Sunday, 29 August 2010

A short story about the price of trust

Till some time ago I thought the price of mistrust was much higher, but the moment I had to pay the price of trust I changed my mind.

Karol (name deliberately changed) joined my class almost exactly ten years ago, when we were beginning our first year at middle school (gimnazjum). I don’t even remember if he sat behind the same desk I sat, or was it me who joined him in. As a rather sociable person he quite easily found his way around us (we’d been together as a class for six years on then), though I can’t say he would get along with everyone for the next three years of middle school. Soon by dint of sitting next to each other we became good mates, though I could never say we had ever been friends. We were just good classmates, spent some time after school together, but surely weren’t friends for good and bad times.

Karol soon became the best student in our class and later even in the whole school. Teachers deemed him to be impeccably well-mannered and he soon also became an exemplary pupil. In fact as we all knew he was not just extraordinarily clever. He was a typical “smarty pants” – no one else would get away with getting a bad grade when being unprepared for a lesson, no one else would wriggle out of being punished for cheating during a class test. For some reason he had a charm which worked on all teachers, but my classmates and I weren’t impressed with his continuous wheeling and dealing.

Karol somehow also had an inclination for trying to outfox everyone around, but not everyone could discern it. Many people, including my parents warned me against him, I treated those advice seriously, but they didn’t dissuade me from helping him putting into practice some of his stillborn ideas. Fortunately, it never ended up badly for me, so actually I could have gone unharmed out of this friendship… Within those three years there were many conflicts within our class, but even despite falling in love with the same girl (who eventually chose him) somehow we didn’t fall out, all tribulations didn’t tear us apart.

As I dropped in on his house quite often, I met his parents and older brother, Adam (name also changed), who incidentally attended the same high school as I did, so we had an opportunity to get to know each other better. Although born to the same parents they were totally different – Adam was a paragon of virtues, Karol kept trying to outwit the whole world around.

With time we my friends from middle school fell in with new companies from high schools, old friendships began to break off. Karol and I met usually met in a bus, since we both commuted to high schools to Warsaw. From time to time we called each other, sent text messages, wished happy birthday or merry Christmas. We hadn’t been keeping in with each other since the beginning of our studies in 2006. Occasionally I met his brother in a bus and when I asked him about Karol, I’d usually hear his inclination for wheeling and dealing had only intensified (to Adam’s discontent).

Karol turned to me a few times in 2008 and 2009. Every time he had a great deal to strike but he was hard up for cash and asked me to lend him some few hundred and later even few thousand zlotys. Every time he claimed he had an opportunity to earn thirty to fifty per cent or so and promised to share profits with me, but never revealed what the gooses that laid golden eggs were. As an economist I know such opportunities generally don’t happen in the real world and each time his loan requests were rejected by me.

On 31 May 2010 a text message from him hit me out of the blue. That time he didn’t write about any profitable (read: shady) business to be done, he said we was in an urgent need of money (2,500 PLN) because he had to pay a bill (lie( of a student organisation he was in charge of (lie). The organisation was about to have its expenses reimbursed within a week plus he was about to get his salary within a few days as well. What he described were just some liquidity problems he temporarily had. He managed to earn my trust by offering to meet quickly and sign a loan agreement that would secure the repayment. On that day I was in the middle of exam period and didn’t wish to bother to meet him to sign a stupid piece of paper.

At the beginning I lied to him I had all my money in stocks and investment funds and it would take me three days to turn the assets to cash, but later on I gave in. I transferred to him 1,000 PLN since I realised this was a quite risky move and of course we didn’t meet up to put any signatures. I know very well why I did it, actually despite myself. Just before it all happened I had painfully experienced a blatant example of mistrust and I told myself the relationships between people could not be founded on mistrust, hence my half-baked decision.

Karol offered to return all money four days later in cash. He offered to come to my house, but as it was the day after Corpus Christi downpour I was busy tidying up my garden I asked him to transfer the money to me next Monday. The other reason was that my parents still don’t know about the sunk money – I somehow don’t fancy hearing the “Haven’t I told you” phrase…

On Sunday he asked me to lend him another 500 PLN, I refused. The money I had lent him didn’t appear next Monday, moreover, Karol stopped answering his phone and writing back to my text messages. Soon his voice mailbox got jammed and I realised things must have gone pretty nasty. I got in touch with his brother who promised to tell him to call me, his mother couldn’t tell me where I could find him. Karol’s behaviour became more and more mysterious.

I had a few phone calls with Adam in June, which consisted in reading between the lines. In early July we finally talked openly. Adam politely asked if I had given his brother any money and if Karol hadn’t given it back to me, I politely confirmed to find out I was a bit out of luck. Karol would behave strangely for the last four years, he moved out from home in 2009. For the last two years his family had been paying his debts until they ran out of cash. They decided not to run up their own debts to repay Karol’s obligations, so all debtors who turned to them were simply rebuffed. Karol managed to ruin financially his quite well-off family. From what I could infer from what Adam had told me, I estimate his all debts could total to around 100,000 PLN. Staggering? During the open conversation in early July Adam told me Karol had assured them he had found a job and promised to give his family a half of his salary. Till now (I called Adam yesterday) they haven’t received a single zloty from Karol. He tritely explained it away by telling his employer hadn’t paid him yet. Adam and his parents still remember about my ten stoovers and still openly declare they will transfer it back to me as soon as Karol gives them the money. I don’t hold out much hopes for getting the money back, but given the very good stance of Karol’s family, there’s still a glimmer of hope. I’ll treat this thousand as a windfall if it ever comes back to me.

Never mind the money now. One thousand more won’t make me much happier, one thousand less won’t make me much sadder (but wiser?).

How come? He used to be the best student in the whole school, everyone spoke highly about him, he was held in high esteem by everyone. Everyone said he would be really successful in the future. My teachers from middle school would never believe in the story above.

And the roles reversed. Seven years ago his family was much better-off than mine. Karol had brand-name clothes and footwear, would go on holiday abroad two years in a year, had all electronic gadgets. At the same time I had clothes from normal shops or from a supermarket, I within those three years I was abroad once for a week and spent two third of my holidays at home and didn’t have all newest consumer electronics devices – my parents were scrimping and saving to buy their dreamt-up house. Today my family’s and mine financial standing is satisfying, his family is flat broke and he ended up as a downright cheater.

I wonder what Karol feels now. I’d be surely conscience-stricken having done something so awful. I wonder how it feels to borrow money with an intention not to give it back. When I talked about it with Scatts two months ago he said in the UK he would never make a down payment for a house without securing it properly, which is normal in Poland. In the UK, in turn, he would lend someone a few hundred pound right away, in Poland he wouldn’t hope to get the money back. Cross-cultural differences?

And how did Karol manage to get into such debts? Stock market? Not that easy. Gambling? Possible. Leveraged risky deals is for me the most probable explanation. If you borrow a lot to increase your profits and it doesn’t work out you’re left with huge debts. That probably dragged Karol (and his family I feel sorry for) down.


Island1 said...

A fascinating personal insight.

"One thousand more won’t make me much happier, one thousand less won’t make me much sadder" —excellent point of view.

Anonymous said...

In my village people say about such situations: "you made a good deal - x zl for not seeing such person again."

student SGH said...


Jamie, you always pick out the most quiant sentence from the whole post and make a comment on it, instead of focusing on something more substantive. But indeed I wrote it just to baffle readers!

No, I won't give another thousand to make you much happier and make myself not much sadder ;)


I think I paid over the odds!

Anonymous said...

You may actually get this 1,000 back, Bartek albeit much later than you expected.

I think people who get themselves into stupid things like this can become so desperate that it drives them to do things they would never normally consider. Like screwing their friends and family.

If he owed money to nasty people then he a fool for borrowing it, if he owed it to a bank then he's a fool for paying them back with other people's money!

But, he's young, in my terms, and there's time for him to sort things out and "repent". I'm all for giving the idiot a chance to make things right to both you and his family and if he's a smart as you say then there's a 50/50 chance of that happening.

student SGH said...

There's still a chance that I get it back.
A bank would try to play along with him, I think his creditors might be really nasty.

Yes, he's still young and can mend his ways, may his family forgive him (though I know they're reluctant to see him at all). I don't want to forgive him not for taking away the money but for vanishing into the air after borrowing it. If he tried to explain himself, negotiate, say sorry, whatever, but he didn't respond to my texts, didn't answer my calls - here's the point.