Why Work for a Living? Winning the Game of Monopoly

Why Work for a Living? Winning the Game of Monopoly

One of Queensland’s fastest-growing cities is set to get its own version of the world’s most iconic property board game — Monopoly!

The idea for the Hervey Bay edition came from local property developer and salesman Glen Winney (Managing Director of WIN Group).

He lobbied Monopoly to make the edition so he could use it as a thank you gift for clients:

I’ve always been interested in property, so Monopoly was the perfect game to actually use for a present, anybody buying property off us, as a gift…Monopoly just makes sense.

Indeed.

To any seasoned Aussie real estate investor, Monopoly certainly makes sense.

Over the boom years of the housing cycle, many will have made more from their real estate going up in value over a year than they would’ve working for a living!

In economics it’s termed ‘economic rent’.

The definition can be summarised as the unearned profit that comes from owning a resource, monopoly, natural scarcity, or anything else that gifts a windfall — one that’s not ‘earned’ from toil, risk, or enterprise.

Rent-seeking can take on many forms.

But undoubtedly, the one that gifts the greatest gains over the cycle always comes from owning the rights to land.

After all, even if the worse forecasts spruiked of a 15% fall in Sydney and Melbourne’s median price were to eventuate from this recent pullback — owners would still be ahead from where prices were pre-pandemic.

The Hervey Bay edition will be on sale from 25 July.

There are more than 1,144 versions of Monopoly circulating.

It’s been translated into 40 languages and sold in more than 100 countries. It’s the world’s most popular proprietary game.

The lesson?

If you want to be as rich as Mr Monopoly, owning real estate and jacking up the rent is the way to do it…

Still, this wasn’t how it started.

Few are aware of Monopoly’s origins.

The true story was covered up for years, and the Parker Brothers fought many expensive lawsuits to keep it that way.

In fact, Hasbro, who purchased Parker Brothers in 1991, still spruik the myth.

According to Hasbro, it was created by Charles Darrow during the 1930s Depression to remind people of better times.

The truth is, Monopoly was originally called The Landlord’s Game.

It was invented and patented in 1904 by feminist and social reformer Elizabeth (Lizzy) Magie (1866–1948).

Lizzy’s father was an anti-monopolist!

An influential figure in his own right, he gave her a copy of Henry George’s best seller, Progress and Poverty (published 1879).

In it, George demonstrates how poverty and unemployment could be minimised by the removal of all current taxation, and replaced with a ‘single tax’ on monopoly rents (i.e. land).

He reasoned, why would we tax productivity, labour, and consumption when there’s a large dollop of unearned income pooling in the pockets of owners of land and other natural monopolies?

This led to a worldwide Georgist movement.

It was the beginning of the progressive era.

Land and wealth were concentrated in the hands of a few.

The economy was recovering from the depths of the 1890s depression — and George’s message was mesmerising to Lizzy and her friends who wanted reform.

The Landlord’s Game contained two sets of rules:

  • One was anti-monopolist, where all were rewarded when unearned wealth was created.

Think of it like a basic income. Money is collected and circulated from taxes on increasing land values.

Everyone gets a bit of the gain — society flourishes.

  • The other version ruthlessly pits players against each other. Driving opponents into bankruptcy, jacking up rents, and leaving competitors in tears.

This is the one we have now.

Lizzy’s fantasy was to prove that the first set of rules was morally superior:

Let the children once see clearly the gross injustice of our present land system and when they grow up, if they are allowed to develop naturally, the evil will soon be remedied.

The Single Tax Review, Autumn 1902

The game immediately went viral.

It became a family favourite across the US.

It’s not clear if Lizzy realised how enthusiastically it had been embraced. Editions were localised from the onset.

Rules adapted to fit in with players preferences.

However, the fact that the anti-monopolist set of rules quickly became obsolete is a lesson in itself. It illustrates much about politics and the economy today.

Monopoly was (and still is) used as a game to teach young minds how to get onto the mythological housing ladder.

It mirrors both society and the economy.

Ultimately, the largest landowner — the bank — always wins.

And unlike in the late 1800s, a large proportion of the population today get to enjoy a small slice of the monopoly pie with an investment property or two.

This behaviour alone ensures the cycle will continue.

There are only two sides to choose from — be a rentier or a renter…

Sincerely,


Catherine Cashmore Signature

Catherine Cashmore,
Editor, The Daily Reckoning Australia