Derivative of slow growth

Real life never seems to get over its obsession with growth. In a recent interview to this paper, economic affairs secretary Shaktikanta Das said India’s economic growth is stable and robust. Okay. But virtual worlds don’t care much about growth. According to them, economic growth is irrelevant at best, problematic at worst. If the amount of wealth per person rises in a virtual world, that is a problem. 

This happened in the game EverQuest once. Money was flowing into the world too quickly and the prices of high-end items were skyrocketing. At the same time, prices of low-end items (for poor characters) were consistently falling. Prices shouldn’t fall when the money supply is growing rapidly, so this was puzzling. Going by player forums, the explanation was that the money flowing into the virtual world was fairly spread across all levels, but the gear was not. The highest players eagerly sought the very best gear and would pay anything for it. On getting the very best gear, they would sell their old stuff to lower players, who would then sell their old equipment to even lesser-advanced players, and so on. Thus, the gear flowed down the levels, and the money flowed up, causing rapid inflation at the top, but a decline in prices at the bottom. The net effect was a dramatic increase in real wages for the lower players: an hour’s worth of earnings would buy a much better set of gear than before. Thus, the players got richer, top to bottom. There was inflation, but real economic wealth was rising. The only thing that was going down was happiness. 

Players on online forums were lamenting the high growth and demanding a let-up in its pace. One post by Lum the Mad said, “It’s like I am a real estate agent in real life, with five sales opportunities every month. Now let’s say there is economic growth, people get richer. As a result, 10 opportunities open up per agent per month. My choices are to pursue five of those and keep my income the same, or go after all 10. If all the agents go after 10 and I go after five, suddenly I am the poorest and least successful agent. If the other agents go after five and I go after 10, suddenly I am the richest and most successful agent. Facing these incentives, every agent goes after the 10 opportunities. As a result, if I want to even keep up in the real estate game, I have to respond to these new opportunities with more work. Otherwise I will lose my social status and reputation.” 

As seen here, economic growth can decrease fun, whether in real life or pixel life. Hence, unlike the economic affairs secretary, virtual worlds generally avoid growth in material well-being. Rather, they prefer a structure that makes economic growth an individual experience within a non-growing economy. Everyone who starts as a penniless virtual tailor gets the chance to make undergarments, gradually working his way up to robes. There’s always a market for those items when you are starting out; the virtual world does not become so rich that nobody wants anything less than silk robes (and nothing beneath). 

Against this backdrop, the secretary’s statement, “economic growth is stable and robust”, might sound a desperate (if deceptive) way to make an economy look fun. Sure, in times of growth, lots of people have the feeling of “levelling up”. But growth does not necessarily ease pain or bump up happiness, as shown by Lum the Mad and others on multiple player forums. Perhaps an idea will come, inspired by Lum the Mad and others: do we really need to be wealthier? After all, it has mental costs, it is a time sink, and it keeps us from having fun. Turning away from economic growth some time in the future, after achieving everything basic, would be a shocking change in real-world macroeconomic policy. On their part, virtual worlds already know that the real-life treadmill is sped up too high. Hence, they try to keep their economic treadmill at a casual pace, making sure its speed is stable across time. More and more people will find this treadmill far more agreeable to their lifelong happiness, and will demand that the real-world treadmill be slowed down, too.     
 

ashish.sharma@bsmail.in