Monthly Archives: October 2010

The Greatest Natural Resource

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Mr. McLaughlin’s comment tonight about the steel company he
worked with in Venezuela who’s financials showed a remarkably low cost of
production reminded me of a conversation I had this summer with my friend
Fabiani in Maracaibo.

Fabiani is a senior in industrial engineering at the
Universidad de Zulia in Maracaibo, Venezuela. When she was 12 years old, her
dad was fired from his job with the state run petroleum engineering company for
his non-socialist political allegiance. With that background, you can imagine
Fabiani’s views on Socialist economic policy. When I told her I was blown away
to find out that the cost of a full tank of gas for a large SUV in Venezuela is
roughly 35 cents, she responded with simple answer that with everything else so
expensive, the government had to at least give them cheap gas.

In Venezuela, it is impossible to get a good deal on
imported goods. The Socialist Party’s mercantilist system leaves customers
paying up to $9 for a box of corn flakes, which is already a rip off for our
standards -let alone when you’re earning Venezuelan wages. Everything’s
expensive. Cars, shaving cream, peanut butter, computers, iPods (and not even
the up-to-date generations that we enjoy) -so maybe you can understand
Fabiani’s answer when I suggested that the government should raise gas prices
to increase revenues. To her, raising prices would only stunt the sale of gas,
and due to the country’s abundance, there wouldn’t be any point to it.

It’s interesting to see the way that natural advantage will
hardly benefit a nation if it lacks proper leadership to exploit its endowment.
Mr. McLaughlin also described China’s rise as a world-class steel producer.
Interestingly enough though, China’s only real natural endowment is its
extremely large labor force. They don’t actually have a lot of coal or other
essential components to produce steel, but they found a way to exploit more
well endowed countries like Russia and Australia that lacked the capital and
labor to take full advantage of their own resources.

What really stumps me though when comparing Venezuela and
China though, is that although they are both neo-mercantilist (wanting to
export more than import), socialist economies, China has grown its economy in
ways that Venezuela, despite being overwhelmingly rich in natural resources,
can only dream of. Because of this, I have to conclude that labor -human
capital is the richest of all natural resources.


The Leaders That We Actually Need

Last May, my friend Alex Thompson wrote:

“So, based on the current structure of the Academy and
this class, what kinds of leaders is it educating? At least to me, it seems
like the Academy is creating the leaders society expects it to make: eloquent,
well-cultured, networked, strong-willed and strong-opinionated individuals. But
are these the kinds of leaders society really needs? I’m not so sure. I worry
that we will turn into the politicians and socialites that we see on TV and in
the media: big personalities with lots to say, but relatively little
understanding. This is not quite the leader that Academy said it was going to
foster; in this respect, I am a little disappointed.”

I remember vaguely my PLA interview in the spring of my
freshman year. The question came up of what I thought I would gain from my
experience in the PLA. At that point I had no concrete idea what the PLA really
was, so I figured I would wing my response and ramble off something about how I
hoped to gain new insight into leadership techniques that I could apply to my
work later on. Melissa and Dean Brady’s expressions told me that I hadn’t quite
grasped how leadership would be defined by the PLA. This excerpt from the PLA’s
website show us what has been the focus of our program for the past two years:

“[the development] of critical thinking abilities
necessary for leaders to implement decisions with sensitivity to the
circumstances that led them there, and the ability to rethink decisions and
even change course along the way, if that is in the best interests of
employers, shareholders, clients, families, organization, or communities.”

The topic of critical thinking has permeated our discussions
and blog posts since our first class last fall, but I think that what Alex
wrote is still true; we all like to be heard -but I’m not sure we actually care
about the topics we discuss.

My international business class this semester has given me
new insight into our approach to current affairs. It seems that almost every
lecture my professor reminds us of the importance of differentiating ourselves
in the eyes of recruiters though developing the habit of skimming the NYT
Business pages before every class. This is a great practice, except for the
motivation behind it. We’re told to ask two questions when reading an article:
“how does this affect my industry” and “how does this affect my job”. It’s hard
to measure, given my young age, but I believe that the overly-competitive
culture that has developed in the States over the past 10 years is hindering
students from developing true passions and convictions because they are too
consumed with making themselves appear employable in front of everyone else’s
eyes. I think Alex nailed it when he wrote:

“At least to me, it seems like the Academy is creating
the leaders society expects it to make: eloquent, well-cultured, networked,
strong-willed and strong-opinioned individuals. But are these the kinds of
leaders society really needs?”

I think that what we really need are men and women who
aren’t motivated by personal promotion, who don’t care about appearances, but
who see injustice and get mad enough to do something about it. People like Blake
Mycoskie who founded TOMS Shoes; prioritizing social justice over profitability
(and still managed to make bank). More than that though, we need people who
actually are who they say they are; people who actually have convictions and
stand up for them.

I think that in addition to critical thinking, the PLA needs
to place a strong emphasis on personal transparency. I don’t mean that we all
need to sit in a circle and share out deepest secrets but I do think that if we
want to mould ourselves into people who could make a difference, then we need
to learn to be different -and not to count our true opinions as less valuable
than the next guy’s. Only in doing this will we be able to form true
convictions and passions -and not just continue to recycle ideas in the hope
that we’ll appear smart.