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Posts Tagged ‘Monopoly

“A buyer with disproportionate power”*…

 

Chickens are seen at a poultry farm at Hartbeesfontein, a settlement near Klerksdorp, in the North West province

Imagine the farm that raised the chicken that produced the meat that sits in your sandwich: a few workers, thousands of birds, tens of thousands of pounds of white and dark meat, work that starts before dawn and ends after dusk, uncertain revenue, slim profits. There are thousands of these small farms in the United States, and they benefit from millions of dollars of taxpayer support each year.

Chicken is America’s favorite protein, after all. Family farms are one of its most prized institutions. And farming is tough business. According to one estimate, a new, hangar-like chicken house costs something like $300,000 to build, and more to maintain and upgrade. “A farmer has to invest over $1 million just to get set up—a lot of debt to carry when you’re paid on average between 5 cents and 6 cents per pound of chicken produced,” Sally Lee of the Rural Advancement Foundation International-USA has found. Even when a chicken-growing operation is established, financial success is far from a sure thing. Given those realities—and given the American love for and support of the family farm—generous taxpayer subsidies seem not just sensible, but vital.

But a government report released this spring calls into question whether all those family chicken farms are really family chicken farms, and whether those taxpayer dollars might be better spent elsewhere. The Small Business Administration’s inspector general looked at poultry growers, and found that many of them are tied-and-bound contractors—so controlled by their agreements with giant food corporations that they no longer act like independent entities. Why offer them taxpayer support meant for the little guy?…

What your chicken dinner says about wage stagnation, income inequality, and economic sclerosis in the United States: “The Rise of the Zombie Small Businesses.”

For a consideration of the effects of corporate concentration on wages: “More and more companies have monopoly power over workers’ wages. That’s killing the economy.”

* Monopsony: 1) (economics) A market situation in which there is only one buyer for a product; also, such a buyer. [from 1930s] 2) (economics) A buyer with disproportionate power.  -Wiktionary

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As we cogitate on (real) competition, we might recall that it was on this date in 1947 that fabled computer scientist Grace Hopper (see here and here), then a programmer at Harvard’s Harvard’s Mark II Aiken Relay computer, found and documented the first computer “bug”– an insect that had lodged in the works.  The incident is recorded in Hopper’s logbook alongside the offending moth, taped to the logbook page: “15:45 Relay #70 Panel F (moth) in relay. First actual case of bug being found.”

This anecdote has led to Hopper being pretty widely credited with coining the term “bug” (and ultimately “de-bug”) in its technological usage… but the term actually dates back at least to Thomas Edison…

bug

Grace Hoppers log entry

 

Written by LW

September 9, 2018 at 1:01 am

“if we’re measuring the wrong thing, we’re going to do the wrong thing”*…

 

Money and markets have been around for thousands of years. Yet as central as currency has been to so many civilizations, people in societies as different as ancient Greece, imperial China, medieval Europe, and colonial America did not measure residents’ well-being in terms of monetary earnings or economic output.

In the mid-19th century, the United States—and to a lesser extent other industrializing nations such as England and Germany—departed from this historical pattern. It was then that American businesspeople and policymakers started to measure progress in dollar amounts, tabulating social welfare based on people’s capacity to generate income. This fundamental shift, in time, transformed the way Americans appraised not only investments and businesses but also their communities, their environment, and even themselves.

Today, well-being may seem hard to quantify in a nonmonetary way, but indeed other metrics—from incarceration rates to life expectancy—have held sway in the course of the country’s history. The turn away from these statistics, and toward financial ones, means that rather than considering how economic developments could meet Americans’ needs, the default stance—in policy, business, and everyday life—is to assess whether individuals are meeting the exigencies of the economy…

Eli Cook explains how America pioneered a way of thinking that puts human well-being in economic terms: “How Money Became the Measure of Everything.”

* “GDP is not a good measure of economic performance; it’s not a good measure of well-being.  What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.”    – Joseph Stiglitz

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As we muse on metrics, we might spare a thought for Henry George; he died on this date in 1897.  A writer, politician and political economist, George is best remembered for Progress and Poverty, published in 1879, which treats inequality and the cyclic nature of industrialized economies, and proposes the use of a land value tax (AKA a “single tax” on real estate) as a remedy– an economic philosophy known as Georgism, the main tenet of which is that, while individuals should own what they create, everything found in nature, most importantly the value of land, belongs equally to all mankind.

George’s ideas were widely-discussed in his time and into the early 20th century, and admired by thinkers like Alfred Russel Wallace, Jose Marti, and William Jennings Bryan; Franklin D. Roosevelt sang his praises, as did George Bernard Shaw.  But with the rise of neoclassical economics, George’s star began to recede.  Still, more modern thinkers like Albert Einstein and martin Luther King were fans.

In a sequence that mimicked George’s arc of influence, it was George’s work that inspired Elizabeth Magie to create The Landlord’s Game in 1904 to demonstrate his theories; ironically, it was Magie’s board game that became in the 1930s (as recently noted here and here) the basis for Monopoly.

In 1977, Joseph Stiglitz showed that under certain conditions, spending by the government on public goods will increase aggregate land rents/returns by the same amount. Stiglitz’s findings were dubbed “the Henry George Theorem,” as they illustrate a situation in which Henry George’s “single tax” is not only efficient, it is the only tax necessary to finance public expenditures.

Henry George

source

 

Written by LW

October 29, 2017 at 1:01 am

“Our people are good people; our people are kind people. Pray God some day kind people won’t all be poor”*…

 

For a singular image of the Great Depression and the roughness of those years, it’s hard to do much better than Dorothea Lange’s 1936 photograph of Florence Owens Thompson, two of her children tucking their faces over her shoulders, a baby in her lap.

Where that image comes from, there are many, many more: around 175,000 surviving portraits of America between 1935 and 1945 taken by the photographers of the government’s Farm Security Administration. The Library of Congress, which houses the collection, has, remarkably, digitized all the negatives and tagged the records with loads of data, such as who took the picture and where it was taken.

Now, thanks to a new project known as Photogrammar from Yale University, viewers will have a much easier time exploring the photographs. There’s a map that displays the images by county and another that shows where each picture was taken and by which photographer. There’s also an interactive that allows viewers to sort the photos by theme (e.g. “war” or “religion”) and then browse from there. Other tools are still in the works

Agricultural workers bound for upstate New York in time for the harvest

More at “Seeing the Great Depression.”

* John Steinbeck, The Grapes of Wrath

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As we go West, we might recall that it was on this date in 1935 that Parker Brothers purchased the patent for “The Landlord’s Game” from Elizabeth Magie, a Quaker political activist who had used the theories of the economist Henry George to create the game to illustrate the way in which monopolies impoverish (“bankrupt”) the many while concentrating extraordinary wealth in one or few.  Parker Brothers had released a copy– Charles Darrow’s “Monopoly”– which  was (to put it politely) closely modeled on “The Landlord’s Game”; when Darrow’s version became a hit in 1933, Parker Brothers bought “The Landlord’s Game” as insurance against a intellectual property suit– and subsequently paid Ms. Magie $500 for her patent to avoid a (completely justified) claim from her that “Monopoly” was, in effect, stolen.  It is estimated that over a billion people have played “Monopoly” over the years.

“The Landlord’s Game” board, from Magie’s original patent application

source

 

Written by LW

November 6, 2015 at 1:01 am

“The score never interested me, only the game”*…

 

In 1913, when he was 20, Clayton Hudson wrote Harry Houdini, daring him to escape from a special crate that Hudson had designed.  Houdini warmed to Hudson, choosing his challenge from the myriad he received, and with £100 at stake, found a way out.  26 years later, Hudson put his expensive lesson to work– using Monopoly sets to help World War II prisoners of war escape…

At around the time that Monopoly was starting to make a name for itself – and to achieve the kind of fame that would make it such a central part of prison life in Stalag XXB – Clayton Hutton was beginning to worry about the fate of Europe. As the 1930s drew to a close, a war was clearly looming, and he wanted to get involved.

Despite service as a pilot during the First World War, Clayton Hutton was not a career military man. Instead, he had left the service to work in journalism here and there and as a publicity director for the movie business. He had also become increasingly eccentric – a fact that, along with his age, may explain why he was swiftly turned down when in 1939 he applied to join the Royal Air Force.

Luckily, British military intelligence was currently looking for “a showman with an interest in escapology” – the kind of man, perhaps, who had once been publicly humiliated by the greatest magician that ever lived.

These were busy times for the intelligence services. MI9 had been newly formed under Brigadier Norman Crockatt; its objective was to facilitate the escape of any allied soldiers captured by the enemy during the coming war, and return them safely to the UK. This sort of thing required some pretty unusual thinking – and some pretty unusual thinkers. Following a short interview with Crockatt – in which the story of the Houdini challenge played a crucial role – Clayton Hutton was employed by MI9 as a technical officer…

Read the whole extraordinary story– and see photos of Hudson’s handiwork– at “Inside Monopoly’s secret war against the Third Reich.”

 

* Mae West

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As we bake a hacksaw into a cake, we might recall that it was on this date in 1944 that Helen Duncan became the last person to be charged under the British Witchcraft Act of 1735.  In the event, her real offense was a form of espionage, a violation of the Official Secrets Act: she’d held public seances purportedly with victims of the torpedoed of HMS Barham, the loss of which was classified.  (It was demonstrated at her trial that she’d had the opportunity to learn of the ship’s loss from crew members’ families.)  Rather than amplify the leak, the authorities prosecuted her under the Witchcraft statute, which made falsely claiming to procure spirits a crime.  She served nine months in prison, and was barred from further “practice”…  though she was caught in the act and arrested again in 1956 (this time under the Fraudulent Mediums Act of 1951, which replaced the Witchcraft Act).

 source

 

Written by LW

January 19, 2015 at 1:01 am

“Economics is a subject that does not greatly respect one’s wishes”*…

 

From “Macroeconomic policy and the optimal destruction of vampires” (1982) by Dennis Snower

A not-so-dismal look at the “science” of economics:  “the world’s first and only stand-up economist”  reviews the weirdest and most wonderful papers ever published in economics journals…  Consider, e.g.,

“Japan’s Phillips Curve looks like Japan” (2008) by Gregor Smith

Smith’s webpage used to link to a version of the paper with this note: “The title is also the abstract and, frankly, most of the text.”

Japan’s Phillips Curve is shown in the right-hand panel of Figure 1. The data are monthly from January 1980 to August 2005.

For ease of viewing, the left-hand panel of Figure 1 rotates the Phillips Curve around the vertical axis so that minus the unemployment rate now is on the horizontal axis. Clearly visible are the islands of Hokkaido and Honshu, though it is somewhat difficult to separately distinguish the southern islands of Kyushu and Shikoku. The Noto-Hanto Penninsula is evident to the north of the southern end of the main island of Honshu. Tokyo Bay is also visible. The data point to the far left in Figure 1 is the island of Fukue-Jima.  

Ten others– including Bauman’s own hysterical take-down of Gregory Mankiw and “On the efficiency of AC/DC? Bon Scott versus Brian Johnson,” featured here in pre-blog times– at “Top 11 Funniest Papers in the History of Economics.”

* Nikita Khrushchev (widely attributed)

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As we search for one-armed economists, we might spare a thought for Charles Darrow; he died on this date in 1967. It was Darrow who took a Quaker game that inveighed against acquisitiveness and turned it into the monopoly that is Monopoly.

 source

 

Written by LW

August 29, 2014 at 1:01 am

“I think it’s wrong that only one company makes the game Monopoly”*…

 

The game Monopoly was created in the early 1930s as “The Landlord Game” by a Quaker anxious to illuminate the dangers of unbridled acquisitiveness.  But by 1935, when it was acquired by Parker Bros., it had been copied, re-titled, and remade into the paean to aspirational capitalism that’s been a huge success ever since.

But times have changed; the methods of wealth accumulation have morphed…  and now there is a new set of rules to reflect this new reality.

It would be hard to simplify capitalism further than Monopoly. The game attempts to express the ruthlessness of raw capitalism by declaring that whoever has the most money at the “end” is the winner. While it’s true our culture proclaims the rich as our greatest heroes, the method of financial gain in Monopoly is not a system that allows for any creativity. Roll the dice, buy a property, pay rent, pass go, and collect $200. Repeat.

Simple models have long been used to help understand complex ideas. With a few small changes Monopoly can be a space where we can play at being in control of the economic system. All it takes is a few new rules.

Rule Change #1: The Banker

In the original rules the role of the banker is simply a chore–the board game equivalent of taking out the trash. But in real life the banker is no passive entity. The banker is the center of the universe.

The Libor scandal, the UBS money laundering scandal, the SAC Capital scandal, FINRA suing Wells Fargo and Bank of America, TD Bank paying to settle charges of a ponzi scheme, Galleon Group’s insider trading scandal. This list could go on. The point is that banking is
exciting work!

The role of the banker is special. The banker should have no piece on the Monopoly board, but this person is in charge of the bank’s money. The success of the banker is judged the same as any other player: Whoever accumulates the most wealth is the winner. Of course, as in life, the banker has some advantages (like control of all the money)…

Read the rest of the new rules at “Rethinking the game of Monopoly“…  then roll the dice.

Playing this version of Monopoly won’t help you understand the details of a banking scandal. But you’ll have experience with a simplified model of the financial system that generates regular “scandals.” A game where arguing and backstabbing are part of the rules and the winner is hard to determine. This simple model recreates the same results found in the real world.

* Stephen Wright

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As we wonder why no one’s done time, we might recall that it was on this date in 1882 that the San Francisco Stock and Bond Exchange was formed;  it later merged with with Los Angeles Oil Exchange to become the Pacific Stock Exchange.  In 1999 it became the first stock exchange in the U.S. to demutualize, and in 2003, closed its trading floors and went to electronic transactions. The PSX, as it was known, merged into the New York Stock Exchange in 2006.

The San Francisco home of the Pacific Stock Exchange from 1930 to 2003

source

Written by LW

June 5, 2014 at 1:01 am

Tilt!…

From Popular Mechanics, “11 Things You Didn’t Know About Pinball History,” e.g.:

7. Pinball Has a Surprise Best-Seller

The best-selling pinball machine of all time is still “The Addams Family,” which came out in 1991.

and…

11. Just One Company Still Makes Pinball Machines


And it does it in the U.S. Every new pinball machine comes from a single Stern Pinball factory in the Chicago suburbs, where factory workers assemble several thousand parts, largely by hand.

Readers will find the other nine nuggets at “11 Things You Didn’t Know About Pinball History.”

As we limber up our flipper fingers, we might recall that it was on this date in 1935 that Parker Brothers purchased the patent for “The Landlord’s Game” from Elizabeth Magie, a Quaker political activist who had created the game to illustrate the way in which monopolies impoverish (“bankrupt”) the many while concentrating extraordinary wealth in one or few.  Charles Darrow’s “Monopoly” was (to put it politely) closely modeled on “The Landlord’s Game”; when it became a hit in 1933, Parker Brothers bought it– and subsequently paid Ms. Magie $500 for her predecessor patent to avoid a (completely justified) claim from her that “Monopoly” was, in effect, stolen.  It is estimated that over a billion people have played “Monopoly” over the years.

“The Landlord’s Game” board, from Magie’s original patent application (source)

 

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