The Dord of Darien

Musings from the Mayor of the Internet

On the morality of exchange

I posted a throwaway snark earlier on the Tweeter that’s earned me some questions. Part of the trouble (most of the trouble, probably) is the data I had to elide to get it into 140 characters, so I’m going to expand it (with context, yet) here. And because I want to, I’m going to delve into the idea a bit. Not my standard bill of fare on this blog, but, hey, if you’re not interested, here’s a very round cat you can pass the time with instead.

Let’s define some terms. A "transaction" refers to any exchange made between two (or more) people, whether successful or not. If I give you a dollar for your widget, that’s a transaction. If I just give you a dollar, that’s a transaction. If I offer you a dollar for your widget and you tell me to get bent, that’s a transaction. If I punch you in the face and take your widget, that’s a transaction.

We then define "violence" as the intentional violation of another person’s natural rights without that person’s consent. Therefore, for our purposes, if I punch you and take your widget, I have used violence against you. However, in these terms, a boxer punching his opponent during a boxing match would not be construed as violence, since both boxers have agreed to accept being punched as a condition of the match. (If you would like me to define "natural rights," I’m willing to do so, but a thorough exploration of the concept really demands its own blog post rather than an aside here.)

Now, it is intuitively obvious to most people that there are some transactions that are wrong. Very few people, I’ll wager, would disagree that it’s wrong to kill someone and take his wallet. So clearly there must be some quality that separates the "wrong" transactions from the "non-wrong" transactions. Can we identify that quality? I say we can: that quality is violence. Any transaction involving violence is wrong, and that includes not only violence done (such as punching you and taking your widget) but also violence threatened (such as telling you to give me your widget or else I’ll punch you). Those are the "wrong" transactions. Everything else is in the "not wrong" transaction pile.

This seems simple, but is made complicated because many people do not want to believe that violence is always wrong. There is significant impetus (some natural, some conditioned) to accept that, sometimes, doing violence is okay; that, in the right circumstances, it is okay to harm another human being.* These people cannot accept that violence is itself the problem — that violence is what separates right from wrong — but they still recognise that some transactions are wrong. So they end up inventing arbitrary categories to place transactions in; we’re told that "exploitative" or "unfair" transactions are wrong, but neither of these qualities is objectively obvious. They’re really just synonyms for "wrong," and the whole argument becomes circular.

The impetus for my tweet was seeing a tweet by another person (who shall remain nameless; this is not an "attack" on that person, so his identity is unimportant) claiming that the "freemium" business model is exploitative, and thus morally wrong. I contend that this is absurd. No maker of a freemium product has ever committed violence against me — not even the subtle violence of fraud. They offer me a set of products or services at a stated range of prices, and I am free to purchase any, all, or none of them at my discretion. How is this "wrong?"

Aren’t you all proud of me? I wrote this whole post without using the words "state," "taxation," or "conscription" even one time!

Self-defense is a complicated issue, and one on which there is significant disagreement among thinkers greater than myself. I’ve come to believe that self-defense is permissible in a certain set of narrowly-defined circumstances because the initiator of violence, by initiating violence, tacitly accepts that the transaction will be conducted with violence (much as in the example of the boxers above, except that the agreement is rarely mutual). As such, one has the right to defend onesself, or to come to the aid of others, in the following circumstances:

  • There must be an actual threat of violence. It is not legitimate to "defend yourself" against inconvenience or disadvantage. You cannot use violence to defend yourself against not getting a seat on the bus, or against other people not giving you something you want, or against people not buying your product.
  • The threat must be imminent. If I get into a fight with a co-worker, and I’m sitting in a bar stewing about it after work, and I’m saying to a buddy "I should just kick that guy’s ass," there is no imminent threat, and no violent response is justified. Similarly, if I punched you in the face last week, there’s no justification for you to attack me today, since the threat is long past.
  • The force employed must be proportionate to the threat. If the threat is that a jilted lover will slap you, shooting her is not justified. If she’s trying to knife you, that’s a different story.
  • The use of violence must end when the threat ends. If I break into your house, and you shoot me in the leg, and I’m down and no longer a threat, there is no justification for you to execute me.

In those limited circumstances I believe self-defense to be permissible. I am hardly the guru on the mountain, however, and there are far more capable thinkers than I who disagree.

February 9th, 2012 Posted by | Bullshit | 6 comments


  1. I’m kind if confused: is the argument that freemium content creators are being exploited? Or being exploitative? I don’t really get it either way.

    Comment by Stephen | 15 February 2012

  2. The "argument" (such as it was; it was really an unsupported assertion) I was responding to is that freemium content makers are exploitative. No support was offered, though, to be fair, it was a tweet, and there’s only so much support one can fit in 140 characters; all that was said was roughly "if you don’t think freemium is evil you need to learn about the psychology of exploitation." Which is unsane.

    Comment by Darien | 17 February 2012

  3. OK, let me take a crack at this one. I don’t think freemium is evil but let’s see if I can construct an argument working from your assumptions for it.

    First we need to establish that there are exchanges that aren’t based around violence that are still scummy. I don’t want to say evil, but I think there’s a class of things that are sort of voluntary exchanges but that most people would consider wrong. “Exploitation” is a pretty good term for these things.

    Exploitation is basically when there is a large imbalance of power (be it wealth, social position, knowledge, etc.) between the two parties to the exchange, and the party with the advantage uses (or exploits) that advantage to his benefit. But that’s not really it, either: there needs to be also a sort of malice to it, or at least indifference. The exploiting party knows that he is advantaged and uses it to get everything he can from the disadvantaged party. The exploited party is also often under some sort of duress, be it an extreme need for money or whatnot.

    An easy example is blackmail. Blackmail is about having an advantage of knowledge: I know something that you don’t want anyone else to know. Pay me money and I’ll keep it a secret. I don’t think blackmail counts as violence under your definition (unless you have a broader definition of natural rights than I’m expecting). But we can all agree it’s a pretty scummy thing to do.

    I can gin up all sorts of other exploitative scenarios, both real and hypothetical. You’re dying of a disease and I alone hold the cure. In exchange for it, I demand all your money forever and ever. People who profit off war refugees, buying their possessions for below market value just because the refugee’s access to wider markets is limited and they need money desperately. People who hire illegal immigrants into very bad working conditions just because said immigrants have few options in the legitimate market. I know you have an alcohol problem so I get you drunk and then I buy/sell something to you at an advantage to me. Etc.

    Assuming we can agree that these kinds of transactions are not violent, I hope we can also agree that at least some of them are not good. (If you believe all of those things are fine and dandy then I guess the conversation stops here; I certainly can’t prove that something is immoral or unethical.)

    Given that, my argument would be that many freemium games are designed to exploit psychological weaknesses in people. I would say they are similar to modern slot machines except that freemium games are vastly better designed to exploit people.

    Most of the sort of Zynga-style games seem to operate under a few principles:

    1. You can play the game totally for free if you’d like.

    2. The games are generally some variant on the old empire building / Sim Whatever games where you start with a little area and then grow it bigger over time.

    3. When you first start, you can sit around and play the game more or less in realtime. You want to build something? OK, that takes 30 seconds. It feels like playing Sim City, where you have lots of little goals leading to a big goal, and you can achieve these pretty fast. You climb that work -> achievement hill that is at the core of gaming.

    4. 6. Having got you used to (maybe addicted) to the feeling of accomplishment from the achievement, the game starts denying you this. As your empire (farm/mafia/dragon ranch/whatever) starts to get larger, building/training/research takes longer and longer. Now it takes 5 minutes to build something. Now an hour. Now 8 hours.

    5. You can still play the game, but it’s not real time anymore. You need to wait. The hill is much, much bigger to get to the achievement. But look! You have a magical gem that you can use to speed up this hill. Press this button to use it and you’ve got yourself a building finished instantly.

    6. Incidentally, here’s a new goal for you. Oooh, that’s going to take a while. You should use another gem. Oh? You don’t have one? Here, you can buy one. Or go post on Facebook/Twitter and get your friends into the game. We’ll give you one!

    These games are very calculated to lure you into in, get you used to playing, and then slowly push you into paying money and/or shilling for the game in order to keep experiencing the sense of accomplishment. They have statisticians/economists/psychologists on staff whose job it is to figure out exactly how to arrange the variables to make you most likely to get sucked in and paying.

    The exploitation is essentially a transaction wherein the designers have a huge advantage (tons of psychological/statistical data about how people respond to different stimuli) over the player, who one assumes is just casually looking to have a good time. “Oh, I can raise dolphins by clicking this link on Facebook? That sounds fun.” Little does our player realize that they’re actually entering a well-oiled machine whose sole purpose is to exploit quirks of human psychology (we get addicted to accomplishment) in order to get the player to pay up increasingly large sums of money.

    It’s almost like the old scare scenario where the drug dealer gives you the first hit free to get you addicted (aside: where are these drug dealers who are constantly giving away tons of free drugs?). If I were to design a narcotic that created a physical addiction in you and I gave you a small dose for free at first but then started for larger, more effective doses as you built a resistance to the original, then uhm I guess I would be a tobacco company. And I don’t think many people would hold them up as shining examples of virtuous businesses.

    The freemium games aren’t too far off, only instead of exploiting biology they’re exploiting psychology. Nobody’s forcing anyone to smoke and nobody’s forcing anyone to play freemium games, but they’re both industries who have done everything they can to exploit certain weaknesses inherent in humanity in order to make money. And the worst thing is neither industry is really producing much of value: freemium games are usually shit games and cigarettes don’t even get you a particularly good buzz. At least Diablo/heroin gets you good and fucked up.

    Comment by Stephen | 21 February 2012

  4. A few postscripts:

    1. This article by Tim Rogers about the Sims Social is pretty awesome:

    You’ll want to click the giant orange fist at the top of the page one or more times to make the text like readable, and Rogers’ writing style can be extremely grating at times, but the content is fascinating. Rogers is a games writer and designer and there’s some stuff in there about his experience working in the industry that are worth the read.

    2. I don’t know that I really believe my argument, but I really kind of hate the “social” games that are just little engines to get your money. They’re bad games and bad for the industry. I was much happier with Popcap being the gateway game for people than Farmville. Also Zynga seems pretty evil.

    3. I would note that not all freemium games fall into this model. League of Legends is a good example of how to do free to play correctly: tons of content for free players, paying for things lets you advance/unlock stuff more quickly but there’s still a real game for you even if you’re not paying. The difference between “good” and “bad” freemium in my mind is something like:

    A bad freemium game is one where everything is designed from the ground floor to get your money. All game design decisions are subordinate to “How can we extract money from the player?” THIS IS HOW YOU DESIGN SLOT MACHINES NOT VIDEO GAMES. I actually have more respect for slot machines because at least they’re honest in their exploitation.

    A good freemium game is one where the core gameplay is built because it’s a good game. It feels like a game was designed and then certain content was either cordoned off (or even better added afterward) as premium content.

    Comment by Stephen | 21 February 2012

  5. A few caveats before we get started:

    1) I am not defending the quality of Zynga’s games. Nothing I say here should be taken as an analogue for "Mafia Wars is as good as Mass Effect 3." I’m merely saying that making these games is not an immoral act.

    2) I have issues with your claim that you "can’t prove that something is immoral or unethical." Now, we’ve had differences in the past on the subject of the definition of "prove" (summary for the viewing audience: Stephen is an empiricist and places large value on inductive proof, I’m a philosophist and place large value on deductive proof), but let me set that aside and recast the issue as: I surely am vulnerable to being convinced that something is immoral. I maintain (Potter Stewart be damned) that morality necessitates a set of objective criteria — that the concept of "morality" is essentially meaningless if we can’t evaluate actions objectively — and proposed my criteria in the original post. Anything that meets those criteria has been "proven" to my satisfaction to be immoral. Alternatively, you can propose different criteria (which you did) and then convince me of the rightness of the new definition (which we’ll get to), and thus prove things that way.

    3) There is space between "moral" and "immoral" for acts that are neither explicitly good nor explicitly evil. For example, if I’m thirsty, and I go to the kitchen and get a glass of water, I contend that this is neither a good nor an evil act. As such, I contend that, just because I allege Zynga isn’t doing evil by is business model, that does not mean I’m alleging that Zynga is a shining paladin of goodness.

    Now to get on with it:

    The core of this argument, as I see it, is that exchange from a relatively strong position should be regarded as wrong. I disagree. First of all, it is impossible to know in many cases the relative strengths of the parties’ positions. If I go to Best Buy and buy a copy of Dragon Quest 6 on the DS for $14.99, which party had a stronger position? I contend that it’s not even possible for the two parties to the exchange to know that, much less for an objective observer. If we say that it’s only exchanges that are "obviously" imbalanced that are the issue, then I contend the definition is hopelessly subjective; what is obvious to you may not be obvious to me, and so forth.

    This leaves us with two other options. The former is to assert the existence of an "arbiter" who decides when exchanges are imbalanced; this position is so completely nuts that I’m not even going to bother with it unless somebody really wants me to. The last option, and most interesting to my mind, is to say that an exchange is immorally imbalanced if one of the exchanging parties believes himself to be at an advantage. The primary issue I have with this is as follows. Say you sell me your old Playstation for $10. Was that immoral? I was clearly willing to give you $10 for it. So my first reaction is to say, no, that was not immoral. But let’s say that you know that I collect Playstations. Was the exchange immoral in this case? After all, you now have information about me that gives you an advantage. Would it be immoral if you sold it to me for $20? $50? I have to say I fail to see a way in which an exchange that we would regard as perfectly acceptable under normal circumstances becomes immorally exploitative solely on the basis of something one party knows, with no change in the actions performed.

    There is, of course, a powerful inclination to complain about "overcharging," or the dreaded "price gouging." If you sell me your Playstation for $10, that’s fine, but $50? Damn price gouging! But this is clearly nonsense. If I find your $50 asking price too steep, I’m free to walk away from the transaction. If I think I can get a Playstation for $10 on eBay (note: these numbers are all made up for this argument; I’ve no idea what the going rate on eBay actually is) I can just go do that. It also overlooks that there is another side to the equation. Should you be compelled to pay too high a price (in Playstations) to acquire my $10? Should you not also have the freedom to walk away from a deal that isn’t suitable to you?

    This propels us directly toward the "charging higher prices for water in the desert" argument. Can’t we all agree that expecting people crawling through the desert to pay a premium for water is evil and wrong? No, we cannot, and the reasons for this are twofold. First of all is the fact that, as Bastiat would put it, we are seeing only that which is visible; we overlook the fact that, without the ability to charge a higher price, nobody would be carting water out to the desert at all. The higher price is exactly what creates the incentive to fill the elevated demand in the first place, and is what will (in the fullness of time and that) lead the prices to fall toward average as the overdemand becomes saturated. Without this premium, the people in the desert just die of thirst and nobody benefits at all. I am not willing to label this "good." The other reason we cannot call this "wrong" follows right on from the first: the only alternative is for the buyers (or some vigilante third party) to use force to compel the sellers to give them water. So the overall situation looks like this:

    You really, really want water because you’re stuck in the desert dying of thirst. You are willing to pay $1000 per pint of water. The potential outcomes are as follows:

    • Water suppliers are attracted by your need, and voluntarily exchange water with you at a price you both agree is acceptable.
    • Water suppliers are attracted by your need, and you kill them and take their water.
    • Water suppliers ignore your need, because some third party has threatened violence against them if they take advantage of it, and you don’t end up getting any water.

    I’d say it’s pretty clear which of these outcomes is most moral.

    Blackmail, to me, is a very interesting concept. (First, of course, it’s important to distinguish between blackmail — which you describe correctly — and extortion, which is "pay me money or I’ll hurt you." You get it right in your post, but they’re frequently confused.) I agree: a lot of people do consider blackmail to be morally wrong, and it’s interesting to explore why. There are, to my mind, three components of blackmail: knowing a secret, exposing a secret, and accepting money. Do we contend that any of these is immoral on its own? Knowing a secret clearly is not, since it’s not only completely harmless, but also pretty much inevitable; we probably all know secrets of some form or another, and we probably all learned at least some of them without any conscious effort at all, but just by being in the right place at the right time, or by having somebody else confide in us. Accepting money also is clearly not immoral in and of itself. So if there is an immoral element to blackmail, it lies in exposing secrets; do we wish to go down that road? I for one find it impossible to accept; not only do we have issues of definition of "secrets" (good lord, can you imagine an even more all-consuming IP law that covers all presumed secrets?), but also we end up condemning the entire conception of journalism, along with our belief in transparency vis-á-vis government. Do we accept, then, that blackmail as a whole is immoral, even though no specific part of it is? If so: why?

    I contend that blackmail, though distasteful, is not actually immoral. There are many things like this; things that many (even most) people don’t like, but that are not appropriately labeled as immoral or evil. Talking real loud on your phone at a restaurant, for one. Swiping a parking space somebody was waiting for (or a resource node somebody was clearing in an MMO — bastards!). Littering. One also could include many of the things that have been prohibited by "morality laws" in this category: drinking, drug use, homosexuality, promiscuity, rock music, violent video games. Lots of people don’t like them. Maybe even most people don’t like them. But that doesn’t make them evil.

    So too with Zynga. Sure, near as I can tell, Zynga’s a completely shitty outfit, and their games are awful. They’re clearly in it to make huge money on Facebook, and not actually to contribute meaningfully to the art of games. But is that "evil," or is that just lame? I’d contend it’s the latter. We are all free not to play Zynga’s games at all if that’s what works best for us. Alternatively, we’re free to play them but just not pay any money. Or we’re free to play them and pay the money. There’s no coercion involved at all, only individual choice.

    But what about addiction? Isn’t Zynga the Facebook version of those horrible, mythological drug peddlers you mention (I’ve had people offer me free drugs, but I get the impression they were just normal dudes being sociable — oh, hey, I just rolled a joint, I should offer a drag to this guy like it’s a bag of chips I just opened — rather than what early 90s PSAs would have me believe were evil, scheming drug lords)? The concept of "addiction" is one of the most abused concepts I’m aware of. The physical phenomenon of addiction occurs when the body becomes so dependent on the presence of a certain substance that it will actually cease to function (or at least begin malfunctioning) if deprived of that substance. Clearly nobody gets "addicted" to FarmTown in that way. What we’re talking about instead is "psychological addiction," which is a nebulous term most often used to deride choices the speaker doesn’t believe are rational. People who play World of Warcraft all day long are clearly addicts, because I wouldn’t do a thing like that! Why does anybody watch American Idol? Obviously addicted. Oh, you buy every new iPod and iPad and iWhatever as soon as it comes out? Clearly you’re a gadget addict! No allowance tends to be made that people who behave in this way are doing so entirely rationally.

    And thus it is with FarmTown. You say these games aren’t of much value; I personally agree, but value is completely subjective. You and I don’t find these games valuable, and so we don’t spend our time (let alone money) on them. But clearly not everybody agrees. Tons of people play these games who have no interest in playing Mass Effect, or Super Mario Galaxy, or even Plants vs. Zombies. Clearly these games have value to those people. I may disagree with their decision — a lot — but that doesn’t mean it’s an irrational decision prompted by some "addiction" rather than a manifestation of the exact same type of decision I make when I boot up Sequence.

    I work with a girl who is ranked #10 in the world on this ridiculous "Joustin’ Beaver" iPhone game. She’s clearly way in to this game. I think it’s absurd. So it goes.

    I agree with you that some games are better than others. I also agree that there’s a "right" way and a "wrong" way to make freemium games, but that’s right and wrong in terms of making quality games, building a respected brand, and having some kind of future for your company once the novelty wears off, not right and wrong morally. It’s not morally wrong to make a shitty game and then ask people to pay you for it any more than it’s morally wrong to make the slot machines you compare them to. Now, when Zynga starts sending people a bill every April and saying they’ll lock you up in a cage and take your stuff if you don’t pay it, then I’ll agree that that’s evil.

    Comment by Darien | 1 March 2012

  6. Oh, also: the tweet I was riffing off of in the first place made no distinction between "good" freemium like LOL and "bad" freemium like FarmTown. I do realise it’s a tweet and perhaps something was elided in the 140 characters, but no impression was given that the poster believes that freemium is only evil if the games are shit. Not that it’s supremely relevant to the discussion, but perhaps worth noting as an example of how some people just believe plain crazy things.

    Comment by Darien | 1 March 2012

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