Real Problems, Virtual Solutions

A few months back I wrote an article responding to people who were comparing the economy of SecondLife to that of developing countries like Burundi, Liberia, DRC and Zimbabwe. My argument was that there is simply no scarcity in a virtual world, making any comparison null and void. This article from VentureBeat echoes my point, that virtual economies simply defy the realities of real world economics.

According to the CIA World Factbook, as of 20 October 2008, SecondLife boasts a very loosely approximated GDP of $215 million per annum with a population averaging about 900,000 regular users (per month). Go back 60 days and the population is slightly higher at 1.2 million. This would put their GDP somewhere between $179 and $239 per capita. By other calculations the population of day-to-day users (people who’ve checked in in the last 14 days) is a more accurate measure and that would put the population at around 500,000 and the per capita GDP at a number closer to $430.

In other words, if SecondLife were a country it would be hovering at the bottom of the pyramid with other African nations like Liberia ($500 GDP), Burundi ($300 GDP), Congo DR ($300), and Zimbabwe ($200).

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There simply is no scarcity in SecondLife. As long as people are playing it and they are spending more than they are earning as a whole, the system scales up. LindenLabs buys new servers and everyone (playing) wins. If SecondLife were ever to truly go into recession, it would mean the costs of operating the SL servers was higher than what the company was making from it’s users and growth would either be halted or you’d start to see in-game islands (which represent different servers in real life) start to disappear to recoup costs. If the real world were like SecondLife the United States would be considering deleting a few of it’s States right about now!

However, because SecondLife (and games like it) are completely controlled environments, if one wanted, they could introduce artificial scarcity, rules, governments etc. Has anyone experimented with a virtual ‘model’ of a developing country? Or perhaps even a whole continent like Africa? At the blog Alice and Kev, Robin Burkinshaw created a family of homeless Sims and proceeded to recount their tale of strife and struggle as a daily narrative…garnering compassion and empathy usually not even reserved for real homeless people!

Could recreating economies in Second Life that suffer some of the traits of developing countries (over population, job scarcity, corrupt leaders, weak economy, optimistic expats etc.) offer a way of studying development? Are there any groups out there experimenting with such a method? I did head over to SecondLife looking for anything remotely like this but only found people modeling tourist destinations and a few NGO virtual offices.

Photo: by damastarrostin used under the creative commons.