When Experts Expound on Things They Know Nothing About

Via Poorer Than You, an article on CNN Money called "Second Life's looming tax threat."

The only "news" in this article isn't news -- if people in "Second Life" are making real live U.S. dollars, the government wants its cut. Snore.

But the article goes further, making the absurd suggestion that entirely virtual economies, like the one in "World of Warcraft," should be taxed by the U.S. government.

Riiiight.

Grace Wong, CNN Money staff writer, quotes Christopher Frenze of the Joint Economic Committee of Congress, who sensibly points out that "as long as virtual activity stays within the virtual economy, it shouldn't be taxable."

But there are always two "sides" to any argument, and trust the mainstream media to find the "dumbass" side. "As soon as you start looking at what's going on in these worlds, they look a lot like real economic transactions," says Texas Tech professor Bryan Camp. According to Wong, Camp believes that "profits that come from, and stay in, the virtual world are taxable." I hope that's a misquote.

As Stephanie from Poorer Than You says, "Unless the IRS is prepared to tax my Monopoly winnings, they should really stay out of this."

So is there really a controversy here? Is the IRS going to tax my WoW gold? No. Although Ms. Wong would like to imply an impending danger, she quotes an IRS rep:

"Any time someone wins a tangible prize or award, the value is reportable as taxable income. An accumulation of 'points' would not result in tax consequences, but redeeming or selling them for money, goods, or services would."

So, there's no there there. Thanks, CNN Money!

Link.

Hilarious German Web Terms

This is from a translation of a German article, giving funny definitions of web terms. Definitely worth a read.

MySpace
MySpace was founded by the music industry and is the largest MMORPG in the world. Kind of like World of Warcraft, but the graphics suck. Everybody who can make up a nickname for himself may join. The goal is to add as many other players (called "friends") as possible to your own profile. The winner is the player with the most "friends". If you leave the game or get kicked out, you also lose all your friends.

Second Life
Second Life is a virtual swinger club for journalists. The platform is financed by the big media conglomerates of the world with the goal to replace editorial staff restaurants, work outings and conference rooms. And also to finally allow sexual harassment at work to the unemployed.

Via Hitchhiker's Guide to the Web.

"Second Life" Bans "Ageplay"

Not that is was ever permitted under their Community Standards, but Linden Labs has officially announced a policy against "ageplay," sexual situations between child and adult avatars.

In-game venues dedicated to "ageplay" have been warned to knock it off by Linden Labs employee called "Chadrick Linden." Apparently, some players with child characters, who do not engage on "ageplay," are concerned about how the ruling will affect them.

Is this even necessary? Personally, I think if you get off on sexual fantasies about children, you have an emotional problem and need to seek help. But you're not hurting anyone, as long as real children aren't involved.

Will fantasizing about sex with children lead to real child molestation? I dunno, will fantasizing about Grace Park make me want to fuck a toaster?

"Second Life" Proves It: Capitalism Is a FRAUD

Valleywag has posted a examination of "Second Life's" virtual economy by a real, live financial consultant who actually investigated what happens when you use Linden dollars as an investment to make real dollars. He characterizes the Linden economy as a "pyramid scheme," because the richest people at the top determine exactly how much money the investors at the bottom can pull out.

It turns out that inside the game, counterparty risk is tremendous. In fact, entire banks will suddenly disappear. Or banks will simply renege on obligations without recourse. Worse yet, the very people who provide the source of nearly all demand-liquidity within Second Life, those guys at the top of the virtual playpen pyramid, are the same ones who effectively set the SLL/USD exchange rate.

Basically, "Second Life" advertises huge returns in Linden dollars on your investment in US dollars; then they promise you can turn those voluminous Linden dollars back into real cash. It all works, until you try to pull your money out. Then the handful of wealthy SL denizens who control the market change the exchange rate, only letting you have a tiny return on your investment.

The joke of course is this is exactly like real-world capitalism. The SL economy is just an extreme model of a real capitalist economy, minus the few tepid socialist restrictions real governments put in place. The American economy is controlled by a handful of very wealthy individuals, who manipulate markets and lawmakers to protect their wealth and to stifle possible competition. There's no "meritocracy," because the very wealthy will always cheat.

They don't necessarily cheat because they are bad people (although some of them surely are) -- they cheat because the capitalist "ethic" tells them that protecting their own interests is best for everyone, and if they don't do it, someone else will.

Remember -- what this consultant labels a "Ponzi scheme" was not designed that way by the creators of "Second Life." It's just what happens when a few people become very powerful, and look out for their own interests. And unlike in a capitalist model like "EVE Online," SL players believe they are protecting real money. So they act like real plutocrats.

Wouldn't it be nice if we lived in a world where ONLY game players were allowed to behave this way?

"Get A First Life" -- Kewl Parody of "Second Life"

Here's a very cool one-page parody of "Second Life."

Even cooler is the ""Proceed and Permitted" letter the creator got from Linden Labs. Nice to know that some people get it.

Via BoingBoing.