In the previous column we looked at the game of Monopoly and its origin related to the progressive work of Henry George. Besides the Parker Brothers game we also noted Atomicopoly, another version.
Interestingly, I found a listing of versions of Monopoly citing 3,472 similar games, both licensed and unlicensed, as of April 30, 2019. Atomicopoly was not included. The web address is: http://jergames.blogpost.com/2006/02/monopoly-versions.html. The logo on the page says “Yehuda – Life Intersects Games.”
As individuals, we are all in competition with everyone else. We all want more, for a variety of reasons. Wait, you say, what about people devoted to only helping others? First, good for them! But they, too, are in competition with other people that have other objectives. If the world was a monopoly of good, I believe it would be wonderful. But we are continually in competition while having a somewhat common perspective that monopolies are usually, generally, most of the time not desired. Monopolies represent power.
Delving deeper, one form of monopoly is labeled coercive. In such a monopoly, the “firm” can raise prices and make production decisions without risk of competition. It is completely shielded from any possible competition, remembering that there is no perfect shield. One example might be electricity. It is government controlled using a power line distribution system. It can be argued that consumers have alternatives such as local generators and solar or wind power. But can it be obtained for a lower cost and distributed among a group of customers without the costly distribution system? One can argue that this really is a societal (or statutory) monopoly owned and controlled by the people. Perhaps it is public coercion.
In contrast, the 18 th Amendment to the U.S. Constitution was ratified Jan. 16, 1919 and banned the production, transport, and sale of intoxicating liquors. You could still drink a beer, but you could not make your own, deliver a glass to your neighbor, or sell it. This gave rise to “bootlegging;” importing, manufacturing, and distributing alcoholic beverages illegally. Al Capone, a rather infamous individual, established a coercive monopoly in his area, including threats and murder.
In both electricity and rum running we can identify coercive monopolism and align them with both good and bad. As an example of the in between, the U.S. Postal Service has a coercive monopoly for the delivery of first and third (also called standard) mail, being protected by law from FedEx and UPS. The goodness or badness of a monopoly is for the citizenry to decide and good arguments can be made for either direction. Since the citizenry is the government, at least in the United States, it seems pretty straight forward, Or is it?
In the 1930’s, the Department of Justice under President Franklin D. Roosevelt charged the Aluminum Company of America, ALCOA, with monopolization. The trial began on June 1, 1938, being dismissed four years later.
The government appealed the ruling, standing by the appeal until 1944 when it was to go to the U.S. Supreme Court. But the Supreme Court could not assemble a quorum and Congress has to pass a special act assigning the case to the U.S. Court of Appeals for the Second Circuit. On March 12, 1945, the case was decided and ALCOA was found to be a monopoly because of its high percentage of the market for “virgin aluminum.” The case was remanded to another court to find a solution.
Between 1945 and 1950, ALCOA continued to fight the decision while the growth of Reynolds Aluminum Company (now part of ALCOA) and Kaiser Aluminum also occurred. ALCOA was freed from divestiture. ALCOA had been successful in its growth by increasing its efficiency and being more effective with its customers, resulting in controlling more than 90 percent of the market. In 1966, Alan Greenspan wrote that ALCOA had been condemned for being too good.
But also note that resolution of the case took 12 years, plus an additional five years of “watching” to ensure there was not a re-monopolization. Do we have 17 years today?
In 1945, knowledge was doubling every 25 years. Now it is estimated to double every 12 to 13 months. Acceleration is accelerating. And so is the invention and discovery of new stuff. Also looking historically at the passion of citizens to ensure competition and control monopolization, how can control be accelerated?
Or maybe we do not care? Knowledge based on information is essential but enormous in quantity. What is the proper role of filtering, both in the context of free speech AND the structure of algorithms to sort it?
At the beginning of these columns some areas were identified that are essential for growth and betterment of earth and humanity. Among these areas of concern are energy, personal information, product distribution, medicine, teaching, integrity, communication, and several others including governance. In all of these areas monopolization could occur. Monopolies seem to be about making money, about competition, and rewarding the winner – with money. Is it a game, life, or the intersection? And is money really real?