Thursday, January 05, 2006

The High Cost of Living

Dr. Eli Berniker (of Pacific Lutheran University's School of Business) recently presented a paper arguing that materialistic tends are on the decline - that people are worrying less about material goods and more about "cultural" goods, i.e. the relating to the exchange of ideas. His premise is that, because these are products of imagination, and because imagination is unlimited, the economic world may be on the brink of going from "economies of scarcity" where things have value because others don't have them, to "economies of plenty," with all of the happy consequences that implies. Dr. Berniker thinks this is already happening on a wide scale. I think he's wrong.

To be clear, I think he's wrong on two levels. First, I think we live in an exceedingly and perhaps increasingly materialistic culture. His assertion that there is a "massive movement" toward sharing over spending isn't, in my view, actually happening. Secondly, I think his proposal that a "cultural economy" can supplant that phenomenon any time in the near future is laughable. Even the domains he feels best represent this economic revolution are, in fact, the classical capitalism model in new clothes.

Consider one of his so-called "cultural goods:" movies. Movies cost an astonishing amount of money to make today. B-movies and "cheap" art films cost hundreds of thousands to make today, while A-list movies cost tens or even hundreds of millions of dollars. The reason for (and result of) this is that the entire process is consumptive. An ideal cinema patron pays as much as $10 to see the movie the opening week and then pays up to $25 to own it when it comes out on DVD. Given that the DVD costs the a major studio less than $5 to manufacture and package, the result is a windfall of profits. The problem is the scarcity of Ideal Patrons. Movies today is high-stakes gambling, where educated guesses can make boatloads (School of Rock), while reckless management (The Adventures of Pluto Nash) can quickly ruin a company. A-list actors are paid in the millions for the same reasons as A-list athletes: star power (be it talent or a pretty face) substantially drives sales.

Even if movies are a poor example, Dr. Berniker expounds the Internet as the true locus of the Cultural Economy. He cites the smash-hit freeware game Counter-Strike as an example. Sadly, however, he misrepresents both Counter-Strike and the online world, and fails to see the underlying dollars and cents.

Counter-Strike wasn't a game per se; it was a mod (i.e. a "modification" of a commercial game, taking the existing game and rebuilding things within its framework) of the commercially and critically successful Half-Life. Because Half-Life was light-years above anything else on the market, everyone had it. Because everyone had it, everyone could get Counter-Strike and because Counterstrike did what it did very, very well, everyone played Counter-Strike. But without the development that went into Half-Life, Counter-Strike couldn't exist. Many modern games live and die by their moddability, and some games (such as the Elder Scrolls series) are famous for including the complete set of development tools used to build the game with every commercial release. More importantly, though, Counter-Strike is the exception to the rule. Virtually every successful multiplayer game has been a commercial product, produced by game studios with their eyes on the bottom line.

As to Massively Multiplayer Online Games (MMOGs), the current top dog is World of Warcraft (or WoW), which has a mind-blowing 5 million subscribers worldwide, all ponying up anywhere from $4 to $15 (depending on the nation in question) a month to continue playing. As MMOGs go, it's the biggest success yet achieved. But consider what it takes to run an MMOG - persistent worlds require very, very good hardware to maintain, and much of WoW's income goes right back into the hundreds and hundreds of servers that the world exists on. In contrast, the game industry has recently been rocked by the spectacular failures of several big-budget MMOGs. The game industry has a high rate of failure in general, but MMOGs require an especially large initial investment because of server technology, and initial commercial failure completely kills such games.

Which brings us to a third problem with the online world: time. As I've written elsewhere, the real currency of most MMOGs is time. Most in-game currencies are ephemeral and cannot legally be transformed into real-world cash (though illegal in-game currency sales are becoming a big deal - for more info, see Gold Farming), the only thing standing between a player and wealth is time spent playing. Thus, a game that wastes a lot of your time is "expensive." Because the non-human content in these games (graphics, abilities, landscapes) is limited and time-consuming to expand, it's smart to stretch that content out a little (or a lot) by forcing things to take time. That way, a person keeps paying you the monthly fee.

And what is the end objective of nearly all MMOGs? Getting better stuff. WoW has a vibrant material economy, with player-created mercantile goods being traded at all times. Growing MMOG upstart EVE Online is especially notable in this case, because its science-fiction setting presents an unregulated, ruthless hyper-capitalist economy run by player-created, player-owned, and player-operated corporations, complete with CEOs, embezzlement, intrigue, and scams. EVE Online is regarded by many as "too intense" because it is *so* materialistic and competitive. Some critics have complained that "playing the game is like having a second job." Others find the no-holds-barred semi-lawless corporate/frontier environment thrilling, precisely because of the risk and intrigue. My point is that MMOGs are not the bastion of "cultural economy" Dr. Berniker describes.

As an aside, for insight into WoW, here is an unusual source of cultural information. This "virtual ethnography" class used WoW as their topic of study. The link provides access to the "projects" (i.e. blogs) of the students in the class, as they studied various aspects of the game. Many deal with commercial (i.e. materialistic) problems. As another aside, many accuse WoW of having an overwhelming market share, which is stifling nascent competition, though others disagree.

Is Dr. Berniker's idea fundamentally wrong? At one level, no. I consider myself to be quite the "cultural manufacturer," as one of the key benefits of roleplaying is "infinite fun for a finite investment, given time." Running the game I'm currently running (which is one of the more ambitious ones I've undertaken) is time-consuming, but provides me and my friends with about 6 hours of entertainment a week. Given typical attendance, holidays, and the like, that's about 1500 man-hours of entertainment a year that I orchestrate and we provide one another. The monetary cost is trivial, perhaps a half-dozen books I spent a total of $90 on over the years. Note, however, that this bounty of leisure costs me time. For every hour of gameplay, I spend at least one in preparation over the course of the week. If I preferred the act of playing to the process of creating, I'd be getting the shaft. Of course, it's quite the opposite: I prefer to run games than to participate in them (I like building stories more than hearing them), but the truth is that people like me are the exception. The manufacture of "cultural goods" can be tremendously time-consuming.

More broadly, nearly all of my entertainments come at minimal cost to myself apart from time. Take Wikraffiti, the new blog I'm collaborating on. We're doing it mainly because it's fun, not because we're working a financial angle. My contributions of Wikipedia have a similar motivation. So I'm definitely doing what Dr. Berniker describes, in a way. I make my own fun, and the benefit I accrue is reduced personal expense on top of the satisfaction I get from it. But I can't imagine normal people doing this sort of thing. Every time I get to interact with working-class types (such as the working stiffs I met working in a call center or for the state), they find the very idea that I roleplay really strange, as if they can't fathom "playing pretend" as adults. For every one of me there is, cruising the Internet at comparatively minimal cost, there are many, many (dozens? hundreds?) normal people who would find Dr. Berniker's longings for an economy of public sharing terrifying or stupid, even threatening.

I would be nice if everyone told stories, plays one another music, and build each other cakes. But the fact is that most of the details you're accustomed to in your day-to-day life can't be accomplished by non-materialistic means. Ask any guy off the street if he'd rather have weekly storytime or a new cellphone and you'll see what I mean. The truth is that what Dr. Berniker is seeing is an illusion. Materialistic and consumptive living are *so* pervasive now that the alternative (the *real* alternative, i.e. the lifestyle necessary) is unfathomable to us. So we don't see it as materialistic any more. The fact that it's ubiquitous makes it "normal," and thus our imaginings of what a better world might be ignore the realities of how the world we live in has developed. The dangerous idea that we can become innured to our own soulessness is, sadly, unsurprising.

The truth is that, at every step in most of Dr. Berniker's examples, someone is profiting. Sierra On-line (who published Half-Life) enthusiastically supported Counter-Strike because the latter couldn't be played without the former. The friendships (even romances and marriages) that are a result of the tight-knit social bonds grown in the world of MMOGs is a service being paid for on a monthly basis. Even in roleplaying, the "Open Game License" that allowed Dungeons and Dragons products to be produced by anyone with no licensing fee was a move made assuming it would bolster sales of the core rule books. Very, very few "cultural products" out there can compete with commercial products in the mainstream. Linux is free and powerful, but very few use it. Why? Because of habit and materialistic preference. I want to play commercial games. You, dear reader, might want to use Microsoft Word (though you could always switch to OpenOffice, hint hint).

My criticism of Dr. Berniker's ideas is, by my own admission, harsh, perhaps even unfair. We clearly share certain values, but mine has always been the role of the cynic. I'm a long-term optimist, which I have often smarmily defined as "things will be better by the time me and my entirely generation have died of old age, or perhaps earlier." There is no doubt that subcultures now exist that are explicitely anti-materialistic, and the inexpensive flow of information has made "community entertainment" an increasingly prevalent phenomenon. As to the former, I think such subcultures are typical of a materialistic society. A visit to the mall will tell you that the cogs of industry are turning just fine. In regards to the latter, I think the truth is that social activity is enjoyable, and that a context to interact socially is going to have appeal in most cases. What we are seeing in the game industry is an effect of market force, a slow and bleary recognition by corporations that mediating social environments (especially social games) can mean big money. While many free venues exist (such as this one),the general public remains out of touch with these resources.

I hope that more people who make their own fun eventually exist. But we live in an age of consumers trained and branded by advertising, inundated by incentives to spend. Americans replace their cars, on average, every 10,000 miles. Pricey gadgetry is the new fad, with iPods, cellphones, and PDAs becoming extremely common. And, sadly, I don't see it slowing down any time soon. Rather than rejoicing that this movement is upon us, Dr. Berniker should be more prescriptive. Instilling in people the value of "cultural goods" can't be bad, but Dr. Berniker is not persuasively demonstrating how to help spread these values. I invite him to consider what methods, if any, can be used to make people aware of the fun right under their noses on more than a person-by-person way.

"What are you doing about it?" you might ask. Simple: I'm writing a blog.


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