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But that situation of the past contrasts sharply with the situation of today. In present-day America, the Industrial Revolution has brought to fruition a wealthy infrastructure. Great essence builders of the nineteenth century and twentieth century have built a solid business and technological foundation. Society in general has become very well-off. People today simply do not face the survival pressures that past generations faced. In fact, large segments of society today exert little productive effort. Yet, those people live in great comfort relative to past generations.
The wealth that the Industrial Revolution has brought society has led to a unique period. Today, large numbers of people can be in an overall money-losing, black-to-red mode. What is meant by a money-losing, black-to-red mode? What is meant by a money-making, red-to-black mode? A person either produces more values than he or she consumes and, thus, is in a red-to-black mode; or that person consumes more values than he or she produces and, thus, is in a black-to-red mode.
Although the majority of people today are net value producers, an increasing number of people are slipping into an overall value-draining, black-to-red mode. This black-to-red mode can be deceiving, for an individual can ride off the efforts of others at his or her place of work. A value-draining, black-to-red individual can even be in charge of a powerful company, but a company that was built by the efforts of past essence builders.
Today, an increasing number of both white-collar and blue-collar workers are in an overall money-losing, black-to-red mode when wide-scope accounting is used to measure their net production of values. Wide-scope accounting takes into account not just how much an individual produces and consumes, but also to what degree that individual aids or hinders the creation of new values. Many workers today are actually draining the successful, value-producing momentum of their companies. Although those value-draining, black-to-red individuals claim credit for their company's existence, their company's success was built by previous generations of hard-working, forward-essence movers as well as other essence-moving workers still within their company. (See Frank R. Wallace's Neo-Tech IV manuscript titled The Fundamental Principle that Determines The Long-Range Common-Stock Value of a Corporation for a specific example of this phenomenon within the DuPont Corporation.)
As all entrepreneurs quickly learn, creating a new area of business from scratch and making it go from red to black, creating something that never existed before and turning it into a profit generator, is incredibly difficult. It requires all the human effort and mental focus within an entrepreneur to even stand a chance of going from red to black. No one can really grasp the difficulty of creating a new area of business and making it go from red to black until they have done so themselves.
An entrepreneur starting a new business takes on enormous expenses, yet receives little income. He must fight for every bit of new income he generates. That entrepreneur is competing not only with other businesses in his field, but he is competing to get dollars that are already being spent elsewhere. Once an entrepreneur manages to cross over that crucial line where his income relative to expenses goes from red to black, a powerful momentum begins building. A short time after that point, the business that the founding entrepreneur struggled so mightily to make go from red to black can build a momentum that will allow it to go on for years. Other managers can then come into that business and, with relatively little effort, keep that business going, even growing for a time. Yet, no one but the founding entrepreneur will know the intense, competitive effort that was required to initially make that business go from red to black. Keeping a business going, even growing, seldom compares to the original feat required to make an initial business venture go from red to black. That is why so many established businesses can go on for years with low-effort, white-collar-hoax managements.
After a business has been successfully established, a low-effort executive can keep it running with fancy maneuvers. But, when those maneuvers are examined under wide-scope accounting, they will be revealed as draining that business' already-established roots. A white-collar-hoax executive will perform business maneuvers that avoid the enormous effort required to build long-range, forward movement. Instead, he will employ short-range maneuvers that cash in on his company's foundations. Such maneuvers are analogous to the farmer who sells his seed grain. That farmer will capture extra profits in the short range, but he will have no seed left to plant future crops.
Today, entire industries exist where the integrated effort necessary to build upon and expand business foundations is not being exerted. Such businesses eventually succumb to competition, particularly foreign competition.
The value-draining, black-to-red disease has reached the extent where many workers today, from hourly blue-collar workers to the highest-paid CEOs, project what Mark Hamilton calls "Marxism in business." Their premise is to avoid doing whatever is a hassle upon themselves rather than aggressively seeking to do whatever benefits their company. Individuals with an "avoid hassles" attitude are in an essence-draining, black-to-red mode. Their good-paying jobs exist because they are riding off foundations built by previous generations of hard-working essence builders. But, such black-to-red workers will eventually drain their businesses dry. Value-draining, black-to-red workers are particularly evident in labor unions. Their "What can business give me" attitude versus a "How can I build this business" attitude destroyed many American industries. Foreign competition simply outcompeted those unionized industries.
By understanding the value-draining, black-to-red mode versus the value-building, red-to-black mode, a person can dramatically elevate his own potential by evaluating his actions to see which are in a value-building mode and which are in a value-draining mode.
Is a specific action a Marxism in business? Is one's action an attempt to avoid hassling oneself? Or, is one's action an attempt to do what is right for the business? Just being aware of this concept can immediately increase a person's personal and business power several-fold.
If, after honest introspection, a person finds that he is in an overall value-draining, black-to-red mode -- which many people today are unknowingly in -- he or she can capture the greatest advantage available in life by pushing into a high-effort, essence-building, red-to-black mode. That will be difficult at first. But, with continuous effort, pushing into an essence-building, red-to-black mode will become more and more natural until it is simply a part of a person's makeup. When a person pushes into such a value-building mode, the future becomes his. Life becomes exciting and prosperous. His competence and self-esteem will continue on a path of upward growth for the rest of his life. A person in a value-building, red-to-black mode is happy and successful. But, a person in a value-draining, black-to-red mode becomes increasingly unhappy, complaint-oriented, and bored. Life for that person holds less and less opportunity.
By understanding the value-draining mode versus the value-building mode, a person learns to quickly spot those in a value-draining, black-to-red mode and then disassociated with them. That will prevent much loss and suffering. Likewise, by identifying individuals who are in a value-building, red-to-black mode, valuable associations can be made. A person's investment of time, effort, and money with such value-building individuals will always pay off.
The value-draining, black-to-red mode versus the value-building, red-to-black mode is a powerful thinking tool. It provides a bird's-eye view at the most fundamental level. The black-to-red mode versus the red-to-black mode can be the fundamental judging mechanism for most actions and people.
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