The metaverse is once again driving hope for a better form of capitalism. Seriously?
Where there is a need, people find a way to satisfy it. Whenever the 19th-century English writer Charles Dickens announced he would be giving a reading in London, a thriving black market quickly sprang up around the tickets. He was the literary hero of his day, and so highly sought after that middlemen bought up the tickets for his appearances as quickly as possible, then resold them to his fans at inflated prices. Sometimes the cost of a ticket amounted to the monthly salary of a normal worker.
Nowadays this task is handled by bots, computer programs that search the Internet for attractive offers and perform transactions automatically. Bots buy up everything from rare models of sneakers to coveted tickets for Broadway shows. Just like their 19th-century counterparts, today’s bot operators aim to resell the goods to end-consumers at a substantial profit.
Capitalism has always been subject to loopholes that can distort the pure doctrine of price formation, which is supposed to create fair prices on the basis of supply and demand. Today’s automated intermediary trade is very efficient at siphoning off value, but it doesn't create any new value. Digital capitalism, once praised as a model for reforming the outmoded capitalism of material times, is automating everything that has been familiar to us – at an absurd pace and on a grand scale.
Enter: the Metaverse, where the next wave of expectations by the neo-socialist techno-evangelists lies dormant. It is all supposed to finally come true in this transcendental space for techies – even the reinvention of capitalism, which the internet has thus far failed to achieve, in spite of all the utopian hopes of the early years. The metavision sounds something like this: Everyone can finally participate in the market at long last. Individual wishes, no matter how extraordinary, can be accommodated in this new, hybrid consumer world. The forces of distribution will be unleashed on a scale that has never been available before. In other words, the Metaverse supposedly represents greatest democratization platform of all time, and will also recharge capitalism itself.
If you want to examine the reality of these forecasts more closely, it’s worth looking at who is currently dominating the discussion about this new virtual space. At the moment, Facebook is talking the loudest about the metaverse and has even renamed itself “Meta.” It’s always a bit suspicious when the revolution that is supposed to benefit the dwarves is being led by a giant. But in purely practical terms, it has long been plain to see where the economic journey in virtual reality is headed.
In the Metaverse, you can buy and trade cryptocurrencies for real. Someone recently paid half a million US dollars for a 40,000-square-meter plot of virtual land on the virtual reality platform Decentraland. The buyers presumably hope their beautiful spot will someday become a popular destination where avatars will want to stop and spend some time. And of course those avatars will want to look good when they visit the virtual hotspot. Various providers are already offering package solutions for avatar-primping. A company called Avatar SDK offers 6000 avatars via subscription, and they can be given new clothes and a fresh haircut for just $240 per month. That's certainly an attractive offer for those who like to play around with their own identities. But it also exacerbates a problem with capitalism that previous versions of the economic system were also unable to control: Production is no longer geared toward meeting a real need, but primarily toward generating the maximum profit for the makers of products and services by creating demand where there is no real need in the first place. And yes, that too is a business model.
Technology is neither good nor bad; nor is it neutral, according to the first law of technology as formulated by US historian Melvin Kranzberg. His insights about technology are still true today. Technology doesn’t take on values and meaning until it is used by people. And the same is true of our capitalist economic system. The forces that drive capitalism are subject to human foibles. The way people shape the Metaverse will determine how it serves us – or whether it fails to do so.
Charles Dickens once wrote, “All other swindlers on earth are nothing to the self-swindlers.” Whether you pay two, 20 or 250 dollars to hear someone read it, this sentence expresses the same truth. And by the way, it's a quote from the book "Great Expectations."