This is part 6 of an 8-part article.
Building Your Two Towers
At regular intervals during undergraduate enrollment, a mentor takes time to talk about the future. What will you be doing after graduation? What is your mission? Do you plan to have a family? How will you fulfill that mission while proving for your family? This necessarily leads to a great discussion. All students are counseled that in order to be effective as future statesmen, they each need to build two towers; a family and an institution.
Tower One: Families
Our very nature as human beings dictates that we gravitate toward the family environment. Our greatest happiness comes only through and within the bonds of a loving and nurturing family. Students are encouraged to plan for a family focusing on preparing first to be a loving and caring spouse, and second, to plan a family and prepare to serve as protective and nurturing parents.
Tower Two: Institution
All students are encouraged to contribute to society by means of developing an institution. This may be a for-profit or not-for-profit corporation. It might be some sort of social entrepreneurial organization or they may decide to make a contribution in an intrepreneurial manner. Regardless the method, all students are exposed to the abundance philosophy and encouraged to make their mark in the world. In order to be successful in creating an institution, students must embrace the two elements required for societal prosperity: the concepts of abundance and producers.
An abundance mentality is one that is rare in society today. Most people are concerned that there is a finite amount of whatever it is that they want, and that they must spend their lives scratching out their meager portion. Abundance mentality assumes just the opposite. It declares that there is more than enough of all material, spiritual and emotional goodness and that although one must decide and work for what they what, there is always enough and to spare.
Prosperity and abundance in a society depend on a certain type of person: the producer. Societies with few producers stagnate and decay, while nations with a large number of producers vibrantly grow—in wealth, freedom, power, influence and the pursuit of happiness. Producers think in abundance rather than scarcity, take initiative instead of waiting for someone else to provide them with opportunity, and faithfully take wise risks instead of fearfully believing that they can’t make a difference.
In contrast, non-producers provide very little leadership in society and cause more than a majority of the problems. In history, as Jefferson put it, producers are the most valuable citizens. Of course, he was speaking directly of farmers, but the principle applies to all those who add significant value to society. Non-producers consume the value that is added to society, but they create little value.
But who are the producers? Fortune 500 executives include themselves in this category, and so do small business owners in their first month of operation. Successful investors call themselves producers, as do unsuccessful day traders who claim that they just “haven’t had their lucky break yet.” Clearly, just calling yourself a producer doesn’t make you one.
In fact, there are at least five types of producers, and each type is vital to a successful civilization. Each of the five creates incredible value, though the currency of the value is not always identical. Without any of the five types, no society succeeds and grows. When all five are creating sufficient value, no society has ever failed. Producers are needed—all five kinds of them.
Prophets
The highest level of value creation comes from prophets. This category of producers is not limited to the Biblical-type prophets who spoke directly with God, but also includes anyone who teaches true principles. This makes prophets the most important of the producers, because without clearly understood principles all the other types of producers fail. Indeed, the other producers succeed to the exact extent that they understand and apply true principles.
Prophet-producers include Moses and Paul, who share God’s wisdom with us, and also sages like Socrates or Confucius or Bastiat, gurus like Edward Deming or Robert Kiyosaki, philosophers like Buckminster Fuller or Warren Buffet, and those who inspire us to serve like Billy Graham or Mother Teresa. Whether you agree or disagree with these people, their wisdom causes you to think, ponder, consider, and ultimately understand truth. By applying these truths, a person is able to produce. Even if you just sit and ponder, letting the truths come to your mind through deep thought or hard experience, true principles are still passed to you through spiritual or creative means.
God is the greatest producer in the Universe, and He shares true principles with us so we can also produce. For value to be created, true principles must be applied. Ironically, because God, prophets and other wise people often share their wisdom without asking for monetary compensation, sometimes other types of producers discount the value of their contribution. But make no mistake: revealing and teaching true principles is the highest level of creating value. Whether we learn principles through inspiration or intuition, or from the lessons gained through hard work and experience, without principles we cannot produce. Parents and grandparents are among the most important producers, because they teach principles most effectively—or not. When they don’t, the whole society suffers.
Statesmen
The next type of creating value comes from statesmen. Do not confuse statesmen with politicians and bureaucrats, who are often worse than non-producers because they actually engage in anti-producing. In contrast, statesmen create the value of freedom in society. The level of freedom in any nation is a direct result of the actions of statesmen—past and present. If great statesmen like Cato, Washington, Jefferson or Gandhi are present, a nation will throw off its enslaved past and adopt new forms and structures which ensure freedom of religion, freedom of choice and action, freedom of property and commerce, and other freedoms.
Together the value created can be called life, liberty and the pursuit of happiness. Take these freedoms away, and entrepreneurship and investment will fade and disappear. There are no exceptions in history to this pattern.
Statesmen like Lincoln, Churchill, Joan of Arc or Margaret Thatcher keep a nation from rejecting its freedoms and moving back into a cycle of tyranny and anarchy, where little production of any kind occurs. In short, without principles there is little freedom, and without freedom all other kinds of production shut down, are regulated out of existence, and cease to be viable options. No matter how entrepreneurial your spirit, you would not have created much value in the economy of Nero’s Rome, Russia under Stalin, or even Boston under the Stamp Act.
Without freedom, only prophets survive as producers—all other types of producers need both principles and freedom to flourish. The greater the understanding of principles and the freedom of the society, the greater the opportunities for producers. Indeed, almost nothing creates more value than increasing freedom.
Only when freedom is widespread would the other types of producers have the peace to think that statesmen don’t add value. And frankly, times when freedom is widespread are the very moments that it is in the most danger of being lost—it is at such times that statesmen are the most valuable producers.
Of course, the well-known statesmen like Lincoln or Jefferson only appear on the scene when there are a lot of lesser known individuals studying, writing about, talking about and promoting statesmanship. Only generations with lots of statesmen produce true freedom that allows widespread educational and economic opportunity. Most of the history of the world shows the absence of such statesmanship, so most of the population of the world were serfs, peasants, slaves and other non-producers.
Yet it is the true nature of all mankind to be producers, leaders, nobles. Jefferson called this the “natural aristocracy,” and it happens only in those rare pockets of history where statesmen create and perpetuate freedom. Next to true principles taught by prophets, freedom is the highest value that one can add to any society.
Investors & Entrepreneurs
The third type of producer is the investor, and the fourth type is the entrepreneur. This needs little commentary among producers, who nearly all realize that entrepreneurship is necessary to create new economic value and that even the best entrepreneurial ideas and leaders can fail without adequate capitalization. Robert Kiyosaki lists Investors as the highest of his cashflow quadrants and Business owners, or entrepreneurs, next. He is right on. Without investors, many if not most entrepreneurs would fail. Without both I’s and B’s, to use Kiyosaki’s language, no society can make significant or sustained progress.
Moreover, without investment and entrepreneurship many of the principles taught by prophets and most of the freedoms vouchsafed by statesmen would go unused—and eventually be lost. Prophets and statesmen are dependent on investors and entrepreneurs, and vice versa. No society is really successful unless all five types of producers effectively create value in their unique but interconnected ways.
Part of the value created by investors and entrepreneurs is obvious—they provide capital and establish institutions, which build society. Every family and every individual benefits from their services. Perhaps less known, but just as important, investors add the vital value of experience. Kiyosaki and Buffet both affirm that without personal knowledge and significant experience in a Business, almost everyone who tries their hand at Investing fails.
A society without adequate investment and entrepreneurship will see little, if any, progress. The old joke is told of an American, a Frenchman, and a Russian, lost in the wilderness, who find a lamp and rub it. Out comes a Genie. He offers them each one wish, for a total of three. The American pictures the large ranch owned by the richest people in the valley where he grew up, and wishes for a ranch ten times its size, with flowing streams and meadows full of horses and cattle.
His wish is granted and he is transported home to his new life. The Frenchman pictures the farm and cattle of the largest estate from his home province, and requests one just like it. Again, his wish is granted. Finally, the Russian pictures the land and herds of the rich family in the steppes where he grew up, and wishes that a drought kill the cattle, dry up the grass, and bankrupt the aristocratic family.
The joke isn’t really very funny, though it brings big laughs with audiences of producers. They get it. The Frenchman, thinking like an entrepreneur, wants the good things that life provides, and is willing to go to work to produce them. The American, who thinks like an entrepreneur and an investor, is willing to go to work also, but wants to see his assets create more value. The Frenchman wants value, the American plans for value, increased market share and perpetual growth. In contrast, the Russian in this parable can only think of one thing—getting even with those who seem to have more than him. This is the same as Steve Farber’s lament about the sad state of our modern employee mentality—where “burn your boss” is a slogan of millions of workers who see their employer as the enemy.
Initiative, vision, effective planning, the wise use of risk, quality execution—all are the contributions of entrepreneurs and investors. Without them, any society will decline and fall. Yet the non-producer mentality is often deeply ingrained most people. For example, a visiting speaker at a small college told the producer-minded student body of how challenging it was to get his employees out of their “serf” mentality. As the founder of a growing manufacturing technology company, he pulled in all his two dozen employees and offered them liberal stock options.
He explained that if the company met its projections, they would all be very wealthy—and he abundantly wanted to share the prosperity. Yet only a few of them would take the options. They only wanted cash salary, and mistrusted the whole concept of stock ownership.
At first he just offered it, thinking they’d all jump on board. 
But when only a few did, he pulled them in one by one and tried to make the case for stock. Still, only a few more took the stock.
The company grew, expanded, and then its value soared. Suddenly, only months later, a half dozen of the company’s employees were independently wealthy. They met, made plans, some stayed with the company and others moved on. But the real story happened with the those who had refused the stock.
They were still paycheck-to-paycheck employees. And they were very angry! Most of them met with the founder in his office, and many of the meetings ended with yelling, names called, and doors slammed.
The entrepreneur couldn’t believe it. NOW these employees wanted their millions. But it just doesn’t work that way. “I begged you to take the stock,” the owner told them. “Now, I can’t help you. Why didn’t you take it when I offered?” he asked. They had no answer. Only that: “I worked as hard as Jim and Lori, so why can’t I get the same payment?”
Entrepreneurs and investors understand that work is very, very important, but that high levels of compensation come to those who create value. Like the fictional Russian in the joke above, this man’s employees felt they had been “ill-used.” Consider the impact of this scarcity mentality on any society that adopts it. Freedom is naturally lost, and prosperity slows down and eventually becomes poverty. Entrepreneurs and investors are essential to societal success.
To Be Continued…