Whoops, You’re in Jail! The Not-So-Average Origins of Monopoly and Their Economic Roots

I know it, you know it, everyone knows it — the board game Monopoly! A true classic, Monopoly has grown to become one of the most popular games worldwide, with over 250 million games sold and having been played by over 1 billion people. Though I’m a bit embarrassed to admit that I played Monopoly for the first time this past June, just like everyone else, I’ve grown to love it.

But Monopoly wasn’t always the game it is now — in fact, its purpose wasn’t even to bring joy (or tantrums, depending on who you’re playing with) to families and friends. Instead, it was to teach people about economic theories and consequences. To truly look at Monopoly from an Average Joe standpoint, we have to look back at its rich origins.

The Landlord's Game was the original version of Monopoly.

The idea of Monopoly was created in 1903 by Elizabeth Magie, an American feminist and game designer. At its conception, the game was called The Landlord’s Game because one of its main features, similar to today, was buying property. The game was inspired by Georgism, a system of economic thought proposed by Henry George. This theory believed that the economic value of land and natural resources should be shared equally by all instead of being consolidated by a monopoly on land ownership. To do this, George proposed imposing a single tax on land rather than taxing labor. We went over monopolies in our earlier article on the Luxottica Group’s monopoly on eyeglasses, but in case you don’t remember, a monopoly is a market structure where one firm or individual dominates the entire market. While monopolies are beneficial for themselves, they often restrict competition, drastically increase prices, and limit options for consumers, generally making them harmful in an economy.

Henry George was the founder of Georgism and the inspiration for modern Monopoly.

So, at its core, Monopoly is really just a tool for people to learn about the economic theory of Georgism and experience the harmful effects of monopolies, specifically on land ownership. This sounds pretty reasonable — personally, when I play Monopoly, it’s more fun when nobody owns the majority of the property, but when one person starts owning everything, rents and prices soar and the game becomes a lot less fun (unless that one person is me, which in that case, it’s extremely fun). To demonstrate the difference in market structures, Magie actually included two different sets of rules: An anti-monopolistic one where everyone was rewarded for the creation of wealth, and a monopolistic one where the goal was to generate your own wealth while destroying your opponents. Ironically, although the game was meant to educate others on the harm that monopolies can create, the monopolistic set of rules is the one that took off and became part of the game we all know and love.

So, maybe the next time you sit down to play a long game of Monopoly, be aware of your monopolistic actions and how they would impact consumers and the free market in the real world. Don’t get too distracted though, or you might just end up in jail!

The Gist:

Monopoly was originally called The Landlord’s Game, inspired by Henry George and Georgism
Georgism believed that the value of land should be shared by all instead of being owned by a monopoly or single entity
Monopoly was originally meant to teach others about economic theories and the harmful effects of tampering with the free market economy, reflecting political and economic tensions of the day