The Hidden Politics of Video Games

[DicedT]

http://www.politico.com/magazine/story/2015/04/xbox-video-games-politics-economic-theory-117289.html?hp=t1_r#.VT0FBJO16py

Michael

[airboy]

I had read this before I saw your post.  Pretty typical "gamer" stuff slanted for a particular viewpoint (liberal pro-big government for Politico).

One thing you list as an opinion in your article that is a fact.  As tax rates increase, at least beyond a certain point, economic activity goes down in a modern economy.  There are literally thousands of papers examining the impact of taxes & government regulation on economic growth that show the negative impact of taxation.  Even Keyes macroeconomic models showed a negative impact of taxation on GDP.

Here is one common set of data: http://www.heritage.org/index/

I've also read the data based on a US State by State analysis and even down to the county level.

A brief overview can be found at:
http://en.wikipedia.org/wiki/Indices_of_economic_freedom

[DicedT]

Not sure what "slant" you're talking about, other than pointing out that games simulating economics and politics inevitably have some kind of slant or underlying assumptions.

"As tax rates increase, at least beyond a certain point, economic activity goes down?"  No kidding. Unfortunately, the trick is determining that point. Heritage says one thing, Paul Krugman. The latter has only won a Nobel Prize in economics, so I think we need to be careful before deciding what's a "fact."

Michael

[airboy]

Not sure what "slant" you're talking about, other than pointing out that games simulating economics and politics inevitably have some kind of slant or underlying assumptions.

"As tax rates increase, at least beyond a certain point, economic activity goes down?"  No kidding. Unfortunately, the trick is determining that point. Heritage says one thing, Paul Krugman. The latter has only won a Nobel Prize in economics, so I think we need to be careful before deciding what's a "fact."

Michael

From your article:
"Either way, you will discover that the game's economic model is based on the famous Laffer Curve, the theoretical darling of conservative politicians and supply-side economists. The Laffer Curve postulates that raising taxes will increase revenue until the tax rate reaches a certain point, above which revenue decrease as people lose incentive to work."

And also:
"The same applies to video games. Sim City could just as easily have gone Keynesian and made higher taxes and public spending the key to a thriving economy. Whether Laffer or Keynes is correct does matter for a real economy, but not a virtual one."

**************
Point being, even Keynes did not think that higher taxes would grow an economy and that higher taxes, at some point, impede economic growth is not an issue in dispute by any economist who can be persuaded by actual data in developed countries.

Congrats on getting the sale to Politico.  Your point that any game with an economic component has to have underlying assumptions to make the game world work is true.  But you did slant it to a liberal audience to get the sale - at least in terms of how taxation impacts economic growth in developed countries.