological point of view), since LL will never prevent you from doing anything. Difficult moral questions like ageplay are left by the residents to decide — LL washes their collective hands from the issue, and with every week that passes, it’s more and more likely that they’ll simply ignore it (and publicly admit as much).

Remember that on LL’s own agenda they’re looking towards either becoming a “carrier” or possibly simply a “software developer”, pushing all responsability towards the users. This is effectively what Microsoft does: they’ll give you the web server and the browser, but decline any responsability of what you do with it or not. If you wish to get any rights, it’s up to you to establish them on your community, it’s pointless to “negotiate” with Microsoft what kind of HTML pages you wish to see or not. Microsoft is just a technology provider, nothing else, and this is what Linden Lab is striving to become.

So the issue remains unsolved. There are no grounds for democratic participation in SL, since people have to voluntarily embark on such a model of participation. There cannot be “regulation” that allows basic freedoms — like the freedom of protecting your assets, your reputation, or your privacy — simply because that “regulation”, if it ever were “implemented”, would be opt-in. You have no right to not be griefed because there is no one to enforce that right for you — it’s pointless to claim that you have a right if nobody is listening on the other side!

Most of us are used to live in a democratic society, where, if you yell loudly enough, some people will listen, and since ultimately your noise might attract the media’s attention, your opinion might be vented to the governmental level, who might be tempted to listen to you so as to get your vote next time. That’s the basic principle that allows your rights and freedoms to be actively protected by a democratically elected government. We’re so used to it that we think the same applies to Second Life. It doesn’t. In a libertarian society, nobody listens, except the ones that are willing to listen, and, through opt-in mechanisms, allow your voice to be heard. But you’re not guaranteed any rights at all to start with — since everybody else’s rights are as valid as yours. You cannot “push” for an agenda because there is nobody to push against; everybody else’s agenda are in the way, and there is nobody to pick the one that is either best for all, or at least has a consensus of the majority. In effect, a fragmented society with lots of local communities pretty much fending for themselves is the ideal result of a libertarian society: you can join a community that enforces a few rights and allows your voice to be heard once in a while, in exchange for listening to others’ opinions once or twice.

However, there will hardly be bridges across communities, when values and morals are widely different. Democratic states in the real life have also their own values and morals; however, they have something in common: they’re used to collaboration and cooperation, sorting out differences among themselves, and finding what is common and work on compromises using those as a starting point. US and European democracies are based on very different assumptions (and the UK or Japan on even different ones from both!); however, their capacity of “finding common ideals” allows them to join forces based on compromises. Democracies cooperate for mutual interest; and this cooperation is very often long-lasting (Rummel reports — with statistics to prove his assertions — that there are no wars between stable and mature democracies, only between democracies and non-democracies, “emergent democracies”, or authoritarian states).

Libertarian communities, however, have exactly the opposite effect — they’re not binding or congregating forces by themselves; instead, they close themselves to the external world (other libertarian communities). Boundaries are drawn on the principle that “both our values are relevant to either of us, but not both”; obviously, they grow organically as people valuing more a set of principles will join a community that enacts those principles. There aren’t, however, values that remain across communities (or they would be bound together from the start). Recognising this principle is understanding why you cannot pick “my” libertarian community to impose “my” values upon “your” libertarian community with “your” values. It simply does not work that way; either both have the same values — and thus they would be joined from the start! — or they simply will be totally unable to accept each other’s values and remain, forever, apart.

When you read on the SL media that “we need to have a tolerant view of BDSMers, furries, ageplayers — we all should live under the same principles in the same world”, there is a fatal flaw in this reasoning. These communities live under a libertarian umbrella, not a democratic one. Tolerance under a libertarian umbrella simply means that you allow them to exist — outside your own community, of course. Only a true democracy is able to fully encompass such wildly different views of the world and allow them all to live together — because that’s how democracies work — but this is not the case of Second Life, and will never be. We’re too strongly rooted into a libertarian approach to the universe.

Years ago, I expected democracy, as a binding force between communities, to naturally emerge from the libertarian landscape. This never happened, although people keep trying (the latest attempt being the Metaverse Republic), and it shocked and surprised me so. Of course, back then, we had the benevolent, autocratic, Linden-controlled community to deal with all issues, so democratic structures were not “needed” if you had the option to appeal to Linden Lab for “justice and order”. However, the roles have changed. There is “nobody up there” any more. We’re on our own. And we haven’t learned the democratic lesson of bridge-building and bonding, of cooperation and compromise — we’re still at the primitive level of selfish behaviour (which is quite natural for the human species) of “defending our rights inside our community”, but not understanding why the others don’t accept our views.

I don’t think there is a “way out”; I just think that we will have to learn the lesson of the “libertarian utopia” in our bones and understand why all the rights we have as granted (since we were born and live under democracies all the time) simply don’t apply at all. We’ll continue to be victims of fraud and vandalism while we insist on “wishful thinking” that it would go away because we dislike it. The only hope I personally have is that a large group of people will understand the issue, start to congregate (voluntarily, under opt-in systems) under democratic systems, and have them grow over time, by having people to join to be able to get their rights and privileges defended and enforced. And then we’ll see, over time, what will work best: communities running their own democratic systems — no matter how complex or simple they are; there are lots of different ways to reach the same result — or the libertarian, lawless communities scattered all over the landscape.

But it’ll be a long way until we can establish a result. Humanity, after all, took almost 6,000 years for an answer.

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About Gwyneth Llewelyn

I’m just a virtual girl in a virtual world…

  • It is quite optimistic to find SL capitalistic. 🙂
    Matter of fact is that we are getting towards it, but it seems we are in a kind of gap. Monarchy of Lindens is slowly withdrawing while we are still waiting for the residents to organize and form some form of government. Funny thing is we’ve never seen that in RL. And there are so many problems associated with forming of SL’s political scene.
    At the same time we face kind of temporarily stable economy (thanks Lindens for that). Regulating of money flow seems to be pretty good. But, how long will it last? It is stable but not much productive. There is not much opportunities for a small business. Just consider expences of running a small shop either rented or on owned ground. Even on 512sqm to avoid paying the tier it hardly makes much profit in most areas of creativity. On one end are T-shirts, tattoos and other stuff that are easy to make and cheap. Competition is too high and I doubt they can make much of an income. On the othe end are good skins, avatars (not bodies but all those robots, dragons and cyborgs) that can cost couple of thousands of lindens but which takes time, effort and skill to be made. And they are not selling too much because of their price. If going to own big shop or mall, bills and tier eats most of the income.
    Only business that makes money in SL, even RL money is land. Buy a sim, divide it, put ugly signs and go for it! If one do a bit of landscaping it is no miss. And it takes no creativity at all. So? So, we are maybe still in feudalism. And we definatelly have a problem with our world that was supposed to celebrate creativity.

  • ‘In Second Life — unlike real life — business is completely unregulated. The only “protection” granted to consumers and producers are the IP rights and the successful transactions (which only fail due to technical difficulties, and although they can be hacked by experts, the horror stories about these are largely myth and urban legends). From there on, it’s a “free-for-all” system — laissez-faire capitalism like on the 1850s in the US and UK.’

    Not quite – in the 1850s UK, there was a substantial body of law (almost all private law), and (more or less) effective systems to adjudicate on it and enforce it, if one had a moderate amount of money, at least. Much of the law that underpins the world’s trade and commerce was developed by the English common law in the nineteenth century: indeed, it has been said that the flexibility of the English common law during that period, and its certainty and effectiveness, substantially assisted the UK’s economy during the period of the industrial revolution, which perhaps goes some way towards explaining why one of the world’s smallest nations founded one of its largest empires.

    In the 1850s, there were remedies for breach of contract, deceit, defamation, negligent loss of or damage to goods, assault, battery, trespass to land, nuisance, breaches of trust and conversion of chattels and choses in action. Although litigation was often less efficient than it is to-day, one cannot believe everything that one reads in Charles Dickens novels: he tended to sensationalise and emphasise the worst of things, and was not by any means a scholar in law.

    With the exception of those few very serious or high-value matters that it is worth pursuing through real-life courts, SecondLife, at present, has none of that. It is more like the Wild West in the 1850s than the UK or Eastern USA in the 1850s. There are some IP rules, enforced by computer code, not by human-run justice systems, and a very rudimentary field of crime (it is hardly criminal law: there is no law in any real sense involved) policed by the increasingly ineffective abuse reporting systems (just imagine if the real world police replied to every incident short of murder, “we won’t respond unless we get another hundred emergency calls about the same incident”).

    A good and effective system of private (especially commercial, but also general) law is not only important for justice in the abstract, and for minimising the number of arbitrary individual injustices that might be wrought against a few individuals by fraud or griefing, but it is essential to a sophisticated economy. Who other than a cowboy, a legitimate outfit with serious security, or the sort of business that cannot greatly be undermined by possible wrongdoing would want to do business in the Wild West?

    What you complain of is not so much libertarianism (the idea that people should have as few restrictions placed on their lives by external agents as possible), but anarchy. Anarchy is not compatible with liberty, since there is nothing to stop people from taking others’ liberties away arbitrarily. Only the rule of just law can safeguard true liberty, and it is only under the rule of law that commerce and creativity can maximally flourish precisely because of the liberty that it safeguards.

    Democracy is not the only conceivable way to secure the rule of law, but it is by far the most desirable, since it is the least susceptible to abuses of power of the sort that undermine order, stability and liberty. That does not mean, however, that there is a sliding scale of democratisation, with anything that is “more democratic” than something else is, for that reason alone, better than it. Democracy is a necessary check against abuses of power, but it is not a good in itself, and itself needs to be checked by mechanisms to promote the rule of law to prevent what is sometimes called the “tyranny of the majority”: the rights of minorities (whether cultural minorities or economic minorities) are worth as much as the rights of majorities, after all.

    What does undermine liberty is over-regulating government, government that acts as if, whether for ideological, misguided pragmatic or selfish reasons, everything would be better if only it were more regulated by government-controlled regulatory bodies. That sort of over-regulation is, unfortunately, rife all over the world, but is particularly prevalent in Western Europe: a legacy perhaps, of the popularity there of various forms of socialism in the twentieth century. SecondLife must never, if at all possible, have a government like that, and its users must do what they can to protect themselves from governments like that who seek, through over-regulation, to oppress valuable liberties without good cause.

    The irony is, then, that, far from the problem being that we are in the middle of a virtual world industrial revolution, what would benefit SecondLife most is a system that is more like 1850s England or the US (although perhaps more democratic than the former) than many modern governments; what is needed is not a giant bureaucratic regulatory body, but a traditional, lassiez-faire nightwatchman state – islands of regulation amidst a sea of liberty, rather than the other way around, such as tends to promote the strongest sorts of economies.

    After all, nobody has needs in SecondLife: nobody needs to log on at all. The welfare state in a virtual world just makes no sense. The whole virtual universe is a luxury item.

    As to attempts to build democracies, there have not been many. So far, I know only of: (1) the original Neualtenburg, (now the CDS), which remains at only two sims and which lacks a viable judicial system; (2) the United States of States United, a tiny direct democracy local community run by Pixeleen Mistral; and (3) the Metaverse Republic. The first two have no real aspirations to go beyond providing local regulation for their own small group of community members.

    The Metaverse Republic, on the other hand (on which I am working) is the first of its kind, largely because (1) nobody seems to have thought of using a system of distributed banishment as a governance tool before; and (2) it is extremely difficult and time-consuming to set something like this up, especially since, in the absence of Linden-provided tools (and it looks as if Linden Lab will be too busy to make any for another year at least), we have to make our own tools.

    If it is successful (i.e., if we get the tools working, finalise a constitution, find enough people to fill the posts, and get a significant number of subscribers), then the Metaverse Republic will be the first of its kind, a unique way of doing government, not just in virtual worlds, but in general.

    The diversity of which you wrote, and which is a consequence of the hugely increased number of SecondLife residents, is accounted for effectively by our proposed provisions for the enforcement of local community rules, and the enfranchisement of local community citizens, something which we believe can be done without undermining the cohesiveness, predictability or effectiveness of the system as a whole.

    Only time will tell whether the system will work, but we have an extremely dedicated and ever growing team of volunteers working to make it happen, and the more of us there are working towards the same goal, the more likely it is that we will succeed. Anybody who is interested in participating should IM me in-world.

  • Hmm, dandellion, I’m pretty sure that real estate is not the only way to make money. An example: a few thousand sims are simply malls/huge shops or locations for live events. Believe me, all their owners are not only making enough money, but they’re making a living out of it.

    So content creation is a good business. What you might mean, however, is that content creation takes skill, talent, and time to create — and business skills to promote it everywhere to attract enough sales. Well, that’s true. While land business is “easier” in the sense that you just require one skill: buy low, sell high 🙂 (obviously, large real estate businesses will have to provide much more added value than that!)

    The best type of business right now, however, seems to be “private condominiums”. By these I mean buying a few dozen private islands, then terraforming them, hiring an urban planner, a few architects, create a lovely place to live in, add a few tech support reps, and then open up the plots for sale. Now this requires a lot of organisation to scrap a few L$ from users wishing to live in a safe and beautiful place. However, it pays off. Not so quickly perhaps — but it does. Whereas the “wholesale” real estate speculator is at the mercy of the market — and of their ability to drive people to “their” plots.

    Now, since SL grows exponentially, there will always be people not knowing what to expect from the mainland, and in that sense, they will always be a market for “empty plots” on the mainland. But… if SL enters a plateau, where the rate of growth is not exponential any more, all these people have suddenly a problem.

    Anshe Chung, the best possible example in business keenness, figured this out two years ago and only sells community-based plots exclusively… all the other huge real estate owners are obviously doing the same, and have been doing it for well over a year now. Only the wannabe landbarons are still dealing with rough empty land. But… their days are numbered. After all, there are very very few Premium users — around 0.1% or so. And literally hundreds of thousands of residents live on “private condominiums” 🙂

  • Soft Linden

    It’s important to remember that the USA is not a democracy, but a federated constitutional republic with democratically elected leaders. I’m not pickin’ nits here! There’s an ocean-wide difference between the two. A straight-up democracy is two wolves and a sheep votin’ on what’s for dinner. You look at real democracies and they don’t last. They develop castes and extinguish individual rights.

    The goal of a democracy could be valid as a vehicle for founding a young government. But the goal should prolly be one of establishing the rights and principles that should guide residents, their government, *and LL* as whatever SL’s government is takes on a more stable form. For groups who aim to create governments within Second Life (F.I.R.E. is one!), now would be a good time to start layin’ out proposals for what rights a government should safeguard and by what means it should do so. But I don’t see an intrinsic benefit in merely amassing voters or calling for the means to enforce majority rule over minorities. (If Gorean furry diaper-players worry about being marginalized *now*, boy let me tell ya…)

    I’m not convinced that the comparison of SL to IIS/IE is a sound one. Where feasible, many (all?) of us really would prefer to move more protection of your rights into code. Helping to identify those rights would be a noble and worthy goal. So would helping us come up with approaches to putting your protection in code. Do you want escrow systems protecting some transactions? Do you want islands with easements limiting parcel subdivision? Should some islands disable automated transactions to create “residential zones?” Tell us what ya want, put it in a JIRA, and get your friends to *vote* on these issues. LL may not wish to be your government, but it *can* shape a reality where the rights you clamor for are as absolute as gravity and four hour day cycles.

    Thanks for writin’, Gwyneth! I always come away thinking!

  • I can’t really say that Gwyn is keeping history totally *honest* here, no. Because Gwyn, you’ve left out some very important parts: the FIC, for example, the group of people, including yourself and your colleagues, who got even MORE special “head starts” in this sweepstakes — like winning the cost-free sim of Neualtenberg in a contest where only one contestant got to play. Like all the free 4096s that charter members were able to buy at a deep discount — a lifetime of no tier. More importantly, like prime coverage on the website and steerage toward the media, and help in making the spinoff metaversal services companies, which had either golden handshakes or NDAs or simply — help in making connections. This is the Silicon Valley way. It’s not necessarily the “American Way” that you’d wish to affirm if you really had the goal of making a *world* and not merely a platform.

    Your notion of laissez faire capitalism isn’t quite right, either. The Lindens do all kinds of socialist things to this day — chief of which is to devalue the value of our labour by constantly printing and selling Lindens out of thin air, artificially keeping the cost of the Linden versus the dollar low.

    They meddle tremdously still, in subtle and not-so-subtle ways — what kind of non-interventionist state would be messing with traffic, a number that, while game, actually shows people’s merit, and is a fair way to organize search results?

    And what kind of “non-intervention” fusses over the events list having “too many” events like Tringo or sales poorly disguised as events? What kind of state in fact allows extortionist crime to take place by 16 m2 griefing, undermining the value of private property? Non-regulation isn’t laissez-faire capitalism; it’s slovenly capitulation to crime, which makes one open to the charge of collusion.

    Problems like the ageplay scandal grow out of that wierd amalgam of socialism and capitalism and — secondlifeism — which on the one hand lets things goes to the dogs, and on the other hand steers the choice bits to its pets.

  • Shorter Prokofy Neva: Call me when Linden Lab is small enough to drown in my bathtub.

  • vampira kanno

    I think this article is brilliant
    but at a very important point it all goes wrong in my opinion but maybe I am also wrong
    but in SL we see that sort of, anyway, anarchy works…anarchy with rules…fragmented society..
    what Gwyneth calls libertarian…
    SL can be model for making this working in RL…
    why waste in on another democracy experiment when all recent events show that democracy is too easily corrupted, it is too easy to steal a whole country bjust getting elected to it…
    why gwyneth waste all this brilliant mind on pumping in the end for an ideology, a bankrupt, corrupted, war-trodden evil, as evil as religion, called democracy?

  • What a wonderful analysis! I have been on a much shorter time and it was already fragmented when I arrived (Jan of this year).

    For 99% of the people who come on – they are expecting an amazingly entertaining environment, since this is leisure for most people (i.e. a game). And you know what? It isn’t much like a game for the most part, so much so that it quickly becomes tiresome for most, and they disappear eventually leaving no trace. Presumably going back to WoW, Myst Online or other, more structured environments. Some find “their thing” and stay, most will go.

    For the rest who find something compelling enough to stick around, we have seen the concurrent population grow from about 20,000 to nearly 50,000 in the time I have been here, meaning we are in the “golden era” here and now. How it ends – is anyone’s guess, but we are in the initial growth phases – and SL may indeed be peaking now – as the other MMOE (Massive Multiperson Online Environments) competition starts heating up.

    And the first popular online service in the US was AOL, now more or less a IM service AIM, but at one point the “top dog” in the business, until it drowned in the Web. Is SL AOL or is it the Web? Time will tell.

  • I should add, incidentally, to my list of attempts to build democracies in SecondLife the fascinating and delightful Al-Andalus project, which will have its own local democratic government, but the plans are at the moment for it to belong to the Metaverse Republic as a local region.

    As to whether the USA is a “democracy”, it is a very narrow use indeed of the term “democracy” that denies it to a federal republic with democratically elected leaders. A democracy is a state in which the general public (“demos”) have the right to vote for those who govern them. There are many different kinds of democracy, of which a federal republic with elected leaders is but one.

    As for two wolves and a sheep voting on what to have for dinner, that is the problem of the tyranny of the majority: that is not solved by abandoning democracy in favour of a dictatorship and hoping, manifestly improbably, that it will be (and remain forever) benevolent, nor giving up on the idea of order at all and resigning oneself to anarchy, but by having strictly balanced powers and the prevalence of the rule of law.

    Prof. Rummel, to whom Gwyneth refers, has undertaken extensive empirical research, which consistently shows that democratic nations are not only less warlike, but tend to have far fewer abuses of power of all kinds. The research also shows that those democracies in which the rule of law and respect for human rights prevails have that tendency significantly stronger than those in which it does not. That suggests that the combination of democracy and the rule of law is the safest form of government.

    No government will be perfect, of course, but, as Winston Churchill once said, “Democracy is the worst form of government – apart from all the others“.

  • An analogy for SL that I am thinking of a lot lately is the creation of the USA. I may be wrong in some historical details, after all I am not American and I probably know more about USA history from Jon Stewart’s “America (the book)” than from anything else.

    Gwyn, I don’t mean to contradict your analogies (or maybe yours are more like metaphors), but I really like mine too. Just think of pioneers, exploration, the wild west. And would you call the wild west libertarian? Or anarchic? I don’t think anyone would consider it to be democratic. Sometimes, I am even thinking of the colonies before the War of Independence. A British government, remote, inefficient, out of step with the values of the New World despite the fact that they created it in the first place (okay, the Spanish were there first, the French were there too, but you get my point). Sounds familiar?

    Anyway, it is very fitting that SL would have similarities with the early USA, especially the wild west. It may be just the normal stages in the creation of a new society, in a new, “uninhabited” land (I don’t mean to ignore the native Indians, but just bear with me for the sake of the analogy, and I did use quotation marks, didn’t I?).

    I am one of those who believe that the US have (still) the truest democracy, despite the effect that the present government has had. And I think this is due to its early history, as a new society that was started almost from scratch by a population of pioneers, explorers, adventurers. So it sounds promising for SL too. It remains to be seen what SL will evolve into, but I see this as a very early phase, a much earlier step in history than Gwyn seems to consider for the present SL. And I think it would have been impossible to predict the present US in the time of the wild west.

  • Great piece of writing. For someone interested in how virtual worlds will develop broad security systems I was particulalry interested in the section on Cyberbullies and your recommendation that the FBI should jail them for 10years to set an example. I think that is a little harsh! But in this increasingly fragmented world the question of juristiction is an interesting one. Virtual world companies could and perhaps should set their own protocols, stating when they would legally pursue users for serious inworld infringments (economic damage, hate speech, harassment/stalking, bullying) as opposed to just being banned from the game via TOS. This could be in conjunction with state law enforcement agencies or simply civil legal actions initiated by the companies. As virtual worlds develop they should have a sheriff – I just don’t think it should be the FBI!

  • Pablo Andalso

    You seem to have the misconception that the internet exists in its own separate sphere. While, in effect, businesses and individuals in Second Life are able to act with impunity, “Real Life” law does indeed apply. I think the issue is more that people don’t think they can protect themselves, and that the DMCA (as a process) is not particularly effective for protecting anyone other than large corporations.

    If someone violates your intellectual property rights, or any other rights for that matter, you can file a DMCA report or subpoena Linden Labs and the Internet Service Provider in order to obtain the offending party’s information and bring them to court.

    The problem is that no one actually does that. For this reason Bragg v. Linden Labs is very good precedent (though not in the sense of Bragg’s case, as he did game the system). Most importantly, Bragg v. Linden Labs is affirming the applicability of existing legislation in cyberspace cases.

    Philip Rosedale’s reversal of the “building a country” concept in favour of augmentationalism is NOT promoting anarchic, laissez-faire capitalism (in the 1850 sense). It’s not leaving a void for an “overlay democracy” to fill. Virtual democracies like Neufreistadt can function like real-life co-ops or municipalities, but existing judicial systems outside of Second Life regardless do retain their effectiveness.

  • Thank you for very informative and thought-provoking overview of SL evolution! I enjoyed reading it very much and would recommend it as a must-read text for all those who want to better understand the ‘whatsgoingonwithsl?’

    There are many gems in the paper, I particularly like the one when you analyze how changes in SL topology, its spatial structure resulted in different economic and social developments.

    But I also feel a bit confused with one underlaying metaphors you rely upon, and that is a description of SL as a ‘governed world’, a ‘nation-state’ of some kind.

    Surely, this is a very convenient way of seeing things, and many people (including I assume LL) would love to promote such view as the most preferable way of seeing things… but is it really the ‘true’ one?

    Would you apply the same argumentation of yours to the development of the Internet, for example? In some sense we are all ‘citizens’ of this ‘digital universe’, ‘global village’ and however else we can label it. And yes, there are also some similarities in how, and by whom the Internet is regulated, who ‘controls’ content production, distribution and consumption, with perhaps similar, if not greater disproportions you pointed to in SL.

    But I guess many people would resist, or at least find problematic such a description as “Internet is a nation-state.” “The Internet as a set of tools”, as an infrastructure allowing various economic, social an political configurations to emerge – yes, that would sell better, I assume (correct me if this not true).

    I think, it’s just happened that SL appeared in this ‘real’ world in such a particular reincarnation (nation-state look-alike) and quite logically experienced the troubles as you describe.

    But if take a ‘long view’ for a second, a view of the IBM guys who predict ‘3D web’ as a universal platform of the future – who would care about ‘economic ripples’ on the surface of one of the first ‘pre-beta-versions’ of this 3D web?

    Looking back to the developments of the web, people discuss how much better is Firefox comapred to Mosaic, or how much more they can do with XML comapred to HTML etc. Or how much more money they can do in web 2.0 comapred to 1.0 or 0.9 – these are the things people are arguing about.

    If we ask ourselves, What are the key contributions of SL to the future 3D web – will we be talking about oscillations of business models as practiced by LL in the beginning of XX century?

    (The hint: I don’t know the answer.)

    But once again – great text you wrote! Many thanks!

  • Well, chatting on MSN/Yahoo/AIM/Gtalk (outside SL) has became a part of my SL routine.

  • vampira, the common misconception that “in democracy there is only corruption” comes from a very important democratic principle: freedom of expression. We take it so much for granted that we forget that all the issues about “politicians being corrupt” (and getting sent to jail for it!) is because in democracies, investigative journalism can root out the corrupt politicians, make a fuss about it, and an independent judiciary can investigate the claims and arrest the corrupt politicians.

    On any other non-democratic form of government you never know where the corruption is; and even if you find out by mistake, there is no way you can tell everybody about it. Much less talk to the judiciary (which will not be independent).

    While this naturally applies to all autocratic forms of government (believe me, you’ll never know what goes on in those), on anarchic/libertarian models things might even be messier. Having no entity to guarantee your own rights — except the ones you’re willing to enforce on your own, in your community, by the force of arms — you can’t trust a “free press” (there is no way to sue them for libel or defamation) and very likely any form of “judiciary” will be opt-in, so there is nobody you can complain to. What this means is that while under an anarchic/libertarian model of self-government you have no real protection from “corruption”, “theft”, “privacy”, or “libel/defamation”, unless you provide it on your own — by employing force.

    Democracy, instead, makes the employment of force a monopoly of the State — which is democratically elected — and rooting out corruption is in the hands of the free press which is perfectly able to tell everybody about what they’ve found out — and, more to the point, tell it to the independent judiciary to investigate. It’s not a perfect model. And it naturally gives the wrong impression that democratic governments are full of corrupt politicians, just because that’s what you see on the news. These news sell, so they’re popular.

    Be glad that you live in a democratic country and are able to read the paper, watch the news on TV or on the Internet, and hear all those horrible stories about corrupt politicians. If you didn’t live in a democracy, you had no way to know.

    @Pablo: I’m sorry if I gave the wrong impression of SL being “independent” of RL’s national and international laws. It is not, and never was, no matter how often some have claimed (or argued) to the contrary. My interest was in analysing how SL works from inside. In the real world, we have corporations being run autocratically (almost all, without exception) and foundations and non-profit organisations who have embraced a democratic model (by far a minority, when considering all entities in the world). Both can affect thousands or millions of users (“customers” of their services). And both, naturally, are subject to precisely the same RL laws, national or international.

    When analysing SL as the “community of customers of Linden Lab’s Second Life” we can, however, make comparisons, since this “community of customers” will interact in predictable, social ways, and will follow models and patterns of behaviour. This was the purpose of the essay; not to claim (or infer) that SL “has laws of its own”, but that SL as a “community of users” can — and will — evolve/develop self-governing structures following a model, depending on the “hints” and “pushing” done by Linden Lab.

  • We’ll continue to be victims of fraud and vandalism while we insist on “wishful thinking” that it would go away because we dislike it.

    Excelente Gwyn.

    Gostava só de apontar que as questões de fraude e vandalismo não são consequência de qualquer sistema laissez-faire, mas sim de uma ausência forçada (socialista) de mecanismos espontâneos que os limitassem ao mínimo eficiente.

    Ou seja, o sistema SL não permite que sejam criadas agências de protecção privadas…

  • Only a true democracy is able to fully encompass such wildly different views of the world and allow them all to live together

    Contra todas as evidências virtuais! 😀

    De facto, só um sistema colectivista permite ter um sistema para toda a gente. Truísmo. Para isso é preciso que a regra não seja opt-in, ou tendencialmente quem quiser isolar-se, realinhar-se, fá-lo-á.

    Mas isso é inclusão à força. Não é agregar comunidades, é esmagar a individualidade dos seus membros para que aceitem o status quo político.

    Enquanto houver concorrência ao SL (não havendo, será banal daqui a pouco tempo), tais conceitos iliberais nunca estabelecerão raiz.

  • AntónioCostaAmaral: Concordo que o que cria a fraude e o vandalismo não é, de todo, o capitalismo laissez faire— de forma alguma. O capitalismo, antes de mais, necessita — talvez até mais do que outras formas!… — de normas de sociedade que regulem princípios como a honra, a palavra, a ética do trabalho, a honestidade, etc. — com as quais se pode, efectivamente, construir uma reputação. No entanto, embora estas efectivamente surjam de forma espontânea (por necessidade), necessitam dos tais “agentes” que as possam garantir e proteger. No Wild West americano, era pela força das armas; no Second Life, no entanto, não existe forma de impôr a força dessa maneira.

    Há, no entanto, outros mecanismos para permitir um adequado controlo dessas normas de relacionamento. As comunidades libertárias tendem a apontar o ostracismo e a exclusão como o melhor método (“portas-te mal, não te deixamos entrar”) e o mais simples de implementar, pois não requer nenhuma “estrutura” para além do mínimo. As estruturas democráticas necessitam da vontade popular em delegar a sua autoridade num grupo de representantes que organizam toda uma comunidade. Qualquer coisa que “comece do zero” e que adopte uma estrutura democrática (por exemplo, na vida real, uma associação sem fins lucrativos…) requer esta noção de opt-in. Fazê-lo à escala de todo o SL é uma tarefa inglória, extremamente morosa, e muito provavelmente mesmo impossível. Mas a escalas mais pequenas (um subconjunto de sims ou de pessoas) é possível.

    Não penso que a questão tenha a ver com “concorrência” ao SL ou não.

  • I’m not sure it’s proper to conflate libertarianism with anarchy. Though there is some difference of opinion (vide Marc Stiegler’s _Earthweb_ for not only an entertaining read, but also in passing a view of a very libertarian future that has the notion of private police forces), the libertarian notion of government I most often read of is a minimal government that protects against fraud and initiation of force–not anarchy.

    That said, as many have pointed out, incumbents in the US have such an advantage that their re-election likelihood rivalled that of members of the Supreme Soviet, and election laws are such as to make it nearly impossible for “third parties” to gain a foothold. Alas, there’s nothing about being a politician that renders one noble.

  • Maybe SL might be a good ‘sandbox’ for alternative governments. I would be very interested in seeing a government based on the same principals used in Open Source software development. A government that would benefit from the HIGHEST IQ’s and not the lowest in the mob, and where everyone benefits from the type of TRANSPARENCY that exists in Open Source projects.

  • MariaD

    Centralasian wrote, “many people would resist, or at least find problematic such a description as “Internet is a nation-state.” “The Internet as a set of tools”, as an infrastructure allowing various economic, social an political configurations to emerge – yes, that would sell better, I assume”

    I think it is a very useful distinction to make here. Do we see SL as a world – or is it a metaverse, a shell for creating worlds? Spatial metaphors such as “country” can be treacherous. It is cute when an old lady from a popular joke calls a tech support number: “Hello! Is this the Internet?” It is less cute, and maybe even dangerous, when people with some access to design power don’t distinguish between particular worlds and middleware meta-tools used to create worlds.

    From the history of SL depicted by Gwyn here, it looks like SL is evolving from a world into such a set of tools. As a result, there may be countries, democratic, libertarian or otherwise governed, that use the engine of SL to run. To be more exact, some of the activities of people using the SL engine can be described as corresponding, metaphorically or through an analogy, to the notion of a country. There could also be other entities that are not like countries, for example, tribes. But to conceive of the SL engine itself and of all activities driven by it as ONE such country, or tribe, or club, or world, or other coherent entity at this point of its evolution, does not make sense. SL is bigger than that. Metaphors such as “SL is a language” or “SL is middleware” or “SL is a construction set” are probably more promising.

  • MariaD, I think that your suggestion is akin to asking “will there be a world government on Earth soon?” (and a second question would then be: “and will it be democratic?”). I believe that we have an answer to that: “no” 🙂

    So I tend to agree with you, there will be no grid-wide government, or, even more than that, no inter-grid-wide government (when that becomes possible!) ever. And the more SL grows, the less likely that is to happen.

  • Dedicated to virtual freedom.