EDITORIAL: It's the Monopoly, Stupid!

I wrote in a previous article about James Carville’s campaign mantra, “It’s the economy, stupid,” which helped refocus political discourse on the real kitchen table issues that matter most to voters. I wrote “it's the land, stupid” to focus on land rent as the core problem with the economy. While I still believe it is the land, I think we can narrow it down to a more specific concept that needs some explaining: “It’s the monopoly, stupid.”

Henry George, the 19th-century economist and author of Progress and Poverty, warned us about the dangers of conflating legitimate profits from capital with the unearned income of monopolies. George wrote that what is often confused as capital, such as stocks and bonds which only represent debts and not real capital, are forms of unearned income. Earned income is only derived from real physical and mental exertion (labor) or real physical material used in production (capital). This confusion has obscured the true cause of inequality: economic rent, the unearned income derived from monopolistic control over land, natural resources, and government granted privileges.

The Marxist-Georgist Difference

Karl Marx saw capitalism as inherently exploitative, blaming the profit motive for wealth concentration and worker exploitation. But Georgists argue the issue is not capital itself; it’s the monopolistic extraction of rent. Capitalists, in the classical sense, provide the material wealth necessary for production and earn profits (or “interest”) for their contributions. This profit incentivizes innovation, real investment, and industrial rather than just financial economic growth. Working class people need access to their own capital as well. Marxists critique the entire concept of private property, confusing land and capital as the same factor of production. But as we've long discussed, land is naturally occuring and capital requires the input of human labor to exist.

Monopolists, however, operate differently than capitalists. They extract rents by withholding resources, restricting supply, and exploiting privileges, rather than by creating wealth. Landlords, for instance, constrict the housing supply, driving rents ever higher. Banks create artificial scarcity in the supply of loanable funds through the government-granted monopolistic control of credit. Even the American Medical Association limits the supply of certified doctors, inflating healthcare costs. Other natural monopolies such as power and water utilities are needed to be publicly owned cooperatives because leaving them privatized would drive up energy and water costs. Private monopolists siphon wealth from society without contributing to its production. Their gains are economic rents, or profits that come not from creating, but from controlling and restricting.

Monopolies Are Why the Rent is Too Damn High

To understand monopolies, we must understand the concept of economic rent. Unlike wages (compensation for labor) or legitimate profits (returns on capital), rents are income derived from ownership or control of a scarce non-reproducible resource. This includes insurance monopolies and patent monopolies like pharmaceutical companies denying competitors access to medicine recipes and production rights. Monopolies come in many ways:

• Natural monopolies control resources like land, electricity and transportation that have high fixed costs and other barriers to entry for new businesses.

• Artificial monopolies are granted by government privilege, like patents or exclusive contracts. Private, for-profit weapons manufacturers in the military industrial complex are rent seeking monopolists.

• Monopsonies dominate as buyers, squeezing suppliers (e.g., Amazon’s treatment of small vendors, and grocery store conglomerates short changing small farmers).

• Oligopolies are markets dominated by a handful of large corporations that give the illusion of competition but implicitly collude to share power and profits.

Contrary to popular belief, monopolies don’t need to own entire markets to wield outsized power. Whether through outright dominance, price-fixing, or restricting supply, monopolists concentrate control over markets that should be competitive.

Monopoly is “The Landlord’s Game”

The board game Monopoly was originally designed to teach this lesson. Lizzie Magie’s The Landlord’s Game aimed to illustrate how land speculation and rent-seeking create inequality. Ironically, Hasbro’s monopoly on the game’s intellectual property erased its radical origins, turning it into a celebration of capitalism gone awry. The history of Monopoly is a metaphor for how monopolists hide in plain sight, like a chameleon, under the banners of both free market capitalism and government intervention.

The Blind Spots of Left and Right

Monopolies thrive in part because of ideological blind spots on both the left and right. To socialists and anti-capitalists, monopolies are the natural outcome of unfettered free markets and private property, and there is a logic to this. To conservatives and libertarians, monopolies result from government overreach. Both perspectives are partially true, but they’re like the analogy of the blind monks describing an elephant: each sees only part of the whole.

The reality is that monopolies emerge when markets are manipulated, either through private hoarding of land and resources or public policies that entrench privilege. A truly free market cannot exist without addressing these distortions.

The Georgist Solution

The taxing and nationalization of monopolies are essential to restoring competition and fairness in the market. Henry George’s land value tax (LVT) is one way to ensure that monopolies, if they must exist, serve the public good. By taxing economic rents and leaving wages and capital profits untaxed, an LVT encourages productive use of resources while funding public needs without penalizing workers or producers.

Both progressives and libertarians should recognize that monopolies stifle the freedom they cherish. A Georgist approach allows markets to flourish by ensuring that land and resources, our shared inheritance, benefit everyone, not just a privileged few.

It’s time to move beyond ideological silos and recognize that monopolies, whether private or public, must be held accountable. If they are to exist, they must serve the public interest. Only then can workers, innovators, and real capitalists pursue their interests in a truly free market.