World of development economics Warcraft

Everything you ever wanted to know about gold farming and the global economy

Published August 7, 2008 6:40PM (EDT)

One home wireless network, two intersecting worlds of Worlds of Warcraft.

Yesterday afternoon, while my son was upstairs leveling up his blood-elf and exulting in his new ostrich mount, I was downstairs, working my way through the 87-page research paper, "'Gold Farming': Real-World Production in Developing Countries for the Virtual Economies of Online Games," by Richard Heeks, a professor of "development informatics" at the University of Manchester. (Thanks to the Private Sector Development blog for the link.)

While my son was hacking and slashing, I was frowning over the self-evident and yet strangely seductive declaration that "development studies and gold farming have so far had nothing to say to one another."

And while we both took a break from our labors, I listened to him exult over his latest virtual triumph, and decided against trying to tell him how his recent ostrich purchase fit into the context of "processes found in chronologies of capitalist development and the product life cycle." I'll wait until he's a little older... like, eleven.

So who was having more fun? I'd guess him, even though I'm the kind of guy who can derive a lot of pleasure just from the mere fact that someone has compiled a 12-page bibliography gathering together every relevant piece of academic research or journalism involving the intersection of gold farming and economic development. I also can't lie. Statements like the following get me pretty excited:

The "pre-history" of gold farming dates from the 1980s, and we can structure it in terms of capitalist development, starting with "subsistence" production and moving through barter, commoditization and monetization until we reach the type of petty commodity production found at the turn of the 21st century. Gold farming proper then started in earnest in 2001-2002, really took off in 2003-2004, and entered something of a black hole phase in data terms during 2007-2008. We can likewise structure this as a move from petty to capitalist commodity production involving wage labor, automation, and globalization/offshoring, particularly to Asia.

For those readers who are completely confused at this point, "gold farming" is the practice of purposely playing an online multiplayer game so as to earn in-game currency that can then be sold to other players for real, non-virtual currency. My son, for example, needed 30 gold to pay for training his ostrich mount. He could have earned that gold himself by killing enemies or selling enough laboriously "hand-made" virtual crafts, or he could have hooked up with a gold-farmer broker somewhere on the wild Net and bought the gold with his real-world allowance. In his virtual actuality, a friendly member of his guild simply gave him 100 gold, no strings attached, which made his day.

(Side note: I later asked him if he was aware of the practice of "gold farming." He said yes, and observed that he regularly sees advertisements for "World of Warcraft gold" on his Gmail account. My son is not easily shocked, but when I informed him that he was seeing those ads because Google was listening in to his e-mail communiques discussing WoW, his eyes widened.)

Hard data on the practice is difficult to come by, but according to Heeks' literature review, 80-85 percent of world-wide gold-farming takes place in China and "the rather wobbly-legged best guesses for 2008 are that 400,000 gold farmers earning an average US$145 per month produced a global market worth US$500 million; but we could easily more than double the latter to over US$1 billion. There are probably 5-10 million consumers of gold farming services."

It would not be an exaggeration to declare that Heeks' opus, which he describes as a "salmagundi of a paper" is "everything you ever wanted to known about gold-farming as seen through the multi-faceted prism of economic and sociological analysis."

Gold-farming has come under criticism from "legitimate" game players, who feel that it ruins the gaming experience and contributes to in-game inflation, to the point that some players feel justified in killing any gold-farmers they run across while playing. Social critics have also dismissed gold-farming operations as virtual sweatshops that simply continue Western exploitation of low-cost developing nation labor. Heeks counters by citing research that suggests that a majority of Chinese gold-farmers enjoy their jobs, and that gold farming has positive macro-economic effects on developing nation economies.

[Gold farming] has also in places reduced the number of unemployed. It is therefore increasing national income. Those earning money from foreign players are also undertaking the equivalent of exports, thus impacting the country's balance of trade. The nature of those employed is mixed but, by channelling income to the unemployed and to rural migrants, gold-farming may have some income equity, even poverty reduction, impacts.

Heeks also suggests that gold farming could be a productive initial foray into the world of information and communication technology entrepreneurship. In other words, once you've mastered making money off of World of Warcraft, you're ready for bigger things. But perhaps most provocatively, he cites research by Nick Yee, a scientist at the Palo Alto Research Center, who proposes disturbing analogues between online and offline international labor relations.

Yee insightfully [demonstrates] parallels between reactions to gold farmers, and the treatment of Chinese immigrant labour working laundry shops during the California gold rush of the mid-to-late 19th century: the same repetitive work in front of a machine; the same association with gold. And similar tropes of associating East Asians with disease and pestilence that justified the need for their extermination -- ethnic-cleansing either from real American soil or from the virtual American soil of game servers:

"The contemporary narrative starts to feel too much like the historical one -- Chinese immigrant workers being harassed and murdered by Westerners who feel they alone can arbitrate what constitutes acceptable labor."

I don't think my son, motivated by a sense of betrayal of the true spirit of World of Warcraft, has beheaded any Chinese gold-farmers. But I think we could have a pretty interesting conversation about how the in-game virtual economy connects to the out-of-game real world global economy. When I start talking to him about discrimination against Chinese laundrymen 100 years ago in California there's a good chance he might stare at me as blankly as I sometimes do when he explains the particularly stunning magical benefits of his latest battle-axe, but somewhere along the line, the connection will be made.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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