Tuesday, September 4, 2012

On the nature of Empire, Part II: The better way


9/4/2012 Portland, Oregon – Pop in your mints…
In our last correspondence, we began to explore the nature of Empire and found that it is necessarily founded and maintained by a prevailing “Might makes right,” mentality.  This mentality has, as its logical end, the effect of destroying the capital stock of a society.  This is accomplished by the wasteful consumption of resources by employing them in both warfare, whose destructive nature need not be further explored, and welfare, which by nature rewards sloth and penalizes productivity.
{Editor’s Note:  Here we must make the clear distinction between charity, which is a voluntary action taken by a willing individuals to help their fellow human beings and welfare, which is a system of Imperially mandated aid which ends in enslavement both for the recipient and provider.}
When confronted with the fatal defect of Empire, the destruction of the capital stock of a society, the Imperial apologist offers support of the Empire as either the lesser of two evils, implying that the ideological alternative, namely: Anarchy, would lead to chaos and an even greater destruction of life and capital or may find support in any number of religious texts for Imperial rule and conclude that submission to government is God’s will.
“I am an atheist with regards to government, for I have chosen to live in the Kingdom of God”
We offered this refrain a mere three months ago as we explored inconsistencies between a belief in God and a belief in the world’s government.  Today, we will take this idea a step further as we present the better way that civil persons over the centuries have searched for and, in their better moments, embraced.
We’ve been inspired to do so by a recent post by Joel Bowman over at the Daily Reckoning entitled: We’re all Anarchists Now.
One of Mr. Bowman’s points is that Anarchy is a concept that has been hijacked.  In the same way that the term Liberalism has come to be associated with social progressives, anarchy has come to be associated with rebellious hoodlums.  However, when properly understood, Anarchy, devoid of the “Might makes right” mentality, is the perfect antidote for the problem of Empire.  As Mr. Bowman explains it:
“Properly understood, the term anarchy, which derives from the Greek anarchia, literally translates an, “without” + arkhos, “ruler.” Freedom from being owned…enslaved…forced against one’s will. Freedom to act voluntarily. Freedom to associate with whomever one so desires and under whatever conditions he or she sees fit…provided they do not diminish the ability of another to enjoy the same freedom.”
In other words, Anarchy declares that, all at once, there are no sovereigns and that every individual is sovereign.  You can understand why this may upset those who cannot begin to image  this worldview.
As for those who would support the “necessary evils” of perpetuating the Empire on religious grounds, we offer the following:  Were the Empire to truly be God’s agent on earth, it would cease to exist.
The Kingdom of God is Within You
“The Kingdom of God is Within You”
From the beginning, God has desired communion with mankind.  It is from a state of perfect communion with God that mankind has fallen, and it is to this state of perfect communion that mankind will return.  How can this perfect communion exist if God requires an earthly, Imperial authority to act on His behalf?
Yet the ultimate solution of Anarchy, where there is no sovereign save God himself or where every individual is a sovereign subject to God, depending upon one’s preferred theology, would be the embodiment of a perfect communion with God.  In fact, it would be the only way in which it is possible.
The problem, then, is not the existence of Empire, the Empire is simply the manifestation of man’s failed belief system that “Might makes right.” It is this failed belief system that must be vanquished.
The better way
Sadly, to study most of human history is to study the violent and destructive embodiment of the “Might makes right” mentality as Empires rise and fall, either to external Empires on the rise or from revolutions from within.  With every violent upheaval, most recently observed in what is now referred to as the Arab Spring, it becomes clear that the populace has simply exchanged one oppressive regime for another.
In fact, as one examines history, it becomes clear that the only true, permanent changes have come about when they are brought about through the use of nonviolent resistance.  Who amongst us are not familiar with the name Mohandas Gandhi or Martin Luther King, Jr.?  These men found the key to permanent change lies deep within themselves.
The key has been articulated by Leo Tolstoy in his insightful work “The Kingdom of God is Within You.”
It is the way revealed to us by Jesus, who chose to suffer and die in order to break the disease of ‘Might makes right” in the hearts of everyone.  To open the way for a perfect communion with the Father.
This is the better way.  His action trumped every argument that could ever be made in favor of Empire, and opened the doors to God’s Kingdom, the reign of a Holy God over a perfect Anarchy where the only rule is emblazoned on every heart:
“Love your neighbor as you love yourself”
Stay tuned and Trust Jesus.
Stay Fresh!
Key Indicators for September 4, 2012
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Thursday, August 30, 2012

On the nature of Empire, Part I

8/30/2012 Portland, Oregon – Pop in your mints…
Those who have followed The Mint for a reasonable amount of time may have noticed a shift in focus, if indeed there ever were a focus.  At first, we simply commented on the folly of the economy post August 2007, when the wheels began to come off.  We spent our digital ink examining the Federal Reserve and the perversions of what we use as money with a focus on current, even daily events.
Since those days, we have begun to examine the corroded bases of the economy, financial system, and society, as it were.  We poured through “Human Action: A Treatise on Economics” the magnum opus of Ludvig Von Mises and compared its compelling logic to the economic reality that we observe in the world around us.  What we have found has been all at once predictable and surprising, it that is possible.  A world where time and progress have been accelerated by the accumulation of a completely unnatural amount of debt.
On one hand, the acceptance of debt has enabled men to make technological advances which were not even dreamed of a generation before.  On the other, this debt has created severe imbalances in the natural world for which the only cure is the liquidation of said debt and an uncomfortable change in the daily activities for many.
Chart - Decline in US Capital Stock
August 2012 has seen a decline in private capital stock in the US. Coincidence or evidence of Empire? Courtesy of The Money Game at http://businessinsider.com
We’ve found that debt, left to its own devices, has a way of achieving equilibrium.  Credit is created in response to anticipated increases in the capital stock.  However, with the advent of Empire, which we define as a centralized system which employs the philosophy of “Might makes right” to dominate its subjects, debt came to be associated not with increases in the supply of capital, but by decree of the Imperial authority.
The nature of an Empire is simple.  It arises out of some sort of ambiguous idea of payment common defense.  Through this seemingly logical argument, the Empire extracts a certain amount of voluntary tribute, what today are commonly called taxes, as people make a conscious choice to cede a portion of their earnings for the common defense.
Yet it doesn’t stop there.   With its nascent consolidation of the power to resort to violence, the Empire inevitably expands its activities beyond the maintenance of a common defense.  Most of these extensions of power are more difficult to palate for those subject to the Empire.  They naturally begin to look for ways to lower their tribute.
A view of Empire througout the world - A Map of World Empires 1900-1914 by Geordie Bozanko
A view of Empire throughout the world – A Map of World Empires 1900-1914 by Geordie Bozanko
The lower tribute coincides with increasing monetary outlays by the Empire, which it must fund by issuing debt.  Yet debt issued by an Empire has nothing to do with an anticipated increase in the capital stock, rather, the proceeds are used to fund deficits as the “Might makes right” model goes to work destroying the capital stock of both the Empire and those subject to it.
As the capital stock begins to dwindle, the Empire naturally progresses to using its monopoly on force to take control of the food supply.  Those subject to the Empire are required to render crops as tribute and then to accept a ration of food from the Empire.  Once the Empire has control of the food supply, the supply “mysteriously” begins to dwindle.
Whatever economic pretense that the Empire was founded on is sacrificed in the blind pursuit of a de facto communism.  The end game, which has played out numerous times throughout history, involves starvation, moral deprivation, violence, and revolution.
As the script has played out over the centuries, civil persons everywhere have been known to murmur, “there must be a better way,”
More tomorrow.
Stay tuned and Trust Jesus.
Stay Fresh!
Key Indicators for August 30, 2012
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Friday, August 24, 2012

The anarchic, feminine genius of Mary Kay’s sales structure

8/24/2012 Portland, Oregon – Pop in your mints…

We recently attended a Mary Kay event for the first time with our better half and were astounded by the simple genius of this amazing organization.  For starters, the products are terrific and, by most counts sell themselves.  From Satin Hands to the revolutionary TimeWise Repair, there is simply no better way to keep one’s skin soft, smooth, and younger looking.

Yet the true genius of this world class organization lies in what we call its anarchic, open source sales structure.  It is a structure that not only appeals to feminine tastes, but ensures an optimum sales force which manages and promotes itself.

How do they achieve this?

First and foremost, when the founder Mary Kay Ash set out to create her dream company, She consulted Accounting firms, Management consultants, Human resource experts, and MBAs of the day with business plan.  As legend has it, every one of them told her it would not work.  Mary Kay had simply examined what she liked about her direct sales experience with other companies as well as her needs as a woman and mother and created a place where literally anyone has the opportunity to succeed and advance in the sales structure.

It is the sort of thing that is difficult for those with advanced degrees and professional credentials to grasp.

As we now know, Mary Kay Ash didn’t listen to them.  As a result, working for the company can be a woman’s dream.  It emphasizes, relationships, beauty, goal setting, self improvement, and recognition.  It is literally a sisterhood of like minded individuals driving the vehicle (the sales structure) that Mary Kay Ash gave them to achieve their dreams and help encourage others to do so along the way.

Mary Kay offers the chance for all those who are interested to become a retailer of their world class product offering.  For a nominal fee, which amounts to the production cost of the products included in the starter kit, anyone who is interested can become a Mary Kay Consultant.  Establishing this relationship gives the consultant the right to order products at the wholesale price, which is 50% of the suggested retail price of the products.  This is in line with what one would expect a small scale retail markup to be in any line of business.

In order to maintain the right to order products at wholesale pricing, the consultant must maintain a minimum order volume over the course of each three month period.

The next part of the structure which we will explore is the tiered referral commission structure.  This is the part of the structure where those consultants who have actively recruited other consultants can naturally move up the ladder and begin collecting a portion of the sales of those whom they have recruited.

The structure is simple and works in the following way.  The consultant who is responsible for signing on a new Mary Kay consultant has the right to receive a commission of up to 26% on the new consultant’s sales.  This 26% may be shared amongst three tiers of consultants depending upon the receiving consultant’s level.

It is important to note that this commission does not impact the selling consultant’s 50% take on sales, rather, it is paid by the company (technically, the customers via the company).  We can imply, then, that the Mary Kay Corporation, who is the manufacturer, must produce their products and cover their overhead for 24% of the suggested retail price in order to break even.

Selling Mary Kay cosmetics is not a get rich quick scheme.  It is a real company selling real products where, in sharp contrast to jobs in the government or financial industries, six figure incomes must be earned.  According to one statistic, roughly one in 2,000 consultants will attain a six figure income from their annual sales activities.
Mary Kay Pink Anarchist Flag
The Mary Kay Pink Anarchist Flag, and homage to Mary Kay’s anarchic sales structure

And therein lies the anarchic genius of the Mary Kay structure, it gives literally everyone a shot at working to attain said six figure income, which cannot be said of many jobs out there.  The barriers to entry are practically nil and sales training is freely available in most cities from fellow consultants, who naturally stand to benefit from the overall success of their fellow consultants.  The only limitations placed on the consultant are the time, energy, and ingenuity that they are willing to put into the endeavour.

The genius of the Mary Kay structure is furthered in that the commission and the sales leadership structures allow for advancement in almost direct correlation to the of effort and ingenuity of the individual consultant.  For the most part, there are no administrative barriers to income advancement, and at any point the consultant can choose to attempt to increase their income by increasing their efforts towards product sales or towards recruiting a team and supporting their team’s efforts at product sales.

It is the entrepreneur’s dream, and it appears to work as the founder, Mary Kay Ash, intended it.  The sales structure of Mary Kay allows the manufacturer to harness the anarchy in which we all live to maximize the sales potential of their considerable product offering.

The secret to success in any income earning endeavour is self determination (being one’s own boss) and working one’s tail off.  Mary Kay provides the tools and gives the consultant the first part of the equation from the outset.  Results and advancement are then determined by the initiative of the consultants themselves.

Starting one’s own business can be a hard, thankless, and sometimes losing proposition, especially during the first few years when the proprietor is learning the ropes and testing what works and what does not.  In Mary Kay, as with anything in life, there is no guarantee of success if one gives it a run, but there is a guarantee of failure if one does not try.

Even if one has no need for skin care products, it is impossible not to admire the anarchic genius of Mary Kay’s sales structure, for it is a microcosm of organic economic activity as nature intended it.
Stay tuned and Trust Jesus.

Stay Fresh!

 David Mint

Email: davidminteconomics@gmail.com

Key Indicators for August 24, 2012

 Copper Price per Lb: $3.46
Oil Price per Barrel:  $96.07
Corn Price per Bushel:  $8.02 
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