Tuesday, April 3, 2018

A Tale of capitalism with a little twist

Spoiler alert - this story has a surprise ending. That's all I'll say for now.

My family had a Monopoly board when I was growing up. I was the youngest of three, so I got used to ending the game in tears of frustration and humiliation when I landed on Pacific Avenue and had to surrender all my cash and properties over to my greedy sister.

I always lost. It seems I had some very bad character traits. When I landed on Boardwalk, and saw that it would cost $350 of the $600 that I had in front of me, I would opt for frugality. And when my sister pointed out that Illinois Avenue only cost me $240, and she was willing to pay me $300, I opted to be trusting and sell it to her. In the very unlikely event that I had developed a piece of property that my sister landed on, I was often lenient, letting her off with the rent for the undeveloped property. Frugality, trust, and compassion. Poor life choices on my part, indeed.

It looks like I may not be collecting that $200

(I have a sneaking suspicion that my sister may have a somewhat different memory of our board games. Whatever she tells you, just remember that I was the injured party.)

As I grew up, I eventually learned that the best Monopoly strategy was to buy every property that I possibly could, mortgage myself to the hilt to buy properties, and to be ruthless when it came to bargaining with other players. And here's an advanced tip: When all the properties have been purchased, it is better to sit in jail and collect rent rather than use the Get out of Jail Free card. All very important life skills that I learned from Monopoly. I had been indoctrinated into capitalist society.

The History of Monopoly
Everything I know about capitalism I learned from Monopoly

Monopoly was and is an immensely popular game. According to Time Magazine, "Monopoly is the most popular board game in history, with more than 250 million copies sold." If you don't believe Time, the Parker Brothers' website says that Monopoly is "the world's favorite family game brand!" I mean, Parker Brother's should know about their own game!

(Warning: the following few paragraphs contain some information which, for want of a better phrase, are outright lies. I promise to clear it up.)

The story of how this game came to be is a real-life rags-to-riches kinda story. Monopoly was invented by Charles Darrow during the Great Depression. You know... the one caused by ruthless investors who realized that their best strategy was to buy every stock they possibly could? Darrow had lost his job in sales, and pitched the game to both Milton Bradley and Parker Brothers. Initially, they both turned it down.

Ever resourceful, Darrow manufactured the game on his own and sold a very respectable number of copies during the 1934 Christmas season. His sales were enough to bring Parker Brothers back to the bargaining table. Parker Brothers eventually purchased the game and helped him get a patent. Darrow became the first person to become a millionaire by designing a board game. 

There we have it. The game of monopoly working out in real life. A resourceful and tenacious inventor with a good idea gets rich.

Some backstory

Remember how I said there would be a surprise ending? Before you get all warm and fuzzy about the wonderful Charles Darrow, I need to fill in a bit more of the backstory. Then I will get to the surprise ending.

First bubble to burst. Charles Darrow did not invent the game. It seems that Darrow and his wife Esther were invited to the home of Charles and Olive Todd in 1933 to play a board game. Darrow later bugged Todd for details on the game, and for a copy of the board and game cards. The game that Darrow sold to Parker Brothers was a direct copy of the game that Darrow badgered out of Todd. Darrow copied the game right down to a misspelling of Marven Gardens, in the game from ToddMarven Gardens is a subdivision in Margate City, NJ, which abuts Ventnor City, but you will note that in Monopoly, it is spelled Marvin Gardens.

Marvin versus Marven

I don't want to imply that there was anything wrong with Darrow manufacturing a game that was in the public domain, or selling that game to Parker Brothers for a big bunch of money. This is capitalism in action. The fact that the Todds never again invited the Darrows over for Saturday night games was just sour grapes.


Darrow told Parker Brothers that he had invented the game. That was a lie, which is morally icky. It's also a bad business practice to lie to business partners (my opinion), and it opened Darrow up for the possibility of a civil lawsuit from Parker Brothers. I do not consider this to be an example of capitalism at its finest.

Here is Darrow's description of the invention of Monopoly:

"Friends visiting our house in the later part of 1931 mentioned a lecture course they had heard of in which the professor gave his class scrip to invest and rated them on the results of their imaginary investments. I think the college referred to was Princeton University.

Being unemployed at the time, and badly needing anything to occupy my time, I made by hand a very crude game for the sole purpose of amusing myself.

Later friends called and we played this game, unnamed at that time. One of them asked me to make a copy for him which I did charging him for my time four dollars. Friends of his wanted copies and so forth."

Parker Brothers got a bit concerned when one of their VPs recalled a patent from 1904 for a very similar board game. Rather than sue Darrow, they asked Darrow to sign an affidavit to the effect that he was the rightful inventor of Monopoly. He signed it, thereby covering Parker Brothers' butt. 

Note that Darrow also filed for a patent of the game of Monopoly, which is legally a statement of inventorship. With these two legal documents -- the affidavit and the patent application -- Darrow  crossed the line to what I think is criminal activity. Now, I'm not a lawyer, so I can't give legal advice. All I can do is give illegal advice, and write that advice on an illegal pad. But here is my illegal advice: please check with your lawyer before signing any legal documents that you know to be lies. You don't want to be sent to bed without your supper.

Real computer programmers don't like goto statements

Tracing Monopoly backward

The Todds didn't invent Monopoly either, and they never claimed to. In sworn testimony, Charles Todd said that he learned the game from a classmate, Eugene Raiford, who in turn, learned the game from his brother Jesse Raiford.

Jesse was a real estate agent in Atlantic City. Of course, you know that all the properties in Monopoly are named after places in Atlantic City? Jesse Raiford is the guy who was responsible for putting reasonable purchase prices and rents for all the properties, based on his knowledge of the actual streets in question. So, when you buy Indiana Avenue for $220, and have to pay out $1300 when you land on Park Place with four houses, you can thank (or blame) Jesse. 

But he did not select which Atlantic City streets (from Baltic to Boardwalk) were immortalized in Monopoly. A teacher at the Quaker School by the name of Ruth Hoskins had learned of a game on a trip to Indiana. She brought the game back to Atlantic City, where the Quakers adapted the game to the Atlantic City neighborhoods that they were familiar with.

A detailed description of the history of the game prior to Atlantic city can be found elsewhere. I will content myself to jump all the way back to the square labelled "Go".

The Landlord's Game

In March of 1903,  Lizzie Magie filed for patent for what what she called "the Landlord's Game". The drawing below, from the patent, is of the game board. It shows that many of the aspects of the game that we all know and love data back to 1903. The upper left hand square instructs one to "GO TO JAIL". Directly opposite of this, in the lower right corner, is the jail. The square that we sophisticated 21st century beings call "FREE PARKING" was called "PUBLIC PARKING" in the original.
The original Monopoly board

Between each of the corners, we see nine spaces (just like today's Monopoly board), most of which have a sale price and a rent price. The middle space on all four rows is a railroad - exactly the same as the modern board. Utilities (light and water) each have a space, and the original board has not one, not two, but three spaces where one had to pay for luxury

The square that we call "GO" bears an odd label in the original version: "Labor upon Mother Earth Produces Wages". This is the square where the player receives his wages for "perform[ing] so much labor upon mother earth". 

Much of the play proceeds quite similar to the modern version, with the winner being the one with the most money after a predetermined number of trips around the board.

Pausing for some perspective

It is patently obvious that the game that Charles Darrow sold to Parker Brothers was largely derived from the 1903 patent by Lizzie Magie. Clearly Darrow lied about how the game was invented. There can be no question about that. But there are two other pertinent questions to address before I continue.

Did Parker Brothers violate Magie's patent?

No. At that time, patents lasted for 17 years after they were granted. (Today, the term is 20 years after the patent is filed.) This patent was granted in 1904, so it expired in 1921. After that time, the invention in the claims entered into the public domain, so anyone was free to make or sell Magie's board game in 1934.

Does the Magie patent invalidate Darrow's patent? 

It would be natural to think that, once "Monopoly" has been patented, the game is over, and it can't be patented again. But one of the cool things about patents is that the patent office is cool with you filing for a patent on an improvement to an existing patent. They even encourage it. Your improvement just can't be obvious when compared with any prior art.

The Magie patent does not describe naming of the properties, grouping properties by color, or rents that depend on additional investments into a property, or the need to own all of the same-colored properties before developing the property. So, if the patent examiner found this to be non-trivial, then there was room for additional patents. I readily admit that I have not spent the week or so necessary to fully understand the claims in Darrow's patent.

Magie's second patent

Elizabeth Magie Phillips (AKA Lizzie Magie) filed for a second patent on her Landlord's Game in 1923. There are some changes to the game. While the new properties have been given fictitious street names, the layout of the board departs from the original patent. The current Monopoly board is clearly derived from Magie's first patent, not from her second.

There are some additions which have made this filing patentable over the previous patent. The new set of claims includes the notion of a grouping of properties together. I would presume that this is a novelty which distinguishes the two patents. But again, I fully admit to not investing a lot of time into interpreting one set of claims over the previous disclosure. 

Magie's second patent was granted in 1924, which means that it was in effect when Parker Brothers and Darrow were signing their deal. Uh-oh. But, Parker Brothers did their due diligence, and negotiated with Magie over the rights for her second patent. She received $500.

That number might just tick you off, but hear me out...

The Monopoly game we all know and love is based on Magie's original patent, so you may feel that she has a right to any and all profit from the Monopoly game. But, she had her chance, between 1905 and 1921 to have a monopoly on Monopoly.

Another consideration is that $500 is not all that much money today. Adjusted for inflation, that $500 would be worth $9,300 today. Not a bad chunk of money. Considering the cost and effort of developing a successful product from a good idea, maybe the size of the check was reasonable?

A final consideration is that there is a real question whether the existing Monopoly game would infringe on the 1924 patent. As with all patents, it comes down to how to interpret all the elements of a claim. For example, claim 1 of the 1924 patent includes "a series of cards of changeable value, two or more of which are alike and which relate to two or more certain spaces on the board". If Monopoly can be shown to not have such changeable cards, then it does not infringe claim 1. To be honest, I don't know what the phrase means. Given enough time, I'm sure I could work up an argument either for Parker Brothers or for Magie.

So, Magie may have been able to parlay this patent into a lot more money, but probably not without  fair amount of legal expense and a certain risk. Collecting $9,300 may well have been a reasonable choice.

And that's capitalism for you.

One more thing...

One of the topics of this blog post is capitalism. I would be remiss if I didn't share a bit more about Elizabeth Magie and some wording from her second patent.

Magie describes the purpose of the game as follows: "The object of the game is not only to afford amusement to the players, but to illustrate to them how under the present or prevailing system of land tenure, the landlord has an advantage over other enterprises and also how the single tax would discourage land speculation".

Here are some other political gems in the patent.

1. There is a space on the board named "Lord Blueblood's estate". "This space represents foreign ownership of American soil, and carries with it a jail penalty for trespassing."

2. Another space is call "La Swelle Hotel". "This space represents the distinction made between classes, only moneyed guests being accepted." 

3. In one particular misfortunate toss of the dice, the player will have been caught robbing the public. They will take $200 from the bank, and the other players will thereafter call the player "Senator". To the best of my knowledge, this is the harshest insult to be found in all the patent archives.

Clear political undertones. And overtones too, for that matter!

Magie's intent with the game was to illustrate the inequity inherent in the idea of people getting paid by rent, beyond pay for actual labor. In a sense, you could say that she was using the game to indoctrinate the players into this anti-capitalistic idea. You see, Elizabeth Magie was a Georgist, one who believes that people should earn money from hard work, but not from property or natrual resources.

The irony is that the game Monopoly has been used for several generations as a training mechanism for young capitalists. That's my surprise ending.


Cheating at Monopoly: Uncovering the secret history of the classic board game

Stealing Monopoly

The Culture Complex: Monopoly Is Us

MONOPOLY: From Berks to Boardwalk

The fake history — and the real one — behind the inventing of ‘Monopoly’

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