My dad used to say that the economy is like a bunch of people sitting in a room passing the same money around between themselves... what is the point? I always thought his view was interesting but simplistic, since money is simply designed to allow more efficient trade in goods and services. Well, it turns out my view was simplistic, and ignored the fact that the wealthy hoard money and treat it like a commodity--as they often do with just about everything else.
A recent game of Monopoly with my son turned into a very interesting experiment. Early in the game, I had gone to great lengths to purchase lucrative properties, mortgaging properties and selling houses in order to raise enough cash to buy properties I just couldn't pass by. I was land-rich but cash-poor, but I figured that later in the game I'd catch up. Meanwhile, my son had a decent but much-smaller portfolio, and had built hotels on his light-blue properties.
I landed on his hotels just about every other time around the board (when I was lucky). This got me into a cycle of more mortgaging and house-selling. I realized this was not sustainable and I was going to lose, despite having better properties. The legacy of my poverty and his wealth made the game go the way the game is supposed to--someone wins, and someone else loses--despite the fact that I had a better property portfolio and better long-term prospects, if I could only get enough cash on hand to make use of them.
So I conceded that he was going to win--nothing I could do was going to stop it. Then we tried something new. We made some changes that allowed me to put hotels on my green properties, but then the game swung the other way, and now I was winning--and I out-negotiated him every time he owed me money. It really wasn't that fun when I ran out of money, but it wasn't that fun when he ran out of money either.
Then I asked if we could try something else--see if we could make the game equitable. Was there a configuration where we both could win? With my dad's concept of the economy just being people passing money back and forth in mind, I realized that with an equitable distribution of income-generating properties, we were doing this in Monopoly--just passing the same money back and forth. Then every time we pass Go, we increase the amount of money in circulation. We both win. This should be the goal of the economy--not creating winners or losers.
This experiment was way more fun than normal late-stage Monopoly. We ended up trading properties and trying different configurations, making deals each time someone was threatened with selling houses/hotels or mortgaging properties in order to pay a debt. It felt so good to be generous and forgive debts. At one point, when my son couldn't pay me without mortgaging/selling, we both got a $3000 cash payment from the bank (due to the pandemic). We got to a point where we seemed to achieve dynamic equilibrium with slowly rising cash in circulation--we had hotels on all the properties except the high end, where we had two houses on the greens and one on the blues. Do to stochasticity and the legacy of inequality, my son had times of low cash reserves, but he always had enough to pay his debts. The likelihood of a bad outcome hadn't disappeared, but it became much less likely. And every time we passed Go, we had more cash in circulation between us, making the long-term situation appear promising. We were now just passing the same money back and forth--as my dad had said was what the economy was all about.
It struck me that this situation was representative of more than just a model economy--it modeled the fluctuations of populations in an ecosystem. Populations of species often rise and fall in a cyclical manner, but when an endangered species goes extinct, it happens when bad fortune coincides with a low point--much like when someone loses in Monopoly. By making sure my son had enough cash to get through the low points--effectively raising the low points above the danger zone--we prevented him from going extinct (without extraordinary efforts, such as mortgaging and selling, much like last-ditch efforts to save species such as captive breeding programs and predator control). Once you get into a mortgaging situation, things generally aren't sustainable. Recovery plans need to get populations into safe zones where extraordinary efforts are not necessary.
Our Monopoly game experiment turned a game of winners and losers into a more fun, collaborative, gratitude-filled exercise. It illustrated how important it is to have enough cash in circulation--when no one has any cash flow (except the rich), no one has any capacity to accomplish their potential. It also illustrated how difficult it is to overcome a legacy of economic disadvantage, even when on paper, the property assets were equal (or even appeared tilted toward the disadvantaged person). Also, where cash in circulation (resources available to a population) is a constant, a maximum wage might be more important than a minimum wage (since limiting the houses--i.e. income--at the high side of the board was necessary to prevent hoarding of limited resources). The details matter, and incrementally adjusting them allowed us to reach a near-optimal configuration where both our fortunes improved. We had to be more generous than expected in order to get the losing party out of the danger zone. This is also a lesson for how we should deal with disadvantaged communities and endangered species in real life. Err on the side of generosity and over-meeting needs, and we just might launch disadvantaged communities and species into a sustainable--or even prosperous--zone. And that benefits everyone.
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| A near-optimal configuration of an equitable game of Monopoly. Not pictured: my son had all the railroads. |
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