Linden Liability and Changing the Rules of the Game

by Urizenus Sklar on 04/01/06 at 7:44 pm

Dow Jonas’s excellent Herald article on the economic consequences of P2P travel has spawned a most interesting discussion on Terra Nova, posted by our friend Ren Reynolds, who is really on a roll.  This discussion, featuring such cyberluminaries as Ted Castronova and Peter Jenkins, has a number of notable highlights, some of which I’ve extracted below the fold.  The headline issue is this: given all the advertising of SL as a place to make real money (and the buyback for hub land owners that seems to recognize their financial interests) is Linden Lab financially liable in this case (or possibly some future case) or is their cover-your-ass ToS language enough to get them off the hook should the issue arise. The jury is not yet in!

Problem is, there’s a disconnect between the TOS and the way things actually are and appear to be run. Yes, Linden Lab is covering their rear in the above-mentioned TOS clauses…but then they put a lot of "Make real money!" in their advertising copy, and do stuff like offer this land buyback.

–Elle Pollock

If LL styles itself as a nation, this is an issue of sovereignty. Governments have certain rights with respect to land and its values, and it seems like Linden is asserting rights like that in its TOS. The likely legal outcome is the shopping mall, though, a place that’s not sovereign but has near-sovereign rights and duties under the laws of a sovereign state. And I’m fairly sure that among those rights and duties will be a requirement that if you want to avoid real-world taxation and regulation, you cannot allow the free liquidity of your in-world currency for out-world money. And by the way, I am kind of shocked at this. Point to point travel will have a dramatic effect on the entire economy. With unconstrained travel, the location of a resource has no effect on price. Only the direct amenity of the resource affects its value. Relative to a world in which movement is costly, that’s an earthquake.

–Ted Castronova

If you’re going to do something this fundamental, and something that strikes deeply at the emergent structures of synthetic society, that undoes history, it seems to me that you have to engage in a different process than what developers are accustomed to: you have to be transparent, you have to be consultative, you have to slowly prepare the ground, and you have to be persuasive about the importance or necessity of the change. Being persuasive means you open up the possibility of being persuaded, e.g., that the change you contemplate might potentially demonstrated to be a bad idea. You have to follow the same formal procedure involved in rezoning a real-world community, only even more so. After the fact compensatory strategies don’t cut it.

–Tim Burke

One concept that seems to be missing from this discussion so far is that one of the original purposes of the telehubs as I understand it was to require players to pass by and be exposed to locations that they would not otherwise visit. This faciliated a certain amount of serendipitous interaction with players of different interests and viewpoints, avoiding Sunstein’s scenario of echo chambers and deliberative enclaves where like-minded persons merely reinforce and amplify each other’s points. Point to point transport greatly reduces the opportunities for serendipitous encounters, as well as for effective public protests. Maybe that is what the Lindens wish to accomplish?

–Peter Jenkins


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