The Complex History of Monopoly

Deep down, I always knew that there was something strange about the board game Monopoly — the way in which I would always feel when I win, ruthlessly smashing my opponents (or, in other words, my family and friends) into submission and watching their discomfort. The nature of the game is to have no pity. That is how one wins. That is how one becomes the supreme “monopolist.”

Only recently, however, did I discover the unique and complex history behind Monopoly.

I’d known for a long time (since I am originally from New Jersey) that the Monopoly board game was based on the street names in Atlantic City, New Jersey, and that it was created by a former heater salesman who couldn’t find work during the Great Depression. But that is only the superficial story of Monopoly’s genesis — the true story is much more intriguing and, well, much more subversive as well.

It goes something like this: Charles Darrow, a former heater salesman from the Germantown neighborhood of Philadelphia went to the home of some Quaker friends one night and, while he was there, played a board game called The Landlord’s Game. Darrow was so taken by the game that, when he went home, he made some slight adjustments to the rules and property names and dubbed his game Monopoly. He eventually patented it and sold it.

However, The Landlord’s Game had already been patented in 1904 by a Quaker woman named Lizzie Magie. (The original patent design can be seen below.) Magie admired the writings of Progressive Era economist Henry George and was herself an avowed “Georgist,” or follower of George’s economic philosophy. She created The Landlord’s Game as a learning tool for those who wanted to understand the principles behind George’s central economic proposal, “the single tax.”

The Landlord’s Game, 1904.

Henry George proposed the “single tax” in his 1879 best-seller Progress and Poverty as a means to alleviate poverty in the inner cities. What it essentially did was eliminate all taxes, such as income tax and sales tax, with the sole exception of one “single tax” — that is, the property tax.

According to George’s theory, property tax alone would be enough to fund the federal and local governments in the United States — indeed, all taxes would be taken from land alone (something that, he believed, should be shared by all men). By doing this, George believed, landlords and investors would not be able to sit on properties in the inner cities, waiting for the prices to go up before hocking their property to the next guy, and gouge rent from poor renters. By having a high property tax, landlords and investors would be forced to sell the properties to those who truly wanted to live in the homes — namely, the poor. (Just think about the crunch that you start to feel when your opponent in Monopoly has hotels on Park Place and Boardwalk and you only have one house on Marven Gardens. The winner of the game is almost pre-determined at that point.)

George was himself a fairly eccentric figure in the history of economics. He was not an academic; in fact, he was the complete opposite: He dropped out of school at the age of thirteen to become a “foremast boy” on a ship bound for India, but, on his way there from Philadelphia, he got off in San Francisco and settled there, eventually becoming employed as a typesetter for a publishing company in the city. (George also considered joining the gold rush in California, but decided against it in the end.) Even though his role at the San Francisco Times was not a glorious one, it still gave George an opportunity to submit some of his own columns and articles for publication and, in 1868, he published What the Railroad Will Bring Us.

In spite of his modest success at the San Francisco Times, George was still a very poor man and, through his trials, he became intimately well-acquainted with the struggles of the poor. This period of his life, and his experiences as an impoverished man with a wife and children to feed, culminated in his economic philosophy, which he eventually transcribed in his famous work, Progress and Poverty.

“Poverty deepens as wealth increases. Wages fall while productivity grows. All because land, the source of all wealth and the field of all labor, is monopolized. Unequal ownership of land causes unequal distribution of wealth. And because unequal ownership of land is inseparable from the recognition of individual property in land, it necessarily follows that there is only one remedy for the unjust distribution of wealth: we must make land common property.”

George is unfortunately little-known today and, even in spite of his profound influence during the Progressive Era, is scarcely even mentioned in most college-level economics courses. From the 1880s to the 1920s, however, everyone knew George’s economic philosophy: According to some sources, his book was only second to the Bible in terms of printing volume in the late-19th century. Moreover, many American politicians, such as Tom L. Johnson, mayor of Cleveland, and Samuel “Golden Rule” Jones, mayor of Toledo, were avowed Georgists. (In 1886, George himself ran as the mayor of New York City as the United Labor Party Candidate and, even though he did not win, he surprisingly beat out Republican candidate Theodore Roosevelt.) George’s ideas are also purported to have influenced the infamous Haymarket labor riots in Chicago, which occurred the same year that he ran for mayor in New York, and David Lloyd George’s “People’s Budget” in England is said to have been influenced by George. Indeed, George’s economic ideas were so profound that entire societies used them as their foundation: The town of Arden, Delaware, for example, modeled itself on a Georgist society and, even to this day, their town identifies itself on its Web site as a “single-tax community.”

Henry George running in the 1886 New York mayoral election. He won 31% of the vote, beating Theodore Roosevelt, who received 28%, but ultimately losing the election to Democratic candidate Abram Hewitt.

In summary, George’s ideas were quite popular during the Progressive Era (1890–1920) and many people dedicated their lives to his ideas. Lizzie Magie was one such person and that is the reason that she created The Landlord’s Game, which later evolved into what we now know as Monopoly: She wanted to teach people about the principles of George’s philosophy and wanted people to understand the ease with which landlords can increase their wealth, monopolize the real estate market, and cause misery and hardship to many. (Interestingly, Magie brought The Landlord’s Game to Arden, Delaware for its first test game.) It should therefore come as no surprise that, as you go around in circles on the Monopoly game board, doing your best to avoid the rent on Boardwalk, Park Place, and Pennsylvania Avenue, you feel a sense of anxiety and despair—that is the same anxiety and despair that many of the poor likely feel when they are forced to pay unreasonable rents to ruthless slumlords, and that is likely what Magie wanted to communicate.

Imagine what a game of Monopoly would be like if you had to pay a 50% tax on all of your properties, hotels, and houses each time that you made it around the board. It’d be almost impossible to maintain the properties and you’d likely have to forsake them to another player or mortgage them. That is what the single-tax would do: It would prevent monopolies and no player would go home feeling down and out.

And being down and out is something that Henry George, the theorist who first proposed the single tax, understood well: In one point in his Progress and Poverty, George recounts an incident in which he was forced to beg a man on the street for money in order to feed his wife and children. He claims to have felt so desperate in that moment that, if the man did not give him what he wanted, he would have taken it from him by force.

According to George, that is what poverty can do to a person, and that same sense of hopelessness and despair is what the losers of any Monopoly game feel: A hopelessness and despair that can only result in one of two things — bankruptcy or complete resignation.