A New Faith: Part 2: Chapter 26

In less than half an hour, they arrived at a private airfield and were driven straight to the jet waiting for takeoff on the runway. It was a typical beige nondescript private jet that could fly way faster than a commercial airline. There were no frills included in the service. The co-pilot doubled up as the steward. 

This was Rachel’s first time in a private jet. Instead of observing the life of the rich and famous, she was busy getting surprised. Ben’s boss was an older woman with twinkling brown eyes and silky white hair. She was wearing a sober blue business suit with a white shirt. She was talking with someone on the phone when Ben and Rachel got on the aircraft. 

Once the aircraft had taken off and reached cruising altitude which happened rather quickly, Rachel felt, the co-pilot/steward offered them some perfunctory beverages and snacks. No fancy champagne and caviar was being served on this flight. Tomato juice and pretzels was what Rachel settled on. She looked out the window as Ben briefed his boss quickly. There were a few follow-up questions and Ben had to pull out his tablet to show her something. Ben’s boss gave him some final instructions and then she turned her attention to Rachel. 

“Who do I have the pleasure of flying with today?” she asked pleasantly.    

“My name is Rachel and I am here because of him.”

Ben’s boss waited with a pleasant smile on her face. She wanted to know more about Rachel. Ben was still making some notes. He had not had a chance to make introductions. 

“I am a part of the US delegation at the UN.”

“Pray, what brings you to Texas? Don’t tell me you hitched a ride with us today just to go visit family and friends.” 

She had detected the Texan accent. 

Ben was done with his task. He put away his paraphernalia and joined the conversation. 

“Let me make the formal introductions. Rachel, this is my boss, Emily Wood. She is the founder and CEO of our company, Foresight Investments.” 

Then turning to Emily, he added, “it was I who asked Rachel to join me today for the trip to the Wichita City complex. I think, I may have a solution for the problem that Rachel is trying to solve.”

Turning back to Rachel, he added, “until recently, Emily used to be an Economics Professor at the University of California, Berkeley. A long time ago, she had served on the President’s Council of Economic Advisers and the Federal Reserve Board. She also spent a considerable amount of time consulting for the World Bank and the International Monetary Fund during her academic years.” 

“It is an honor and a privilege to meet you, Emily!” Rachel stood up from her seat to go shake Emily’s hand. 

Emily nodded graciously. 

“So what is vexing our delegation to the UN these days?”

Rachel looked at Ben and said, “well… maybe you should be the one to describe the problem since you claim to have a solution for it. I am still not sure what your big idea really is.” 

Ben nodded and began, “a few months ago, in the aftermath of the heat wave tragedy, some of the Nordic countries offered a small parcel of their land for re-settling climate refugees. 

Rachel, please feel free to jump in with additional details.”

“The size of the parcel is about one thousand square kilometers and they are willing to accept up to 25 million refugees. It is located way up in the north… in the Arctic Circle, I think. They also put some conditions on their offer. The refugees are to be confined to that parcel.  And they want the UN to set up the refugee camp and operate it,” Rachel chimed in.

Ben continued, “the problem is that these Nordic countries only offered the land and nothing else. As you probably know, the UN doesn’t have any funding to take them up on their offer. Rachel has been spending all of her time over the last few weeks trying to finagle cash from different countries.

No one is ready to step up unless the US takes the lead. As you can well imagine, the current US government has zero interest in doing any charity for people from other countries, especially, poor folks living in godforsaken places. I believe they like to use another more colorful word for those countries.”

“Of course!“ Emily murmured to herself. One of the least popular items in the federal budget had always been foreign aid despite it being, practically, a trivially small number.

“My big idea for Rachel was to try and get investors to fund the creation of the camp instead of looking for charity from governments. If the UN could offer a reasonable return on the investment then investors would be happy to step up to the plate. I dunno… maybe 7-10% ROI should be sufficient to get some big players interested in this.”

“Now that’s a novel idea! I am glad, I have kept you around, Ben,” Emily exclaimed.

“Please do elaborate. Where would the UN get the revenue to pay off the investors?”

Ben became slightly defensive.

“Well… I was thinking that the refugee camp could be like the Wichita City complex.”

Emily raised an eyebrow while Rachel looked positively scandalized by this statement. 

“Surely, you are kidding, Ben!” Rachel snapped. 

Ben’s face reddened noticeably. He was not expecting this reaction from Rachel, especially, in front of his boss. And, especially, when his boss seemed to like his idea. It felt - well - disrespectful. 

“You think that the UN should become a factory operator? A factory that employs teenage girls and then keeps them locked up in a compound? Are you nuts?” 

Rachel liked Ben and he was her good friend. But this was plain absurd. She sputtered with more indignation and realizing where she was, she decided to shut up and fume in silence. 

“Even if we keep the factory aspect aside, for a moment, the idea still has legs. Pretty solid legs, I think,” Emily said in a mild tone. 

“Where would the revenue come from?” Rachel felt as if they were going around in circles.

Emily looked at her kindly.

“A city is a very effective engine for economic growth. Even without a factory, people do many things to make money. For example, arts and entertainment generate pretty solid revenues. So do professional sports. Restaurants and bars can be quite profitable. When several million people live close to each other, they eventually figure out what they are good at and what others are good at. That is when the magic of trade happens. Ever heard of Adam Smith?”

Emily was chuckling at Rachel’s obvious embarrassment. 

“Even more magic happens when that same singer can sell their music to customers who are living in other cities or even faraway countries. Or the chef offers paid online classes to teach people from those faraway places. All those customers send money to that city.

Come now… Rachel. Cities will produce revenues. We have known that for a long time. How much revenue would a city that has been created from scratch generate over a period of time, that we don’t yet know. It will depend on the nature of the city and the people who live there. I think, Ben’s idea is worth exploring.”

“Umm… okay. Fair enough.”

Ben was grateful for his boss swooping in and saving his idea from getting thoroughly rubbished. 

Emily wasn’t done though. Again in a mild tone but which distinctly held a clear rebuke, she said, “I think Rachel, you are also judging the SOZs too harshly. As someone who makes money from investing in them, I may be biased. 

The lives of those teenage girls from Asia and Africa are immeasurably better than what they would have experienced if they had stayed back in their homes. I am not defending the SOZs in their totality. Don’t get me wrong. I wish we - humanity - could offer every individual a dignified life such as the one that you or Ben or I am getting. Unfortunately, we don’t live in a fair and just world. We live in a world where even relative improvements are important to recognize. 

I remember the catastrophic floods in Pakistan that had submerged almost a third of their land for months on end. The destitution was unimaginable. One of the ways those masses of displaced people tried to deal with their situation was by marrying off and sometimes even selling their teenage daughters off so that they could use the money to help the rest of the family survive. It was horrifying for the girls. I would rather those girls were living in an SOZ where they at least had basic physical security. 

Wouldn’t you agree?”

Rachel became pale. She was deeply affected by this observation. Like any privileged person, she had simply passed judgment without thinking. Worse, she had done so in a self-righteous manner. It was especially embarrassing because she knew better. She had traveled to many of the poorest and most deprived parts of the world. She was not one of those proudly ignorant Americans.

She kicked herself mentally for slipping into a patronizing attitude. She must do better than that. Not just in front of people such as Emily, but in a genuine and permanent way. She had to get rid of the blinders that come from wealth and privilege. With her head hanging down, she offered an apology to Emily.

Emily waved it off, “it happens. We can do better and we must constantly aspire to do better. But we need to be clear-eyed about the world we live in. So… what do you think of Ben’s idea?” 

They all sat around for a few moments imagining a fictitious city. Of course, their minds immediately went to their home, New York. Their city did generate vast amounts of revenue. The annual budget of the city was easily upward of a $100B. They knew that the gross metropolitan product of New York was greater than $2T, more than the GDP of the vast majority of countries while its population was close to 20M. At least, in a very very crude sense, the idea of people investing in a city sounded plausible. But there were so many unknowns. 

“You guys are investors…,” Rachel began cautiously. 

“What would make this an attractive proposition for you?” 

Emily glanced at Ben, “what do you think?”

Ben was a thoughtful guy. He took a few moments to toy around with the ideas flitting through his mind. He frowned a bit as he tried to figure out how to go about answering this question.

Emily gently prodded him, “maybe… we start with the aspect of costs?”

Ben’s brow cleared and he nodded his head. 

“Yes - we should start with reducing the costs of this operation. Uhh… I mean the refugee camp. Or maybe… we should just call it a city,” he looked up in alarm at both Rachel and Emily as he fumbled around to find the right words.

Rachel decided not to bite his head off. Yet. She was getting an insightful demonstration of how Wall Street thought about people and civilization. 

“The way I see it,” Ben began, “the big costs in the lives of people of any city in the world can be put in three buckets.

The first one is housing. It is more or less entirely an outcome of scarcity. In most cases, this scarcity is artificially created through zoning laws. Invariably, it leads to higher costs than are necessary. In any case, the land offered by the Nordic countries is not a gift to the UN or the refugees. They are not transferring the property rights. They are not giving up their sovereign rights over that land. So - it is as if the land is being offered to the UN rent-free. So what if, the UN in turn constructed the housing and all the attendant infrastructure for the residents and offered it to them rent-free, too. No property rights. No property transactions. As the population grows and more housing is needed, it is constructed and allocated rent-free.” 

Emily silently nodded her head. Rachel didn’t react. This seemed fair and pretty straightforward.

“The second biggest cost is healthcare. This is a tricky one. I mean, the UN can offer it for free to all residents. But it will still be a cost and it is quite substantial however much we try to minimize it.”

Ben paused. He was wrestling with what he wanted to say but was doubtful that it would go down well with Rachel or even Emily for that matter. 

“The healthcare costs of the various SOZs that we invest in are quite low,” Ben said cautiously. 

“That is because the people who work there are all young and single. The big healthcare expenditure is usually on older folks and little children. The age of our labor… uhh… I mean staff… ranges from high teens to late thirties. They tend to be healthy pretty much all the time and don’t need any major healthcare services. And whatever they need we provide at the lowest possible cost making full use of AI-medical assistants.”

Again, a pause to gauge the reactions of Rachel and Emily. There was nothing. But both had a somewhat grim expression on their faces.

“Another aspect that keeps our healthcare costs down is that most of our staff consists of women. And women tend to be more resilient and robust than men. Women also tend to take better care of themselves and each other. Far more diligently than men, for sure.”

Rachel had raised one of her eyebrows. Ben couldn’t read her expression. So he decided to just go for it. 

“To minimize the cost of this hypothetical city, I would suggest that the residents should mostly be young and relatively healthy women.”

He cringed preemptively as he tried to prepare for the onslaught from Rachel. He had recommended condemning the children, the old, and the weak to more misery while rescuing those who were the most resilient. 

Surprisingly, Rachel had a broad smile on her face. In fact, she came over to his seat and gave him a quick hug. 

“That is the best thing you have said all day today!” 

Ben looked at her carefully. Was she pulling his leg? Was this sarcasm? Rachel didn’t really do sarcasm. How in hell was she going along with this suggestion?

“Yes, this is an excellent idea, Ben,” added Emily meditatively. 

She saw his disbelieving look and said, “you are a white man. Straight, educated, and wealthy. You simply have no comprehension of the life of a woman… even that of a white woman who is also straight, educated, and wealthy. It is orders of magnitude more difficult than yours. The life of a woman from a downtrodden community in a poor country is unimaginable for a person like you. 

Don’t take offense. But you just don’t know how bad it is. In addition, there is the flat-out exploitation that young women are subjected to in places where their position is already condemned to be marginal at best. It is not just as labor, but as sexual objects. Rape is wielded as a weapon by men against women and the other men that they are competing with. Young women may be the most resilient, but they also are the ones that require the most rescuing.”

Rachel was vigorously nodding her head. The earlier rebuke from Emily and this fascinating aspect of health cost minimization that Ben had brought up seemed to have aligned fantastically. 

“Old people and children have far more privilege and access to support as compared with young women in most societies.”

Ben heaved a sigh of relief. He had inadvertently managed to say the right thing. It would trouble him for the rest of his life, this fact, that he was simply unaware of the challenges that women face even in the 21st century and in the so-called developed parts of the world. 

He added softly, “and women tend to be significantly more productive than men. So, if we are looking at the city to become a major generator of revenue in a short period of time, then women would not only adapt to that life faster than men, not only learn new skills quicker, but also deploy those skills more effectively.”

“What else?” Rachel asked. Low housing costs and minimizing healthcare costs. This seemed plausible. She would have to see some numbers. But these ideas were most definitely worth exploring further.

“Food is a big cost, especially, given the location of this city. I mean, within the Arctic circle and over an area of a thousand square kilometers, it is going to be almost impossible to have conventional agriculture. Most stuff will have to be shipped in over long distances. Wouldn’t it?”

Rachel shook her head. 

“Nah. Food is not an issue at all, I think. As long as they have a reasonably cheap source of reliable energy, we can have vertical farms enclosed in greenhouses and precision fermentation for other kinds of food products. I believe, energy is not an issue in the Nordic countries. They have cheap wave and wind energy coupled to abundant hydro-electricity. The foot-print for growing food would be quite small for those many people.”

“Great… then that takes care of the other big cost item that I had on my list. I mean, energy,” said Ben.

“Another cost that manifests in different ways, at least in the US, is the car-centric form of our urbanization. Too much money is wasted on cars and the infrastructure required to support them. In fact, if there were no personal vehicles in general and only mass-transit or micro-transit modes of transportation, then the overall foot-print of the city can be massively reduced - narrower roads, no need for parking, etc. And of course, no energy needed to power those individual vehicles.”

Rachel nodded her head. Her pet peeve growing up in rural Texas had been those ugly pickup trucks being a necessity for life. The move to New York city had totally liberated her from that abomination. Yes, the hypothetical city could be like New York or any good and dense European city. Like Barcelona or Amsterdam or Paris.

“What else? Which other costs would we have to worry about?”

“Education is considered a big cost in the US for households. But I think it is mainly because of the inefficient way we go about offering it. I think, and I imagine, the people in this hypothetical city could probably learn most things virtually. They don’t need degrees and certifications from Ivy league schools to do their jobs. All they need are skills. The certification is merely to indicate that the person has the necessary skills.

Plus, if it is virtual then most colleges around the world would probably have no problem offering up their digital archives for free to the residents of the city. Also, I hear the AI-teaching assistants are fantastic. They can apparently achieve an extremely high-level of customization for each student without incurring any additional cost. That should help… I guess.”

“So… housing, health, food, energy, education… all these can be delivered at as low cost as possible to the residents. We shall have to nail down the details of providing them… both upfront costs and ongoing costs,” Rachel was murmuring to herself as she stared off in the distance. For the first time, since the heat wave tragedy, she was seeing a glimmer of hope. She was desperately going to cling on to it. 

“Emily, you haven’t said much about this,” Rachel inquired.

Emily had been looking out the window. It had been mostly dark, probably, because of the cloud cover. The aircraft was getting closer to the densely populated region of the mid-Atlantic. Every now and then, a window would open up among the clouds and she would see the twinkling lights of some small town or large city flash by. She mulled over the idea. Turned it around every which way in her mind to see if she could poke any holes in it. So far, this was all conceptual. For the purposes of turning this idea into an investment-grade proposal, a lot of number-crunching would have to be done. The more she thought about it, the more she liked it. She turned around to look at the expectant faces of Ben and Rachel. She decided to force them into refining the idea even more.

“So far so good. You’ve done well in minimizing the cost of building and running this city. I give that to you. I don’t see any other places to cut.”

Ben relaxed a bit. He had inadvertently become quite tense as he waited for his boss to give her verdict. It was not as if his job was dependent on this conversation. At least, so far. Even then, he genuinely admired his boss and had always sought her approval. For once, he had put himself out there with some new type of thinking. He had been worried that his boss might think it was not so good and somehow whatever impression she carried of him in her mind until then, would be diminished. 

“Where do you get the revenue to not only cover the operating costs, but to start paying off the capital and a hefty return on top of it? Do the residents have their own currency? Who decides what they do? What sort of taxation exists?”

“I dunno about currency. I am no economist,” Rachel replied. 

“The residents decide what they want to do. They will all be given a grace period during which they have to figure that out. They have to find a way to earn. The allowance they all will get would be sufficient to cover their key expenses. Buying food, clothes, etc. It will be capped. At the end of the grace period, the allowance will start diminishing to a minimum amount.

Taxation will be progressive. They will all be aware that they are on the hook to pay for their own way and also to pay off their loan with interest. We shall have to be honest with them about that aspect. If the revenue stops, then the city shuts down and they will be sent back to their native places.” 

“What happens if the revenue falls short?”

“Short? Of what?”

“What do the investors do if the city doesn’t generate sufficient revenue as per the contract? Does the UN just declare bankruptcy and the investors sell off the city to recover whatever they can?” 

These were a lot of terms that Rachel had heard before but was not sure what they all meant exactly. Especially, that part about “selling off the city” made her concerned. The city was the refugees. There was nothing else there. No resources, no equipment, nothing that was going to be of value. It was not as if the investors could sell off condos from the city and recover their investments. Or could they? They might exactly do just that. After all, the city would have all the infrastructure. Wealthy people from around the world wouldn’t mind having yet another place to hang out near the north pole. Heck, they could convert the city in some kind of a resort and not just recover part of their investment but even make a handsome profit out of it. 

What if, though, she was thinking furiously, the investors went after the refugees and decide to convert the city into another manufacturing campus similar to the one she saw earlier that day? What then? That would just not do. It would never happen. She wouldn’t let it happen. The city wouldn’t fail. It would not just survive but thrive. It would not only pay off the investors, but the additional revenue that it would generate would fund expansion of the city and maybe even the construction of similar cities for the billions of climate refugees in the world. They HAD to make this work! There was NO other alternative! The alternative future was too terrible to imagine! She had seen what a global climate tragedy could do. She had seen the rotting corpses in village after village in Africa. 

‘They will generate the revenue. I am sure of it. People always find things to do. Just the way you described it earlier. It not only happens in a large city such as New York, it starts happening even within a refugee camp. It happens rapidly, within days of the camp being opened. Adam Smith’s invisible hand shows itself in no time. It has been happening for millennia. Humans are social creatures and we live in tribes. We automatically start figuring out what we are good at and what others are good at. Exchanges of all kinds appear in even the most primitive societies that have been studied.” 

The pilot announced that they were about to land and everyone should put on their seat-belts. 

Emily nodded. 

“I am inclined to agree with you, Rachel. This could work. This could even be a success. Who knows. I would invest once you figure out all the details of this proposal.”

Rachel was radiant with enthusiasm. Ben was very happy to see his friend back to her old self. He was glad he could help her. And getting this pat on the back from his boss was a fantastic cherry-on-the-top. Instead of this being a dreary day of travel and staring at spread-sheets and asking difficult questions to accountants who acted as if he was pulling their teeth out without the benefit of anesthesia, this day had turned out to be wonderful. He was tired. But it was all good.