Monopoly is one of the most popular board games in modern history, but behind the familiar game lies a fascinating relevance to land ownership, wealth, and the increasing gap between the wealthy and the rest.
The widely held story is that Monopoly was invented by Charles Darrow in the 1930s - which is actually not the case. In this blog, we delve into the origins of Monopoly and the subtle economic lessons woven into the game's fabric, tracing its origins back to a daring feminist’s radical vision.
The Origins of Monopoly
In the early 1900s, amidst a backdrop of rising social inequality, a progressive thinker in the USA named Lizzie Magie created a board game that would ultimately evolve into Monopoly. Her creation, known as ‘The Landlord's Game’ aimed to educate players about the perils of land ownership concentration and wealth inequality.
The game featured two sets of rules, highlighting both monopolist and anti-monopolist perspectives; one set of rules emphasised ruthless monopolies and cutthroat competition, while the other advocated for cooperation and wealth distribution.
This innovative board game was more than just a pastime, it was a tool designed to illustrate the consequences of unchecked capitalism. Lizzie Magie invented a game to teach people how the land capital system works, with the objective of demonstrating how rents enrich property owners and impoverish tenants.
She based the game on the economic principles of Georgism, a system proposed by Henry George to alleviate societal inequality by taxing land rent i.e. any income specifically related to a piece of land. This would include natural resources, income from farming, industrial enterprises, and property rental, to name a few. The game, featuring properties, debts, and even a stint in jail, mirrored the struggle of everyday life under the prevailing economic system.
Henry George's Ideological Influence
Henry George was an economist who questioned societal inequalities. When he looked at the U.S economy during ‘The Long Depression of the 1870s’, he asked two very simple questions:
Firstly, how is it that the USA is far wealthier than pretty much any country in history, making such progress as a society with technology etc. yet there has been a massive rise in social inequality?
Why is it that some people seem to have so much and some people seem to have so little, despite the fact there is all this progress?
Secondly, why do we get these periodic economic booms and busts which have the effect of feeding the inequalities in society and directly or indirectly lead to economic and political unrest (Things like the Brexit result, the rise of populism, and polorisation in thoughts; the majority of the population do not feel they have a stake in their society, and therefore vote for options that will wake people up to the inequality they are suffering).
George believed that land and property ownership are central to mankind's basic needs, as identified by Maslow's Heirarchy of Needs. Land and property are therefore central to all wealth creation and the ‘lucky’ owner is given an automatic advantage in life.
At the base of Maslow's hierarchy are physiological needs which include the most basic necessities for survival such as food, water, and shelter. The next level in the hierarchy is safety and security needs, which includes protection from physical harm, a home, and a job.
Throughout history, land has provided for these needs through hunting, farming, fishing, and associated work providing income. The land, through the development of property, has provided security, warmth, safety, and thus the ability to move up the hierarchy of needs.
As society develops and industrialises, some land and property became more useful than others, and the land rent measured in monetary terms grows, making the owners wealthy.
It can be argued that the whole of capitalist society is built around land ownership and the development of that land leading to wealth creation. George believed that many of the problems that beset society, such as poverty, inequality, and economic booms and busts, could be attributed to the private ownership of the land rent.
George proposed that individuals should own 100 percent of what they made or created, but everything found in nature, particularly land, should belong to everyone. Therefore, tax upon land rent is the most just and equal of all taxes.
He proposed that Government should be funded by a tax on land rent rather than taxes on labour, and by returning land rent to the public purse, societal inequalities could be mitigated. The Landlord’s Game subtly teaches players about the consequences of land ownership and wealth concentration.
The Landlord’s Game
Lizzie’s game featured play money and properties that could be bought and sold. Players borrowed money, either from the bank or from each other, they had to pay taxes, and it featured a path that allowed players to circle the board.
As players made their way around the board, they performed labour and earned wages, and on passing GO they earned a wage for that round which could be used to meet living expenses (Chance Cards) or to acquire real estate. Players who ran out of money were sent to the Poor House. Players who trespassed on land they did not own had to either pay rent, just like you do in real life, or GO TO JAIL. There, the unfortunate individuals had to linger until serving out their time or paying a fine.
As the game develops, players start to build houses and hotels on real estate and the land gets much more expensive. When a player lands on another player’s real estate, they have to pay more in rent, and as some land becomes more valuable than other land, bigger and bigger rents are charged for landing on it.
At the start of the game, everyone is equal, they are collecting £200 each time they pass GO, they don't have to pay out much in rent and so everyone is in a similar position. As the economy develops, land is bought and developed, and players have to pay more and more if they happen to land on something which has been well developed. All their income goes in rent and they are cash poor.
Ultimately, land takes all of the gains of societal development and the system is inherently unstable because owners of land become richer and richer, and the rest have suddenly lost all their money, had to sell all their assets, and then they are out of the game.
But, in addition to the standard Monopoly rules we are all familiar with, in which the goal is to create monopolies and crush opponents, The Landlord’s Game had a second set of anti-monopolist rules in which everybody was rewarded when wealth was created.
Prosperity: The Social Equality Rules
In the second set of rules known as Prosperity, the land rent was shared.
If you land on another player's real estate, you pay rent to the owner of that space, but you also pay rent based on locational land value (ie if it is in a ‘nice place’, or developed land, you pay more for the privilege) and you pay that into the public purse.
As the game is played, the public purse gets bigger and bigger, and then over time, spaces on the Landlords Game board, like education, or utilities, become free. As the game plays out, players get a bigger amount of money as they pass GO, so no one person can effectively bankrupt the other.
The system becomes more stable, and so answered the two questions that Henry George was asking; why do we get this rising inequality in society and why do we get this instability?
Lizzie Magie designed the answers into The Landlord’s Game.
The Evolution of Monopoly: From Magie to Darrow
In a twist of fate, Charles Darrow, an unemployed man in the midst of the Great Depression, stumbled upon Magie's creation through friends in 1932. The version that Darrow played had the core of Magie’s game, but also modifications added by the Quakers to make the game easier to play.
Darrow re-branded it as Monopoly, eventually selling it to Parker Brothers and propelling the game to unprecedented fame. However, the game's original purpose as an educational tool to highlight economic disparities was lost in translation. The game's popularity soared, making Darrow a millionaire, while Lizzie's contributions faded into obscurity.
Unfortunately, Lizzie Magie, while she wasn't on the breadline, never got to see any financial benefits from her game. The greatest irony was that the second set of rules she designed to teach people how the land system could provide real social equality, was taken out. What was supposed to be teaching people about the dangers of property speculation has ever since become the very celebration of property speculation.
Monopoly Today: Beyond a Board Game
While Monopoly remains a beloved board game worldwide, its origins in progressive economic thought go unnoticed. Monopoly, as envisioned by Lizzie Magie, highlights the pitfalls of unchecked capitalism. Through game play, it illustrates the inherent instability of economic systems and the widening wealth gap. Lizzie's original vision, advocating for communal wealth and fair taxation, serves as a poignant lesson in today's world, where economic disparities continue to shape society.
As we roll the dice and navigate the board of Monopoly, let us remember its origins - a testament to the fight against inequality and a call for economic justice.