Welcome to Gaia! :: View User's Journal | Gaia Journals


View User's Journal

Report This Entry Subscribe to this Journal
Musings of a L34f in a 7r33...
Just as the title states, here shall I post my various Facebook status esque musings about Gaia and stuff in general, should the urge strike me.
The Gaian Economy
I just got finished getting advised by a friend of mine on the art of playing the markets: On buying low, selling high, haggling, calculating cost, gain, profit, the 2% tax, all that stuff. Frankly, most of it flew way over my head and I've decided, at least until I can get a bit more comfortable here and have a bit more starting capital, that I'll just do what I did in Dead Frontier that one month when I had no access to a computer with Unity but still really wanted to play: I'll be a bloody inflammatory bot. I'll buy anything that's sizably cheaper than the next lowest price and sell it for slightly more while still being lower than the next cheapest price. All on the market. No haggling, no socializing, just pure, unadulterated inflation of prices.

Which brings me to the title of this post: The Gaian Economy. I used to play Puzzle Pirates a long time ago, and I was amused at how the economy there was player run and stuff. Now, I hadn't taken an econ class yet at that time or anything, so I didn't realize a lot of the implications of the player-run economy nor of the personal, internal economies of every island. To this day, I still don't, but I can talk a bit more like I do.cat_smilies/icon_xp.gif

So coming back here after my, what... 5?, 4?... however many year leave, having also now taken an econ class and seen "Spice and Wolf" and "C: The Money of Soul and Possibility Control," it struck me, mostly due to my friend's lecture, just how developed and economy-esque the economy of the Marketplace is. In fact, it's rather like an entire country's economy. Quite fitting, given the nature of this site, no?

Basically, a normal nation's economy, to my understanding, has money come in and go out and resources and blah blah blah... I really don't remember. What I do remember is how the government, specifically the Fed, F's with the economy to try to keep prices how they want them. Now, there are multiple way this is done, as I remember, including stuff like taxes and business incentives and crap like that, probably, but the one I came to understand most was open market operations.

Basically, "open market ops" means that the government can inject or remove money from the nation's money supply, not by printing money or summat, but rather by buying stuff and selling government crap on the markets, specifically bonds. Now, there's good incentive to buy government bonds, as they're backed by an entire nation's bloody government, so you're most likely going to see the return on your investment. (Though trolling may occur should the value of the money you get back have been effectively fiddled with.)

You see, the normal reason why any person who bought a bond from an organization wouldn't get the return on their investment is if the organization they got it from was physically incapable of paying it back, as the government and law enforcement and such would be all over them if they have any net value left and don't use it to pay off what are essentially their debts to their customer. This would therefore usually only occur as a result of the organization or business or whatever shutting down. The government, however, essentially being a bloody nation, is most likely never not going to be able to pay their bonds back. (though, since they're the ones that keep themselves in check, if it weren't for the power of your vote and taxes, you'd probably never see a penny of that money ever again, what with how morally deficient everyone is these days, myself included)

Now, the way open market ops work in terms of practicality go like this. Market prices, the average price at which an item would go for sale, are affected by the money supply in a supplyXdemand kinda way. Basically, the larger amount of money there is in existence, the less rare it becomes and therefore the less value it has as, though demand is technically insatiable, supply would get closer to meeting it, so the gap between supply and demand lessens, lessening the price. How this works with money: The more money in circulation, the more money you'll need to buy the same thing. So, as prices change, the item's intrinsic value doesn't, only how much the money being used to buy it is worth. What the government does to cause inflation, the addition of money into circulation and the accompanying rise in prices, is buy stuff, injecting the nation's money into businesses and such which will put that money into making stuff, buying stuff, selling stuff, paying off their employees, etc. causing the money to circulate throughout the economy. What the government does to cause deflation, the removing of money from circulation, is sell stuff, (bonds and the like, like I said, like those "war bonds" during WWII, those those were legitly because the .gov needed the cash...) causing the money that was circulating from consumer to seller to worker and back and forth between businesses and stuff to be holed up in the Federal Reserve or summat, lessening the amount of money in circulation and therefore making the remaining money rarer, increasing its value and decreasing the amount value of prices, though you're still paying as much in terms of value.

All this to say, though my train of thought was derailed multiple times there, and I dare not go back and read that burnt waffle from hell, lest my head explode from the sheer volume of fail, Gaia's economy has quite a number of amusing parallels. While workers and plants and such create money IRL, gamers essentially create money in Gaia, and in so doing inflate prices. Every person that joins Gaia brings however much gold they start with into circulation, as well as any and all gold they attain from the system itself through things like games, events, and freebies. While consumers and use and such generally remove money from circulation IRL, stuff like the shops, the 2% tax, and people leaving and leaving their fortunes behind remove money from circulation, thereby deflating prices. Of course, shop prices are fixed, so anything that is sold there's price has to work around that. The admins, via events, freebies, and god-modding, can even work like the government, controlling the economy to suit their whims, within reason.

In addition, Gaia has the amusing added element of time dictating prices. It seems, though this and a majority of what I wrote before are pure speculation, that, like wines and such, the older an item gets, no matter how absolutely meh it may be, the price goes up. Expo-frikkin'-entially. I theorize hypothesize that the reason for crap like that is both the unpredictable whims of the Internet, and inflation bots, such as myself and most of the egregiously wealthy cheapskates on this site. Basically, we cause prices to rise, at a profit. In so doing, we attain money for ourselves by jacking up prices, screwing over anyone that actually wanted those items for more... pure... reasons. Yet the way that the market works here, especially the more underground market of the Exchange, is quite intriguing and beautiful and such...

I have no idea what I just wrote there, as I'm pretty sure I blacked out a few times while typing, (bloody lack of sleep...emotion_smilies/icon_facepalm.gif) but yeah, such is my spiel for this afternoon. If anyone who happens to read this (why would you read this!?) happens to be some kind of 1337 econ buff and could correct some of my terrible wording or whatever, that'd be great. I literally don't remember why I wrote this, what my objective was, etc. at all, and I'm feeling really sleepy all of a sudden, but yeah. I figure it'd be a waste to delete what I've written as there's probably something amusing in there somewhere, not that anyone'd be able to find it...
まあぁ、いいか。 With that, I'll end this spiel.

I am the form of my post.
"Bump" is my body,
Memes are my blood.
I have posted over a thousand messages.
Unknown to ban,
nor known to replies.
Have withstood pain to revive many threads.
Yet, those "bump"s will never say anything.
So as I pray,
Community Member
«Prev | Next
Archive | Home

  • 02/10/13 to 02/03/13 (2)

    Manage Your Items
    Other Stuff
    Get Items
    Get Gaia Cash
    Where Everyone Hangs Out
    Other Community Areas
    Virtual Spaces
    Fun Stuff
    Gaia's Games