Yet Another Business Model

A couple of weeks ago, Prokofy Neva wrote a blog post about the relationship between IBM and Second Life, entitled I Be Am. This fascinating post was followed by a series of equaling interesting comments, including notably a few statements by Adam "Frisbee" Zaius about the OpenSim project. The ensuing debate between Prokofy Neva and Adam Zaius focused on the general subject of the role of capitalism in virtual worlds, and on the particular subject of why OpenSim is being implemented without data encryption to protect intellectual property, and without payment protocols to support an in-world currency.

Reflecting on this debate led me to formulate a mixed-economy business model for a new virtual world. I described this business model in a late comment on Prokofy's post. The short exchange of comments between myself and Prokofy on this subject is reproduced below. (A few irrelevant sentences about the configuration of Prokofy's blog have been deleted from this otherwise verbatim transcript.)

Danton Sideways:

I finally read "The California Ideology" as you suggested, and probably agree with it even more than you do. Because the solution proposed by the authors is a *mixed economy* for digital development, with state funding to help the disadvantaged participate in the internet revolution. For example, that the state should help provide every citizen with a computer and cheap broadband access - which is of course socialistic.

As an advocate of mixed solutions, I see interesting possibilities for combining open source with protection of intellectual property. I may write a post on my blog about this, but to sum up, one possibility would be to organize a virtual world as a consumer cooperative. All residents would pay a fee to be members of the cooperative, and the cooperative then hires a management team to run the hardware and software, including data encryption to protect IP. And the software could be developed on the basis of the OpenSim platform, but as a forked private system incorporating Paypal and other modules. Structuring the company as a consumer coop would permit running it as a representative democracy both in-world AND in real life.

Prokofy Neva:

Whenever I hear the words "co-op" I think of my many years in Toronto or Rochester joining various food co-ops or living in communes or whatever, and eating millet loaves and all that kind of organic stuff. Co-ops are good for certain small things among like-minded people. They are terrible ideas for how to organize entire societies.

That's what's wrong with all this opensim stuff -- it's constantly predicating its model on an assumed and often unconscious belief that a sturdy foundation of capitalism will underpin its notions, ready to pay lots of money that it has gained from proprietary code lol. I find it hilarious at how unconscious all
this is.

Capitalist free markets are more efficient and serve more people.

Socialism doesn't work.

Danton Sideways:

I agree with you that a society that leans too far towards socialism will fail, as did soviet communism. But so will a society that leans too far towards unregulated capitalism, which is why Keynes introduced national economic regulation and the welfare state. All really-existing national economies are mixed systems.

As for cooperatives, either of producers or consumers, they *do* work on a large scale. Large examples of the former are farmer's cooperatives, and an example of the latter is my bank, the Credit Mutuel, which is one of the largest banks in France. Any cooperative must however be managed in a sufficiently professional way.

In the virtual world business model that I propose, the "nation" would be set up as a a democracy of paying citizens (consider the payments to be the equivalent of taxes), and the "government" would be the corporate structure to which implementation is delegated. Note that some or even the major part of the implementation could be outsourced, such as in the form of a management contract, to a separate company which would be required to meet specific performance criteria. The outsourcing could even be done with an open competitive bidding process.

This model could provide a way to mix together social cooperation and market capitalism for successful implementation of a virtual world.

Prokofy Neva:

[At the time of first posting of this article, the above dialogue is still on-going on Prokofy's blog. Prokofy's expected reply will therefore be inserted here.]

[Note added on July 3rd 2008: the dialogue on Prokofy's blog in fact ended there. And this post went pretty much unnoticed until today, when RightasRain made the comment shown below.]
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On Strike

Danton supports the Second Life blog strike.

See:

http://rhetasworld.wordpress.com/2008/04/15/strike

(And ignore the following "Read More" prompt which I must learn how to get rid of when it's not needed.)

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Swept Away

Help! I've been sucked into the maelstrom of brutal politics within the Confederation of Democratic Sims (CDS).

A few short months ago I discovered what seemed to be the sleepy little virtual democracy of CDS, and took up residence in a corner of the Colonia Nova sim. I was attracted to CDS because it is a democratically-run region, which appeals to my leftist leanings towards all things cooperative. I promptly joined the moderate leftist party within CDS, which is called the Citizen's Social Democratic Faction (CSDF), and settled in for what I expected to be a gentle game of virtual democracy. In fact, I was hoping that others would do most of the democratizing for me, because my main interest was in promoting Ivan Illich's philosophy of convivial tools.

Alas, fate has decided otherwise. At first I watched from the sidelines as the political climate within CDS deteriorated. Then I found myself getting pulled into the conflicts as a participant. And now I find myself in the position of single-handedly trying to create a new political party within CDS. How did this all come about?

The first sign I saw of the troubles to come appeared on Christmas Day of 2007. I logged in to find a number of buildings missing in Colonia Nova. I ran across a small group of CDS residents standing on a bare patch of snow, discussing the sudden departure from CDS of Michel Manen, who had deleted all of his builds. I found some explanation for this behaviour only some days later, reading a thread on the CDS forum, which contained a rather bitter debate between Michel, founder of the CARE faction, and certain members of CSDF. In the middle of the thread, Michel posted the following comment, dated December 25th:

"On second thought, who really needs this?! Y'all have fun! Merry Christmas, Happy New Year and best of luck with your project."

Following his departure, Michel's group was re-organized as NuCARE, under the leadership of ThePrincess Parisi. The elections for the new term of the Representative Assembly were carried out during the week of January 14th to 21st, 2008. The CSDF faction received the most votes, followed by NuCARE, but the CDS electoral system is set up such that candidates were elected from all of the four participating parties. The new Representative Assembly was sworn in on February 3rd, as I've told on one of my blog posts. Patroklus Murakami, as leader of the faction having received the most votes, automatically took the role of Leader of the Representative Assembly (LRA).

The first meeting of the RA on February 3rd was good-humoured and consensual, but things began to go sour at the very next meeting. The conflict centred around procedural questions. In order to understand the positions of both sides, one must know something about the way the CDS political system was initially set up. The voting system tends to favour small parties, which means that the party that gains the most votes will generally have only a minority of representatives. To compensate for this, the LRA is given the authority to set the agenda for the RA meetings. The idea was that the majority party sets the agenda, but the other parties can easily vote down any motion they dislike.

In the new assembly, however, members of the minority parties, lead by ThePrincess Parisi of NuCARE and Beathan Vale of the Simplicity Party, immediately began challenging this traditional role of the LRA, and proposing procedural changes. In addition, ThePrincess spiced up these procedural debates with a liberal dose of name-calling and personal attacks on the LRA, Patroklus Murakami.

To make a long story short, Patroklus decided that an appropriate response to the minority party attacks would be for the CSDF representatives to resign from the Representative Assembly in protest. This drastic step was debated at a meeting of the CSDF faction on March 5th. I was present at this meeting and voted against the resignations, though I understood Pat's point of view. He announced the resignations the next day on the CDS forum, giving the following explanation:

"It has become clear since the recent elections that there's a minority in the RA that is determined to prevent me from chairing meetings as LRA. I have not always responded well to the challenges of chairing meetings under these circumstances and I apologise to the CDS community for my faults in this regard."

The withdrawal of the CSDF representatives from the RA had two immediate consequences. One was to give the voting majority to the alliance between NuCARE lead by ThePrincess and the Simplicity Party lead by Beathan (Brian Livingston, the leading candidate of the Simplicity Party, unexpectedly resigned from the RA himself, shortly after Pat did). The second consequence was to provoke an interim by-election to replace the CSDF representatives. CSDF has decided to present candidates for this by-election, with the hopes of gaining back one of the two seats they had given up.

It was Pat's resignation that caused me to become involved in the disputes. First, I got to thinking about how it was that this region, which had been so painstakingly built up by the voluntary contributions of one group, could now so easily be taken over by a new hostile group. This lead me to start a forum thread called Collective Property vs Un-Gated Community, in which I argued that having collective property in an un-gated community inevitably leads to the tragedy of the commons. And secondly, I was irritated to see ThePrincess, whose attacks had caused my friend Pat to withdraw from his seat on the RA, crowing about how rosy the situation was in CDS. So I said as much on the thread she had started, and that she had called WHATS UP WITH CDS? I'LL TELL YOU WHAT!.

The conflict escalated. Profiting from the absence of CSDF, the new majority passed a series of highly controversial measures, as Patroklus describes on his blog, in a post entitled Virtual Zimbabwe. Patroklus also opened a thread on the CDS forum, called Catalogue of Abuse, in which he reminded everyone that the main factor that had prompted his resignation was the treatment he had received from ThePrincess. I found Pat to be far too mild in his own defence, so I jumped into the fray. I wrote a comment on this thread saying that in my opinion the behaviour of ThePrincess is that of a troll and a griefer. And when all of her associates jumped up to defend her, I replied that those who defend a notorious griefer become griefers themselves. And to think that only a few months ago I posted a cheerful account of the in-world marriage of ThePrincess and MT.

I found myself suddenly in the very thick of the fray. And I realized that I had forgotten to check with anyone from CSDF about my outburst on the forum. But I had for some time been toying with the possibility of creating a new leftist faction within CDS, one that might be less bound by the weight of tradition than CSDF, which is made up of many of the historical pillars of CDS. So I announced in a post on the CDS forum my plans to create a new faction. My announcement received one reply, from Dnate Mars, who said only: "I wish you the best of luck!"

Since I perceive Dnate to be closer to the alliance between ThePrincess and Beathan, than to CSDF, I get the impression that his comment may have been a bit sardonic. But I replied good-naturedly: "Thanks. I'll need it!"

So here I am condemned to try to build a new political party within CDS. My other Second Life projects, such as the promotion of Ivan Illich's philosophy, or the organisation of a Second Life Parliament, are pushed to the back burners.

I've begun to make the rounds of all of the various "progressive" regions of Second Life, such as Commonwealth Island, Better World Island, Cedar Island, and so on, in search of possible new members for my new party. I'll tell more about that on my next post. But one little piece of information will give you a foretaste of how my search is going. How many possible new members have I found so far, you may ask? The answer is quite simple: zero.
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