Archive for the ‘Economics’ Category

GreshamWe have been discussing the 5 laws of decline detailed by Orrin Woodward at the end of his book ‘Resolved‘, and in his and Oliver DeMille’s book ‘Leadershift‘.

In our look at Bastiat’s Law, we saw how people do the least amount of work possible to get what they want, which includes nothing and theft. Add to that Sturgeon’s Law, and we know at most 10% of the people in charge will stand up to that law and do what is right, even if the easier way is available.

That leaves at least 90% of politicians and leaders to fully embrace Bastiat’s Law.

It would not be surprising if you were convinced that the numbers are even worse than that. With the 3rd law of decline, I would be on youre side in that argument since it brings out the worst in a company; and in a country’s leaders as well. It is also always in action when you have Bastiat’s Law showing it’s teeth; in fact it feeds Bastiat’s Law, making Surgeon’s Law even a smaller percentage.

Gresham’s Law

Orrin Woodward takes his 3rd law of decline from Thomas Gresham‘s view on what happens to money. In the book ‘LeaderShift’, he describes it like this:

Thomas Gresham, an English financier, first elaborated Gresham’s Law as it pertains to money. He taught that when a government uses force to support one kind of currency over another, the bad money drives out the good.

But Gresham’s Law applies to more than just money. In short, when a bad behavior is rewarded, more of the bad behavior will be done, and that in turn will drive out the good behaviors.

In the leadership field, this is displayed when bad behavior is rewarded. For example, if someone can sit at their desk all day watching movies and get paid, this will cause others to choose this simpler method of making money (plunder).

Rewarding bad behaviors either converts others to plunder or drives them out of the company as they seek a firm that rewards people based upon productivity, not plunder.

Gresham’s Law: When bad behavior is rewarded, more of the bad behavior will be done, and in turn will drive out the good behavior. (more…)

TheLawPreviously we had discussed the first law of decline; Sturgeon’s Law. This law stated that 90% of everything is crud, and showed how you can’t count on 90% of leaders and politicians to do the right thing without some kind of check in place to stop them. 90 percent of them will undoubtedly fall to the second law of decline; Bastiat’s law.

These laws come from Orrin Woodward‘s book ‘Resolved‘ as well as his and Oliver DeMille‘s book ‘LeaderShift‘.

A couple of years ago I read a book by Frederic Bastiat called ‘The Law‘. In this book, Bastiat goes through the concept of having a law; what it is supposed to be used for and what it then actually get’s used for. He shows how laws are supposed to be there to protect a persons property, and thus people themselves, but end up getting used to steal or harm people’s property.

Bastiat’s Law

Bastiat wrote a profound passage that Orrin Woodward takes for his second law of decline, which he first outlined in ‘Resolved: 13 Resolutions for Life.’

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain—and since labor is pain in itself—it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work.

– Frederic Bastiat, The Law

Bastiat’s law: Since men are naturally inclined to avoid pain, which labor is itself, it follows that they will resort to plunder whenever it is easier than work. (more…)

Theodore SturgeonIn ‘Resolved: 13 Resolutions for Life‘, Orrin Woodward first introduced us to his five laws of decline; showing how if we are not aware of them, our life, our organisation, and our country, will suffer the consequences.

In ‘Leadershift: A Call for Americans to Finally Stand Up and Lead‘, Orrin and Oliver DeMille go through these laws more in relation to a country. Although these laws apply to everything, and all business leaders should be aware of them for their companies sake, it’s in relation to our nation they really hit home. You may not mind if a company goes under because of these laws, but you will certainly mind if the country does.

As not everyone will go out and get those books, we will go through some of the key concepts; let’s ensure as many people becomes aware of them as we can.

For some of these laws, left on their own, things might not be too bad, even if it’s still a problem. The real issues come when all of these laws are left unchecked; which is often the case since one usually leads to another.

Today we will take a look at the first law of decline.

Sturgeon’s Law

Theodore Sturgeon was a science fiction writer who defended his genre when it was being criticized for being full of crud; that it didn’t keep up with the times and new technology. Sturgeon’s reply was to point out that 90 percent of it was indeed crud… just as it is in everything.

That is Sturgeon’s law: 90% of everything is crud. (more…)

This might be one of the most important questions you can ask about a problem.

Do you ever feel that the government is ruining your country with its partisanship and inaction? Don’t you wish they would just stop all the bickering and come together to pass the laws, instead of always in a stalemate and getting salaries for accomplishing nothing?

I would say ‘yes’ to that in some situations, while in others I’m grateful they are arguing with each other and, as would seem to the average individual, accomplishing nothing. In most cases accomplishing nothing is actually a great accomplishment in the end.

The thing is, how can you be sure that when the government does come together, that they are actually accomplishing something good?

I believe in equality. I believe in equal rights and equal opportunity; this means that I don’t believe in complete equality (more…)

freedomEver since I started on the LIFE subscriptions, I always looked forward to the next talk I would get on the subject of freedom or economics. I have always considered freedom to be one of my core principles, but at the same time I used to be a socialist; I had the wrong information on how the world worked. I had the wrong information on what was right. I thought the socialists ideas helped the poor, helped those in need, while stopping the rich from trampling all over the poor; did I ever have that backwards!

Through many of the teachings on leadership, economics, and freedom from the founders of LIFE, and their subscriptions, I have come to see the error of my ways.

I have come to see the value of free enterprise, and how it actually helps more people get jobs. I have seen how it actually gives people an incentive to get out of poverty and provides paths to do so. I have seen  how governments and big business’ use new laws and regulations to keep people dependent and in poverty; I’ve seen them use regulations to allow themselves to grow beyond where free enterprise would have allowed, at the expense of hard working citizens.

I have seen how important leadership is to bringing back lost freedoms (more…)

Financial FitnessA couple of years ago I went through a finance pack from LIFE that cost me almost $50, but has saved me between $70-$100 every month since. That pack consisted of a small book and 4 audio CDs which proved to be invaluable.

Well, LIFE has outdone itself this time, with a new product; the Financial Fitness pack. It doesn’t leave anything out when it comes to finances. I’ve never really looked into any finance materials before, other than my accounting class in school or from reading Robert Kiyosaki’s ‘Cashflow Quadrant’. From what I understand though, financial education usually only covers one side of finance.

What I love about this new pack is that doesn’t just cover how to spend less or just how to get out of debt. It doesn’t only cover how to save properly. It doesn’t just cover how to make more money. It covers ALL of that in the offense of defense sections of finance. But there is more! It also covers the ‘playing field’ which goes into how money works, giving you the information you need to prosper in any economy.

It goes through 47 principles of finance that make total sense when you read them, but that can really set you back when you don’t even know about them. (more…)

Have you been watching playoff hockey lately? If you’re Canadian, the chances are you have. You would then have seen those commercials about Canada’s Economic Action Plan. It’s VERY hard to get under my skin, but every so often something comes along that just gets to me. Did you know you’re spending around $95 000 each time that advertisement plays; to be told that you’re spending money on improving the economy?

A while back I wrote a piece on the different ways money is spent, and I encourage you to go through it if you haven’t already. It explains how when you’re not spending your own money for yourself, it tends to get wasted. This is especially true when it’s not your money and it’s not for you, which is called third party spending.

If given that $95 000 to spend, even assuming you can’t spend it directly on yourself, how many people do you think would have chosen to spend it on that advertisement? I’ll bet anything that even the people who spent it on the ads would have spent it elsewhere if given the choice; if it wasn’t set for that campaigns budget by the government.

I recently read an article that showed the government has spent $113 million on these type of advertisements since 2009, that tell us they are doing a good job improving the economy. (more…)