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The Affluent Society

 

The Affluent Society is a 1958 book by economist John Kenneth Galbraith in which he describes his view of the socioeconomic challenges faced by the post-war United States. He viewed the U.S. as a nation that had come out of economic malaise and saw the emergence of a newly affluent middle class which could afford a large variety of consumer goods. Although Galbraith’s book focuses on the United States, many of his analyses can be applied to Western Europe of the same era. More interestingly for us, I think some of the issues Galbraith discusses can be applied to EVE Online as well.

Rising From Poverty

One of the central themes of Galbraith’s book is that economists and the general populace had a world view that was rooted in times characterised by widespread poverty. For many people in the post-war United States, the Great Depression and the Dust Bowl was still part of living memory. The accepted economic theories of the time had been written by economists who still struggled to understand how societies could provide the most basic goods necessary for survival, let alone prosperity. Galbraith argued that this back-referential thinking lead the people and government of the U.S. down a false path of economic development which ignored the new conditions.

Players of EVE Online come from similar conditions in-game. When we begin playing we hardly have anything of value. After the tutorials each one of us possesses a handful of frigates, destroyers and a basic hauler. The opportunities to produce income at that stage are extremely limited, and what little we have can be lost easily. I still remember how long it took me to scrape together the ISK I needed to buy a ship that could even survive level 4 missions and the nagging awareness that one misstep could throw me back to square one. “Don’t undock what you can’t afford to lose” is the conventional wisdom all new players get taught. In more extreme cases they might even be told that they should not leave highsec at all if they can avoid it.

During those early stages of gameplay we internalise a way of thinking that many take with them as they make progress in EVE. Even players with comfortably filled wallets tend to be apprehensive when it comes to putting their assets on the line. They might easily be able to replace a lost ship, but there is more to a loss than just the financial impact. Losing an expensive ship can lead to public mockery and in some cases even reprisal for damaging the killboard statistics. An expensive loss can also trigger the fear of slipping back into poverty. A depleted wallet reduces a player’s freedom to participate when they can’t afford the ships necessary for an expensive doctrine, or they may not be able to sustain their in-game lifestyle in general. This results in a problem which is both economic and social.

By far not all organisations in EVE are concerned about killboard statistics, but the stigma of poverty is almost universal. Having little ISK is commonly associated with the helpless state of being an “irrelevant” highsec-dwelling newbie, and a consistent failure to amass wealth is often seen as a sign that a player is not sufficiently proficient at EVE, or at least not applying themselves as much as they could. Consequently many EVE players try very hard to not appear poor. Even in well organised nullsec alliances individual players will keep collecting ISK even if there is not much they would realistically need it for. After all, ships that are lost during operations are replaced, sometimes even provided for free. Still, the hoarding tendency people develop during the early stages of the game remains, and it creates an increasing and unrealistic threshold for new players who would like to be part of that affluent class. It is one thing to become member of a powerful and wealthy group, but to really overcome the newbie status a player has to be among the wealthy too, and so the upward spiral keeps on turning.

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Competing For Riches

There was a time in EVE when the aggregated amount of ISK and production capacity in the game’s economy was much lower. Owning a handful of battleships was considered a great achievement back then. Currently they get thrown away in casual fleet battles without a second thought. Originally, CCP thought that it would require the combined effort of a large alliance to build a few titans or supercarriers, but now we are long past the point when massive supercap forces became a reality. Today, even smaller alliances own titans, many people casually use carriers for AFK ratting, and Goonswarm even use Titans for gatecamps. Once, it took Ascendant Frontier months to build the very first Titan in the game, but in recent times, the immense losses of B-R were easily shrugged off as “already replaced”.

A similar proliferation of high-class goods happened in the real world when the post-war U.S.A. entered a period of widespread affluence. Virtually every middle-class family would soon own a car, a television set and a fully featured kitchen on top of all the things they needed. The upper classes still felt the need to distinguish themselves from the common people though, and that lead to the introduction of more luxury goods. The ability to afford luxuries served as an outward indicator of social standing, particularly because those goods did not offer any utility based on function alone. A car with rosewood dashboard paneling and fancy leather upholstery doesn’t perform any better than the basic model, and an expensive watch doesn’t tell the time any more accurately than a decent mass-produced article. The function of those items is to display wealth and by extension social standing.

In EVE we can see a similar tendency of people to display their wealth in times where “any scrub” can potentially afford a hangar full of T3 cruisers. High grade implants and officer-fit ships do not necessarily serve the pure purpose of providing an edge in combat. Certainly, a ship with more effective modules and a set of good implants can help a pilot to gain more kills, but are they really just used because of their effectiveness? For the same price, a much larger number of cheaper ships can be bought, and with the same level of fighting skill they can result in the just as many kills or even more. Excessive spending becomes even more evident with PvE fits as they begin to perform beyond the threshold of diminishing returns. A PvE site, mission or incursion can not be cleared significantly faster with an expensively fitted ship. At least not to the degree which would justify the price. To a certain degree, such fits are a display of the capacity to spend high amounts of ISK to go above and beyond the necessary. If a player loses a ship like that, they can appear as impressively wealthy by simply shrugging off the loss and replacing it. Provided they aren’t in an alliance or corporation that punishes such frivolity.   

This tendency to buy ever more expensive ships has created the idea among newer players that owning such assets is necessary to be part of the community’s top tier. This fallacy can often be observed with those who buy expensive ships with PLEX or purchase implants that compensate for a lack of fitting skills. When they lose such an investment, they often learn the hard way that ISK and expensive equipment can not compensate for lack of skill and experience.

There is however an even more pressing issue that arises from the idea that a wallet containing dozens of billions is a necessary thing in EVE. Players continuously optimise their playstyle to gain the maximum ISK per hour out of their PvE activities, and that results in over-farming. Often nullsec residents will mention how many players can be supported by the number of sites available for income generation. If everyone keeps pushing the envelope of how quickly and efficiently they can clear combat sites, expansion becomes necessary just to get enough systems for those players to farm. At the same time, players will create more alts to generate extra income in Factional Warfare, highsec or wormhole space and then they will of course try to minimise their real-life costs by sustaining those alts with PLEX. This way they unnecessarily create an even higher income threshold for themselves and at the same time devalue the local income sources for the players who base themselves in those areas.

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Luxury Is Not Security

In his book, Galbraith proposes that it is dangerous to mistake a widespread capacity to acquire consumer goods for economic security. He warns that a one-sided focus on consumption as an indicator for a society’s overall economic health fails to take the possibility of economic shocks into account. If the collapse of a market would occur, either through external circumstances or internal dynamics, an economy relying too heavily on consumption could spiral into a deep recession. Individuals and the economy as a whole would find it difficult to recover if there isn’t enough public spending that provides a safety net. The subprime mortgage crisis of the last decade is an example of such an economic shock and its results.

In EVE, the excessive overspending of players has also created an environment where they become increasingly vulnerable to particular changes in the game’s economy, most notably the price of PLEX. When players rely ever more on the use of alts to generate income and become dependent on the ability to finance those alts with PLEX, a rise in PLEX-prices can lead to a point where this lifestyle becomes unsustainable. This has begun to play an increasing role over the past two years. The problem becomes even more aggravated, when older and richer players hold on to PLEX which they have acquired at a lower price. They constrain the supply while demand continues to rise. As a consequence, many of the newer player’s alts are retired and they either have to invest real money to sustain their high standards or face the prospect of dropping below an income level where they can still participate in the gameplay of the “upper classes”.

Galbraith also warns that an underdeveloped public sector can result in a form of poverty that is not simply of a material nature but related to skill and knowledge. When quality education becomes a luxury, many of the less affluent members of society will drop below the education levels that secure them a good job and decent income later. That does not only affect those people on an individual level, but also reduces the overall factor productivity of labour in the economy. Furthermore, to overcome one class stigma, the affected people will try even harder to compensate it through overspending. There are numerous examples of that behaviour both in the real world and in the game we play.

Although we do not have a public education sector in EVE, we can observe a related phenomenon. Even though the education available does not cost ISK as such, it carries an opportunity cost. Time spent in EVE University or with personal learning means time that is not spent with income generation. For quite some time, larger alliances have tried to solve that problem by supporting new recruits with significant amounts of ISK. Unfortunately, the consequence is that those players only learn to play the game in a particular way and within a specific organisational culture without learning how to handle themselves. Older players who have been in the game since before the times that such support existed, had to learn the game by themselves, and that provided them with a much broader perspective and skillset. Like I said before, ISK and expensive equipment is no substitute for skill, and players who “grow up” relying too heavily on ISK donations and ship replacement will lack the knowledge on how to “make it on their own”. In the more extreme cases they do not even know how to fit a ship by themselves, how to function in a small gang or how to avoid obvious traps laid for PvEers.

 

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Avoiding The Trap

It has become difficult to confront players with the reality that EVE is not a game of instant gratification. The time it takes to learn the in-game skills necessary to fly a ship does however correlate with the development of player skills to some degree. Being able to afford a more powerful and expensive ship, on the other hand, does not grant the ability to use it well. Newer players would be much better served by developing those skills while their in-game skill points accumulate and their income progresses steadily. There are many roles that can be fulfilled by players on lower skillpoint levels, and usually those require much cheaper ships. That way, players can exist in EVE based on their means while they “live and learn”.

There is a logical progression built into the game which starts in highsec and then branches out into lowsec, nullsec and wormhole space. CCP’s marketing and the attitude of players themselves have created the impression, though, that everyone should get into nullsec as soon as possible because that is where the great things happen. Certainly, there is something to be said for being part of a successful large alliance and experiencing a major campaign for sovereignty, but those things also contribute little in the sense of individual achievement. The players who become famous in those environments are not the newbies who have been sponsored and had their hands held from the day they joined. Most of those great leaders and FCs have learned how to play the game from the ground up over the course of years. Even the great alliances as a whole have developed their strength and cohesion through many hardships, and they would not be what they are today if someone else had uplifted them. TEST alliance is a great example of how the opposite works out. They grew up under Goonswarm’s wing, and when they thought they could go it alone the result was a disaster. After they had survived that collapse they returned to the scene richer in experience and much better at setting their goals and managing their expectations.

I believe new players have to let go of the idea that they can jump into the deep end and become “relevant” straight out of the tutorial. The thrill of playing EVE is not intrinsically connected to membership in a great and powerful nullsec alliance anyway. There are many opportunities to experience excitement every day, and few of them involve billions of ISK or massive fleets. In fact, as someone who has experienced both sides of that spectrum, I would say that EVE becomes more boring on the grand scale except if you end up becoming a major fleet commander or alliance leader, but like I said, that requires practice and experience.

New players who really seek fame and popularity on an individual level would be much better advised to follow the lead of Chance Ravinne and Wingspan Delivery Services. Think creatively, find a niche, become good at what you do within your means and with the abilities you have. In the long run, that will serve you much better. Should you quit before reaching the lofty heights of strategic fleet warfare, you at least had fun while it lasted. 

Tags: economy, isk, tarek

About the author

Tarek Raimo

Former nullsec spy (no not under that name of course) and current failure at lowsec solo PVP, Tarek spends his time not logging in to the game as much as he keeps thinking about its social and metagame nature and sharing some of those thoughts with the CZ readers.

  • Dantelion Shinoni

    Interesting read. Although I can see why the amount of isk around and the way it is showered out, I think it’s far from a problem in my opinion.
    A bigger problem is the way that luxury spending can buy you power.
    I will explain. When you start the game you have understand pretty quickly that ISK is power. The more you have, the bigger things you can buy. But then comes titans and caps. From there you have the impression of a natural ceiling in the way power can be accrued through isk. A Titan seems powerful but seems less efficient than buying a dozens strategic cruisers, but as a luxury buying for the people with a LOT of ISKs, it’s worth it.

    Except it doesn’t work like that. The power accrued by officer mods, links, hulls through ISKs is totally linear with near zero diminishing return.

    This is what is really making it hard for a newbie to become relevant. The level at which you can be relevant and comfortable with your income and not be farmed by the guy next system is very high.

    • Kamar Raimo

      Yep, a good angle that I didn’t cover.

  • Great read. And at an individual level I think Galbraith ideas are insightful and pertinent as you have excellently highlighted. I tend to lean towards Piketty’s view of capital (aptly named) at the more Macro/meta level. The plex market and what it seems to represent makes more sense through that lense.

    • Kamar Raimo

      I’m still busy digging through that book. It’s pretty impressive but also a tough read.

  • Ben Ishikela

    I like your point.
    So you say something like: “better build your own little empire than be a marionette! Isk is not that important compared to skill.”, yes?

    Isk might fade. but experience and stories stay.

    • Kamar Raimo

      I guess I’m more saying something along the lines of “Becoming better at EVE and more “relevant” in the game can not be bought with ISK. If you focus on developing skill and smarts rather than min-maxing your gameplay based on income opportunities, you will become a better player faster.”