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The Real World is Like a Game of Monopoly

monopoly

The Real World is Like a Game of Monopoly

Okay, Monopoly may be only a game. One person ends up with everything; everybody else loses everything. The one with everything wins bragging rights, and anything else the players might have agreed to. But what are the real life implications?

The game of Monopoly is all about economic success and failure. But think about what happens after the winner is declared. There is no “happily ever after”. What exactly does the winner get? Remember, the game is about economic success and failure. With that in mind, what does the winner get? – Other than bragging rights, the chance to say “I beat you at this game so I’m better than you, ha ha!”

The winner owns all the real estate. During the game, as this real estate is being accumulated, the real estate is used to extract wealth from the other players in the game. In the real world, “other players in the game” would translate to “everybody else in the economy.” As the eventual game winner accumulates more and more real estate, the “other players in the game” have less and less to contribute. By the time the game is over, they have nothing to contribute. What good is this real estate to somebody who owns it all, if the overall goal is economic wealth? How can owning all of the real estate be of any financial value when nobody can afford to pay rent? The real estate will end up sitting idle, generating no wealth for winners or losers. You wind up with empty buildings while “everybody else in the economy” is hungry and homeless.

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The winner owns all of the money. As the game progresses, and the eventual winner keeps accumulating more and more of the money, there is less and less money left to get. The economy slows down, eventually coming to a complete halt. What good does it do to have all of the money? Money has no value if nobody else has anything worth buying. Money becomes, well, Monopoly money in the figurative sense.

So what can the “winner” do? What good is it to own all the wealth? Is it really wealth if it provides no tangible benefits? One option would be for the “winner”, who is now a monopolist, to hire some of those, “everybody else in the economy”, who got wiped out in the game to produce something that they would buy. The monopolist will have no desire to give up wealth; the workers will get paid just enough to ensure that production takes place; nothing more. The incentive for the monopolist is to accumulate wealth. This won’t be accomplished if the workers are paid according to what they produce; they will need to be paid as little as possible, to live off the “crumbs”, so to speak. A good PR campaign will keep them happy. The monopolist just needs to convince the people that without the “generosity” of the monopolist, the people would have no jobs at all. It doesn’t matter that before the monopolist “won” the game, these people had good-paying jobs, and that if it weren’t for the game, these people would not have to rely on the monopolist for menial jobs. With a good PR campaign, the monopolist can become somewhat of a hero in the minds of the people. He is now the benevolent “job creator”. The people won’t realize that, without the monopolist taking all the wealth to begin with, there wouldn’t have been a job void in the first place or a society living off the crumbs of the wealthy.

Relying on workers who receive only “crumbs” for wages is one option for the monopolist, but this option is a losing battle from the beginning. It might work for a certain amount of time, but it is not sustainable forever. No rational monopolist would consider using this strategy alone. The monopolist expects to make more than the workers. Where is this profit going to come from if the people only get their money from the monopolist? An additional strategy is needed. The monopolist would have to find customers with money to spend; customers in addition to the “other players in the game”. Who are these customers? They have to be people who are not part of “everybody else in the economy”. They would have to be people who weren’t in the game at all. The overall economy will have to be redefined to include foreigners who can become customers. The domestic economy would have to succeed on the strength of exports, with the monopolist owning everything to be exported. This might work in the short run. But what would happen in the long run?

If the foreign markets are strong enough to provide profits for the monopolist, then more profits can be achieved by moving production to where the customers are located. Costs can be lowered in the process, even more so if the customers exist in a country with a third world but growing economy. Who needs domestic sales, when the only money that domestic customers have comes from the “crumbs” of the monopolist? Here is where another PR campaign can come in handy for the monopolist. The domestic workers face the real threat of having their jobs shipped overseas. A good PR campaign will convince them that the jobs are leaving because of “high domestic labor costs.” The people now will be willing to work for even less than the “crumbs” that they were making before. The people, who are so grateful to the “job creators,” will be convinced that they are overpaid even while working for less than a living wage!

This outcome from the game of Monopoly is being played out in the real world, right here in the richest part of the world. The above scenario is the natural outcome of unregulated, “free” markets in which policies always favor the “job creator”. Giving the “sellers” free reign does not produce the theoretical outcomes of economic efficiency caused by increased competition. The opposite occurs. Competition is drastically decreased, continuously. The natural outcome would be the above scenario, with only one “seller” in the entire economy.

We haven’t reached that extreme outcome yet. We have yet to get to the point where the economy consists of only one seller, with a near-total reliance on foreign sales and almost “free” labor domestically, but we are headed in that direction and very quickly. Competition is decreasing rapidly, as fewer companies control larger market shares. As competition decreases, the surviving corporations are branching out into more and more markets. More and more workers are being paid less than a livable wage, even as productivity and profits skyrocket. Many of these workers have been convinced that the system is good for them because of the benevolence of “job creators”, even though more jobs, and a living wage, would be available without so much economic power going to fewer corporations. Masses of people have less money to spend, so the economy can produce fewer jobs and smaller economic growth. In the name of “free markets,” society has to deal with a growing number of working people who cannot subsist on market wages.

The only solution is to return to a system in which labor is actually paid according to productivity. Free reign for corporations in an unregulated economy will not provide that. An insistence on a living wage, taxing offshore profits, and eliminating the concept of “too big to fail” will. But in order to get there, we have to deal with the fact that millions of people have bought into the PR campaigns designed to convince them that they will somehow lose their personal freedoms if they are forced to accept a living wage.

What about “taking money away from those who earn it?” The truth is, as long as there is a divergence between labor productivity and wages, this redistribution is already occurring. In modern-day America, wealth never gets redistributed from the wealthy to the poor. Wealth always moves from the poor to the wealthy, and the middle class quickly disappears in the process. The historical data overwhelmingly support this truth. The divergence between productivity and wages has been going on since the beginning of the 1980s, and correspond to fundamental changes in economic policy. These policy changes are known as “trickle-down economics,” and the overwhelming historical evidence in the results of these policy changes is that trickle-down economics simply does not work for the people or for society in general.


A version of this essay is included as a chapter in the book Sanity and Public Policy: Separating Truth from Truisms by Jerry Wyant. This book is available in both paperback and eBook formats.





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Author: 
Jerry Wyant
Date: 
2014-08-04
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