Time Is Not Free

This is a lesson I learned from EVE. There is also a relevant XKCD here. (http://xkcd.com/951/)  Basically, the idea is that my time - and your time! - should not be considered free. And as a result, anything you do with your time has some nominal cost associated with it, even if you’re not paying out cash during that time period.

The lesson in EVE comes from pretty much the most boring occupation in the game, mining. A fair number of players in EVE spend a significant amount of time mining. It’s boring, but that’s fine. Once you’ve mined your minerals, you can turn around and sell them on the market. This activity, of course, presents no problems. You’ve spent your time hoovering up space rocks, and now that time is being converted into the in-game currency of ISK. Great.

The problem occurs when a player begins manufacturing. They go out and mine their own minerals to build in-game equipment, such as modules and ships. Now we’ve got the potential for an economic problem and a logic failure. The less savvy player who does this may decide that it’s cheaper to build things this way, because after all, they got the minerals for free. They didn’t have to buy them off the market! They converted their own work into minerals, and now they’re free to build stuff for cheap!

Except it’s not for cheap. It’s at the cost of time. There is an easy fallacy to fall into. After all, how you spend your time in game is your business. And in this process I’ve outlined, no ISK is generated, since the player skipped the market step. They mine the minerals, they process the minerals, they use them to build the module. Where’s the problem?

The problem is that the cost is in time, and it has an ISK number associated with it. Other, savvy players of course realise this, and generally, they’re the ones setting market prices. So even if you think your module or whatever was built for ‘free’, what’s happening is you’re simply eating a sort of opportunity cost.

What is opportunity cost? Well, in this case, it’s the expense of mining versus the cost of just buying the module. I’m going to make up some numbers here to help illustrate the point. Let’s say it takes you an hour to hoover up 100 units of space rock. And let’s say space rock is going for 1 ISK per unit. So, at the end of an hour of mining, you’ve essentially got 100 ISK in your cargo hold. But you don’t want to sell it, because you need to build your module, which just so happens to take 100 units of space rock.

Here’s the tricky part. Let’s say this module is available for sale on the market, and it’s going for only 90 ISK.

So which is better; to buy the module on the market for 90 ISK, or make it ‘for free’? Well, if you sell your 100 units of space rock, you get 100 ISK. Then spend 90 ISK on your module, and ta-da, you’ve managed to make 10 ISK.

Your time was not free, and the module you were going to build was not going to be free. Thanks to market fluctuations and manufacturing times and many, many market factors, it’s important to stop and think about the real actual costs of the activities you undertake. ISK makes a useful middle step in EVE, even if you’re not earning it or spending it directly. How much ISK per hour could this activity net me? How much would I make or lose doing something else? This can get as complicated as you like, because EVE is a complicated game, but I hope my simple illustration will suffice.

This applies to the real world as well. My time, and your time, it’s not free. Right now, I’m eating an opportunity cost. I could easily be making somewhere upwards of 60,000 a year doing industrial work. Instead, I’m choosing to go to college, and filling out the broke college student stereotype quite well. The opportunity cost for me is about two years’ worth of industrial level salary. In exchange, I’m getting an education. Hopefully when I’m done, I’ll be able to get a higher paying job, but honestly, that’s not the point. I’ll certainly get a job I’ll find more interesting. But I -am- paying attention to the costs of my decision, both eyes open, and fully informed.

You can take all of this however you wish. For me, this doesn’t mean I spend every waking moment of my life trying to wrench the maximum value out of it. How droll would that be! I would become an exhausted, wretched man. But it is worth paying attention to how I am spending my time. So that way, as the XKCD comic points out, I’m not working for drastically less than minimum wage in search of better gas prices.