For the Win

by Cory Doctorow

  Young Palmer opened his mouth again and Connor stopped him. “Look, this is all model-able. Let’s stipulate that we can take care of the monetary supply and move on.” In the back of his mind, he knew that he was dismissing a potentially explosive issue with a lot more cavalier abandon than was really warranted, but the fact was this was his chance to take care of the gold farmers once and for all, with the full weight of the company behind him, and if that screwed up the economy a little, well, they’d fix it later. They controlled the economy, after all.

  Later, at his desk in Command Central, he looked up from his feeds and saw a room full of the smartest, toughest people in the company—in the world—bent to the same task, ferreting out the parasites that he’d been chasing for months. And if he himself had once been a kind of gold-farmer, a speculator of in-game assets, well, so what? He graduated to something better.

  The fact was, there wasn’t room on earth for a couple million gold farmers to turn into high-paid video-game executives. The fact was, if you had to slice the pie into enough pieces to give one to everyone, you’d end up slicing them so thin you could see through them. “When thirty thousand people share an apple, no one benefits—especially not the apple.” It was a quote one of his economics profs had kept written in the corner of his white-board, and any time a student started droning on about compassion for the poor, the old prof would just tap the board and say, “Are you willing to share your lunch with thirty thousand people?”

  And hell, there were at least three million gold farmers in the world. Let them get their own goddamned apples.

  “Sea-level” is a term that refers to the average level of all the world’s oceans. Think of the world as a giant bedpan, filled halfway with water. You can blow on one part of the surface and induce some tiny waves whose crests are higher than the rest of the water. You can tip the bed-pan from side to side and cause the water to slosh around, making it higher at one end than another. But overall, there’s a single level to that water, a surface height that you can easily discern.

  Same with the oceans. Though the tides may drag the water from one edge of the sea to the other—and really, there’s only one sea, a single, continuous jigsaw-puzzle-piece-shaped body of water that wraps around all the continents—though the storms may blow up waves here and there, in the end, there’s only so much water in the ocean, and it more or less comes to an easily agreed-upon height. Sea level.

  Same with money. There’s only so much value in the world: only so much stuff to buy. If you got all the money in the world, you could exchange it for all the stuff on earth (at least all the stuff there is for sale). It doesn’t matter, really, whether the money is in dollars or gold pieces or mushrooms or ringgits or euros or yen. Add it all together and what you’ve got is the ocean. What you’ve got is sea level.

  So what happens if someone just prints a lot more money? What happens if you just double the amount of money in circulation? Will the monetary seas rise, drowning the land?

  No.

  Printing more money doesn’t make more money. Printing more money is like measuring the ocean in liters instead of gallons. Converting 343 quintillion gallons of ocean into 1.6 sextillion liters (give or take) doesn’t give you any more water. Gallons and liters are measurements of water, not water itself.

  And dollars are measures of value, not value itself. If you double the amount of currency in circulation, you double the price of everything on Earth. The amount of stuff doesn’t go up just because you’ve printed some money. That’s called inflation, and it can be savage.

  Say you’re a dictator of a tin-pot republic. For decades, you’ve lined your pockets at the people’s expense, taxing the crap out of everyone and embezzling it into your secret offshore bank-account in Honduras. Eventually, you’ve moved so much wealth out of the country that people are ready to eat their shoes. They start to get angry. At you.

  Normally, you’d just have your soldiers go and make examples of a few hundred dissidents and leave their grisly, carved-up remains by the roadside in shallow graves as a means of informing your loyal subjects what they can expect if they keep this kind of thing up.

  But soldiers—even the real retarded sadists—don’t work for free. They want to be paid. And if you’ve taken all the money out of the country and put it in your bank account, you need something to pay them with.

  No problem. You’re a dictator. Just call up the treasury department and order them to print up a couple trillion ducats or gold certificates or wahoonies or what ever you call your money, and use it to pay the troops. It works—for a while. The troops take their dough into town and use it to buy drinks and snazzy clothes and big meals. They send it home to their families, who use it to buy lumber and tile and steel and cement to improve their houses, or to buy farm implements and pay the hired hands to help them bring up the next crop.

  But as the amount of money in circulation grows, it gradually becomes worth less. The bar raises its drink prices because the landlord has raised the rent. The landlord has raised the rent because the cost of feeding his family has gone up, because the farmer isn’t willing to sell his crops for the old prices, because she’s paying double for diesel for the tractor and triple for water.

  And then the soldiers show up at the dictator’s palace and explain, with bayonets if necessary, that their old wages are no longer sufficient.

  No problem. Just call up the treasury and order up another trillion wahoonies. And watch it all happen again.

  Inflation is the cheap sugar high of governments. Like a cramming student sucking down energy beverages, a government can only print money for so long before they have to pay the price. It’s not pretty, either. Families that carefully saved all their lives for their retirement suddenly find their tidy nest-egg is insufficient to cover the price of a dinner out. Every penny of savings is wiped out in the blink of an eye, and suddenly you need a lot more soldiers on the job to keep your loyal subjects from gutting you like a fish and hanging you upside-down from your own palace’s front gate.

  If you’re a very cheeky dictator, you’ll go one further: take all the savings in the banks that are denominated in real money—euros or dollars or yen—and convert them into wahoonies at today’s exchange rate. Use all that real money to pay the army for a day or two more, plus your airfare to some place very, very far away.

  If you think inflation is scary, try deflation. As people get poorer—as less and less money is in circulation—the value of money goes up. This is good news for savers: the wahoonie you banked last year is worth twice as much this year. But it’s bad news for everyone else: only an idiot borrows money in deflationary times, since the wahoonie you borrow today will be worth twice as much next year when you repay it. Deflation is uneven, too: the cost of food may crash because of some amazing new fertilizer, which means you can buy twice as much cassava per wahoonie. But this means that farmers are only earning half as much, and won’t pay as much for cable TV. The cable company hasn’t had its costs go down, though, so the reduced payment means fewer profits. Businesses start to fail, which means more people have less money, which drives prices down and down and down. Before long, no one can afford to make or buy anything.

  In other words, the amount of money in circulation is a big deal. Theoretically, this amount is watched carefully by clever, serious economists. In practice, all the world’s money is in one big swirling, whirling pool. Dollars and ducats and wahoonies and euros, blended together willy-nilly, and when one government goes to the press and starts to churn out bales of bank-notes, everyone gets the sugar high. And when things crash, and peoples’ savings go up in smoke, the deflationary death-spiral kicks in, and prices sink, and more companies fail—and governments go back to the printing press.

  So in practice, this big engine that determines how much food is grown, whether you’ll have to sell your kidneys to feed your family, whether the factory down the road will make Zeppelins, whether the restaurant on the corner can afford the coffe
e beans, all this important stuff has no one in charge of it. Some people claim to be, but they’re in charge of one tiny piece of it, and maybe they think their piece is a brake or a steering wheel, but they’re wrong. The world’s economy is a runaway train, the driver dead at the switch, the passengers clinging on for dear life as their possessions go flying off the freight-cars and out the windows, and each curve in the tracks threatens to take it off the rails altogether.

  There’s a small number of people in the back of the train who fiercely argue about when it will go off the rails, and whether the driver is really dead, and whether the train can be slowed down by everyone just calming down and acting as though everything was all right. These people are the economists, and some of the first-class passengers pay them very well for their predictions about whether the train is doing all right and which side of the car they should lean into to prevent their hats from falling off on the next corner.

  Everyone else ignores them.

  “Hey, Connor!” his broker said, his voice tight and nervous, his cheer transparently false.

  “What’s wrong?”

  “Cut to the chase, huh, man?” Ira’s voice was so tight it twanged. “You’re such a straight-shooter. It’s why you’re my favorite customer.”

  “What’s wrong, Ira?” Command Central roared around him, a buzz of shouts and conversations and profanity.

  “So, you remember those bonds we took you into?”

  Connor’s chest tightened. He forced himself to stay calm. “I remember them.”

  “Well, they were paying out really well—you saw the statements. Eight percent last month—”

  “I saw the statements.”

  “Well.”

  “Ira,” Connor said. “Stop being such a goddamned salesman and tell me what the hell is going on, or I’m going to hang up this phone and call your boss.”

  “Connor,” Ira said, his voice hurt. “Look, we’re buddies—”

  “We’re not buddies. You’re a salesman. I’m your customer. I’m hanging up now.”

  “Wait! Come on, wait! Okay, here it is. There’s a little…liquidity crisis in the underlying assets.”

  Connor translated the broker-speak into English. “They don’t have any money.”

  “They don’t have any money this month,” he said. “Look, the coupon on this contract has been through the roof for more than a year. Ultimately, it can’t lose, either, because of how we’ve packaged it with a credit-default swap. But right now, this instant, they’re having a tough one-time-only squeeze.”

  After the first month’s interest had paid out, Connor had liquidated several other holdings and bought more of the bonds, bought big. So big that the brokerage had FedExxed him a bottle of champagne. He’d lost track of how much he had tied up with Ira’s “fully hedged” scheme, but he knew it was at least $150,000. That had seemed like such a good bet—

  “What kind of one-time-only squeeze?”

  “Nintendo,” the broker said. “They’ve loosened up their monetary policy lately. The star-farmers in Mushroom Kingdom are bringing up huge crops, and so Mario coins are dropping off in cost. But the word is that this is just a temporary gambit because they’ve had such a huge rush of new players who can’t afford to keep up with the old-timers, so they’re trying to lower commodity prices to keep those players onboard. But once those players catch up and start demanding more power-ups, the prices’ll bounce back.”

  It sounded plausible to Connor. After all, they’d done similar things in their own games. The experienced players howled as inflation lowered the value of their savings, but a player who’d been honing his toon for two years wasn’t going to quit over something like that. The new blood was vital to keeping the game on track, replacements for the players who got old, or bored, or poor—any of the reasons behind the churn that caused some players to resign every month.

  Churn was one of his biggest economic problems. You could minimize it in lots of sneaky ways: email a former player to tell him that you were about to delete the toon he hadn’t touched in a year and there was a one-in-three chance that he’d sign up to play again, rather than doom this forgotten avatar to the bit-bucket. But ultimately some players would leave, and the only thing for it was to bring new players in.

  The broker was still droning on. “—so really, we expect a huge surge in four to eight weeks, more than enough to make up for the drop. And if things go bad enough, there’s always the prince and his bets—”

  “What’s the bottom line?” Connor said.

  “Bottom line,” Ira said. “Bottom line is that there’s no coupon this month. The underlying bonds are selling at a twenty-percent discount off face value.” He swallowed audibly. “That’s sixty percent off what you paid for them in this package. But if things get bad enough, you’ll recoup with the insurance—”

  Connor tried to keep listening, but his breath was coming in tight little gasps. Sixty percent! He’d just had more than half his net worth vanish into thin air. The worst part was that he had other obligations—a mortgage, payments due on some of the little startups he’d bought into, money to pay the contractors who were fixing up the holiday cottage he’d bought as a rental property in Bermuda. Without the cash he’d been expecting from these investments, he could lose it all.

  Oblivious, the broker kept talking. “—which is why our recommendation today is to buy. Double down.”

  “Excuse me?” Connor said, loud enough that the people closest to him in Command Central looked up from their feeds to stare at him. He scowled at them until they looked away. “Did you say buy?”

  “There’s never been a better time,” the salesman said. Connor pictured him in his cubicle, a short-haired middle-aged guy in an old suit that been fashionable and tailor-made but was just tailor-made now, a collection of bad habits glued to a phone, chewed-down fingernails and twitching knees, a trashcan beside him filled with empty coffee cups, screens everywhere around him flickering like old silent films. “Look, any idiot can buy when the market is up, but how much higher does the market go when it’s already at the top? The only way to make real money, big money, is to bet against the herd. When everyone else is dumping their holdings, that’s the time to buy, when it’s all down in the basement.”

  Connor knew that this made sense. Buying stuff that everyone else wanted was a safe, uninteresting bet that paid practically nothing. Buying into the things that everyone else was too dumb to want—that was how you got rich.

  “Ira,” Connor said, “I hear what you’re saying, but you’ve seen my accounts. I can’t afford to double down. I’m maxed out.”

  “Connor, pal,” he said, and Connor heard the smile in his voice and he smiled himself, a reflex he couldn’t tamp down even if he’d wanted to. “You’re not tapped out. You’ve got a liquidity problem. You have a relationship with this brokerage. That’s worth something. Hell, that’s worth everything. We got you into this problem, and we’ll get you out of it. If you need some credit, that’s absolutely do-able. Let me talk to our credit department and get back to you. I’m sure we can make it all work.”

  Connor was overcome by an eerie, schizophrenic sensation. It was as if his brain had split into two pieces. One piece was shaking its head vigorously, saying Oh no, you’re out of your mind, there’s no way I’m putting more money into this thing. No, no, no, Christ, no!

  But there was another part of his mind that was saying He’s right, the best time to buy is at the bottom of the market. These things have been paying out big-time. The explanation makes sense. Just think of how you’ll feel when you don’t buy in and the security bounces back, all that money you’ll miss out on. Think of how you’ll feel if you clean up and can buy a bigger house, another income property, a new car.

  And his mouth opened and the words that came out of it were, “All right, that sounds great. I’ll take as much as you can sell me on margin.” On margin: that was when you bought securities with borrowed money, because you were sure that t
he bets would pay off before you had to pay the money back. It was a dangerous game: if the margin call came before the bets paid off—or if they never paid off—it could wipe you out.

  But these were not bets, really. The way that the brokerage had packaged them, they were fully hedged. The worse the underlying bonds did, the more the bets against them from the prince paid off. There might be some minor monthly variations, but when it was all said and done, he just couldn’t lose.

  “Buy,” he said. “Buy, buy, buy.”

  Through the rest of the day, he was so preoccupied with worry over his precarious position that he didn’t even notice when every other executive in Command Central had a nearly identical conversation with their brokers.

  Wei-Dong’s mother was the perfect reality check when it came to games and the Webblies. He’d never appreciated it before he left home, but once he’d gone to work as a Turk, his mom had tried to re-establish contact by clipping stories about games and gamers and emailing them to him. It was always stuff he’d absorbed through his pores months before, being reported to outsiders with big screaming OMG WTF headlines that made him snicker.

  But he came to appreciate his mom’s clippings as a glimpse into a parallel universe of non-gamers, people who just didn’t get how important all this had become. The best ones were from the financial press, trying to explain to weirdos who invested in game gold exactly what they had bought.

  And those clippings were even more important now that he’d come to China. Mom still thought he was in Alaska, and he made sure to pepper his occasional emails to her with references to the long nights and short days, the wilderness, the people—a lot of it cut-and-pasted verbatim from the tweets of actual Alaska tourists.

  Today, three weeks into the strike, she sent him this:

  A UNION FOR VIDEO GAMERS?

  They call themselves the Industrial Workers of the World Wide Web, and they claim that there are over 100,000 of them today, up from 20,000 just a few weeks ago. They spend their days and nights in multiplayer video-games, toiling to extract wealth from the game engines, violating the game companies’ exclusive monopoly over game-value. The crops these “gold farmers” raise sell to rich players in America, Europe and the rest of the developed world. Companies that control the games say that this has the potential to disrupt the carefully balanced internal economies—