"Let me begin by first explaining that the Outer District Talent Acquisition Program is in conflict with the interests of the gangs of the slums and the Underworld," she explained with a straightforward tone. "For one, the Underworld gets some of its mages from the ranks of the slums, disregarded by the rest of the nation. While their methods, acquisition rate, and even their training are crude, at best, they still manage to get their hands on a small number of mages that get firmly integrated into the Underworld."
Cæ's expression darkened immediately as he understood where this was going.
"The slum talent program takes away their source of new mages," Cæ realized with a grim expression. "It puts the Underworld operating in the slums of Colohen City directly at odds with the Elendir Institute of Magic."
She nodded with a serious expression. "Although they are very inefficient at the acquisition of talents within the slums and are only able to tap into a portion of the magical talent that exists within the slums, they can't allow it to slip out of their hands. If the Institute is allowed to get its hands on the magical talent within the city, it will lose an important avenue of magical talent."
Cæ's expression grew grave as he understood the gravity of the plan that she had proposed and what was at stake. There were multiple forces at play that had driven the Headmistress's decision to go ahead with this plan. For one, there was her personal political ideology that advocated for equality of opportunity. However, Cæ suspected that that was not the main source of her motivation.
She most likely wanted to bolster her branch of the Elendir Institute of Magic with the talent of the slums in order to boost her magicademy's performance. If she could prove great results, not only would it give her greater influence and soft power, but it would also force the other branches of the Elendir Institute of Magic to adopt the same program to mimic her success with the slums of their cities.
Virtually all cities in the nation, and even all polities in the world, had plenty of slums to execute the same strategies. The inability to spread magigrids as far as people meant that the poorest of people around the world had no access to magical energy.
It meant that this program, if successful, could be spread across the entire city. In the most extreme of cases, it could potentially be adopted as standard practice for magical institutions to tap into talent hidden within the slums.
From a purely rational point of view, this was obviously a sensible policy that should have been implemented a long time ago from a purely human resources perspective. Unfortunately, the Elendir government was not exactly the most hyper-rational governing body. From political pressure from the former aristocracy of the country and some other factions, as well as the prejudice inherent in the humans who ran the government, it simply hadn't materialized in the Democratic Republic of Elendir.
Cæ directed a gaze of dawning realization to the Headmistress, realizing that her ultimate ambition was most likely achieving precisely this result, to ensure that the Democratic Republic of Elendir ultimately began paying more attention to the slums, for their own sakes.
It was a truly grand strategy to influence an entire nation's policies, albeit a single-dimensional and discrete impact, but an impact nonetheless. The Headmistress' expression was inscrutable as she simply gazed at him with her usual perfunctory smile, never once revealing her true thoughts.
He didn't dare directly ask for the truth.
As a mere student, he really didn't have the power or influence to try to squeeze an answer out of her. She was rather generous with him, considering that she was the one making the proposal, but he was not under the delusion that he could somehow interrogate her as an equal.
"…Coming back to the main point," Cæ remarked carefully. "You are offering to give protection to Trinity Housings from the Underworld, allowing us to expand deeper into the slums because your Outer District Talent Acquisition Program has already made a conflict between the Elendir Institute of Magic and the Colohen Mafia inevitable?"
She nodded. "My battle with the Underworld in Colohen City is guaranteed. In that case, I might as well offer you protection from them while you expand your business within the Colohen Slums without having to worry about them. You will make more profits. Far more profits than if you just sell to the innermost layer of the slums."
Cæ's hesitant expression betrayed the struggle between fear and greed within his eyes.
The tug of war between caution and ambition.
Before, expanding his business deeper into the slums was absolutely off-limits due to the sheer dangers associated with this. He didn't want to end up disappearing one fine day, never to be seen ever again.
But with the power of the Elendir Institute of Magic and its backers, the battle was between two giants, and he would simply be hiding behind the protection of the bigger one. This was what the headmistress was offering him in return for leading the slum talent acquisition operations.
He heaved a sigh, shaking his head lightly. "It's tempting, but unfortunately, the primary reason we focused on limiting our activities to the forty-eight districts circling the inner city was because only the top ten percent of the slums can possibly afford to buy our Haven units, even with our thin profit margins. And most of the top ten percent of the slums reside in the innermost layer of the slums, surrounding the inner city. So while we might get some boost in our revenues by selling deeper in the slums, it will be marginal at best."
As far as he was concerned, this alone was a good enough reason to reject her entire proposal. As strangely fascinating as this business was, it was simply not worth the meager gains that he would make from it.
Unfortunately, he had underestimated the foresight of the Headmistress.
"You are correct," she continued. "You will not make much profit from the depth of the slums as things are now. However, what if I told you that things will not remain as they are now?"
Cæ frowned. "What…?"
She twirled her fingers as a third document was extricated from the stack of documents on the shelves in her office. It flew over to him, resting itself on the table before him. He raised an eyebrow at the documenting as his gaze returned to the Headmistress, before his attention returned to the document before him.
FLAP
Cæ opened it, skimming through it.
"This…" His eyes widened with shock as he understood what he was looking at.
He could scarcely believe what he was looking at.
"This is the soon-to-be in effect monetary policy of the Central Bank of Elendir," she remarked. "It is confidential, officially at least, so I cannot allow you to disclose what you have seen in it."
Cæ stared at the document with a frozen expression. "This describes… a massive rate cut? And a lowering of credit eligibility criteria?"
She smiled confidently. "Correct. The Central Bank intends to cut repo rates for the first time in five years, having constrained the money supply to ameliorate supply-side inflationary pressures caused by food insecurity across the world in the past few years due to the Estroycia Federation and the Serveil Kingdom. In other words…"
Her smile grew more certain, "…there will be a surge in economic activity which will undoubtedly trickle down to slums as a much greater number of them will be hired for manual labor by people in the outer rings of the inner city, which will in turn spread across the entirety of the slums."
The repo rate was the interest rate at which the Central Bank of Elendir lent money to all other banks in the nation, private or governmental, which in turn decided at what rate banks lent money to the rest of the country. It was the tap that decided at what rate water gushed out for people to consume.
By reducing the interest rates, more people would be able to borrow money, which, in turn, would increase the amount of money being spent. This, in turn, increased employment rates and increased wages in the economy, including the slums. While their slums themselves were disconnected from the maginet and the magigrid, the people of the slums still did grueling manual labor in the outskirts of the inner city, sometimes even deeper to get their hands on a decent income.
The interest rate cuts would directly trickle down to more people in the slums employed in grueling manual labor and earning a very humble income. With more money in the hands of the people of the slums, they would have higher purchasing power than ever before, allowing a greater portion of them to have the ability to purchase their haven units.
This was the rationale that Headmistress Lenolia was trying to convince him with.
Cæ grew stunned by the revelation, still struggling to process the fact that he was looking at controversial government documents.
He didn't even want to know how she got her hands on these, but he didn't even care. The information that he saw in the document was quite valuable to know ahead of time. While the Central Bank did engage in some forward guidance, signalling its intentions for a repo rate cut eventually to stimulate the economy, he hadn't expected to get his hands on confidential documents, sealed with the seal of the Central Bank of Elendir, which was illegal to even attempt to reproduce.
More importantly, he now finally understood why the headmistress appeared to be so confident in her ability to persuade him with this contractual partnership offer. By accepting the offer to lead the Elendir Institute of Magic's slum talent acquisition program, he could get his hands on more than an order of magnitude more revenue than before.
Thus, he would simultaneously be leading both Trinity Housings and the Outer City Talent Acquisition Program while the Elendir Institute of Magic would be protecting both of those enterprises. This was the partnership agreement that the Headmistress was proposing to him, and frankly, he was starting to see the appeal of it.
It was a perfect division of labor for their respective interests.
Both the Elendir Institute of Magic and Trinity Housings had business in the slums.
The Underworld was an unpleasant obstacle to both of them.
The Elendir Institute of Magic needed his expertise with the slums while he needed the Elendir Institute of Magic's magicapita, power, and protection so that they could both ensure that their respective enterprises in the Colohen Slums were successful.
It was the perfect partnership that they were both in the perfectly right place to get into with absolutely no downsides or disadvantages to it.
Cæ found himself genuinely considering the powerful offer, realizing the sheer amount that he had to benefit from if he accepted the proposal. He couldn't help but picture his humble housing unit spreading across the entirety of the Colohen Slums, earning him a massive revenue and profit.
With that success, he could easily expand his business to the entirety of the slums of all cities across the entire nation, allowing him to gain even more revenue. By accepting this partnership, he would be able to drastically accelerate the rate at which his business would grow, allowing him to tap into the massive untapped demand.
With the benefits of economies of scale, the relative cost of production would go down significantly, allowing him to achieve a monopoly in this particular niche.
These were merely fantastical conjectures, of course.
However, he realized that in this partnership, they weren't entirely impossible!
And yet, despite his urge to accept it, he didn't immediately leap at the plan.
He gazed at the elderly visage of Headmistress Lenolia with careful eyes.
"I would like to propose an amendment to this agreement."