Second Life, Economic Evolution and the CopyBot
The big news from the metaverse this last week has been "CopyBot," an application that allows a Second Life user to duplicate... well, just about anything, including clothing and objects other Second Life denizens have created for sale. James "Hamlet" Au offers a recap of the situation at his New World Notes site; be sure to read the comments to get a sense of how upset many SL residents are about this program.
As Sven Johnson suggests, the important story here isn't about Second Life per se, but about the clash between a scarcity-based economy and an abundance-based world.
The Second Life internal economy was predicated on the notion that designers could produce in-game objects that they could then sell; these objects would ostensibly be scarce (in the economic sense) because the designer could put limits on how many copies s/he would sell, and because -- in principle -- other residents couldn't make copies except by tedious efforts to reproduce a design by hand. Although the only "raw material" involved in the creation of Second Life goods is the memory & storage space needed on the SL server, the capability to design desirable objects serves as a market-generating form of scarcity. No matter that everyone can have the capability to make limitless numbers of in-game objects -- unless you can design something that other people want, you're just making digital junk.
But with CopyBot, these limitations are less meaningful, because it eliminates the barriers to making your own duplicates of other people's designs. It's not tedious or challenging, it's a click of a button. As a result, apparently over a hundred in-game designers have shut down in protest, and threats of lawsuits and copyright-infringement actions are flying.
If the ability to make copies continues to exist, these vendors argue, the basis of the SL economy will be destroyed. And since there's a direct conversion between in-game money and real-world money, anything that weakens the SL economy threatens the real-world economic livelihoods of many SL residents. They're right -- but is the Second Life economy worth saving?
What Linden Lab has tried to do is replicate the atom-world scarcity rules in a bit-world environment. Nobody should be surprised in any way that this doesn't work for long. It is the nature of bits to be easily copied. Even if Linden manages to shut down CopyBot, it will arise again in another form, and probably as something much harder to squelch. The death of Napster becomes the explosion of Gnutella and Bit Torrent; the death of CopyBot will mean the emergence of something more powerful and less easily eliminated. It's delightfully Darwinian.
Bit world economies based on scarcity are inherently fragile, and cannot survive. To the degree that Second Life is a test bed for a future of abundance, then, the way that the Second Life community (both the builders and the players) responds to this reality will give us an early indication of how the real world will respond to the economic challenges of nanofactories and distributed fabrication. The question is, will Second Life be a model of successful evolution or a painful failure to adapt?
(Update: I wrote a follow-up to this article: CopyBot and the Abundance Economy, Revisited)