Parsimony & Power: The Counterintuitive Economics of Digital Leadership
The Virtual Prince XVIII: In Praise of Parsimony; Warbonds, Strategic Generosity, and Frontline Looting
While generosity seems virtuous, Machiavelli reveals a counterintuitive truth: that excessive generosity ultimately harms both prince and subjects.
The tension between generosity and miserliness is an aspect of The Prince which directly carries over from the 16th century to the digital realms. If you wish to be seen as a generous leader who distributes resources lavishly to cultivate admiration, you must spend for it; but you will inevitably spend too much, eventually bankrupting yourself and becoming a burden on your people.
The Hazards of Generosity
In The Prince chapter 16, Of Generosity and Miserliness [De liberalitate et parsimonia], Machiavelli writes:
“...I say that it would be good to be considered generous. Nevertheless, generosity employed in such a way as to give you a reputation for it will injure you, because if it is employed virtuously and as one should employ it, it will not be recognized, and you will not avoid the infamy of its opposite.
And so, if a prince wishes to maintain his reputation for generosity among men, it is necessary for him not to neglect any possible means of sumptuous display; in doing so, such a prince will always use up all his resources in such displays, and will eventually be obliged, if he wishes to maintain his reputation for generosity, to burden the people with excessive taxes and to do all those things one does to procure money.”
The Prince, p. 54
True generosity is dangerous in a leader, not a virtue; Machiavelli points to the wisdom of appearing generous where possible, but otherwise adopting the spending habits of a miser. A miserly leader has more resources available to his state, which improves every aspect of his organization, and thus makes him a more powerful and capable leader in turn.
Plus, there is not so much reputational damage in being perceived as a miser, compared to other vices such as rapacity; miserliness is unpleasant, but does not inspire hatred. Miserliness is thus a net positive in a leader, while generosity is a tremendous negative.
Machiavelli writes:
“Therefore, a prince, being unable to use this virtue of generosity in a manner that will not harm himself if he is known for it, should, if he is wise, not concern himself about the reputation of being miserly.
With time, he will come to be considered more generous, once it is evident that, as a result of his parsimony, his income is sufficient, he can defend himself from anyone who wages war against him, and he can undertake enterprises without overburdening his people.
In this way, he appears generous to all those from whom he takes nothing, who are countless, and as miserly to all those whom he gives nothing, who are few.”
The Prince, p. 54
This principle applies perfectly to the virtual prince's situation today. During my tenure leading our online empire, I maintained a distinctly parsimonious approach. Unlike many players who coveted expensive virtual assets, I found little personal interest in acquiring luxurious spaceships; even a fully-equipped Titan held little appeal compared to the strategic satisfaction of conquering or destroying territorial assets. This personal restraint naturally evolved into organizational policy - a culture of parsimony that proved tremendously advantageous.
By contrast, our enemies during these years - the MoneyBadger Coalition (MBC) - demonstrated the perils of excessive generosity.
Despite controlling a massive stream of gambling income, instead of investing in strategic stockpiles and competitive fleet strength, their leadership squandered these windfalls on ostentatious faction ships for themselves and their favorites. These extravagant vessels proved worthless in actual combat, requiring withdrawal to prevent their loss. They further depleted their treasury by hiring mercenaries, whose ineffectiveness we've already established. In this way, the MBC foolishly dispersed one of the largest fortunes in the game's history on mercenaries, battlefield-useless ornamentation, and general profligacy.
When it came time to test their stockpiles against ours, years later, it was miserliness, which had over time contributed to the largest stockpiles of war materiel in the history of the game in the Imperial Palace, which won the day.
Strategic Generosity: Liberality with Conquered Resources
Parsimony is useful when it comes to your own assets, or those of your subjects. By contrast, when you are able to seize new lands and assets, you must be a river to your people and share with them your new bounties.
Machiavelli writes:
“A prince either spends his own money and that of his subjects, or that of others. In the first case he must be economical; in the second, he must not hold back any part of his generosity.
For the prince who goes out with his armies and lives by looting, sacking, and ransoms, and who lays hands on the property of others, such generosity is necessary; otherwise, he would not be followed by his soldiers.
Of what is not yours or your subjects, you can be a more generous donor, as were Cyrus, Caesar, and Alexander: spending the wealth of others does not lessen your reputation, but only adds to it. Only the spending of your own is what does you harm.
The Prince, p. 56
An online leader can only ‘tax’ citizens so much before they log off or go elsewhere, even if some online games do include direct taxation mechanics.
One of the advantages of treating your citizen’s assets economically is that, when confronted with threats, you are more likely to be able to call upon their donated resources at your hour of need.
For example, after years of developing a reputation for efficiency and good stewardship of citizen assets, in 2020 the Goonswarm finance team launched a wildly successful warbond drive, with citizens donating vast sums of ingame currency to the state’s war-strained coffers. This would not have been possible without the detailed, almost securitized financial plan created for the warbond issuance, and the regular updates and payments made as the project continued.
Seeing the success of the Goonswarm warbond project, several competing alliances attempted their own warbond funding projects - but, lacking the reputation for treating their citizens' assets economically, these imitation bonds could not get as much buy-in and were ineffective.
Compared to the assets of the citizenry, the virtual prince on the warpath should follow Machiavelli’s counsel and be generous with the property of others; functionally that amounts to gifting the assets of others to the citizenry, through donations, great projects, or simply allowing unrestricted looting as the frontline advances.
While not a formal aspect of our online policy, in many cases assets such as income-producing moons in recently-pacified virtual territory would be seized up by first-moving citizen soldiers, who would fight a battle for territory one moment, and be mining it out the next; looting and scavenging apply to the online realms just as in ages past.
Efficient Displays of Generosity
Given the disadvantages of generosity as a trait in a leader, one is left wondering how often does one see it cultivated online? In my review of this chapter, I have struggled to find examples of online leaders who were especially loose with their money who succeeded, save pointing fingers at the greed of the MBC leadership in wars past.
Machiavelli writes:
“In our times we have not seen great deeds accomplished except by those who were considered miserly; the others were all wiped out.”
The Prince, p. 55
Especially in the modern online era, generosity is often a tactical display, aimed at cheaply influencing as many people as possible - gifts for those who matter enough to make gifting worthwhile, with affordable and occasional circuses for everyone else. Virtual princes may wish to be seen to give away accolades, to throw parties, to shower benefits upon their people, but to do so overmuch might overwhelm their coffers and bring about their ruin.
An example of an efficient public display of generosity was a program where about every quarter, we would gift an extraordinary member of our organization a Titan, a very expensive and important type of spaceship. This was an expensive investment, and the gift was made publicly with the beneficiary being hailed for their honest contributions to the virtual society. But because the gift was also a powerful warship, this generous donation also directly contributed to the warfleets of the state; it was both seen as a generous gift, and it was a direct subsidy to the Imperium’s military and would be used in battle for common defense.
In Praise of Parsimony
“Therefore - in order not to have to rob his subjects, to be able to defend himself, not to become poor and contemptible, and not to be forced to become rapacious - a prince must consider it of little account if he incurs the reputation of being a miser, for this is one of those vices that enables him to rule.”
The Prince, p. 55
It is a quirk of life in these modern times that not many aspire towards a reputation of generosity, and who can fault them given the relative advantages of parsimony? This holds true in online leadership just as it did in the 16th century examples of Machiavelli’s day.
I would echo Machiavelli and advise virtual princes to not concern themselves with seeming generous, except when spending the assets of outsiders, and instead learn to focus on economizing and accumulating, as healthy finances are a tremendous advantage to a virtual state.
A healthy state led by a parsimonious leader will be able to provide much more to its citizens in the form of valuable programs, a strong military, and good policies; the generosity which comes from effectiveness and efficiency is the best kind a leader can provide.