would creating huge markets in the Metaverse for buying and selling digital goods make us actually richer?
Yes. If you measure “huge” by number of 2025 dollars spent in those markets, rather than number of items sold (copies of digital goods could have very low prices due to low marginal costs of production, after all).
An example to illustrate why: Suppose in year 0, with no metaverse, I am someone who is employed in a way that does not fully use my talents, but I am able to get by. To directly address your question about agrigultural production, let’s say I’m a subsistence farmer.
In year 10, there is a thriving metaverse where I can perform various digital activities for money. More money than I could make as a subsistence farmer. So I start doing some of that, and my income goes up. And because of that, I’m able to access loans and credit that I was not able to before. So my ability to invest in productivity-enhancing equipment on my farming operation goes up. And I do so, and my farm income goes up, and more agricultural production has occurred.
Or, let’s suppose I’m not a subsistence farmer. Let’s suppose I’m unemployed, and I skill up in year 10 and do some digital thing for which I get paid. And my ability to access more and better quality food goes up. I spend some of my money on that. As a result, a mix of things happens. The demand for the food I buy goes up slightly, which means those who can produce it cheaply make a bigger profit, and invest more in producing more of that food, and to the extent that the demand can’t immediately be met in this way the price spikes a little, which brings more production on line as new businesses decide they can make a profit at this higher price point. Exactly how much of my income goes to increased profit for existing producers who then shift more of their efforts towards that line of business, how much goes to a price spike that brings new producers into the market, and how much is other effects, is hard to answer, but in equilibrium under competition, price = marginal cost, so to a first approximation, enough extra production gets brought online to meet the demand my buying generates, and maybe the marginal cost goes up because some inputs to that production are scarce, or maybe marginal cost goes down because of economies of scale. But roughly, probably, price goes up a little and production goes up to meet the new demand.
Most likely an individual isn’t going to make a noticeable difference, they’ll just get served out of existing inventory. But scale that story up by 1000x and you start being able to see the effects.
The key here is I’ve been able to do a new, more valuable thing, which makes the people around me better off, and some of the benefit of this is captured in how much they are willing to pay me. Whether that’s a physical thing like planting a seed or doing something in a digital virtual marketplace, if it’s genuinely of value to the people paying money for it, that’s what matters. Both I and they become richer than we would be if I didn’t do the thing, and some of that enrichment will likely mean growth in the amount of physical stuff produced.
Yes. If you measure “huge” by number of 2025 dollars spent in those markets, rather than number of items sold (copies of digital goods could have very low prices due to low marginal costs of production, after all).
An example to illustrate why: Suppose in year 0, with no metaverse, I am someone who is employed in a way that does not fully use my talents, but I am able to get by. To directly address your question about agrigultural production, let’s say I’m a subsistence farmer.
In year 10, there is a thriving metaverse where I can perform various digital activities for money. More money than I could make as a subsistence farmer. So I start doing some of that, and my income goes up. And because of that, I’m able to access loans and credit that I was not able to before. So my ability to invest in productivity-enhancing equipment on my farming operation goes up. And I do so, and my farm income goes up, and more agricultural production has occurred.
Or, let’s suppose I’m not a subsistence farmer. Let’s suppose I’m unemployed, and I skill up in year 10 and do some digital thing for which I get paid. And my ability to access more and better quality food goes up. I spend some of my money on that. As a result, a mix of things happens. The demand for the food I buy goes up slightly, which means those who can produce it cheaply make a bigger profit, and invest more in producing more of that food, and to the extent that the demand can’t immediately be met in this way the price spikes a little, which brings more production on line as new businesses decide they can make a profit at this higher price point. Exactly how much of my income goes to increased profit for existing producers who then shift more of their efforts towards that line of business, how much goes to a price spike that brings new producers into the market, and how much is other effects, is hard to answer, but in equilibrium under competition, price = marginal cost, so to a first approximation, enough extra production gets brought online to meet the demand my buying generates, and maybe the marginal cost goes up because some inputs to that production are scarce, or maybe marginal cost goes down because of economies of scale. But roughly, probably, price goes up a little and production goes up to meet the new demand.
Most likely an individual isn’t going to make a noticeable difference, they’ll just get served out of existing inventory. But scale that story up by 1000x and you start being able to see the effects.
The key here is I’ve been able to do a new, more valuable thing, which makes the people around me better off, and some of the benefit of this is captured in how much they are willing to pay me. Whether that’s a physical thing like planting a seed or doing something in a digital virtual marketplace, if it’s genuinely of value to the people paying money for it, that’s what matters. Both I and they become richer than we would be if I didn’t do the thing, and some of that enrichment will likely mean growth in the amount of physical stuff produced.