Virtual Economies? What Virtual Economies?

I make a point to use quotes when I speak of “virtual” economies (meaning the economical side of online worlds). As a matter of fact, I think there is nothing virtual in them:

  1. “real” money is traded for local currency upon entry
  2. local currency is payed for services or goods
  3. local currency then traded for “real” money upon leaving the world.

All this is so unvirtual that the owners/builders/creators strive to make sure they get a small percentage on every of the above steps. In terms of GDP, SecondLife would already be the 120th-some country, and there are all signs that this rating will improve.

The wider public’s little familiarity with online worlds is the only reason why journalists insist on adding an adjective when dealing with this kind of economy. Is this kind of economy new? OK. Under- (or maybe ill-) regulated? Could well be. Virtual? Not at all.

If we insist on dubbing virtual the economy of online worlds, on the grounds that “no physical object or action is exchanged”, or that “this so-called online-world currency is actually coloured pebbels”, we should remember that the gold standard has long been dropped and that the “real” money in your pocket has only the value that is agreed for it in the neverending hubbub of global markets.
As for your credit cards, well, their level of “reality” is already the same as that of the “colored pebbles” of online worlds.

Where does all this leas us? A couple simple conclusions:

  1. “virtual” economies are already real
  2. market pressure will make “virtual” and “real” economies merge in a global market, just like national economies.
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