Editorial: Double-Fisted Posting: On Video Games and Economics


I have sunk maybe two or three hours into Final Fantasy XIII. I honestly do not know how much more I can at present, not when there are more Darkspawn to be slayed. I still have not gotten lich… only died trying’.

The typical justification for the gross abuse of traditional Final Fantasy mechanics is that we should not worry and enjoy the story. Yes… the story.

I normally do not outsource my work, but my wife, Becky, was sitting beside me on the couch for the initial unwrapping. She made it pretty far, all things considered, leaving only after a minor side character died. The melodrama was high, and my wife turned to me and said: “that is some Disney shit right there.”

This isn't a game; it's an anime with button presses
"This is some Disney shit right here," quoth my wife.

I have taxed my brain attempting to find some rejoinder, some way of saving this “on-rails role playing game” or oRPG. I have tried to find redemption in the story thus far, and failed.

All of the elements of a Final Fantasy story are there: rebel groups, bizarre and impractical technological advances, Japanese weirdness… but it all feels like we have seen this before, like we have been at this point of storytelling before.

This will be a sad chapter in the history of being a Square Enix fan, but at least it is a sharp-looking sad chapter. It is all glitz and glam with no substance, but there are worse things.

This is not a video game; it is an anime where players occasionally have to press buttons.

The WoWconomy

Much like Freakonomics, WoWconomics is a discipline mixing the disparate studies of video game elves with political economics.  The inventor of WoWconomics, a shady and terrible old wizard still heady from his days in the Dalaran subversive subculture, has had little effect in publishing his tired screeds to 2: Trade, a disreputable journal of public record more likely known for an endless barrage of Chuck Norris jokes and bodily-function humor, with occasional slanders and libels about some grungy character known as “ur mom lawlz.”

World of Warcraft is neither unique in the aspect of having a player-based economy among multiplayer games, nor particularly innovative.  What sets the dreaded “Auction House” of WoW apart from its clones in many other games is the size of that economy.  On a high-population server, I would estimate that somewhere over 10,000 unique transactions happen on a daily basis.

With the advent of add-ons like Auctioneer, it is very possible for a person to become rich playing the market.  This is done through the exploitation of economic principles; an economics graduate student could easily “clean up” over two week’s time.

The WoW Auction House
"Raiders of the world, unite!"

Of course, there are other, non-economic forces that drive the WoWconomy.  For instance, the virtually limitless supply of black market currency can cause prices to be inflated, as there are those who will disrespect the basic cardinal rule of working for what you want for the cheap and easy fix of free (in terms of in-game time) money.

The reason in-game time is the proper measure of value for the WoWconomy is that it is the one factor common to all players:  in order to make money, one must play the game.  Now, classical economists and Marxists will disagree at this point:  the former, following Adam Smith, will tell players that their leisure time playing the game does not amount to labor, whereas Karl Marx will say that no matter how enjoyable the time spent is, it is still labor.

This article will focus on the latter definition, and indeed, Marx’s theory of value, as the proper philosophical basis for the WoWconomy.

In The Critique of Political Economy, Marx discusses the nature of the commodity and how things acquire value. Marx takes the definition of a commodity from the English classical economists, or something that satisfies some want we have. All commodities therefore have certain use-values, or utility to us in some fashion. A nugget of iron, for instance, has various uses, some more valuable than others. But use-value only happens when the object is consumed.

Crafting materials in WoW are the most ready comparison: those loads of cobalt and saronite in your bags are worthless just sitting there, but if you are needing to make some new armor, they have a definite use-value to you.

On the other hand, you may not want to make metal armor because you are a dirty, sneaky rogue or a cowardly hunter. Therefore, the saronite is not as useful to you as, say, Heavy Borean Leather. So you wish to exchange your saronite for leather, which creates a relation between the two. Saronite now has an exchange value relative to leather.

But how do we get this value? Market economists will tell you (as will many of the WoWconomists out there) that exchange value is derived from what people are willing to pay. However, this is contrary to the actual experience of WoW.

Players are allowed to specialize in two kinds of professions, either gathering (Fishing, Herbalism, Mining, Skinning, or killing mobs for meat and cloth) or production (Blacksmithing, Tailoring, Leatherworking, Jewelcrafting and Alchemy). In order to performing production tasks, which are necessary for all players at the highest level of play, synergy must exist between gatherers and producers. Consequently, rare types of materials, like Primordial Saronite, Frost Lotus, Arctic Fur or epic gems are very expensive if purchased off the auction house.

This is typically chalked up to demand for these items being high, while supply is necessarily low. However, even in a saturated market, these goods do not drop significantly in price. This is not a function of inelastic demand, since there is always the possibility of just farming for the materials yourself. It is rather a perfect example of what Marx calls “abstract general labor,” or labor that creates exchange value.

Difficult materials to obtain (or, similarly, difficult production patterns to obtain) represent an investment of time and effort (i.e., labor). Marx writes:

In fact, what appears objectively as diversity of the use-values, appears, when looked at dynamically, as diversity of the activities which produce those use-values. Since the particular material of which the use-values consist is irrelevant to the labour that creates exchange-value, the particular form of this labour is equally irrelevant. Different use-values are, moreover, products of the activity of different individuals and therefore the result of individually different kinds of labour. But as exchange-values they represent the same homogeneous labour, i.e., labour in which the individual characteristics of the workers are obliterated. Labour which creates exchange-value is thus abstract general labour.

What other lessons from Marx can we expect to show up in the WoWconomy? The possibility of collective action is seen in many guilds, where even non-raiders will work to stock the guild’s bank with materials they themselves will not use. Since the end game is a concerted, collective effort, the proceeds of each individual’s labor do not go toward his own end (unless he voluntarily excepts himself from social game play), players voluntarily agree to seek wealth for common goals, rather than individual ones.

I would argue that guild microeconomies and the wider, Auction-House based WoWconomy are the best modern examples of Marxist economics at work. This is, however, subject to a few corrupting influences, such as the availability of gold (currency, which has only a social exchange value) from a black market. Most gold sellers do not obtain their supplies of gold from legitimate means (such as doing quests, selling drops, or putting the products of labor on the Auction House) but through the illegitimate means of stealing accounts and selling all of the equipment.

The availability of “labor-less” money complicates the equation Marx proposes for the generation of value. Like the capitalist mode of analysis of the WoWconomy (I dare someone to create a bank alt named LolDavidRicardo), this is seen as an artificial “inflation” of value, but not because of the devaluation of currency, I advance, but rather because it allows people to amass something of high exchange value (currency) without spending any time actually producing something with use-value.

A cool experiment that ought to be carried out by sociologists ought to be to see if they can fully enact Marx and Engels’ vision of a labor-theory economy on a World of Warcraft server, and see what the overall effect on the distribution of wealth would be, and how class struggle would play out. But, that is an idea for another time… and perhaps a well-funded government grant.


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