"Democracy and liberty are not the same. Democracy is little more than mob rule, while liberty refers to the sovereignty of the individual." ~ Walter Williams
Exclusive to STR
December 15, 2008
What sells in a depression? In the 'downturn' of 2001, consumer electronics continued to be popular, with the Playstation, Xbox, and DVD players leading the way. According to a recent survey, nothing much has changed; sales of video games and the hardware to play them are this season's hot items, though total consumer spending is expected to be down. Video game sales for November reached $2.91 billion, up by 10 percent over last year's total for the same month. As many shoppers can testify, some electronic items are hard to find, even at Amazon, which announced on Sunday, December 14 that they would have 'extremely limited supplies' of Nintendo's Wii available for purchase that day.
An analyst for market research firm NPD Group said one reason for the video game industry's 'ongoing solid performance' was due to the 'availability of a broad range of games,' adding that games 'also provide a relatively cheap form of stay-at-home entertainment.'
What else sells in a depression? Possibly a board game. When a heater salesman named Charles Darrow lost his job in Philadelphia following the 1929 stock market crash, he survived by working odd jobs. One day some neighbors showed him a board game they had been developing, and Darrow was intrigued. Meanwhile, Lizzie Magie, a supporter of Henry George's views on rent as a form of exploitation, had created a board game called The Landlord's Game, which she hoped 'would illustrate the negative aspects of concentrating land in private monopolies.' The Landlord's Game had circulated in the Midwest and made its way to Atlantic City , where it was customized with that city's street and property names. A man named Charles Todd had learned the game and taught it to Charles Darrow, who evidently appropriated many of its elements into a creation of his own.
In 1934 Darrow began selling home-brewed copies of the game to Wanamaker's department store in Philadelphia . Encouraged, he showed the game to Parker Brothers, who by that time had 50 years experience in the games and puzzles business. Perhaps they had become stodgy, but all they saw were defects of design, identifying 52 'fundamental problems'--including the game's length and complexity. After Darrow started selling it to other Philadelphia department stores, Parker Brothers reconsidered. The following year Darrow and Parker Brothers closed a deal giving the company the rights to mass-produce the game, and by 1936 Parker Brothers was producing 20,000 sets of it per week, making Darrow the world's first millionaire game designer.
Darrow called his new game Monopoly. Hasbro, the current owner of Monopoly, estimates that 200 million copies of the game have been sold in 37 languages, which they claim makes it the best-selling board game in the world.
The enormous success of electronic gaming may be partly responsible for a resurgence in board game sales. According to NPD, sales of the board game Scrabble have increased 30 percent in the first nine months of 2008, in part due to its popularity on Facebook, which has 420,131 monthly active users of an Electronic Arts version of the game. Facebook lets you register as a fan of Monopoly ' whatever that means ' but doesn't offer it as an online game.
With all the games available today, you would think the market would be saturated. But as Louise Lasser told her boyfriend Woody Allen in Bananas during a conversation about their relationship, 'Something's missing.'
From an economic perspective, Monopoly itself is deeply flawed. As economist Benjamin Powell points out, Monopoly lacks the concepts of consumer choice and consumer sovereignty. This is not some small detail; it's the foundation of a market economy. In Monopoly, consumer choice becomes a roll of the dice. It determines whether he pays taxes, collects a fee, goes to jail, receives or pays rent on properties he lands on. 'Landing on property owned by another person creates not a mutual gain but a loss. In this way, trade is portrayed as 'zero-sum,'' he writes. However, if we assume Monopoly portrays a controlled economy, with each square representing an 'individual monopoly grant' by the government, then consumer influence is no longer an issue.
Although the bank in Monopoly acts as a central bank in that it is forbidden to go bankrupt, it lacks the economy-destroying potential of a true central bank such as the Federal Reserve. The economy in Monopoly, such as it is, ends up in shambles when a winner emerges, but it's the winner's dice rolls and perhaps some clever horse-trading that determines the outcome, not the activity of the bank.
This is what's missing from the world of games, especially today--a game that strongly approximates the activities and consequences of the central bank's printing press and is at the same time intoxicating to play. Granted, the virtually infinite inflationary potential of a central bank would seem to rule out stocking a game with enough printed money. But a creative enterpriser could circumvent this problem by including, say, calculators that employ scientific notation to express the mega-sums involved in 'stimulating' the economy. The only problem then would be how to make an expression in the form of
a x 10b
In my proposed game, a player could have the option of paying rent to the bank in return for future undisclosed favors. If a player subsequently finds himself threatened with bankruptcy by landing on a property with hotels, he could draw a card to see if his past rent payments have earned him the status of 'too big to fail.' Also, if a player wanted to put 7,000,000 hotels on a piece of property in a fit of irrational exuberance, the bank should have the option of providing cheap credit to cover the investment. And if another player should be so unfortunate as to land on a property with 7,000,000 hotels, the bank should once again be available to intervene in the public interest by bailing out the player.
Obviously, my idea is on the low side of half-baked, but imagine the reaction if a game such as I propose hits the market, especially if it carries an express condemnation from the American Economic Association, the Council on Foreign Relations, and Ben Bernanke. A great game would need a great name -- maybe Bailout! would catch the buying public's attention. What do you think?