Virtual Political Economy

January 8, 2008

Virtual Political Economy

Edward Castronova talks about World of Warcraft, Second Life, and such with Russ Roberts on the latest econtalk.

I used to play bridge quite a bit, but I stopped when I went to grad school. At that point, the last thing I needed was a hobby that was sedentary, brain-taxing, and mostly male. I took up folk dancing instead.

A couple of years ago, I thought I might get back into bridge. I went to a local club and played a round. A local pro offered to give me "lessons," meaning that I would pay him to play as my partner and help me to earn master points, which are the non-tradable virtual currency of the bridge world. I decided I wasn't that interested in getting back into it.

Anyway, the Castronova interview did not convince me that the economics of online virtual games differ qualitatively from the economics of bridge. Yes, suppliers can make money. Pros can make money from amateurs who want to earn points that way. But that's not so earth-shattering.

I do fantasize about the Internet facilitating the development of what I called "virtual Federalism" in my essay on Long Tail politics. Castronova seems to think that online games could provide some sort of path to virtual Federalism. I'm skeptical, but listen for yourself.