“…it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things…” –Niccolo Machiavelli, The Prince
Anarchists and libertarians frequently debate three topics concerning a free society: how to establish a free society, how to prevent its decline, and how to provide infrastructure. One might infer that the goal is to prepare by identifying and overcoming barriers to reduce the probability of failure and minimize start-up costs. These questions are often approached by extrapolating from areas where freedom exists, by engaging in thought experiments, or by trial and error.
When asked how institutions will function, anarchists like Michael Malice and Jeff Berwick often point out that most human interactions already take place in a state of anarchy.[1,2] Austrian economists sometimes explain markets with fictional stories about the island of Robinson Crusoe. While these stories are useful, such thought experiments consider the actions of imaginary people with imaginary preferences. Neither approach can reveal a black swan event, the unexpected extreme consequence.
Rather, ideas must be tested in reality to discover events that appear obvious in hindsight, but here the costs and risks are high. People will make huge and often avoidable mistakes. Changing social and economic systems will risk human lives, freedom, and valuable capital. An opportunity to test ideas at significantly lower cost and risk is a valuable way to protect life, liberty, and property. Virtual worlds provide this opportunity because the people involved and their preferences are real.
Liberty Minecraft is a profit-generating demonstration of a free society, where real people with real preferences act without state intervention. This article is the second in a quarterly series of updates on the Liberty Minecraft project, and it will explore four topics: specialization at the level of town management, developing land conflicts and their origin, the costs and benefits of culture building, innovation and it’s appearance in market prices. The goal is to demonstrate that a digital world is a rich environment for exploring a free society.
The New Stockholm Purchase
On Aug. 31, 2018, a player named Heronproject started to acquire land in the west end of Scar City. If one judges by initial investment, his plan was ambitious. In our first month he accumulated more than 12,000 square meters of high-value property. It was called New Stockholm. One could see in New Stockholm the expression of a preference to organize one’s own affairs in a new way, but development came to a halt just days after it began. Heronproject was and remains a busy Swede. Someone with greater ability, more time, or both would have to take over. To achieve his goal, Heronproject decided to sell New Stockholm.
On Nov. 10, a player named Haksndot purchased this land package for an undisclosed eight-figure sum. Heronproject sold everything except for Ruby Tower, making a tidy fortune and a calculated bet: Haksndot has experience. He is the owner and creator of Hrafnia, the largest estate in the Old World. He is the monopoly owner of Origo Station and The Netherway, the first and largest transit system in the New World. He also founded the Terrain and Agricultural Restoration Project, a free market initiative from the Old World.
By Nov. 12, New Stockholm was gone. In its place, Haksndot has created an opportunity to try again with a few iterations. Unlike other districts in Liberty Minecraft which sell management privileges (where Haksndot would remain the property owner) he has split the land into plots which may be purchased outright. The plots are intersected by privately owned streets and squares.
By Jan. 18, 2019, Haksndot had sold at least seven houses in New Stockholm for a total price of $9.06 million. Of the five players to buy claims, Heronproject was one of the first. Investing in land at a flat rate of $10,000 per square meter represents a considerable challenge for these new buyers. One plot has been converted into a market for trading and producing Nether Wart. Nether Wart is primarily used when brewing potions, but it is inexpensive to produce and represents a small part of our world’s economy. It is hard to imagine how any of these new buyers will return their cost of capital and earn a profit, but one need not imagine. Whether and how these buyers will profit will be discovered in time.
Developing Land Conflicts
Some players of Minecraft engage in an activity called griefing; they join a Minecraft server and damage unprotected property. Liberty Minecraft deals with this in two ways: players may purchase land using Claim Blocks which use computer code to protect the land, or they may invest in land which the rightful owner has intentionally left unprotected. Digital security is necessary to protect digital property because aggressors may use digital means like proxy servers and aliases to rejoin our world after they are banned. With property rights hard coded into the world, our players are free to do everything they are able to do, provided they do not break the server rule.
Even so, when players invest in land they do not own, this often ends in conflict. This scenario has been playing out underneath New Stockholm. One of the new denizens, named Aewheros, decided to core out the underground and build roads. Colloquially, this new area is being called Underholm. In time, claim owners will extend their land claim and interrupt Aewheros’ plans, settling the conflict over who owns what. The rightful land claim owners retain the option to protect any land beneath their claim. Until their land claim is extended into the ground, the area remains unprotected land which anyone may use.
Aewheros has also permitted a player named illdeletethis to build on his own claim. The plan was for illdeletethis to start building a home and then purchase the land, but now the house appears to be finished and still no sale has been made. illdeletethis has even built a second house which was not part of the initial plan. In this way, Aewheros will experience both sides of a conflict over land by investing in land he does not own and permitting another to invest in land he does own. This produces a remarkable opportunity to see how one person will navigate both sides of a difficult conflict over scarce resources.
The first conflict has already occurred. A visitor named shortanglewinner discovered Underholm on Jan. 9, and immediately started digging up the unprotected roads. Aewheros, who was present at the time had no means to protect his investment. He decided to complain that shortanglewinner was being unfriendly. In time, perhaps Aewheros will be grateful that the flaw in his design was exposed quickly because after his flaw was clearly demonstrated it was quickly solved. Haksndot, the proper land owner, exercised the option to extend his claims. Today, the main roads of Underholm are protected property belonging to Haksndot. He has also granted Aewheros permission to continue building the roads, a privilege which Haksndot is extending to the claim owners of New Stockholm. This demonstrates how exercising exclusive control over private property is a means to end conflict.
Culture Building, Warning Signs, and Dealing with Aggressors
Beginning in 2017, I decided to research and develop a new custom for Liberty Minecraft. This custom was developed with the aid of scientific research on attrition rates as presented by Daniel Coyle in The Culture Code. When players join the New World, I attempt to perform three tasks: 1) bring them food to share, 2) engage with them to learn what they are best and worst at, or what they like about Minecraft, and 3) present them with the symbol of Liberty Minecraft and the tool which players use to claim land, a Golden Axe that bears their name.
When I succeed in performing all three tasks, this custom has produced incredible results which seem wildly out of proportion to their cost. Players who have joined since the launch of our New World and participated in this welcoming custom have been far more content and secure in their social status and more willing and interested to participate in group activities. This success has been encouraging, so I will develop an in-game player networking system which will prompt our community to perform these tasks.
Attempting and failing to perform these three tasks has come to represent a warning that the new player or players may not integrate into our community easily. In December 2018, a group of five new players joined Liberty Minecraft. Within ten days, three of these players rejected my one rule and were banned. A fourth left while being investigated for using hacks. I was unsuccessful in sharing food with this group. Four of the five did not offer an opportunity and the other one walked away when I attempted to share food. None of the five responded when I asked questions about them. None were presented with Golden Axes.
Other warning signs were present. The players were dressed as Klansmen or as Hitler. For completeness, a fifth player wore a Belgium flag, but the significance of this is lost on me. Also, when players asked them to not swear this new group simultaneously claimed that swearing is against the rules (it is not) and continued to swear, choosing to violate a rule which they claim exists. This shows both a denial of reality and a willingness to violate perceived rules.
Liberty Minecraft’s one rule is to resolve nonviolent disputes nonviolently. Anyone who rejects or violates this rule will be banned. On Dec. 9, one of the group of five advocated that communism is a better way to organize society than anarcho-capitalism, and was banned. Another player rejected my one rule in regard to political matters and was banned. The remaining three players immediately started responding all at once to claim their friend was banned for arbitrary reasons. For nine minutes they spammed the game’s chat with the same inaccurate statement. This group was organized. One hour later, a third player admitted that he would not accept my one rule and was banned from Liberty Minecraft.
Lessons and Observations
Hostile players will use the good will of our community to build up arms. The group asked where they could purchase gunpowder and other materials to create TNT and fire-starters. Unclaimed land was later destroyed or burned with items they purchased. This is not a violation of my rule because there is no dispute. Unclaimed land in Liberty Minecraft is my unprotected property. I permit the players to use it or purchase the land from me.
In my absence, players of Liberty Minecraft will protect the natural landscape and impose social norms by acquiring land and raising prices. Aewheros and a player named K9us teamed up to purchase land surrounding the group’s land claim, protecting it from further damage. A player named Remixster was granted permission to replant the burned forests. K9us granted this permission at no charge and Remixster was given saplings to begin restoring the forest. One of the group who had destroyed land also requested permission. K9us offered to sell them permission for $30,000 per block which is the highest price ever demanded for access to land in Liberty Minecraft.
Rule breakers may be prepared. The group used mass messaging to claim that their group members were banned for arbitrary reasons. They invested at least three days of their time to build up supplies. They may have been using hacked game clients but left before I could make this determination.
Developing Private Health Care
In Survival mode, a Minecraft player will die when their 10 heart icons run out. A Minecraft player can lose health in many ways, for example; when they are struck by a monster, by drowning or falling a great distance, or by walking into a Cactus. Health can be restored by eating food, by consuming Health Potions, or by standing within range of a Regeneration Beacon. Over the last four months, players of Liberty Minecraft have reduced the price of Beacons by 96 percent.
To obtain a Beacon, Minecraft players must find a Nether Fortress and battle tens or hundreds of Wither Skeletons until they recover three skulls. Next they must summon The Wither, a very powerful monster. Players must defeat the monster to recover its Nether Star. Finally, with a Nether Star in hand, they can craft a Beacon. When Liberty Minecraft’s New World opened, there were no Beacons. First players had to remove the greatest obstacle to one’s use of a product: its nonexistence. Haksndot and a player named Cardano_ff were both early developers in The Nether, one of Minecraft’s three dimensions. Each player created a Wither Skeleton farm and each farm made the task of producing skulls more efficient and less hazardous. This demonstrates that capitalists in a digital free market will eliminate hazards as a means to protect their digital capital.
On Oct. 11, Cardano_ff offered a Beacon on the market for $10 million, representing between ten and twenty hours of Diamond mining. The next day Haksndot listed one for $5 million. Cardano_ff matched his price, but it was unclear what price the market would support. The price fell to $3 million, then $2.5 million, then $2 million. At every step Haksndot and Cardano_ff offered the same price. It is unclear how many sales occurred during this time. Haksndot has expressed that most of his early Beacon sales were transacted “off the books.” This occurs whenever players trade without using a ChestShop. This is a common practice when an item is in short supply and/or is traded rarely.
After one week on the market, two Beacons sold for a total of $4 million on Oct. 18. It seems that these trades were enough to produce a shortage because the market price started fluctuating higher. The price rose to $2.5 million, then $3 million, and by Oct. 20 it had reached $5 million. That day, a third supplier entered the market when K9us offered to sell a Beacon, matching Haksndot’s price of $5 million. By Oct. 24, the price had fallen to $2 million, and once again two more Beacons were sold. By Nov. 11, the price had fallen by another 25 percent, and two more buyers purchased three Beacons. The price moved back to $2 million. The market remained shallow and a low volume of trading was causing quite a splash. Whenever new buyers entered at a lower price, the price rebounded.
A Market Shock
On Dec. 1, a fourth supplier appeared. A player named freakdown shocked the market by offering Beacons for $1 million each, cutting the market price in half. Two new buyers appeared. One of them was K9us, a former seller. As before, new buyers appeared at lower prices and the market moved, except this time the price fell. On Dec. 7, freakdown’s price was $600,000, another 40 percent decline. At first it appears to violate the old adage: “this time is [never] different.” In fact this has happened before, a month earlier when a player named Shahayhay cut prices on Blaze rods for the second time. The cause in that case was innovation. What about now?
A significant, unidentified event had occurred, and it was changing player behavior. Players started buying out of convenience, buying in bulk, and buying for the first time. A player named TheScrubJay decided to purchase a Beacon simply because it was easier than going home to fight a Wither. After all, he would want more than one. On Dec. 23, Aewheros bought three more beacons at the bulk rate of $483,333 each. Then on Jan. 7, freakdown cut his price to $400,000 or ten Beacons for $250,000 each, another decline. A player named NorraLigan entered the market to purchase her first Beacon at the new low price. In four months our players have provided over $18 million in value to each other, cutting the price of Beacons by 96 percent. A player named Mr_Digs now provides free health care at Ivory Tower, simply for stopping by.
The Nether Factory
It is clear that Beacon prices have fallen, but at least one big question remains: what was the cause? Our market experienced a spike in demand after an 80 percent decline. Then the price fell by half, and then it fell by half again just for good measure. How did freakdown do it?
Supply increases with falling prices only happen in a couple of ways. Either the cost of materials has dropped, or the process has become more efficient, reducing the time to deliver the end product. For Beacons, the most expensive producer good is a Nether Star, which requires three Wither Skeleton skulls. Obtaining these skulls started as a dangerous and labor-intensive task. Players entered The Nether and traversed an uncharted, inhospitable landscape of lava lakes and strong monsters in search of a Nether Fortress.
The risk of death is rarely higher, and the cost of dying can set players back hundreds of thousands of dollars. Armor, weapons, and tools which players carry and use while exploring The Nether can range in price from $50,000 to over $1 million. Better gear is often more costly. For example, a fully enchanted Diamond Sword is longer lasting, hits harder, and increases the probability of dropping valuable loot. However, in Oct. 2018, this sword was trading for $250,000. On the other hand, a successful return trip may take five hours, resulting in an opportunity cost of $4–5 million. A failed expedition represented millions in losses. Players have to balance risks to maximize their expected return. Both Cardano_ff and Haksndot overcame these obstacles to produce the world’s first Beacons. Today, rail lines connect directly to both farms, and the risk of death is practically zero with a round trip time of less than one hour.
To increase production, freakdown had to do something different. He searched for hours to find and prepare the perfect Nether Fortress, which allows him to spawn monsters in a relatively concentrated area. The farm produces enough Wither Skulls to create more than 200 Beacons per day. The materials used in construction are worth less than $100,000, but his opportunity cost brings the total investment to nearly $25 million. Today, the entire farm can be operated automatically and produces gold, coal, and bones as byproducts.
Liberty Minecraft provides an opportunity to protect life, liberty, and property by examining a free society at low cost and low risk. Players spontaneously organize their affairs to build competing roads and towns. Conflict over unowned land occurs regularly. Innovating in cultural development provides a way to welcome new group members and identify troublemakers at an early stage. When aggressors enter into the community, the members will band together to enforce norms and protect the natural landscape. Finally, the presence of innovation can be observed in prices when a spike in demand is met with a sustained increase in supply and decline in prices. These and many other lessons are experienced in Liberty Minecraft.
- Malice, Michael; Rogan, Joe (2017, May 23). “Joe Rogan Experience #963 – Michael Malice.”
- Berwick, Jeff (2019, Jan. 15). “Regulation vs Anarchy: A Last Chance to Free Humanity.”
- Calton, Chris (2018, Jan. 24). “Minecraft and Crusoe Economics.” Mises Institute.
- Dempsey, Nathan. “Fiscal 2017 Donor Report.” libertyminecraft.com.
- Coyle, Daniel (2018). The Culture Code: The Secrets of Highly Successful Groups. New York: Bantam Books.
- Mises, Ludwig von (1958, Sept. 9). “Liberty and Property.” Mises Institute.