by Dreamingen Writer, Correspondent

Dreamingen believes we are employed by the future to help the next generation. He is a law student, art lover, and Pollywog’s hat model.

Dreamingen:  Tell us a little about yourself.

Desmond:  In first life I’m a small business owner in my 40s; I have a small company in the California tech industry. In Second Life I’m pretty much what you see, a shopkeeper and private estate “land baron” as it’s called.

Dreamingen:  I am exploring a very broad topic of what role or application does the legal system have to a virtual world, if any. What benefits could a virtual world have by self regulation? You have had a great deal of experience in dealing with this question on your own virtual continent, what happens when everything does not go as planned?

Desmond:  Usually things don’t go as planned! It’s the norm. However, some things are more important than others.

Financially as a micronation on the grid, we are in great shape. I know that usually for every region I add, there will be someone backing out, having financial difficulties. Usually one per region though sometimes none. I’ve factored that in financially and run a waiting list, so if someone breaks their word it’s almost a nonevent—I just offer land to the next person in line. Generally speaking, a straight up risk assessment of “trusting people’s word” for me has been roughly 95% sure thing: 5% breach of verbal contract.

As for “rules” violations between established residents, the track record is this: I’ve not thrown a single person out for any rules violations, ever. That’s across a year and a half, and dealing with several hundred people. Haven’t needed to!

Does that mean nobody violates Caledon’s covenant? If I were to compare the covenant to what people do, I’d say maybe 30% or more are violating some minor rule or other. Maybe by having something not quite in theme with our land, or sticking something out into a public area too far—that kind of thing. It’s a bit like speeding in a car. People like to drive a bit over the speed limit for their personal reasons, but they also like that the speed limit is still there, just to make sure things don’t get completely out of hand.

In a month’s time, across hundreds of tenants and about 1.5 million square meters of mostly resident-controlled land, I may gently tap someone on the shoulder about something once or twice. Nobody’s given me a lot of fuss. Should I enforce the rules more thoroughly? I think not. Caledon gets rave reviews and overwhelming interest as it is—more demand than I can meet. If I make a mistake, I’d rather make it in the direction that favors the individual, and it would take a deeply significant tragedy of the commons to cause me to act. With regard to interactions between individuals, as opposed to business with me directly, I simply look at it this way: “Is it any of my business?”

Usually the answer is no, and their dispute is simply not something I should rightfully be involved in. I wish everyone would consider that carefully, on an intellectual level. Just because someone may be considered “in the wrong” or judged to “owe” another resident something, doesn’t mean my responsibilities change. I am still responsible for defending everyone’s land, regardless what I think of them, or what they may owe another. Just because I could theoretically take away someone else’s land with little consequence, even to popular acclaim in the court of public opinion, doesn’t mean I ever should.

Dreamingen:   Linden Lab (LL) outlawed gambling in Second life. Do you see this as a trend? Do you see LL making more rules for all the residences or should it be up to the residents? Or is it up to the US Government to take action?

Desmond:  Linden Research Inc. didn’t outlaw gambling per se, they simply and correctly took steps to ensure that they followed the laws of their land. There was no choice in the matter for them. They would have faced civil and criminal consequences were they to knowingly allow such activities to continue, or worse yet profit from it.

I do see Linden Research Inc. making rules for residents only in the capacity that they absolutely must, for business survival. It is expensive to make rules. Rules imply some degree of enforcement, no matter how minor, and that takes time and money. I can see them stepping back significantly and quickly as best as they are able.

That’s the trend I see.

Should rules be up to the residents? Taking the long view, they already are.

The laws that govern residents re: gambling and other such things are largely in place via our societies, not cooked up by our virtual world service provider. Our social interactions on the grid are already largely formed by us, and these are the basis for our rulesets. We can generally tell what is intended to be someone’s virtual bedroom as opposed to the street. We can generally ascertain meaning from how people chat, interact, move, and conduct business. From these social cues, we form distinct online cultures with their own values. Should governments of nations take action? For money laundering, identity theft or other major crimes, yes. But if someone leaves a virtual flaming bag of poo on your virtual porch, no, the government should not be involved.

Dreamingen:  What do you think about letting residents have more autonomy on dispute resolution and regulating commercial and griefing activities?

Desmond:  More than we have already? Right now, there really isn’t any reliable dispute resolution mechanism via our virtual world service provider. Sure, you can report someone harassing you, and they will look at it if they can. But even if they eliminate the offender, the offender can be back on another account within minutes.

I think the issue revolves around tools. We can eject anyone we want from land we control. We can leave a public area at any time. Nobody’s stopping us from regulating each other’s commercial business, other than ourselves. Commercial regulation is a risk reduction factor, typically best measured in financial terms. So far, that risk factor hasn’t been high enough to spawn many land escrow services, insurance businesses and so forth.

All of these things are likely fauna of an economic environment that would evolve a true, home-grown, legitimate regulation mechanism. But even with thousands of dollars changing hands on the grid regularly and commonly, I simply don’t think there’s enough money on the table out there to successfully spawn regulation - not yet.

Dreamingen:  What shortcomings if any are had by not having a legal system?

Desmond:  Lots of them. Breach of contract, loss of valuables, all the obvious answers. But we have a legal system. In fact, we have a plurality of them. The United States legal system. The UK legal system. The legal systems of South America, Southeast Asia, China and more. The issue is that we don’t have a legal system that works on small financial scales for anonymous people in a global society. And the reason why: justice is just too expensive. If an anonymous person across the sea steals your coffee money, no justice system in the world is efficient enough to recover it cost effectively.

Dreamingen:  Does the development or non-development of a legal system affect the future of commercial activities in SL?

Desmond:  I would be very careful of the phrase “legal system” except within a philosophic discussion, when considering it as an independent entity in the context of a virtual environment. I’m not a law expert, but I suspect there is a difference between a true legal system and anything we could create purely online. The problem of identity is significant; the problem of jurisdiction is significant. Any system that someone could simply opt out of by disappearing, even with high financial consequences, seems less than a true legal system. I’ll leave it to the law experts to determine how much less.

So let’s consider, say, a system that compels its membership to behave according to rules. Maybe not a legal system but close enough. Perhaps each member is bonded via collateral, or gains significant benefit for participating. There’s one clear, obvious benefit, and that’s the enabling of commerce on a scale not possible with mere trust networks of individuals.

Ironically, that’s also the downfall of such a system. Nobody’s going to quibble (successfully) over the cost of a gumball. However, people will quibble successfully over the cost of one million gumballs, and they will use real governments and real courts to do it. Any benefit of an online system might be found in the gap between one gumball and one million. My guess is that the success and scale of any online system will be measured in relative proportion to whatever stake its members have in it.

Dreamingen:  What do you see for the future of commercial activities in the Metaverse and SL?

Desmond:  I expect the Metaverse at large to run on simple trust networks for a long, long, long time. For it’s how we do business anyway. Consider, when you park a car anywhere you generally trust that you’ll still find it when you get back. The insurance doesn’t really cover its value to you; the police don’t generally find a stolen car.

When you hand your credit card to someone, you trust they won’t copy the information. Even credit card companies, grocery stores and a variety of businesses simply budget for, and write off, small time losses. Binding contracts and tort law are saved for the big deals, which are presently done outside the framework of the Metaverse already anyway.

Dreamingen:  How is this affected by collapses of Stock exchanges and banks (Ginko)?

Desmond:  I am loathe to comment “on the record” about any specific entity I’ve heard of online. There’s no way for any of us to know the facts, or even if scenarios aren’t simply conjured up. I don’t think that’s the case with Ginko, but I am always given pause, remembering this case: http://terranova.blogs.com/terra_nova/2004/10/a_riot.html

This is a case where purportedly the game business itself introduced a character that did certain hated acts, spurring interest and creating dramatic tension. Just because we read about something doesn’t mean we have the truth, and I don’t like to comment based on hearsay.

That said, I do believe that virtual worlds are rife with scams, Ponzi schemes and the like, and both scammers and the criminally negligent run rampant.

I wish I could site the reference (I don’t seem to have it on hand) but I read recently that the US Department of Justice is now more funded than ever to be on the lookout for more scams relating to gambling. Here’s an example of what they catch already: 2006 Internet Crime Report, prepared by the National White Collar Crime Center and the Federal Bureau of Investigation

Personally, I think there is far less impact from such things than the hype has suggested. I deeply doubt any significant fraction of a million dollars was involved. Such high asset claims are easily fabricated, impossible to prove, and only serve to make things look good while scams are in full swing. I also think anyone deeply invested into such a scam must have some sense that they are not lawful, or are simply fools whom no system, legal or otherwise, will protect. One cannot legislate against stupidity with any success.

Dreamingen:  Do you have any impressions of sims like the Confederation of Democratic Simulators developing a justice system?

Desmond:  I highly respect their efforts, and even if they don’t ever create the perfect system, the fact they tried makes it worthwhile. We have a lot to learn from their effort, and I really hope someone is recording it in an unbiased manner somewhere.

Much is stacked against them, such as the lack of tools they need to base such things as identity on—a cornerstone of democracy. It’s easy to pick apart what’s wrong. But before the first airplane that flew, hundreds of attempts failed.

The key is to learn, understand the questions, and never give up. I applaud their efforts and secretly wish them success, that we might someday pull ourselves out of the muck of good-old-boy style trust networks.

Dreamingen:  Have you any comments on the Metaverse Republic [proposed legal system for SL]?

Desmond:  I tease Ashcroft [Burnham] mercilessly about it because we are friends, but the honest answer is, until there is something to critique there’s not much for me to say. The Metaverse Republic has not taken its first steps yet, so it’s like trying to measure how fast a newborn can run. I think there are definitely high, high, high hurdles that it will have to overcome, in order to be a success. What I do see, however, is that it’s more than just an attempt to leverage people from positions of advantage. There are too many easier ways to do that, without going to all the trouble of creating a Metaverse Republic.

On the good side, I see the attempt as having that special passionate desire for justice. Allow me to explain; this is a fine point. For any of you that have sat on a jury trial of significance, it’s that sense you get on a jury when a group of people gets together and honestly, truly, passionately tries to do the right thing. It’s real, and most people really do have that nature. On the bad side, I see the great possibility to accidentally recreate a virtual Stanford Prison Experiment, collapsing spectacularly and discrediting itself in the first stumbles, before it has learned to walk. I’m very concerned that the bad side of human nature won’t be weighed in with the good. See http://www.prisonexp.org

Dreamingen:  Do the residents need something like the Metaverse Republic? Is it even possible? Practical?

Desmond:  If they need it, it may be accepted once someone goes to all the trouble of making it or something like it work, and work better for residents than not having one. Nobody ‘needed’the Internet for thousands of years, for instance. One of the biggest drawbacks is that people are pretty happy with corporate style governance on the grid right now. They will frequent zoned, administered areas such as the one I have, because it’s clear that without keeping people happy I’d lose the whole thing. A very natural check and balance. If you run a restaurant and pee in the soup, you won’t be successful.

The Metaverse Republic will have to show it’s even better than we are at pleasing its members. Could it? If it’s light-handed, absolutely it could.

Possible? Sure. But there’s a difference between four participating members and four million. I suppose we’ll have to know more about what it is before this question will be answered.

Practical? Well, the blunt answer seems to be: not very. One can do very very well, and quickly, in business using trust networks and working up, proving your reliability. Consider the Metaverse Republic as something brewing for more than a year, the work of many individuals - that’s a lot of work so far with nothing to show—yet.

Dreamingen:  Would you join a project like Metaverse Republic? Why or Why not? And what would you want to know before telling your citizens that it is a good idea?

Desmond:  No. Why not? Jurisdiction. I simply don’t have it, even if I ever decided it was a good idea to join up. I have a relationship with people in Caledon via the land covenant, but my jurisdiction does not cover “joining them up” with this or that other system of arbitration or anything else. Nobody signed on with any such expectation; in fact, if anything the expectation would be quite the contrary. Let’s flip this around. What if people wanted to join the Metaverse Republic voluntarily? I wouldn’t bother to stop them, but certainly any ruling of a Metaverse Republic official would be dangerously close to laughable within Caledon. There would be clear and intense political motivation not to “cave” to such a thing, regardless of how just or fair it may be, just so our independent nature remained crystal clear. I’d probably hang whatever document I was sent on the wall of the Guvnah’s Mansion, though.

Dreamingen:  To develop a legal system in SL, if there was only one element that it must have, what is it?

Desmond:  Accountability, based on identity.

Dreamingen:  The catchall question, what are your long term views of regulation of the Metaverse, relationship with RL legal systems, potential to develop a system of justice and regulation unique to SL and recognized both by LL and RL jurisdictions?

Desmond:  I don’t see regulation really working out. Real scammers will simply log off and disappear, and ensure they never really risk anything of value. Honest people may offer to take part, and thus perhaps some largely honest people may be caught now and then at something; perhaps largely contract negligence when their computers break, they go to the hospital or go on vacation.

Another matter: evidence. It’s sorely lacking in a virtual world. There are off-grid chats, there is no current access to what was said, what was agreed upon—no proof that anyone is even the same person from day-to-day. I see big problems for anyone professional enough to insist on dealing with fact versus hearsay.

Also, likely the loss of pride for the losing party in a Metaverse courtroom may be worth more to them personally than whatever the case was about. As such, you’ll have a nasty fight on your hands each time, over trivialities.

I also see an incredible “professionalism gap”—people will partake in systems with no knowledge of basics. Just as you don’t want an amateur doing minor surgery on your hand, do you really want amateurs doing minor judicial hearings on your financial interests?

For thousands of years, law has been a profession. Turning it over to the simply curious to play with in a metaverse seems... foolish, as long as anything of real value at stake.

Yet, with professionals involved, what happens if a “loser” in a Metaverse court takes a chatlog of the virtual proceedings to the Bar, and establishes a link between the avatar and the law professional’s identity?

Would the “Metaverse court” be taken as just playing a silly game and not put the participant’s credentials and practise at risk? In a world where the Metaverse is being taken more seriously every day, I wouldn’t be so sure.

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metanomics
Metanomics is the study of business and policy in the "metaverse" of virtual worlds. Metanomics ‘07 is a series hosted by Professor Robert Bloomfield in partnership with the Cornell Johnson School of Management and produced in association with metaversed.com.

Virtually Blind
Virtually Blind is a regularly updated blog on "virtual law," covering legal news, issues, and events that impact virtual worlds.