Monopoly is Theft

[MachineGhost]

The game’s true origins, however, go unmentioned in the official literature. Three decades before Darrow’s patent, in 1903, a Maryland actress named Lizzie Magie created a proto-Monopoly as a tool for teaching the philosophy of Henry George, a nineteenth-century writer who had popularized the notion that no single person could claim to “own”? land. In his book Progress and Poverty (1879), George called private land ownership an “erroneous and destructive principle”? and argued that land should be held in common, with members of society acting collectively as “the general landlord.”?

Magie called her invention The Landlord’s Game, and when it was released in 1906 it looked remarkably similar to what we know today as Monopoly. ... The Landlord Game’s chief entertainment was the same as in Monopoly: competitors were to be saddled with debt and ultimately reduced to financial ruin, and only one person, the supermonopolist, would stand tall in the end. The players could, however, vote to do something not officially allowed in Monopoly: cooperate. Under this alternative rule set, they would pay land rent not to a property’s title holder but into a common pot—the rent effectively socialized so that, as Magie later wrote, “Prosperity is achieved.”?

...

A few weeks before the tournament, I’d had a conversation with Richard Marinaccio, the 2009 U.S. national Monopoly champion. “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 this 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. It’s about shutting down the marketplace. All the players have to do is sit on their land and wait for the suckers to roll the dice.

Smith described such monopolist rent-seekers, who in his day were typified by the landed gentry of England, as the great parasites in the capitalist order. They avoided productive labor, innovated nothing, created nothing—the land was already there—and made a great deal of money while bleeding those who had to pay rent. 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 about ending free trade and nixing competition in order to replace it with rent-seeking.

http://harpers.org/blog/2012/10/monopol ... /?single=1

[doodle]

MG, I can't figure you out. First global warming, now this. Where do you stand?

Moda and stone would be proud though as this article seems to reinforce the backbone of their argument against libertarianism.

[MachineGhost]

I think what is more important is not where anyone stands per se, but whether they have the ability to acknowledge they are, or might be, wrong and change their minds.  To paraphrase Keynes, "I change my mind when the facts change.  What do you do, sir?"

[stone]

This thread made me think about a casino banking game idea I had. I think casino banking would be a great basis for a fun board game too.
http://gyroscopicinvesting.com/forum/ht ... ic.php?t=8

People enjoy playing Monopoly. "Casino Banking" is in the media a lot but what it is is fairly mysterious. Would it lend its self to being the subject of a family game like Monopoly? Might that help people understand what they are all paying to bail out? I've drafted an attempt at making such a game. Does it seem fun and easy to play? Is it realistic?

This game allows each player to experience the thrill and pride of being at the helm of a global systemically important financial institution. The aim of the game is to gather remuneration. Whoever has been remunerated the most by the end of play wins. With each round of the game, you are remunerated with 20% of any profit your bank makes. If your bank makes a loss you don’t get any remuneration that round.

Each player gets a bank with £1B as capital. Each bank can hold (in whatever proportions you choose) cash (which keeps a constant nominal value and gives no income), stocks (which vary in price and income per share), treasuries (which give a constant 10p income per share but vary in price) and commodities (which vary in price per share and give no income). For each round of the game, each player decides what to hold and the three dice are thrown, each determining the performance of an asset class. At the start of play, each share costs £1 but during the course of play that price will meander around accumulating the consequences of the dice throws.

dice throw  treasuries                stocks                                commodities
1                x3/2  10p inc                  x2  30p inc                            x4
2                x5/4  10p inc                x2  20p inc                            x3
3                x6/5  10p inc                x2  10p inc                            x2
4                x5/6  10p inc                x3/2                                          x1/2
5                x4/5  10p inc                x2/3                                        x1/3
6                x2/3  10p inc                x1/8                                            x1/4

As a bank, you may make loans to your fellow banks for them to further speculate in such financial assets. You may not make loans to yourself. Loans are for five rounds of the game with 20% of the principle being repaid after each round along with any interest. The fixed interest rate for the full term of the loan is determined at the start of the round before players decide whether to make loans and how to allocate their asset holdings. Two dice are thrown and the interest rate is the resulting score between 2% and 12%.

Each bank must hold net assets of 4% the value of the total assets it holds (ie 4% capital ratio). So (loans+cash+treasuries+stocks+commodities)/(loans+cash+treasuries+stocks+commodities-loans owing) must always be more than 25x. If your capital ratio falls below 4%, then your assets get distributed to your creditors in proportion to the amount owed. 

If an insolvent bank has run up debts that have no hope of being serviced, then rather than writing those debts down, a bailout may be deemed appropriate for creditors who have made political campaign contributions at the start of that round. If a £100M contribution has been made, then a coin will be tossed and if it is heads, then that creditor will get the full amount owed. If a £200M contribution has been made, then two coins will be tossed and if either is heads then that creditor will get the full amount owed and so on with larger contributions.

Example of play:

The dice are thrown to determine the interest rate as 5%.

Bank1 makes a £10B loan to bank2 and bank2 makes a £5B loan to bank1.

Bank1 buys 4B shares of treasuries, 1B shares of stocks and 1B shares of commodities.

Bank2 buys 5B shares of treasuries, 3B shares of stocks and 3B shares of commodities.

The dice are thrown as: 1 for treasuries, 6 for stocks and 1 for commodities.

Bank1’s holdings consequently are valued as:
3/2x £4B= £6B for treasuries
1/8x£1B=£125M for stocks
4x£1B=£4B for commodities
giving £10.125B in total.
Bank1 also receives £500M in interest from its loan and £400M as income from its treasuries. Bank1 repays £1B of loan principle and £250M in loan interest leaving
£10.125B+£500M+£400M-£1B-£250M=£9.775B. Bank1 still owes £4B so the increase in net assets is £9.775B-£4B-£1B=£4.775B so £955M is taken as remuneration, leaving £4.82B of capital to be deployed for the next round.

Bank2’s holdings consequently are valued as:
3/2x £5B=£7.5B for treasuries
1/8x £3B=£350M for stocks
4x£3B=£12B for commodities
giving £19.85B in total
Bank2 also receives £250M in interest from its loan and £500M as income from its treasuries. Bank1 repays £2B of loan principle and £500M in loan interest leaving
£19.85B+£250M+£500M-£2B-£500M=£18.1B. Bank2 still owes £8B so the increase in net assets is £18.1B-£8B-£1B=£9.1B so £1.82B is taken as remuneration, leaving £8.28B of capital to be deployed for the next round.

Going into the next round, the price per share is now £1.50 for treasuries, 12.5p for stocks and £4 for commodities.