Guilds and taxes

Where it comes to World of Warcraft economics, the Greedy Goblin resonates the strongest with my thinking. He posted recently on guild “taxes”. I put taxes in square quotes because there’s a major difference in what a guild does to collect these “taxes” versus what a government does to get money out of their citizens.

A guild is a voluntary association, set up in the game by using the various amenities that Blizzard provides to guild leaders to provide for pooling of resources. A government is “an institution that holds the exclusive power to enforce certain rules of social conduct in a given geographical area.” The guild leader can enforce his rules by restricting a person’s access to these pooled resources, or to even kick the offending player out of the guild. A government can use its police powers to extract a person’s property and worse.

So if a player doesn’t pay their “tax”, the worst that can happen is they are not in the guild anymore. Calling it a “tax” confuses the difference between a guild and a government.

As far as what it takes to fund a government, I can tell you what I learned in the way to get my economics degree. Along the way, I took a course that discussed and analyzed taxation. The fixed fee, “head tax”, is the economically best means of taxation.

The reason why the head tax is considered best, economically, is that other taxation schemes influence and distort individuals’ economic behavior. Flat taxes, sales taxes, VAT, progressive taxes, you name it—all these give people a reason to reevaluate their consumption and labor choices.

In the case of a guild, similar reasoning applies, but you have to keep in mind the voluntary nature of a guild, the nature of raiding, and also personal motivation. It is a travesty that a commenter on that Greedy Goblin post has mentioned along the way that BoE greens, blues, and epics all go to the guild bank instead of being put up to a roll for the raid participants, yet requiries that raid participants bring their own consumables. Another commenter said his guild bank is sitting on a cash pile worth 32K g, plus tons of enchanting mats. These are the spoils of raiding, but they’re not going to the raiders.

Raiding does have a cost, and people prefer that the costs be more predictable than not. If there is a “fee” that covers a base amount of consumables and provides insurance for repair costs, that is preferable to having everyone suffering huge losses due to repeatedly wiping. Everybody in the raid is there for that next piece of gear and the badges serve as a good consolation prize, and every extra bit of loot a player can bring home from the raid is a return on their investment for their own consumables, so what I will call guild bank communism won’t work to keep the best players around. Having a voluntary system in place that lets people smooth out their raiding expenses will.

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I am David. I will use this blog to inflict status reports of the progress of my continued enlightenment in all things: animal, vegetable, and mineral, with some World of Warcraft too. You may contact me at [name] at [domain]