We’re living out the insidious rules in real-time
I had a wonderful childhood and wonderful parents, but there is one semi-traumatic memory that has burned itself into my brain: The times when my father essentially forced my family to play the board game Monopoly.
My dad’s rationale was sound: It was important for his children to learn about money and mortgages and renting and borrowing and how horrible their lives would become as they wasted their prime decades giving a large portion of their hard-earned after-tax income to passive extractor landlords and bankers.
The board game’s origin can be traced back to the early 1900s, when an anti-monopolist named Lizzie Phillips invented a board game called The Landlord’s Game to expose the horrible effects of land concentration in the hands of private monopolies and definitively prove that rents enriched property owners and impoverished tenants. The game had two sets of rules: anti-monopolists were rewarded for creating real wealth, while monopolists were rewarded for creating monopolies and crushing opponents.
Take a guess who won.
Modern economic life is far worse than Monopoly
In the game, everyone gets a nest egg to start.
In life, the poor start with nothing and the rich start with everything.
In the game, people all earn the same money on their journey.
In life, CEOs can earn up to 434x their average worker.
In the game, all the land is available for purchase.
In life, all the property is already taken.
In the game, people can buy vacant land and build houses on it.
In life, undeveloped properties are now locked by monopolist cartels (typically called “city councils”) who wield “zoning rules” that largely forbid individual house development — especially if it’s a planet-friendly environmentally-sustainable alternative dwelling.
In the game, people can’t stop you from building a house.
In life, monopolists make truly affordable human shelter impossible.
And it’s about to get far worse.
As a game of Monopoly progresses, every property with a house on it is eventually turned into a passive rental property. This is already the lived reality for America’s 115.4 million renters, who fork over their hard-earned after-tax dollars to 23.7 million extractive landlords.
But that’s only half the prophecy.
The century-old game predicted, with terrifying accuracy, something that no one in the 1900s could’ve foreseen becoming a reality: That, in time, after every owner-occupied house had fallen to the land-lorder, every rental would be transformed into a hotel.
Enter Airbnb, the emerging monopoly that will likely go down in history as the most dangerous and society-shattering company ever created. As landlords convert their properties to Airbnbs… and holiday companies buy up collections of Airbnbs… and hedge funds use outrageous leverage to buy up portfolios of holiday companies… and sovereign wealth funds swallow hedge funds whole… it’s no wonder that the average house will cost $10 million in 50 years.
House prices used to be based on the maximum amount that an area’s average local buyer could afford to mortgage over 25–40 years.
Under the rapidly emerging monopoly paradigm, a house’s value is now the maximum amount of daily rental income that can be extracted from it by a global institutional investor, multiplied by maximal institutional leverage.
The end game
Ironically, Lizzie Phillips’s self-published Landlord’s Game was eventually stolen and re-branded by a man named Charles Darrow, who became the world’s first board game millionaire when he sold the rights to Parker Brothers (who went on to acquire 1,800 other games and sue anyone who tried to create an anti-monopoly game.) Parker Brothers was eventually acquired by General Mills, and in 1991, the massive $13 billion games monopoly Hasbro ate Parker Brothers whole. Today, Hasbro itself is owned by even bigger entities, including JP Morgan, Vanguard, and the world’s largest asset manager, the $9 trillion firm Blackrock.
Games of Monopoly around my childhood dining room table always ended the same way— with all three kids screaming and crying and my mom shouting at my dad for following the rules and making us stay to the bitter end as he squeezed out every last dollar.
Eventually, in a rage, one of us would swipe the entire game straight off the table and everyone would storm out, leaving my dad alone with a fistful of worthless money, no game to play, and no one left to play with.
If we stay on our current trajectory, that’s exactly where we’re headed.