A few years ago I was invited to a fancy dress party where invitees were asked to come as their “favourite childhood memory”. It may sound strange, but I went as a giant Monopoly board. I have many happy memories of playing Monopoly with my younger brother.
Sometimes I would win, sometimes I would lose, but it usually ended in one of us realising our empire was doomed to failure, at which point we would reluctantly declare bankruptcy and set off a path of destruction with a wave of the hand across the playing
board.
The strategic maneouverings of the global banking sector in the last two weeks are not dissimilar to a giant Monopoly game, with many of us still wondering who will be the winner.
My brother and I had a theory that the player to acquire Mayfair and Park Lane would usually win Monopoly. If Lloyds TSB is Mayfair, then HBOS could be their Park Lane. It now has more market share and an ability to collect extra rent (interest rates) from
tenants (customers).
With Bear Stearns and Lehman Brothers out of the game, the other players are doing what my brother and I called cheating – pilfering money from the bank to sustain their empires.
The US Federal Reserve is acting as the reluctant banker in this game, but I prefer to think of Warren Buffet as the real banker in this tale. Surely
he knows his investment in Goldman Sachs will pay off as it acquires other distressed players. And he looks a little like Monopoly mascot Rich Uncle Pennybags (Mr Monopoly), which is ironic given Pennybags was loosely based on the original banking billionaire
J P Morgan.
The inventor of Monopoly, Quaker woman
Lizzie Phillips, would perhaps be a supporter of the US Government’s bail-out of large financial firms. Phillips was a Georgist, believing that the economic rent from land should be shared equally by society rather than falling into hands of private individuals.
She invented the board game to illustrate the negative aspects of land being mostly held by private monopolies.
Of course many of today’s US taxpayers feel a little different given their tax dollars are expected to stretch a lot further than was the case in the early 1900s.
By allowing its banks to cheat at the game of Monopoly, the US Government is hoping to protect the little guy, propping up financial giants for what it has deemed the greater good. It’s no wonder people are
asking if it’s the death of capitalism.
Just as Georgists like Phillips argued the earth should be the common property of humanity, perhaps it’s just a matter of time before more commentators start arguing
US taxpayers should gain some equity in the financial institutions they are helping to save.