“But that only works if the prices keep going up, so they had to keep putting more money in it. They started selling the futures of the land they were buying to buy even more. They were taking out loans against property they didn’t even own yet.”
“Who on earth would lend them the money to do that?”
“They’re Ackerman! Who in their right mind thinks Ackerman can’t pay back a debt? It’s the largest corp in human history. And when other people saw them doing this, they said, ‘Hey, no corp would be that stupid, they must know something we don’t!’ and they all jumped on the bandwagon. The price of land went up four hundred percent in three years.”
“I remember this—the bubble burst after that. This all happened years ago,” I said. “If Ackerman had actually done all of that, they’d have gone bankrupt.”
“They did.”
I waited, but she didn’t say anything else.
“What do you mean, they did?”
“Ackerman went bankrupt about five years ago.”
“Kate, I work there every day. I’m telling you, they’re financially sound. Christ, Ackerman has the most solid financial foundation of any corporation in history.”
“That’s Perception Management talking. Takashi knew that if people learned how bad Ackerman had been hit, they’d make all their margin calls and Ackerman would be wiped out. So he hid the debt, and just started kicking the can down the road.”
“You can’t hide debt like that!”
“Sure you can. Just keep moving it around.”
“Look, we may have lost some money in real estate, but we’re a brokerage firm, and we’re making record profits in Arbitrage.”
“That’s where it’s hidden,” Kate said. “The entire debt is just washed out over the trading floor. Takashi ordered trade quotas raised by fifty percent and gave huge bonuses to anybody who doubled their previous earnings. Well, you can’t get blood from a stone, so traders from Ackerman offices all over the world are simply trading to each other. Ten million rolls of toilet paper in Guam are sold to Ackerman offices in Paris, then to New Washington, and then back to Guam. They get traded three times in one day and never leave the warehouse, and all of those sales count as revenue coming in. And the traders are all getting record commissions on these phantom trades.”
“But there would be no real money coming in,” I said. “Somebody would have noticed that.”
“Nobody noticed when they were doing the same thing with land. Money is coming in; it’s just coming from future trades nobody’s yet made. On paper, every phantom trade looks as though it brings in money. But in reality it costs the corporation money in commissions and services. Since they didn’t have the money for a real trade in the first place, they can’t pay for the phantom one, so every five phantom trades executed this month requires another eight next month to pay for. The trading floor doesn’t even do real trades anymore; they don’t have the time for it. They’re the hardest working division in Ackerman and their only job is to hide debt, to try to purchase fewer losses this month than they did last.”
I couldn’t even feel the gash in my leg or the cuts on my face. Her revelation was stronger than any painkiller. I fell back into my chair.
“At this point they’re just in a state of denial. They can’t fathom a world without Ackerman. They really believe something will come to save them if they can hold off the grim reaper just a little bit longer. They can’t believe that, collectively, they’d do something that stupid, so they must not have. They figure that someone has a way out of all this, that some colleague out there has a plan to rescue them. So they keep gaming the system, get as much money before the problem is fixed. Hey, they’re making so much on commissions that it can’t possibly be wrong, right?”
“So Ackerman is going to fail?”
“Yep.”
As the reality set in, my fear melted, and I felt an overwhelming sense of joy. Everyone thinks themselves above petty revenge, but there was justice in this. All those people, everyone at Ackerman who thought themselves masters of the universe, who bought and sold lives for pennies on the dollar, they were all about to be taught one hell of a lesson.
“Why are you smiling?”
“Don’t you see? We’re going to be free! Ackerman can’t come after us if they’re bankrupt! This is all the more reason to leave, get out while the getting’s good! This is wonderful!”
“Oh my god, Charlie, I don’t think you understand what I’m saying.”
“I understand perfectly! Ackerman can’t hurt us. This is great!”
“No. The problem started in land. More than eighty percent of all corporations at the time had something invested in real-estate, and probably a third of those were hit hard enough by the correction to go bankrupt. Less than five percent of them actually failed. So what the hell happened to the debt?”
“Well I don’t know. But the corporations survived, so it must have gone somewhere.”
“Well, that’s what you said about Ackerman. Every one of those corporations say that they made all their money back. But if Ackerman—one of the most powerful corporations in the world—couldn’t squeeze a dime out of the market to save themselves, what makes you think any of the other corporations could?”
I had lived through two bombings, the death of my father, and the untold suffering I watched in the executions every month. None of it prepared me for how empty I felt at that moment.
“Everybody’s doing it?” I asked.
“About a third of our Karitzu at least. It’s harder to tell for some of the others, especially those based in Europa. They’re running schemes like this everywhere; it was the only way for them to compete, to survive—at least for another day.”
“You’re telling me a third of these corporations are going to fail?”
“No. I’m telling you that they already have. These corps exist only on paper; they don’t even own their own colleagues anymore. They just don’t know it yet.”
I had to think like Linus. He would be able to understand the enormity of it. It’s always been theoretically possible for man to destroy himself. We always think it won’t happen on our watch, that it will be some other generation that destroys the world. That, in the end, is what makes us blind to the possibility, which is the very thing that makes it possible.
But capitalism is a game of brinksmanship, survival by being willing to risk just slightly more than your competitor is. Of course the world would come to this, with both sides driving themselves (and everybody else) off a cliff. Was there any other way?
All that really surprised me was that it hadn’t ever crossed my mind until then.
So what would be the next logical step? What would Linus say would come next?
There would be a tipping point, a point at which the phantom trades could no longer be kept secret. Massive layoffs would follow within days; corporations would fail overnight. Within a week we could see a third of all corps—at least in the Americas, and possibly across the world—collapse. And this would not be any third, but the largest third—those that had leveraged the most. Even to an Epsilon the ramifications were clear—you’d see half of the remaining corporations wiped out completely, corporations that had done nothing wrong, that had not shared in the risk, would be sharing in the consequences.
“The PulpMill Paper Company,” she said, “has never invested in anything other than exactly what they need to run their business. Everything they do is above board. But sixty percent of their business comes directly from Ackerman, and the rest of it from within the Karitzu. When Ackerman fails, PulpMill will go under, too. The cost of paper will soar. Any corporation with narrow margins—which is just about all of them—won’t be able to buy any. So they’ll go under. In a two-week period more than half the jobs on two continents are going to vanish. The price of everything will skyrocket. Everyone will pull their money from the system—a run on every bank in the world, simultaneously. Credit will freeze up; corporations won’t be able to
make their payrolls. Even if they could, caps would become worthless, and food and water will be the only thing of value—but there won’t even be close to enough of that to go around.”
“What do you mean?”
“The Al-Arabina Karitzu controls over eighty percent of the world’s oil. They’re heavily invested in Ackerman. If Arabina fails, the flow of oil and gasoline stops completely. How are you going to supply food to a city without trucks? We can’t get water without pumps, which need oil. Without coal there’s no electricity. And even if you had trucks, who’s going to pay the truck drivers? And with what?”
“There must... if this is really happening, there must be a way to stop it.”
She nodded. “I understand how you feel. I’ve known this for a while, so sometimes I forget what it’s like to hear it for the first time.
“You know, light travels so fast that we think it’s instantaneous. But it’s not. It has an actual speed. Over long distances, you can measure it. The light from the sun takes eight minutes to get here. What we see in the sky isn’t the sun as it is, but as it was eight minutes ago. If it exploded, or just vanished, we’d still see it. Nobody would know, because we don’t have a measuring device faster than the speed of light. We wouldn’t know for eight minutes.
“You and I, the whole world, we’re living now in those eight minutes. Ackerman, your colleagues, corps, the world as a whole—are all dead, they just don’t see it yet. We are waiting on the day before the dinosaurs went extinct. We know for certain that it’ll happen, but there’s nothing we can possibly do about it. The age of corporations is over, my love.”
Chapter 15
Kate pulled a small tea infuser out of the cupboard. She crushed up some leaves, put them into it, and dropped it into a clay mug. Then she put a dollop of condensed milk into the tea.
It was a precious commodity, the milk. But I had lost my appetite.
“Is this what they would call a war?” I asked.
“War is the inevitable conclusion of capitalism. We’ve been at war for centuries. This is the end of war.
“Corporations are run by people, nothing more or less. They’re not monsters, not superhuman intellects, just people who are, for the most part, reasonably as clever as one another. Some corporations will fail and others succeed. But everyone thinks that they deserve to win. So when they think they’re going to lose, they feel justified in moving the line of acceptable behavior further down the field. They resort to more and more desperate actions to survive. Those desperate actions become the norm, and the next corporation has to take even more drastic measures just to compete.”
“But that’s so selfish.”
“That’s capitalism. Survival of the fittest. A good capitalist will tell you that in general people are ethical and would never take advantage of the system. That’s what the Communists thought, too. Zino hated this kind of behavior. She assumed most people would never do it. She said that if your actions were honest, all you needed was the rational perception of others. But that’s not true. They need to be honest, too. Sure, on paper competition is survival of the fittest; the smartest and most efficient corporation wins. But really the winner is the one who can appear to be the best while actually investing the least in customers or other expenses, the one who can betray the most people with the fewest knowing about it—the one who can best ignore human conscience without getting caught. Given unrestricted power, the corporation will feel entitled, even obligated, to leverage it. Unrestricted competition is a policy of scorched earth, period.
“The same was true for governments, too. Power was supposed to be shared.”
My hand was trembling as I brought the tea to my lips. “We have to warn people.”
“How? Most people in the corporation don’t even know a crash is coming. They won’t until it’s too late. Those who do are already making preparations to run, and the last thing they want to do is tell anyone else. You talk, and Ackerman will arrest you. Perception Management will call it a scare tactic to make money by forcing a run on banks or selling short, and everyone—even Perception itself—will believe it.”
“Kate, do you know how many people are going to die?”
“Most. It’ll be mass famine.”
“This can’t be true, it just can’t be.”
“I wish it weren’t. As much as I hate Ackerman, nobody deserves this. But this is why I hate them, because this is what they bring us. The victors of competition haven’t ever shared their profits, but they’re happy to share their losses.”
“I’m saying it can’t. You must be wrong.”
Kate shook her head. “I wish we were. We’re not.”
Now that I had come most to respect life, I was going to witness the loss of it on an unparalleled scale.
But wait. She told me. Why would she tell me if nothing can be done? She wants me to stay at Ackerman. That could only matter if….
“You built one!” I cried. “An actual republic! You really are a citizen. You saw this coming years ago, and you’ve been preparing. That’s what the secret meetings have been about, that’s what you’ve been hiding from me.”
A look of joy bloomed—as if a terrible burden was lifted. She could never tell me, never violate that oath. But now that I knew….
“I wanted to tell you so much. It’s never been so hard to keep a secret. But so much is at stake, and there are a lot of us. The only thing that can get us killed is if they find out before we’re ready. If they do, they’ll take the bunker.”
“Bunker?”
She turned to me. “Yeah, an old bunker under one of the old apartment buildings up at Glendale. We found it by accident; it’s not on any map, and there’s no reference to it in the Galt or any of the ruins. It’s from the last, great republic. It was designed for a nuclear war—it’s huge. We’ve been stocking it for years—food, water; we have solar generators, hydroponics, waste reclamation and management. We can live down there for decades.”
“We? How many people?”
“About a thousand. It’s a vault. Once the doors are sealed, not even Ackerman could get inside—if they were still around.”
I loved Kate; nothing was more important to me than she was. But I was overwhelmed with fear. The pain from my panic attacks, which I hadn’t felt since I met her, came flooding back. I was a man on a sinking ship who’s been told only one lifeboat is left.
“If... if somebody wanted to get in, how would he do it?”
“We all have tickets—every family.”
“But you don’t have family.”
“They gave me two tickets, one for me and one for someone else.”
My throat thickened again, and I couldn’t breathe. “Who are you taking?” I croaked.
She gave a playful little laugh and rubbed her foot against my side. “You really don’t know?”
“Well, we haven’t been together that long. You have a lot of friends—”
“Of course I’m taking you, Charlie. Don’t be silly.”
I grabbed her by the waist and began spinning her through the air. She giggled and laughed. I wanted to ask her thousands of questions. But between the blast at the café, learning that the world was coming to an end, and this refuge of salvation, I was exhausted.
That night we lay in bed, but I couldn’t sleep, overcome with torrents of emotion: crushed at the thought of so much suffering, guilty that part of me thought that they deserved it, elated that I might survive, and unworthy of the honor. I was even a little angry with Kate; she’d passed on a horrible burden, and a terrible risk. The lives of the other thousand citizens, the fate of the Republic, were not worth risking over a colleague like me.
“Jazelle agreed to let me in?” I joked.
“She did,” chuckled Kate, “but I don’t think she likes you. She thinks you could be Retention. After the crash, it won’t much matter.”
I could have been Retention. Jazelle had a point. And anyway, if I had learned about the Republic, Ackerman could t
oo. Heck, every colleague is Retention, by definition.
Corporatism breeds paranoia.
I tried to quiet my mind.
I would never tell, of course. Ackerman could torture me until the end of time (or at least until the crash) and I would never tell.
But I was also racked with guilt over even having gotten the information out of her. How much she must have sacrificed with her citizen friends by falling in love with a colleague. I mourned the loss of the world, the walking dead who knew nothing about their future. But as Kate said, we had to focus on what we could control, not what we couldn’t. We would live, and that was something.
Maybe we all have a little colleague in each of us.
“It’ll be so wonderful to live in a republic, free of all corruption.”
Kate laughed. “Oh, my darling, I wish that were true. Republics had corruption, too, people trying to grab money and power. They don’t incentivize corruption as such, but people will try to game any system. The difference is that in a republic, power is distributed more evenly. The system isn’t one dollar one vote, but one man, one vote. The rich will be more powerful than the poor, they always are, and maybe it’s supposed to be that way. But the fate of each is tied more proportionately to the other, and that helps keep the peace.
“But the only real check against corruption is vigilance. The lack of it lead to the death of republics: success bred complacency and arrogance, just like today. They thought that the system was enough to protect them, that they didn’t need to be involved. The point of a republic was to elect people to run government for you so you could live your life. But citizens just let go of the rope. Nobody voted, nobody got educated on the complexities of the governing. And the corporations moved in and spent massive amounts of money on perception, promoting the people that they wanted into office, and convincing the public that the rich should get richer, so that they could employ the poor and drive the economy. They convinced people that capitalism—this god of nature—would do the oversight for them, that the free hand of the market would keep them safe. But it wasn’t true, and on that front, the corporatists and I agree—life is work.”
The Water Thief Page 14
