- Historic Sites
The Monopoly Nobody Doesn’t Like
The game that has sold 200 million sets was born to teach its players about the evils of capitalism
September 2000 | Volume 51, Issue 5
No country is so obsessed with the idea that monopoly is evil as the United States. The response of other industrializing societies to the development of economic hegemonies has been to regulate them, not to break them up. And no other major country has anything resembling the corpus of antitrust law that has built up here since the first statute, the Sherman Antitrust Act, was passed by Congress in 1890. The American economy has changed almost beyond recognition over the course of the twentieth century as the industrial empires of Andrew Carnegie and John D. Rockefeller turned into the electronic empires of Andrew Grove and Larry Ellison. But antitrust law has hardly changed at all.
The word monopoly has been much in the news lately, as a judge has ruled that the legendarily profitable Microsoft Corporation has an illegal monopoly with its computer operating system. Just how much of a threat to competition this “monopoly” is in the rapidly evolving digital world is an open question, to put it mildly. Regardless, the judge ordered the company to be split in two in order to restore a competitive marketplace. The case, of course, is far from over, and how it will finally play out is anyone’s guess right now, as the company appeals the ruling.
Another kind of monopoly, however, has also been a little bit in the news lately. It’s the board game that has been played by millions for the last 60-odd years. The earliest known Monopoly set, handmade by Charles Darrow, is now on display at the Forbes Galleries in New York City, on the ground floor of the building where many Forbes publications are edited, including American Heritage .
Monopoly the game is a genuine American original. The traditional story has it that an out-of-work engineer named Charles Darrow invented the pastime in the depths of the Great Depression. He approached Parker Brothers to market Monopoly for him; they turned him down, explaining that his game suffered from no fewer than 52 fundamental flaws. But when Monopoly started selling like hotcakes in the New York toy store F. A. O. Schwarz, Parker Brothers reconsidered and licensed the game from Darrow for a royalty. The rest, as they say, is history.
Since 1935, Parker Brothers, now part of Hasbro Incorporated, has sold about 200 million sets of Monopoly, and so many still sell every year that Parker Brothers prints about $50 billion annually in Monopoly money.
If that story sounds a little too good to be true, it’s because it is mostly a public relations legend. In fact, the ultimate origins of the game Monopoly lie more than half a century before the onset of the Great Depression, in a time when the crusade against real monopolies was gathering steam. One of the leaders of that crusade was a man named Henry George.
Henry George (1839–97) had a varied career before writing a book that made him famous. Born in Philadelphia, he quit school at thirteen and a couple of years later shipped out on a vessel bound for India and Australia. On his return, he learned typesetting, tried his luck in the gold rush on the Fraser River in British Columbia, and worked for several years as a newspaperman, in 1871 trying to establish his own paper, the San Francisco Daily Evening Post . The enterprise failed after four years.
Always interested in politics, George tried unsuccessfully to win elective office several times, and finally landed a patronage job as state inspector of gas meters. During this somewhat checkered career, George had been thinking about the economic problems of his day, especially the persistence and apparent increase of deep poverty amid the creation of so much new wealth as America industrialized at a furious pace in the post-Civil War years. In 1879 he published Progress and Poverty .
While an admirer of the creative nature of capitalism, George ascribed much of the evils he saw around him to monopoly ownership and advocated government ownership of so-called “natural monopolies,” such as public utilities. But he felt the worst monopoly of all was in land. Land is the one natural resource that is absolutely fixed in its quantity. As an economy develops, rents inevitably go up and landlords reap a harvest they did not sow. George’s solution to this inequity was to tax away these profits on land (but not on improvements on the land, such as buildings) at 100 percent.
The new game was like the real world. It was competitive, you could get rich, you could ruin your friends!
George calculated that the revenue from this land tax would be sufficient to allow government to repeal all other forms of taxation, including tarrifs (he was an ardent free trader). Written in vigorous prose with everyday examples that the layman could easily grasp, Progress and Poverty was one of the most astonishing successes in the history of publishing, selling more than two million copies in the United States. It made its author both famous and rich.
He moved to New York City, the nation’s media capital, and began to lecture widely. Still hankering for political office, he ran for mayor of New York in 1886.