A Young Man's Guide to Late Capitalism (26 page)

Catacora squinted, and Gabriel knew that he'd pushed too hard and aroused his suspicion. He wasn't acting like a freelance journalist. He knew too much, for one thing—not just that Catacora had been selected to head the finance ministry, but the contents of his master's thesis—and he'd passed on an exclusive, supposedly holding out for something better. It was odd. "I don't know," Catacora said. "Honestly, we haven't made it to that level of specificity."

Gabriel scribbled the word
nada
on his pad. If he'd had more time, he might have called it a day and circled back later, but he didn't have more time, so he looked up and said, "The inauguration is approaching quickly."

"Yes. We just had the election and then the holidays and now Evo is preparing to leave on this journey. He and I have barely had a chance to talk. We are trying to figure these things out as quickly as possible, but it might not be solidified until after he takes office."

"I can wait a couple days."

Catacora leaned forward, pursed his lips, and frowned at his desk in contemplation. Gabriel sensed that Catacora was about to turn the questions on him and he readied himself.

"Can I read your most recent article about Bolivia?" Catacora said. "I Googled you, but there wasn't anything recent."

"I haven't published anything since I came down."

"You're not—do you work for one of the gas companies?"

"
What?
" He hadn't seen that coming. "No, not at all. God, I wish I did. I could use the money. That would be tremendous! I'm not—you do realize I'm staying at Hotel Gloria."

"I know. It just seems strange. You're not with the U.S. government either, right?"

Gabriel was relieved by the craziness of the accusations. He shook his head, sincerely amused. "Like the CIA? That would be nice too. And I won't complain if you decide to spread
that
rumor! I'd be the talk of the town. But, really, would I be asking these questions?"

Catacora shrugged. "I suppose not. I've just never met a journalist who is not in a hurry to publish his exclusives."

"I need something bigger. When I was at
IBI,
I wrote a lot of hundred-word briefs, and I'm done with that. Knowing the name of the Bolivian finance minister a few days before the rest of the press isn't all that remarkable. I'll do it—I'll do that brief if I have to, but I hope I don't have to do it. Look, I'll give you a few days, and if I don't hear from you by the end of the day on Thursday, it'll go forward like that."

"And what will you write?"

Gabriel didn't reply. This was his opportunity to twist the man's arm. He gave a look that indicated that he considered it a regrettable thing, but he was willing to do it.

Catacora absorbed the implication without any help. He considered the situation for a moment and then spoke. "You'll write that we don't even have a plan for our fiscal policy?"

"It's the truth, right? You say you want to nationalize gas, but there's no plan."

Catacora shook his head dismissively, but it was a lost cause. He was cornered. Gabriel had something that was newsworthy enough to get his article sold, and all he knew so far was that they hadn't even formulated a vague plan of action. Not the kind of news that an incoming administration wants publicized.

"You'll call me in the next couple days?" Gabriel said.

"By the end of Thursday I will call you."

"No problem. But if I don't hear from you..." He let it dangle like that.

Catacora blinked quickly, nodding. It was understood.

In his second year at Brown, Gabriel had become interested in game theory. Particularly, he was interested in the argument about its efficacy. Marooned between the social sciences and mathematics, advocates of game theory are often conflicted about their purpose: to study human behavior or to study the mathematical models themselves.

Game theory is built on fictional scenarios, or games, which require the adoption of assumptions that ensure that the fictional players are competing on a set playing field; the precise assumptions about the playing field vary from game to game. The assumptions are known as the Nash equilibria—named for John Nash, the schizophrenic Nobel Prize—winning mathematician.

Game theory's most famous example is the Prisoner's Dilemma:

Two suspects are arrested by the police. They are put in separate cells, and each one is told this: "If you testify against your partner, and your partner remains silent, you will go free and your partner will go to jail for ten years. If you both say nothing, you'll both go to jail, but only for six months on a minor charge, since we don't have enough evidence to convict either of you of a major crime. If you both testify against each other, both of you will receive five-year sentences." Each prisoner must choose to betray the other or to remain silent.

What should the prisoners do?

The playoff matrix looks like this:

The assumption is that each prisoner is interested only in minimizing his own jail time and couldn't care less what happens to the other. If all the equilibria are in place, the dilemma produces a non-zero-sum outcome; that is, the gains and losses will not balance. Each prisoner is better off betraying his partner no matter what the other does. However, the result is counterintuitive: If each prisoner acts in his own best interest, each will get a five-year sentence. But if the prisoners cooperate with each other, each one gets a lighter sentence.

In the more complex Iterated Prisoner's Dilemma, the prisoners are repeatedly confronted with the same situation and can learn from their mistakes. In these repeated games, players can adapt and change their strategies, leading to better outcomes. Certain iterated games show that what looks like altruism is actually purely rational and self-interested behavior.

Of course, the assumptions in the Prisoner's Dilemma and all of its variants are fictitious. The fact that the equilibria don't match up with real-world circumstances is, according to game theorists, beside the point. They work with models analogous to the models used in physics. To game theorists, their models describe perfect human behavior. The results are prescriptive, not descriptive.

In the mid-1960s, an unpopular group of social scientists tried to develop
descriptive
models for classic game-theory schema. They presented actual people with the situations from game theory's games and found that their subjects almost never chose the rational response.

These empirical studies often debunked basic Nash equilibria, including, crucially, the notion that people always aim to maximize their individual wins. The results became statistical and varied—best organized on vast spreadsheets, rather than in tight mathematical formulas. The work remained unhelpful, if not an affront, to traditional game theorists.

In an abstract for a paper criticizing the findings of some of his empiricist peers, Yale mathematician Niles Gilbert wrote, "While it might be entertaining to see how individuals handle these games, it is the work of psychologists. Mathematically, I see nothing of use. The data appear intended to point out the real-world fallibility of the Nash equilibria, as if that were ever in question ... More to the point, their methodology, I'm sorry to say, demonstrates a complete misunderstanding of our very enterprise."

Gabriel had continued to be interested in game theory during his years at Brown, and had even written two papers on the Closed-Bag Exchange game as it applied to the problem of moral hazard in bailout packages during credit crises. He'd followed the mathematics. He'd untangled the formulas and pursued the issue to the limit of his curiosity.

Later, when he started digging into the skewed results of theoretical economics in his senior year, specifically the inflexible CPI basket that was used to measure inflation, Gabriel grew wary of the more strictly mathematical version of anything in economics. When it came to formulating actual policies and grappling with real phenomena, theorists were working with broken assumptions. The empirical side might be less pure—might even be unhelpful to theorists—but Gabriel wasn't a theorist. He wasn't, finally, a quant.

For better or worse, he dealt with real people. The tangible and messy world interested him. He wanted the place where players' information was forever imperfect, their motives inexplicable, where if you wanted to play well, you had better get used to working with blurry integers.

Gabriel stopped in at MAS's office on the way back to his hotel. Lenka was leaving for Sucre that afternoon. She and Evo would be in Sucre for the next two nights. The banner had come down, and the desks were mostly cleared. A handful of employees helped direct movers. Otherwise, the office was empty. He walked across the room and peeked in the window of Lenka's office, but she wasn't there.

Gabriel went down the hall, looking for her. He heard voices ahead, from a conference room. He opened the door, knocking as he did so.

Inside, he found Lenka, Evo Morales, and a few others around a table. They stopped talking and turned to stare at him. He saw newspapers stacked on the conference table. He hesitated—would it be a mistake to indicate that he knew her? Before he could finish his calculations, Evo said, "Can we help you? Are you looking for someone?"

"I didn't mean to interrupt," Gabriel said. "I—" He was dumbstruck.

"Are you a journalist?" Evo said.

Gabriel glanced at Lenka. "Yes," he said. "I—" He hesitated.

"I was supposed to talk to him," Lenka said. She glanced at her watch and said, "If you want to go sit at Café Presidentes, I'll find you there when I'm done. Sorry I'm late."

He nodded and was about to turn away, but then he paused, stepped forward, and extended his right hand to Evo. "Congratulations, by the way," he said.

Evo shook his hand. "Thank you." He had a powerful grip, meaty hands.

Evo released his hand, and Gabriel looked at the other faces: Lenka's coworkers, all of them. Maybe she'd mentioned a freelance journalist, but it was unlikely. Some had probably seen him come around that day for lunch, but they wouldn't remember. To them, he was just another journalist who was there to talk to Lenka.

He hurried back down the carpeted hallway, his right hand tingling at his side.

His mother would be shaking Evo's hand too in a few days. Or would she kiss his cheek? Gabriel played out possibilities, outcomes. Would someone—maybe Lenka herself, unwittingly—point out to Evo that he'd met the woman's son recently?

My son? The one who is here working for BellSouth? I hadn't realized he...

The rest was too unpleasant even to consider. The awkwardness. The overturned expectations. A presidential interview postponed. Or would his mother continue with the interview? Would she be able to successfully compartmentalize Gabriel's betrayal? Probably. She'd be stoic, if visibly heartbroken. She'd get through it. Gabriel's life, however, would explode. It would be thunderous—a slow-motion action-movie explosion, a grandiose fireball explosion. And when that was done, Gabriel's life would be done. Not even a flake of ash would remain.

In the game Gabriel had focused on in college, two people meet and exchange closed bags. It's a simple transaction: the sale of something illicit, maybe. It's conducted in public, where neither person can open his bag. One person is supposed to give a bag of money, and the other person is supposed to give a bag with the goods. Because the bags are closed, each player can choose to honor the agreement, or he can "defect" from the deal by turning over an empty bag weighted with something worthless. If the exchange goes as planned, both players come away with a reasonable profit. If only one player defects, he gains hugely, because not only does he not forfeit his prize, he gains the prize of the other player.

The payoff matrix:

When all the appropriate Nash equilibria are in place, the rational player will turn over an empty bag. The rational choice is to defect. The game is
truly
zero-sum.

The players should lie to each other, each promising to deliver on his end. Then they should meet up and exchange empty bags.

The correct scenario is lose-lose. That is the only rational outcome.

The café was empty. Gabriel ordered a cappuccino and salteña. The metal steamer wailed as the barista foamed a jug of milk. At the window, Gabriel stood on a chair to get a better view of a small demonstration outside. A line of police guarded the palace. Behind him, the espresso machine reached a shrieking crescendo and then went abruptly silent. He picked up his cappuccino. They served the best cappuccino in La Paz. The place was called Café los Presidentes Ahorcados, which meant "the hanged presidents." A colorful mural behind the counter showed the hanging of President Gualberto Villarroel in 1947, a pigeon perched on his head, the Neptune fountain splashing in the background.

Gabriel returned to the window and monitored the crowd. Who were they and what were they protesting? He had no idea and he didn't care. He'd given up trying to decipher their motivations. They had won, fair and square, and yet there they were, back in the plaza, the day after Christmas, braying some new complaint. He knew they had reason to be upset, maybe more than anyone else on the continent, but the ceaselessness of it, especially considering the recent election, made no sense to him.