Thoughts on a Socio-Economic Environment based on Nothing

One of the first economists to seriously examine virtual worlds (Edward Castronova) makes the observation that scarcity is fundamental to the environments that thrive. Utopia is boring. That’s a common theme of a lot of subsequent academic studies: The underlying patterns of human behaviour and motivation don’t fundamentally change from the physical to the virtual.

We have to “exist” in the real world (“eat, drink, breath”). We are highly likely to continue to “live” in it too (that is, perform social/economic/spiritual functions, in addition to biological existence). But it is not necessary to rely on it quite as much as we do now. Critically, living in virtual environments opens up some avenues for society’s development that may otherwise close.

Start at the “peak oil“-type resource analysis. The idea that up to this point, western culture (in particular) has assumed increasingly easy extraction of resources, but from this point forward will have to start dealing with the implications of increasingly hard extraction of resources. It follows that any “standard of living” (social status, economic income, etc) that is based on rampant consumerism and resource use, is likely to become highly unstable.

The fact that telecommunications and computerised technology is generally much more resource efficient than physical networks and products is almost a secondary consideration. The most interesting thing for me, is the creation of a sustainable socio-economic environment largely based on nothing.

That statement sounds like nonsense. But it has already mostly happened in highly developed western economies. Some examples:

So the most advanced types of work (which are also the ones generating a disproportionate amount of wealth), and the crude capitalist motivations of most western societies (the accumulation of stuff we don’t need) are already mostly based on “nothing”. It isn’t such a quantum leap to move those processes into a virtual environment.

We will never leave behind the physical world. But consider that once almost everyone in western society worked in agriculture, and now a tiny proportion do. There has always been a logical progression of society’s development which have led to progressively fewer people working in older sectors of the economy. This may simply be the next iteration. We are unlikely to understand it any better than an 18th century agricultural worker being shown a steam engine. As Charlie Stross’s Unpacking the Zeitgeist demonstrates, the present would be hard for us to have understood 30 year ago. Indeed, his description of the present is still a mystery to most of those living now.

But “our” children seem to embrace it. Many of the kid’s virtual worlds (such as Gaia Online) allow their young customers to buy virtual collectables using real money – these items don’t physical exist, but still represent something “of value”. These are not geeky male niches. Barbie Girls gained 3 million online users in its first two months – which from a discrete market of US teenage girls, probably numbering less than 20 million in total, is impressive.

There is still a big gap between making trivially small payments for virtual goods on glorified online social gaming/networking platforms, and the integration of these concepts into mainstream society and economy. However, these children are now developing some of their life skills in these virtual environments. Perhaps they will naturally accept what we will struggle to comprehend?

This topic evidently requires a lot more research and consideration. I’ve posted it here as a record of my current thinking only.

6 comments on "Thoughts on a Socio-Economic Environment based on Nothing"

  1. On February 2nd, 2008 at 10:56 pm BarCamp: Living on Virtual Fish - Gone Fishing wrote:

    […] Thoughts on a Socio-Economic Environment based on Nothing Tim Howgego, 2nd February 2008. Bookmark This. Topics: Advertising, BarCamp, Edinburgh, El, Learn2Play, Video Games, Virtual Goods, WoW. […]

  2. On March 27th, 2009 at 3:23 am Financing Hyper-Virality in the Clouds - Tim Howgego wrote:

    […] intangible entities, which primarily function over communications/internet-type services (see a Socio-Economic Environment based on Nothing) – most economic activity will occur in this communications/internet-type environment. But even if […]

  3. On July 31st, 2009 at 5:21 pm Paying for Points - Tim Howgego wrote:

    […] we are moving towards an economy based on nothing, eventually wealth generation will primarily flow from “virtual activities”. But it is […]

  4. On August 25th, 2009 at 2:50 pm Do You Fish in Real Life? - Tim Howgego wrote:

    […] virtual environments, is key to applying this technology outside of its current gaming niche. And I’m fascinated with the notion that existing resource-intensive human activities (from [driving to] work, to […]

  5. On December 7th, 2009 at 11:09 am Valuing Nothing - Tim Howgego wrote:

    […] 2007 I wrote some introductory Thoughts on a Socio-Economic Environment based on Nothing. This article continues to explore the value of things in a highly intangible, knowledge-based […]

  6. On August 10th, 2011 at 9:17 am Virtual Property, Rights, Riots and Governance - Tim Howgego wrote:

    […] have previously mused that generations born into this sort of technology might learn to use it better, by not […]