A confession: I know very little about any theories of economics. I know it when I have to deal with it at the supermarket or at bill-paying time, but, generally speaking, I know about as much about economics as your doorstop [maybe a bit less; the doorstop usually reads your paper before you bring it in]. That said, I suspect the above Calvin and Hobbes cartoon is as good a starting point as any for our discussion.
As to the current US financial crisis, I've got no solutions, or even suggestions. For a quick read on how the whole mess started, I recommend this article; it's one that even I could understand [then again, when your barn is on fire, do you really need to know what knocked over the lantern?]. As for sensible opinions on the whole thing, many of my fellow bloggers are taking it up; something tells me you can't swing a cat on the Blogosphere right now without hitting one. I'd have no idea whose site to visit: read around and find an opinion that makes sense to you.
Speaking of economies, the Entrecard system is frequently referred to as "an economy". But since, for most participants, no money changes hands, I think that's just people making themselves feel good about taking part in the activity. Truthfully, I think of at least the advertising element of the system as "fantasy football"; as a participant, you have 'X' number of credits to work with. You use your credits to advertise your blog on those sites which you believe will bring you the most visitors, as a team manager in FF uses his "payroll" to acquire the best players available. The principal difference is that, in FF, all participants have the same payroll to start with, while EC allows the more ambitious to acquire a larger bankroll.
Of course, those who work hard within the rules should be allowed to prosper. But every successful economy throughout history has had one common element: the existence of a strong and secure middle class. Pick any EC category at random. You'll notice a few sites [based, one assumes, on the merit of the blog represented] trading for two thousand EC credits or more, a small group available for hundreds of credits, and a large group of sites selling ads for 128 credits or less. (I recently read a post on one site, celebrating the fact that the blog had reached the top advertising rate in its category. Legitimate congratulations are in order for that blogger. But, and an important "but" at that, if your product is priced too high for the average participant to buy, these large blocks of credits will pass from hand to hand within the "plutocrat" community.)
To be fair, Entrecard has admitted that the problem exists [go here for a recent EC Forum discussion on the matter]. I'm a little sceptical of the "luxury goods" option; anyone competent in PhotoShop or Gimp can make an EC ad look enough like the "golden ticket" sites to make the distinction meaningless. But 10 out of ten for at least considering the issue. As in the real world, there are no simple solutions. Then again, in an artificial economy, no one is hurt when the wrong manipulations are made.
-Mike Riley
