February 15, 2004

What's Wrong with Monopoly (the game)?

Benjamin Powell and David Skarbek explain what's wrong with Monopoly:

That's the real world. 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.

(...)

To make the game resemble an economy with grants of government privilege, think of each square as an individual monopoly grant. Since the government has the ability to give out these grants, think of the government as the initial owner of each square at the start of the game. The initial price players pay for their land goes to the game's bank and should be thought of as a cost of lobbying the government to receive the special monopoly grant. The final step is to imagine that government compels the other players to buy from you and you from them, when a player lands on a grant of monopoly privilege.

Although reinterpreting the starting conditions of the game makes it more accurate, another problem is thereby created. The game's winner is not a wonderful entrepreneur but just the best rent seeker. He wins because he is the most successful at securing grants of government privilege and coercing other players into trading with them.

Monopoly may be fun to play but it leaves us with two unpleasant choices. The game either misrepresents the nature of trade in a market economy, or if slightly reinterpreted it glorifies rent seeking by making it the object of the game.