

China Bans Gold Farming - michael_dorfman
http://www.informationweek.com/news/internet/ebusiness/showArticle.jhtml?articleID=218101859

======
ckinnan
From the ministry press release: _Cui Ran, an expert on the Chinese online
industry, said the regulation aimed to "nip illegal online activities in the
bud," as current trading volume was still too small to shake the nation's
entire financial system.

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.

~~~
netsp
Very possibly.

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.

~~~
stcredzero
Chairman Mao once said, "Power comes from the end of a gun."

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.

~~~
netsp
I don't think that it has gotten to that point or near it very often.

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.

~~~
stcredzero
_I don't think that it has gotten to that point or near it very often._

This is what makes it more economical.

 _other things like media & information to project their power_

Yes, but behind all that, there's guns.

------
TrevorJ
This is good news for gamers, I'd be interested to know what the impact will
be in China in terms of human rights/living conditions. I have heard a little
about some of the Chinese companies who hire people to farm gold for long
hours every day for poor wages and worse living conditions.

~~~
philwelch
But then you run into the question about sweatshops that no one wants to ask:
if it sucks so much to work in a sweatshop, why do these people willingly do
so? Answer: the alternative is even worse.

~~~
davidblair
Sweatshops are unacceptable even if no better alternative currently exists.
This is not about what stage of develop an economy is in but instead it is
about helping people see past present situation.

How can alternatives develop when the current practice is so brutally
efficient at keeping costs down making other choices inefficient by
comparison?

~~~
xenophanes
> Sweatshops are unacceptable even if no better alternative currently exists.

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?

~~~
davidblair
I applaud people working long hard hours to get ahead. I am not against
working hard but instead the abuse on the part of employers. They hold the
power in this situation, not the people. There are types of employment that
are simply unacceptable.

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.

~~~
xenophanes
Slave labor lowered the South's standard of living, btw. It's inefficient and
costly compared to a free market. The view that slavery is practical,
economical, or beneficial in any way is a pro-slavery myth!

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.

~~~
TrevorJ
"Sweatshops will go away when the country is richer, with or without laws"

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?

~~~
lionhearted
Hey Trevor, I normally wouldn't reply to a post that has a lot of closely held
beliefs, but you seem like a really smart and caring person so I'm going to
take a shot. I've spent some time in really poor places, I've been self-
employed, and I've also had people work for me.

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.

~~~
TrevorJ
First of all, thank you for the well thought out and articulated reply.

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.

~~~
lionhearted
> First of all, thank you for the well thought out and articulated reply.

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.

~~~
TrevorJ
"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"

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.

------
henning
This won't change anything. Gold farmers already evade China's national
firewall in order to access international game servers.

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.

~~~
froo
_The rest is obtained by bots that they run en masse which really mess up the
game for everyone else._

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.

------
jackmoore
Why would they do this? Seems like any money flowing into the economy would be
a good thing.

~~~
ArcticCelt
Exactly my thoughts. Not only money, but money in exchange of nothing of real
value.

~~~
netsp
Nothing of value in what sense? It's clear that there is value to the buyers
of the gold, they pay for it. It costs something (player's time & computers)
to accumulate, they forgo value to create this.

