For The Win (26 page)

"But everyone
knows
gold is valuable. How did they all agree on this? That's where I started to get really fascinated. Because gold and money are really closely related. It used to be that money was just an easy way of carrying around gold. The government would fill a hole in the ground with gold, and then print notes saying, 'This note is worth so many grams of gold.' So rather than carrying heavy godl around to buy things, we could carry around easy paper money.

"It's funny, isn't it? We dig gold out of holes in the ground, weigh it, and then put it in another hole in the ground! What good is gold? Well, it puts a limit on how much money a government can make. If they want to make more money, they have to get more gold from somewhere. "

"Why does it matter how much money a country prints?"

"Well, imagine that the government decided to print a crore of rupees for every person in India. We'd all be rich, right?"

Yasmin thought for a moment. "No, of course not. Everything would get more expensive, right?"

He waggled his chin. He was sounding like a schoolteacher again. "Very good," he said. "That's inflation: more money makes everything more expensive. If inflation happened evenly, it wouldn't be so bad. Say your pay doubled overnight, and so did all the prices -- you'd be all right, because you could just buy as much as you could the day before, though it 'cost' twice as much. But there's a problem with this. Do you know what it is?"

Yasmin thought. "I don't know." She thought some more. Ashok was nodding at her, and she felt like it was something obvious, almost visible. "I just don't know."

"A hint," he said. "Savings."

She thought about this some more. "Savings. If you had money saved, it wouldn't double along with wages, right?" She shook her head. "I don't see why that's such a problem, though. We've got some money saved, but it's just a few thousand rupees. If wages doubled, we'd get that back quickly from the new money coming in."

He looked surprised, then laughed. "I'm sorry," he said. "Of course. But there are some people and companies and governments that have a
lot
of savings. Rich people might save crores of rupees -- those savings would be cut in half overnight. Or a hospital might have many crores saved for a new wing. Or the government or a union might have crores in savings for pensions. What if you work all your life for a pension of two thousand rupees a month, and then, a year before you're supposed to start collecting it, it gets cut in half?"

Yasmin didn't know anyone who had a pension, though she'd heard of them. "I don't know," she said. "You'd work, I suppose."

"You're not making this easy," Ashok said. "Let me put it this way: there are a lot of powerful, rich people who would be very upset if inflation wiped out their savings. But governments are very tempted by inflation. Say you're fighting an expensive war, and you need to buy tanks and pay the soldiers and put airplanes in the sky and keep the missiles rolling out of the factories. That's expensive stuff. You have to pay for it somehow. You could borrow the money --"

"Governments borrow money?"

"Oh yes, they're shocking beggars! They borrow it from other governments, from companies -- even from their own people. But if you're not likely to win the war -- or if victory will wipe you out -- then it's unlikely anyone will voluntarily lend you the money to fight it. But governments don't have to rely on voluntary payments, do they?"

Yasmin could see where this was going. "They can just tax people."

"Correct," he said. "If you weren't such a clearly sensible girl, I'd suggest you try a career as an economist, Yasmin! OK, so governments can just raise taxes. But people who have to pay too much tax are unlikely to vote for you the next time around. And if you're a dictator, nothing gets the revolutionaries out in the street faster than runaway taxation. So taxes are only of limited use in paying for a war."

"Which is why governments like inflation, right?"

"Correct again! First, governments can print a lot of money that they can use to buy missiles and tanks and so on, all the while borrowing even more, as fast as they can. Then, when prices and wages all go up and up -- say, a hundred times -- then suddenly it's very easy to repay all that money they borrowed. Maybe it took a thousand workers' tax to add up to a crore of rupees before inflation, and now it just takes one. Of course, the person who loaned you the money is in trouble, but by that time, you've won the war, gotten reelected, and all without crippling your country with debt. Bravo."

Yasmin turned this over. She found it surprisingly easy to follow -- all she had to do was think of what happened to the price of goods in the different games she played, going up and down, and she could easily see how inflation would work to some players' benefit and not others. "But governments don't have to use inflation just to win wars, do they?" She thought of the politicians who came through Dharavi, grubbing for the votes the people there might deliver. She thought of their promises. "You could use inflation to build schools, hospitals, that sort of thing. Then, when the debt caught up with you, you could just use inflation to wipe it out. You'd get a lot of votes that way, I'm quite sure."

"Oh yes, that's the other side of the equation. Governments are always trying to get re-elected with guns or butter -- or both. You can certainly get a lot of votes by buying a lot of inflationary hospitals and schools, but inflation is like fatty food -- you always pay the price for it eventually. Once hyperinflation sets in, no one can pay the teachers or nurses or doctors, so the next election is likely to end your career.

"But the temptation is powerful, very powerful. And that's where gold comes in. Can you think of how?"

Yasmin thought some more. Gold, inflation; inflation, gold. They danced in her head. Then she had it. "You can't make more money unless you have more gold, right?"

He beamed at her. "Gold star!" he said. "That's it exactly. That's what rich people like about gold. It is a disciplinarian, a policeman in the treasury, and it stops government from being tempted into funding their folly with fake money. If you have a lot of savings, you want to discipline the government's money-printing habits, because every rupee they print devalues your own wealth. But no government has enough gold to cover the money they've printed. Some governments fill their vaults with other valuable things, like other dollars or euros."

"So dollars and euros are based on gold, then?"

"Not at all!" No, they're backed by other currencies, and by little bits of metal, and by dreams and boasts. So at the end of the day, it's all based on nothing!"

"Just like game-gold!" she said.

"Another gold star! Even
gold
isn't based on gold! Most of the time, if you buy gold in the real world, you just buy a certificate saying that you own some bar of gold in some vault somewhere in the world. The postman doesn't deliver a gold-brick through your mail-slot. And here's the dirty secret about gold: there is more gold available through certificates of deposit than has ever been dug out of the ground."

"How is that possible?"

"How do you think it's possible?"

"Someone's printing certificates without having the gold to back them up?"

"That's a good theory. Here's what I think happens. Say you have a vault full of gold in Hong Kong. Call it a thousand bars. You sell the thousand bars' worth of gold through the certificate market, and lock the door. Now, some time later, someone -- a security guard, an executive at the bank -- walks into the vault and walks out again with ten gold bars from the middle of the pile. These ten bars of gold are sold at a metals market, and they end up in a vault in Switzerland, which prints certificates for
its
gold holdings and sells them on. Then, one day, an executive at the Swiss bank helps himself to ten bars from
that
vault and they get sold on the metals market. Before you know it, your ten bars of gold have been sold to a hundred different people."

"It's inflation!"

He clapped. "Top pupil! Correct. There's a saying from physics, 'It's turtles all the way down.' Do you know it? It comes from a story about a British physicist, Bertrand Russell, who gave a lecture about the universe, how the Earth goes around the Sun and so on. And a little old granny in the audience says, 'It's all rubbish! The world is flat and rests on the back of a turtle!' And Russell says, 'If that's so, what does the turtle stand on?' And the granny says, 'You can't fool me, sonny, it's turtles all the way down!'" In other words, what lives under the illusion is yet another illusion, and under that one is another illusion again. Supposedly good currency is backed by gold, but the gold itself doesn't exist. Bad currency isn't backed by gold, it's backed by other currencies, and
they
don't exist. At the end of the day, all that any of this is based on is, what, can you tell me?"

"Belief," Yasmin said. "Or fear, yes? Fear that if you stop believing in the money, you won't be able to buy anything. It
is
just like game-gold! I remember one time when Zombie Mecha started charging for buffs that used to be free and overnight, all the players left. The people who were left behind were so desperate, walking around, trying to hawk their gold and weapons, offering prices that were tiny compared to just a few days before. It was like everyone had stopped believing in Zombie Mecha and then it stopped existing! And then the game dropped its prices and people came back and the prices shot back up again."

"We call it 'confidence'," Ashok said. "If you have 'confidence' in the economy, you can use its money. If you don't have confidence in the economy, you want to get away from it and get it away from you. And it's turtles all the way down. There's almost nothing that's worth
anything
, except for confidence. Go to a steel foundry here in Mumbai and you'll find men risking their lives, working in the fires of hell in their bare feet without helmets or gloves, casting steel to make huge round metal plates to cover the sewer entrances in America. Why do they do it? Because they are given rupees -- which are worth nothing unless you have confidence in them. And why are they given rupees? Because someone -- the boss -- thinks that he'll get dollars for his steel discs. What are dollars worth?"

"Nothing?"

"
Nothing!
Unless you believe in them. And what about the discs -- what good are they? They're the wrong size for the sewer openings in Mumbai. You could melt them down and do something else with them, but apart from that, they're just bloody heavy biscuits that serve no useful purpose. So why does any of this happen?"

Yasmin said, "Oh, that's simple. You really don't know?"

"It's easy? Please, tell me. It's not easy for me and I've been studying it all my life."

"It all happens because it's a
game
!"

He looked offended. "Maybe it's a game for the rich and powerful -- but it's not any fun for the poor and the workers and the savers who get the wrong end of it."

"Games don't need to be
fun
, they only have to be, I don't know,
interesting
? No,
captivating
! There are so many times when I find myself playing and playing and playing, and I can't stop even though it's all gotten very boring and repetitive. 'One more quest,' I tell myself. 'One more kill.' And then again, 'One more, one more, one more.' The important thing about a game isn't how fun it is, it's how easy it is to start playing and how hard it is to stop."

"Aha. OK, that makes sense. What, specifically, makes it hard to stop?"

"Oh, many little things. For example, in Zombie Mecha, if you stop playing without going to a mecha-base, you get 'fatigued.' So when you come back to the game, you play worse and earn fewer points for making the same kills and running the same dungeons. So you think, 'OK, I'm done for today, time to go back to a base.' And you run for a base, which is never very close to the quests, and on the way, you get a new quest, a short one that has a lot of good rewards. You do the quest. Now you head for the base again, but again, you find yourself on a quest, but this one is a little longer than it seemed, and now even more time has gone by. Finally, you reach the base, but you've played so much that you've almost levelled up, and it would be a pity to stop playing now when just a few random kills would get you to the next level and then you can buy some very good new weapons and training at the base, so you hunt down some of the biters around the base-entrance, and now you level up, and you get some good new weapons, and you've also just unlocked many new quests. These quests are given to you when you reach the base, and some of them look very interesting, and now some of your friends have joined you, so you can group with them and run the quests together, which will be much quicker and a lot more fun. And by the time you stop, it's been three, sometimes four hours more play than you thought you'd do."

"This happens a lot?"

"Oh yes. Many times a week for me. And I don't even play for points -- I play to help the union! The more play you do, the more sense it makes to keep on playing. All this business with gold and rupees and dollars and steel plates -- we play that game all the time, don't we? So of course it works. Everyone plays it because everyone has played it all their lives."

"I can see why Big Sister Nor told me I must talk with you," he said. "You're a very clever girl."

She looked down.

"What do we do about Big Sister Nor?"

"She thinks we need to find money and support for the strikers. I think she needs money and support for
herself
. She says she's fine, but she's in hospital and it sounds like she was badly beaten."

"How do we get her support from here? They're so far away." Thinking:
Mumbai's opposite corner is far away for me -- China might as well be the moon or the Mushroom Kingdom.
"And how do we know that Big Sister Nor will be safe where she is?"

"Both good questions," he said. "It's frustrating. They're so close when we're all online, but so far when we need to do something that involves the physical world." He began to pace. "This is Big Sister Nor's department. She sees a way to tie up the virtual world and the real world, to move work and ideas and money from one to the other."