Ludocapitalism and the Scarcity in Gaming Worlds

Excellent essay by Steven Shaviro, which is also a review of Julian Dibbel's My Tiny Life, but especially of Play Money, an analysis and real-life account of gaming economics.

URL = http://www.shaviro.com/Othertexts/MMOs.pdf

Excerpts

18. Any market economy, mercantile or capitalist, presupposes an underlying condition of scarcity. In a society as vast and interconnected -- and yet as privatized and atomized -- as ours, markets crop up at the slightest hint that any resource, or possible object of desire, is less than immediately accessible. As Dibbell (2006) puts it, "markets will seep like gas through any boundary that gives them the slightest opening" (43). Conversely, markets are killed off by abundance. People stop buying CDs when it is easy to download music for free. You can't charge for resources that are plentiful, and that it costs almost nothing to produce. This is as much the case in virtual, simulated economies as it is in fully material, physical ones.

19. Why, then, should scarcity be a problem in online virtual worlds? After all, bits and bytes of digital data, like ideas, and unlike physical artifacts, are inherently non-rivalrous goods. They are plenteous, and endlessly replicable -- aside from the artificial scarcity introduced by copyright laws and the like. Information, as the saying goes, wants to be free; once the network is in place, the marginal cost of generating, reproducing, and disseminating it is vanishingly small. There is always a certain cost for hardware, of course. LambdaMOO, a decade ago, ran on a single server: hard drive space was therefore at a premium. Dibbell devotes a chapter of My Tiny Life to the economics of LambdaMOO, recounting how this scarcity was man- aged bureaucratically rather than through a market (161-185). But MMOs today suffer from no such limitations. They run on vast arrays of servers; once such a system is online, the marginal cost of adding additional storage space and processing power is, again, extremely low.

20. Economic scarcity in virtual worlds is therefore not inevitable. In Ultima Online and other MMOs, it exists only because it has been deliberately programmed in. Scarcity is not a bug, but a feature. And people find it compelling, even fascinating. Players spend untold hours negotiating the frustrating economic constraints of all these worlds. They turn their play into a kind of work, both menial and entrepreneurial. They perform the dig- ital equivalent of hard labor. Dibbell's account of his obsessive immersion in Ultima Online's economic system is what makes Play Money such a compelling read. He tells us about profitable coups he made, about deals that went awry at the last minute, about the times he got ripped off, and about insider manipulation of the Ultima gold market. As Dibbell gets more involved in his economic pursuits, he increasingly loses interest in the social, community, and networking aspects of life in Ultima Online, and indeed in the Dungeons-and-Dragons-like gaming aspects as well. "As I invested myself more and more in the economy of UO players," he writes, "I could feel myself drifting further and further from their community." Dibbell is no longer interested in the chatting, socializing, and emotional soap operas that had once preoccupied him on LambdaMOO. Nor does he pay attention to "the dungeon quests, the crafting trades, the big houses and the little chunks of fame that came with owning one." The overt features of life on Ultima Online have ceased to engage him. All he cares about is the money (149).

21. There have been many attempts at building online virtual worlds in which resources are abundant, and life is free and easy. But none of these worlds has been anywhere near as successful as the scarcity-driven MMOs like Ultima Online and Everquest (Dibbell 2006, 41; Castronova 2001, 16-17). Dibbell and Castronova both puzzle over why this should be so. Castronova takes what I think of as the Captain Kirk approach. Again and again, the Enterprise comes upon what seems to be a utopian world, a world of effortless play. But Kirk always ends up destroying these worlds -- in direct violation of the Prime Directive -- ostensibly for the inhabitants' own good. For they need obstacles, they need something to strive for; otherwise life is not worth living. Castronova similarly argues that the difficult challenges of MMOs stave off boredom, and promote intense emotional involvement. "Scarcity is fun," he writes; "the process of developing avatar capital seems to invoke exactly the same risk and reward structures in the brain that are invoked by personal development in real life" (14-16).

22. Dibbell offers a more sinister, Burroughsian explanation. He suggests that, in our postindustrial, increasingly virtualized world, we have become habituated -- addicted, even -- to scarcity. "In an atmosphere of oxygen, our bodies learned to breathe; in a world of scarcity, the soul might just as likely learn to need the universal obstacle to its desires" (43). Scarcity is a bit like heroin, in the way it stimulates, and satiates, those risk and reward structures in our brains. The craving for scarcity, and thereby for the market, means the death of the utopian -- or at least heterotopian -- impulses that used to animate places like LambdaMOO. For the market is voracious; it absorbs everything that it encounters, and translates all values, and all desires, into its own monetary equivalents.

23. There is still, however, a puzzle here. The appeal of scarcity would seem, not only to negate all those old-fashioned utopian longings, but also to violate the entirely non-utopian grounding assumption of neoclassical economics: the idea that people always seek to maximize their "utility." How, then, could they ever choose to make things hard on themselves? As Castronova says, from an economic point of view it is "shocking. . . to suggest that utility and well-being are not the same thing. Utility always rises when constraints are relaxed, yet people seem to prefer a world with constraints to a world without them" (16-17). On this account, even hedonistic consumerism -- the one utopian ideal still available to us today -- is belied by the experience of MMOs.

24. I think, however, that this seeming aberration is nonetheless in full accord with what I can only call, following Weber, the "spirit of capitalism." Free- market economists tend to abominate abundance, because it is inefficient. It subverts "the discipline of the market," undermines the price system, re- moves the motivation to compete, and seduces people into sheer waste and unremunerative play. Free-market economists thus value the actual process of the market mechanism -- the way that it assigns a price to everything, and subjects "man," as F. A. Hayek (1991) puts it, to "the bitter necessity of submitting himself to rules he does not like in order to maintain himself against competing groups" (76) -- far more than they do the prosperity that is supposed to result from the market's smooth functioning. And today, after Reagan and Thatcher and the worldwide triumph of neoliberalism, we all implicitly feel this way. We cannot help it. We believe in the Market more than we do in anything else. Indeed, the Market is probably the only thing that we really, truly believe in. Even in virtual reality, we prefer scarcity to abundance, for the same reason that we prefer Euclidean geometry and Cartesian coordinates to any other way of organizing space. In both cases, the former is the only arrangement that feels "natural" and "realistic" to us. We are disoriented by abundance, just as we are by a relativistic spacetime that is curved and filled with wormholes.

25. I prefer scarcity to abundance, in other words, because it gives me a reason to go shopping, and because it allows me to dream of making a killing as a merchant or entrepreneur. And this is the case in Second Life, as much as it is the case in my "first life." Scarcity is a barrier to fulfillment, but for that very reason it enables fantasy. And doubtless Zizek (1989) is right to assert that "ideological fantasy structures reality itself" (44). The fantasy of the market, grounded in the constraint of scarcity, is what gives our lives consistency today. Gameworlds are not opposed to the "real" everyday world, in the way that fantasy is supposed to be opposed to reality. Rather, in the virtual worlds of MMOs, we seek out precisely those fantasies that sustain us in everyday life. Now, it is widely accepted that every game needs some sort of constraint. Constraints (or rules) work to focus and enrich play, to make it feel worthwhile and meaningful. But what happens when the game is a world, and the world is a game? Dibbell suggests, not just that games need rules, but more generally that, "all else being equal. . . people will choose the world that constrains them over the one that sets them free" (41). I fear that this observation is all too accurate. It reminds me of Spinoza's (1998) remark (often cited by Deleuze) that people "will fight for their servitude as if for salvation" (3).

26. The real question, then, is not why we choose virtual worlds grounded in scarcity over ones that offer us abundance; but rather, why we value and evaluate these worlds in economic, utilitarian terms in the first place. Dibbell addresses this question by tracing the history of work and play under capitalism (58-64). Capitalism, as Weber shows, is grounded in the distinction between work and play -- a distinction that many pre-capitalist societies did not even recognize. Capitalism traditionally exalts work as salvation, and stigmatizes play as diabolical. In the twentieth century, theorists like Huizinga, Caillois, and the Situationists sought to invert this binary, celebrating play as a subversive alternative to the Protestant Ethic and capitalist rationality. But today, the entire work/play binary has collapsed. MMOs offer us the possibility of "productive play": something that neither the Puritan inventors of capitalism, nor its Situationist critics, could ever have understood (64). Dibbell finally suggests that we are entering an era of ludocapitalism: " a curious new industrial revolution, driven by play as the first was driven by steam" (297). When work and play merge, Weber's " 'iron cage' of meaningless hyperefficiency" gives way to an economy based on "contriving meaningful activity. . . through the mechanisms of play" (298-299).

27. Ludocapitalism is by no means just confined to the MMOs Dibbell writes about. From a global perspective, the entrepreneurs who make money from the commercial activities surrounding Everquest, Ultima Online, and Second Life are small potatoes. But the entire world economy today is dominated by ludic, virtual wealth. For the trade in financial derivatives exceeds by many times over the buying and selling of actual commodities. Indeed, the value of currently held derivatives is far greater than that of the world's entire physical economic production (LiPuma and Lee, 2004). The prices of these financial instruments are calculated by means of complex differential equations, involving rules that are so arcane and abstract, so inaccessible to intuitive grasp, and so detached from any ordinary considerations, that I can only think of them as as being like the rules of some incomprehensible game. And although derivatives were originally invented as hedges against risk, the trade in them today is almost entirely speculative: what Susan Strange (cited by Dibbell, 24) calls "casino capitalism." The wealth embodied in derivatives is entirely virtual; it only exists in the form of bits. It cannot be used to purchase physical goods, or to invest in physical production; there is just too much of it. Yet the trade in derivatives has powerful effects on "real" economic conditions, as it can crash whole national economies, and relegate millions of people to very real misery, merely through a series of nearly instantaneous computer-generated transactions.

28. Dibbell finally suggests that, under the reign of ludocapitalism, with work turning into play, it is no longer necessary to "find a way out of the grind, an escape from modernity's productive regime"; for "the grind [i]s already escaping from itself," emerging into the realm of play (299). A similar point is made by Nigel Thrift (2005), who remarks that, today, "for quite a few people, capitalism is not just hard graft. It is also fun. . . Capitalism has a kind of crazy vitality. It doesn't just line its pockets. It also appeals to gut feelings" (1). And indeed, who can disagree with such assessments? The world today approaches the condition of gamespace, as McKenzie Wark (2006) has taught us to understand: "Games are no longer a past time, out- side or alongside of life. They are now the very form of life, and death, and time, itself" (5). How can anyone be so surly, and indeed Puritanical, as to object?

29. Nonetheless, I am inclined, in curmudgeonly, Adornoesque fashion, to see the situation as one in which even leisure and play have become hard work, and work has been transmuted into play only in order to get us to do more of it. I am thinking, not only of those gaming factories Dibbell mentions, but also of phenomena like "word of mouth marketing," in which people volunteer to create "buzz" for new products, by hyping them in casual conversation (Walker, 2004), and "crowdsourcing" (Howe, 2006) -- as practiced by many companies online, including virtual worlds like Second Life (Llewelyn, 2006) -- in which individual "creativity" is promoted and encouraged, precisely as a way for corporations to get their customers to do their R&D work for them, for free. None of this seems the least bit liberating -- which is, of course, precisely the point. I began this essay by recanting the naive utopian hopes I once invested in LambdaMOO; now I end it, rather inconsistently, by lamenting the absence of such hopes from Ultima Online or Second Life. You can't really have things both ways, I guess -- even if the promise and lure of play has always been that, somehow, you can. Ludo- capitalism is just the latest instance of the Market's astonishing ability to subsume, denature, and profit from whatever threatens to contest it -- and perhaps I had better leave it at that."