What is Modern Monetary Theory (MMT)?

“This game is a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences, as it contains all the elements of success and failure in the real world, with the object being the same that the human race in general seems to have, ie, the accumulation of wealth.” Elizabeth ‘Lizzie’ Magie, 1903, creator of the ‘Landlord’s Game’ (the predecessor of the ‘Monopoly’ game).

What is Modern Monetary Theory (MMT)? Well, like most people, if you’ve played ‘Monopoly’, then you’re already familiar with the core concepts of MMT, and you are already an ‘MMTer’.

MMT is a currency analysis, it describes how our federal gov’t creates fiat money. The federal gov’t, the issuer of fiat dollars, creates money the same way as the Monopoly game does.

The Monopoly game rules were written around the same time when President FDR initiated our country’s switch from gold-backed dollars into fiat dollars (ending the gold standard era). As per the Monopoly game rules, “The Monopoly Bank never goes broke, if the Monopoly Bank runs out of money, the Monopoly Bank may issue as much as needed by writing on any ordinary paper.” Which is the same as our federal gov’t today, the federal gov’t, the issuer of fiat dollars, is the same as the Monopoly Bank. The federal gov’t (the Monopoly bank) simply prints “$1”, “$5”, “$10”, “$20″, $50” and “$100” on pieces of paper, or the more prevalent, most modern way, they just tap them into electronic existence with a keyboard.

In addition, there is absolutely no mention in the Monopoly game rules about the Monopoly Bank going into ‘debt’ when it creates the Monopoly Money; nor is there any mention whatsoever in the rules about the Monopoly Bank having to ‘borrow’ Monopoly Money. Which is the same as our federal gov’t today, or any monetary sovereign issuing their own non-convertible, free-floating, fiat currency. Anyone who says otherwise doesn’t understand the rules. Anyone who has played Monopoly and does understand the rules easily grasps that rather than ‘borrowing’ or going into ‘debt’ like a household that needs to balance its budget and maintain prosperity; the Bank (the issuer) is merely supplying the Players (the users) with more needed currency to balance the Game and widen prosperity.

Unlike the Monopoly Players (the users of Monopoly money), the federal gov’t (the issuer), is not going to ‘run out’ of its own Monopoly Money. No Monopoly game that you ever played ever ended because the Monopoly Bank ran out of Monopoly Money. The Monopoly game only ended for Monopoly Players (households like you & me), when WE ran out of money.

In 1903, Elizabeth ‘Lizzie’ Magie, a bold and progressive woman, created two sets of rules for her ‘Landlord’s Game’: An anti-monopolist set, in which all were rewarded when wealth was created (to pay homage to Lizzie’s political hero, economist Henry George); and a monopolist set in which the goal was to crush opponents (to highlight the contradictions between the opposing ideologies).

Three decades later it was the cutthroat version that players preferred. Her monopolist version eventually caught on with a community of Quakers in Atlantic City, who customized it with the names of local neighborhoods, and in 1932 it found its way to Charles Darrow.

The next year, in 1933, FDR began the process of ending the gold standard era of ‘sound money’ and replacing it with fiat currency. Darrow dusted off Elizabeth Magie’s patent, created another game based off her monopolist version, and incorporated the monetary concepts of modern fiat currency in the rules of the game.

When Darrow’s ‘Monopoly’ game started to take off in the mid-1930s, Parker Brothers bought up the rights to his game plus all other related games created by Elizabeth Magie. However, Elizabeth Magie got nowhere near what Charles Darrow got (for the patent to the ‘Landlord’s Game’ and two other game ideas of hers, Lizzie reportedly received $500 — and no royalties). Lizzie, who felt cheated and became distraught, was afterwards quoted in The Washington Post saying, “There is nothing new under the sun.”

To this day Hasbro (a Parker Brothers subsidiary), still downplays Magie’s status. Hasbro credits the official Monopoly game produced and played today to Charles Darrow, and on Hasbro’s website, a timeline of the game’s history begins in 1935.

“The Monopoly case opens the question of who should get credit for an invention, and how. Most people know about the Wright brothers (who filed their patent on the same day as Lizzie Magie), but don’t recall the other aviators who also sought to fly. The adage that success has many fathers rings true, but says nothing of success’s mothers. Like Lizzie’s original innovative board, circular and never-ending, the balance between winners and losers is constantly in flux.”

Happy Mother’s Day

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SOURCE:  https://www.theguardian.com/lifeandstyle/2015/apr/11/secret-history-monopoly-capitalist-game-leftwing-origins

 

 

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