Sweatshops are not a game
New York Times posted a story online Tuesday (appearing in print July 1, 2009, B4) on China's latest attempts to restrict the trade and use of virtual money, banning virtual currencies being exchanged for real world goods...
NYT reports Edward Castronova, a professor of telecommunications at Indiana University Bloomington, approves China's response and considers virtual currencies pose a possible threat to world economies.
The buying and selling of the make-believe currencies used in online gaming has become so widespread that Chinese authorities fear it will affect the real economy.NYT writes that the China Internet Network Information Center found that nearly $2 billion in virtual currency was traded in China in 2008. Real world sweatshops producing earned virtual credits later to be resold at profit to overseas customers and online marketplaces trading in virtual goods for real goods and cash are two sides of the online coin.
NYT reports Edward Castronova, a professor of telecommunications at Indiana University Bloomington, approves China's response and considers virtual currencies pose a possible threat to world economies.
As virtual currencies take over more and more purchasing power, control over the effective money supply shifts from the central bank to the game developers.Author of such works as, Exodus to the Virtual World: How Online Fun Is Changing Reality and Synthetic Worlds: The Business and Culture of Online Games, Castronova as early as 2001 predicted:
Unlike many internet ventures, virtual worlds are making money -- with annual revenues expected to top USD 1.5 billion by 2004 -- and if network effects are as powerful here as they have been with other internet innovations, virtual worlds may soon become the primary venue for all online activity.While describing China's current regulations to rein in online gaming as their toughest, NYT points out the activity continues to grow.
Labels: economy, internet, technology
posted by stephen at 12:49 AM
1 Comments:
I'm not too certain I understand virtual money or virtual economy, but then, being that the economy itself is so pressing an issue to figure out, apparently even for economists, I don't feel so much in the dark.
Isn't the 'real world' economy virtual in and of itself?
We have no gold standard and essentially the economy is based on GNPs, trade, etc.
Still sounds virtual.
China is the major manufacturer of goods in the world with chains like Walmart happily sending jobs overseas to be performed for pennies on the hour; and we still wonder where our economy has gone.
Since the economy is so volatile as it is, can, or does, a virtual economy have an affect on it?
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