Introducing Modern Money Monopoly (MMM)

By Alex Hofmann

Coming back to Stephanie Kelton’s “A Contest: MMT for Eighth Graders” from last May, we have yet to find a good way of explaining basic modern money concepts to children. I followed the blog thread with much interest, but it seems that the initiative has got stuck on the fundamental challenge of finding child-like analogies for concepts that are too abstract even for well-educated grown-ups. As has been pointed out many times, didactics or ‘framing’ is perhaps MMT’s biggest strategic challenge. 

Looking at my own children, a lot if not most of their learning happens not by chewing on concepts but through play, often enough by integrating recent experiences into their favourite games. Hence, what might work better than verbal explanations is an adaptation of the popular ‘Monopoly’ board game: Modern Money Monopoly (MMM).

Of course, individual features of ‘Monopoly’ have come up here and there as an analogy in various MMT blogs. In this context I should like to refer to J.D. Alt’s interesting piece “Playing Monopolis Monopoly: An inquiry into why we are making ourselves so miserable” which was posted on New Economic Perspectives on 17 May, 2012 in which the author suggests to put ‘Monopoly’ into a modern money context and runs through certain extension of the traditional rules*). Alt’s ‘Monopolis’ and MMM have certain similarities.

However, in order to help children develop a complete understanding of modern money in a playful way it is necessary to turn the original ‘Monopoly’ from a micro-economic ‘money-drop’ view into a game that accurately reflects the use of money, macro accounting and sector balances, albeit in a simplified fashion. The advantage of starting with a well-known family game is that a lot can be taught and learned by comparing the original game with the new rules under MMM.

Before discussing the didactic benefits (and limits) of MMM, I should set out how to play this game:

All you need is a classic ‘Monopoly’ board game (for reasons that I will set out further down, I’d have a slight preference for a more recent version that uses debit cards, but the good old paper money version will do, too). Then, you must make the following changes to the rules (everything else stays as in original):

Objective: Achieve the highest net worth over any period of time or number of rounds which can be determined at the outset of the game. Given rule #6.4 bankrupting your mates is not a suitable goal. In fact, the only monopolist at the table is the gov’t (bank) with its money.

#1 – Getting started

1.1 – Instead of starting with hand-outs of ‘helicopter drops’ of money from the bank as in the original:

1.1.1 – All property cards are distributed roughly equally amongst players;

1.1.2 – Houses and hotels go into a ‘pool’, which belongs to all players;

1.1.3 – No cash is distributed at the start; players do not receive ‘salaries’ when passing ‘GO’

1.2 – Change the composition of the ‘chance’ and ‘community chest’ stacks as follows:

1.2.1 – Take out all ‘money drop’ cards, such as cards which grant presents; prizes; inheritance; dividends, etc.;

1.2.2 – Remove random taxes, penalties, fees etc. since these cards will worsen the deflationary drag on the game;

1.2.3 – “Advance to” cards stay in the game

1.3 – The “Income Tax” spaces on the board shall be ignored (players landing on these spaces are encouraged to ponder the beauty of modern money)

#2 – Players are free to develop their properties right from the start:

2.1 – Take rent (which is receivable even in the event of the owner being in jail);

2.2 – Buy and sell property cards;

2.3 – Build houses and hotels at any time (no need to own a series or to build evenly across each lot);

2.3.1 – Houses and hotels must be acquired from the pool (see #1.1.2);

2.3.2 – When buying from the pool, the proceeds are evenly divided amongst the other players (excluding, of course, the player making the purchase)

2.4 – Buy, sell or mortgage property or issue IOUs (see ##4, 5)

#3 – After the 1st round, upon passing (or landing on) ‘GO’ each player has to pay cash taxes to the gov’t (bank).

3.1 – The tax is calculated as the higher of ¼ of the per round salary receivable in the original game and 5% of the cost of houses and hotels that a player has built;

3.2 –Taxes (as well as any other payments due to the gov’t (bank) must be paid in cash (HPM or bank money) immediately; private IOUs will not be accepted;

3.3 – It is possible to sell property (property cards, houses or hotels) to the government in order to cover tax liabilities (see #5)

#4 – Cash requirements/ payments can be met as follows:

4.1 – Sale of property to other players (see #5.1);

4.2 – Sale of property to the gov’t (bank) (see #5.2);

4.3 – Taking out mortgage loans of up to ½ of the nominal value of each property card; interest is paid through a redemption premium of 20% (the bank will not accept private IOUs);

4.3.1 – The ‘Go-to-prison’ cards in the ‘chance’ and ‘community chest’ stacks are re-designated as “There is a banking crisis – the bank calls all outstanding loans at their redemption amount”

4.3.2 – Loans don’t prevent receiving income on or developing property;

4.4 – Issuance of private IOUs to other players;

4.5 – Bartering property cards with other players

#5 – Sale of property

5.1 – Private players can buy and sell or swap property at any rate that they can negotiate amongst each other;

5.1.1 – A developed property need not be stripped (unlike #5.3 below);

5.2 – The gov’t (bank) will buy any property at the higher of cost (nominal value on card + ½ cost of houses) and the rent receivable, less any outstanding mortgages at the redemption rate;

5.3 – Property sold to the gov’t (bank) is stripped down and made available for sale (see #5.3.3):

5.3.1 – Houses and/ or hotels go back to the pool (see #1.1.2);

5.3.2 – Players which land on a space available for sale may purchase it at face value

5.3.3 – If a player who has landed on a space owned by the gov’t (bank) declines to buy it, the gov’t (bank) can try to sell it through a ‘Dutch’ auction starting at face value in which all players including the player who has landed on the space can bid

#6 – The gov’t (bank) will take active measures in the following cases:

6.1 – If after 8 rounds more than 9 houses or an equivalent amount (i.e. more than 4 houses and 1 hotel; or more than 2 hotels) are left in the pool, the gov’t (bank) will reduce the tax per #3.1 by one half and purchase all the houses and hotels at the minimum price;

6.1.1 – the houses and hotels that the gov’t (bank) has acquired will be returned to the pool after one round;

6.1.2 – If an auction per #5.3.3 fails to clear at more than 25% of a property card’s face value, the gov’t (bank) shall reduce the taxes per #3.1 by one half until either (i) next auction clears above 25% or (ii) rule #6.3 (see below) applies

6.2 – If there is a banking crisis per #4.3.1 the gov’t (bank) will ‘buy’ the loans of all but the most indebted player which, hence, needn’t be called (in effect, only the most indebted player gets hit by the bank’s ‘call’ until the next chance or community card calling for a banking crisis is drawn)

6.3 – If for more than two rounds there have been no houses or hotels left in the pool and the government holds no property cards, the round tax payable upon passing ‘GO’ is doubled until the gov’t (bank) holds one or more property cards or the pool starts filling up with houses and hotels in which case the tax goes back to ‘normal’ (see #3.1) or #6.1 is applied

6.4 – Should any one player own more than 50% of all slots, the excess property over 50% of that player will be expropriated at cost (i.e. face value of property card + ½ of cost of houses/ hotels)


The game can be played in variations:

‘The Austerity Game’: if one wants to simulate a Government Budget Constraint one player must keep track of gov’t (bank) disbursements (this will be so boring in itself that your children will likely refuse to play the GBC version, as instructive as that may be – I trust that they’ll get the idea anyway…). Should aggregate disbursements at any point exceed the cumulative taxes collected by a factor of 2, the following rules should be disapplied until all taxes received throughout the game match all purchases of property from players (i.e. a ‘balanced budget’):

–   #1.2.2

–   #1.3

–   ##4.2, 5.1, and 5.3

In addition taxes per #3.1 will be doubled

‘The Austrian Game’: no gov’t (bank); just private money; in that case the following rules will be suspended:

–   ##1.2.3; 3; 4.2; 5.1, 5.3; and

–   #6

 Good luck with that…

 Observations from running test games**

– The idea is to play a game that should be fun for children while at the same time being fairly realistic and instructive

– MMM turns the classic ‘Monopoly’ game into a macro-economic game (MMters of a libertarian bent will be thrilled that at the outset all property cards and the pool belong to private individuals and all the state ‘has’ is the power of taxation and money). By matching spending and income and introducing an element of trust break-up (see #6.4), the sense of all-out dog-eat-dog competition may be mellowed or may even go away altogether

– Things to point out during or after the game:

  • Property cards stand for goods and services provided by the private sector
  • Houses and hotels represent value-add and private sector investment (note that while houses and/ or hotels are fixtures when they form part of a property and drive higher rents, houses as such are treated as inexhaustible not unlike human labour; the fact that houses and hotels can only be acquired from the other players through the pool simulates the division of labour and provides additional sources of income;
  • The pool itself is a proxy for capacity utilisation in the economy incl. employment. Given the propensity to save due to bank crisis cards (see ##4.3.1; 6.2) as a proxy for general uncertainty it can easily be shown that (i) not all money held by players will drive demand; (ii) only government spending is able to close the demand gap resulting in excess capacity; and that (iii) such gov’t (bank) spending adds to each player’s wealth. Ask the children what they think the true ‘cost’, if any, of the removing the excess capacity was.
  • The gov’t (bank) is treated as one single entity since banks perform important functions for the economy as a whole; also, it may help to explain that the nature of commercial banking should be that of a public private partnership. Also, the book keeping involved in separating gov’t and bank, as interesting as they may be to the armchair economist does slow down the game considerably – the last thing want when playing a new game with children.
  • Box with paper money (bank) is an opportunity to point out that paper money in the bank has no bearing on how the game proceeds (“if it doesn’t come out of the box it isn’t really there and when it goes into the box it’s gone…; the only way it comes out of the box and into the game is if when you take out a loan which doesn’t make you richer or if it is spent into the game by the government which does make you richer”).
    • From the point of view of making it apparent that the government doesn’t need ‘stuff’ to make money and that HPM are electronic entries, playing the game with electronic debit cards may be more intuitive (if you are attached to your old paper money game consider replacing the paper money with entries on pocket calculators for each child)
    • For a more advanced form of MMM consider using different money things for each, e.g. paper money provided in the game for HPM and mere ‘booking entries’ or entries in pocket calculators for the bank money created through loans or vice versa (there are pedagogic draw-backs to each option)

–  What MMM helps to illustrate:

  • Rather than coming out of the blue, money is created and destroyed through transactions only (endogenous money);
  • Basic macroeconomic relationships, such as spending equals income; source of profits; the relationship between investment and savings
  • Sector balances in a 2-sector economy;
  • A general sense of stocks and flows in a modern monetary economy
  • Demand is at the core of economic activity;
  • The risks in creating too much bank money (see #4.3.1) and that while it is prudent to keep a certain amount of cash in reserve (savings) lest you get snagged by the bank crisis card, doing so in aggregate slows down the game
  • The rules around banking also help to illustrate the difference between inside and outside net wealth, since the game is likely to quickly stagnate without the help of the gov’t (bank). If the only money that players use is bank money the value-add realised through building houses can only be re-distributed at the expense of other players since the money is fixed at ½ the aggregate property values. Taxes and the risk of banking crisis will put a further drag on the game. It is therefore easy to point out to the children that the only source of additional money is the gov’t (bank). This will become clear particularly if the Austrian version is played, which assumes in essence a single sector economy without any possibility for outside wealth.
  • Since MMM assumes a consolidated treasury, central bank and commercial banking sector certain complexities such as central banking operating procedures can be ignored without reducing the economic accuracy of the game;
  • Since the children start off holding property and will, most likely, raise most of their starting cash through mortgages one can easily explain that savings are not required for lending

I trust you will enjoy playing this game. Especially the first game is a real eye opener for the children since they simply cannot imagine that our little game of MMM can get off the ground without ‘money’ to start with.

Even if MMM is perhaps not the comprehensive MMT-primer for kids everyone was looking for, it is fun to play and the kids do learn a fair bit about the working of a monetary economy. 


*) – I am particularly grateful to Stephanie Kelton for pointing Alt’s article out to me.

**) I am indebted to Dr. Dirk Ehnts, my German partner in all matters MMT, who played an earlier version of the game with his students at the Berlin School of Economics and Law. Dirk has made helpful suggestions of how the game could be more fully developed for grown-ups. My sister-in-law Alexandra von Rotberg and my children, above all Jakob Hofmann, deserve to be mentioned for giving up valuable holiday time to test-run MMM.


16 responses to “Introducing Modern Money Monopoly (MMM)

  1. Pingback: Introducing Modern Money Monopoly (MMM) | The M...