The [pessimistic operator](http://docs.rubygems.org/read/chapter/16#page74) `~>` makes sure that rails is updated to anything lower than rails 3.3. Meaning that the way this Gemfile is written updating to 3.2.11 is implied for bundler. Technically speaking this line could be rewritten as:

```ruby
gem 'rails, '~> 3.2'
```

Either way, though, running `$ bundle install` makes sure that your local Rails install is version 3.2.11.