The video piece is by a successful entrepreneur named Nick Hanauer, who argues that rich men (like himself) are not the real job creators at all. The last thing a business-owner wants to do is create a job, he says: he does it only when consumer demand forces him to hire on another worker. The real thing that makes for flourishing wealth is consumers, which means that you have to have enough distributed wealth to enable the flourishing.
The second article looks at the same problem -- creating a flourishing of economic activity -- from the perspective of the businesses themselves. How much are we able to understand, with our limited algorithms and processing capacity? Where we see real successes in economic flourishing comes from places where we've had leaps in the math:
ORION’s promise was and is clear: For each mile saved, per driver, per year, UPS saves $30 million. The mathematics required to arrive at some solution to the traveling salesman problem, even if approximate, is also clear. But in trying to apply this mathematics to the real world of deliveries and drivers, UPS managers needed to learn that transportation is as much about people and the unique constraints they impose, as it is about negotiating intersections and time zones. As Jeff Winters put it to me, “on the surface, it should be very easy to come up with an optimized route and give it to the driver, and you’re done. We thought that would take a year.” That was a decade ago....The two arguments aren't quite opposed to each other, but there's real tension between them. The first argument suggests that UPS' improvements in efficiency are in some sense harmful: they cut into the wealth of middle-class workers like the drivers and mechanics, in order to maximize concentration of wealth in the corporation. The corporation is of course turning around and re-investing much of that wealth (in projects like ORION), but that kind of investment does little for people outside the highly-educated classes.
For one thing, humans are irrational and prone to habit. When those habits are interrupted, interesting things happen.... People are also emotional, and it turns out an unhappy truck driver can be trouble. Modern routing models incorporate whether a truck driver is happy or not—something he may not know about himself. For example, one major trucking company that declined to be named does “predictive analysis” on when drivers are at greater risk of being involved in a crash. Not only does the company have information on how the truck is being driven—speeding, hard-braking events, rapid lane changes—but on the life of the driver. “We actually have built into the model a number of indicators that could be surrogates for dissatisfaction,” said one employee familiar with the program.
A compromise position would be to raise taxes on the stockholders of UPS, but not on the corporation itself. That would leave the corporation with money to invest in its information improvements, while still ensuring consumers with enough wealth to buy whatever products are being efficiently distributed from factories to stores.
But a compromise is probably not wanted, because there are moral principles underlying -- and overriding -- the economic arguments. The unspoken moral principle underlying the first argument is that it's OK to take from the rich and give to the less-rich; some kind of ideal of fairness or common-good makes this something other than theft. The second argument has the unspoken moral principle that the people at UPS are working very hard to earn that $30M savings. It's their hard work that is making this possible, and it is very hard work involving the best minds and the fastest computers we know how to make. Naturally they are entitled to keep what they earn by the sweat of their brow, aren't they?
We have a fundamental disagreement on the moral principles, which means we cannot even begin to agree about what to do with the practical questions. There's some sense in which it is obviously true that you need consumers to have a consumer economy, and the first author's talk of a feedback loop between consumers and business is really right. It's likewise true that UPS is making new jobs, and better ones, in part out of the destruction of old jobs. But their efficiency is reflected in part in lower prices, which could drive job creation among small businesses that couldn't afford higher structural prices.
Could we come to a compromise? Yes; the two positions are not logically incompatible. Ought we to? People on both sides of the debate are nearly certain to answer, "No." Whether that preference for morality over wealth is praiseworthy or blameworthy, it is in fact the only point of agreement that unites us.
