PLEX is too cheap


(zluq zabaa) #344

Socialism is about making sure everybody has food, a house, school, a career, good sex, mobility and the freedom to start a new life whenever they want. Socialism IS NOT to devalue real work in order to gain advantages in a hobby. You are right about the healthcare thing, but EVE is of zero, null, nada, niente, importance compared to healthcare. It’s a good game, but just a game.

Luxury is a matter of definition. In socialism it would probably exist, just not with today’s meaning that only the few can have it. It will mean something like: purely a matter of taste, subjective value, so after all needs of everybody can be fulfilled, after a proper amount is put into science and all that: the rest can be luxury. Human nature changes with the way humans are organizing their societies, so who knows, maybe in a true socialism they would look back and wonder what kind of pitiful beings most people were in todays world.


(Captain C0ld) #345

PLEX should be expensive, because ISK is cheap.
PLEX was cheap when ISK was expensive. Simple as that.

So, don’t compare prices to 2008, 'cause back then earning 300M isk was as easy as earning 1.5B nowadays. It’s just following the ISK printing curve…


(Sitting Bull Lakota) #346

Yarp.
PLEX more than any other item is valued at the rate of isk creation. Relative to PLEX and other items, the EvE economy experiences very little, if any, inflation.
As an indicator of the health of the economy, soaring PLEX prices tends to indicate runaway isk faucets.
Well that or the Ruple is tanking from oil related sanctions against Russia.
Hard to know.


(Teckos Pech) #347

So…looks at PLEX prices in game no runaway isk faucets then.


(Teckos Pech) #348

Okay…

That the price of PLEX complaints are largely ridiculous. There are all these doom-n-gloom scenarios but they never come to pass. Right now Plex have stabilized after increasing. They went down to 2.75 million each, then rose to about 3.3 million and have stabilized. My guess is we’ll see another down swing unless something happens to put alot of ISK in players pockets for very little effort.

The PLEX market is a result, IMO, of what is known as technical trading. That is players are employing various strategies to try and make ISK off the PLEX market. Strategies can be pretty sophisticated or pretty simple depending on the individual. When a market for assets (stocks, PLEX, etc.) exhibit technical trading you get more volatility and “little” booms and busts.

Yes, there has been an overall trend towards PLEX prices rising, but that can initially be explained by the PLEX market valuing PLEX too low. This is another thing seen in markets, especially early on. In the early stages players who buy PLEX to sell for ISK may have a high opportunity cost of time–i.e. they just cannot take the time to grind ISK. So with the introduction of PLEX (or GTCs) a market forms where those with a high opportunity cost of time cand engage in transactions with those who have a low opportunity cost of time.

The high opportunity cost of time player wants ISK, but doesn’t want to grind. The low opportunity cost of time player grinds, but doesn’t want to spend real money on his sub. So this arrangements leads to mutually beneficial transactions. Early on, prices can start low, but as people with low opportunity cost of time learn of this market the price will be bid up over time. This is not uncommon in asset markets. That the initial offering is low, look at the price of Amazon’s stock at the time of their IPO. It was $18/share while the current price is over $1,500. Or look at the experimental economics literature on this. These experiments start off where each player has an endowment of cash and financial assets. The asset has a fixed value. Typically in these experiments the price for the assets is well below their actual value, then the prices are bid up well above their actual value then near the end of the experiment the market crashes.

Most people with a high opportunity cost of time probably have such a high opportunity of cost because they are doing things in real life to earn real money–i.e. their hourly (implicit) wage could be say $40 (after taxes). So spending 1 hours worth of work and buying 1,100 PLEX and paying for a full years subscription with real money means they have 3.6 billion ISK to blow on ships and modules. Now, suppose they grind for that ISK, it will take a little over 18 hours (assuming a whopping 200 million ISK/hour), and at $40/hour that is $726, They can either “spend” $726 to get 3.6 billion or they can spend $40.

Complaints about PLEX prices are based, generally speaking, on a fundamental misunderstanding of how asset markets work generally. Want an example, here we go…

This dingleberry wants to create artificial scarcity in the market. He is happier when there are no PLEX to buy at any price than when the PLEX price is above this arbitrary limit he has chosen based on nothing other than…I like it. Pure foolishness.

Some people will see an upward trend and project it out a number of periods and come up with ridiculous predictions like PLEX prices being 5 million ISK in a few months or the like. Yet, markets are self correcting. As PLEX prices rise in game it creates and incentive to buy them from CCP and sell them in game which increases the supply and drives prices down. As prices go down, people who are buying PLEX for game time have an incentive to start buying them especially as they have no shelf-life. These fluctuations also create opportunities for speculators as well. Like right now the price increases have capped out. Many speculators who bought PLEX when it was cheaper (say August and September) may now be looking to liquidate their stash of PLEX and take their paper gains and make them real.

These threads are the result of economic ignorance and an anti-market bias and even a pessimism bias. Look, there is even somebody advocating “socialism” (not entirely though, as setting prices is part of socialism, collective ownership of the means of production is also a key feature) in game even though socialism has never ever worked anywhere it has been tried in earnest (and predictably he’ll either assert "that was not real socialism or he will erroneously point to someplace like the Scandinavian countries and will claim market economies with a robust social safety net are socialists). Add on top of this that people are generally rationally ignorant and rationally irrational at times…these threads are a rich source of looking at all the cognitive biases that afflict humans and lead them to believe errant nonsense.


(Teckos Pech) #349

I have been playing long enough to recall when it was GTCs and not PLEX. And yeah, it was different. You could make good ISK in null, but it was belt ratting back then, not anomalies. You’d have to warp from belt to belt and kill whatever was there. There was some theorizing that if you killed the belt rats “just so” you’d have a higher chance of getting a really good spawn.

And mineral prices were very different then too. Tritanium was super cheap and “mining with guns” was a thing (you’d take your mission/ratting loot and simply reprocess it vs. selling the items). And drone poo out in the drone regions was how they made ISK there.

There have been lots of changes that make price comparisons across time problematic. Even ship prices have changed, in part, by changes to their inputs. And of course, changes to the various aspects of the ships themselves. As CCP changes bonuses and limitations it affects the value of the ship for various players which in turn affects the price.


(Jonah Gravenstein) #350

I saw Forbes use the phrase “compassionate capitalism” to describe the Nordic model.


(Teckos Pech) #351

Another term is welfare capitalism. I like to describe the intent as having a social safety net to keep people from falling into poverty even when they do nothing wrong, but also does not trap them in a near poverty lifestyle. Despite my pro-market stance I’m fine with this, at least as a concept. Let the market process generate wealth, some of which is used to help those out who need it. Of course, the devil is in the details of how it is implemented–i.e. the incentives such a system can engender (as I noted we don’t want to create an vicious cycle). The Nordic countries seem to have figured it out for their situation…how it would work in other countries is a very big question as culture and social norms and taboos do matter and vary from country-to-country and region-to-region.


(Butt Cigar) #352

Wow. That’s the most hilarious definition of Socialism I’ve ever heard. Socialism is fine, until you run out of other peoples’ money.


(zluq zabaa) #353

Hehe, the obligatory Thatcher quote.

Honestly, I think her more famous comment “there is no such thing as society” made me laughing more - because, if there really was no society, how comes that there is a paid job as leader of the country she had, how is there even a country and even a law that forbids people to throw pineapples at her for saying such dumb things? :slight_smile:

It’s basically the same thing with the quote you brought. What is money? Pretty simple, eh? It is the one thing you can exchange for every other thing that is created/delivered by other humans. How are all these other things created or delivered? Right, by work, human work. People always work, they want to and they have to.

The idea of socialism is that every single human being reaps the fruits of their work. So different from now, where people have no health insurance, no real home, no car and no holidays - even though they work, while a clever set of laws and indirect threat of violence (the state) makes the few very rich profit from the work of others. Meh, pretty lame in my opinion.

Now, if today a country runs out of money, what does it do? One of two things.
Either, it “borrows” money from their central bank, which means not much more than creating money out of thin air and hoping that they can enforce/create conditions in the near future that will allow for higher capital turnover (no matter what it may mean for the general population, e.g. cuts here and there).
Or, it stops spending on public infrastructure - so basically the only task a state even has (or the only reason for it to exist so to say). That means, less money to schools, motorways, healthcare and so on.

Not because it is so bad, but because it has to. In this system, money has to grow, capital has to grow. There is no option of not growing.

In socialism, money would be quite different from today. It’s only a pointer to real economics then and not the silent force of the market that needs to grow and grow, no matter the human needs or capabilities. No, in a true socialism, if it ever comes, the society could not run out of money, because it certainly won’t run out of human work And sure, this means the general level of luxury would be equal. If you had a Ferrari, then because many people can have one. Not like now, when you can have a Ferrari if you managed to exploit the labour of other people in order to afford it, while they can barely put food on the table for their kids.

Nice catchy phrase though, makes it easy to not think too much about it, I guess.


(Butt Cigar) #354

Wow. I triggered an essay. didn’t read it.


(Foggy Bernstein) #355

Damn Socialists! Give 'em an inch, right?

Next thing you know, they’ll be wanting free police, free fire fighters, free roads, free health care, free walls to keep out undesirables, free military, free public libraries, free public schools, free parks, free public toilets, free… Oh…


(Teckos Pech) #356

The definition of socialism: the collective (communal, common, etc.) ownership of the means of production.

This is usually followed with elimination of profits and losses and often prices. Of course, this system, in practice completely breaks down and never works. Ever.

But this is really all academic. In that the economy in EVE Online in an economy that exemplifies the market process. Players rarely struggle to get rich in game. In fact, the game is often characterized as having too much production–i.e. too much stuff–and not enough destruction. To have socialism across the game we’d need a single planning entity which would have to be CCP and there is no way they could match player wants with production in any meaningful manner…it would be a complete shitshow.


(cBOLTSON) #357

It was a while ago now but in my head it doesnt seem that long ago that full plex`s were around 300m isk… oh those days are long long gone now.


(March rabbit) #358

Is there any examples of socialism trying to take off and fail without “help” of established capitalism?


(Teckos Pech) #359

The only place socialism “works” is in small groups. Households are typically run along socialist lines. The member of the household that needs the most resources gets the most resources. Thing is there is often a very close relationship between members of a household, typically speaking. Small groups that are highly cohesive can also work pretty well too. So a group of 50, 100 or even 200 people can operate in a socialist manner. But beyond that it tends to fall apart and rather quickly because the relationships are not there.

Your computer that you are using to type comments on these forums…who made it? You have no idea. Who made the various components? You don’t know. How about the people who made/produced the components for the components? Or who shipped various raw materials and intermediate goods around? Who shipped the final product to you? You don’t even know how many people that entails let alone their names or anything about them. They are all anonymous to you. Completely and totally. Markets entail what is known as anonymous exchange. Where you engage in exchange and you know literally nothing about 99.9% of the people who put that product in front of you. And the same for them. You may very well produce a product that is used by who knows how many people. They don’t know you; you don’t know them. But it all works, more or less. It isn’t perfect, but it sure the Hell is better than any system of socialism beyond some group of 100-200 people.

Markets really took off around 1800. And look at what has happened to extreme poverty on a global scale over time since then,


(March rabbit) #360

While i appreciate your post as informative i still want to see some proofs for the quoted part. Why you deem such relations as needed? Is it really nothing can be done? Etc…


(Teckos Pech) #361

Do you really want me to believe you care about people you don’t know just like those you do know? You would care about a stranger and give him or her the exact same resources as your spouse/child/parent? I don’t think so.


(Ramona McCandless) #362

As I cant stand my family, Id be more inclined to help a stranger tbh.

What is it that for some people being related is suddenly a thing of value?


(March rabbit) #363

Yes, and this makes me think that to make socialism work (following your theory) you only need to change people.
According to You people should start to care about someone beyond themselfs and their close relatives. And seeing today some people already being not cavemen i guess this is not impossible to have it in mass one day.
So using your very theory socialism is very possible in future. And it is only impossible today.

Do i miss something?