How would a game designer build the world economy?
4 lessons from games for the real-world economy
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Hi!
Flaws in the world economy are starting to show. Economists are predicting a K-Shaped recovery from the pandemic. The rich are getting richer, while the poor are doing worse. There are immense chasms between the top and bottom of society. It is said that the top 3 richest people in America have more wealth than the bottom 50%.
I am lucky to be in the demographic that is insulated from these problems. We are still able to maintain a comfortable life. However, I feel sad knowing that many others are making do with much less. My quality of life is out of reach for many, yet nothing makes me special to deserve this more than any other person.
Without formal experience or training, I have little credibility to discuss how to restructure the economy. But, I dabble in economics all the time through games. All games are economic experiments - a board game about building an economic empire, saving 1000 gold for my World of Warcraft epic mount, finding the best price for turnips in Animal Crossing, or even trading health for a better position in Counterstrike.
One of the things I miss from the pre-Covid days. I probably would have an economics PHD if I didn’t spend so much time gaming
Here are 4 guiding principles I learnt from gaming which I think would build a better economy:
1. Imbalanced games are not fun. There must be equal opportunity.
Balance is central to game design. A game without a fair chance of winning is not fun. Every game has winners and losers. It is natural. It encourages competition, strategy, and risk taking. These are the same conditions for a growing economy.
The constant struggle to find perfect balance.
A game loses fun when it feels impossible to catch up to the winners. Certain strategies being arbitrarily powerful. Loopholes in rules being exploited. Small advantages multiplying too easily into big ones. Those ahead being able to push the others back down.
This manifests in the real world too. Differences in wealth are not always due to fair competition. In ‘capitalists vs. cronyists’, Scott Galloway observes how the wealthy have co-opted state instruments to protect their wealth and prevent the proper operation of markets to allow businesses to fail. The wealthy extract huge profits in good times without saving for a crisis, waiting to be saved by bailouts. This impacts the prospects for future growth by giving new entrance a chance.
The bailouts he describes may not occur as much in Singapore. Yet parallels exist. Investors in failing instruments such as Minibonds or Hyflux were vocal in calling for support and raising issues of prejudice. Their losses would be mitigated at the expense of everyone else. If these investments had paid off, I highly doubt they would have shared their returns with me. They would gleefully say they were shrewd investors.
Even in more mundane matters, we all know that a wealthy family has an inherent advantage. I myself have the luck of 2 healthy parents with a decent income. I never needed to worry about day to day needs. I had books to read, and people with time to read them to me. I had reliable computers and internet access. My dad would drive me to classes and school. These small things add up. I must acknowledge that I have had a huge edge over someone more capable but lacking the same resources.
Unequal opportunity erodes long-term value. The best people, products, or organisations cannot take the spotlight they deserve. We deprive ourselves of improvement for the sake of preserving the status quo of the winners. Those who have less have no chance to catch up.
2. Real life has no respawns. We need safety nets.
Games are fun because the consequences are minimal. Lose a game and try again. You can experiment with strategies, analyse problems, raise the difficulty to impossible odds. You can learn from failures and try again. You can let your younger sibling win just so they feel happier.
Inequality exists because the real world has severe consequences. Falling on the wrong end really sucks. I am lucky to never have been poor in reality. Being poor in a game already feels frustrating. Even if you don’t play games, imagine those times your project budget was running out, or you lack manpower to meet an impending big deadline. It is stressful and miserable. It must be so much worse when it comes to basic needs like food or health.
Our economy is winner-takes-all. Not much is done to help those who fall behind. Can we blame the winners for wanting to entrench their position? The world is harsh, and a small mistake is impossible to bounce back from. This is why early childhood education can be a big business. I can understand why parents fear their children being left behind.
We need safety nets because it generates value. If we can recover from failure, then we have space to pursue a passion, to take a risk, and to learn by doing. For every game, there are thousands of pages discussing strategy, everyone gets to learn and become better. This is only possible because we can take risks to try it out.
We need safety nets because it counters inequality, so that we can stop obsessing over getting ahead, and so that we can focus on being better people
We need safety nets because people should not suffer.
I support ideas such as universal basic income - (Do also check out ‘Universal Basic Income is Capitalism 2.0’ - where it argues how UBI is consistent with the demand side of capitalism and will increase wealth generally). I think it will pay off for humanity in the long run. I recognise that implementation is likely to be hard, but that is not a reason for brushing it off. Those who have the influence to design the system should think hard about it.
3. Winning a game is not only about skill
Meritocracy is a commonly heard term these days. As an aim, meritocracy is great - those who are better should be more likely to win. As a description, meritocracy is terrible - it says that those who are richer are better. It justifies inequality. Winners can say - I got here because I was the brightest and most hardworking. This justifies behavior to entrench positions or exploit others.
Most gamers will recognise that skill is not the only factor. Somehow we are slower to recognise this in the real world. Acknowledging that there is more than skill leading to the results is a key step towards us being more compassionate towards others, skeptical to our own success, and thankful for our blessings.
Most games have an element of luck. Will the card I need come soon? Will he dodge left of right? These are out of our control and we have to accept that we win or lose due to good or bad luck. Real life is even more chaotic. Luck determines where you were born, your health, finding your passions early, meeting the right business partner, starting a business just before an economic boom or global pandemic.
The Mahjong scene in Crazy Rich Asians is really about luck.
There is also a metagame. Maybe your opponents would adapt to your personality or band together to bring you down. Maybe you can manipulate them into fighting each other. Success could happen because of support for ulterior motives. In Cold War America, the abundance of a supermarket was a shining symbol of the success of the free market economy, but it was in reality propped up by government investment, the antithesis of a free market.
Finally, sometimes the winner of a game got there by cheating. This happens in reality too. Businesses breach regulations, defraud investors, fail to honour their contracts. If they don’t get caught, they get to enjoy the spoils.
We need to adjust for all this. Be compassionate when we see failure. Be skeptical when we see success.
4. Wealth is not the end game
Wealth is not the goal of most games. It is a means to an end: Getting victory points, saving the world, building a farm. Wealth is not the end goal to gaming. The goal is to have fun.
Life’s goals are harder to define. No one tells us what counts towards the score. Money is easy to count and something mistakenly becomes a proxy for winning. We think those who have more are happier. We end up exploited by the economy rather than using it as a tool to allocate resources and achieve growth. Friends compare paychecks. Siblings fight over inheritance. There is pressure to have more.
We need to learn to find our end game. Sadly the structure of the economy tries to distract you from it. It makes you work hard without question and seek mindless entertainment. It tries to build up demand and feel like we are lacking in material possessions.
We can’t leave this table
Unfortunately, we cannot stop playing and find a different game. We have to work within this game. I hope those who can influence the design of the system have these thoughts in mind when building it. I acknowledge that these are broad ideals, and there is a much much harder question of how to implement them. I don’t envy their job.
I have little influence in this, but I will try and play the game without being consumed by it, and to do what I can to help others along the way.
Stay safe!
James
Thanks for reading! I would love to hear any thoughts you had about this post and to discuss it further. What do you think about the state of the economy? How could we contribute to make it better?
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