Philip Rosedale: Ruling with a Light Hand

I have always been fascinated by Linden Lab®’s approach to setting policies on user behavior. This is obviously a touchy topic, and it is virtually impossible to get a Linden Lab exec to elaborate on the company’s public statements about their policies on gambling, banking, and now advertising. But Philip was willing to talk more generally about Linden Lab’s philosophy on the matter.

Take a look, and then see what the author of Virtual Law, Ben Duranske, has to say.

PHILIP ROSEDALE: I would say our overall philosophy remains that, given that the system is global, so we have users from many countries, it’s likely to become more open and less locally regulated. That is to say, as people are running servers in their own countries, you’re going to have different regulatory regimes, and therefore, treatment of different content or experiences, whatever. What this suggests is that we need to really redouble our efforts to regulate and create central policies as little as possible, recognize that those policies will probably be fractured at international boundaries and by people who are running servers. Today we own and operate all the servers. We don’t believe that, longterm, that’ll be the case. So as people are operating their own servers, they’re likely to have different policy and regulatory decisions. So I think our basic goal is what it’s always been. I think we’re staying pretty true to it. As the world gets bigger, there are things that we’ll do. It’s just to reasonably promote stability and the growth of the overall world while imposing as little policy or regulation as possible to do that. Every time we impose a policy of some kind, everybody’s going to say, “You’re taking away our freedom.” But—

ROBERT BLOOMFIELD: Except for the people who are saying, “Finally!”

PHILIP ROSEDALE: Yeah, or, “Thank you.” And, of course, everybody else is saying, “You’re too slow.” Sometimes, especially as it relates to governance and policymaking, I know what it’s like to be the President or something of a country. It’s been an intriguing experience because you really can’t please everybody on these global policy issues. And I think the only way you can please everybody is to simply have as little policy as possible. I really do think that is generally a maximizer. And so we try to pick our battles very, very carefully.

There are types of content where, if you do it, we will go after you. We don’t want the economy or the general quality of people’s experience to be impaired, and we’ll fight a little bit to protect that, but we really do recognize that, especially again with the use cases growing and the business models and the server models and stuff, open grids, all this stuff growing, it means that we probably need to be even smarter about moving toward... We’ll have less opportunities to set policy in the future even than we do today.

I will let Ben Duranske provide the primary commentary, but I would like to make a couple of points about Linden Lab's banking policy. I am on the record in my Technology Review opinion piece encouraging Linden Lab to let Second Life's banks and stock exchanges continue to be unregulated. Well, they didn't listen to me...almost immediately after the piece was published, Linden Lab announced that they would be requiring any resident promising interest on deposits to provide proof of real-world regulatory oversight.

I now think this was probably the right call...the libertarian experiment that was inworld banking simply didn't have the ability to succeed.

I eat my words --here--, while drawing lessons from last year's Second Life financial market fiascos, and applying them to the fiascoes we are seeing in the real world today.

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