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Henry Haphorn Gallente Majesta Empire	Posted - 2010.11.17 03:43:00 - [1] When I look at the world economy and compare it to the economy of New Eden, I can't help put wonder, which of the two are superior in terms of a stable model? At first, I really wasn't so sure how to determine the answer to that question. As I browsed the Jita market, I noticed a valid frame of reference was available. The Rifter (T1 Minmatar Frigate) in Jita at the time of this posting is going for about 200,000 ISK. In the real world, a Boeing 747 back in 2008* (about the same length as a Rifter*) costed at least $200 Million. Now, seeing as a combat-worthy spaceship with all its armor, navigation, and propulsion equal to that of a Rifter would cost way more than $200 Million in the real world economy, how is it that a Boeing 747 (with its primitive design) in real life would cost more than a Rifter in Jita? Does this mean that New Eden's economy is far stronger than that of the real world and that a Boeing 747 built in Jita would probably cost no more than 2,000 ISK? Or am I wrong? I'm no economic expert at all, so I'm not sure what to make of this. Another thing I am wondering is how (if I'm correct) the New Eden economy got stronger than that of the real world economy? Is this ISK-driven economy an example of how the real life economy should operate? Does a paper-money economy create more problems than an electronic-money economy such as new Eden's? References: http://www.boeing.com/commercial/prices/index.html ** http://www.airliners.net/aircraft-data/stats.main?id=100
Tamarana Minmatar C.L.A.W.	Posted - 2010.11.17 04:19:00 - [2] New Eden economy is superior to Earth Economy. What matter is not the electronic / paper money. Both ISK and paper money like $US or úUK or Ç are fiat money. The comparison of a 747 and a Rifter is misleading. New Eden economy is way much more larger than the economy of Earth 2010. In a 5.000 solar systems cluster we can suppose that the capital goods available are much more than on Earth, the global population is greater and so the productivity of individuals is orders of magnitude greater. It is like comparing the productivity of a peasant of 1000 AD and a peasant 2000 AD. What put New Eden economy above the global economy 2010 is the low taxes regime, the ability of the people to act without asking permission from authorities, the simple laws, the strong protection of the private properties of capsuleers. This permit people to work to produce ever increasing quantities of goods for themselves and for others and lowering prices. In the RW this don't happen, for practical reasons sometimes, for political reasons usually. Real people is taxed 10-20x than capsuleers in New Eden. Half of the wealth produced in places like Europe or the US is taken by the government to be used in various wasteful ways. regulations are often both wasteful and damaging. It is not a surprise that the RW economy grow slower than the New Eden economy.
Lederstrumpf	Posted - 2010.11.17 04:22:00 - [3] So following Eugene Volokh's chain of thoughts "every time we go to Jita and buy Rifters rather than 747's, or vice versa, we are necessarily (if implicitly) comparing apples and oranges"? http://en.wikipedia.org/wiki/Apples_and_oranges P.S.: And yes, that sandbox EVE is part of the real world!
Syath Caldari Einherjar Rising Cry Havoc.	Posted - 2010.11.17 04:28:00 - [4] and again this leads us to the conclusion which has always been and will always be the opposite of what a mob wants. The fact that government is inherently inefficient and thus should be smaller, however what the people want is things for free which then leaders to bigger government and more inefficient means of production, and higher prices.
Tasko Pal Aliastra	Posted - 2010.11.17 04:29:00 - [5] Edited by: Tasko Pal on 17/11/2010 04:30:13 The Eve model is clearly more stable. Fewer, simpler, and more homogeneous products, less politics, far simpler economic interactions, and most of the system only changes when CCP changes it. Originally by: Henry Haphorn The Rifter (T1 Minmatar Frigate) in Jita at the time of this posting is going for about 200,000 ISK. In the real world, a Boeing 747 back in 2008* (about the same length as a Rifter**) costed at least $200 Million. There's no basis for comparison. In the real world, you can't stick a bunch of data into a black box and get a space ship out with zero labor other than you hopping into the pilot's seat (or rather your pod doing the hopping). Basically, manufacture is like a simplified form of cooking. You collect the ingredients, you toss it in the oven, and bam! you have a rifter. And there's no real world analogy for the Pod outside of Eve itself (and some science fiction stories) and the vast infrastructure that it implies. You have several powerful things present with the pod, physical immortality, mind uploading, and instantaneous transfer of a persona. Automated background learning is another built-in feature of pods, I gather. As to making a 747 in Eve, the plane itself is rather big, it probably would cost a significant amount of materials (being on the scale of a cruiser), but would be very easy to assemble otherwise. It probably would be a mix of asteroid minerals and PI materials (if one attempted to get as realistic as this crazy game allows). If one attempted to duplicate the manufacture process, a lot of man-years goes into the vehicle. Presumably corporate wage slaves make a lot less than pod pilots (and you'd have to be Amarrian emperor level of insanely wealthy to build a 747 with pod pilots) so the isk wouldn't be that hard to come by. I bet for this sort of skilled labor, hourly wages would be far, far lower than for top end pod pilots, like tens of isk per hour tops. Let's say 100 isk/hr. Further, there's a lot of labor in a Boeing 747, let's say 5000 man-years (order of magnitude guess based on what little I see online). For the US, there's roughly 2000 hours in a man-year (Eve workers probably would put more in than that). So you're looking at 10 million hours, plus or minus a lot. I think it reasonable to expect a Boeing 747, made the hard way (that is, like it is in the real world) to have at least 1 billion isk in cost, just due to the labor. Now, if you had a BPO for a 747 and just threw it in the oven, you'd probably be looking at a few million isk tops in cost, more than 2 orders of magnitude less than physical labor. In order for human labor to be cost competitive with BP manufacture, it'd have to be on the order of 1 isk/hr, I think.
Henry Haphorn Gallente Majesta Empire	Posted - 2010.11.17 04:39:00 - [6] Well, if a 747 can't be compared to a Rifter, what can? The Space Shuttle from NASA?
Nathan Jameson	Posted - 2010.11.17 04:43:00 - [7] I'm not sure you can even attempt to compare the two. The economy of EVE has artificial rules and boundaries placed on it by the Devs. You have a known total ISK amount in EVE; carefully regulated faucets, sinks, and drops; manipulated resources; and seeded items at set values. The amount that players are still able to make a fluid, organic market is commendable; but this is still all ultimately inside a closed, regulated system.
Ave Volta Red Frog Investments Blue Sky Consortium	Posted - 2010.11.17 06:21:00 - [8] Error: This discusion is severely flawed and has no hope.
Mme Pinkerton United Engineering Services	Posted - 2010.11.17 06:29:00 - [9] Originally by: Ave Volta Error: This discusion is severely flawed and has no hope. ^
Cid Mutation	Posted - 2010.11.17 06:30:00 - [10] Your frame of reference is crap. A 747 takes about 3 month minimum to build where a rifter if I want to build one take me 1 hour. A 747 takes minimum of 1500 hours of flight time before FAA let you get into one, a rifter can be flown in what a minutes. A player in Eve makes about 10M/h where in the real world its around 15-20$/h so if we do a exchange rate base on wages and the 2 being of equal value. The rifter would cost 750$ in our world and a 747 would cost in New eden 100.000.000.000.000Isk. You cannot try to judge thing like that because our world are to different. New Eden economic system is very simple and basic compare to RW economic. You could probably compare Eve economic system to the economic system of a small 30000 population town. That would be more resonable scale to get answers about what your brain send you during your bath time. And a rifter would be a small sccoter not a 747.

Netheranthem	Posted - 2010.11.17 11:21:00 - [11] Originally by: Cid Mutation Your frame of reference is crap. A 747 takes about 3 month minimum to build where a rifter if I want to build one take me 1 hour. A 747 takes minimum of 1500 hours of flight time before FAA let you get into one, a rifter can be flown in what a minutes. A player in Eve makes about 10M/h where in the real world its around 15-20$/h so if we do a exchange rate base on wages and the 2 being of equal value. The rifter would cost 750$ in our world and a 747 would cost in New eden 100.000.000.000.000Isk. You cannot try to judge thing like that because our world are to different. New Eden economic system is very simple and basic compare to RW economic. You could probably compare Eve economic system to the economic system of a small 30000 population town. That would be more resonable scale to get answers about what your brain send you during your bath time. And a rifter would be a small sccoter not a 747. To be fair, your frame of reference is crap. Now, if you look at the EVE universe we're the capsuleers, or if you prefer, the best, the elite. The conversion 1 ISK = 1 USD is pretty realistic, if you look into goods like vaccines etc... The comparison in time is also crap, since you probably don't have the same technology.
Breaker77 Gallente Reclamation Industries	Posted - 2010.11.17 11:27:00 - [12] Originally by: Netheranthem The conversion 1 ISK = 1 USD is pretty realistic, If you read some of the chronicles, it mentions that the averge income of non capsuleers is just a very few ISK PER YEAR!! Most pod pilots make several years of wages from 1 rat bounty.
Caldariftw123	Posted - 2010.11.17 11:49:00 - [13] Edited by: Caldariftw123 on 17/11/2010 11:49:18 Originally by: Tamarana What put New Eden economy above the global economy 2010 is the low taxes regime, the ability of the people to act without asking permission from authorities, the simple laws, the strong protection of the private properties of capsuleers. This permit people to work to produce ever increasing quantities of goods for themselves and for others and lowering prices. In the RW this don't happen, for practical reasons sometimes, for political reasons usually. Real people is taxed 10-20x than capsuleers in New Eden. Half of the wealth produced in places like Europe or the US is taken by the government to be used in various wasteful ways. regulations are often both wasteful and damaging. It is not a surprise that the RW economy grow slower than the New Eden economy. Lol you cannot be serious? You compared a GAME economy to real life and genuinely think it proves that regulation was the key? Does the fact that we print money out of thin air without having to care for the consequence of inflation not clue you in to how irreconcilable the two economies are? There is no way in hell you can compare the growth in the EVE universe economy to real life. The inflation is incredible, the number of people producing "free minerals, because I mine them myself" etc etc there is nothing comparable. And the comparison in the OP between the Rifter in an imaginary game (where a single person can click a few buttons and produce one) and the 747 (where the research, design, manufacture, etc. composes of thousands of people and thousands of man hours using 21st century technoloy) simply because their prices "both begin with a 2" is hilarious.
Adunh Slavy	Posted - 2010.11.17 14:11:00 - [14] Please allow me to train margin trading to lvl 10 and create ISK as I wish and then we'll revisit this question. The Real Space Initiative - V6 (Forum Link)
Henry Haphorn Gallente Majesta Empire	Posted - 2010.11.17 22:31:00 - [15] Gee, I can see that a couple of people here are real shallow in their criticism. I agree with the majority of those that comparing a Rifter to a 747 may not have been a good comparison, but at least they weren't up all over my face about it. The original reason I came up with comparison is that I imagined New Eden (just for the sake of argument) as if it did exist in real life and see how it could compete in the Earth-like economy. Overall, I only wanted a civil discussion (whether or not people agree with me) about economics. I never intended for shallow people to come in here and try to crucify me over this. If that is your intention, then I politely ask the moderators to please lock this thread as I can tell that people here are just too shallow to participate in a civil discussion.
Adunh Slavy	Posted - 2010.11.17 22:35:00 - [16] Originally by: Henry Haphorn I never intended for shallow people to come in here and try to crucify me over this. Welcome to the Eve Forums :) The Real Space Initiative - V6 (Forum Link)
Akita T Caldari Caldari Navy Volunteer Task Force	Posted - 2010.11.17 23:41:00 - [17] Originally by: Henry Haphorn Gee, I can see that a couple of people here are real shallow in their criticism. I agree with the majority of those that comparing a Rifter to a 747 may not have been a good comparison, but at least they weren't up all over my face about it. The original reason I came up with comparison is that I imagined New Eden (just for the sake of argument) as if it did exist in real life and see how it could compete in the Earth-like economy. That's NOT the reason why "people crucified you". RP-wise, the EVE economy is a galactic economy, the combined total output of any given planet is insignificant compared to just the in-universe stuff just the podpilots have a direct hand in, let alone what any of the factions are supposedly able to meddle with. Comparing any of that to the economy of the real world in terms of scale is downright laughable... the entire planet would be basically insignificant. Tying to equate "X ISK = Y USD" is even more futile than trying to equate ISK to fictional in-game planetary/factional currencies (never present in gameplay other than novelty items like "a pile of cash"), since even order-of-magnitude approximations won't stand up to scrutiny if you dig long enough. Finally, trying to compare an economy based on sinks and faucets where cash represents "work accomplished" (EVE economy) to an economy where cash has basically morphed into representing "work owed" (real life) is bound to result in the most egregious "apples vs oranges" backlash of them all. _ Beginner's ISK making guide \| Manufacturer's helper \| All about reacting _
Tasko Pal Aliastra	Posted - 2010.11.17 23:53:00 - [18] Originally by: Henry Haphorn Gee, I can see that a couple of people here are real shallow in their criticism. I agree with the majority of those that comparing a Rifter to a 747 may not have been a good comparison, but at least they weren't up all over my face about it. The original reason I came up with comparison is that I imagined New Eden (just for the sake of argument) as if it did exist in real life and see how it could compete in the Earth-like economy. Earth would be considered savages with primitive weapons (at least till a capsuleer gets nuked and podded). But in the long run, even a rifter is going to own the skies over whatever Earth can field. While no current Eve ship is designed for planetary bombardment, there are at least two cases where it's happened in the Eve literature. Militarily, Earth would be a joke to even a small group of pod pilots in good ships. Economically, Earth doesn't fare well either. A dedicated freighter pilot could on their own swamp Earth with all sorts of Eve technology. And frankly, the only people who'd really be interested in the economic value of Earth humans (as opposed to the planetary resources of Earth) would be the Amarrians, who always need more slaves. Earth humans would be just a small group of the minmatar slaves that populate that mighty empire. I think Earth's best chance would be to sponsor some pod pilots with a friendly empire and use the wealth generated by those pilots to crash-develop Earth to the technology level of the empires. Basically, pull off a "Japanese miracle".
Zea Aestria	Posted - 2010.11.18 00:02:00 - [19] Edited by: Zea Aestria on 18/11/2010 00:02:26 I appreciated that the OP included some citations, but in the end all I got was: Originally by: Henry Haphorn ...I'm no economic expert at all...
Max Cetera Capital Researchs Inc.	Posted - 2010.11.18 01:38:00 - [20] People trying to compare Eve Economy and RL Economy should be banned from forums

Liberty Eternal	Posted - 2010.11.18 05:36:00 - [21] Edited by: Liberty Eternal on 18/11/2010 05:42:20 The EVE literature shows that the Earth economy would have no problem at all in fitting into the New Eden economy. Most of New Eden's thousands of populated Planets have their own currencies [described often as "worthless local currency"]. So far from it being impossible to peg the US Dollar to the ISK, it would actually be completely within the norm for pod pilots to set up an exchange rate between a Planet such as Earth and their own currency. I would estimate an exchange rate of around $20,000 to 1 ISK. I base this on the literature which states that working people in New Eden would receive less than a few ISK per year in wages, as Breaker observed. This would make a battleship worth about $2 trillion, which is a fair figure considering each one is the size of hundreds of Empire State buildings. Earth would also be considered reasonably well developed and would have goods for the New Eden markets. The literature states that the Amarrians have lightly populated slave Planets producing wheat and other agricultural products. So the Earth economy can be measured against that of New Eden. Henry, for your Boeing 747 comparison, it would probably be better to compare the plane to a Gallente shuttle. These cost around 10,000 isk each which works out at $200 million roughly. If you strip the pod and cargo bay out of a Gallente shuttle and refurbish it for civilian transport, it could probably carry around a dozen passengers. Economically, running a dozen passengers around space would yield similar financial rewards to running 300 passengers between Europe and America. One could also imagine similar levels of fuel costs, maintenance and engineering for construction involved in the creation of both items. If Earth came under peaceful administration by the Gallente, it would quickly develop with minimal fuss. The economic output of the entire Earth would probably be around 3-4 billion isk a year at current levels. The reason for New Eden's rapid growth is simple - they are in a time of great technological transition, and the elites have unlimited free market capitalism. Local Planets would probably have more regulated and heavily taxed economies though - free markets and isk are purely for the elite in New Eden.
egola Amarr	Posted - 2010.11.18 09:08:00 - [22] no....eve won't work in the real world, in RL we use a keynesian model but in eve its some twisted hyper-capitalistic model where CCP is removing all bottom prices (npc prices) as well limiting all the isk faucets out there. if you look at the quarterly reports you'll notice thaat inflation should be ******ed high if you look at the isk faucet v. bounties and the mounting isk that keeps stacking.
Xanaan Zenithdul	Posted - 2010.11.18 09:14:00 - [23] Edited by: Xanaan Zenithdul on 18/11/2010 09:14:44 Real world has officials controlling competition etc and scams, EVE doesn't. And free competition always leads into monopoly situation, but in EVE the invention and bpo's is preventing this from happenin since we do not have patents.


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