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ajqtrz
Chef - loquacious Old Dog
The following is in response to a thread where a player said the Evlenar economy is "closed." I beg to differ.
First, a couple definitions. An open market is, in it's final form, a place where transactions are controlled entirely by the parties in the transaction. Such markets cannot fully exist as they would be, by definition, lawless.
A closed market is, in it’s final form, a market in which all transactions are done by the state and the human parties involved have a completely prescribed set of actions they do in performing the transaction. All aspects are governed by the government, including prices and conditions.
Neither open markets or closed markets in their extreme iterations can exist in the world because, on one side it would be anarchy, and on the other, totalitarianism of the type where all citizens are just robots.
That a fully open market is destructive of the foundations of trading altogether, I’ll leave as pretty obvious.
But what of a closed market? For there to be a close market there must fist be a closed economy. Why? Because to control all market conditions you have to control all inputs and outputs (“imports and exports”) of the economy. These inputs and outputs include not only the actual goods and services being traded in the marketplace, but the intangibles which might influence the markets, including political ideas, media popularization of this or that, and so on. For in a closed economy (a planned economy), supply and demand must be kept in proper balance to insure stability in pricing. Any influence exerted outside the control of the planners would disrupt their calculations and thus destabilize the closed economy and markets in that economy.
Is it possible, therefore, to have such an economy? In theory, certainly. All you have to do is have no inputs or outputs – complete isolation based on complete self-sufficiency. This has been, more or less, tried. Japan pre-Admiral Perry, for instance. The results were not good as there were numerous times of starvation and the nation remained “backwards” for a long time. And that was not even a completely closed economy.
In any case, if one could isolate and be self-sufficient there would still be fluctuations in supply/demand if for no other reason then the weather. In a closed market such fluctuations would be handled by adjusting the price of the goods in accordance with the ration of supply and demand. But the changes would always be somewhat reactionary as there are always things happening that weren’t predicted. Somebody burns down one of two factories producing this or that and suddenly there’s a shortage. No one could predict it, but it happens. So the economic planners have to react to changing market conditions or leave things as they are. But that, too, won’t work.
It won’t work because the nature of human transaction is to avoid losing value and any “break even” transaction is a loss. Why? Because it took time and energy to make the transaction happen. If I buy a hundred widgets from you and transport them to my store, I need to add my own hourly labor rate to the cost at least, as well as the transportation costs. So that $100 of widgets I bought from you must be sold for, say $110. You can call the $10 gross profit, but, in essence, if it costs me $10 to make the transaction, pay my labor and shipping costs, there is no net profit in it. If I sell it for what I purchased it, I lose. Lose over and over and pretty soon I’m not making any transactions but sitting on a street, probably starving to death. If you leave the markets alone with prescribed prices and those don't reflect market conditions you will get a "black market" very, very quickly.
Thus the first misconception of a closed market: that the transaction is valued at the price offered compared to the price asked, alone. No transaction that is “break even” is actually “fair” to either party. It may look fair, but only if you forgo the totality of the transaction. That totality includes the items mentioned, but also, often, many, many other intangibles.
A second misconception, I believe, in thinking about markets, is that you can actually measure the value of the item. The value of any thing is what you can exchange it for. What most markets do is set that "value" by what the item has traded for in the past. It's "current value" is what it is trading for, at this point in time. It is no guarantee that it's actually worth that amount since market conditions and individual transactions are governed by those making the trade, not by the predictions of those making predictions. And such predictions can be wrong if they don't anticipate sudden fluctuations in supply/demand. In a game like Elvenar the change in the perceived value of scrolls was pretty fast. A couple weeks after the introduction of the Moon Stone Set, you could see it. But since it takes a time to measure the impact of such a change, to analyze it, to suggest “remedies,” to analyze the impact of those “remedies” and to implement them, the adjustment is still forth-coming (or not).
But broadly seen, the Elvenaar economy is neither isolated nor closed.
It is not isolated exactly because transactions are in the hands of the players whose lives do intersect with the game. The emotional and financial state of the players influence their decisions for good or ill. Trades are not controlled even if they are heavily influenced. And if you don’t control the perceived value of a thing you don’t control it’s trade value.
And it is not closed because not only do the players decide what to trade and when, they also purchase and spend diamonds. Diamonds are “imported” by trading for an “external” value. I use diamonds to purchase expansions and that’s pretty much all I’ve done. Why? Because I think the prices on just about everything else too high for the $ I used to purchase the diamonds. The principle here is that if the value of a thing in a closed market is influenced by the value of things outside the closed market, the market cannot be controlled, and is thus, not closed. To the degree the “outside” things influence the market the less the market is closed.
Having said that, we get to three ways the Elvenar economy and markets are not closed and the question of why they are more open that some people would, apparently, like.
1) You can purchase things in the game with money from outside the game. If the value of that which is outside the game fluctuates so will the value of the things inside the game, either directly or indirectly.
2) The actual value of goods is set by those making the transaction, not the system. Whatever claims the system has about the “fair” value do not take into account the intangibles.
3) System pricing is set by and aggregate cost of production rather than individual cost of production plus intangibles within the individual transaction, and thus may out of line with the what the players actually sense is the value of the good.
Edit: I spoke, at first, about a fourth way Elvenaar is not a closed economy here – the use and apparent toleragion of “push accounts” -- but am not certain of it’s validity. I leave this edit just to suggest a line of inquiry.]
Why do people think Elvenar is a closed economy? Because they think the declaration by the devs of what is a fair transaction is the actual determiner of value. That’s the star system. I’ll not go into it here as it’s a bit off topic.
Why is Elvenar a more open economy than people like to admit? The evidence is in how people act.
1) Cross tier trading is up. If it were still considered “bad” or “only good for the really, really small players” people would do it less. But it’s increasing and that tells me the players are exerting their valuations over that of the system.
3) 3 star offers are way up. People are devaluing their boosted goods as they seek to purchase the goods they need. This means that either the value of these goods is not the 1:1 the devs have declared, or there are other, intangibles, that are influencing the game. How about the Spire? I suspect the demand for goods is because negotiating the Spire has risen, but of course, I don’t really know.
4) Scrolls are being discounted over what the devs have declared their value. This is simple supply/demand ratio reaction but it does show that the “enforcement” of the set values is not in the hands of those controlling the “closed economy” but in the individual players.
In a closed economy these things would not occur unless the planners were wildly incompetent. I don't think they are such here and thus, I conclude the openness of the Elvenaar economy is greater than some would consider it to be.
AJ
First, a couple definitions. An open market is, in it's final form, a place where transactions are controlled entirely by the parties in the transaction. Such markets cannot fully exist as they would be, by definition, lawless.
A closed market is, in it’s final form, a market in which all transactions are done by the state and the human parties involved have a completely prescribed set of actions they do in performing the transaction. All aspects are governed by the government, including prices and conditions.
Neither open markets or closed markets in their extreme iterations can exist in the world because, on one side it would be anarchy, and on the other, totalitarianism of the type where all citizens are just robots.
That a fully open market is destructive of the foundations of trading altogether, I’ll leave as pretty obvious.
But what of a closed market? For there to be a close market there must fist be a closed economy. Why? Because to control all market conditions you have to control all inputs and outputs (“imports and exports”) of the economy. These inputs and outputs include not only the actual goods and services being traded in the marketplace, but the intangibles which might influence the markets, including political ideas, media popularization of this or that, and so on. For in a closed economy (a planned economy), supply and demand must be kept in proper balance to insure stability in pricing. Any influence exerted outside the control of the planners would disrupt their calculations and thus destabilize the closed economy and markets in that economy.
Is it possible, therefore, to have such an economy? In theory, certainly. All you have to do is have no inputs or outputs – complete isolation based on complete self-sufficiency. This has been, more or less, tried. Japan pre-Admiral Perry, for instance. The results were not good as there were numerous times of starvation and the nation remained “backwards” for a long time. And that was not even a completely closed economy.
In any case, if one could isolate and be self-sufficient there would still be fluctuations in supply/demand if for no other reason then the weather. In a closed market such fluctuations would be handled by adjusting the price of the goods in accordance with the ration of supply and demand. But the changes would always be somewhat reactionary as there are always things happening that weren’t predicted. Somebody burns down one of two factories producing this or that and suddenly there’s a shortage. No one could predict it, but it happens. So the economic planners have to react to changing market conditions or leave things as they are. But that, too, won’t work.
It won’t work because the nature of human transaction is to avoid losing value and any “break even” transaction is a loss. Why? Because it took time and energy to make the transaction happen. If I buy a hundred widgets from you and transport them to my store, I need to add my own hourly labor rate to the cost at least, as well as the transportation costs. So that $100 of widgets I bought from you must be sold for, say $110. You can call the $10 gross profit, but, in essence, if it costs me $10 to make the transaction, pay my labor and shipping costs, there is no net profit in it. If I sell it for what I purchased it, I lose. Lose over and over and pretty soon I’m not making any transactions but sitting on a street, probably starving to death. If you leave the markets alone with prescribed prices and those don't reflect market conditions you will get a "black market" very, very quickly.
Thus the first misconception of a closed market: that the transaction is valued at the price offered compared to the price asked, alone. No transaction that is “break even” is actually “fair” to either party. It may look fair, but only if you forgo the totality of the transaction. That totality includes the items mentioned, but also, often, many, many other intangibles.
A second misconception, I believe, in thinking about markets, is that you can actually measure the value of the item. The value of any thing is what you can exchange it for. What most markets do is set that "value" by what the item has traded for in the past. It's "current value" is what it is trading for, at this point in time. It is no guarantee that it's actually worth that amount since market conditions and individual transactions are governed by those making the trade, not by the predictions of those making predictions. And such predictions can be wrong if they don't anticipate sudden fluctuations in supply/demand. In a game like Elvenar the change in the perceived value of scrolls was pretty fast. A couple weeks after the introduction of the Moon Stone Set, you could see it. But since it takes a time to measure the impact of such a change, to analyze it, to suggest “remedies,” to analyze the impact of those “remedies” and to implement them, the adjustment is still forth-coming (or not).
But broadly seen, the Elvenaar economy is neither isolated nor closed.
It is not isolated exactly because transactions are in the hands of the players whose lives do intersect with the game. The emotional and financial state of the players influence their decisions for good or ill. Trades are not controlled even if they are heavily influenced. And if you don’t control the perceived value of a thing you don’t control it’s trade value.
And it is not closed because not only do the players decide what to trade and when, they also purchase and spend diamonds. Diamonds are “imported” by trading for an “external” value. I use diamonds to purchase expansions and that’s pretty much all I’ve done. Why? Because I think the prices on just about everything else too high for the $ I used to purchase the diamonds. The principle here is that if the value of a thing in a closed market is influenced by the value of things outside the closed market, the market cannot be controlled, and is thus, not closed. To the degree the “outside” things influence the market the less the market is closed.
Having said that, we get to three ways the Elvenar economy and markets are not closed and the question of why they are more open that some people would, apparently, like.
1) You can purchase things in the game with money from outside the game. If the value of that which is outside the game fluctuates so will the value of the things inside the game, either directly or indirectly.
2) The actual value of goods is set by those making the transaction, not the system. Whatever claims the system has about the “fair” value do not take into account the intangibles.
3) System pricing is set by and aggregate cost of production rather than individual cost of production plus intangibles within the individual transaction, and thus may out of line with the what the players actually sense is the value of the good.
Edit: I spoke, at first, about a fourth way Elvenaar is not a closed economy here – the use and apparent toleragion of “push accounts” -- but am not certain of it’s validity. I leave this edit just to suggest a line of inquiry.]
Why do people think Elvenar is a closed economy? Because they think the declaration by the devs of what is a fair transaction is the actual determiner of value. That’s the star system. I’ll not go into it here as it’s a bit off topic.
Why is Elvenar a more open economy than people like to admit? The evidence is in how people act.
1) Cross tier trading is up. If it were still considered “bad” or “only good for the really, really small players” people would do it less. But it’s increasing and that tells me the players are exerting their valuations over that of the system.
3) 3 star offers are way up. People are devaluing their boosted goods as they seek to purchase the goods they need. This means that either the value of these goods is not the 1:1 the devs have declared, or there are other, intangibles, that are influencing the game. How about the Spire? I suspect the demand for goods is because negotiating the Spire has risen, but of course, I don’t really know.
4) Scrolls are being discounted over what the devs have declared their value. This is simple supply/demand ratio reaction but it does show that the “enforcement” of the set values is not in the hands of those controlling the “closed economy” but in the individual players.
In a closed economy these things would not occur unless the planners were wildly incompetent. I don't think they are such here and thus, I conclude the openness of the Elvenaar economy is greater than some would consider it to be.
AJ
