I was trying to remember a URL for a site which was setup to explain why gold sales are bad, it's an interesting read.http://www.nogold.org/why/Why is gold selling bad? - SPORTSMANSHIP
MMORPGs are games, and most players expect their peers to treat them as such. Purchasing gold, items, and accounts from businesses detracts from the nature of the game. MMORPGs are hugely competitive (where players compete for levels, items, honor, and status). When players with large bank accounts simply buy their way to the top, it ruins that element of the game for everyone else. - INFLATION
So, you are playing your MMORPG. You kill a rat with your mightysword, and loot 2 gold off its lifeless body. You shout for joy,and continue on playing.
Why were you happy? Because gold means something in your game. You use it to purchase armor, weapons, mounts, housing, and raw materialsfor your trade skills. You form guilds, ride on public transportation, and participate in events with it. People work to obtain gold in MMORPGs because it is worth something to them.
Gold farming (and the selling of it) creates inflation. Thinkof your MMORPG’s economy as a pool of water (the money). Water is constantly being put in it while water is constantly being drained out at the same time. If there is too much water being put in (the gold farmers) and not enough water being drained out (costs from durability and mounts etc.) then the water will keep rising.
Drains for money in the economy (or money-sinks) are designed to keep the amount of money level. Gold farmers do not play by the intended design however. They don’t spend money on armor, weapons, mounts,housing, or raw materials. They just add TONS of new money to the MMORPG economy.
This means that the value of your 2 gold drops. The gold farming artifically inflates the in game economy, forcing higher prices for items and ruining the ability for people who do not grind or buy gold to purchase items.
This leads to a cycle. Players must kill more and more rats to buy the same item, because gold buyers have bid up the price for said item. These players become frustrated with grinding gold, and are more likely to purchase gold from a seller for real money. This leads to further inflation. - SWEATSHOPS
Where did you think gold sellers get their labor? Gold wholesalers employ hundreds of employees in third world countries. These laborers work 10-12 hour shifts for pennies an hour. The wholesaler then sells the gold to a major reseller in North American or Europe. Both the wholesaler and reseller in turn make massive profits. They exploit workers and MMORPG economies for a quick buck. Read an excellent article on 1up.com
for more details on how the industry operates.