What Lesson Does Monopoly Teach?
by Thomas Woods on February 11, 2013 at 2:29 PM
Harper’s magazine, talking to Monopoly champion Richard Marinaccio, writes:
“Monopoly players around the kitchen table”—which is to say, most people—“think the game is all about accumulation,” he said. “You know, making a lot of money. But the real object is to bankrupt your opponents as quickly as possible. To have just enough so that everybody else has nothing.” In his view, Monopoly is not about unleashing creativity and innovation among many competing parties, nor is it about opening markets and expanding trade or creating wealth through hard work and enlightened self-interest, the virtues Adam Smith thought of as the invisible hands that would produce a dynamic and prosperous society. Instead, it’s about shutting down the marketplace… The initial phase of competition in Monopoly, the free-trade phase that happens to be the most exciting part of the game to watch, is really all about obliterating free trade and annihilating competition in order to replace it with monopolistic rent-seeking.
Right, but Adam Smith never imagined someone would confuse a game in which people randomly land on properties and arbitrarily have to pay exorbitant sums with the free market.
Ben Powell explained the problems with Monopoly in a nice article at Mises.org. (Now let me note: I am not a humorless automaton who can’t just shut up and enjoy a game of Monopoly. I have in mind here the people out there who actually think Monopoly is supposed to be an approximation of the real free market.) He writes:
In the game Monopoly, owners of land and houses and hotels, though acquiring their possessions by luck, are flattered into believing they are masters of the universe, extracting profits from anyone who passes their way. There is no consumer choice and no consumer sovereignty. This is not a small detail. The entire raison d’etre of the market is missing, and thus the real goal and the guide of all production in a market economy.
Consumer choice is replaced by a roll of the dice. The player then becomes passive. Landing on property owned by another person creates not a mutual gain but a loss. In this way, trade is portrayed as “zero-sum.” The elimination of consumer choice leads to the belief that businesses profit only at the consumers’ expense….
In Monopoly, a roll of the dice forces exchanges between producers and others. However, business to business transactions are left to free negotiation. Players are allowed to offer property for trade or cash to other players on mutually agreeable terms. Even in these transactions, regulation raises its ugly head when there are buildings on the property. Players are forced to demolish buildings before making any property exchanges.
The pervasiveness of monopolies in the game does not represent the situation in the real world. Every piece of property on the game board is essentially a monopoly; once the dice roll determines where a player lands, there is only one seller who the consumer must purchase from….
In fact, Monopoly better illustrates how an economy works when it is based on intervention, central banking, and government privilege.