Archive for May, 2007

Geography: Meaningful for Modern Economic Growth?

May 9, 2007

Chances are you’ve at least heard of Jared Diamond and his book Guns, Germs, and Steel (originally published in 1997).  It won the Pulitzer Prize and does a stand up job of refuting most implicitly or explicitly racist or ethnocentric explanations for the disparate levels of development and stability across nations and continents.  Diamond’s theory is founded on the idea that different ancient societies began making technological leaps and bounds at different times depending on the contemporary geography that attended.  In general, the orientation of the continent (east-west vs. north-south), the availability of domesticable animals and plants and the relative nutritive content of the latter, the climate, the macro- and microfauna – all these factors, which lie outside the scope of the human equation – vary from region to region.  That one modern group of humans is richer or has more power than another, says Diamond, is ultimately determined by the prehistoric, unfair distribution of natural resources and favorable accidents of birth and settlement. 

And the theory is pretty sound, or at least appears so upon a cursory examination of the data.  Leave it to a modern economist, however, to take a good theory and stretch well beyond reason.  I speak of a paper by Douglas Hibbs and Ola Olsson, in which they develop a methodology to explain modern GDP/capita via a series of measurements of a nation’s “prehistoric biogeographical endowment.”  They find strong correlations between modern GDP/capita and things like prehistoric climate, axis, available domesticable plants and animals, etc.  Perhaps most provocative is their assertion that the quality of a nations institutions is explicable in large part by the attending prehistoric biogeography.

It is at this point in reading the paper that I became quite perturbed.  It is very misleading to use modern nation-states, none of which existed in any way shape or form until just a  few hundred years ago (and that at best – most modern African and near East nations did not exist until the middle of this century!), as an analytical unit when measuring the effect of a series of events that occurred as much as 10000 years ago.  Modern political boundaries were not determined by geography.  In fact, most borders on the impoverished continents of South America and Africa were imposed haphazardly and arbitrarily by the colonial powers, regardless of the ethnic makeup of the regions that were split up.  As a consequence, you have many ethnic groups that are split up into two different states, others which were forced to live together under the same flag who would not otherwise choose to do so.  Dense populations are suddenly created in areas unconducive to dense population, leading to proliferation of disease, poverty, and conflict. 

My point is simply this:  Prehistoric Geography has about as much causative effect on present day GDP/capita as the Big Bang does.  It is very hard to make the case that the system that produced modern day circumstances was entirely predetermined.  That is, the power of cultural interaction to determine present circumstances has long outstripped the effects geography would have.  It would be one thing to expalin Mesopotamia’s cropping-up with reference to geography.  It’s entirely misleading to say that Sudan (for example) is poor because of its prehistoric biogeographical predispositions.  Geography vested power, perhaps, but it is the use of that power towards destructive ends that gives us our current situations. 


World of Warcraft: The New Economy

May 9, 2007

Although my reserach agenda for WoW appears halted (and likely just stone dead), I don’t think that necessarily precludes from writing about virtual economies. 

So in that vein I think I want to bring up a new design aspect of the WoW expansion (The Burning Crusade) about which, I must say, I am somewhat unhappy.  This concerns the way that the professions have been changed such that you are unable to buy and sell the fruits of your labors in the economy. 

For instance, blacksmiths were long separated between weaponsmiths and armorsmiths.  In the original version, even specialized smiths could buy and sell their goods and services as they saw fit.  With the expansion came a new (and seemingly unreasonable restriction) on that aspect of the smithing trade – and now armor and weaponsmith products can only be used by armor and weaponsmiths, respectively.  From what I understand, this has happenend also in tailoring, and though I’m not sure, probably in leatherworking as well.  I don’t know about jewelcrafting, though I do understand that there are certain products of the trade that can not be shared with others.

So why do it?  I’ll just focus my analysis on smithing, but I think with some modification it could be applied to the others.  The main problem may be that Blizzard simply made the products of the trade so powerful – far more powerful level-for-level than anything you can pick up in any non-heroic 5-man instance – that if, say, a warrior weaponsmith and a warrior armorsmith were to be able to produce and trade, they would have much less incentive to hit instances more than once or twice just to finish quests.  Still, this seems rather myopic.  Armorsmiths can’t make shields, and at a higher level the only thing they can really make is some crazy chest-pieces.  Wep-smiths can only make, well, weapons, so you couldn’t argue that the two could trade at higher levels thus significantly reducing the number of warriors that would be willing to be MT or OT in an instance.  In any event, by making the pieces more powerful than what you can pick up in an instance, they actually give you an incentive to bother collecting the materials for the recipe.  I mean, I spent a week getting together what I needed for the first epic chestpiece that I made.  I recall that before the expansion the prospect of collecting what you needed for armormithing was so daunting, and the rewards for your effort so small, that i never really bothered making anything.  I would just go in the instances and hope for good luck. 

Actually I really can’t think of one good reason why they would do it.  It doesn’t diversify the products in the economy; in fact, it takes upper level crafters out of the economy.  It doesn’t contribute to the social aspect of the game for the same reason: it takes people out of the economy.  I can only conceive that Blizzard reasoned that people weren’t crafting because they had no incentive to do so, so the specialized smithing professions were not contributing anything more to the economic/social aspect of the game. So, they thought, we can decrease the material requirements and/or make the crafted pieces more powerful than what can be acquired through regular instance runs.  But, if we do that, people might stop playing the instances, so we should require that only the professionals themselves can utilize their product.  So while weaponsmiths and armorsmiths might be crafting and using their own weapons and armor, they certainly participating any more in the social or economic aspect of the game as a results. 

Face facts, however:  While the pieces are better than what the professions used to be able to make, the materials are still expensive and collection is time-consuming.  I can’t imagine that loosening usage restrictions would actually hurt game play, especially when you consider the economic advantages that would attend such deregulation.  I know I would be smithing more often if I could actually really offer something to customers.