What Monopoly Taught Me About Capitalism
By: Avinash Royyuru
Tags: Games, Capitalism, Monopoly

Monopoly began life as The Landlord’s Game, designed and patented by Elizabeth Magie in 1904 to teach players about Georgism. Georgism was named after the Single Tax system’s most famous proponent, Henry George. His book, Progress and Poverty, written in 1879, was the #2 bestseller in the US in the 1890s, behind the Bible. The key idea in Georgism is that economic rent derived from owning land should belong to all members of society.

The Landlord’s Game board, from the original patent application

Economic rent is different from the traditional concept of rent, which is the payment an owner receives for the temporary use of an asset. Consider someone who owns a piece of land near a train station. The presence of a nearby train station makes it more attractive to build an apartment block on the land. The train station, which the landowner did not contribute to, allows them to make more money and creates additional, unrealized value.

This unrealized value is the economic rent. Georgism proposes that this economic rent should be distributed among all members of society by taxing it. This is the single tax, as opposed to the multiple tax system today: landowners pay income taxes on profit and a property tax. The conjecture was that a single tax system based on the economic rent would be efficient and decrease inequality.

The rules of the game

Magie’s intent to use the game as a teaching tool is explicit in the rules. Players could play with rule variations to appreciate how different approaches to property ownership could lead to different social outcomes. One such variation is ‘The Monarch of the World’.

The Landlord’s Game is based on present prevailing business methods. This the players can prove for themselves; and they can also prove what must be the logical outcome of such a system, i.e., that the land monopolist has absolute control of the situation. If a person wishes to prove this assertion — having first proven that the principles of the game are based on realities — let him do so by giving to one player all of the land and giving to the other players all other advantages of the game. Provide each player with $100 at the start and let the game proceed under the rules with the exception that the landlord gets no wages. By this simple method one can satisfy himself of the truth of the assertion that the land monopolist is monarch of the world. The remedy is the Single Tax.

The Single Tax rules had all players gaining when a new property was acquired. Land rents and income from property purchases were paid into the middle of the board. This money was used to buy back the public utilities and railroads, which made them free to land on. This then resulted in more money given to each player as they passed Go, a metaphor for increased wages.

If the players wish to prove how the application of the Single Tax would benefit everybody by equalizing land opportunities and raising wages, they may at any time during the game put the single tax into operation by a vote of at least two of the players.

In the early 20th century, the Landlord’s Game was widely played among left-wing intellectuals and had many spin-offs and successors. Charles Darrow made a version of this game and eventually sold it to Parker Brothers in 1935. This is the Monopoly we know today. The game’s roots in teaching economic theory and the many versions of the game leading up to it were erased and the cult of the first millionaire game designer was born. And the greatest irony — Monopoly saved Parker Brothers from bankruptcy during the Great Depression.

Monopoly is now owned by Hasbro, whose gaming sales have increased by 21% in 2020 thanks to COVID-19 and lockdown. With the Christmas holidays approaching, more families might put away their devices to play Monopoly.

Without the rule variations, what are we learning about the world by playing this game with our families and children?

1. Do whatever it takes to buy, buy, buy

Everyone starts the game on an equal footing: M$1500 in cash and no assets. The early game strategy is to buy every property that you land on, even if you have to go into debt. The game teaches us that it is much more valuable to buy assets than it is to hold on to cash. Never mind about the short term cash crunch. We will pass Go again. We will make more money. Properties will make us money so invest, invest, invest!

Even if you don’t need a property, buy it anyway. Because someone else might need it and you can trade for something you actually need.

2. Monopolies are not built alone

It is rare for players to hold all the properties in a color group without a trade. Someone else might have a property we need to build a monopoly. I will give you a red property if you give me a green one. Is that a good deal? This is where our knowledge of the true value of the property is tested. No! You give me the red property and M$200, then I give you the green one. Pff. No.

Sometimes, we are nice. Sometimes, we wait until someone ends up in a bad situation. Then we force them into a bad trade. The best trades are the ones where both parties are happy.

3. Inequality is baked into the system

Once monopolies get built, property rents double immediately. And development can begin. Woo! This is the most exciting part of the game. It takes an hour of moving around the board and buying up properties before things get to this stage. As houses and hotels get built, the monopoly owners make exponentially higher rents. Things become more expensive because of the rent-seekers. The difference between the haves and have-nots becomes starker. Soon, that M$200 we get for passing Go seems minuscule. A salary is not enough to get by. One must own properties. One must build. And build more.

And not everyone has the same properties because resources are limited. That’s the nature of the game. So a small inequality in property ownership and wealth slowly becomes larger and larger and larger, until a player goes bankrupt. That’s too bad. It’s just how the system works! It’s not my fault that you’re poor. It’s your fault.

4. It is only fun for winners

No one has fun just playing the game. Everyone wants to win. But, there is only going to be one winner who will bankrupt everyone else.

The poor people who weren’t lucky enough to accumulate and develop properties are forced to pay rent and die a slow death. Winners don’t empathize with them. Winners collect rent with glee. Haha you are so bad at this game! Winners force losers into bad trades when they cannot pay their rent. Winners laugh at losers and feel smug about being good at the game.

Winners don’t understand when losers get upset and don’t want to play anymore. Oh, stop being a sore loser, we say. Get over it, it’s just a game! How many games of Monopoly end with a toppling of the board… an enacted desire to topple an oppressive system that does not work for everyone? How many of us have made secret deals and stolen money from the bank?

Monopoly is not just a game, it’s intention is to teach the players about the capitalist system. It is too easy to use the system as an excuse to be mean to others. That innocuous game is a microcosm of humanity and the capitalist system that we exist in.

In a 1902 issue of The Single Tax Review, Magie said, “It is a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences. It might well have been called the ‘Game of Life’, as it contains all the elements of success and failure in the real world, and the object is the same as the human race in general seem to have, i.e., the accumulation of wealth”

A hundred years on, this is more true. This game is not fun for everyone. It is only fun if you’re winning. Let us remember that the next time someone is unhappy with the system and wants to topple the board.