Just throwing stuff at the wall here, but with the coming population collapse, I'm thinking we might be able to derive some lessons or maybe even a blueprint for how to navigate said collapse by examining MMORPG economies. I know that in the past economists have studied WoW in earnest so maybe there's still some insights yet to be mined.
How does the economy change once the server population starts shrinking?
I know from my own experience playing FFXI back in the early 2010s that there were regularly specialized materials on the auction house that wouldn't get stocked regularly. In my case it was some fish and for a couple weeks I was able to make good money at it because while there was almost no one supplying the item there was definitely still a demand for it. Then someone started flooding the market and I moved on to other ventures. No idea if the end result of that was a temporary supply or if it turned into a stable availability of the product. Maybe the one guy just made a whole bunch of product the one time and then once it was sold he moved on to the next thing and all the smaller producers like me ended up gone and the product itself just outright vanished from the market.
I imagine the dynamic is quite different now as the population dwindles further, although they do consolidate servers so that might throw a wrench in the fact finding opportunities here.
The number one thing driving concern for declining population is the gold plated social benefits programs every western nation has saddled itself with. When there is not enough working age population to support the gold plated benefits for the old, you must either lessen the benefits for the old, raise taxes on the existing working age population and risk riots and/or revolution, or get more working age people.
Old people vote, and no politician wants to risk their comfortable sinecure, so all rapidly aging nations are going the import the working age populations from the third world route, at a very rapid pace, with predictable results. Those foreign born working age people don't work, act just like they did in the shit holes they came from, and in general cause all manner of strife where there was none before.
The future of the west is grandpa selling his two million dollar house to blackrock so he can burn all the money on vacations and end-of-life care while his unmarried and childless grandkids prepare for open war against the imported turd world invaders who live off the state.
Certainly not. They would be in big trouble if they acted like that back home. Here, they can get away with anything.
Only white
guiltcountries. Japan hasn’t. China definitely won’t.China had 1 child policy for decades and never resorted to “solving” it by mass third world migration.
China has been growing faster than most western countries for decades.
its a lie that migration is needed.
So, mmo arent a great allegory for real world economies because there isn't need in a virtual world, but we can gain some basic ideas that might resonate with people who have experienced them but might not be able to correlate those experiences with the real world in their mind.
Supply vs demand is the basis of all economy. Your fish werent being supplied, and demand was high so price was good. Others saw this and flooded the market to try and gain some of those high profits, then decreasing demand(more people fishing them) and increasing supply, driving the value down, eventually driving "gold rushers" out of the industry and stabilizing to the new price based on fulfilling the finite demand, with price based on the effort to produce the good. This is a stable economy.
This is how a need based economy works too. It takes land, time, skill, and labor to produce food. If food is rare, its price will be high. If land is rare, its price will be high. Etc.
When price is high, people will see the profitability and produce it in abundance, then driving the price down and eventually normalizing. This is disrupted if you do not have either a truly free market, allowing for direct competition, or a captured market(i.e. guilds) who need to maintain proper supply demand stability to ensure continued prosperity for the producers. Guilds work VERY WELL for sustenance production, while free markets work better for luxury markets. The reason is that if sustenance production crashes, people die. A guild market fluctuates less, and also hinders new additions to production, ensuring a continued desire for production.
This is another huge hole in the MMO economy that does not make a good analogy for the real world:
Fish rots.
You can't just have an over abundance of things lying around to dump on the market when demand suddenly rises. People would have thrown out their excess fish a LONG time ago.
An entire, massive segment of the economy is the economy of scale and shipping things in a timely fashion before the goods go bad. None of this is represented in any MMO economy that I am aware of.
What they DO represent well, however, is Fiat currency and inflation when more currency is simply dumped into the economy with each new update.
You make an excellent point, which goes into the balance of value. If you want something you cant make locally it costs more. If its perishable the market pressures determine what you make so it doesnt spoil, but it also requires continued effort, increasing cost.
I quit playing an old MMORPG because the economy was unsustainable. Endgame material depended on items that themselves depended on materials of very low-level monster drops, but without a healthy population of new players willing to farm for those drops the items were very expensive. You could, of course, farm the materials themselves with was boring and tedious. Of you could pay someone else to do it, but since there was such a demand the prices of the materials blew through the the earnings you would get from the endgame content.
It made myself and my friends ask what the point of it was, if we spent most of the game either busting our asses but unable to collect wealth, or to spend time not having fun as we mindlessly grind for crafting mats. Instead of sticking with the game, we could be playing another MMORPG or even just some multiplayer game and be having fun.
Population collapse should not be as much an issue as currently is.
Automation progresses should cover more then enough of the population decline. We keep seeing automation in services, agronomy , medicine.
What it does impact is profits. Less consumer base = less money.
Over simplified but this is how I'm seeing the current trend. Do we really need 10 people to oversight the work of 4 engineers? Do we really need 100 people in marketing with 10 people working on the actual product? Do we need this bloated state and federal system?
In my un-educated opinion the current system should be able to maintain the population decline. It will not create infinite market growth but do we need that?
That is the not what I'm saying. The population decline can be supported thru automation. You can't complain that automation is taking jobs and that the population is declining.
Automation taking jobs should mean we need less immigrants to harvest crops and automation in medicine means that you can get your diagnosis based on some tests with very little doctor interaction and less of a chance the doctor will screw up.
Most places we have immigrants can be supported by automation to some extent but no one wants that because initial investment is high, requires planning and does not increase the consumer market.
I'm bad of explaining my own train of thought.
Initial issue: population decline and how it hurts the economy and sustainability of a country
current solution: mass migration to stop population decline
proposed solution: automation instead of mass migration
cons to new solution: those with money want growth, want more consumers, want house prices to go up, want cheap labor and less of an investment.
Automation taking away jobs and having a population decline are not compatible issues as one should solve the other.
Additional input: lack of social security for old people. Automation can match the needs but does it also cause growth? Economic growth is need it for social security for old people.
Additional analysis and solution is need it to tackle the increase cost of social security for old people.
One monkey wrench I see emerging is that this requires the populace to be able to learn the new technology and at the current rate of technological advancement I don't think that's actually a given. Between tech becoming more complex and our population becoming dumber(in part because we keep importing third worlders) we might find ourselves in a situation where those new jobs just require more cognitive capacity than the population has to offer up.
As to the rest of your post, wouldn't those 70 excess just be put to work providing luxury goods and services, or are we accounting for those in the machines + 30 people already? It's a grim outlook to be sure.
Well historically the answer is to burn off the excess population in war, but even that is becoming more and more tech centric.
Its the opposite as I see it. I work in what you might call a fundamental supply chain. My industry WILL always exist, even if the nukes drop.
There's nothing left here except shuffling things through, making things just bad enough to need repair, so you can quit and get a better job fixing what the last guy let decline. Endlessly cycling on that principle until somebody dies.
It doesnt HAVE to be this way. At all, in fact in reality our industry really behaves as a complex ecosystem in stability. Production demands can't keep up with the full scale of growth that we aim for, but the competitors are always ready to scrape a bit of fat off for their overlarge pile, just long enough for you to right the ship and scrape off of THEM.
It'd be completely illegal if you codified it, but that'd be the way to achieve efficiency of the system.
MMOs being entirely artificial can just cheat and add resources as needed.
The Homecoming server group for City of Heroes always knew they were never going to have the same numbers the retail servers did so took steps to both support and avoid certain previous market issues.
Back on retail the materials known as Salvage which were used to create the equivalent of gear and cosmetics were only ever supplied by the players. There were 3 brackets that ranged from level 4 up to 50. These brackets were 4-25, 20-39, and 35-50. Understandably the highest bracket was one of the easiest to farm in general but also because actual dedicated farm builds functioned at level 50 so simply meant significantly more time invested in sourcing drops.
This again understandably led to lower bracket drops being less available and culminated in one or two specific low level drops, Luck Charms and something else, being bought out by one player and re-listed at several magnitudes greater in price.
This itself is just how markets can work, low supply and high demand can lead to price gouging and what limited stocks being available getting manipulated.
What Homecoming did to avoid this was change how the game auction house classified salvage so that ALL salvage was fungible within its respective category. All common/white salvage was considered the same, so if someone was selling a bracket 3 Spirit Thorn it could technically be sold as a bracket 1 Luck Charm when someone else specifically bought that instead of the actual item listed. This was the same for uncommon/yellow salvage, and rare/orange salvage.
What this ended up meaning was that level 50 farmers could in theory perpetually supply the AH with everything since all the bracket 3 drops they got could just as easily translate into bracket 1 or bracket 2 items depending on what others were buying. This helped solve potential supply issues, and because setting up a farm build was relatively easy many players had one and would simply bulk dump anything they got for as low as possible which then kept prices down.
What Homecoming also did was set up the AH to always have its own seeded infinite supply of items at set prices, albeit prices players would rarely ever reach unless things got weird, which they did a few times.
You would rarely, if ever, find a player spending 100k on yellow salvage because player supply was so great everyone kept undercutting each other. But just in case that player supply ran low for whatever reason there was the 100k line which meant you never had to spend more than that for what you wanted. Some still would because they didn't know this was how things were set up, and others simply didn't care because earning currency with a farmer was not only extremely easy but something you could quite literally do passively by AFKing said farm build in a map and either going to do something else or even just going to sleep.
Homecoming didn't mind players doing this, they knew farmers were helping supply the server with cheaper alternatives than the seeded items, in addition to things that weren't seeded like the very rare/purple drops. Players complained about farmers but in the end they were more advantageous than otherwise, many simply didn't want to do it themselves and didn't want others to have the option to either.
This sort of thing only really happens on private servers and small ones at that which aren't still looking for other means to milk players for money. A lot of WoW servers still have various p2w options on their own 3rd party shops which range from cosmetics to gear to profession perks that cause problems, so it depends a lot of the time on which game, which server group, and which devs you end up with whether there are attempts to improve QoL of whether it's simply just another cash revenue scam being attempted.
Either way, games too easily break the rules for economies since they can quite literally print money with the press of a button, but also print services and rewards which distinguishes them from how IRL money printing works. We're not yet at the point you can simply press a button and have an F-22 Raptor ready to go infront of someone.
Having played HC for some years I'll add the only real limit the devs imposed on farmers was having no more than 3 characters logged in at a time. Players could easily manage this by running multiple clients at once and barring special circumstances like open world raids, where players were usually limited to just 1 character/account unless on a low pop server that wouldn't reach the 50 player zone cap, the only thing stopping anyone from running 3 farmers at the same time was their own motivation and time to organise it all. Plus the point doing so meant they couldn't then actually play the game at the same time due to the 3 character limit.
Still, it was extremely helpful having farmers dumping so much into the economy because they not only earned the item drops but also generated currency while doing it. The AH would always take a cut which removed currency from the game. So those who "made" money through flipping and reselling were really only redistributing currency while also removing some per transaction. Farmers on the other hand would often generate so much they'd spend just as much on things they wanted because they had millions, if not billions, and didn't care how much they spent, so sometimes poorer players would get far more for their sale than expected.
Also at times sometimes people fucked up and put an extra 0 or even a 9, which is how I had items I usually sold for 10 mil sometimes earning me 100 mil if not more.
After the black death first ravaged europe, killing something like half the population, the people left behind had one of the largest transfers of wealth, social mobility and lifting of restrictions ever.
Before this, wages had stagnated, work was hard to come by and seasonal and day laborers were basically told to be happy with what they got, cause there was always someone more desperate to do the work for the pay offered.
Once the plague passed, farms that had been rented out needed new tenants. Now, the market was flooded with far to few workers. Land owners had to negotiate rather than dictate terms, and the average tenant farmer got a better deal at lower cost in money, goods or labor owed per year.
The same happened to seasonal workers and day laborers. Now you actually had to pay them whay they wanted, not what the most desperate would take.
It also made people more mobile, people travelled farther for work or to fins vacant tenancy. And all this added wealth being put in the hands of what had been the lowest social strata ensured that they could generate long term wealth and made the change of social status possible.
The population of many parts of Europe remained lower for centuries, not coming back up to pre-Black death for centuries, only to explode in the industrial revolution.
Without migration, the aging population of Europe and North America would probably lead to an economic miracle for those who remain, who would then have more children.
With migration replacing those, we will stagnate into spiraling social costs.