The defining feature of this time period is the Internet, which provides unprecedented freedom of speech and access to information. But the more things change, the more they remain the same. Millennials have suffered from the same steady march against economic freedom. We understand much about social media and relatively little about free markets. But a new generation can know about a free society right now, and this led me to build Liberty Minecraft.
For the past quarter century, the Internet has generated emergent digital economies in which people exchange digital items for analog items, usually fiat currency. These economies offer pay at any rate, avoiding minimum wage laws that remove low rungs on the economic ladder. Digital economies also exist in massively multiplayer online games.
In 2007, more than one hundred thousand people were employed as gold farmers in World of Warcraft for as little as thirty cents per hour. A gold farmer is a person who plays multiplayer games to earn in-game currency for the purpose of selling it for real-world currency. Earning in-game wealth takes time and effort. Because online games can be accessed all over the world, people can earn a competitive wage in relatively low-wage markets by selling in-game currency to players in high-wage markets. Gold farming uses server bandwidth in exchange for money that players wish to spend on the game, and this costs game developers. It was once typical for game developers to ban gold farmers, but in recent years they have turned toward economic freedom as a solution to rising costs due to gold farming.
Today, players of Runescape and Eve Online may exchange in-game wealth for tokens called Bonds or CCP, respectively. These tokens are purchased for cash by one player, traded in game to another player, and may be used to pay for membership services that would otherwise cost $10-$15 per month. Game developers like play-to-pay business models because they can sell membership services for a 30% premium and use their own players to regain market share from gold farmers. For gamers, play-to-pay models can provide dollar-equivalent hourly wages of less than $1, but highly skilled players can earn $5 or more. One may earn a wage during the least productive periods of their daily lives, producing at least some value instead of none.
Transactions are not always small. For example, a player of Entropia Universe spent $2.5 million to purchase virtual real estate in 2012. This was done because in the game, land owners share the revenue generated by player-to-player transactions, and this revenue is directly convertible to US dollars. This speculative bet may have yielded annual returns of 27 percent. By their nature, speculations infrequently generate a profit, but one develops ability by trial and error.
Digital economies make it easier to learn about economics. Many capitalist acts between consenting adults are illegal in the real world, but such barriers are rare in online games. Digital exchanges execute billions of trades per month for any of a thousand virtual commodities. Players of all ages can make thousands of equity decisions in those markets without having to file capital gains taxes. People can lose a digital shirt and learn real economic lessons.
Experiencing economic freedom in games is all well and good. This may partly explain why millennials were so attracted to Ron Paul’s “End the Fed” movement. However, organizing society by libertarian principles is about more than economics. Non-aggression and private property require freedom from the state. No such freedom presently exists in the real world. The lack of such empirical examples may help one understand why those same millennials support Bernie Sanders and Donald Trump just four years later. We do not understand freedom from the state, and this has not changed. Because a libertarian society is foreign to our experience, people ask questions like “who will build the roads?” The answer is actually simple. Without a state, people who want roads and are capable of building them do so. I have seen this in action because of Minecraft.
Original Conditions in the World of Minecraft
Minecraft is a sandbox game. Play is self-organized within a block building, 3D world. Players may select one of three basic game modes. In Creative, one may access a menu with infinite resources. In Survival, one must gather and consume resources to live but will respawn if they die. Hardcore mode is like Survival, but death is final.
Minecraft worlds are large by default. From an origin, a player may travel 30,000 kilometers along any axis and may build 256 meters to the world’s zenith. This is roughly half the size of Neptune by surface area (if it were a terrestrial planet) or seven times the surface area of Earth. Each Minecraft world has three dimensions of this size and depth. Each world is generated algorithmically from an 8-byte seed, a string of numbers. There are 264 possible 8-byte strings, leading to over 18 quadrillion possible Minecraft worlds.
The Virtual State of Nature
Online, Minecraft is lawless. Before modifications of any kind, the only rules which govern player behavior are physical laws. You have exclusive control over your player character but anyone may attack and try to kill you, thereby gaining access to resources that you carry or protect. However, in such large worlds with abundant ‘natural’ resources, violent conflict is relatively rare because it is simply easier to work for what one wants.
Competition among Minecraft servers is unfettered and meritocratic. Engagement is high; Minecraft is the best-selling computer game at present. The barrier to entry is low: a Minecraft server can be created or copied in minutes, deployed online at low cost, and operated by anyone. In less than one minute, a player may select and visit any of thousands of servers. Participation is voluntary; players always have the option to leave a Minecraft server at once.
Minecraft servers have diverse rule sets. An infinite number of server configurations are possible with server plugins that modify the game. Within commercial use guidelines and technical limitations, server operators establish rules according to their preference. These rules need not and often do not conform with existing laws in the real world. These rules can be and are often enforced by computer code. In this way, all Minecraft servers are new principalities which may or may not be governed by smart contracts.
Social orders are spontaneously created within Minecraft. Players develop institutions that are optimized to solve problems. Users build means to produce, distribute, and trade valued goods, especially food and building materials. They create farms, roads and shelters, and also chests to organize and store items for later use. Players create and promote their own social norms. If a player does not fill in potholes or replant trees to replace those that they have felled, other players may try to change their behavior. This may take various forms, from warning them in the game’s chat to attacking problematic players. Those who share values and aesthetics build their own communities and exclude (sometimes by violence) others with opposing values. Spontaneous order thus develops with or without an explicit ethical framework.
In Minecraft, people experience social orders with arbitrary rules. So, what happens if one creates a Minecraft server that defines rules by libertarian ethics and Austrian economics? In my case, the result is Liberty Minecraft.
Long Experience in a New Order
Liberty Minecraft is a sandbox for freedom. The goal was to establish a practice environment where people may test ideas within a digital free society and may learn about freedom by playing it. For over nine months, this goal has been achieved. Play is ordered spontaneously within the physical laws of Survival Minecraft. In a number of other ways Liberty Minecraft is different.
Liberty Minecraft is not as large as a default Minecraft setting. As before, there are three dimensions but their size has changed. The Overworld is seven kilometers on a side; just under nineteen square miles in surface area. This is roughly the size of Manhattan. The Nether, another region, is just as large. The End, a place devoid of most resources, is ten times larger.
Some resources in Liberty Minecraft are renewable, while others are not. Resources must be gathered in order to be used or exchanged. Products are either created by the players or discovered in scarce structures that are native to Minecraft worlds. Liberty Minecraft could someday run out of trees, water, or soil, among other things.
Liberty Minecraft has few rules. Only one rule constrains player behavior; resolve nonviolent disputes nonviolently. Players of Liberty Minecraft must seek nonviolent solutions to the problem of scarcity. Two other rules further specify conditions that permit a player to use my server: read and understand the rules, and do not hack the server. The fourth rule is followed by myself and by the server itself. This rule does not bind the players, but rather provides them with an option and a promise: everything you claim is yours; if someone else claimed it first, then it is not yours. Private property rights within Liberty Minecraft are enforced by smart contracts.
To claim property, a player may use a claim tool on unclaimed land and must spend claim blocks to create a claim. Claim blocks cost $20 each. A player may also purchase land from an existing claim holder. In both cases, smart contracts are optional and available to execute these transactions. Smart contracts also enforce all other forms of property on the server. This applies to player characters.
One may engage in combat with others provided that each player turns on the ability to do so. In Liberty Minecraft, a player character is protected from other players by default. This protection is optional. A player may disable these protections and enter player-versus-player mode. By entering this game mode, a player consents to be attacked at will by other players. This allows for combat between two or more people to take place, but only if all parties involved agree to enter into mutual combat.
Competition within Liberty Minecraft is unfettered and meritocratic. In under one minute, anyone who owns Minecraft for PC can join the server and begin to act within a libertarian social order. Player interactions are voluntary, with complete freedoms of association and discrimination. No one is required or forbidden to provide for others.
Liberty Minecraft uses Diamonds, one of the in-game commodities, as money. At present, Diamonds are used to create the best tools and armor in Minecraft. They are also scarce, durable, and fungible. Within Survival Minecraft, diamonds cannot be farmed or produced synthetically. To obtain a diamond, one must search for hidden chests in scarce structures or dig underground for diamond ore.
Minecraft players seem to have freely chosen Diamonds as the medium of exchange. Thus, I have chosen Diamonds as money. However, a Diamond is indivisible. This problem was addressed by creating a Diamond Exchange to split a Diamond into $1,000. The value of a dollar is measured to fifteen decimal places, so there is plenty of room for revaluation if money becomes too valuable to perform ordinary transactions.
Engagement is strong so far; since the official launch in March 2017, players have engaged in more than 100,000 trades using our shop system. A single trade may consist of anything from one item to more than a thousand items, all player created. More than 8,000 hours have been logged by the players at the time of this writing. Liberty Minecraft is also cash flow positive and profitable.
Some Problems with Liberty Minecraft
There are four clear problems with Liberty Minecraft. First, the money is inherently disinflationary. Land claims as private property can only be traded when players have a “claim blocks from play” value that is larger than the size of the claim being traded, which is a technical limitation. To provide a real estate market with existing smart contracts, players must somehow accumulate claim blocks from play. To achieve this, players accumulate 20 claim blocks per hour, which is an arbitrary amount. All players receive the same amount per hour of play. Claim blocks are worth $20 each, so players currently receive a universal basic income of $400 per hour of play. Universal basic income is an obviously anti-libertarian element, but it does present the opportunity to solve this problem and observe what happens when a libertarian society eliminates universal basic income.
Second, within Liberty Minecraft, power is centralized in a single, flawed operator. I, Nathan Dempsey, make mistakes and correct them. Both types of actions can cause problems. For instance, when I created the world border in The End, I incorrectly calculated the area. The End was roughly ten times larger than I intended, and if I had left it that way, our world would become far too large for me to economically perform regular backups. I recalculated and changed the world size. This changes the availability of resources that are found in The End. I will make more mistakes as time goes on. However, if any player decides that my choices are intolerable they may (with some work) use software to download the world and their property. Then, they may put their version of the world online with server software and compete with me for players. This functions somewhat like a hard fork of a cryptocurrency. Following a land dispute, a player decided that absolute property rights are intolerable and left after downloading the world, which proves both that new competitors may enter my line of production and that I cannot be an ultimate decision maker.
Third, the conditions of the game and server make theft and assault impossible. A player might create a death trap, but these can only be made on one’s own property, on unclaimed land, or on land in which they have been granted permission by the claim owner to create such hazards. Because property claims are impossible to violate (unless I chose to or a hacker managed to alter the server status), Liberty Minecraft does not provide a model for dealing with aggressors against property rights aside from having the server owner (me) remove someone from the server.
Finally, the Terms of Commercial Use prohibit anyone from selling soft currency for hard currency. Therefore, I cannot offer the play-to-pay model described in the opening without violating the Terms of Commercial Use. The terms provide a narrow range of ways that I can provide value to players in exchange for money. This even applies to affiliate marketing (which is not permitted), such as with Amazon. The consequence is that I must innovate within these narrow terms, which creates an interesting problem but deviates from a libertarian order. And ultimately, Mojang, the company that developed Minecraft, is regulated by the state, so Liberty Minecraft still operates within a statist framework to some degree.
Minecraft spontaneously generates social orders. Liberty Minecraft is an effort to create such an order based upon Austrian economics with libertarian ethics. Within Liberty Minecraft, players operate in an unfettered free market and experience social freedoms that are opposed by state aggression. This experience sharpens one’s thinking about economic and social affairs. Experiencing economic freedom online without freedom from the state has led people to reject the Federal Reserve System but favor the state at large. The goal of this project is to test libertarian ideas in a simulated environment and lead people to reject the state in favor of private property rights and non-aggression, which one experiences within Liberty Minecraft. Liberty Minecraft has some important problems that may be solved in future updates, and represents nothing less than a proof-of-concept for exploring social orders in games.
- Valdes, Giancarlo. “Jagex Wages War against Gold Farming in RuneScape 3 with Bonds” VentureBeat, 25 Sept. 2013. http://venturebeat.com/2013/09/25/jagex-wages-war-against-gold-farming-in-runescape-3-with-bonds/
- Dutton, Fred. “Entropia Universe player spends $2.5 million on virtual real estate” Eurogamer.net, 4 Apr. 2012. http://www.eurogamer.net/articles/2012-04-04-entropia-universe-player-spends-USD2-5-million-on-virtual-real-estate
- Block, Walter. “Fake Economic News | Walter Block” YouTube, Mises Media, 4 Aug. 2017. www.youtube.com/watch?v=FiwhlU4d-nY
- Dempsey, Nathan. “How The World Works” Liberty Minecraft, 14 Oct. 2017. www.libertyminecraft.com/how-the-world-works/
- Dempsey, Nathan. “How Private Property Works” Liberty Minecraft, 4 June 2017. www.libertyminecraft.com/how-private-property-works
- Dempsey, Nathan. “How The Money Works” Liberty Minecraft, 4 June 2017. www.libertyminecraft.com/how-the-money-works/
- Dempsey, Nathan. “Free Market Update: Land Disputes” Liberty Minecraft, July 2017. https://www.libertyminecraft.com/free-market-update-land-disputes/
- Hoppe, Hans-Hermann (2001). Democracy: The God That Failed. Transaction Publishers. p. 21.