Rebirth of Reason

Post to this threadMark all messages in this thread as readMark all messages in this thread as unread

Post 0

Friday, August 8, 2014 - 6:01amSanction this postReply

It is why the Austrian economists insisted that investment must come from savings.  Assuming a gold-based capitalist economy in which each new product or service increases the value of existing money, savings is rewarded by the "natural" improvment in society.  In order to get your money, a banker must offer you more than it will appreciate if you do nothing.  So, the banker pays interest.  In order to get the banker's money, the entrepreneur or investor must be able to pay more by means of superior production.  This is very mainstream. A manufacturer borrowed money to make the payroll because that was cheaper than taking cash away from the capital investment or raw materials accounts.


Conversely, sellers seek the utility of cash.  


We know that it not that X is "worth" Y but that X and Y are worth relatively more to each party in the exchange.


Like real gold, game gold is just a counter.  You can buy with it, of course, but at the end of the game, your ranking is based on your skill level, plus your inventory of tools, weapons, scrolls, etc.,  including your gold.  


Even those of us who know the theory of capitalism often fall into the easy vernacular of "spending" money to "buy" goods or services.  It is just as true that you are selling money to people who are spending goods and services.  This week the American Numismatic Association is celebrating their annual Worlds Fair of Money convention, again in Chicago.  At the height of activity on the bourse floor you will see a thousand people  buying and selling all kinds of money in exchange for all other kinds of money.  The Australian Mint and the Austrian Mint both will be there, selling their "worthless" gold coins hoping to get very many very "valuable" US Dollars.    


The ANA makes its money by providing the bourse space.  That is another point from Joseph's article. The middleman is a transmission medium who lowers the costs  of those transactions, usually by decreasing the timespan of transactions.  In order words, valuable goods (whether armor or game gold; whether wheat or steel) spend less time idle and are put into production sooner.


(Edited by Michael E. Marotta on 8/08, 6:04am)

Post 1

Sunday, August 10, 2014 - 1:38amSanction this postReply

On the other hand, when the Institute for Advanced Studies built the ENIAC for John von Neumann, to get time on the machine, you had to convince von Neumann that the problem was interesting. The active research areas were thermonuclear explosions, stellar evolution, digital evolution, and weather prediction.  The Monte Carlo Method was developed for the first of those.  After President Eisenhower appointed von Neumann to head the Atomic Energy Commission, new management at the ENIAC required accounting for time and payment in dollars.  Whereas in the first five years, the machine was seldom idle, now, many operator entries read "NO CUSTOMERS."   -- Turing's Cathedral: The Origin of the Digital Universe by George Dyson (New York: Pantheon, 2012).

Post 2

Tuesday, August 12, 2014 - 11:12amSanction this postReply
"...nor do you act as the middleman in setting up the transactions...."


This assumes the speculator is only ever buying from the auction house and then reselling in the auction house.  In fact, all the AH speculators I know also have a network of sub-contractors, if you will.  These are players who have no interest in navigating the auction house but, in the course of play, will accumulate commodities in excess of their own needs.  Without the speculator, those excess commodities would be sold to an in-game vendor for a nominal price and never enter the market at all.  With the speculator, the sub-contractor earns more than the nominal vendor price, and those commodities become available to the market.



Post 3

Thursday, August 14, 2014 - 3:57pmSanction this postReply

Great article.


I had so much fun playing the auction house back in the day.  If only it was as easy to make money in the real world as in the WoW auction house.

Post to this thread

User ID Password or create a free account.