Orrin Woodward LIFE Leadership Team

Winner of the 2011 Independent Association of Business Top Leader Award; Orrin Woodward shares his leadership secrets.

Leaders Produce Long-Term Results

Posted by Orrin Woodward on September 5, 2010

I just read a snippet online that I believe is from a Peter Schiff’s book called CrashProof written in 2006.  It was a parable describing why consumerism and debt are bad habits to develop for individuals, companies, and nations.  America became a great nation by its disciplined people who saved, produced, and then enjoyed the fruits of their labors.  Today, many are taught the alleged joys of debt, consumerism, and the right to live off our American birthrights.  The reason I am so passionate about leadership is because it is so lacking in our culture today.  Leaders get results, not just talk, not just pose, not just run to government to protect them!  Leaders get results through serving their customers.  

Do you want to help restore the American Dream?  Then start dreaming, learning, leading, and producing results.  When you lose ask yourself this question.  Do you hate losing bad enough to change or do you hate changing bad enough to lose?  Everyone hates losing, but most are adept at sidestepping the responsibility for the loss and thus never change. Don’t pass the buck, don’t blame your parentage, your environment, your spouse etc.  Accept responsibility for losing, learn to really absorb the loss and hate it enough to change.  Those who are willing to change ultimately win and those who are willing to blame perpetually lose.  Here is the snippet, are you one of the producers or one of the writers of IOU’s.  America cannot stand government IOU’s and needs leaders to lead a revival of true production.  God Bless, Orrin Woodward

A Tale of Two Farmers

Farmer Chang grows only oranges. Farmer Jones grows only apples. Each grows only the fruit he produces most efficiently, trading his surplus for the fruit grown by the other. Both farmers benefit from comparative advantage and free trade. The sole reason that Farmer Chang “exports” oranges is so that he can afford to “import” apples, and vice versa. Suppose that one year a flood wipes out Farmer Jones’ apple crop. Not having any fruit to trade, but hungry nevertheless, he proposes to trade apple IOUs for Farmer Chang’s oranges. Since Farmer Chang cannot eat all the oranges he grows anyway, and since Farmer Jones’ IOUs will pay 10 percent interest (in extra apples, of course), he accepts. Farmer Chang accepts Farmer Jones’ offer only because of the apples that Farmer Jones’ IOUs promise to pay. By themselves, the IOUs have no intrinsic value. Farmer Chang cannot eat them. It is the promise to pay additional apples that gives the IOUs their value.

When Farmer Jones issues his apple IOUs in exchange for real oranges, he does not actually pay for the oranges. Payment will not really be made until the following year when Farmer Jones redeems his notes by giving Farmer Chang all the apples his IOUs obligate him to pay. Only then can the notes be retired and the transaction be completed. Now suppose that the following year Farmer Jones’ crop is again destroyed, this time by a hurricane. He and Farmer Chang once again make the same deal, with Farmer Jones getting more of Farmer Chang’s oranges, and Farmer Chang accepting more of Farmer Jones’ IOUs. Further suppose that similar natural disasters continue to besiege Farmer Jones for several more years, until it finally dawns on him that he is eating pretty well, without actually farming. He therefore decides to turn his apple orchard into a golf course and simply play golf all day while enjoying farmer Chang’s oranges.

In other words, Farmer Jones now operates as a service economy. Farmer Chang, by contrast, is so busy growing all those oranges that he never gets a chance to play Farmer Jones’ course. In fact, he has been accepting Farmer Jones’ IOUs for so long that he no longer remembers his original reason for doing so. He now counts his wealth based solely on his accumulation of Farmer Jones’ IOUs. Farmer Jones actually enjoys such a good reputation within the farming community that Farmer Chang is able to trade some of Farmer Jones’ IOUs for goods and services provided by other farmers and merchants. However, as a result of Farmer Jones’ good reputation, no one notices that his apple orchard has been turned into a golf course. His IOUs are now worthless since Farmer Jones no longer possesses the ability to redeem them with actual apples.

Some might argue that the entire community now depends on Farmer Jones and his worthless IOUs and that Farmer Chang and the others will simply accept them indefinitely to avoid acknowledging the reality of their folly. Of course, were these revelations to occur, any unfortunate holders of Farmer Jones’ IOUs would officially be forced to realize their losses. However, their true financial situations would improve, as any further accumulation of worthless IOUs would end. As for Farmer Chang, he would once again, literally, enjoy all the fruits of his labor. The real loser, of course, would be Farmer Jones, for without a viable apple orchard or the ability to buy oranges on credit, he would starve. It would take years to transform his golf course back into an orchard, regain his lost knowledge of farming, and replace his obsolete and dilapidated farming equipment (provided he hadn’t already traded it in for golf carts and titanium clubs). In the end, Farmer Jones’ only alternative might be to sell his golf course to Farmer Chang and take a job picking fruit in his orange grove.

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