In my opinion, economics is the least understood of the sciences.  Economics affects every person that desires to provide for their families, but most people rely on government or the media for their (usually incorrect) snippets on economics.  The Austrian School of economics has the most logical descriptions of what occurs in an economic transaction and aligns with my personal experiences.  I believe that to learn economics properly, you must read and then apply the principles into your business endeavors.  We have watched our government since the 1920’s take over our economic freedoms.  With every loss of economic freedoms, political and religious freedoms are sure to be lost also.  Ludwig Von Mises is my favorite author in economics, but they may be a little deep for your first economics book.  Paul Pilzer wrote a book called Unlimited Wealth, Warren Brookes wrote a book called Economy in Mind, and Friedrich Von Hayek wrote his classic, The Road to Serfdom.  All three of these will give a great foundation for understanding what is happening in our economy today.   Ludwig Von Mises magnum opus, Human Action is the best book on economics ever written in my opinion.

If we go to our economy today, we will see major violations of economic law.  The sad thing is that the government will violate economic law with its interventionist policies and then when it fails – the government blames free enterprise.  This allows the government to do more interventionist policies.  It is like a mad doctor who gives the patient a drug and it makes the patient worse.  The doctor then states the patient is very sick and will need further drug injections.  The process ends only in the death of the patient.  Socialism/Communism has never worked anywhere!  I hear all these poetic words on the joy of government regulations and control to stop the greedy entrepreneur, but in Cuba, North Korea, Soviet Union, etc, they only succeeded in stopping their economy.  The Austrian school of economics recognizes that all economies rise and fall on the economic calculations and predictions of the entrepreneur.  If you kill the entrepreneur then you kill the catalyst for the entire economy.  China has transformed itself into a pseudo-free enterprise country by allowing entrepreneurial profits.  The Chinese totalitarians saw the economic writing on the wall and modified their economics (in a blatant disregard of their Marxian roots) to maintain power.

Peter D. Schiff is the president of Euro Pacific Capital Inc., a brokerage firm based in Darien, Connecticut.  He is a follower of the Austrian school of economics and has predicted our current crisis years in advance.  Peter, by using the logical conclusions drawn from economic analysis, predicted the credit crisis, the housing devaluations and many more of the economic maladies.  Here is video footage of news programs where Peter was laughed and mocked for his economic views.  Notice how he stands his ground and does not give in.  Like the old saying goes, “A man with the facts is not at the mercy of a man with an opinion.”  I salute Peter Schiff for his economic stands against the hysteria of the crowds.  We need more men and women that learn the truth of economics for themselves so we will not be led down rabbit holes by our government and media.  God Bless, Orrin Woodward

[youtube=http://www.youtube.com/watch?v=2I0QN-FYkpw&w=425&h=344]

[youtube=http://www.youtube.com/watch?v=6NvjrfC6i0I&w=425&h=344]

There is an ideological battle blazing in the Network Marketing industry.  At stake is the Soul of an entire industry and whether it retains its free enterprise roots or morphs into a totalitarian control by the few.  On one side are the totalitarians that demand control and obeisance from the “proprietary trade secrets” otherwise, known as your friends and families.  On the other side are the libertarians that believe in free enterprise and the “right to own your own business.”  There can be no middle position here.  Either you are for companies owning the people who freely join their business, but are not free to leave or you are for the free enterprise principle that customers will stay only if you serve them.  Most people begin in business as libertarians and love freedom until they get a big community and then they want to use coercion to keep them.  I don’t believe this can nor ever will work.  People join networking to get out of the bureaucracies and coercion of a corporate job and are highly disappointed when they find out that some networking companies claim to have more control than their corporate jobs had over them.

Networking companies have always touted free enterprise and personal freedoms.  I have attended years of seminars and have heard speakers share quotes from Ludwig Von Mises, F. A. Hayek, Milton Friedman, Ayn Rand, George Reisman and others on stage for their stand on free enterprise.  I love the Network Marketing/Community Building field and what it can do for people’s thinking and lives.  I read most of the books of these giants of free enterprise and economics and was inspired to build a large free enterprise networking community.  I am now very concerned with the totalitarian direction of many in the networking industry.  Why is the networking field moving away from its free enterprise foundations that drew so many incredible entrepreneurs into the field in the first place?   Is the Direct Sales Association the group that can fix this or do they represent only the company’s perspectives?  Perhaps a field led association needs to be created to ensure that free enterprise reigns throughout Network Marketing?

“To deal with men by force is as impractical as to deal with nature by persuasion.” – Ayn Rand, a free enterprise and founder of the Objectivist school

When Lee Iacocca was fired by Henry Ford II, he simply took his ideas, many of his top leaders and went to a competitor Chrysler.  If Ford thought Lee was not fit for their company then they have every right to fire him.  But to then forbid him from getting another job in the automotive field sounds totalitarian to me.   Ford did not stop him from joining Chrysler and Lee did bring over 25 key lieutenants from Ford to Chrysler.  Any sane company would know that firing a top leader will create havoc in their leadership team.  The totalitarians in Networking desire the right to fire people at will and then sue the fired person.  They sue to steal the years of effort in building a community and deny the fired person the ability to compete against them in a free and open market.  Anytime competition suffers, society suffers.  The DSA should encourage competition as it helps the entire industry.  Currently, if the community chooses to follow the leader and not the totalitarians, the leader is sued by the totalitarians either in a public court or worse yet in a confidential arbitrations proceeding.  It may be only a couple of hundred dollars to join most networks, but whoever said it would be several million dollars for the right to leave even after you are fired?  This is not an idle discussion as big corporations are suing numerous top leaders in the networking industry as we speak.  There are multiple top leaders that are being sued for requesting the right to join another network.

The truth is that economic competition is the very opposite of competition in the animal kingdom. It is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth. – George Reisman, professor of Economics

Are networking field leader’s chattel or independent business owners with the right to choose where to ply their trade?  I am not for dabbling in numerous enterprises because I strongly believe that focus is essential for success.   Having a “free agency” mentality in our industry I believe is the key.  People should have the ability to come and go as they please, to work with companies and leaders that will serve them.  This ensures that all companies and leaders will serve their communities and put the customer’s best interests first.  If they don’t, just like every other market, their customers will leave and buy product and services from a competitor that does a better job.  Isn’t this what free enterprise is all about?  When a big company decides to insert rules into contracts and sue their top performers rather than serve them, I believe it puts the whole basis of Network Marketing at risk.  Big companies with good will can lose it quickly by inserting rules into existing contracts and destroying the free enterprise principles the company was founded upon.  No other market or industry in the free world operates like this.  To see the devastation of this type of mentality, you have to look no further than the economies of Cuba or North Korea.

“The role which good will plays on the market does not impair or restrict competition. Everybody is free to acquire good will, and every bearer of good will can lose good will once acquired.” – Ludwig Von Mises, the greatest economist of the 20^th century

Networking has always been about free enterprise and business ownership. The totalitarians are turning the meaning of these words into Orwellian double speak.  They want to be the only true business owners and everyone else they label business owners even though they are their “proprietary trade secrets”!   What is proprietary to a Networking Company about your neighbor or you friends at church?  Why haven’t the big leaders that are more like prisoners than business owners done anything to rectify this abuse for themselves and their groups?  In corporate America they called this golden handcuffs.  Not happy with the situation, but unsure of what to do.  Many big leaders are stuck in totalitarian organizations and would leave, but are afraid of being sued and bankrupted.  What kind of compassionate capitalism is this?

“Capitalism demands the best of every man – his rationality – and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him.” – Ayn Rand

The whole argument sounds frighteningly familiar to the history of Major League Baseball before the reserve clause was eliminated.  A player could play out his contract and be a free agent, but the owners of the team has a reserve clause that allowed them to still own the player.  Players would leave the game and have to get side jobs to survive because the owner raked in the profits at the players’ expense.  Curtis Flood fought over this reserve clause and eventually won.  The owners argued that it would destroy the game of baseball by having free agency and that there would be no stability in teams.  Economics theorized that free competition for the best players would raise all salaries and it did.  History has proven the owners wrong and all the major league players have benefited by higher pay and better retirement packages and the owners still make big money.  Freedom of movement for entrepreneurs is essential to create true competition. 

“If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion” – F. A. Hayek, Nobel Prize winner in economics

People in sports and networks do not come to see the owners, but do come to see the leaders.  In rare instances, this is the same person.  But many times the owners make the vast majority of the profits and the leaders handle the heavy load of leading and being controlled by bureaucrats.  Just as Curtis Flood stood for all of his fellow players and sacrificed personally for their future gain, I believe the key leaders in the Networking field must stand for the right to freely join or leave a company if they are not being served.  Any leader worth his salt would understand that jumping companies on a regular basis will hurt their credibility and raiding others people’s groups is just poor character.  People have the right to choose who they wish to be in business with and should make these choices with character and integrity in mind.  But adding reserve clauses and threatening to sue any top leader who is not being served properly only hurts the whole industry.  Reserve clauses made the players chattel of the owners with no freedom to leave one team for another.  Non-competes and “proprietary trades secret” clauses make distributors no longer owners of their own business, but “owned” by the company they are in business with. 

“I think that nothing is so important for freedom as recognizing in the law each individual’s natural right to property, and giving individuals a sense that they own something that they’re responsible for, that they have control over, and that they can dispose of.” – Milton Friedman, professor of economics and one of Ronald Reagan’s favorite economists

As a leader, I am moving in the direction that I know will help millions of people have their victory, if they choose to do the work.  If a Networking company is not serving their customers or if I am not serving my team then I have no right to demand anyone to stay.  The ethical way to leave any company is to sit down with them and share your issues.  Perhaps they were unaware there were issues.  If they address and fix the issues then you both are better off.  If you sit down and they tell you to beat feet, then you should be free to pursue other opportunities not get sued.  Everyone ought to have the right to start their own business! Any time the freedom of action is hindered by totalitarians, by that same proportion free enterprise is hindered.  The catalyst for all free enterprise is the entrepreneurs and by denying freedom to entrepreneurs, you lose the competition that brings out the best practices for the end consumers.

“Entrance into the ranks of the entrepreneurs in a market society, not sabotaged by the interference of government or other agencies resorting to violence, is open to everybody.” – Ludwig Von Mises

The totalitarians desire control so they can pay less than their competitors and still fence in the unwilling distributors by fear and intimidation.   We freely join and we should be free to leave any community that is not meeting our needs.  Anything else is not free enterprise and you certainly cannot say that distributors own their own business if they are not free to sell their business and move on.  Totalitarians are unwilling to satisfy the consumers, but unwilling to lose their power.  In order to achieve these contrary principles, coercion is inserted into the contracts by non-competes, costly arbitrations, “trade secrets” language, etc, to restrict competition and maintain power.  My thoughts are: Let free enterprise reign!

Big business depends entirely on the patronage of those who buy its products: the biggest enterprise loses its power and its influence when it loses its customers. – Ludwig Von Mises

These are my opinions, what are your opinions?  God Bless, Orrin Woodward

This is not a bash networks discussion, but a discussion to make the networking field the best for entrepreneurs to enter.  If you won’t post under your real identity then why should I post your opinions?

The Team launched a new video where I describe the difference between pin working and networking.  I use an analogy of barge working or bridge building.  I believe that the right leadership team at the company and the right leadership team in the field is more important than any product, compensation plan, or high tech gadgetry.  I am not against any of these, but if you do not have leadership that understands the Three Keys to Wealth then you are wasting your time and effort.  I attempt to do everything in life with a specific intent.  Watch the video and apply the concepts to your life – it will make a difference in your life.  God Bless, Orrin Woodward

Orrin Woodward Team Video

Several years ago, I wrote an article on the heroic vs. anti-heroic world-view.  I strongly believe that individuals must learn to accept personal responsibility if they are going to develop into leaders.  The minute a person allows themselves to become a victim, is the minute that they stop becoming responsible for creating change.  Are their many things wrong in the world?  I think we can all answer a emphatic yes to that.  But we must not pass the buck and make it our governments, employers, or leaders fault.  We must constantly ask, “What can I do to make things better?”  Have you thought about what you can do to make a difference?  Below is the article I wrote on the Heroic World-View.  Take note of the books that I reference and order a copy for yourself.  Understanding the thinking behind the culture war is a necessary first step in developing the mindset necessary to choose which side you are on.  I am proud of you for taking the time to read and improve yourself.  God Bless, Orrin Woodward

Heroic World-View

I was sent the following email and I thought it would be good for all the Leadership Blog readers.  I found a website that had the story and some compelling commentary in addition.  Here is the story and the commentary to laugh, think and learn from.  God Bless, Orrin Woodward

“I bought a bird feeder. I hung it on my back porch and filled it with seed. Within a week we had hundreds of birds taking advantage of the continuous flow of free and easily accessible food. But then the birds started building nests in the boards of the patio, above the table, and next to the barbeque. Then came the poop. It was everywhere: on the patio tile, the chairs, the table …… simply everywhere. Then some of the birds turned mean: They would dive bomb me and try to peck even though I had fed them out of my own pocket. And other birds were boisterous and loud: They sat on the feeder and squawked and screamed at all hours of the day and night and demanded that I fill it when it got low on food. After a while, I couldn’t even sit on my own back porch anymore.

I took down the bird feeder and in three days the birds were gone. I cleaned up their mess and took down the many nests they had built all over the patio. Soon, the backyard was like it used to be…. quiet, serene and no one demanding their rights to a free meal.

Now lets see….our government gives out free food, subsidized housing, free medical care, free education and allows anyone born here to be an automatic citizen. Then the illegals came by the tens of thousands. Suddenly our taxes went up to pay for free services; small apartments are housing 5 families: you have to wait 6 hours to be seen by an emergency room doctor: your child’s 2nd grade class is behind other schools because over half the class doesn’t speak English: Corn flakes now come in a bilingual box; I have to press “one” to hear my bank talk to me in English, and people waving flags other than “Old Glory” are squawking and screaming in the streets, demanding more rights and free liberties.

Maybe it’s time for the government to take down the bird feeder?”

We Let This Happen!

The story is funny at first but then the seriousness of its deeper meaning sets in. There is a lot of truth in it and one has to ponder what the roots of this reality are: The answer is simple:

We, the citizens of the United States of America are the roots of this reality! We let it happen! One can argue when it all started, who started it all and what the first element of this reality was.  The fact is that it has happened, not all at once, of course, but in small steps over many, many years. Some people will argue that it all started with Congress passing laws introducing ‘Individual Income Taxes’ in the early 20th century. Most will say it all started with the start of entitlement programs such as Social Security (in the 1930’s), Welfare and Medicare Programs in later years, primarily in the 1960’s and the amendments and enlargements of these and other programs (Food stamps, housing assistance, school lunches etc) in the years since then. It is easy to see that the government’s bird feeder simply got bigger and bigger over the years so that more and more “birdies” could get things for free.

While some programs, especially the Social Security system, were very noble and also needed and were built on contributions over the working life span of all individuals earning a paycheck or making a profit. When Social Security began, there were over thirty people supporting one recipient of such benefits, now there are only three people supporting one recipient. This is scary especially in light of the fact that the so called ‘baby-boomer’ generation will start soon to become recipients of monthly Social Security checks.

What is especially scary about this is the fact that the elected officials in Congress are not willing to seriously address this problem. They have been and continue to play politics with this issue wherein the Democrats will vehemently oppose anything Republicans and especially President Bush propose. On the other hand, the Republicans had control of Congress and did not make real attempts to fix this problem. They rely on estimated projections of when the Social Security trust fund will run out of money and since this date is over thirty years away from now, it is so much easier to leave it for future lawmakers to deal with. An even bigger problem is Medicare, where insolvency is estimated to occur within ten to twelve years from now.

All one can say is Shame on all of them in Congress….No Exceptions!!!  But then, as we stated earlier, it is essentially our fault, we, the people let it happen! The big question is: Will we, the people allow us to keep all the bird feeders we have right now or is it time to take some down and clean up some of the mess they have caused by simply being there.

Here is an article that has me even more concerned about the viability of the United Nations.  Doesn’t the US provide funds to support the United Nations?  Is the U.N. working or is it a big spy ring like this article alleges? 

The Associated Press

UNITED NATIONS — A former Russian top spy says his agents helped the government steal nearly $500 million from the UN’s oil-for-food program in Iraq before the fall of Saddam Hussein in 2003.

Sergei Tretyakov, who defected to the United States in 2000, says he oversaw an operation that helped Hussein’s regime manipulate the price of Iraqi oil sold under the program — allowing Russia to skim profits.

Tretyakov, former deputy head of intelligence at Russia’s UN mission from 1995 to 2000, names some names, but sticks mainly to code names. Among the spies he says he recruited for Russia were a Canadian nuclear weapons expert who became a UN nuclear verification expert in Vienna, a senior Russian official in the oil-for-food program and a former Soviet bloc ambassador. He describes a Russian businessman who got hold of a nuclear bomb, and kept it stored in a shed at his dacha outside Moscow.

Tretyakov, 51, had never spoken out about his spying before this week, when he granted his first news media interviews to publicize a book published Thursday. Written by former Washington Post journalist Pete Earley, the book is titled “Comrade J.: The Untold Secrets of Russia’s Master Spy in America after the End of the Cold War.”

“It’s an international spy nest,” Tretyakov said of the UN, during an interview this week. “Inside the UN, we were fishing for knowledgeable diplomats who could give us, first of all, anti-American information.”

His defection was first reported in 2001, followed by the news that he was not a diplomat, but a top Russian spy who was extensively debriefed by the CIA and the FBI.

I am reading a book called WIKINOMICS by Tapscott & Williams.  My good friend Bob Dickie III, the CEO of Team, bought it for me for Christmas.  I have not finished it, but the first couple of chapters were enlightening.  The world is changing and the command and control organizations are going the way of the dinosaur.  Peter Senge stated, “The only competitive advantage is your organizations ability to learn faster than the competition.”  I
have stated, “The only way for your organization to consistently learn faster is to engage as many minds in thinking and learning as possible!”  How can you get any faster than engaging the entire world to help you?   Read what the authors said in WIKINOMICS:

A new kind of business is emerging—one that opens its doors to the world, co-innovates with everyone (especially customers), shares resources that were previously guarded, harnesses the power of mass collaboration, and behaves not as a multinational but as something new: a truly global firm. . . The new art and science of wikinomics is based on four powerful new ideas: openness, peering, sharing, and acting globally. 

Let’s discuss the first concept today and as I read further, we can
discuss more of the concepts.    When you think of openness, you think of candor, transparency, freedom, flexibility, access, and sharing.  The old industrial age companies believe in confidential information, hierarchical structure from top to bottom, authoritarian command and control, and contracts to control people and other companies.  Today’s informational age companies that make their boundaries porous to external ideas and human capital outperform the dinosaur companies that rely solely on their internal resources and capabilities.   Here is what the authors expressed in their book:

Yet another kind of openness is exploding: the communication of previously secret corporate information to partners, employees, customers and shareholders, and other interested participants.  Transparency—the
disclosure of pertinent information—is a growing force in the network economy. . . People and institutions that interact with firms are gaining unprecedented access to important information about corporate behavior, operations, and performance.  Armed with new tools to find out, inform others, and self-organize, stakeholders are scrutinizing the firm like never before.

Customers can see the true value of products better.  Employees have previously unthinkable knowledge about their firm’s strategy, management,
and challenges.  Partners must have intimate knowledge about each other’s operations to collaborate.  Powerful institutional investors who now own
or manage most wealth are developing x-ray vision.  And in a world of instant communications, whistle-blowers, inquisitive media, and Googling, citizens and communities can easily put firms under the microscope.  

Leading firms are opening up pertinent information to all these groups—because they reap significant benefits from doing so.  Rather than something to be feared, transparency is a powerful new force for business success.  Smart firms embrace transparency and are actively open.  Our research shows that
transparency is critical to business partnerships, lower transaction costs
between firms and speeding up the metabolism of business webs.  Employees of open enterprises have higher trust among each other and with the firm, resulting in lower cost, better innovation, and loyalty. 

The old adage, “information is power” has changed to “information shared is empowering.”   So why do some companies conceal and control all information from their customers?  I talked earlier of the benefits of social capital, but a firm that controls all the information loses its ability to create social capital.  The market today will reward the companies who are open and punish companies who are closed.   It is hard to trust a person or company who
keeps secrets from others.  This is why I love the NY Times test.  If what you are doing cannot be written on the front page of the NY Times, then why are you doing it?   Joseph Schumpeter described free enterprise in a concept he called, “Creative Destruction.”    Creative Destruction according to Mr. Schumpeter is what makes free enterprise so effective in creating long-term
wealth.  The underlying principle is that old wealth and ideas will be replaced by new wealth and ideas.  The new creations will destroy the old businesses.   This has happened numerous times over the years.  Look at the record industry; how is that idea doing today?   How about the carbureted automobile?  Is anyone making money with carbureted cars today?  New ideas and money moved in to create CD’s and fuel injectors.  The opening thesis of the WIKINOMICS book is: the future will be created by the open and transparent companies and the firms who guard their information will be destroyed.   I strongly believe the future belongs to the company who will learn and adapt the fastest.  Slow companies who guard all the information necessary to improve the company are committing corporate suicide.
Is your company, job, or business in the (Open) information age or the
(Closed) industrial age?   I advise you to take Mr. Schumpeter’s principle of Creative Destruction seriously—it will make all the difference whether you are created or destroyed financially in the information age.  God Bless, Orrin Woodward