A level Economics: Starting Fair and Dealing with Luck: Comparing Monopoly and Real Economies

 ChatGPT

Think about Monopoly, the game where you buy properties and compete to win. Now, let's compare it with how the real world works when it comes to money, businesses, and luck.

In Monopoly, every player starts with the same amount of money. This makes sure that nobody gets an advantage right away. It's like starting a race with everyone on the same line. This makes the game about skills and strategy.

But in real life, things can be different. Some people start with more money or better chances. It's like some players in Monopoly starting ahead with better properties. This isn't fair, and it's how it is in the real world sometimes.

In Monopoly, luck comes into play with the roll of dice and the cards you draw. Sometimes you land on good spots, and sometimes not. Luck can make a big difference in the game. Similarly, real life has surprises too. New inventions, what people want to buy, and unexpected events can change how well businesses and people do.

But here's where they're not the same. In Monopoly, luck only matters during the game. In real life, luck is just one piece of the puzzle. Real life is more complicated. It's not just about luck – it's about how things are made, what people like, and rules set by governments. All of these things make the real world much harder to predict than a game.

So, in Monopoly, luck follows the game's rules. In real life, luck mixes with many other things, making it more complex. The comparison between Monopoly and real life reminds us that the real world is unfair and trickier.

Inherited wealth is an injustice. Let's end it

Inheritance, which rewards the wealthy for doing nothing, is once again becoming a key route to riches – just as it was in the Victorian era

• 
• • James Butler
  • theguardian.com, Wednesday 26 March 2014 15.08 GMT

'The transfer of wealth between generations allows access to privileges that are otherwise beyond reach.' Photograph: Cultura Creative (RF) / Alamy/Alamy

Inherited wealth is the great taboo of British politics. Nobody likes to talk about it, but it determines a huge number of outcomes: from participation in public life, to access to education, to the ability to save or purchase property. When David Cameron recently promised to raise the threshold for inheritance tax to £1m and praised "people who have worked hard and saved", he is singing from the hymn sheet of inherited inequality: it is, after all, easier to save if you inherit substantial sums to squirrel away, or if you can lock money in property that is virtually guaranteed to offer huge returns. Hard work has very little to do with it.

In 2010-11, the most recent period for which we have figures, 15,584 estates of 259,989 notified for probate paid inheritance tax. That is approximately 3% of all deaths that year. Already, inheritance tax is paid by a tiny fraction of all estates. The asset composition of these estates remains stable over time, with property composing about 50% of taxable estates; a disproportionate number of these are located in London and the south-east, reflecting the rocketing house prices in that corner of the country. The "nil-rate threshold" – the value under which inherited wealth is untouched by tax – currently stands at £325,000, frozen since April 2009. But that's only half the story. Since 2007, it has been possible for spouses to transfer their unused nil-rate band allowance to their surviving partner. This has lifted many estates in the £300-500,000 band out of inheritance tax altogether: at this point we are beginning to talk about substantial, indeed life-altering, sums of money.

Beyond these key figures lies a hinterland of tax-minimisation strategies through which assets can be exempted from tax, including various types of trust and business property relief. Despite nominal efforts to curb this kind of minimisation, there remains a booming market in financial advice tailored to avoidance. The knock-on effects of this minimisation are huge: it permits further concentration of wealth in the hands of those who already possess it, rewarding those cunning enough to avoid taxation, and cushioning their children with an influx of unearned wealth. There are obvious uses to which this can be put: paying off student loans early, thus avoiding interest, investing in buy-to-let property, or high-return financial products. It permits the children of the middle classes to sustain themselves through unpaid internships or unfunded study into secure middle-class careers, while locking these off from those without such resources. Given the chancellor's recent changes to pensions, the flow of cash into property as a secure income stream for the already wealthy is only likely to increase. Again, despite the rhetoric, this has little to do with hard work, but the preservation of wealth gaps between classes.

Why do we permit this? The transfer of wealth between generations is an injustice: it is a reward for no work, and a form of access to privileges that are otherwise beyond reach. Professor Thomas Piketty, in his new book Capital in the Twenty-First Century, makes the argument that, after a social-democratic blip in the middle of the last century, inheritance is once again becoming the key route to wealth. Piketty argues that if wealth is concentrated and the return on capital is higher than the economy's growth rate, inherited wealth will grow more rapidly than that stemming from work. This returns us to the terrain of Balzac and Austen, where the road to financial security is to target those who already possess wealth and, where possible, marry them. The data Piketty analyses – a huge and comprehensive set – suggests that the proportion of people receiving a sum in inheritance larger than the lifetime earnings of the bottom 50% is set to return to 19th-century levels in the next couple of decades. Pleasant news for our neo-Victorian government; less pleasant for the rest of us, and a disaster for anyone who cares about inequality.

It is difficult to justify inherited wealth from anything other than a class-partisan position. It is the point where the already threadbare veil of "meritocracy" falls off to reveal a fiscal system designed to reward already concentrated pots of wealth. Far from a Keynesian "euthanasia of the rentier", we are seeing the triumph of a rentier economy: in such conditions, rather than further accumulation by the sons and daughters of the wealthy, we should instead demand an end to inherited wealth entirely.

Hockey - The untold story of how India lost world supremacy

by Minhaz Merchant in the Times of India

Pakistan’s hockey stars have been forced out of the lucrative new Hockey India League, patterned on the cash-rich IPL. I will leave debate on the rights and wrongs of this to a later post as a sequel to Make Pakistan pay. For the moment, let’s stick to hockey – how India lost its global supremacy and how we can regain it.

One afternoon, as I watched the late Tiger Pataudi, India’s former Test cricket captain, playing a hockey match at Bombay Gymkhana, I realized that few were aware how good a hockey player Tiger was. He had long retired from Test cricket but played a brilliant game for the club that afternoon.

Later, chatting casually, he remarked, pointing to the lush green field: “The tragedy of Indian hockey is that we no longer play on grass like this.” Tiger was appalled that the international game had switched to astroturf, putting Indian players at such a disadvantage.

Between 1928 and 1980, India won 8 Olympic gold medals in hockey. After 1980, we have not won a single hockey gold. At the 2012 London Olympics, India’s hockey team finished last in a field of 12.

The reasons for this are complex. But a principal cause is the betrayal of the country’s national sport by those elected to guard it and the ruthless duplicity of European and Australasian hockey authorities.

Till the early-1970s, hockey globally was played on grass. Indian players, bred on the fields of Punjab, Kerala and Goa, were unbeatable. Only Pakistan, with a similar lineage, offered competition.

All that changed in the mid-1970s. The International Hockey Federation (FIH) altered the rules to make synthetic astroturf the mandatory playing surface for international hockey tournaments.

The 1976 Olympics in Montreal was the first Games in which astroturf was used in hockey. For the first time since it began playing hockey in the 1928 Games in Amsterdam, India did not win even a bronze medal. The Indian Hockey Federation (IHF) should have objected. Whether through collusion or apathy, it did not. All Olympic Games henceforth were played on hard astroturf.

India has few astroturf grounds. They are expensive to lay (over Rs. 8 crore) and difficult to play on. While grass, on which hockey had been played internationally for nearly a century, allowed skilled Indian and Pakistani players to trap the ball, dribble and pass, astroturf suits the physicality of European and Australian hockey players based on raw power rather than technical skill.

Affluent Western countries like Holland, Germany and Australia have hundreds of astroturf grounds. The advantage is palpable. Not surprisingly, since 1980, Europe and Australia have dominated world hockey. India and Pakistan have slipped out of the world’s top five hockey-playing nations.

Indian sports administrators must share the blame. Not only were they complicit in allowing the change in playing surface from grass to synthetic astroturf, they were slow to adapt to it once the rules had been changed. Astroturf grounds were not laid. Local tournaments continued to be played on grass. When India played abroad, it started with a huge handicap.

As Sardara Singh, currently India’s best hockey international, said in a television interview, “Hockey players in India play on astroturf for the first time at the age of 19 or 20 and find it hard to adapt.”

What is the way forward? While astroturf cannot now be wished away, India can use its growing commercial influence to host a separate annual field hockey tournament. The game would be transformed. Just as tennis is played on different surfaces (grass at Wimbledon, clay at the French Open and hard courts at the US and Australian Opens), there is no reason why hockey can’t have two optional surfaces: astroturf and grass.

Like tennis players adapt to grass, clay and hard courts within a span of months (between the French Open in May, Wimbledon in July and the US Open in September), so can professional hockey players. Grass is hockey’s natural surface. It tests skill not just strength.

India’s hockey authorities, fractured by internecine rivalries, have little global clout. It is India’s corporate sector, with an interest in future Olympic gold medals, which must lead the campaign to restore natural turf as one of two alternative playing surfaces of choice in future international hockey tournaments. The new Hockey India League could set the example in its next edition. Sponsorships for field hockey tournaments would follow.

India has begun winning Olympic medals in individual sports since the Beijing Games but none in team sports like hockey. That must change. In India less than 0.1% of the population (around one million) has access to the facilities, nutrition and training athletes from Western countries and China do. In “sports-access” terms, our population is equivalent to New Zealand’s. It is no shame to win fewer medals than smaller, richer countries. But it is a shame not to give our national sport, hockey, a level playing field.