Money Talks: An Interview With EVE Online’s Economist

EVE Online‘s economy is unique among videogames in being truly player-driven; outside of the wildcard item of PLEX, almost everything in the game is constructed, hoarded and sold by players. The enormous complexity of this is why, seven years ago, CCP decided to hire a full-time economist. “My name is Eyjolfur Eyjo Gudmundsson but no-one can pronounce that,” he laughs, “So I am known as Dr Eyjo. I have a doctorate in economics and in that capacity I am the lead economist for CCP, as well as the head of the analytics unit.” I sat down with Dr Eyjo to talk about EVE’s economy, player manipulation, and why everyone isn’t leaving the United States.

What exactly does a game economist do? “Observe it, observe it,” says Dr Eyjo. “And if I notice anything that is ongoing in the economy that I think is probably in the wrong direction, I have a meeting with the game designers about possible solutions, about sorting the problems. To give a real world analogy, it is very much like a central bank dealing with governments. Sometimes they agree, sometimes they disagree, but together they have to manage the economy and make it happen.”

“The only exception is PLEX.” In EVE Online players purchase an item called PLEX – Pilot License Extension – which can be exchanged for either 30 days of gametime or sold on the market for hundreds of millions of ISK. “The PLEX is the only item that CCP has stated it is happy to become involved in trading to either stabilise fluctuations or somehow correct the direction the market might be going into, all depending on the circumstances,” says Dr Eyjo. “In the past we have intervened in the market because we’ve found something broken in the game elsewhere that was impacting the PLEX market which meant that we needed to participate in trading until that is ‘fixed’ for maybe a period like 7-8 days.”

Observing a nicely-oiled machine is one thing – but EVE’s players love a bit of ISK, and the methods they use to obtain it can be outright ingenious. One particularly interesting discussion I had at Fanfest centred around how Goonswarm were manipulating prices for a particular kind of mineral by stockpiling it in specific parts of the universe.

“So when players are able to make a dent in the market by moving prices in a direction of their liking, to me that is a part of PvP,” says Dr Eyjo. “It is player interaction and they are putting a lot of effort into making it happen. It creates excitement and so on within the game, so everything that has to do with player trading – as long as they are using the tools in the way that they are supposed to be used in the game, then I see nothing against players trying to do it. And I challenge them to do it, simply because the size of the EVE eoncomy has become so big now that anyone trying to make a dent in the market overall will have to put a lot of effort into it.”

So something like Burn Jita – where players over the course of a weekend gang up and gank every trader coming into the game’s main economic hub – is more or less insignificant?

“I wouldn’t say insignificant because it creates a lot of excitement and it certainly affects some prices for the duration of it happening, and sometimes in a direction that stays for a few days or a few weeks,” says Dr Eyjo. “But it’s not drastic, and if it was drastic enough that – for example – an item was to completely disappear from the market then we might take a look at that. I just can’t foresee that situation. But never say never!”

The fact that such concentrated sabotage has no particular impact makes me curious about the scale of EVE’s economy. “There are several ways we look at this,” says Dr Eyjo. “The most reliable measurement is to look at ISK on active accounts – because there are a lot of accounts that are inactive and, as you will know, if you play EVE your stuff is always there even if you quit playing. Even though that ISK exists, we know that it’s not going to be used in-game so it doesn’t really count even though it could potentially return.”

“So the measurement that we find most valuable to observe is ISK on active paying accounts, people playing the game and subscribed – and that is at any given point between 6 and 700 trillion ISK. A lot of ISK!”

One of those little details that tickles me about EVE Online is that ISK stands for not only Inter-stellar Kredit, but also the Icelandic Krona. Seeing as I mostly interview people about how many guns their game has, and I’m sitting in front of an economist, I decide to ask how things are going for everyone’s favourite icy volcano country – after all, they decided not to bail out the banks like the rest of us chumps, but have still ended up in a depression. What gives?

“I think this is slightly misunderstood,” says Dr Eyjo. “What we decided to do was allow our banks to go bankrupt, absolutely, because the country couldn’t repay the loans the bank had taken – there was just no way, they were too big. It was not that we were so clever and so anti-capitalist to just say ‘no!’ We just simply didn’t have it. At the same time we decided that anyone that put money into these banks as savings, that was protected. Which is interesting when you think about it because we were protecting the wealth of 5% of the population – and the other 95% of the population was paying for it.”

Dr Eyjo looks very nonplussed and pauses. Am I right in thinking he doesn’t agree with this decision? “Yeah. Or, well, what I’m saying is that people look at that decision a little too much on the surface, and should dig down into what actually went on. However our current path is horrible. If we continue on our current path then we will be a natural resource-based economy paying low wages, a country where anyone with application and talent will leave for other countries in 10-15 years. All of them.” Or join CCP? Dr Eyjo laughs.

My reading material on the plane was book-of-the-moment Capital in the Twenty-First Century by Thomas Piketty, which has been making waves due to its argument that our current systems are creating greater and greater inequality in a manner that – without the radical political solutions Piketty suggests, like taxes on capital and an 80% rate on high earners – is irreversible. In short it shows how the rich keep getting richer (and is surprisingly funny). I wonder what Dr Eyjo makes of this, and whether the miniature economy he oversees bears out the book’s argument?

“Two things. First I have the book, but haven’t read it yet so I can’t comment in detail but will take it on faith your summary is accurate. Given what you say, we do see the same behaviour in EVE in the sense that some people, simply put, are able to acquire much more wealth than others. I do though believe that that proportion is more even in EVE than it is in real life, simply because to become that rich in EVE requires you really come up with new schemes and control such a big vast operation that it’s very difficult.”

“A lot of the wealth in real-life that is concentrated in few hands is there because of real-life protection,” says Dr Eyjo. “It can be patents that make people very rich, it can be oligarchal restrictions in trade – like in Russia and in some cases the US, where entities have become so big they are difficult to compete with. This is the discussion about companies like Walmart and McDonalds and labour laws and labour costs etc, which shows us that these systems as such might not be good enough to resolve such an issue.”

This is a central part of Piketty’s argument also, hence the book’s title – the returns on capital exceeding economic growth and, in effect, making it impossible for the system to ‘correct’ itself towards equality. “A very interesting dilemma that I discovered myself a few years ago in EVE is that, while we were doing balancing – one of our biggest concerns is if a particular function breaks so it starts to give out more wealth relative to others, giving more economic value due to bad code or a mistaken intention, that to us is a problem. If players are able to earn a lot more per hour than other players then that disproportionately destroys the experience for others because they all then rush towards that activity and do it. So we have to think about game balancing in terms of equity so that, whatever you do, you should roughly be able to earn the same.”

“So this made me think: why don’t we do the same in real life? As an economist there is this thought that it should all be about the competition,” says Dr Eyjo. “But here we have an example where if we allow one subset of people to earn more money, then they will take all the wealth, people will move towards that activity, and if they cannot do that activity then they will leave.”

“So according to this analogy, why don’t people leave the US? After all there is a lot of inequality in the concentration of wealth with a few people, so why don’t the rest just leave and go to Canada or the Scandinavian countries? They absolutely can live better lives. It is a perplexing question. So I look forward to reading the book and thinking more about this!”

EVE Online’s economy is not, of course, any kind of parallel to the real world economy, and attempting to draw lessons from it always risk falling foul of the fact that we are ultimately talking about internet spaceships. But as I say goodbye to the avuncular Dr Eyjo, I can’t help but think of one of CCP CEO Hilmar Petursson’s most famous lines. Internet spaceships is serious business.

You can read more of Rich Stanton’s EVE Online reporting, including his look at the big game hunters who track and destory EVE’s largest ships, his diary of EVE Fanfest 2014 in Iceland, and his investigation of EVE China’s biggest battle.


  1. rexx.sabotage says:

    So, we’re just doing weekly EVE articles now?

  2. Tom De Roeck says:

    Was about to say, I mean, I know I can happily ignore these articles, but dear me, that is a huge amount of EVE fluff. Guess it beats playing the actual game.

  3. Gesadt says:

    you might wanna fix that to “former eve online economist”

  4. Dave Tosser says:

    Given how few people actually play EVE over something like TESO, how long it’s taken for the thing’s importance to be recognised, and given how the MMO genre is still spewing forth fetch quest singleplayer nonsense like the aforementioned TESO, I dare say we don’t have enough EVE articles. It’s fanfest time, anyway.

    We get it, though: EVE players are right bastards and the battles are right big. Maybe do something on Perpetuum to give the cynics hope that EVE’s promise isn’t being completely ignored by the industry?

    • Tom De Roeck says:

      Which. ofcourse, has a wonderful RPS corporation. One of the biggest corporations, in fact. Check the RPS channel in game, in case youre interested. But still, I dont care about perpetuum articles, but it just felt like the slightly older article on Eve China was still being featured, and here there is a new one.

      • Danny252 says:

        >One of the biggest corporations, in fact.

        Am I right to think it’s RPS Holdings? If so, I’m not entirely sure how much the “biggest” label is qualified, as it seems to be 57 members – big, but not really the biggest ;)

  5. TillEulenspiegel says:

    so why don’t the rest just leave and go to Canada or the Scandinavian countries?

    Speaking as someone who’s done it – because it’s almost impossible unless you’ve already got a job lined up before you leave. I think EU citizens tend to forget how amazing it is to be able to just move to another country at will, without layer upon layer of bureaucracy and scrutiny.

    US citizens don’t have that privilege. Except maybe with Guam or something, I don’t know.

    • Gap Gen says:

      Yeah, it’s incredibly difficult for people who don’t already have buckets of money to leave a country. Aside from language barriers, countries actively want to limit immigration due to voters’ prejudices amongst other things. Also, the global economy is defined by the US, so you can’t completely escape its system unless you defected to North Korea or something – good luck finding a Western country not lousy with neoliberals at the top, for example. Finally, every western country seems to have problems, so I’m not sure what you’re escaping to (the EU has it worse than the US in some respects).

      Another thing people forget, particularly libertarians, is that the global economy only exists due to the hegemony of the US Navy in enforcing the US’s view of how the economy should be run. Take that away and there’s nothing to stop people just taking your shit. This is, I suspect, partly why EVE is different, because for most people working in nullsec there’s no central authority guaranteeing things like shareholder rights or corporate law.

      Another thing the Piketty book goes into (just started it) is that the 20th century tilted towards a more equal distribution of wealth because of the various wars and crises that happened in it, which disrupted the system. EVE is full of disruptions, like wars that destroy titans, etc. Another thing is that I suspect alliances aren’t really run like corporations that hire and fire workers, but more like cooperatives, pooling resources and so on. Finally, CCP runs EVE to maximise the fun the players have – real-world economies are structured around power relationships, and richer people can influence systems more than poorer people because they have power over, e.g., lobbying, etc (as well as simply having more buying power). So the real-world system is more corruptable than CCP.

      • Dozer says:

        Hegemony… of… the… US… Navy???

        If you have any more information to back that up I’d be very interested to see it!

        • Gap Gen says:

          link to (if you look at the total number of ships, North Korea comes first because they have a ton of tiny boats, I’d guess – and in any case you can’t really project power with anything other than carriers)

          Also worth noting is that the US have access to the Pacific and Atlantic oceans in the world, whereas countries like China and Russia have limited or contested access to the oceans thanks to their position (China is ringed by other countries who are dubious about it gaining more influence in SE Asia). Here’s a map of the world’s oceans as viewed by the US Navy (with fleet locations): link to – note that some ships are in their home ports at the moment.

          Basically no other nation has either the ability to project power globally or field the same firepower as the US on the oceans. China has just commissioned one ex-Soviet carrier, compared to the US’s navy’s 10 carrier groups and several decades of experience using them. I agree that regions like South East Asia are becoming more unstable as nations build up their navies, but none of those navies would be able to take control of the global sea lanes for quite some time.

    • cylentstorm says:

      Ahem…I have little to say about this, because the situation in the US isn’t good, to put it politely. People can pretend all that they want, but if the only positive thing that I can say about this place is that I probably won’t be stabbed/shot/mugged/raped/bombed as I cross the street to buy some nasty Ramen noodles with what little money I have left from (insert shitty low-paying job here) then what is there left to say?

      Here’s a second opinion, because opinions matter. link to

      And. 2.5: link to

      • Gap Gen says:

        Effectively money won, crushed the unions, and now can do what it like and if you don’t give out blow jobs for pennies in this economy, enjoy staving in the street (if you can even get a job giving out blow jobs, but then who cares about you, I own a yacht).

      • Squirly says:

        Wong writes some good stuff.

    • Banyan says:

      Continuing this tangent that I have knowledge about, Guam is a territory of the U.S. and persons born on Guam are U.S. citizens. It’d be no more weird for an American to move to Guam and look for a job than it would be to do the same for Puerto Rico, American Samoa or some other U.S. insular territory. It’s not at all unusual to meet young people from Kansas or wherever, looking to live on a tropical island for a bit while working a low level service job.

    • Tom Servo says:

      Exactly, I would love to leave the US but it is extremely difficult for a US citizen to immigrate to Canada or Switzerland, my preferred destinations. Unlike the US, other countries/unions like the EU actually try to protect their own job markets. And I even have a decent job, I just really don’t like the direction this country is going.

  6. biggergun says:

    As far as parallels and correlations go, I wonder if the people who want to ban non-consensual PvP in EVE (I exaggerate a bit, but you know the type) are the same people who want “radical political solutions” and 80% rate on high earners IRL.

    • BenLeng says:

      An 80% tax rate is a “radical political solution”? That’s adorable!

      • Rizlar says:

        I wonder if there is a correlation between people who are against higher tax rates for the richest among us and those who would actually have to pay them?

        Answer: no.

    • Stellar Duck says:

      Based on me, no. I wouldn’t mind high taxes for high earners, and indeed live in a place where that tends to be the case.

      As for radical political solutions, well, I’m a Marxist or whatever you want to call it these days so I fundamentally think that owning the means of production is counter productive to a fair society.

      However I would never ban non consensual PVP in EVE. When I undock I give my consent that other people can blow my stuff up.

    • Dave Tosser says:

      I think PvP should be mandatory in all MMOs.

      I also think we should beat the rich with heavy implements until they’re battered and bleeding, and then we should collect their blood and smear it all over their expensive carpets.

      See, these two statements have absolutely nothing to do with each other! He he. Heh.

      • The Random One says:

        You’re a horrible monster if you want all that high quality blood to go to waste.

    • Gap Gen says:

      Growing social inequality is a serious problem – even if you don’t care about orphans dying in the gutter or whatever, your domestic consumption will be screwed because no-one can afford your expensive TVs any more, and eventually people will begin to riot over being locked out of the system (even if the US is fairly resilient culturally to that kind of thing). Historically the US has had high taxation with no ill effect (between the 1930s and 1970s), and unions were in general stronger and able to demand better wages for the working and middle classes – now, there is no barrier to CEOs paying themselves whatever they want, and publicly-traded companies are required by law to consider their shareholders over their customers and employees.

      Plus, the Founding Fathers were in general in favour of progressive taxation, because they feared tyranny and power concentrates into a few hands: link to – in many ways the success of the American corporate elite represents a failure of the American way, and something that various presidents have warned about over the years as destabilising the system by breaking the balance of power in society (see also the military-industrial complex).

      It’s not so radical to ask for higher taxation for the top earners; indeed, it was thought of as necessary quite early on. The argument of Piketty (backed up by a huge amount of data from around the world) is simply that without any outside influence, the rich get richer and hence more powerful. I don’t know if the call for a global tax is realistic, but then I’m not sure what else the solution is, short of starving mobs burning down Manhattan in 30 years time.

      • biggergun says:

        Well, I’m not really familiar with the works of the Founding Fathers, it’s more of an American thing, I guess, but I think I have one serious advantage over them in that matter – I’ve seen what 70 years of socialism can do to a country. Slavish dependence on government, mob mentality, apathy, total lack of ambition and initiative, populism running wild – you name it, we have it in Russia, courtesy of the left wing. Social equality kills. Seriosly, it does. But this is something a nation can only learn from experience, I’m afraid.

        Returning to EVE, I wonder if it’ll one day be big and complex enough that CCP has to hire, say, a sociologist. That’ll certainly be something.

        • Gap Gen says:

          I think Russia has always been autocratic; it’s a relatively poor, sparsely populated country trying to hold onto huge tracts of land, and has a history of dictators trying to keep it together. Socialism in Britain and France has generally been fine, by comparison, and like people have said the US did have a high top tax bracket at one point. I do agree that one criticism of Marx is that there’s no roadmap to what society should look like after a revolution, and these things tend to take a long time to stabilise out (see also France circa in the 1790s), but his criticism of capitalism came from a reasonable place.

          • biggergun says:

            >Russia has always been autocratic

            Not really. No more than her European contemporaries, anyway.

            >relatively poor

            Nope. Before the revoluiton it was the fastest growing economy in Europe.

            >sparsely populated

            Sorry, no. One of the frequently cited reasons for revolution was overpopulation.

            As for Marx, I’ve always found it somewhat amazing that the western academic world is so enamoured with something that is basically sectarian Christianity with God replaced by social progress, and “soul” and “sin” swapped for similary vague imaginary concepts like “alienation” or “labour theory of value.” Luckily, the fashion seems to be finally passing.

          • Gap Gen says:

            I suppose it depends – you’re right that certain European nations had less of a liberal evolution than others prior to WWI, but then I’m not sure it had a similar liberal movement as in Britain/France/US?

            Russia has generally had a lower GDP per capita than other European nations: link to (I suppose 1913, prior to WWI and the Russian Revolution, is most relevant – you could argue about Russia versus Former USSR, but I don’t know if the results would be very different)

            And Russia has a lower population than Bangladesh, plus it places near the bottom of the tables for population density: link to

            I suppose you could compare the part of Russia west of the Urals alone, if that changes things, but I’m unsure where to find data on that.

            In any case, my point is that Russia is (factually) sparsely populated and difficult to defend (short of winters killing invading armies), with relatively low wealth per person (on average). This means that its leaders tend to be more concerned about threats from outside than, say, the US, which is fabulously wealthy and has highly secure borders, or even Britain with the Channel. This isn’t to justify Stalin’s purges, say, but I do think that some of a nation’s character is in its history and location rather than just the ideology it happens to have at a given time. And as I’ve said, socialism in the forms it took in Britain and France has been largely benign, and even good for people (if, say, you look at health care costs per person in Europe versus the US).

          • biggergun says:

            >I suppose it depends – you’re right that certain European nations had less of a liberal evolution than others prior to WWI, but then I’m not sure it had a similar liberal movement as in Britain/France/US?

            At the time of the revolution it was generally in transition to consitutional monarchy of the British kind. Most of the framework, as in local self-governance, proto-civic society etc was already in place. One notable example was the excellent judicary system that was noted by contemporaries to be one of the best in Europe, juries and the quality of the lawyer corps being two areas where it shone in particular.

            >Russia has generally had a lower GDP per capita than other European nations

            That is true. But firstly, it was stably and rapidly growing, and secondly, GDP data is somewhat less relevant for a country where a lot of people still lived directly off the land.

            >I suppose you could compare the part of Russia west of the Urals alone, if that changes things, but I’m unsure where to find data on that.

            Yes, precisely. What most people tend to forget is that territory east of the Urals at the time was not part of Russia strictly speaking – it was a colony. Basically, it still is, because after the Revolution the process of natural settlement mostly stopped. West of the Urals the lack of land was evident, and the “redistribution” of it was one of the more popular Bolshevik promises. There wasn’t, of course, anything to redistribute, there was simply too many people – so before the Revolution the government tried to adress the problem by sponsoring colonists moving to Siberia, but it was too little too late. Still, by the time the Civil War began a class of free farmers had began to form, and while poor western peasants were generally pro-red, peasnts in Siberia gravitated towards the whites.

            >some of a nation’s character is in its history and location rather than just the ideology it happens to have at a given time.

            Oh, I agree – it’s true that Russia always had a certain character influenced by geography and such. One prominent Russian historian notably compared Russian state to a military-industrial company – this is quite accurate, I believe. I’m just saying that politically and socially Imperial Russia wasn’t that different from the rest of Europe. It was a degree of difference between, say, Germany and Austria-Hungary, not between Germany and China.

            >And as I’ve said, socialism in the forms it took in Britain and France has been largely benign, and even good for people (if, say, you look at health care costs per person in Europe versus the US).

            Pardon me if I’m wrong, but wasn’t Britain rather poor and backwards for a European country before Maggie Thatcher came along?

            >if, say, you look at health care costs per person in Europe versus the US

            That is also true. But I think that such data is not really meaningful until you take the lag and ineffectiveness of a socialist system into account. I mean, yes, on paper we do have cheap and publicly available healthcare here in Russia – but in practice you almost always have to pay, to do things fast enough, to recieve adequate care, etc. The end result is the cost of a private insurance, without the security or reliability of one. I have a friend who lives in Sweden, an American expat, and judging by what he says many of those problems also exist in Scandinavian counties.

            The bottom line is, I guess, that government will always be less effective than private initiative, due to very basic hardcoded things like for example how motivation and cooperation work in primates. Can this ineffectivenes be compensated by other benefits of a socialist society is anyone’s guess – 70 years of socialism in Russia say it can’t, but then again, we simply lack the means to conduct a proper conclusive experiment, so people will keep trying.

          • Gap Gen says:

            Here’s the British GDP per capita from 1960 (Thatcher was PM from 1979 to 1990): link to and total gdp: link to (obviously Britain as a whole was richer before the world wars)

            It seems like growth actually slowed around 1980, which is interesting (there was a general sea change towards neoliberalism around 1980 with the rise of Reagan and Thatcher, plus changes in corporate structure after the stagflation period in the 1970s). But yes, Britain was severely damaged by WWII, both in terms of the damage from the war and the debts incurred, and in losing control over the world’s oceans to the US as well as most of its colonies. Actually, on that point, a country can still be poor and have excellent GDP growth (Afghanistan has around 7% GDP growth, near China’s rate). But sure, the issue is not with the Moscow area but with Russia’s need to control the Caucasus, Siberia, etc.

            As for the NHS, I’m not really convinced that market forces would drastically improve the quality of the service for healthcare. Sure, I’m not saying that you get better cars or computers under communism (note that when I say “socialism”, I’m not advocating full state control over all economic activity), but for things like healthcare a mandatory insurance makes sense because the financial risk is spread across the population; you might spend nothing on healthcare until you retire, or you might get cancer and have a series of expensive procedures. In this point a single payer has the advantage of collective bargaining, as well as lower overheads (public servants are paid far, far less than CEOs of publicly traded companies, for one). I don’t disagree that spending extra to get private healthcare gives you a better service, but equally it’s not like queues in hospitals don’t exist in the US either, and the UK never had terrible things like pre-existing conditions voiding your insurance. Then again, before Obamacare the US health system was horribly broken, so I don’t know if it’s fair to compare to that or another country with an insurance system (equally, Obamacare isn’t a socialist system, but rather a re-regulation of a private market – the federal government still doesn’t offer health insurance outside of special cases, it simply provides a marketplace for private insurers and introduces a mandate to lower premiums overall).

    • CantankerousDave says:

      Just ignore that tree-hugging hippie Eisenhower with his 92% top marginal rate.

    • AimHere says:

      I doubt it. It might even be the opposite.

      Back in the old MUD days, the pattern was that the British MUDs tended to be the most vicious and violent – non-consensual PvP everywhere, you got killed and you lost *everything*, where battles were fast and fierce (MIST was described as a ‘text-only arcade game’), and American MUDs tended to be fairly wimpy no-playerkilling affairs. British academics (MUD started on JANET, the university network before the Internet became public) generally tended to be rather left wing, compared to the people the Americans let onto the net in those days…

      I remember the AberMUD creator Alan Cox (later to become a high heid yin of the Linux kernel) commenting that in America, people were beastly to each other in Real Life, and nice to each other on MUD, whereas in the UK, the reverse was true. Google for Lorry’s ‘Confessions of an Archwizard’ to get a flavour of how psychotic and Machiavellian the British MUD culture was like back then!

      • Gap Gen says:

        I wonder if that’s because in general British people are more reserved than Americans, so we bottle up our rage until it all flows out online, whereas New Yorkers get it out of their system on the subway. Or maybe it’s the proportion of urban dwellers, or something. Might make an interesting paper.

      • biggergun says:

        It probably is the opposite, yes.

        Thanks for the hint, I looked it up and it’s hillarious.

  7. Rizlar says:

    Great article. Needs more staring eyes though.

  8. Tridae says:

    That header image is what I image 90% of the EVE playerbase looks like .

  9. Gap Gen says:

    Out of interest, does EVE encourage low levels of inflation? Most modern economies target around 2% to encourage spending, the argument being that otherwise people would just sit on their money and the economy would slow down because fewer people are spending their money. Hyperinflation is bad, for sure, but deflation is also bad, because the economy seizes up as why spend a dollar now when it’ll be worth more tomorrow? Then again, it depends what EVE players do with ISK, and if the game requires that they spend it in some other way, then inflation could be unnecessary.

    Also, Iceland is interesting in that its cheap geothermal helps it compete in parts of the tech sector – it even has a healthy aluminium export industry despite not having any buried under the ground, because smelting it costs so much energy that geothermal is the only effective way to do it.

    • biggergun says:

      Most players prefer to store ISK in form of PLEX, I think. Kind of like buying gold.

      • Danny252 says:

        Eh, the only reason to do that is if you think there’s going to be a significant rise in the price of PLEX, and will sell it off later. There’s no reason not to keep ISK as a liquid asset – your personal wallet is entirely safe (unless you spend it!), whilst for a corporation it wouldn’t make much difference whether its in ISK or PLEX if someone decides to steal the lot.

        • biggergun says:

          I recall reading about people storing large amounts of ISK in PLEX to protect it from inflation. I even think this was in another RPS EVE article. I’m not absolutely sure, though, so.

          • Gap Gen says:

            Aha, this is interesting: link to

            OK, so it’s complex and messy, but it looks like since 2004 prices have actually dropped and then had some high-ish inflation (around 5%?) in recent years. And again, I assume most of the price shocks are caused by it being a violent place where a huge amount of assets can be blown up in a matter of hours. In that case, a 2% inflation rate seems within the noise floor for whatever that graph is doing.

            I still don’t entirely understand macroeconomics (I’m not an economist), but there’s some interesting work on the post-recession economy, and how it responds to stimulus and low interest rates.

          • Danny252 says:

            I guess if you’re talking long enough term for inflation to be a factor, then yeah, those sorts of timescales are more sensible.

            However, even then you’re still dominated by the PLEX price changes, which have been much larger than inflation – I think they’re getting on for tripling in price over the last 6 or 7 years. Prices in general have changed far more than inflation for various other reasons, mainly due to changes CCP has made I’d say (see the labels on the graphs GapGen linked to) – both in terms of changing things that make items more expensive to produce (some ships have had their prices tripled in cases like that), and smaller changes that make items more/less valued (e.g. changing the stats on ships/weapons that suddenly cause an increase or decrease in demand).

            I’d also argue that you can make much more profit beyond “keeping up with inflation”, as 2%/5% profit a year is a pittance in EVE. Then again, it could also be argued that having it stored as PLEX makes it easier to liquidate quickly, as compared to a large amount of stock that needs selling before your cash becomes free.

          • Gap Gen says:

            Does EVE have markets where you can speculate on minerals, etc? So that you could liquidate your assets rather than sell your stuff manually. Granted, that would lead to bubbles, but if you have a market system those are kinda unavoidable.

  10. Strickebobo says:

    Money doesn’t talk, it swears

  11. cpt_freakout says:

    I could care less about EVE but this was very interesting to read. Thanks.

  12. Frank says:

    Gah, can no non-famous economist interview without name-checking Piketty?

  13. johnerick says:


  14. the grue says:

    Is this the same Dr. Eyjo who will be leaving CCP at the end of next month?

    link to

    Good thing you got an interview in before he departed, I guess.

  15. Calculon says:

    What I find fascinating about the comments in this thread is that there seems to be general agreement that the ‘purist’ capitalist approach that is the USA is ‘broken’ or at the least hasn’t functioned properly for decades. That’s an interesting shift in the thought process of ‘westerners’ which until 2008 ish was pretty entrenched in a strong pro-capitalist mindset. The times they are a changin.

    Anyhoo – activated my damn EVE accounts again – thanks RPS :p. Back to C5 WH farming for me (at least until I build the coffers back up)

    • Bury The Hammer says:

      It’s a pretty selective group you’re talking about here – youngish, indie game enthusiasts. It’s a relatively left of centre crowd. So I wouldn’t say it’s representative in the slightest.

      ‘Capitalism’ (and by that I mean, western style mixed capitalism/socialism) is fairly popular for the general public once you actually start putting it in ways they understand – like being able to start your own business, and generally choose what you like. If it was revealed that the government were going to nationalise the coffee industry, I can’t see it being received well.

      Plus, I don’t know what crack people are smoking when they say it’s failing (I suspect it’s more wilful ignorance), because on a number of important metrics, it really isn’t. For example, global extreme poverty is falling at a historically unprecedented rate, even if the US and EU are stuttering. link to

      • Harlander says:

        Maybe they don’t understand that there’s points on the scale other than “this is perfect for everyone in every circumstance” and “this is utterly terrible and must be replaced”.

        There’s a lot of that about.

      • Gap Gen says:

        Yes, there’s a difference between neoliberalism/classical liberalism and market-based economies in general, as well as socialism in terms of selectively nationalised things like health services or transport, versus full state control over the economy.

      • Calculon says:

        While I would agree that the sample size is pretty small, I would argue that the viewpoints on RPS are much more diverse than you are representing. That’s the interesting thing about gaming – you get quite a cross section of folks interested in it.

        “Plus, I don’t know what crack people are smoking when they say it’s failing (I suspect it’s more wilful ignorance), because on a number of important metrics, it really isn’t. For example, global extreme poverty is falling at a historically unprecedented rate, even if the US and EU are stuttering. link to

        What I mean by failing is that you have the prime example of capitalism (that being the United States) largely being bankrupt, and having a waning influence in the world. Even if we just look at the state level with several states close to or at bankruptcy, decaying state and national infrastructure, dismal education scores, and several large cities which have either defaulted or are close to defaulting, and you have a pretty clear picture of a ‘failing’ system.

        Im not sure what other markers you would like to look at? National Debt levels? Money printing? extraordinary measures being taken just to keep the ‘lights on’? I think those are also good indicators of the health of a nation.

        What I find to be ‘willful ignorance’ is someone who tries to represent the obvious fact that the United States is bankrupt and on a significant decline as being untrue, or a ‘silly notion’. Facts are facts, and they dont lie no matter how much you attempt to twist them.

        • green frog says:

          That’s ironic that you would take the economic situation within the United States as an indictment of capitalism when the correlation between the political climate of various areas within the US and their economic fortunes suggests the opposite.

          The states and cities that are disproportionately bankrupt and failing, and bleeding population (epitomized by the Northeast and California), are the “blue” Democratic-dominated areas that have left-wing politics, strong unionization, heavy regulation, high taxes, skyrocketing spending, and bloated public sectors.

          The states that are disproportionately thriving economically and gaining population, (epitomized by Texas), are the “red” Republican-dominated states, with business-friendly economic policies, low taxes, and a trim public sector.

          So if the problem with America is capitalism, then why are the areas within the United States that are friendly to capitalism the ones that are doing well, and the ones that are hostile to it are bankrupt and in perpetual crisis?

          Facts are facts, indeed. By the way, I’m not shilling for the Republicans here – I find their social and foreign policy repulsive, and they certainly can be irrational on economic matters as well. But they are the party that are most clearly in favor of preserving capitalism, not squeezing it.

  16. racccoon says:

    Waaaah! WaaaaH! WaaaH!!

  17. Vendae says:

    Nice article, won’t be seeing more about him though (as he is becoming rector of an Icelandic university and so and so).

    I am not in the best of times to assess all the information available (that is, all the minutes in this article and some other linked in the comments), but the thingie with inflation reminds me the way metal has devalued this last year in TF2. I have to give it a thought to this to conclude whether it has to do with the “bimetallic” money system (metal and keys; ISK and PLEX), the change of reluctance in spending real-money ingame or some other reason I cannot fathom at the moment. Whoever reads this is free to expand on these ideas.

    PS: This reminds me the Greek economist at Valve with a blog and all that got featured in these gaming sites, for not too long after disappear in utter silence.