Ages ago, when somebody tried to explain to me the concept of “capital”, it was the version probably most people have heard of: a factor that creates more productive value, or maybe some good that is used in production of other goods, something along those lines. Then you get some examples of “capital” like a tool, a machine, a car… then you hear it’s contrasted with consumptive raw material, non-productive land resource, labor, etc. etc. I always thought it was completely vague and incomprehensible. What things are capital? Why is a tool capital, for example? I’ve got plenty of tools sitting around doing nothing of value most of the time, and when I use them I never produce anything.

Later I realized this was a stupid way of explaining it (or I was just stupid at the time). Capital isn’t a “thing”, it isn’t the physical object at all, it is the usage. Whether something is capital is completely determined by intention, that is, how it is intended to be used, hence the vague definition.

For example a $100 bill, depending on how it is used, can be a consumptive good, a store of value, or capital. If you burn the paper money as offering to the gods, it is a consumptive good. If you keep it under the mattress to buy stuff later, it is a store of value. If you invest it by putting it to use in a productive venture or lending it to somebody whom you expect to do so, then it becomes capital. It’s the same $100 bill, the only difference is intention…
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Old news that I never digested from about a year ago.

• Mutilated Furries, Flying Phalluses: Put the Blame on Griefers, the Sociopaths of the Virtual World (Woah)
• Anshe Chung Studios (Wow)
• The Virtual Taxman Cometh (Hmm)

At first I wondered, well what exactly is being produced in game economies that are of productive value? Then, I thought, wait, what is being produced in real economies that are of productive value? Especially the “service sector.” Lots of things can be dismissed as having no productive value, but as long as there is demand, there is value, and where there is value, there is an economy waiting to develop. I guess that’s the first lesson.

Secondly, there is no way Anshe Chung would have been as successful in the real world without the virtual world existing. Not only would she not have pursued some of the, erm, career opportunities, let’s say, nor would she have been given the kind of opportunities such as real estate “development” to amass the starting capital as easily — most opportunities in the real world have been taken or have strong players already firmly entrenched. It puts a new kink in the argument of work vs. luck in terms of financial (or general) success in life, and it highlights the fine boundary between obeying social constraints vs. giving up on risk taking.

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