Dictatorship or democracy in virtual worlds

Why not just create a "democratic" game that has a constitution, full citizenship for players, and all the prerequisites for stable wealth? Such a game would be open source (so that other, interoperable "nations" could be established for you to emigrate to if you don't like the will of the majority in one game-world), and run by elected representatives who would instruct the administrators and programmers as to how to run the virtual world. In the real world, the TSA sets the rules for aviation -- in a virtual world, the equivalent agency would determine the physics of flight.

an article by Cory Doctorow from Informationweek