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Monopoly teaches people a view of economics being a zero-sum game and too many people learn the wrong lessons from it. Real life isn't a zero-sum game.
by chungy 7y ago
Monopoly teaches people a view of economics being a zero-sum game and too many people learn the wrong lessons from it. Real life isn't a zero-sum game.
- Barrin92 7y agoas the article points out the game was in particular desgigned to show the economic effects of private land rent, hence the original title 'the landlord's game', and that is in fact a zero sum game as they aren't making any more of it. And in particular on tech websites like these people vastly overstate how non 'zero-sum' economic activity actually is mostly because tech has been in a bubble of highly anomalous growth. (A lot of it ironically arguably not real productivity growth but rent collection through platforms and market power). In many ways the tech startups of today look more like digital landlords than innovators whose disruption is primarily taking over the market from a host of competitors rather than improving process efficiency. If we were living in Fordist times and the assembly line and other innovations delivered 6-7% growth annually, then we could rave on about non-zero sum economies. Total factor productivity growth these days is relatively non-existent.
- xixixao 7y agoI think that’s a super narrow view of tech development. Many menial jobs are being replaced by tech, and if that’s not increasing productivity than I don’t know what Ford’s assembly lines did...
- Barrin92 7y agoI don't think it's true that many jobs are being replaced by tech. Restaurant workers, store clerks, nurses, assistances, even warehouse workers and so on are stable. Go through a list of the jobs in the US that employ most workers and none in the top 30 have been created in the last 20 years. Many economists have pointed this out. If the 'rapid innovation' that a lot of tech entrepreneurs talk about was happening (and they have an incentive to oversell it), we would see high unemployment (as people are being replaced) together with high productivity and high GDP growth. We see no such thing. The Andrew Yang robot horror scenario is nowhere in the data. By historical measures, the technological progress of the 1940s to late 1970s vastly outpaces today.
- xvedejas 7y agoI understand that land is finite, but you'll need to explain further how tech is at all similar, or else I'm not sure it's a good metaphor. Monopolistic platforms aren't great, and I'm also no fan of competitive inefficiency, but how is any of this like land? It sounds like you're implying it becomes impossible at some point to make more tech?
- BurningFrog 7y agoAnd yet we are 30x richer per person in a 10x bigger population since the Industrial Revolution started. That is 300x more than a zero sum model would predict.
- loaiw1 7y ago"We"? What is being counted here, the average income and wealth? Of course people are better off with food and iPhones, but in many major European cities people with middle class incomes share apartments that were literally single family worker apartments around 1900. In terms of living space, the quality of life for the middle class is worse than 100 years ago.
- LoSboccacc 7y ago> In terms of living space, the quality of life for the middle class is worse than 100 years ago. most urbanites of today don't own a chicken, let alone a cow, in 800's standard they're worse off than serfs.
- GreenJelloShot 7y agoIn 1900, the average life expectancy for an American man was 48.3 Today, the average life expectancy for Americans is 78.7
- dlp211 7y agoThat is mostly, but not completely, due to infant mortality rates.
- solotronics 7y agoThere are exponentially more people today. In 1850 there were 23 million people in America, today there are 330 million. There was a 15x increase in population, with more than that in the city centers. Texas had a population of 212k in 1850 and 29 million today. How can you compare the size of a house or land ownership then to today?
- bobobooey 7y agoshut it down boys, everything's already been made.
- hirundo 7y agoI just drove from Seattle to Albuquerque, through vast tracts of empty land. Land is politically, not physically scarce. That's even true right around major metropoli, let alone the hinterlands. And even that doesn't count unused potential square footage along the vertical axis. The truly constraining axis isn't x, y or z, but NIMBY.
- StillBored 7y agoEmpty land because its rainfall is insufficient to grow traditional crops. Worse, the water table in much of it is quite deep and the groundwater opportunities are scarce (and becoming more so). Compare with the US east coast where its pretty much impossible to throw a rock these days an not hit someone's house. Even in the rural areas people are frequently on plots of land that wouldn't support them without intensive industrialized farming. Check out the "field lab" video's for a now ten year video blog posting of the hardships of attempting to live off the land in the arid SW us. Somewhere along the way he started saying "i'm just not someone who can grow crops". But in reality, its more a case of he can't grow crops because they don't survive 100F summers, or seasons without a lot of rainfal. If the weeds are having a hard time growing, your potato's/whatever are probably not going to be doing well. edit: just to point out the redundancy, if you go read the newspapers in any of the major cities in the SW what you will frequently read about is water woes. Overwhelmingly those cities ability to supply water at the projected population growth rates are questionable.
- smegger001 7y agoYeah CGP Grey had a god video about federal land ownership the majorty of land in western states is federal land. https://youtu.be/LruaD7XhQ50 https://youtu.be/LruaD7XhQ50 Its kind of ridiculous. how little control states have over the land within their own boarders.
- WalterBright 7y ago> that is in fact a zero sum game Not at all. Putting a 10 story building on a lot is multiplying the area by 10.
- pslw71 7y agoAnd the proceeds still go to the landowner. The times that high rise buildings had cheap rents are long gone. So what is the point? Get out of your bubble and see how poor people are. Typical Caltech brat.
- WalterBright 7y ago> And the proceeds still go to the landowner. You can buy property and multiply its value by 10 by putting a 10 story building on it, and even sell floors on it. It happens all the time. It is simply not a fixed supply. > Typical Caltech brat LOL. My opinions on markets were quite atypical for Caltech students in the 1970s. They're likely even less typical today. Setting aside opinions, I've been in business and associated with business entrepreneurs ever since Caltech. Consistently, those with positive outlooks and willingness to take action have done very well. Those with negative views and a victim mentality have all done poorly.
- viklove 7y ago> You can buy property Most people can't afford to buy property. That's sort of the crux of this discussion. Half of Americans live paycheck to paycheck and about the same amount have less than $10k in the bank. > I've been in business and associated with business entrepreneurs ever since Caltech. Consistently, those with positive outlooks and willingness to take action have done very well. Yes, people who have money can easily acquire more money. Most people don't start out with money though, so it's rather selfish to judge the world solely from this perspective.
- WalterBright 7y ago> That's sort of the crux of this discussion. This discussion is about property being zero-sum. It isn't zero sum. > Most people don't start out with money though There are endless businesses one can start with no money.
- mewpmewp2 7y agoDepends. If earth overpopulates and there is lack of resources it will be even less than zero sum.
- znnn 7y agoYou cannot mention this on HN. Mr Graham Himself has declared that the pie always grows.
- DubiousPusher 7y agoThis is strange as economists agree pretty much across the board that one way of making an economy grow is to increase population. It stands to reason that one way to shrink an economy is to decrease population. Note that I am making no comment how that growth or shrinkage affects the quality of life in that economy but when looking at total growth population change is correlated.
- mewpmewp2 7y agoIs this always true? To take it to extremes - just to prove that overpopulation can lower output, imagine our population increased 1000x overnight, do you think in this scenario the economy will grow? I imagine this situation would not be handleable and people would be going completely crazy killing each other. The above scenario is not realistic, but what about if population grows and grows and then comes a point where we realize that for example we have 1) Reduced potential living space by a huge margin due to for example climate change or pollution. 2) We have no idea how to solve this issue. We can't move to another planet, we don't have the tech yet even if this was possible. There's many potential ways we could fuck up which causes there to be limited basic resources that at the very least would make the world scramble to solve this issue and produce less value because they have to focus solely on this issue and large proportion of people would have to be fending for themselves, with sometimes only options to get basic necessities is to steal from others. Or the people who are rich, thanks to using the monopoly principles will be good because they have enough money, power and control to buy the remaining resources.
- 7y ago
- praptak 7y agoOnce we hit the limits of eternal growth (if not by CO2, then by something else) it becomes one.
- leetcrew 7y agoI'm sure those limits exist, but who's to say we'll ever hit those limits on human timescales? right now, global warming is an existential threat that sets an upper bound on how much energy we can responsibly use. but if we can develop carbon-neutral means of harnessing energy at scale, we can use much more. if we can develop viable space travel, we can gain access to more material resources than exist on Earth. any one of the "next steps" along the exponential curve can fail, but I wouldn't assume we will hit a hard ceiling anytime soon.
- falcolas 7y agoFrom a purely monetary point of view at a global level, transactions are indeed a positive sum. But the "positive" value of transactions, globally, is remarkably small - it's effectively inflation minus population growth (between 1 and 3% yearly). So, if your money is growing more than this 3%, someone else is losing money so you can make it. EDIT: I figured this would be unpopular - please feel free to correct me, to point out where the money on, for example, 6% returns on investments come from if not from someone else.
- pjc50 7y agoThis is the whole Picketty et al "r > g" question, and I believe economists disagree on what the real numbers are.
- falcolas 7y agoSo, it seems that "r > g" is less of a question and more of a generally accepted statement. I'm not an economist, but a cursory review of economist whitepapers (here's one[0]) indicates that most don't dispute the "r > g" assertion, but instead just say that "this is a reasonable state of affairs", or "it's a problem, but the solutions are worse." [0] https://scholar.harvard.edu/files/mankiw/files/yes_r_g_so_what.pdf https://scholar.harvard.edu/files/mankiw/files/yes_r_g_so_wh...
- pyrale 7y agoThe monopoly game is not zero-sum. Money increases when you pass start, and cards drawn are on average a source of money. In fact, the money owned by players inflates as the game goes on.
- koheripbal 7y agoThis is correct - but I think the point the user above is trying to make is that the game doesn't teach the most fundamental lesson of capitalism - that competition drives adaptation.
- dr_dshiv 7y agoCompetition driving adaptation is really important, but darwinism predates capitalism! I'd argue that the most fundamental lesson of capitalism is that markets magically allow individual self-interest to contribute to the collective benefit Ok, fun facts: Adam Smith got his PhD in a department of moral philosophy. His first book was about why people are nice to each other: I feel good if you feel good, I feel bad if you feel bad. His second book, "Wealth of Nations", was also about why people are nice to each other. He described capitalism (aka market economies) as the basis for large-scale moral action. Markets and trade naturally support collective benefit. Adam Smith wasn't extreme -- his point was to promote "the greatest happiness for the greatest number" -- a phrase coined by Adam Smith's PhD advisor, Francis Hutcheson.
- airstrike 7y agoYou could argue that's just inflation. Total real value remains the same with every lap, it's just distributed differently between players (particularly if you count the unclaimed tiles as an extra player)
- three_seagrass 7y agoThe "Do not pass Go" mechanic effectively means some players skip income and it's not uniform inflation. Also players selectively mortgaging properties will destroy overall wealth in the game.
- standardUser 7y agoIt's a game about land, and land is finite.
- grabbalacious 7y agoHouse rules that obviate this to some extent (e.g. 'free parking') seem a bit like a debt jubilee.
- StillBored 7y agoI'm not sure about the non-zero sum economics models anymore. Physics says that the planet is finite, so much of the "wealth creation" is little more than changes in perceived valuation. And while a lot of people have a lot more $ and things like iphones, most people have less land, more polluted oceans, and many other things that may turn out to be move valuable in the long run than those iphones. On the land thing, one of my grandfathers had close to 500 acres of farmland. Today I could barely pay the taxes on that land if it was still in the family. But its not, instead there are a couple dozen families living on smaller 20 acre plots.
- d1zzy 7y agoI'd argue that in terms of land/housing market, in an established, multi-centuries contiguous (ie not disrupted by revolution, nationalization, large redistribution) urbanized area it becomes a zero-sum game and hence all the problems that entails. IMO this is more or less the inevitable result of long surviving land ownership rights. You can see this in the correlation between home ownership rates and when was the last time land was nationalized/redistributed: https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne... What do the top 10 countries have in common: they were communist dictatorships in the previous century were all land was taken and managed by the state. What do the bottom 10 countries have in common: very long standing property rights with no redistribution in the last few centuries. Not saying that what we need is nationalization/revolution but simply pointing out statistics and trends which may help inform people in order to counter their effects.
- mytherin 7y agoMonopoly is about land, and monopoly teaches people a correct view of land: land is a zero-sum game. It is striking how much real-life has mirrored monopoly: when the game starts and there is plenty of land to go around, there are no problems. After a while, the land runs out, and the wealthy hoard the land and charge the others for its use. The wealthy then get wealthier and the poor get poorer. We are now in the later stages of the real-life monopoly match.
- dntbnmpls 7y ago> Real life isn't a zero-sum game. Wealth may not be zero-sum within the narrow artificial scope of "money", but power is zero sum. Wealth viewed as money is a sneaky neaningless distraction. Wealth viewed outside of power is meaningless. Lets say bob and alice are in a room. They both have a nerf gun. Now bob gets a machine gun and alice gets another nerf gun. So the "wealth" in the room increased. But the power in the room didn't increase. It shifted from 50/50 between bob and alice to 100/0. When you view wealth superficially, it's not zero sum. When you view wealth seriously, it's zero sum. The value of wealth isn't the pile of worthless money. The value of wealth is the power it projects over other human beings. If everyone on earth died but jeff bezos, his wealth would be meaningless. What does $130 billion mean when only he's around? It means nothing because it can't be converted to power in a world with 1 person.