MAN'S MATERIAL WEALTH

[Music] hello i'm herb lyon director of corporate administration of the dow chemical company it's indeed my pleasure to introduce to you today rich devos president of the amway corporation of ada michigan one of the great concerns of many thoughtful americans today and certainly a matter of interest to dial people is that we seem to be losing touch with the fundamentals of our economic system in some ways we seem to have made a mystery out of economics the result is that we have less and less just plain talk about those things which have made our country great rich devos is a gifted man who speaks plain talk that we can all understand and let me assure you he speaks with authority he has helped build the amway company from the ground up and a highly successful company it is i believe we will find his message rings true that it is timely for americans today and that is is that it is worthy of preserving and passing on to future generations of americans here is rich devos well i'm honored to be with all of you today and to take just a few moments and talk about something many of us in this country call the free enterprise system and others call it the private system and there's all sorts of terminology for this simple thing as to how we make our bread and how we produce the good things of life the concepts that i just want to visit with you about are this on the one hand we have an economic system which for most of us in the united states we call the free enterprise system while in other parts of the world they have an economic system which they call a socialistic system and i would like to not only try and at least distinguish for you which system is which but when we're through then you can come to a decision as to which one you want to support because as the years go by you're going to have to choose especially for those of us who live in free lands where we have an opportunity to choose between the kind of men who will represent us or women that we're going to have people represent us who believe in one philosophy or another and certainly as we approach this critical year those are the choices you're going to have to make and maybe i can help you come to a little simple conclusion as to why one country does so much better and another does so relatively poor now the united states of america of course is considered one of the most prosperous nations on the face of the earth and yet in reality you know the united states has only been going about 200 years and so that doesn't mean it's got a great history it's one of the newcomer nations so to speak but when you look at its performance record you've got to come to the same answer and hopefully the same questions that all of us do and say why why is this country so prosperous today what do they do well let's see if we just can't talk about where it comes from for a minute and i've done it with a what we call a simple formula it wasn't developed by me it was developed by the american economic foundation many years ago in new york this exhibit was put on at the new york world's fair and i've merely taken their formula and put my words to it because it made so much sense to me when i first heard of it now we're going to talk about something called man's material welfare mmw mmw is in reality everything you and i eat sleep use enjoy every day a lot of times uh i have to go to church i don't know if you do or not but i do and i the preacher sometime will talk about materialism as though that were an evil thing he says you're too materialistic and of course that is the love of things and we must all be careful of that on the other hand let's think of materialistic things in a little different sense for a moment let's think of it as food food that can feed the starving millions in the world platitudes do not feed people only food feeds them how and why can we then provide more food not lectures on it but food that's the key material substances are things like medicine which helps sick people material substances are hospitals because hospitals don't just happen somebody has to build them somebody puts forth the effort why do we have such fantastic hospital facilities in this country that people from around the world come to this country to get medical treatment talk about housing talk about the cars you drive the clothes you wear everything you and i have in a material sense has to come from someplace well then where does it come from and why do some peoples on earth have more than others let's just look at the simple formula because it all says that man's material welfare is equal to nr plus he that's where it all comes from it all comes from the natural resources combined with human energy that's the only source of it all and i don't care whether you're talking socialism or capitalism or free enterprise or comment don't make any difference i don't care whether you're in china or whether you're in russia or the united states this is where it comes from it's the only source of all goods everything is either on the earth or grows under the earth all the food you eat if it's corn it comes on top of the earth if it's potatoes we dig them out of the earth i'm speaking on a microphone here with a little wire inside that wire's little piece of copper which carries the word that comes out of the earth the suit i'm have i have on is a wool suit which comes off an animal which grows on the ear the home i live in is made out of wood which comes off the earth it's made out of brick which comes out of clay out of the earth it has steel in it which comes from within the earth the car i drive has aluminum which comes from bauxite and i can just go on and on with you that's the source of every single material substance we have everything in this building everything in your home everything you use drive and enjoy and eat even to live on comes from the earth then somebody's oh that's the reason the united states is so much better off than everybody else you have got the most abundant natural resources in the world that's why well let's be thankful we do have great resources but the resources are not the difference because there are other nations in the world that also have great resources but they've never been able to convert them into material substances as we have india for example possesses two natural resources both iron ore and coal for the manufacturing of steel japan possesses neither one of these has to import both of them but produces many many more times steel than does india in other words the availability within your boundaries of the natural resource is not the key for years i thought saudi arabia was just a big kitty litter box see we suddenly discovered didn't we that their natural resources were not above the ground but under the ground see all nations have natural resources to some extent the question is how do you get the most out of it well it all happens with human energy because the availability of the natural resource itself does not produce anything coal just lays there it won't heat homes it doesn't keep people comfortable a forest can be a lovely thing but you can stand in the forest and get awful wet or awful cold it isn't until somebody cuts that tree down and turns it into finished lumber puts it all together somehow that it performs a protective shelter for us you can have the greatest farmlands in the world but they won't produce food until somebody gets down there and clears that land and grubs those stumps until finally somebody tills that land and plants the seed and takes care of disking it and takes care of the weeding of it and harvests it then we have food the natural resources plus the human energy now natural resources as i told you comes in two sources it's either in the earth or on the earth human energy also comes in two forms both mental and physical some of the people for example at dao don't do much physical work their work is up here they contribute their brain power their knowledge their insight their vision they sit down and just on a piece of paper sketch dreams and out of that comes great new discoveries because they contribute their mental power other people over here in this whole complex they do physical things they tote those boxes don't they and they load those trucks and and they actually do the physical work that makes things happen all are important to the process but i just want you to understand that one form of human energy is not superior to another one because a man who works best at whatever he knows how to do contributes to the well-being of not only himself but everybody that he's associated with now we're talking about human energy the fact that every person no matter who he is or where he comes from is important and that each person in the scheme of things makes it all happen doesn't he somebody has to get down on the ground for example to build a building and dig the ditches and finally somebody else does the final beautifying work and the sculptures and everything else but it all comes together so human energy plus the resources produce food shelter and clothing for everybody well as i said that's true of all economic systems but the difference then as to why some peoples produce more and others produce less is in the last little bit of our formula here and from there you get a simple complete picture and notice that while this is a plus we combine these two over here we're multiplying the output of the people through the use of tools tools are what permit us to do more in less time and so in our society we're more productive and that each human person can do more because he's got better equipment i was in peru a while back and i watched a native peruvian in a little town in cuzco and he was bent over and they loaded him up with lumber he was the lumber truck and he trotted off and he could probably move a hundred pounds of lumber you know maybe five miles before he stopped or collapsed or whatever but he couldn't really haul very much in a day's time by our standard one of our truck drivers in this country what does he do what he climbs in a big rig you know he's got a 40-footer back of him he's hauling 40 000 pounds one man he's moving it not at five miles an hour at 55 miles an hour he's sitting in an air-conditioned cab isn't he he's got the hi-fi on he's got a citizen's band radio he's a smokey the bear signpost 42. he's notifying all the so here he is the same man what's the difference between these two men one man producing a thousand times more than the other man one man's got a truck that's all one man has a truck one man's been given a tool to do more one man working in a farm field with a hoe can barely grow enough food to feed himself and maybe his family that's all but a farmer with tractors and automated equipment why one farmer can feed 20 other people or even more as they do in the united states a friend of mine runs a 2 000 acre farm in iowa they grow all sorts of beef cattle and grow the corn and everything for their own cattle they run the whole farm with two men and they do it with buttons they want to feed the cows they push a button and goes the food out of the silos out stuff that comes out the other side of the cow push another butt goes right back out doesn't it see he doesn't shovel it anymore he just he goes on a truck and he gets back out in the fields the dignity of work begins to develop why because the man produces more now good tools therefore make the work more meaningful we talk in this country but how can we make work more meaningful by sophisticating it to the extent that he doesn't have to do menial labor a lot of our people who are in production what do they do they stand there like this they're highly paid and they do great amounts of work and they monitor that whole production system and if it fails they stop it and correct it for a moment but through the use of tools we produce greater and better goods so the employer employer really makes more money per hour because he produces more the customer gets a better product because we can put more technology into it and better quality control to it the customer gets a better product at a lower price all through the use of tools and like in this country out of the use of our automation not only in factories but on our farming systems we produce enough food in this country with five percent of our people working on farms we produce enough food to feed 200 and some millions americans plus many other people in the world in russia for example where they have antiquated tools they end up now with and i hear conflicting numbers and russian numbers aren't too reliable because they they they are planning on a drought five years from now already see it's fascinating to me they they are ready to we need a they're trying to make grain deals with us for five years in the future because they were going to have another drought i think now what they're really saying to us is that their system isn't able to produce enough food to feed their own people and 30 to 50 percent of their people work on farms what that tells you is some place for every person who works on a farm he is able to feed himself and maybe one person and if it's 30 percent maybe two people besides himself so he works like a trooper and that's all he can do as far as multiplication of his effort is concerned well that's true of all systems as i've been saying it's true in russia in the united states we have better tools we produce more our people live better and our higher standard of living is obvious by the way we carry on well you say to me then what is the difference you were you told me you're going to tell me what's the difference between socialism and capitalism what's the difference between free enterprise and an economic state where the government controls everything it's all right here it's all on this word here and learn that one and then you can decide which way you want to go it's strictly this should the state own the tools of production or should the people have the rights to own that's all it is socialism is a system where the state says we will own the tools of production the state will own everything like they do in russia and therefore there will be no ugly thing like profit we'll take profit out of it and the state will run it and therefore we'll produce more and the people will get products at a lower price and in our system we say no the people through stock holdings through investment through are starting their own little companies have a right to own and be involved in the means of production and distribution what's the difference when you decide this i'll ask you a few simple questions my son was 16 i gave him a card drive i noticed something every time he left the drive we spun the tires i bought the tires he hauled his buddies all over town i bought the gas at 18 it became his car and he bought the gas and he bought the tires you know what happened he stopped spinning the turrets and he stopped hauling his buddies all over town because suddenly he had to pay for it and so i advanced the simple thought to you that when the state owns the tools of production two things happen the tools do not last as long and they do not produce as much on the very simple concept that when it's yours you take better care of it don't think so you go rent your house and see how it looks a year from now you think you're so good you go rent somebody else's house and see how it looks a year from now it's simple isn't it you just don't it's not the same and that's why when our economic system happens and you watch the farmers in the united states what does he do he's up with the chickens isn't he and the farmer over here he's out there when it's a blizzard yet to get his spring planting done he's out there what is he doing he buys lights for his tractor they don't do that those other countries why that's his piece of ground and he is going to be rewarded in relationship to what he produces off that piece of ground and so he works because it is to get more out of it simple thing we were coming into los angeles the other day freeway was jammed early in the morning had a renter car this guy was with he was driving and the train was freeway just jammed up i said to him cut on in it's a rental car i would do that with my car and i advance to you that on that simple margin is the difference between tremendous production and people putting in their time and getting by and so america lives high and the other people live relatively low because they do what they have to do what they're required to do by the state and that's where it stops and that's why if you watch the people in socialist societies and if you'll check the agricultural production in all socialist countries they have not improved their percentage of output more than one percent in the last 25 years now we talk about problems human problems people say to me the free enterprise system doesn't produce for people it's it's lets the rich get richer and the poor get poor it's a selfish system but the fact of the matter is is that our system has permitted the poorer people to live better than any other standard in the world also so since some work harder to grow farther even the bottom man of the totem pole has come up farther in america because remember this nobody gets it if there ain't none you can talk about distribution all you want you could say if the united states ate lest the people of india would have more not so because if we ate less and our people didn't work to produce it and pay for it and if the farmer couldn't be rewarded in relationship to what he does what did he do forget it 30 years ago in argentina juan peron said i'm going to control the prices for the people of argentina those city folks those farmers are getting too much for their food and so he laid the law down he set price fixing into motion 30 years ago 30 years ago argentina was the second largest beef exporter in the entire world plus much grain and other things prosperous country a booming country and then juan peron decided he was going to take care of the city folks and set the price so that's profiteering couldn't be done by the farmer you know argentina is today don't you today argentina is on the brink of constant civil war and strife today argentina barely if at all produces enough food to feed itself it exports no food at all anymore its production is gone and at the current time inflation in argentina is running in excess of 300 a year well it should be obvious to all of you that the differences in economic systems then are really quite simple do you want the state to control your life to set your standards of life or do you want the private sector to have a bigger hand in how your life's going to be run so those are the general shifts that go on in the world the nations that maintain a private economic system always have free people and socialistic states that control the tools of production automatically finally put this people into slavery very logical if if i was the head of that dictatorial government and i control all the manufacturing facilities and all the power companies in every possible all the buses and all the streetcars then pretty soon i control the people and i say you will drive streetcar you will not go to college you're going in the army you you have one child maybe because we don't we have too many right now and we're going to control that and what you people always forget is that when the state owns the tools the people ultimately go into slavery to the state and all you have to do is look at history and look at every nation that's opted for security says well government you've got to take care of me from the cradle to the grave you're going to solve them economic problems pretty soon they not only solve your problems they become the absolute controller of your life for example in russia now they come finally to a point where if your children are non-believers of any form of religion and you say we'd like to have them learn our faith it's against the law for you to teach them your personal religious beliefs because if you do that's contrary to the will of the state and you will be adjudged an improper parent and they'll remove your children from your home you can't share the guy that's true in china today too so you cannot share your religion with them because after all in those countries they ultimately come to this one they say we're going to equalize everything with the masses and then they go on and say but there is no god the state is your god and you watch that come full circle in all nations where they move through well we're going to take over the the power company we'll take over the steel company and then everybody will get more and finally what happens is everybody gets less and less and so it is in the united states today we have 100 million cars and in russia which has had dictatorial systems for 60 years now there's only a million cars and trucks in the whole land and i was just recently in russia and i've got to tell you in my opinion at least 40 years behind us there where i can envision we were when i was a very very little child if at that point at all with all their five-year plans and 10-year plans and total government control that we're gonna do it they aren't doing it so which do you want slave or free socialism or free enterprise one always leads to slavery socialism will lead to the loss of human freedom free enterprise will have a chance of protecting your rights to say i want a black car i want a green car i want to live in this house i want to move to this town i want to have so many children i want to go to this job i want to help my children go to college those are the choices you and i have every day and those are the glorious freedoms we have as far as i'm concerned that's the most important thing to work and to cherish every day but 200 years ago a man wrote some lines it was at the time of the fall of the athenian republic and this is what he said then and i think you'll find it interesting his name was professor alexander teitler the truth of his words today are even more fitting than they were then he said this a democracy cannot exist as a permanent form of government it can only exist until the voters discover that they can vote themselves largesse from the public treasury from that moment on the majority always votes for the candidate promising the most benefits from the public treasure with the result that a democracy always collapses over loose fiscal policy always followed by a dictatorship the average age of the world's great civilizations has been 200 years these nations have progressed through this sequence from bondage to spiritual faith from spiritual faith to great courage from courage to liberty from liberty the source to abundance from abundance to selfishness from selfishness to complacency from complacency to apathy from apathy to dependency and from dependency back again to bondage our nation is 200 years old we are the leading nation from a material sense on the face of the earth we have more abundance to share with more people than any peoples have ever had disasters that occur in the world we render aid why because we have it poor nations don't forget cannot help poor nations poor people cannot maturely help poor people and therefore i challenge you to be as successful and as excellent in everything you do as a person so that then out of your abundance you have something to share with those who have less but not by giving it to them but by showing them how to in turn be independent themselves but neither you nor i can do that unless we have done it so i challenge you to excellence i challenge you as members of this nation to be as diligent and to be as independent as you can not seeking somebody else to solve your problem but say we'll take care of our problem here we don't need governmental outside help and out of that will come a strong nation built on strong people and a prosperous nation which then in the face of disaster can in turn render aid to other people who are starving or in great calamity but we must first have it if we're going to share it so let's see how much we can produce and then out of love share what we know and what we have with others who are less fortunate can we escape the cycle i believe we can but the concluding line is this those who do not understand history are bound to repeat it and i challenge you to understand history and i hope what i've told you will give you a better perspective on where we're going and where we can go you