Reading around the SLblogosphere i saw some posts about SLeconomy. Some of them related or asking for more regulations in SLbusiness and economy.
I’d like to remark the really interesting post in Prad Prathivi’s blog, where Prad plead for a trusting system for SLbusinesses, some like the one in eBay, based on references of customers. Personally i find quite interesting the proposal of Prad, even, as he says too, it would be something quite different to do, technically and “socially”. In any case i strongly suggest the reading of the post (as most of Prad’s blog).
In the other side Grace McDunnough, in another quite interesting post, she pleads for a business license system in this case in order to regulate and increase the trust in business.
I’d like to share my view about all this, about regulations in SLbusiness. Every day we have in Second Life transactions for millions of L$ (what means thousands of US$) and the problems you can find are minimal, at least i don’t think is worse than economy in RL. Moreover most of the transactions have values under the equivalent of 10 US$, normally even less. If one have a problem in a purchase due to grid issues normally you shop owners give a solution in a reasonable time for one simple reason: if you don’t have good customer service you won’t have customers, as simple as this. Under my opinion the system works quite good for the 80 % of the transactions.
But, what happen when your transaction is bigger, when we talk about businesses of hundreds (even thousands) of US$ or €? I still think Linden Lab is doing ok keeping distance of this kind of economical relationships, this kind of businesses are RLeconomy, not SL even generated in Second Life. In this case i think the right thing is too sign a contract,and agreement or something legal like that. I think is more a question of common sense more than trust. To make big money business you need to have some information about your provider or customer, and of course, some legal protection in both cases. RL laws in most of the countries provide this legal protection. It seems for me that asking to Linden Lab to care about this kind of transactions is some like asking them to care about something you should care about.
One of the interesting things in Second Life is that anybody can start a business, big or small. The system itself works for most of the transactions, the RL legal system works for the biggest transactions. In my opinion there is no need of more regulations, a license system will just help bigger business and will damage micro-economy.
Image in this post by Ze Moo, licensed with a Creative Commons license.
I agree, I think any form of licence would ultimately be meaningless, particularly if it involves either purchasing one or approval from an appointed committee. A purchased license basically both prices out smaller interests and makes the document itself meaningless. A system controlled by a small committee introduces nepotism and partisanship and would give some credence to the idea that Second Life has a “Feted Inner Core” and it would probably only take one major mistake on the part of either system to destroy their credibility and, if there is Linden involvement, that of the Labs.
If anything is needed, it is probably better education during orientation, that *you* are responsible for your account, your money and your purchases and it be stated very clearly that Linden Labs will not get involved in disputes between residents. The buyer must understand that when they purchase something, it is a private deal between residents and the buyer has to be aware of what they are doing and how much money they are doing it with. I’ve read cases of people being cheated out of a LOT of money and always wondered why they were so naive with such large amounts and why they were *spending* such large amounts if they could not really afford to make a risky investment.
Sometimes I think people will scream and shout when LL attempts to regulate content in world and provide guidelines on what can and cannot be done, saying that they should have freedom of choice; but when a GINKO bank vanishes and the chief owners vanish with all the money or someone gets cheated out of a small fortune because they rented land in a private sim from a dodgy landlord, they immediately project these free choices back on Linden Labs and demand they regulate them.
Being in SL for almost 2 years (God I’m old!) and having rented and bought land, just to speak of major transactions, I have never come across fraudulent people. In the classes I give about buying and renting land I always warn people that they should rent from a trustworthy source or direct to Linden Lab. There are too many people cheating out and people must be aware of that and be careful – a bit like you do in RL, I think.
As for “investments”, in my early days in SL there was this friend of mine that kept all his money in Ginko because of the interest rate. I went to an ATM and read carefully the notes and terms of service. Gave up setting myself an account when I read the disclaim that “they were not responsible for the funds if the bank went bankrupt”. So I kept all my Lindens under the matress till now.
In what concerns Linden Lab regulating the commerce/economy in SL, IMHO it would start what all of the residents (or at least the majority of them) would face as a dictatorship, favouring the “rich” or LL’s friends.
The economy is good as it is and I believe we don’t need LL to interfere with rules and regulations (except when they go against RL laws, like it happened with gambling).
Thanks for sharing your ideas, Winter and Khamudy. I think you are right about the possibility of favoritism in a license comittee.
About the Ginko issue, well, imagine a friend that comes and tells you the next story: “Hey, dude! I met a guy just today, he says that if i give him money he will make it bigger! I will give him all!!!”. In my opinion that’s what happened with Ginko, one have to be quite naive to think someone is “selling euro for 90 cents”, is SL or wherever one never should trust someone saying you will have big earnings from nothing.
I have been in SL long enough to see the impacts of regulation, I think. When they banned casinos – the economy went down. When they banned banks – the economy went down. I would claim that to be some kind of rule of thumb. I still have my own conspiracy theory about that:
http://hammerwielder.wordpress.com/2008/01/26/ll-bank-ban-my-personal-conspiracy-theory/
I do not claim SL users to be smarter than others in RL which seem to hold an 80 % lunatics rate. So small business is about meeting some of those at some times and live with it. But anyway, when you do BIG business in SL with serious people, you exchange real identities before jumping in and rest your business on solid soil. This is what trust is about.
If your potential business partner does hesitate there … skip and run and as fast as you can.:)
So if you open your eyes and he a community of businesspeople who do the same, this should work without LL regulation things.
Btw., any coincidences with RL-banking-sector in the US may be pure coincidence. Why dont they ban banks there?:)
Calixus, i see we have the same opinion about BIG business and meeting your business partners.
I agree the SLeconomy went down after banning of casinos and banks, but i think was a good ban in order to keep the “unregulated” economy, to keep banks SLeconomy would need strong regulations to keep out pyramidal systems.
About RLbanking sector… personally i think they practice what we can call “institutionalized usury”, they pretend the privatization of earnings and the socialization of the loss and sometimes i think they should be banned too… but this is an SLblog not a RLpolitical blog
Hi. I read it all: the post, the comments, went to prad’s blog, came back and one thing you said, Raul, seemed to be the most appropriate of all:
“Thanks for sharing your ideas, Winter and Khamudy. I think you are right about the possibility of favoritism in a license comittee.”
I agree with you.
I am against favoritism and I believe most people act in a correct way.
Thanks, Lucille, i believe too most people act in a correct way, that’s why i think an regulative intervention by the Lab is not needed in SL.
If you are negotiating a large dollar contract then it is done over the telephone irl anyway. Unless you are an idiot of course.
Attempting to force people to reveal identities seems to be a violation of the SL TOS so if you do not agree to the SL TOS then you are not supposed to be logging in.
As for business licenses? Sure we have those. It is an RL thing. Like a DBA license. Filing taxes every year, etc. Already done. You are not entitled to see the license because you are not entitled to know anyone’s identity unless such arrangements are willingly made outside of SL.
As for the suggestions made by various people for a business police association? Hogwash. These efforts will lead to libel lawsuits and abuse reports and the people running the scam associations being either banned or driven from SL for favoritism. Just like always happens every time, about twice a year, that someone in a business gets mad at the presence of new competition and tries to force the competition out of business via strongarm/libel tactics. BBB in SL = nothing but someone’s drama fest.
I’m still out the L$1000 from the last one that turned out to be a competition griefing operation just like the rest.
No these type organizations are not welcome in SL because they are scams. Just like in RL.