FREE MARKETS REQUIRE REGULATION:

Monopoly, Milton Friedman’s Way (DAMON DARLIN, 2/19/11, NY Times)

The precise details of our classic game are blurred by the alcohol consumed that night and the years that have passed since then, but this much is recalled. We decided that Monopoly was hostile to a free market because it restricted the number of houses or hotels one could buy. We voted that a player could buy as many hotels as a property could physically bear and rents would be raised proportionally.

But the bank soon began to run out of money. So we did what any government would do. We began printing more of it, by scribbling $500 on scraps of paper. We printed a lot of money.

Prices shot up, which we all knew, even in that inebriated state, was the consequence of expanding the money supply. (After all, the great economist told us, “Inflation is always and everywhere a monetary phenomenon.”)

The inflation became so extreme that we eventually voted to alter the rules again: we’d cut the money supply. Any money we printed that came back to the bank would be taken out of circulation.

A severe depression kicked in, of course. Prices plummeted and it was a race to liquidate assets. One by one the players quickly went bankrupt, and sometime around 4 that morning the game was over.

Who won has long been forgotten, but it was one of the greatest games of Monopoly ever played because we got to change the rules.