#3 And Economics 101

There is nothing special about the Number 3. But it took on a whole new meaning for me in 1993. St. Louis, MO In 1993, the transit Agency in St. Louis, known as the Bi-State Development Agency (BSDA) built and operated a seventeen-mile light rail system; a line referred to as MetroLink. At this time, there were no rail transit system in Missouri making MetroLink a big deal. Big Changes BSDA provided the bus transit public service crossing the Mississippi River serving passengers in both MO and Illinois. All of their bus operators were unionized and, as part of the collecting bargaining agreement, all future Train Operators must come from the existing unionized bus operators. This may sound like no big deal, but believe me it is. Union Seniority For those not familiar with how Unions work, “Seniority” is everything. Seniority is simple to understand; the longer one is an employee of the transit agency Union, he or she gets to pick the best jobs, work hours, and vacation times than those with less seniority than they. So, when it was time for the bus drivers to decide to move from driving a bus to a train, the most senior bus operators called all of the shots. It was predictable that the highest seniority bus drivers would choose to drive a train as opposed to a bus. Driving a bus is not an easy job. They fight traffic all day and sometimes passengers who won’t pay their fares or are just obnoxious. Driving a train, in comparison to a bus, is a dream job. Train Operators do not have to fight traffic or even talk to passengers at all. In Short, anyone driving buses for 30 or more years predictably chose to transfer from being a bus driver to a train operator—and that’s exactly what happened. Seniority & Self Interest I was given the opportunity of a life time in 1993 when I was asked to be the “Director of Train Operations.” for MetroLink. Part of my duties was to transfer the most senior bus operators and train them to be Train Operators. As expected, when I posted the combination of daily train routes/runs, the most senior train operators picked the best day runs and days off. Each Operator, out of “Self-Interest” picked the most coveted schedules. No surprise—they operated “Rationally” and in their "Self-Interests." These two terms are self-explanatory, but I doubt most people know how significant they play out in our World Economy and specifically how they persuade, manipulate and control your spending behavior. As such, I found it important to understand the subtle forces at work that “control me” because I don’t want to “be controlled” and I suspect neither do you. So put your thinking hat on and figure out what causes you to do what you do with your money. Economics 101 In college Economic classes, there is a theory that people (consumers) will always choose based upon their “Self Interest” –a label tagged by Adam Smith in his book “The Wealth of Nations.” Smith is considered the "Father of Capitalism" and he changed the way the world produces everything from food to supplies and appliances of all sorts. Smith made the observation that People are Rationale and as such, they will make decisions based upon their self-interest. He coined the following phrase: The “Rationale Man” (Us) will more often (if not always) choose based upon their “Self-Interests.” This logic caught on quickly and it gave the world a means to predict consumer behavior so as to guide effective production of vendors to maximize profits. But that was only half of what he gave us. Around the mid 1700s, Smith made another observation. He showed the world how to maximize wealth through specialization of the world's work forces. But, I wish to focus upon the Rationality principled for the purpose of this narrative. He was actually a brilliant and a humanitarian--and Not a Greedy Capitalist. He would roll over in his grave if he new his prinicipals were being twisted to suggesting he and real Capitalism is about getting as much as you can from as many people as you can regardless if these other people were to be hurt in the process. The idea that hedonism was at the heart of Capitalism today and being taught that Hedonism is a virtue as "what is good for me" is good for everyone (regardless of the collateral damage caused in the process. The world's new understanding how people are Rationale resulting in them or choosing in one's self interest may give you a better understanding why you are the victims of so many commercials and advertising. Producers are working hard to appeal to you to buy a vendor’s product by convincing you that purchasing it, you are acting rationally and in your “best- interest” so pull out your wallet for the “best-interest” of the vendor. Everyone WINS based upon Rationally choosing what is their Best-Interests. BUT, IT IS A BALANCE ACT. If the balance gets out of whack and the Weight of Self-Interest exceeds that of the collective Interests of Others, Greed wins and all that is good looses. Rationally choosing in one’s Self Interest is the very DNA which propels our world economics… But, is this accurate? I thought so until I dealt with #3. #3 And The Irrational Man acting against Self Interests? One of my jobs was to afford management opportunities to senior train operators when such positions became available. That was one of the best parts of my job as I enjoyed rewarding those who proved to be good train operators and who seemed to have the “right stuff.” When a management position became available, I wanted to promote one of the train operators. Let’s call him John. John had a very high seniority number. He had the 3rd highest seniority amongst all the train operators. I called John into my office and offered him a Supervisory management position. The promotion came with a number of benefits such as: higher pay, not having to behind a train console all day, better and longer vacations, and others. Also, being a management employee, he didn’t have to be concerned with seniority ever again as management staff operated quite differently. This was a “no brainer” or so I thought. Number #4 I expected John to be exuberant and anxious to transition to a better job ASAP. Here, in summary, was John’s honest response and I’ll never forget it. It went something like the following: John's thining “If I’m promoted, the #4 seniority train operator (call him Sam) behind him would take over my #3 spot.” Note: Once a Train Operator was promoted to Supervisor, he/she would forfeit his seniority as it no longer applied. For decades the #4 Operator (Sam) coveted #3 (John’s) position. It turns out #3 and #4 were not the best of friends. From what I was told, John would always find out what Sam desired when it came to everything important to all the drivers including Days Worked, Weekends Off, Vacation Picks, etc. Once John found what Sam wanted, John picked them so Sam could not get what he desired. My Epiphany When I understood that John (#3) wanted to remain a train operator in order to frustrated Sam (#4), I concluded that John was not rationally behaving by choosing in his “Self-Interests.” I was surprised and disappointed. But the biggest surprise was he did so only in spite of Sam (#4). John would “be damned” before he allowed Sam get what Sam wanted. Imagine, John refused a better job, higher pay, better days off and more because he found more satisfaction screwing Sam (#4). It turned out that I was wrong and that John was not management position based upon his immature and punitive response. If Adam Smith was still alive, he would have to rethink and/or modify his powerful assumption as John did not prove to be a “Rationale Man” who acted in “Self-Interest.”