One Trillion Dollars

by Andreas Eschbach

  “One moment,” McCaine said and lifted a finger like a teacher. “That was another one of those errors of reasoning by the Vacchis: to believe that someone could suddenly appear, analyze the complicated global state of affairs and produce a revolutionary idea to solve those problems. No one can do that; not you, not me, and Albert Einstein couldn’t have done it either. But don’t forget, I’ve had a quarter century to think about it. And lots of time equals ingeniousness. I had time to think and to plan, and I had time to look around to see what others had to say about this problem. I saw that an army of highly intelligent scientists had analyzed the problem for a long time and from all possible sides. You don’t need to dream up some vast new vision, all the reasoning has been done, it’s all been thought through and published. The problem is not so much knowing what to do, but that it’s not being done. All that has happened is that time has passed and nothing has happened.”

  John watched him walk over to an office cabinet and look around in it. His mouth was dry. McCaine hadn’t thought to offer him a drink. Maybe he thought everybody, or anyone of importance, was as immune to human needs as he seemed to be.

  “Here,” McCaine said holding a book. John couldn’t see the title from this distance. “I would start with this book. Before this book appeared, there were only the doom-mongers and they contradicted one another for the most part, all of them written by illogical publicity seekers. Then there were serious studies and real insights. The Limits of Growth; that is the title of this book and it was published in the early seventies. The authors were Dennis Meadows and Jay W. Forrester. Forrester was an MIT scientist and developed the theoretical basis for system dynamics, which is a branch of cybernetics studying the behavior of highly interconnected systems. Meadows created a computer program called WORLD2, which was very simple and limited, but was still capable of showing what humanity’s future could roughly look like, and, based on this, how different measures could affect the outcome of this prediction.” McCaine sat down and placed the book on the table. John had never seen a book so worn from reading. McCaine must’ve been reading it for years. “You will understand why this caught my attention, being a programmer too. You must know that back then, programming computers was an occult science surrounded by myth. I copied Meadows’ program to experiment with it. Back then I had to use the computer at the university and had to drag cartons of punched cards around and do all this at one in the morning, because it was only time of day students could use the computer for free. Today you could do this with any home computer. But no one does it any more.”

  He opened the book and shoved it to John so he could see the diagrams. John wondered why McCaine never thought of buying a new copy. Almost every sentence was underlined or otherwise marked, and some pages were coming loose.

  “This is the so-called standard flow,” McCaine said as he tapped a finger on a primitive looking diagram that had five wiggly lines going up and down. “The development of the five major variables; population, quality of life, pollution, raw material reserves, and invested capital, under the assumption that no measures are taken to change any of them. That was in 1975, not to forget. Today we know that nothing was done, and so this graph actually works — it predicted what has really happened. Do you see this line that I drew in at 1970 and 1995? If you look only at this, things don’t look so bad; a slight increase in pollution and strong population growth, a small reduction in raw materials and quality of life, as we have observed, right? The hole in the ozone layer opened and the world population grew even faster. It is now almost six billion. And so forth. Now see where this is all leading; a collapse in the year 2030, brought about by lack of raw materials.”

  “But that is unlikely,” John argued. “Raw materials are getting cheaper. New reserves are continuously being discovered and replacements are also being found or developed. Just recently I read that it would take only a truck load of sand to make a fiber-optic network for an entire country, whereas once it would have taken many tons of copper to do the same. “

  McCaine folded his hands together. He had obviously heard this argument before. “First, this is a simple model. What was meant by raw materials was simply everything; copper and crude oil and so on. This line is only a very, very rough approximation. Second, concerning the prices of raw materials — yes, one can replace many things with others, and many raw materials, like iron and aluminum, are plentiful. But you are missing the same points everyone misses: it’s the raw materials that are largely unknown and that are very essential to certain industrial processes that are becoming scarce forcing the prices to go up continuously. They are materials such as molybdenum, tantalum, palladium or hafnium, germanium or niobium, and so on. And third,” he said, taking the book and leafing through it to another graph; he seemed as familiar with the book as a priest with the bible, “all this is part of an interlocked system of networks. All factors are dependent on other factors. Your argument, Mr. Fontanelli, is a typical argument of linear thinking. A certain problem appears, and it is addressed without realizing that the solution could give rise to an even worse problem. If, for example, you remove the problem of raw material scarcity, which is easily done in the program by increasing the known reserves by, say, a factor of five, then other problems will suddenly appear. See this chart; if the consumption of raw materials decreased, the limiting factor that would cause a sharp collapse of the system around the same time is rapidly rising pollution.”

  “Oh.” John turned the page. This diagram looked worse than the previous one. Whatever one tried, it always ended in catastrophe. Even reducing the output of pollutants would delay the breakdown by only two decades. However, after the catastrophe, visible by the rapid decline of population, which obviously meant millions upon millions of deaths, some of the lines went back to acceptable limits. As if it were followed by a period of relative calm.

  McCaine noticed John’s expression and seemed to read his mind. “Forget those lines shown after the catastrophe, regardless how they look,” he told him. “Principally, they really shouldn’t be put in after the great breakdown. What comes afterward is incalculable. It might be the end of humanity as a species.”

  “All this looks pretty hopeless,” John said.

  “That’s because it is,” McCaine replied dryly. He flipped the pages and stopped by another section, opening it wide. “This is what we could have achieved if proper measures had been taken back in 1970; a condition of equilibrium. A strong limit to population growth should’ve been implemented, pollution drastically reduced and utmost restraint taken in use of raw materials. What this might have meant in detail cannot be ascertained here, but it is clear that that the basic foundations for such a condition would have meant the end of economic and population growth, but at a high standard of living for a long time.”

  John remembered Lorenzo’s article. His cousin had hit the nail right on the head: the constant, endlessly worshipped totem of perpetual economic growth. “The end to growth,” he repeated in thought. “And how do you do that?”

  “The question is why hasn’t it been done already? Growth doesn’t happen by itself. You have to work hard for growth to occur. It costs sweat and labor. The real question is: why not stop when there’s enough?”

  “Okay then, why not stop when there’s enough?”

  “Because no one wants to be the first to do it. It’s like an arms race; each side is afraid to take the first step, because he’s afraid to be left vulnerable. You don’t stop because the others don’t stop.”

  John stared at the worn book lying before him. He had a headache. “Okay, what does all this have to do with me?”

  “Isn’t that obvious?”

  “No.” John put his hands in the air. “I have no idea.”

  “Alright,” said McCaine, leaning back and folding his arms before him. “Mr. Fontanelli, how do you get wealthy?”

  “What?” John batted his eyes a few times. “How to become rich?”

  “Yes. How does it wo
rk? Why do some people get rich and others don’t? Not counting inheritances.”

  “I never thought about that.”

  “Just like most people. But you do realize that there must be certain criteria?”

  “I think much of it is coincidence. Besides, I don’t see the connection with our previous topic.”

  “You will.” McCaine stood up, suddenly seeming to be moving a bit awkwardly. “Lean back, relax. I will explain it to you.”

  Her name was Karen, and the more Marco joked around with her the more he liked her. Once in a while he’d look through the glass door, but both men were still deeply involved in their conversation and Mr. Fontanelli didn’t seem to be in any danger.

  The red-haired secretary didn’t seem to have much to do today, despite her impressive array of computer, monitor, printer, and phones.

  “Sometimes there are days like this,” she told Marco. “And there are others were all hell breaks loose. It depends on what happens in the stock market.”

  “That’s beyond me,” Marco admitted.

  Karen convinced him to have another coffee and even found some cookies for him. They told each other about themselves as they ate.

  “I could show you London,” Karen offered him. “The next time you’re here.”

  Marco’s eyes looked furtively at her figure. “I would really like that,” he told her, and then added sadly: “But I have no idea when I’ll be here again.”

  “Oh, I’m sure you’ll be here more often,” she said with a smirk. “My boss would like to work with your boss, and he can be very persuasive.”

  “Wealth is first a matter of income, and second a matter of spending,” McCaine explained, standing by the window overlooking London. “If you spend more than you earn you will grow poor, and if you earn more than you spend you will grow rich. As far as spending is concerned, you can reduce it only so far — at least if you want to live a normal life in our society. This leaves you with increasing your earnings. So far so good?”

  John nodded skeptically. “So far so boring, to be honest.”

  McCaine didn’t seem to have heard him. “The possible level of earnings follows a certain hierarchy. Work is at the lowest level of this hierarchy — you do something for someone and he gives you money for it. That can be as an office employee or as an independent tradesman, that doesn’t matter. It is commonly known as honest work, and the earnings you achieve will never be significantly more than your spending. Taxes have a lot to do with this. The government wants your money, all of it if it were possible. But since you’d starve and wouldn’t make more babies who will grow up to pay taxes, you are left with enough to survive on. No country, no government is interested to seeing its population become financially independent. So, honest work, which is what most people earn their livelihood doing, will secure only the average standard of living, no more.”

  John thought back to his days at the laundry. How he spent sweaty nights at the steam press. His weekly pay was just enough for the essentials.

  “The next level of income,” McCaine went on, “is specialized work. The worth that a type of work has, as with everything else in a market economy, is based on the laws of supply and demand. If you learn the same stuff as everybody else, and are as skilled as everyone else, then there’s no reason why somebody else couldn’t do your job, and your level of income is correspondingly low. Your income will rise if you are willing to do what others are not — to ruin your health, to work very hard, to work nightshifts or on weekends — or if you can do what others cannot, as long as it’s something useful. You might even have to find a market for your skill; a regular teacher will always earn the same, but if he or she is really good, it is possible to earn more in a private school. On the other hand, there are trade unions, bar associations, and craft guilds … structures that would also be known as cartels in the industry, which assure their members a certain level of income. But since the free market is being bypassed, in a way, the result is a reduction in turnover, because a service at a higher price won’t have as many sales as one with a lower price. At any rate, the more specialized your service is and the more it is needed, the more your earnings can grow, significantly. A lawyer can make five hundred dollars per hour and a famous pop star twenty thousand for a one-hour performance. Yet, there is a limit. The lawyer, for instance, has his office and secretary to pay, and the pop star has an agent, and travel costs, and an appropriate wardrobe, practice sessions, autographs to sign, besides the fact that he or she may have earned close to nothing for years before being famous.”

  John remembered Paul Siegel, who used to be his best friend; the one who went to Harvard and learned something that made it worth companies’ interests to pay him twenty thousand dollars an hour for his time. John remembered well the time Paul told him how much he could command, and the immense gap that had opened up between them.

  “Now the next jump, the one that gets you real leverage. This next level in our hierarchy is trade. Trade means to buy something cheap and sell it expensive. To put it bluntly, the trader eliminates the difference of supply and demand through his efforts and profits from this. The leverage here is the dependency of the income on the value of the goods being traded, and not the effort to deal with the goods, per se. If you sell a watermelon you might earn ten cents, if you sell water desalination equipment for a factory you might earn ten thousand dollars. But the effort involved might be the same. You aren’t being paid for your labor, but your ability to satisfy a want or need. The span of possibilities at this level can be very large. You may earn little or nothing by trading, but you might also get fabulously rich. A book salesman may keep thirty to forty percent of the profits per book, but the owner of a boutique may add two to three hundred percent to his buying price. Sales provisions may range from ten to fifteen percent, which may be quite a lot if you sell a machine worth several million dollars. Especially if you only made a few phone calls and invested an afternoon’s worth of wheeling and dealing.”

  John didn’t say anything. The gallery owner, with whom Sarah and the other artists displayed their artwork, probably fell into that category. She was the middleman, or rather woman, between those producing art and those wanting to buy it and cashed in from both parties. No wonder she drove a large car and the artists came by subway.

  “The next step is one in which you sort of reproduce yourself. You don’t work any more; instead, you get others to do the work for you. You are then an entrepreneur. A person who is doing what you want him to do, will get paid by you for this. You will try to buy his work as cheaply as you can, because now you are on the other side of the market mechanism. Everything you pay your workers from the profits that your company makes will reduce your own income. Starting your own business is always fraught with risks and always very hard work. But it makes it possible to reproduce your own capabilities to almost any size. You can train people who will train more people who will train even more people, and so on. And when you’re well represented in the market place, then the money you pay your people will be one of the very best investments you can make. In human resource management, an employee who brings in one point three times what he costs is worth his money. In other words an actual yield of thirty percent! There is no other way to easily achieve this sort of return in the long run. The large companies are an example of how far you can push this principle, and the bosses of such companies may earn ten million a year or more, which, even assuming they have a heavy workload, comes out at thirty thousand dollars per hour.”

  Murali sprang into John’s mind; he never baked a single pizza in his life, much less delivered one, but he knew how to hire cheap pizza bakers and delivery guys. He was in the store from morning to night, bitching and grumbling and hollering and kept everything going. Thousands of people in south Manhattan got their pizzas thanks to him. That’s how Murali earned his living, even though John had no idea how much it was.

  “I hope you’ve noticed the role money that’s already availabl
e plays in this level. The more money you have the easier it is to get into the next category of income. If you’re poor it will be almost impossible to get a higher education that will allow you to get out of the lowest category. If, on the other hand, you have a fortune it will be far easier to do trade or to start a company than it would if you have to depend on borrowed money. The more money you have the easier it is to make more.”

  “But that’s not fair,” John interrupted without thinking about it.

  “Nature is cruel,” McCaine countered. “The world is not fair. Justice or fairness would mean balance, but life is out of balance, a network of reciprocally multiplying imbalance, that’s why you have fundamental injustice in income.” He lifted a finger, like a dark Mephistopheles standing before the bright buildings of the city. “And finally we get to the top level of income, to the ultimate leverage, the ultimate self-reproduction. This is the level where your money alone earns you more money. We’re talking about the money market, pure finance. Owning a company can be lucrative, but it may become more difficult to manage as it grows, as if there were invisible forces working against growth. But not with money. The effort is always the same regardless if you put a million, a hundred million or a hundred billion dollars into the worldwide financial markets. You, Mr. Fontanelli, are in this top category. You don’t have to work at all, because your money is working for you, and it earns you more money in a single year than the total wealth of the next richest person. Do you even notice it? Are you putting in any effort? Not in the slightest. It can go on infinitely. From here there are no more limits.”

  McCaine moved away from the window so suddenly that it startled John. He paced back and forth in the office. “Money,” he said, “is the strongest power on this planet. If you have money you have everything else too. You have a name. You have esteem. You enjoy respect. You’re loved! Sure, I know the saying money can’t buy you love, but this is like many other proverbs — absolute bullshit! Of course you can win a woman for yourself without being rich, but then you’ll have to be kind, attractive, and attentive to her needs. You must put in an effort. And you can be as attractive and loving as can be, but there will always be certain women that are out of reach for you if you are not wealthy. Name a single model who is married to a carpenter or a hotdog salesman. There simply aren’t any. Do you think that Onassis was able to marry Jackie Kennedy because he was so good looking? Bullshit! He was ugly, but still was able to fuck her, because he was one of the richest men in the world, that’s how easy it is. Money makes you sexy.”