Art Diamond Interviewed on the Small Business Advocate Radio Show

Yesterday morning, Jim Blasingame, the host of his nationally syndicated “The Small Business Advocate” radio show, interviewed me on issues related to my book Openness to Creative Destruction, and “A Disney Story for Young Socialists,” my Oct. 10 op-ed piece in the Wall Street Journal. You can click on the links below to listen to each segment of the interview.

Hunter Hastings Posts “Professor Arthur Diamond on Sustaining Innovative Dynamism” Podcast to His “Economics for Entrepreneurs (E4E)”

The podcast episode “Professor Arthur Diamond on Sustaining Innovative Dynamism,” is also posted at the Mises Institute site: https://mises.org/library/professor-arthur-diamond-sustaining-innovative-dynamism

Mott Joined Sloan in Methodically Avoiding Durant’s Entrepreneurial Hunches

(p. A13) Charles Stewart Mott never had his name on an American automobile, but he was on intimate terms with most of the men who did (he was godfather to Walter Chrysler’s daughters). He was also crucial to the rise and success of General Motors.

. . .

By the time Mott, a graduate of Stevens Institute of Technology in Hoboken, had returned from the Spanish-American War, his uncle Fred had added Weston-Mott, a company that manufactured wire bicycle wheels, to the family’s cider and vinegar operations. Charles went to work at Weston-Mott, soon becoming superintendent, just as the bicycle business entered into a sudden eclipse; the automobile had begun its imperial progress. Happily for Weston-Mott, most early cars ran on wire wheels, which Charles Mott supplied—$200,000 worth in 1903—many of them to the Buick Motor Co. of Flint, Mich.

At that time, Buick was in the hands of William Durant, the future founder of General Motors. Cars were being assembled piecemeal, with parts delivered from many far-flung suppliers. Durant didn’t like that, so he asked Mott to move his wheel-building operation to Flint from Utica, N.Y. According to Alfred P. Sloan, who in 1923 became president of GM and whose fortunes would be tied with Mott’s for six decades, the move marked “the first step in the integration of the automobile industry.”

The years to come would see struggles for control of the ever-growing GM, a complex and tangy story that Mr. Renehan recounts with verve and lucidity. “I like to work with Mott,” Sloan wrote of his most valuable lieutenant in his 1941 memoir. “His training had made him methodical. When he was confronted by a problem, he tacked it as I did my own, with engineering care to get the facts. Neither of us ever took any pride in hunches. We left all the glory of that kind of thinking to such men as liked to be labeled ‘genius’ ”—by which Sloan meant Durant.

For the full review, see:

Richard Snow. “BOOKSHELF; Company Man.” The Wall Street Journal (Friday, Sept. 6, 2019): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Sept. 5, 2019, and has the title “BOOKSHELF; ‘The Life of Charles Stewart Mott’ Review: Company Man.”)

The book under review is:

Renehan, Edward J., Jr. The Life of Charles Stewart Mott: Industrialist, Philanthropist, Mr. Flint. Ann Arbor, MI: University of Michigan, 2019.

“To Be Profitable, You Have to Have a Purpose”

(p. F2) When a group of the nation’s largest companies said last month that they had changed their mission strictly from making profits to also include benefiting “customers, employees, suppliers, communities and shareholders,” it was generally applauded as an important step in the right direction.

. . .

Treasury Secretary Steven Mnuchin in his first public comment on the topic, flatly told me: “I wouldn’t have signed it,” stunning a room of policymakers and business leaders in Washington at last week’s DealBook DC Strategy Forum.

His explanation was nuanced: “To be profitable, you have to have a purpose. I think it’s not as simple as saying we either have a purpose or we have profits. I think the problem with creating a simple answer is it doesn’t fully explore the issues.”

He added: “I do think companies should be long-term oriented. I don’t think companies need to necessarily be focused on quarterly profits and hitting Street earnings numbers. But I think, ultimately, a business’s job is to deploy the capital correctly and to make profits.”

Stephen A. Schwarzman, the co-founder and chairman of Blackstone Group and one of only a handful of members of the Business Roundtable who declined to sign the document, also went public with his explanation in a conversation with me earlier this week: “I know why we’re in business: because people give us money to manage. They want us to earn a lot of money to give them back or else they would give us nothing.”

He said “the idea that business should be concerned” with employees, customers, suppliers and the community should be a given. But, he said, he objected to the idea in the Business Roundtable statement that profits should be listed as simply equal to the other four issues.

“I have trouble managing when I don’t know what I’m supposed to be doing,” he said, suggesting the statement gives managers too many masters. “I know what I’m supposed to be doing, which is making good investments, safely, and making a great contribution to these pension funds and regular people.”

For the full commentary, see:

Andrew Ross Sorkin. “Profits or Public Interest?” The New York Times (Thursday, September 19, 2019): F2.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Sept. 18, 2019, and has the title “Profits or the Public Interest: The Debate Continues.”)

Pilots of Delivery Robots Benefit from Video Game Skills

(p. B4) Michael Niedermayer used to fly drones for the U.S. Army and the Central Intelligence Agency, gathering real-time, life-and-death intelligence on battlefields in Iraq. Now he pilots delivery robots for a San Francisco Bay Area startup that wants to disrupt burrito delivery.

Postmates, which in mid-August received a permit to operate its Serve delivery robot in San Francisco and is already testing it for food delivery in Los Angeles, employs a growing team of “pilots” to remotely oversee, and at times steer, these four-wheeled food ferries.

“We will probably see a drastic increase in our workforce over the next five years,” says Postmates Chief Executive Bastian Lehmann.

Disrupting “last-mile” delivery—historically the domain of box trucks, bike couriers and personal vehicles—“felt like a great fit for my military background,” says Mr. Niedermayer.

His story is hardly unique. Across industries, engineers are building atop work done a generation ago by designers of military drones. Whether it’s terrestrial delivery robots, flying delivery drones, office-patrolling security robots, inventory-checking robots in grocery stores or remotely piloted cars and trucks, the machines that were supposed to revolutionize everything by operating autonomously turn out to require, at the very least, humans minding them from afar.

Until the techno-utopian dream of full automation comes into effect—and frankly, there’s no guarantee that will ever happen—there will be plenty of jobs for humans, just not ones their parents would recognize. Whether the humans in charge are in the same city or thousands of miles away, the proliferation of not-yet-autonomous technologies is driving a tiny but rapidly growing workforce.

. . .

When Postmates managers interview potential delivery-robot pilots like Diana Villalobos, they ask whether or not they played videogames in their youth.

“When I was a kid, my parents always said, ‘Stop playing videogames!’ But it came in handy,” she says.

For the full commentary, see:

Christopher Mims. “KEYWORDS; Behind ‘Autonomous’ Tech, a Person Playing Robot.” The Wall Street Journal (Saturday, Aug. 31, 2019): B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “KEYWORDS; The Next Hot Job: Pretending to Be a Robot.”)

With Work Ethic, but Not Much Education, “You Can Come Out Here and Still Make Six Figures”

(p. B1) When Mike Wilkinson moved to Midland, Tex., in 2017, he hoped the world’s largest oil field would change his life. His marriage was in tatters. He owed tens of thousands in credit card debt. His morale was broken.

He soon began working as a “hot shot” truck driver, carrying loads for drillers who need pipes or drums in a hurry. The United States is the world’s largest producer of oil, surpassing Saudi Arabia and Russia, and demand for “hot shots” has soared.

The epicenter of the oil boom is the Permian Basin in Texas and New Mexico, a massive layer cake of shale that’s cracked open with a blasting technique known as fracking. The country’s growing energy dominance has created tens of thousands of jobs in this part of the Southwest in recent years, many for people like Wilkinson looking for fresh starts.

. . .

(p. B4) There are now 55,000 people now work in the Permian. Mr. Wilkinson says he’s found a certain camaraderie with other transplants: “They are either escaping debt or family issues or poverty.

. . .

“I have to make money, and this is the best way I can make money,” he said. “If you’re not educated and have a good work ethic, you can come out here and still make six figures.”

For the full story, see:

Clifford Krauss. “Boom Times and Fresh Starts.” The New York Times (Thursday, Sept. 19, 2019): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 10, 2019, and has the title “‘This Is the Most Lonesome Job’: Ride With a ‘Hot Shot’ Trucker in Oil-Rich Texas.” The online version highlights photographs by Tamir Kalifa. The online and print versions have significant differences in wording and ordering. Where there are differences, the passages quoted above, follow the print version.)

45 Is Average Age of Gazelle Founders

(p. B7) It took an entrepreneur to reimagine the mundane home thermostat as an object of beauty — and then to make a fortune based on that vision.

The entrepreneur was Tony Fadell, who had that thermostat epiphany after decades in the tech industry, including at companies like Apple. Mr. Fadell embodied his idea in a new company, Nest, which he started with the help of a colleague from Apple in 2010, at age 41.

The Nest thermostat had a sleek and intuitive design, smartphone connectivity and the ability to learn its owner’s temperature-setting habits. The product was a big hit, and within a few years Google acquired Nest for $3.2 billion.

Mr. Fadell’s deep experience and relatively mature age when he started Nest are typical of superstar entrepreneurs, who are rarely fresh out of college — or freshly dropped out of college. That’s what a team of economists discovered when they analyzed high-growth companies in the United States. Their study is being published in the journal American Economic Review: Insights.

The researchers looked at start-ups established between 2007 and 2014 and analyzed the top 0.1 percent — defined as those with the fastest growth in employment and sales. The average age of those companies’ founders was 45.

For the full commentary, see:

Seema Jayachandran. “ECONOMIC VIEW; High-Flying Tech Has a Touch of Gray.” The New York Times, SundayBusiness Section (Sunday, September 1, 2019): B7.

(Note: the online version of the commentary has the date Aug. 29, 2019, and has the title “ECONOMIC VIEW; Founders of Successful Tech Companies Are Mostly Middle-Aged.”)

The forthcoming article mentioned above, is:

Azoulay, Pierre, Benjamin Jones, J. Daniel Kim, and Javier Miranda. “Age and High-Growth Entrepreneurship.” American Economic Review: Insights (forthcoming).