China Bans Gold Farming
informationweek.com
informationweek.com
But as the trade expanded steadily, with increasing conversions between virtual and real money, there would be an impact on the financial system, he noted.
This is about maintaining state control over the currency and taxation.
When I think about it, it's surprising that some form of virtual currency (it's interesting to actually think about what that term means) hasn't gained a stronger foothold. So many of the products we buy are virtual.
I think if you sat down and thought about it when something like paypal was young, you would have predicted a huge virtual currency world.
There are a good number of groups who control millions of guys with guns. They use currencies as a tool to project their power and increase wealth. If you mess with that tool, they send intimidating messages. If pressed, they send the guys with the guns.
These groups are called governments.
These guys with guns also use other things like media & information to project their power. There have been many confrontations between governments and emergent media. It has been a very obvious occurrence. Keeping it contained is a constant battle.
It doesn't seem that virtual currency has a very strong urge to be.
This is what makes it more economical.
other things like media & information to project their power
Yes, but behind all that, there's guns.
How can alternatives develop when the current practice is so brutally efficient at keeping costs down making other choices inefficient by comparison?
So if the alternative to a sweatshop is homelessness and starvation that's better? How does that help people "see past [their] present situation"? What does that even mean?
Have you even been to China? Unless you have family or friends to support you the only alternative to employment is starvation or crime.
I fail to understand how making someone unemployed will do anything BUT keep costs down(among other things).
For some reason people think sweatshops are an awful thing, compared to working for MicroSoft sure.
Look at Victorian Britain. Yes they had sweatshops filled with women and children, who without the work would have starved(to death). Never mind the affordable goods that those factories produced.
No viable choice exists precisely because the current system is tolerated. Is this something individual workers can fix? No, maybe not, but as long as people collectively put up with sweat shops, companies who wish to treat workers better have a huge uphill battle to compete with the low overhead. Things can't get better till the practice is halted.
So, you want the poorest people in the world to have a worse life, now, because it'll make you happier about the state of the world? You're asking them to give something up. The worst off people in the world should sacrifice for you?
During the industrial revolution, ability to support ones family was used to justify young children working in factories. During the civil war, the south fought for the right to use slave labor in order to maintain their standard of living.
I'd also like to note that I am fascinated by people with high standards and willing to let others suffer for them. :-)
Sweatshops will go away when the country is richer, with or without laws. The hard fact is that nicer working conditions cost money. That means lower wages. If everyone is well off, like in USA, that cost is clearly worth it. If people are very poor, they may prefer the money (which they need to buy necessities) to the improved working environment.
Explain to me what motivation a company with cheep access to unskilled labor has for improving conditions of it's employees please. What evidence do you have that low wages mean better working conditions for workers? What economic mechanism do you suppose will guide companies to pay unskilled laborers more as the company becomes more profitable? Or are you banking on the general goodwill and fairness of the employer here?
Companies pay more and improve working conditions to get better people. If people prefer better working conditions, they'll sometimes choose that over higher pay. You can see an example in the first world - Google's pay on average is lower than Microsoft's, but they have more benefits.
People sometimes - frequently, actually - do choose higher wages over nicer conditions. I'll tell you personally, I never bought an air conditioner in Boston because I wanted to keep my electricity down and didn't want to go spend the $50 on a used window box. I also ate cheap food and rarely went out. Everyone told me I was crazy and cheap. But later on I had the cash I'd saved to buy out partners' shares in companies when the opportunity was right for both of us, and it improved my life a lot. I still live dirt cheap now, but for a very different reason - I want to start a family in the next couple years, and kids cost a lot. And I want a large family :)
I've digressed a bit - people take higher wages/worse conditions frequently. When I was in Chengdu, China, there were plenty of high quality, nice condition jobs. You could easily get a job doing sales, customer service, even serving tables in high class, modern facilities with air conditioning, amenities, etc. Yet a lot of locals chose to work in worse conditions at much higher money. An artisan in a sweatshot might make 3x-10x the money of a waiter. And 40 cents/hour looks low, until you realize that a good breakfast would run you 22 cents, your bus ride to work cost 11 cents, etc. My gym membership for the full month with infinite personal training was 12 bucks and change, at one of the nicest gyms in Chengdu.
Maybe the biggest example of people choosing money over conditions were the ice cream runners. See, there's lots of historical mountains for hiking in China. People (mostly Chinese, not many foreigners) like to eat ice cream on the hard, sweaty, brutal hikes up the mountain. The Chinese government could never take good care of the bridges, so often one or more would be down and you'd have to ford a river as part of your hike, but that was all just part of the adventure.
Anyway, some guys would literally practically run up the mountain with ice cream strapped on their back packed in ice, and sell it to people at the top of the mountain - other locals who sold ice cream on the trails, temples and monasteries, and the occasional small overnight inn (not too many, most people stayed in temples or at the bottom of the mountain). Anyway, from what I gather, the ice cream runners make crazy money, because they're running up a mountain fast with a heavy weight on their back that's melting. They could make less money doing crafts, working in one of the temples, or farming on the mountain - all more pleasant labor. But instead they choose brutal work, completely unforced by anyone, to make it further in life. That was always some lesson to me.
China's coming up fast - there'll always be jobs that are less pleasant that pay more, like construction, sewage treatment, etc. in the West. That's common. But at some point on the wage scale, people would prefer lower pay/better conditions such that it'd be cheaper to install air conditioning, offer benefits, etc., than it would be to just continue to increase pay to attract people. At which point, the job conditions will improve. Places that are worse will have to pay more or offer better conditions, or people will work elsewhere.
So why do I write this comment? Took me a lot of time. I write it because I think people in China aren't stupid, and are making the best decisions for their lives. There's already better jobs at less pay than ice cream runner, factory worker, construction worker. People choose the harder jobs for the harder pay, and they're not dumb people. As the country gets wealthier, things will get better. I guess the main reason I write in is because you seem like a bright and thoughtful cat, and I hope some of my take is useful to you. Cheers.
Your point is a valid one, and it is true that even in an economy where there aren't regulations to determine wages the free market does dictate just as you say: higher wages attract better workers. It's a good point, and I don't deny the validity of it in many aspects. Fact is though, that in some places, there either is no shortage of skilled labor, or no need for it. Because of this, there's no reason for the companies to treat workers better because the workers have no other choices at hand. It has nothing to do with intelligence or lack thereof, but if the skills you posses aren't in demand you will take whatever you can get, fair wages or not.
I think part of the misunderstanding is that we are talking about two different things. You are speaking of hard labor for which people are compensated fairly, and I am speaking of labor for which the compensation is not fair. Sadly, the latter still occurs as I have witnessed it firsthand in several places in the world. As long as people have viable choices and aren't forced into poor pay and poor conditions by the realities of the economy, there is nothing wrong with working hard for an honest day's wage.
It's my pleasure - I think we're on the same team here, so I want to do what I can to spread some good. At the risk of bringing politics up, I'm one of the more liberal people I know and have spent a lot of time internationally. When I think of issues, I don't think just "my country win, everyone else on their own" - I try to look at how to build the best possible complete world. This reply turned out pretty long too, but I hope there's some ideas of value in here for you.
> Your point is a valid one, and it is true that even in an economy where there aren't regulations to determine wages the free market does dictate just as you say: higher wages attract better workers. It's a good point, and I don't deny the validity of it in many aspects.
Cool, cool. One thing that didn't really sink in until I was in China is that people who try to do right for themselves are in the long run forced to do right by other people. The funniest was seeing the price of cooked food and ice cream go up as I hiked up the mountain. There were more purveyors of food and wares at lower prices lower on the mountain, and it got more expensive and less frequent as I went up. Crazy stuff to see.
> Fact is though, that in some places, there either is no shortage of skilled labor, or no need for it.
I've got mixed feelings on this point. That's because there's an unlimited amount of value things that could be done in the world. That means that as long as there isn't a shortage of food, anyone can do something valuable in exchange for food (and all the other stuff people need and want). To make a wage, a person simply needs to do something that someone wants done that they'll pay for.
> Because of this, there's no reason for the companies to treat workers better because the workers have no other choices at hand. It has nothing to do with intelligence or lack thereof, but if the skills you posses aren't in demand you will take whatever you can get, fair wages or not.
There's actually a huge point in here - people who are desperate do actually get treated much worse in the job market. If someone isn't desperate, they can look for a new job, get training, etc.
Now, most people have options at a young age when they're healthy. Most societies need some basic manual labor, at least to build buildings and houses, distribute goods, provide basic services, they could serve in the military, etc. These won't provide a Western standard of living, but they will provide a decent life, let you raise some kids and be sheltered, etc.
The big problem is when people get stuck - because they're ill, or a family member is ill, etc. I personally try to support charities that help people who really bad luck/bad circumstances hit. When I've donated to charity and ran fundraising events in the past, I've choosen St. Jude's Children's Hospital in the USA, Great Ormond Street Children's in England. A friend of mine in Japan is helping starting a Therapy Dog program over there, so that's one I support in Japan now too.
The other thing I support is education for developing countries. I almost opened a bilingual school in China with my girlfriend at the time, but alas, life went into different directions. I'm still convinced that that would've been a good life if we'd gotten married and I'd lived there, helping run the school(s) and being part of Chinese culture.
I digressed again! (Sorry!) The point here is that I believe that I've personally observed that in functioning countries that have the basics of stability and aren't completely corrupt, it's possible to find work. And I've been to some really poor places. People get in trouble when they get stuck due to bad circumstances, and I absolutely think we should help them, their families should help them, their community should help them.
> I think part of the misunderstanding is that we are talking about two different things. You are speaking of hard labor for which people are compensated fairly, and I am speaking of labor for which the compensation is not fair.
I might be mistaken, but I really think that the provinces that I spent time in in China are exactly the places that most people claim the compensation isn't fair and would like to do something about.
Oh, it's poor, don't get me wrong. There's lots of problems there. The quality of life is much lower. The pollution is totally gross in the cities - Chengdu has a hazy pollution cloud over it and is filled with smog. I don't mean to glamorize Sichuanese life - it's a poor place with a low quality of life.
The thing is, there'll be better paying, worse job conditions available anywhere. If we go in and mandate that conditions are improved, pay will fall. If, say, waiting tables and doing factory work took the same skills, the same amount of unpleasantness, and has the same chances for advancement/prestige/etc, then they'd pay about the same. To get someone to work in a less nice, less prestigious factory, you'd have to pay more.
Unless they're stuck that is - have to work there due to illness, the company threatens violence if they don't work, Communist Party Commisar assigns them to work there, etc. Then they get shafted.
> Sadly, the latter still occurs as I have witnessed it firsthand in several places in the world. As long as people have viable choices and aren't forced into poor pay and poor conditions by the realities of the economy, there is nothing wrong with working hard for an honest day's wage.
Cool, I'm with you. You're a heck of a writer and I've read some really sharp comments by you, and you seem like a fairly enlightened cat. The worry I have is that imposing Western ideas of what a workplace looks like is going to reduce opportunities for poor people in China. It's really unpleasant to look at and think about people doing unpleasant work in unpleasant conditions - even here in the USA, where laborers get paid pretty well.
It seems to me that the areas that are the most desperate and destitute aren't the ones that have no labor laws. Instead, they're the places that either have a lot of corruption/no stability (much of Africa), or are highly regulated. If a businessman improves the quality of work in a workplace so that it's even with a more pleasant job, he will pay as much money to workers as people pay people in more pleasant jobs.
The post I aimed to answer asked this, "What evidence do you have that low wages mean better working conditions for workers? What economic mechanism do you suppose will guide companies to pay unskilled laborers more as the company becomes more profitable? Or are you banking on the general goodwill and fairness of the employer here?" Here's my attempt to answer those directly:
Owners pay higher wages or someone won't work for them. Companies don't pay unskilled laborers more as the company becomes more profitable unless the workers become skilled in their role and thus more productive. (Well, sometimes they do, but it's being charitable - they're not forced to and continue to do well even if they don't.) Some owners have goodwill and a sense of fairness, some don't. Owners are just people like the rest of us - they run the spectrum of charitable to not charitable, focus on money exclusively to focus on other things, and so on. The reason they do wind up paying more is so that their businesses win and flourish.
It's necessary to pay people better as an economy improves, because more enjoyable jobs are created. Thus, unenjoyable jobs need to be made more enjoyable or paid well. Your point that people who are stuck get underpaid is totally true though - my personal answer to that, on moral, ethical, and practical levels is to help the people get unstuck - help them get educated, get healthy, cure their children or illnesses. I don't think the answer is to mandate working conditions reach a certain level, because that takes opportunities away for people to trade working conditions for higher pay, as I personally did for a few years and it paid off great for me.
Thanks for the thoughtful reply, and if I may answer questions or continue discussing with you, I'm happy to be at your service.
That really is the crux of the issue in many regards. The aid programs that I have seen work focus on education and loans for people who wish to better their skills or go into a different field rather than trying to come in and 'fix' the system till it looks like the what we in the western world recognize. At the same time, there are certain conditions that no human should ever have to be exposed to. As anything, it is a balance and I believe both viewpoints are needed for there to be a total solution.
Thank you again for the thoughtful discussion.
The economic mechanism that makes companies pay more is competition with other companies for the better workers.
The evidence I have that better working conditions mean lower wages, and vice versa, is what I already posted: they both cost money, and there's a limited amount of money. Spending more on one leaves less for the other. Of course if you're doing well you can have a good amount of both, it's only when there isn't a lot of wealth that it gets to be a real tough choice.
If companies that pay their workers well are undercut into unprofitably then things will never improve. The near-slave labor practices ARE the problem, not a small step on the road to better wages as you seem to think.
This is part of the reason minimum wages standards exist - to keep wages form declining industry-wide to the point that good companies can no longer afford to pay good wages.
Violence, intimidation, and misinformation are the tools used to pervert the free market and maintain the status quo.
The free market is a wonderful thing but it's all too often used as the theoretical backstop for situations where the market is actually rigged.
Yeah, these people should be making me shoes and tainted milk instead. (Gold farming is the least of China's worries.)
Most of the currency the farmers sell is stolen from hacked accounts obtained by malware that the farmers actively spread for the express purpose of hijacking in-game currency. The rest is obtained by bots that they run en masse which really mess up the game for everyone else.
Do you really think they'd sit there for 14 hours a day pounding away at buttons, earn their gold/gil/whatever legit, and sell the fruits of their labors? No way.
Back when I played wow, I could have sworn that there were a few botters that would use something like Auctioneer to make money by buying things that were undervalued for resale. So I tested out my theory (this was just post-BC)
I created several dummy characters on my account and loaded them up with spare boar meats that I had farmed. 2 boar meats for 100 gold, so 50 gold a pop. I would constantly send the meats to newly created characters and start putting them on the auction house, 50 gold each.
What this did was over the period of a week and maybe 15 characters (I'm not sure the actual number), I artificially raised the perceived value of the meats, so when I started putting them up for 200 gold for each stack of 10, I literally couldn't farm enough of them to keep them in stock as they were always bought by the same couple of people (botters?).
The botters aren't infallible, you can break them - but I do agree that it's hard to compete with a 24x7 player, especially when you only played 2 hours at night yourself.
Gold farming is a real business model in china. Research it you will be surprised.
Youtube video on Chinese Gold Farmers:
http://www.youtube.com/watch?v=ho5Yxe6UVv4
"Estimates of 400,000 people working in China on gold farming/trading are seen as very realistic, and the number could be 500,000 up to 1,000,000"
http://virtual-economy.org/blog/update_on_chinese_gold_farmi...