Monopoly Might Be a Zero-Sum Game, but Wealth Isn’t.
Foundation for Economic Education
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In this episode Seamus and the gang play Monopoly and discuss the fixed-pie fallacy — the least savory of all economic tropes.
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Written by Seamus Coughlin & Jennifer Maffessanti
Animated by Seamus Coughlin
Produced by Sean W. Malone
11.12.2021
LIES. monopoly is not fun
Can you pass me the link of the brooking institute please
The baby won his butt implants
Actually monopoly has two sets of rules. One version has. TAXES yaay no one goes bankrupt…
When I was 8 years old, my mom saved up $1,000 for a shitty VHS camcorder in order to document the grand kids and family gatherings and stuff. Today, I can walk into Walmart and buy a cheap smart phone that takes video at way higher quality, plays music and video games aside from its primary function as a phone and instead of the $1,000 my mom paid for her camera, I paid $50 for my phone.
If everyone got richer, then I wonder how much more the rich got richer compared to the poor. Yes there is more wealth overall, but is there also more inequality? Is inequality a problem?
Not every dollar that the rich earn is accounted for by a growth of the nation's wealth by a corresponding dollar. This only happens if the money is earnt from somewhere outside of your country's economy. The pie isn't FIXED, but it doesn't expand with every transaction, and some people are left with less or more of a very slowly expanding pie chart.
This brings into question the global context. Is there a fixed amount of value or wealth across the entire globe?
Do countries' fortunes increase or decrease as money is exchanged between them?
YES, but the Global Economy also constantly increases which has led to an incomprehensibly large global debt.
And also not fast enough to make everyone better off after every deal is done.
If Americans overall continue to get richer, how do those in Africa fair? With a fixed and perhaps increasing wealth whose rate of change does not match the numbers of people who live there. The EAGERNESS of the birth rate matched with the economic profitability leaves many people fatally impoverished. There isn't enough money around the world for everyone to continue getting richer. If there was, money would truly be meaningless, and that isn't a system I want,,, But you only present half of the truth in this video.
America is prosperous but the world, overall, is less so.
I like monopoly too.
We’re are the sources??
Wealth doesn't increase without limit.
Wealth can be created…
But it can also be loss.
The absolute amount of wealth possible, in any given system, is a fixed limit. Factors may change the limit(finding out how to profitably do something new or running out of a fixed resource, for instance) but most of the time it is just the efficiency of generating/getting wealth that changes.
It does a good job of explaining a more conservative and libertarian viewpoint, which is important. But I think several points can be debated, or more added on to than they are presented. Wealth is not static, this is definitely true, we see cryptocurrencies like bitcoin as static currencies where only a finite amount exists and it usually tends to end up in the hands of the people with the most physical wealth to pay for PC units and graphics cards to mine for them. They didnt take it from anyone, but in bitcoin, the rich are indeed getting richer, while the poor are simply dropping out as their bitcoins are gradually worth less, and this makes bitcoin as a whole worth less. In real currency, more wealth is created to circumvent this problem. Word of the day is inflation. More money being created by the federal reserve means people can indeed get richer, the problem lies in the costs of goods and services goes up with it, so you create a problem where people are getting richer, but have no more spending power or even less spending power than those in the past. All that's been done is move the bar up. The rich are still rich, the poor are still poor, but everyone has more money so they can spend more money on goods and services that increase prices on the more money people now have to spend.
The other problem with the game is the idea of no voluntary exchange. Basically, throughout the game, people are expected to gouge each other endlessly without concern for competition. In reality, if I put up an obscenely expensive hotel on boardwalk, no one would be forced to go to it, and instead would become patrons of less expensive establishments.
As a legitimate question from a conservative is the reason the wealth of those poorer people has gone up because of inflation?
What about inflation?
Does your data take into account the Purchasing Power of the Dollar?
What about pretty much entry level internet research questions one would have if they decide to look into the Federal Reserve?
While it's true economic fallacies can lead to disastrous economic policy (Ohi france and spain), I don't particularly like you just throwing out that government policy 'is often preventing the creation of new wealth'.
Isn’t it both? As in thought the poor’s portion of the pie is growing smaller but the pie itself is growing bigger.
Total wealth and relative wealth are also very different things. Just because you have a bigger number in your bank account, doesn't mean that you have more money than your past self. By the same notion of the poor have 50% more money if the rich have 100% more money then they had before than due to market forces the poor people can potentially afford less even though they have a bigger number in their bank account, and thus have less wealth.
That being said we don't live in a zero-sum world anymore due to advancing technologies which is why we really should keep funding the sciences so that new developments can help us all.
Those studies don't account for inflation, and you didn't address the rising costs of living either. It's never been more expensive to sustain yourself, let alone providing for a family. It's not surprising that most Americans believe the rich are getting richer and the poor are getting poorer, 95% of created wealth since 2009 has gone to the top 1%. The top 1% own 40% of the country's wealth, and the top 5% own over 90% of the countries wealth.
Oh but hey, people can afford to finance smartphones and and flatscreens so it /totally/ evens out right?
Can someone show these brilliant cartoons to Bernie Sanders, please?!
"I have a generous soul" XD
Monopoly isn’t a zero sum game. However, you win with zero sum strategy. Kind of like capitalism.
The argument against wealth inequality isn't "rich people are taking things from poor people and we need to stop it." It's that when wealth is unevenly distributed, power is unevenly distributed.
Our government should be designed to serve the interests of all it's people equally. But if a small group of people were to wield a disproportionate influence over the creation of new laws (hypothetically we'll say through campaign contributions) then we could only expect them to act rationally and support their own interests over the interests of others.
Wealthy people creating laws to benefit wealthy people would mean that as the "pie" grows wealthier people would get a portion of the added wealth (like you see in the figure at 1:49), and would therefore wield even more control over the creation of new laws.
If you look at real family income gains starting from the 1950s you'll see that the 20th percentile and 95th percentile move in lock step with each other until the 1980s, when the income growth for the 95th percentile starts to outpace income growth for the 20th percentile.
https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
i didn t understand jack shit, other than that baby knows how to play monopoly and u guys don't
Funny how a two minute video can have such profound meaning. This opens my eyes and makes me see the world differently.
"I have a generous soul." This is great, love the humor in these videos. Keep up the good work!
while more wealth has been created, most of it did indeed go to the richest pockets ; the poorest 20% didn't get that much richer if you count for inflation, and the poverty rate stagnated. More importantly, we know from the Nordic country exemple that it is possible to almost completly eliminate poverty and still be as most or even more competitive as we are today with a more egalitarian system
wealth is also relative
if the fed printed 100 trillion USD tomorrow and threw it in the "back closet" and didnt tell anyone about it then the economy wouldnt be effected.
and so if 90% of the currency that exists floats around among corporations, its not relevant to any individual because its outside of our relative financial space, corporations buying and selling stuff that doesnt effect us doesnt impact the cost of living, the cost of living will always be dependent on what people can afford to pay, which is based in part on the amount of money floating around at our level, if half that money goes to corporations, then prices will have to adjust for people to be able to afford things since theres no money to be gained in a product no one can buy.
(though profits from the corporations perspective would drop that leads down a whole other complicated rabbit hole)
Nothing lasts forever for a good or bad life.
Seems that a lot of critics of free market capitalism don’t get the full picture of how economy really works…
But hey, Monopoly might be a good game to demonstrate what can happen when everyone stop being productive and entrepreneurship and just try to be landlords living off rents.
Why does everyone hate monopoly, I LOVE that game
Some things are not a fixed pie – like technological innovation.
Other things are a fixed pie – for example, the amount of land on Earth. Yes we can learn to use it more efficiently so that everybody benefits, but that doesn't happen if a small minority of people privately own most of it.
And yes, i know one day we could colonize other planets, but that doesn't stop the same kind of monopoly from happening.
Tl;dr: There's a bit of truth on both sides of politics.
(And also a lot of lies lol)
to be fare to monopoly game it only cover one part of the economy(rent holding) and nothing else. ecoclips has a great video on real monopoly's, both natural and gov sponsor.
But if everyone gets more money, won't places charge more because they can so the poor are still ultimately poor?
Wealth is not a fixed pie, but power is. When someone else accumulates wealth they aren't taking wealth from you, they are taking power from you.
0:23 no dast cominizam
GaGa?
Yo please hit me with some sources links please
Read The Iron Heel for some examples of similar fallacies. Jack London was an interesting feller.
Class divides vary depending on the nation, in poorer countries the poor are getting poorer whilst the more wealthy accumulate more wealth over time. In the United States however you would be correct in saying that the Upper class is growing yet the same could not be said in which many nations have been a product of mass globalisation over time.
Honestly I didn't realize the name of the fallacy was fixed pie fallacy. Nice to know.
I am like i don,t care the Capitalism is evil
I am playing monponly for fun Jesus christ
This game was about land monopoly not market monopoly. It was inspired by Progress and Poverty
What about inflation? Or do you mean in relation to the price of goods vs the amount of money a person has?
"This game is a lot of fun."
Umm, no. I understand that Monopoly was used as the example because it's commonly known but… try games like "Chinatown" or "Lords of Vegas" (used those examples because they're economic based). There are many other great board games out there, check out Boardgamegeek.com
You should address the fact that the poor get disperporteonally less wealthy than the wealthy, which wouldn’t be too much of a problem if the wealthy actually paid their taxes and contributed to the betterment of society. But this would only be so given that our government actually spent the money wisely and not waste fully like they do now.
According to fed stats in 30 yrs , the top 10% will own 100% of wealth in this country, So, they want you to think it is not a zero sum game, but they know it is. Monopoly's original purpose was to show how capitalism is a zero sum game. It took 40 yrs for the top 10% to get half the wealth in this country, why would we think they are going to stop, when they, koch bros, fund these institutes to hide the true narrative. Do they think we still believe in trickle down?
01:48 That's simply not True; (According to Empiric Evidence) Here in Germany (The Fourth Biggest Economy in the World and the BIGGEST ECONOMY IN EUROPE) there is a flourishing Economy and a huge "creation of wealth" YET the Richest 25 % of the Country keep getting richer and the poorest 50 % of the Country keep getting Poorer (Adjusted for inflation; I also heard that REAL WAGES for American Workers are stagnant since the '70s (so there isn't more Wealth for them)
So Germany has a prospering Economy yet the Rich are getting richer and the poor are getting poorer; Adjusted for Inflation (Or Real Purchase Power) the poorest People are getting poorer and the Middle Class is shrinking
Even the fairly Centrist "Die Zeit" (One of Germanys biggest and most respected Newspapers) and THE GOVERMENTS STATISTICS confirm this
https://www.zeit.de/wirtschaft/2017-03/wohlstand-deutschland-mittelschicht-abstieg-sozialsystem-loehne
How do you argue with this empiric Evidence dear Foundation of Economic Education ?
Maybe you aren't really educating on the reality of economics and society but rather only mentioning what fits your Neoliberal View of Economics…. just saying….
In absolute terms the poor are not getting poorer, but they are getting poorer in relative terms. The gap between the rich and poor is growing every day.
This video is actually entirely incorrect. I totally agree with the concept that the economy is not zero-sum and is a growing pie. However, Monopoly is NOT a zero-sum game. The total amount of money available to the players- the total size of the pie- actually increases every time any player passes Go. (Some is eliminated from penalties, but it usually does not exceed the cash injections of passing Go.)
Monopoly is actually a positive-sum game. Yet, it still ends with one player owning all of the growth. By the end of the game, everyone is still making money from passing Go, but one person owns all of the property and thus gets all of the growth.
Monopoly actually does demonstrate an issue here; you can have a positive-sum economy, and still have an inequality problem where the inequality actually chokes out the poor EVEN THOUGH the economy is growing. Slight tweaks to Monopoly (such as redistributing money from income tax via Free Parking, a common house rule) make the game last much longer (which makes the game boring as a game, unfortunately).
So yeah. Your thesis – inequality never matters in a positive sum game- is actually disproven by Monopoly, since Monopoly is a positive sum game that trends towards a single player owning the market. Generally, the growing pie benefits everyone, but it is entirely possible for a pie to grow and all- or a disproportionate amount of- the growth be captured by the largest owners.