Currency

 

Garden Party

But it's all right now
I learned my lesson well
You see, you can't please everyone
So you got to please yourself

What lessons have you learned?

Monopoly as a board game, is indeed the board game that your little sister is most likely to upend in frustration, but it was originally intended as an economics instruction game. Monopoly is derived from The Landlord's Game, created by Lizzie Magie in the United States in 1903 as a way to demonstrate that an economy that rewards individuals is better than one where monopolies hold all the wealth and to promote the Henry George's economic theories on taxation. And despite its current use as primarily an entertainment game, it is actually serving its original function.

One of the lessons that Monopoly imparts comes from a strict interpretation of the printed rules versus the “House” rules as they are often played. (For example, in the printed rules, fines are NOT placed in the center of the board and given to the player who lands on the “Free Parking” space, but this is often the case in “House” rules.)  Strictly according to the printed rules, there is the opportunity to create a housing shortage. This happens when a player, such as your annoying little brother, buys all of the houses and refuses to turn them into hotels. Thus, when you want to buy a house, the bank has nothing to sell you.

Cornering the market on a commodity is bad for the game, or the economy. My father worked for Gorham Silver and that business was ruined when the Hunt brothers tried to corner the market on silver in the late 1980s. The Hunt brothers intended to make a large profit by forcing anyone, such as Gorham, to have to come to them if they wanted to continue using silver. In reality what they did is to drive up the price of silver for everyone and lose a tremendous amount of money for themselves  in the process.

But back to Monopoly. It is considered a dirty tactic to create a housing shortage. It creates an impasse in the game. But the actual rules say that it is allowed. The “House” rules find a way to create more houses so that there is no shortage. This may involve forcing your little brother to turn his houses into hotels, or using chits for houses. There is a lesson here.

When the currency is a commodity, it is possible to corner the market on that commodity/currency. We do not currently have bank runs or a collapse of the economy but this is what happens when a commodity/currency becomes concentrated in the hand of a few and the economy tries to respond. The alternative is a fiat currency, which is what the US dollar has been since the 1930s. But there is a problem when those issuing the chits, fiat, get carried away such as the Confederacy, Weimar Germany, or post Hugo Chavez’s Venezuela. Having too much currency is just as bad as having a shortage of currency. The Confederacy and Weimar Germany actually printed too much currency. Hugo Chavez’s Venezuela did it unintentionally by price controls such that there became a surplus of currency because you could earn currency but not spend it

The strict rules can often bring a game to an impasse. The “House” is NOT interested in the outcome of the game, but the continuation of that game. The "House", the group, can, and should, change those rules that cause an impasse. But it should be careful in how it does that. Its intention should only be to continue the game, not to change its random outcome.