In many ways, that in-game wealth is meaningless unless it's bankable in a system that's responsive to democratic principles. In other words, you can accumulate a lot of money in apartheid-era rand, or Soviet-era rubles, but it doesn't really mean anything because you can't really export your wealth — because the state controls access to it. And even if you can, you can't export the source of your wealth, right?
Say you managed to accumulate a lot of wealth in the former Soviet Union because you built a factory and the relationships to keep it running. Even if you can get your rubles out by converting them to something that you can smuggle out of the country like diamonds, you're going to lose your factory and you're going to lose those relationships. Those are all stuck in this kind of totalitarian state. So if we're going to say that these places are where we're going to live our life — or our second or third or fifth life — for that to be meaningful — those places need to be responsive to democratic principles.
Since you can exchange Linden dollars for US currency — even outside the official Second Life exchange — one assumes Doctorow is referring to Linden Labs' control of the means of production, so to speak. You can't pick up your penis-crafting business and move it to Mexico for the cheap labor, after all. Without the magical ability to "export" your Second Life "factory" to Mountain View, it seems the sources of SL wealth will remain beyond the reach of democratic principles. Probably a good thing, really.