For the Win - Cory Doctorow (best pdf ebook reader .txt) 📗

sharp, General, it's a wonder you don't cut yourself. Yes, it's possible that all of this is a giant triple-twist bluff, aimed at fooling you. But what would I want to fool you for? As rich as your Army has made you, you must know that I could be just as rich by working as a junior lecturer in economics at IIT. But General, at the end of the day, you either trust me or you don't. I can't prove to you that you're inside the scheme rather than its target. If you want out, that's fine. It will hurt the plan, but it won't be its death. There's a lot of people involved here."
Mala smiled her sunny smile. "You are a clever man," she said. "And for now, I will trust you. Go on."
"Let's step back a little. Do you want to learn some history?"
"Will it help me understand why you're taking so long?"
"I think so," he said. "I think it's a bloody good story, in any case."
She made a go-on gesture and sipped her chai, her back very erect, her bearing regal.
"Back in the 1930s, the biggest confidence jobs were called 'The Big Store.' They were little stage plays in which there was only one audience-member, the 'mark' or victim. Everyone else was in the play. The mark would meet a 'roper' on a train, who would feel him out to see if he had any money. He'd sometimes give him a little taste of the money to be made -- maybe they'd share some mysterious 'found' money that he'd planted. That sort of thing makes the mark trust you more, and also puts him in your power, because now you know that he's willing to cheat a little.
"Once the train pulled into the strange city and the mark got off, every single person he met or talked with would be part of the trick. If the mark was good at finance, the roper would hand him off to a partner, the 'inside man' who would tell him about a scam he had for winning horse races; if the mark was good at horse races, the scam would be about fixing the stock market -- in other words, whatever the mark knew the least about, that was the center of the game.
"The mark would be shown a betting parlor or a stock-broker's office filled with bustling, active people -- so many people that it was impossible to believe that they could all be part of a scam. Then he'd have the deal explained to him: the brokerage house or betting parlor got its figures from a telegraph office -- this was before computers -- that would phone in the results. The mark would then be shown the 'telegraph office' -- another totally fake business -- and meet a 'friend' of the inside man who was willing to delay the results by a few minutes, giving them to the roper and the market just quick enough to let them get their bets or buys down. They'd know the winners before the office did, so they'd be betting on a sure thing.
"And they'd try it -- and it would work! The mark could put a few dollars down and walk away with a few hundred. It was an eye-popping experience, a real thrill. The mark's imagination would start to work on him. If he could turn a few dollars into hundreds, imagine what he could do if he could put down all his money, along with whatever money he could steal from his business, his family, his friends -- everyone. It wouldn't even be stealing, because he'd be able to pay everyone back once he won big. And he'd go and get all the money he could lay hands on, and he'd lay his bet and he'd lose!
"And it would be his fault. The inside man wouldn't be able to believe it, he'd said, 'Bet on this horse in the first race,' not 'Bet on this horse for first place' or some similar misunderstanding. The mark's bad hearing had cost them everything, all of them. There is a giant scene, and before you know it, the police are there, ready to arrest everyone. Someone shoots the policeman, there's blood and screaming, the place empties out, and the mark counts himself lucky to have escaped with his life. Of course, all the blood and shooting are fakes, too -- so is the policeman. He's got a little blood in a bag in his mouth; they called it a 'cackle-bladder': a fine word, no?
"Now, at this stage, it may be that the mark is completely, totally broke, not one paisa to his name. If that's the case, he gets away and never hears from the roper or the inside man again. He spends the rest of his life broke and broken, hating himself for having misheard the instruction at the critical moment. And he never, ever tells anyone, because if he did, it would expose this great man for a fool.
"But if there's any chance he can get more money -- a friend he hasn't cleaned out, a company bank account he can access -- they may contact him again and offer him the chance to 'get even'. You can bet he will -- after all, he's a king among men, destined to rule, who made his fortune because he's better than everyone else. Why wouldn't he play again, since the only reason he lost last time was that he misheard an instruction. Surely that won't happen again!"
"But it does," she said. Her eyes were shining.
"Oh yes, indeed. And again, and again --"
"And again. until he's been bled dry."
"You've learned the first lesson," Ashok said. "Now, onto advanced subjects. You know how a pyramid scheme works, yes?"
She waved dismissively. "Of course."
"Now, the pyramid scheme is just a kind of skeleton, and like a skeleton, you can hang a lot of different bodies off of it. It can look like a plan to sell soap, or a plan to sell vitamins, or something else altogether. But the important thing is, whatever it's selling, it has to seem like a good deal. Think back on the big store -- how do you make something seem like a good deal?"
Mala thought carefully. Ashok could practically see the gears spinning in her head. Wah! She was smart, this Dharavi girl!
"OK," she said. "OK -- it should be something the mark doesn't know much about."
"Got it in one!" Ashok said. "If the mark is smart and accomplished, she'll assume that she knows everything about everything. Dangle some bait for her that she doesn't really understand and she'll come along. But there's a way to make even familiar subjects unfamiliar. Here, look at this." He typed at the disused computer on a corner of his desk, googled an image of a craps table at a casino.
"This is a gambling game, craps. They play it with dice."
"I've seen men playing it in the street," Mala said.
"This is the casino version. See all the lines and markings?"
She nodded.
"These marks represent different bets -- double if it comes up this way, triple if it comes up that way. The bets can get very, very complicated.
"Now, dice aren't that complicated. There are only 36 ways that a roll can come up: one-one, one-two, one-three, and so on, all that way up to six-six. It should be easy to tell whether a bet is any good: take the chance of rolling two sixes, twice in a row: the odds are 36 times 36 to one. If the bet pays less than those odds, then you will eventually lose money. If the bet pays more than those odds, then you will eventually win money."
Mala shook her head. "I don't really understand."
"Imagine flipping a coin." He took out his wallet and opened a flap and pulled out an old brass Chinese coin, pierced in the center with a square. "One side is heads, one side is tails. Assuming the coin is 'fair' -- that is, assuming that both sides of the coin weigh the same and have the same wind resistance, then the chances of a coin landing with either face showing are 50-50, or 1-in-1, or just 'even'.
"Now we play a fair game. I toss the coin, you call out which side you think it'll land on. If you guess right, you double your bet; if not, I take your money. If we play this game long enough, we'll both have the same amount of money as we started with -- it's a boring game.
"But what if instead I paid you triple if it landed on heads, provided you took the heads-bet? All you need to do is keep putting money on heads, and eventually you'll end up with all my money: when it comes up tails, I win a little; when it comes up heads, you win a lot. Over time, you'll take it all. So if I offered you this proposition, you should take it."
"All right," Mala said.
"But what if it was a very complicated bet? What if there were two coins, and the payout depended on a long list of factors; I'll pay you triple for any double-head or double-tails, provided that it isn't the same outcome as the last time, unless it is the third duplicate outcome. Is that a good bet or a bad one?"
Mala shrugged.
"I don't know either -- I'd have to calculate the odds with pen and paper. But what about this: what if I'll pay you 300 to one if you win according to the rules I just set up. You lay down ten rupees and win, I'll give you 3,000 back?"
Mala cocked her head. "I'd probably take the bet."
"Most people would. It's a fantastic cocktail: mix one part confusing rules and one part high odds, and people will lay down their money all day. Now, tell me this: would you bet ten rupees on rolling the dice double-sixes, thirty times in a row?"
"No!" Mala said. "That's practically impossible."
Ashok spread his hands. "And now you have the second lesson: everyone has some intuition about odds, even if they are, excuse me, a girl who has never studied statistics." Mala colored, but she held her tongue. It was true, after all. "Most people won't bet on nearly impossible things, not even if you give brilliant odds. But you can disguise the nearly impossible by making it do a lot of acrobatics -- making the rules of the game very complicated -- and then lots of people, even smart people, will place bets on propositions that are every bit as unlikely as thirty double-sixes in a row. In fact, smart people are especially likely to place those bets --"
Mala held up her hand. "Because they're so smart they think they know everything."
Ashok clapped. "Star pupil! You should have been a con-artist or an economist, if only you weren't such a fine General, General." She grinned. Ashok knew that she loved to hear how good a general she was. He didn't blame her: if he was a Dharavi girl who'd outsmarted the slum and made a life, he'd be a little insecure too. It was just one more thing to like about Mala and her scowling, hard brilliance. "Now, my star pupil, put it all together for me."
She began to recite, counting off on her fingers, like a schoolgirl recounting a lesson. "To make a Ponzi scheme that works, that really works, you need to