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.

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