Robert Reich met Bill Clinton when they were both Rhodes Scholars during the 1960s. In the 70s, Reich attended Yale Law School with Hill and Bill. And then, decades later, he served in the Clinton administration as Secretary of Labor. Somewhere along the line, the political economist picked up some drawing skills (putting him in good company with Winston Churchill and George Bush) that work nicely in our age of whiteboard animated videos. Now a professor at UC Berkeley, Reich visually debunks three economic mythologies in two minutes. This clip follows a rapidfire 2012 video, again featuring his cartooning skills, called The Truth About the Economy.
The great capitalist game of Monopoly was first marketed by Parker Brothers back in February 1935, right in the middle of the Great Depression. Even during hard times, Americans could still imagine amassing a fortune and securing a monopoly on the real estate market. When it comes to making money, Americans never run out of optimism and hope.
Monopoly didn’t really begin, however, in 1935. And if you trace back the origins of the game, you’ll encounter an ironic, curious tale. The story goes like this:Elizabeth (Lizzie) J. Magie Phillips (1866–1948), a disciple of the progressive era economist Henry George, created the prototype for Monopoly in 1903. And she did so with the goal of illustrating the problems associated with concentrating land in private monopolies.
As Mary Pilon, the author of the new book The Monopolists: Obsession, Fury, and the Scandal Behind the World’s Favorite Board Game, recently explained in The New York Times, the original game — The Landlord’s Game — came with two sets of rules: “an anti-monopolist set in which all were rewarded when wealth was created, and a monopolist set in which the goal was to create monopolies and crush opponents.” Phillips’ approach, Pilon adds, “was a teaching tool meant to demonstrate that the first set of rules was morally superior.” In other words, the original game of Monopoly was created as a critique of monopolies — something the trust- and monopoly-busting president, Theodore Roosevelt, could relate to.
Patented in 1904 and self-published in 1906, The Landlord’s Game featured “play money and deeds and properties that could be bought and sold. Players borrowed money, either from the bank or from each other, and they had to pay taxes,” Pilon writes in her new book.
The Landlord’s Game also had the look & feel of the game the Parker Brothers would eventually bastardize and make famous. Above, you can see an image from the patent Philips filed in 1904 (top), and another image from the marketed game.
Magie Philips never got credit or residuals from the Parker Brothers’ game. Instead, a fellow named Charles Darrow came along and drafted his own version of the game, tweaked the design, called it Monopoly (see the earliest version here), slapped a copyright on the packaging with his name, and then sold the game to Parker Brothers for a reported $7,000, plus residuals. He eventually made millions.
As they like to say in the US, it’s just business.
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For many people, the arguments and analysis of Karl Marx’s three-volume Das Kapital (or Capital: A Critique of Political Economy) are as relevant as ever. For many others, the work is a historical curiosity, dated relic, or worse. Before forming an opinion either way, it’s probably best to read the thing—or as much of the huge set of tomes as you can manage. (Vol. 1, Vol. 2. and Vol. 3.) Few thinkers have been as frequently misquoted or misunderstood, even, or especially, by their own adherents. And as with any dense philosophical text, when embarking on a study of Marx, it’s best to have a guide. One could hardly do better than David Harvey, Distinguished Professor of Anthropology and Geography at the City University of New York’s Graduate Center.
Harvey’s work as a geographer focuses on cities, the increasingly predominant mode of human habitation, and he is the author of the highly popular, two-volume Companion to Marx’s Capital. The books grow out of lectures Harvey has delivered in a popular course at the City University. They’re very readable (check them out here and here), but you don’t have to read them—or attend CUNY—to hear Harvey himself deliver the goods. We’ve previously featured his Capital: Volume 1 lectures (at top, preceded by an interview with a colleague). Now Harvey has made his lectures on Capital, Volume II and some of Volume III available. Watch all twelve classes above or view them individually here. As Harvey admits in an interview before the first lecture, the neglected second volume of Marx’s masterwork is “a very difficult volume to get through,” due to its style, structure, and subject matter. With Harvey’s patient, enthusiastic guidance, it’s worth the trouble.
You can view the lectures from Harvey’s course on multiple platforms. Below we provide an easy-to-access list. You can also see all lectures on David Harvey’s website, where you can also download class notes.
Morgan Spurlock is a filmmaker who has long found catchy ways of getting his point across. For his breakout movie, Super Size Me(available on Hulu), he sought to illustrate just how truly awful fast food is for you by subsisting solely on McDonald’s for a month. His diet literally almost killed him. Not long after the movie came out, McDonald’s started adding more healthy options to its menu. In POM Wonderful Presents: The Greatest Movie Ever Sold, Spurlock looked to make a documentary about product placement in movies by financing the doc entirely through product placement. (That movie gets pretty meta fast.)
And most recently, Spurlock has launched We The Economy: 20 Short Films You Can’t Afford To Miss. As you might surmise, the series tries to explain economics to the masses by releasing 20 short films made by a host of different stars and filmmakers, including Amy Poehler, Tony Hale, Sarah Silverman and Maya. The whole project will be released in theaters and on VOD but the shorts have also been released in advance on Youtube. You can watch Spurlock’s segment, called “Cave-o-nomics,” above. Seeking to answer the question “What is an economy?” Spurlock dresses up as a caveman struggling to increase his material wealth by swapping spears for meat.
The clear stand out of the bunch, however, is Ramin Bahrani’s “Lemonade War.” Bahami tackles the potentially dreary issue of business regulation by telling a tale of two rival lemonade stands. One is run by a corrupt slob – played by Patton Oswalt — and the other is run by a whip smart ten-year-old girl. Though the girl doesn’t have the money or connections that her rival has, she more than makes up for it with moxie and business acumen. This, sadly, proves to be not enough. When she calls the government regulator about some of her rival’s truly unhygienic practices, she discovers the regulator is in her competition’s pocket and soon she’s driven out of business. Things look hopeless for her until a neighborhood hero, played by none other than Werner Herzog (!), comes to her rescue. With the little girl in tow, he confronts the slob and regulator with his trademark malevolent Teutonic lilt. “If Mr. Smith could go to Washington today,” he declares, “he would filibuster you back into your big bang wormhole you have slithered out of.” The two simply cower in the face of Herzog’s Old Testament wrath. If only Herzog could deliver similar fusillades against the board of Goldman Sachs.
Jonathan Crow is a Los Angeles-based writer and filmmaker whose work has appeared in Yahoo!, The Hollywood Reporter, and other publications. You can follow him at @jonccrow. And check out his blog Veeptopus, featuring lots of pictures of vice presidents with octopuses on their heads. The Veeptopus store is here.
What other topics will the course cover as it unfolds? It’s all still TBD. But, again, you’re invited to help shape the syllabus. Bigger picture suggestions are being sought here.
The distribution of wealth is one of today’s most widely discussed and controversial issues. But what do we really know about its evolution over the long term? Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the twentieth century? What do we really know about how wealth and income have evolved since the eighteenth century, and what lessons can we derive from that knowledge for the century now under way?
Capital (which by Piketty’s definition is pretty much the same thing as wealth) has tended over time to grow faster than the overall economy. Income from capital is invariably much less evenly distributed than labor income. Together these amount to a powerful force for increasing inequality. Piketty doesn’t take things as far as Marx, who saw capital’s growth eventually strangling the economy and bringing on its own collapse, and he’s witheringly disdainful of Marx’s data-collection techniques. But his real beef is with the mainstream economic teachings that more capital and lower taxes on capital bring faster growth and higher wages, and that economic dynamism will automatically keep inequality at bay. Over the two-plus centuries for which good records exist, the only major decline in capital’s economic share and in economic inequality was the result of World Wars I and II, which destroyed lots of capital and brought much higher taxes in the U.S. and Europe. This period of capital destruction was followed by a spectacular run of economic growth. Now, after decades of peace, slowing growth, and declining tax rates, capital and inequality are on the rise all over the developed world, and it’s not clear what if anything will alter that trajectory in the decades to come.
On this side of the Atlantic, wealth and income were less concentrated in the 19th century than in Europe. After a spike in top incomes that topped out in the late 1920s, the income distribution flattened out here again, albeit in less dramatic fashion than in Europe. Since the 1970s, though, the U.S. has seen a sharp and unparalleled increase in the percentage of income going to the top 1% and especially 0.1%. This has not been driven by the capital and inheritance dynamics at the heart of Piketty’s story. He attributes it instead to the rise of what he calls “supermanagers.” Piketty cites recent research that shows managers and financial professionals making up 60% of the top 0.1% of the income distribution in the U.S., and proposes that their skyrocketing pay is mainly the product of sharp declines in top marginal tax rates that made it worth managers’ while to bargain harder for raises. This isn’t the only explanation available, and Piketty’s discussion of U.S. inequality doesn’t carry the same historical authority as other parts of the book. But it surely is interesting that, as he and several co-authors report in a new article in the American Economic Journal: Economic Policy, the rise in the top-percentile income share in 13 countries was almost perfectly correlated with declines in top marginal tax rates in those countries. It’s also interesting that this huge rise in relative income inequality has brought no discernible economic benefit. Yes, the U.S. economy has grown a bit faster than those of other developed economies, but that’s purely because of population growth. Per-capita economic growth has been almost identical in the U.S. and Western Europe since 1980, and because of the skew towards the top here, U.S. median income has actually lost ground relative to other nations.
But why let HBR give you insight into Piketty’s thinking when Piketty can do it himself. Below we have a talk he gave at the Economic Policy Institute earlier this month. He starts speaking at the 5:30 mark.
And finally Paul Krugman’s review in the New York Review of Books — “We’re in a New Gilded Age” — is worth a read.
Do Milton Friedman and John Kenneth Galbraith debate in that great economics department in the sky? Both men died in 2006, after remarkably long and distinguished careers as two of the most widely read economists of the 20th century, yet I can only with great difficulty imagine them ever agreeing. Friedman, founder of the free market-oriented University of Chicago “school” of economics, scrutinized the world’s economies and found that a only minimum of government intervention makes for a maximum of freedom. The Canadian-born Galbraith, who served on Harvard’s faculty as well as under four U.S. Presidents, saw things differently, believing in the necessity of a strong state to ensure stability, efficiency, and equality. Both spent a great deal of time and energy communicating directly with the public, not just with popular books and commentaries on economic issues of the day, but with television programs too. You can watch Galbraith’s The Age ofUncertainty, which first aired on the BBC in 1977, above. Friedman’s “response” Free to Choose, broadcast on PBS in 1980, appears below.
The fifteen-episode Age of Uncertainty and the ten-episode Free to Choose both come down to the teachings of their star economists; you might think of them as extended lectures, with quite different conclusions, on the causes and effects of capitalism. But both expand upon this base of content with rich imagery, from a variety of creative visualizations (up to and including historical dramatization) of Galbraith’s words to Friedman’s travels far and wide, from his money-driven birthplace of New York City to the “haven for people who sought to make the most of their own abilities” of Hong Kong in search of real examples of the free market in action. The styles of dress may look dated, but the production value holds up, and the economic issues discussed have only grown more relevant with time. Whether you believe the government should keep a helping hand on the economy or keep its grubby mitts off it, both series have a wealth, as it were, of entertainment and education in store for you. As bitterly as Galbraithian statists and Friedmanite libertarians may argue, surely they can agree on the enjoyability of quality television.
“Everyone has questions about the economy. I started looking for the answers in economics. I found enough insights to get me interested, but I couldn’t seem to make the insights add up. I went back to the original sources, the great economists, and started to see a big picture. And while the whole picture was complicated, no one part of it was all that hard to understand. I could see that all this information made a story. But I couldn’t find a book that told the story in an accessible way. So I decided to write one, in the most accessible form I knew: comics.”
The book covers two (plus) centuries of economic history. It starts with the Physiocrats, Adam Smith and theoretical development of capitalism, and then steams ahead into the 19th century, covering the Industrial Revolution, the rise of big business and big finance. Next comes the action packed 20th century: the Great Depression, the New Deal, the threat from Communism during the Cold War, the tax reforms of the Reagan era, and eventually the crash of 2008 and Occupy Wall Street. Along the way, Goodwin and the illustrator Dan E. Burr demystify the economic theories of figures like Ricardo, Marx, Malthus, Keynes, Friedman and Hayek — all in a substantive but approachable way.
As with most treatments of modern economics, the book starts with Adam Smith. To get a feel for Goodwin’s approach, you can dive into the first chapter of Economix, which grapples with Smith’s theories about the free market, division of labor and the Invisible Hand. Economix can be purchased online here.
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