Posted Mar 22, 2015 by Martin Armstrong
History is all about amazing connections between ideas and events that become reality. We far too often forget our origins of customs and terms. For example, New Jersey is named after Julius Caesar – Nova Caesaria (land of the new Caesar). A Caesarian birth is named after how he was born and of course July is named after Julius as well. August is named after his successor and nephew Augustus, but did you know that both July and August are the only two months back-to-back with 31 days? Why? Because the Roman Senate did not want to offend Augustus so they took the extra days from February and moved them to August so they both have the same amount of days and February has just 28 (29 for leap year).
The history from the Great Depression still lives on today. We have hit the 80 year anniversary of the board game Monopoly which we have played since childhood. Its history may be also surprising how people and ideas are connected. One such story is that of the origins of the most popular board game in modern history. It’s an American classic: each new generation of Monopoly players learns to love (harmlessly) indulging its cutthroat, ruthless, greedy impulses. It may be that these traits are retained by some children who grow up to become politicians. However, Monopoly began in 1904 as the Landlord’s Game and this makes its 100th year anniversary from a political movement.
Players begin the game as equals. Luck and strategy combine enabling one player to dominate all others showing an early talent to be president perhaps one day. That player ends up amassing a huge fortune in cash and real estate. Most Monopoly players don’t know (or care) that this game was originally the product of a passion for social and economic justice as they have no idea that the Wizard of Oz was about a march on Congress to object to the yellow-brick road which was the gold standard.
In the late 1800s, a young woman named Elizabeth Magie was introduced to the writings of Henry George (1839-1897) by her father. George was an American writer, politician and political economist, who was the most influential proponent of what became the Progressive Movement. George was a proponent of the land value tax and the value capture of land/natural resource rents, an idea known at the time as ‘Single-Tax’. Henry George’s proposals were to raise pubic revenue exclusively from those who owned land. Keep in mind that attempts to tax income were unconstitutional until the 1913 Constitutional Amendment. George’s immensely popular writing is credited with sparking several reform movements of the Progressive Era and ultimately inspiring the broad economic philosophy often referred to today as Georgism, the main tenet of which is that people legitimately own value they fairly create, but that natural resources and common opportunities, most importantly the value of land, belongs equally to each person in a community. This was the center plank of the socialist movement and it is found in Karl Marx’s Communist Manifesto of 1848.
Henry George’s most famous work, Progress and Poverty (1879), sold millions of copies worldwide, probably more than any other American book before that time. It is a treatise on inequality, the cyclic nature of industrialized economies, and the use of the land value tax as a remedy for the business cycle. This important work was an inquiry into the cause of industrial depressions and the persistence of poverty amid advancing wealth. George published this work in 1879, and it was advocated by many great minds such as Albert Einstein, Winston Churchill, Leo Tolstoy and Sun Yat-sen in China. It contributed greatly to the idea of communism and socialism.
Henry George lived through a period of American history observing the business cyclle during the 19th century. He witnessed the closing of the frontier, and he noticed the dramatic deterioration in the condition of labor once that unfolded. Curiously, when land was freely available, wages were high. However, once land was enclosed, wages fell. Ironically, what George was observing is the perpetual cycle of economic evolution in the game of progress. With each technological advance some are left behind. When jet plane appeared, many prop-plane pilots could not make the transition to faster reaction requirement and lost their marketable skills. George wrote:
This classic work is an enquiry into the cause of industrial depressions and the persistence of poverty amid advancing wealth. Published in 1879, it was admired and advocated by great minds such as Albert Einstein, Winston Churchill, Leo Tolstoy and Sun Yat-sen in China. Henry George lived through a period of American history which witnessed the closing of the frontier, and he noticed the dramatic deterioration in the condition of labour once that happened. While land was freely available wages were high, once it was enclosed wages fell.
Some argue that Adam Smith appears not to have appreciated the full consequences of this business cycle of progress.Smith was writing in 1776 and had not yet observed the business cycle in this context of evolution. Henry George saw the connection between land enclosure and poverty and unemployment. He failed to grasp that this was a byproduct of economic evolution driven by technology. Those who think they see a new age of knowledge driven by technology are still lost in their focus for this is the progress that is perpetual through all ages. George assumed that the harmful effects could be rectified, without confiscating the land, through a change in the tax system and allowing market forces to work.
Elizabeth Magie eventually became one of many people who took on the task of trying to teach others what she had learned from studying Progress and Poverty and George’s other works. She collaborated with her friends in Brentwood, Maryland and created The Landlord’s Game.Elizabeth applied for a patent, which was granted on January 5th, 1904 (No. 748,626). She explained that the game was to be a “practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences.”
This was the social era of the rising popularity of Marxism and the Progressive Movement. By 1912, the Republican Party was split with Teddy Roosevelt creating the third party known as the Progressive Party. This whole trend contributed to introducing the income tax in 1913 via Constitutional Amendment. This did not prevent the Financial Panic of 1920 nor the Great Depression of the 1929 era. The whole idea of taxing the rich was that this would somehow smooth out the business cycle. In that respect, it was a complete failure. Marxism led to the Russian Revolution in 1917 with the confiscation of all wealth. The German Communist Revolution of 1918 led to the Hyperinflation as people hoarded money assuming the government would confiscate everything as did Russia.
Elizabeth, known as “Lizzie” to her friends, became a regular visitor to the Single Tax enclave of Arden, Delaware, followers of Henry George. This was around 1903. Whether on her own or in conjunction with other Single Taxers in Arden, Lizzie continued to work on the design of The Landlord’s Game as a way to explain how Henry George’s system of political economy would work in real life.
In 1906, Elizabeth moved to Chicago, Illinois, where she met, and in 1910 married, Albert Phillips. It appears that Albert was sympathetic to his wife’s efforts for she was a determined woman. At some point in 1906 Elizabeth and a number of other followers of Henry George established the Economic Game Company of New York, which published The Landlord’s Game. They believed that the way to get their progressive ideas out was through a game where people could experience the issue.
Elizabeth and Albert moved to Clarendon, Virginia, in the Washington D.C area and eventually patented a new edition of The Landlord’s Game in 1924 (No. 1,509,312) under her married name of Elizabeth Magie Phillips. This new edition, published by the Washington, D.C. firm, Adgame Company, appeared in 1932 and included named streets and other changes in the appearance of the board. More importantly, the new edition included a second, alternative, set of rules and a second name for the game, Prosperity. This came at the low of the Stock Market in 1932, the bottom of the economy during the Great Depression.
Atlantic City 1932
Scott Nearing was introduced to The Landlord’s Game by either Lizzie Magie and went on to become a member of the economics department at the University of Pennsylvania in 1906. Nearing used the board game to teach the ideas of Henry George at Penn. The game began to appear in all the universities including Princeton University and Haverford College. Changes were made to the board design, gathering the properties into groups, allowing buildings to be added to the locations and increasing the amount of rent charged based on the number of like properties owned. However, it was this connection with Penn that led to the game being based on Atlantic City, which was the beach resort for those in Philadelphia.
Charles Darrow (1889-1967) was a domestic heater salesman from Germantown, Pennsylvania, which was a neighborhood in Philadelphia.After losing his job at a sales company following the Stock Market Crash of 1929, Darrow worked at various odd jobs. Darrow copied the idea of Elizabeth and recast the game on Atlantic City naming it Monopoly. While Darrow eventually sold his version of Monopoly to Parker Brothers, claiming it to be his own invention, modern historians credit Darrow as just one of the game’s final developers.
Parker Brothers wisely purchased Elizabeth’s patent in 1932 for $500, under condition that Parker Brothers would continue to publish The Landlord’s Game as well as Monopoly. In a January 1936 interview in The Washington Star, Elizabeth was asked “how she felt about getting only $500 for her patent and no royalties ever. She replied that it was all right with her “if she never made a dime so long as the Henry George single tax idea was spread to the people of the country.”
Parker Brothers published the Landlord Game in 1936 but never promoted it. Monopoly won out.