All posts by V.E. "Bill" Haloulakos

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

INVESTING BY THE NUMBERS

HaloulakosDr. V. E. “Bill” Haloulakos
Aerospace Science Consultant/Professor
AIAA National Distinguished Lecturer and Legacy Member
Distinguished Engineering Educator Award Winner
E-mail: imveh@sbcglobal.net

 When we invest money we are always playing a numbers game.

  • The amount invested is a number
  • The interest rate is a number
  • The period of investment is a number
  • The final value of the total amount accrued is a number
  • The number of compounding periods in a year is also a number

We then feel justified to raise the question as to exactly WHAT IS A NUMBER?

We shall discuss the concept of numbers and also lay out the peculiar behavior of two special numbers, namely ZERO and INFINITY, and also show how INFINITY plays a special role in an interesting investment problem.

When we need to talk about the numbers one, two, etc, we usually show the corresponding number of fingers or we point to a corresponding number of material items. But in the number system there are two very special numbers with rather elusive behavior. They are the numbers of ZERO and INFINITY. When we need to talk about zero all we can do is make a circle with our thumb and the index finger. There’s no other way to indicate the idea or concept of nothing, which the number zero indicates. On the other end of the numerical spectrum lies infinity which is impossible to describe in a simple understandable manner. All we can say is that it is BIG, very BIG. Actually exactly as say that infinity is something very BIG we can also say that zero is something very small. How BIG and how SMALL is only understood by crossing over into the fields of Physics and finance, which we shall do below.

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THE VALUE OF WORK IN A PERSON’S LIFE

HaloulakosDr. V.E. “Bill” Haloulakos  is Aerospace Science Consultant/Professor,  AIAA National Distinguished Lecturer and Legacy Member and a Distinguished Engineering Educator Award Winner


Work is the most valuable aspect of a person’s life.
It is what gets things done.
A person involved in productive work is a very happy person. Idleness is not a natural state of human life.
Invariably idleness leads to criminal activities that harm both the persons involved in it as well as the Society at large. Work renders human life very meaningful.

ERG is the basic unit of measuring useful work in the basic Physics centimeter-gram-second (cgs) system. It is derived from the Greek word for work, ERGasia, although some may say that it is derived from enERGy or ERGon, but all are Greek words so the distinction is immaterial. It is interesting to note, however, that the word commonly used in the spoken Modern Greek language for work is not ergasia but douleiá. It should be noted that the accent is on the last vowel “á”. By contrast it should also be noted that if the accent is moved over to the left over the previous vowel “í”, i.e. douleía, then the meaning becomes slavery! It is of special interest to note that Modern Greek language dictionaries contain both of these words, one for work and one for slavery, but dictionaries of the ancient Greek language contain only the word for slavery, i.e. douleía, and also contain the word ergasia for work. We, therefore, must conclude that the modern word douleiá, meaning “work”, must have been adopted later in history. Is it possible that it was adopted during the years of Ottoman (Turkish) occupation to denote the servitude to which the Greek people were subjected by their Turkish masters? This writer would welcome some expert historian etymologist to shed some light on this issue.

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THE NEW GAME FOR THE AUTO INDUSTRY IS: RECALL, RECALL AND RECALL

Haloulakos

Dr. V. E. “Bill” Haloulakos  is an Aerospace Science Consultant/Professor,  AIAA National Distinguished Lecturer  Distinguished Engineering Educator Award Winner

From the the current daily news one would conclude that the Automobile Industry is the recall and design flaw remedy business instead of designing, producing and marketing new automobiles. Many millions, yes millions, of autos are being recalled be it because of faulty airbags, fuel lines, ignition switches and their likes. Especially the airbag issues have resulted in congressional committee hearings with heated exchanges between industry representatives and members of Congress.

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WORKING IS THE NATURAL STATE OF HUMAN LIFE

Haloulakos

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contributor to The Business Thinker

PROLOGUE

A new phenomenon has surfaced in our country. Political leaders, government bureaucrats and even some academics are floating the idea that perhaps it is OK for people, especially the young ones, not to work. Perhaps they see that as a way to solve the unemployment problem and the economic stagnation that plagues the country. In addition, since these people will receive a government subsidy they will be indebted to the politicians so they will continue to vote them in again and again. Have we arrived at “the de Tocqueville” situation? This article attacks this concept as un-natural for it is in the very nature of people to WORK, otherwise life will have no meaning. Besides the USA was founded on the basis of hard work.

DISCUSSION

In the world of Physics Energy is defined as “the ability to do work” and work is given a mathematical definition as “the moving of a mass (material object) by a force through a distance. The precise amount of work being simply the product of the force times the distance”.

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THE EDUCATION BUSINESS IN THE USA:Is it Really Educating for the Needs of the Business World?

Haloulakos

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contributor to The Business Thinker

 

GEORGE_SPARTAN0001

 Rev. Protodeacon George A. Haloulakos, MBA, CFA, is a professor at the University of California at San Diego (and Irvine) Extension programs. He is a Chartered Financial Analyst and is owner/operator of Spartan Research and Consulting.
 

  • Education has become a big business in the United States
  • The proliferation of the number of departments and major fields of study in both public and private universities is staggering
  • The number of students at undergraduate and graduate levels is phenomenal
  • The amount of money expended is almost beyond measure
  • Yet, many businesses in the US need to hire special help from abroad under the umbrella of the H-1B Visa programs
  • This implies that the education business establishment may not be satisfactorily fulfilling the needs of the Business World
  • The proliferation of for-profit universities and the expansion of special extension courses in many of the large universities strengthen the above conclusion
  • Political correctness has significantly altered the environment whereby open discussion and debate on key issues appears sharply limited or restricted in our schools and universities
  • It was this “new political correctness” environment that caused the President of Harvard University to resign for merely raising the question as to why there is an under representation of women in the fields of science and mathematics and whether they could do something to remedy the situation
  • The deleterious effects of this political correctness is perhaps best illustrated by an article, exposed by Diane Ravitch, in the Wall Street Journal, June 20 2005, titled “ETHNOMATHEMATICS”

EARLY HISTORY

Education has been around for the entire history of mankind. It has been something that is always sought in order to elevate and improve a person’s or an entire family’s life. This was by way of acquiring knowledge that enabled one to do things and perform tasks that had market value and as the world of business entered human life the value of education increased substantially. Business required record keeping of the transactions between the trading individuals and groups. In fact it has been suggested that it was this business record keeping that developed the need for written languages.

In the earliest of days “reading-and-writing” was the property or secret of the elites and it was passed from generation to generation via word from mouth to ear and thus, these elite classes exercised a lot of power over the illiterate masses. History is replete with examples of the infamous “scribes” of many early societies, primarily that of Egypt where the whole system of knowledge was the property of the priests and their hieroglyphic writings were uniteligible until the Rosetta Stone was found by Napoleon’s soldiers in Egypt, now on exhibit in the British Museum in London, which eventually deciphered the Egyptian Hieroglyphs.  Even in the, so called advanced and sophisticated days of the Roman Empire the elites had learned the Greek language and communicated among themselves in Greek so as the masses, i.e. “the hoi polloi”, would not understand it. In fact it is this very custom of talking Greek so the masses did not understand it that has resulted in the common phrase of today “It’s Greek to me”.

While there are many early societies that have made numerous contributions to the development and the advancement of education, it is to the Ancient Greeks that most of the credit must go for their contributions are unique, everlasting and widespread. First, they developed the Greek Alphabet and a language that is still used and understood and then they opened education to the masses, which resulted in the plethora of writings, philosophy, history, geometry, and astronomy and on and on… It was Plato who opened his Academy in Athens, the forerunner of today’s university, in the 4th century BC, where one could attend and learn. Inspired by the admonition of his mentor, Socrates, prior to his unjust execution that “the unexamined life is not worth living”, Plato and his student, the political scientist Aristotle, helped lay the foundations of Western philosophy and science. Specifically, geometry and mathematics so were highly valued and thought of that led to Plato’s inscription above the Academy entrance “Let no one enter who does not know geometry”  

Education for many centuries was done by mentors. Galileo became so famous as a thinker, lecturer, scientist, etc. that it resulted in many students from all of Europe moving into his house so they could be mentored. Eventually, however, education became the formal business of organized institutions that we call universities. The first university establishments in the western world are thought to be University of Bologna (founded in 1088) and later Oxford university (founded around 1096). In what is now the United States of America (USA), all of the top private universities were founded by religious orders, quite often as schools on theology. Harvard University, for example, established in 1636, although not officially associated with a church, it primarily trained Congregational and Unitarian clergy. Likewise, 17th century clergymen who sought to establish a college to train clergy as well originally chartered Yale University as the “Collegiate School”. Similar stories can be told about other universities, e.g., the University of Southern California founded in 1880 by the Methodist Church. All these originally religious universities have become and continue to thrive as secular institutions. On top of that there has been a plethora of many other private and public universities that we have rightly call “The American Education Industry”, the main topic of this article.

THE AMERICAN EDUCATION INDUSTRY

Today in the United States there are about 4200 degree-awarding institutions [2500 4-year and 1700 2-year universities] with an approximate enrollment of 18 million students. This is indeed a big business! It is a business whose mission is not necessarily to make money, with some exceptions perhaps of some of rather recent “sprouting” of  “for profit schools” to be discussed later in this article, but to help their students improve their life, be productive members of our present society and also equip them with the tools to be creative and influence the future. For sure one critical purpose of a university education is to help individuals become self-sufficient, productive members of society. It can perhaps be observed that schools such as engineering, physical sciences, medical, business and their likes appear to be meeting their goals of their mission but there are other disciplines in the liberal arts such as history, political science, that are may be falling short of this goal and they also happen to put out the largest number of graduates. The exception is either English majors (who possess very strong writing and research skills transferrable to a large number of venues) or those liberal arts graduates who continue their education to acquire a specific skill-set or certification that is either technically or business oriented, and is commercially marketable.

We are not questioning the value of such a liberal arts education but we are simply saying that our economy may not need such an abundance of graduates in fields where there is either limited or no demand for such knowledge. Such individuals may find themselves either unfilled, underemployed or both as their skill set and formal education may not sustain them because they are unable to find gainful employment in that field. Thus, business is often forced to make use of the H-1B Visa plan to bring in international workers while many thousands of our US college graduates remain unemployed.  By any objective measure, this implies that many universities and their current programs are falling short in providing an educated work force with commercially marketable skills.  While institutions strive to educate one for life, it is equally important to remember that education should also, if not hopefully, enable one to make a living as well!

The proliferation of all these “feel good” majors in areas that give the students very limited marketable skills is becoming a national scandal. In an article in the Wall Street Journal issue of February 5, 2013 titled “Higher Learning, Meet Lower Job Requirements” James S. Shaw reports that North Carolina Gov. McCrory suggested in a recent interview with former US Secretary of Education William J. Bennett that “ college degrees should lead to employment”!  Many thousands upon thousands of college graduates today not only remain unemployed but also many of them have acquired huge loans, most of them Government guaranteed, in the process and it has become a national “scandal”. One should then ask, why such a young person spend four to five years studying things that are known not to be easily marketable and also run up such humongous debts in the process? The most likely answer is that perhaps the academic establishment is misadvising them. It is beyond question if these persons would spend those years on even a mediocre job in a four or five-year period they would be further ahead in life and without the burdensome loans.

There are numerous other deleterious effects of this situation. Being in college and pumped up by “marginal” faculty members, students may end up putting their minds to use in less-than productive activities with the worst result being all this political correctness and intellectual intolerance that are so prevalent in today’s university campuses. How can one forget the trials and tribulations of the Harvard University President who not too long ago dared ask, “why are there not more women in the sciences”? HE LOST HIS JOB BECAUSE OF THAT QUESTION! And by the way we still do have not the answer to this question. In fact this prevailing madness in current day academia has made some old jokes, such as putting up the correctness of the Pythagorean theorem to a vote, a reality. This can be seen in June 20, 2005 Wall Street Journal article, by Diane Ravitch, titled “ETHNOMATHEMATICS” where she very eloquently exposes this insane political correctness. She writes:

Those were the days of innocent dumbing-down. Now mathematics is being nudged into a specifically political direction by educators who call themselves “critical theorists.” They advocate using mathematics as a tool to advance social justice. Social justice math relies on political and cultural relevance to guide math instruction. One of its precepts is “ethnomathematics,” that is, the belief that different cultures have evolved different ways of using mathematics, and that students will learn best if taught in the ways that relate to their ancestral culture. From this perspective, traditional mathematics — the mathematics taught in universities around the world — is the property of Western Civilization and is inexorably linked with the values of the oppressors and conquerors. The culturally attuned teacher will learn about the counting system of the ancient Mayans, ancient Africans, Papua New Guineans, and other “non-mainstream” cultures.

Partisans of social justice mathematics advocate an explicitly political agenda in the classroom. A new textbook, “Rethinking Mathematics: Teaching Social Justice by the Numbers,” shows how problem solving, ethnomathematics and political action can be merged. Among its topics are: “Sweatshop Accounting,” with units on poverty, globalization, and the unequal distribution of wealth. Another topic, drawn directly from ethnomathematics, is “Chicanos Have Math in Their Blood.” Others include “The Transnational Capital Auction,” “Multicultural Math,” and “Home Buying While Brown or Black.” Units of study include racial profiling, the war in Iraq, corporate control of the media, and environmental racism. The theory behind the book is that “teaching math in a neutral manner is not possible.” Teachers are supposed to vary the teaching of mathematics in relation to their students’ race, gender, ethnicity, and community”.

This is madness!   As anyone who either has studied or utilizes mathematics in their field knows, the laws of physical science and mathematics are immutable.  To teach otherwise would require one to view the world in the manner described in Lewis Carroll’s classic “Alice In Wonderland Through the Looking Glass.”  No wonder there are so many young people who shy away from the math and science courses and opt for “feel good” subjects (many of which are in the liberal arts venue) instead.  This begs the question: How does one correct this situation?

HELP IS ON ITS WAY

As it has been the custom in the American Business, it is the private sector that often spearheads changes, innovation and progress. While some may cite World War II or the Space Race of the 1960s as being government-led, such an observation ignores the fact that government largely served to identify goals that were in the national interest of fulfilling on a massive scale.  It was the private sector that made the accomplishment of those goals achievable, feasible and economical.  This is because the price mechanism and the immutable laws of supply-and-demand were allowed to function in a manner that allowed physical, financial and intellectual capital to achieve its highest valued use in the context of the goals (e.g., victory in war, first to the moon) set forth.

In this situation concerning role of higher education, the rise of numerous private and in some cases, “for profit” education institutions, special extension courses and related certification programs is providing the template for maximizing the total return on investment in higher education that is fulfilling in both financial and non-pecuniary terms for the individual while helping to meet the ever evolving needs of the business world.  There are four such examples we can cite that affirm this observation.  Three are direct responses by the private sector, while the fourth example is “private sector” response by a public institution.

Our first example is the aforementioned University of Southern California (established in 1880 by the Methodist Church).  USC is world renowned for its professional schools, including but not limited to business, engineering, dentistry, education law and other such fields of endeavor.  During the post World War II period USC’s emergence as a world-class institution of higher learning began as the university provided “full-time” programs in the aforementioned fields that allowed working adults (many who were returning combat veterans who going to school on the GI Bill) to pursue their studies and earn their degrees in their chosen fields taught by fully-accredited faculty.  When the aerospace industry and other areas of business, along with the education field began to pay their more ambitious employees to acquire marketable and needed technical skills (e.g., science, math, accounting, finance, commerce, educational and business administration) these people were able to accomplish this by matriculating at USC.  They were able to earn undergraduate and graduate degrees (including doctorate and post-graduate level) but did not have to give up their day-jobs.  Thus USC helped its region (Southern California) and later, the rest of the nation and overseas, by making education an option that did not require having to forsake gainful employment and professional advancement because its classes were available both day-and-evening!  USC also pioneered the oft-imitated deployment of “satellite” degree programs in which faculty members teach classes on site for large corporations that allow their employees the benefit of furthering their education but without the time-and-expense of commuting.  For these reasons, USC’s dominance among the aforementioned professions in Southern California owes its legacy to its initiative to anticipate-and-respond to the needs of the business world.  As such, this provided the foundation for the university to achieve national and international eminence that now makes it one of the stellar academic institutions in the 21st century (e.g., named College of the Year by Time magazine and Top 10 and Top 25 rankings in its various professional schools by The Wall Street Journal, Business Week, et al).

A second example of the private sector responding to the needs of a specific end-user market is National University (headquartered in San Diego, CA.)  Founded in the early 1970s, NU is a private, non-profit institution that provides a fully-accredited series of undergraduate and graduate level degree programs that not only meets the needs of working students (on-ground and on-line), but most especially those in active military service whose deployment schedules might otherwise preclude them from acquiring a “traditional” college or graduate level education in a single locale.  The military has become increasingly high-tech, and NU makes it possible for active duty members of the armed forces to acquire much needed technical skills to help them in their day-to-day responsibilities, and also provides a segue into the private sector upon retirement or discharge from their military deployment.

A third example are the for-profit institutions which have come to fruition during the decades of 1990s and 2000s.  These institutions — while coming under heavy scrutiny and criticism by “traditional” universities as well as major print-and-video media publications that appropriately question accreditation and adherence to academic standards — have been able to provide a venue for students who are seeking a particular skill-set to help them in either in their current jobs or launch a new career path.  Such students may lack the background or credentials to earn entry into prestigious or traditional academic institutions. But they are not necessarily seeking an easier way to earn a degree, but rather an opportunity to learn from successful professionals and practitioners as well as expand their own networks.  These students are sometimes described as non-traditional learners, but nevertheless are ambitious to grow and develop into being more self-sufficient and productive members of society.  The group-study and interactive learning modes popularly used by these institutions enable working adults to engage in an environment that is similar to the work world, and thus makes this education more relevant or applicable to their particular circumstances.  In sum, these “for-profit” institutions are a reminder that there is a growing market which looks at higher education from the perspective of finding the school that is best for their needs rather than attending the so-called best school.  This is because the so-called best school in a given field may not be relevant or important IF they are not able to afford it or gain access.

The fourth example, and in response to the increased competition now evident in the realm of higher education, is that well-known universities such as the University of California (the world’s #1 rated public university system) have now developed Extension programs that allow students to receive Certificates of Completion in various fields such as accounting, finance, management, and other areas that are becoming increasing technical and complex in nature.  The Extension format allows students to earn college course credits which can later be applied to a formal degree program if they so desire, Certificates of Completion or both.  These classes are noted for high-level content and rigorous academic standards, but are very narrowly focused and completed in a relatively shorter period of time.  Typically offered both on-ground and on-line, day and evening, the Extension program enables a student to obtain a very high return on his or her investment (especially if from a prestigious public university like the University of California) because the person acquires a specific skill set and Certification that increases versatility, marketability but without the onerous financial burden of lengthy and often expensive graduate level degree programs.  If a student has for example, a bachelor’s degree and is in a solid career track, but wants to augment his or her skill set with specialized knowledge then the Extension program is an ideal way to do so in a fully accredited, academically rigorous but practical venue.  Similarly, this is a very time efficient way to independently acquire knowledge or a recognized academic credential for a change in careers without having to subject oneself to the whims and risks associated with the group study models associated with some, but not all for-profit educational institutions.

These are just a few, but not an all-inclusive list of examples on how the private sector has creatively responded to the ever-changing needs of education.  But since the private sector is based on application of free-market principles, including the price-mechanism, a cautionary note is in order. In his book, titled The Higher Education Bubble, published on June 26, 2012, Beauchamp Brogan Distinguished Professor of Law at the University of Tennessee, Glenn Harlan Reynolds, very eloquently speaks of the problems associated with a speculative bubble in higher education. He writes:

America is facing a higher education bubble. Like the housing bubble, it is the product of cheap credit coupled with popular expectations of ever-increasing returns on investment, and as with housing prices, the cheap credit has caused college tuition to vastly outpace inflation and family incomes. Now this bubble is bursting.

Nationally syndicated radio talk-show host Dennis Prager noted in his February 6, 2013 program that “Glenn Harlan Reynolds explains the causes and effects of this bubble and the steps colleges and universities must take to ensure their survival. Many graduates are unable to secure employment sufficient to pay off their loans, which are usually not dischargeable in bankruptcy. As students become less willing to incur debt for education, colleges and universities will have to adapt to a new world of cost pressures and declining public support.”

The economic principles of supply and demand apply to the entire realm of higher education and thus affects both private and public institutions.  How will the education industry respond?  Only time will tell.  However, in closing, it should be noted that over the course of recorded history, there is a difference between schooling and education.  The two concepts are not one-in-the-same!  One may have a degree or many degrees, or no degree at all. Earning a degree affirm one’s successful completion of a program of study, but that does not mean one is necessarily educated as one may have only learned about published knowledge.  Education requires the blending of wisdom and discernment to accompany the acquisition of knowledge.  As such, it may be possible to be educated without having a degree because one can learn so very much through life and work experience, and through reading on one’s own time!  Samuel Clemens (aka Mark Twain) summed it up when he wrote that “I have never let schooling interfere with my education.”   The world of higher education that provides schooling hopefully will continue to evolve and adapt to the ever present reality of price-and-value relationships, and hopefully this learning that will be accompanied by the wisdom and discernment that will advance our human progress.

 

 

 

 

BUSINESS AND SOCIETY

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

Business and modern society are inseparable.

Business causes society to become organized, educated and civilized.

A modern society cannot exist without a business activity as a partner.

American society was built on and by business.

That’s the primary reason that the country progressed so fast to become the superpower that it is. The benefits to the world that originated in the United States are beyond measure. Its business innovations have created many industries whose products are helping the entire world. The technology spin offs from the American space program have changed and are still changing the world and our lives.  Most notably, American Agriculture has saved millions of people from famine. Former Soviet leader Nikita Krushchev went to his grave still thinking, talking about and admiring the Iowa cornfields!

 

EARLY HISTORY

Business and society have been interwoven with one another since the beginning of recorded human history. Obviously business needs society for it needs customers. Similarly society needs business for its products and services it provides as well as the organizational structure that assures a smooth operation. Society has existed from the inception of humans on earth and it is constantly and continuously evolving. At first it consisted of the family unit then it transformed into the tribal unit, then into groups of tribes, nations, empires, etc. From the early beginnings the need to trade and exchange goods and services between the various society groups started an activity that eventually led to the concept of business. It became apparent that individuals and small groups could not efficiently produce all the goods and services on their own and found it more convenient or economical to turn to others for some of their needs and “these others” would likewise get some of their needs fulfilled by this mutual exchange of goods and services. Originally this was in the form of barter trade but as the time progressed money was invented and from then on the concept of business sort of came on its own and this interweaving of business and society took a new form.

The earliest humans were hunters and foragers but as times passed they became agriculturalists and farmers, thus growing their own food by cultivating the earth and domesticating animals to help them in their farming tasks and transportation of products plus also providing for their own meat needs. Then the next advancement came in the form of tools, such as plows and improved hunting weapons. One major advance came with the building of water sailing vessels and eventually larger ships with which they were able to navigate the seas and the oceans. With sea-going ability one sees the building of significant trade and the creation of empires. The Phoenicians and later the Greeks, primarily the Athenians, were able to spread their influence in the Mediterranean World and even beyond the Pillars of Hercules, today’s Straights of Gibraltar, into the Atlantic Ocean. With all this trading capability new products were found in far away places and were transported into major population centers and from there, in order to facilitate their flow from the harbors to the consumers, the concept of the middleman shopkeeper/trader was generated. Thus, the idea of handling products by buying and selling them at a profit started becoming more and more widespread which eventually became the modern business enterprise.

SEAFARING BUSINESS NATIONS

With the expansion of seafaring trade, nations and states that actively engaged in it prospered and became very influential in human history. Even small city-states, like Venice, became strong and prosperous simply by their seafaring trade. Later on we see the expansion of colonial states the likes of Spain, Portugal, France, the Netherlands and Great Britain. All these states left their indelible mark in the world, which is ubiquitous to this day. It stands to reason, therefore, to promote such society/business community interrelationship for it improves the life of the people. It was in the western world, primarily Britain, where the industrial revolution occurred that resulted in the extraordinarily spectacular creation of wealth and the improvement of the life of all humanity. In fact this led to the most humane system business/society relationship where many millions of persons were enriched and it also resulted in the formation of the greatest system of true philanthropy known as Capitalism.

Yes, Modern-Day Responsible Capitalism is the best example of true philanthropy.

It creates an environment of economic progress and free enterprise which allows individuals to improve themselves, provides employment for many people, who in turn improve their lot and that of their families, expands wealth, which then provides opportunity for all, including for the “not so entrepreneurial” individuals as well.

It’s worth noting here how quickly a nation that withdrew from its maritime ventures lost its superior standing. This was China, when in the late 1300s and early 1400s had a fleet of over 400 ocean-going vessels that routinely navigated the world’s oceans and according to the book “1421” by Gavin Menzies, William Morrow, 2002, as well as the 1990 NASA Space Exploration Initiative (SEI) report to President Geo. H. W. Bush, they had circumnavigated the Globe and had also made stops along the coasts of what is now the United States. They used to routinely go around the Cape of Good Hope and up the west coast of Africa. But there was unrest back home in China. People would protest the expenditure of the national wealth to such far away places while there were so many poor to feed at home and they recalled the fleet back to port and in 1432, i.e. 60 years before Christopher Columbus’ voyage, they burned the entire fleet to the water line! NOW WE KNOW THE REST OF THE STORY!

Would the world today be different if a Chinese fleet had sailed into Palos de Frontera in 1492, instead of Columbus sailing out?

 

BUSINESS AND SOCIETY IN THE US 

The United States (US) from its very inception and formation recognized the value of maritime activity and seafaring capabilities. One should not forget that it was the new US nation with its meager navy, at the direction of President Thomas Jefferson, in the early 1800s that undertook the task of confronting and successfully fighting the Barbary Coast, i.e. North African Moslem, pirates while the “sophisticated and smart” Europeans were paying ransom to them. That also happens to be the origin of the US Marines’ hymn

“… to the shores of Tripoli…” It was this American intervention that ended that piracy practice back then which had been thriving for many years, very similar to what’s happening today off the coast of Somalia. One would then think that what we may need today is a Jefferson-like president to resolve the Somalia piracy scourge.

By the way, we can mention here that the Barbary pirates were one of the main contributing factors in the US’ abandonment of the Articles of Confederation and the adoption of the Constitution with a strong central government that enabled the president to operate and mobilize a real Navy to far away places, such as the Mediterranean Sea. Our “good friends” the British, with their formidable navy, they would protect the sea-lanes from the pirates, but they would not extend their protection to the US shipping.

(See “Our Oldest Enemy: A History of America’s Disastrous Relationship with France” by John J. Miller).

The US Revolutionary War against Britain, “THE MOTHER COUNTRY”, was fought over the issues of taxation without representation, a truly money and business issue, and it was over the moment the issue was settled and the new Nation was formed. The US was founded on the basis of free business enterprise unencumbered by government interference and regulations and that’s the main reason for its rapid and tremendous growth. It was that free business spirit that triggered the westward movement that helped spread the 13 original colonies to a nation spreading “from sea to shining sea” in less than 75 years! The idea of American Society and Business being interrelated can perhaps best be accented by the famous saying of  “The Business of America IS Business” by US President Calvin Coolidge. The idea of free and unimpeded free trade was one of the very fundamental principles of the new American nation. From the very early days of the John Adams and the Thomas Jefferson presidencies special efforts were made to secure the free flow of traffic in the nation’s waterways, This was especially true for the Mississippi river and the access to the port of New Orleans, as it again reverted from Spain back to France during the Napoleonic years in 1800. As a matter of fact President Jefferson sent Robert Livingston and James Monroe to France to discuss the accessibility to the port of New Orleans with Napoleon, which resulted in the unbelievable LOUISIANA PURCHASE, thus doubling the size of the United States and also, following the Lewis and Clarke expedition, sparking the westward expansion to the Pacific Ocean. As the multitude of migrants, first initiated by the Mountain Men, moved westward communities were established on the basis of economic principles, i.e. communities were economically viable quite often by the discovery of mines or the establishment of trading posts. It should be noted that when mining became economically unattractive, usually by the exhaustion of the mined ores, many of these communities were abandoned and eventually became “ghost towns”. It was the economic viability of the area that determined whether a settlement continued its existence or it was abandoned. Here we should note an observation made by an American survey group that visited Siberia in the early 1990s, following the collapse of the Soviet Union, to assess its state of underdevelopment. They said that “Siberia was not underdeveloped, it was mis-developed”! The point being that Siberian settlements were primarily or exclusively were determined by the central government authorities of  St. Petersburg and/or Moscow from the days of the Tsars through the Communist Soviet Regime.

One of the noted developments in the American West was the discovery of gold and the ensuing “Gold Rush” in California. People looking for riches came from all over the world, among them the later famous archeologist and excavator of historic Troy Henry Schliemann, boosting the population by 410% between 1850 and 1860, thus enabling it to join the United States as a state without the requirement of an intermediate territorial status. The discovery of gold and the ensuing statehood gave California its state seal composed of the Archimedean EUREKA and Goddess Athena who, according to the ancient Greek legend, was born as an adult. They say that became possible by the application of “the alternate version of the Golden Rule ‘he who has the gold makes the rules’.

Business requires organization and commitment. Hence it causes society to also organize and become civilized. People become producers and learn to care for each other. The great American business tycoons, the likes of oilman John D. Rockefeller (the original), steel magnet Andrew Carnegie, automaker (the original) Henry Ford, aviator pioneer Howard Hughes, to just mention a few, established huge business enterprises and in the process of enriching themselves they also enriched millions of others and also created everlasting educational and philanthropic institutions that continue to thrive and benefit mankind to this day. They were very much aware that they could not accomplish their goals alone but needed the help of millions of others, hence the enrichment of all these “others”. Besides they had numerous spin effects that usually go unrecognized. Case in point, how often does one hear how the “original” John D. Rockefeller saved the whales from extinction?

He did so by producing, refining and marketing petroleum products that ended up being used to light the household lamps, which up to then were using whale oil with the whales being hunted almost to the point of becoming extinct! Thus, use of whale oil became economically noncompetitive and their hunting ceased or was substantially reduced.

The next significant event, other than the US Civil War, was the Golden Spike at the Utah Promontory Point where the east-west railroads met on May 4, 1869. From then on, westward moving pioneers did not need to walk across the prairies, they simply rode the trains. This substantially increased the population, and formed major cities across the land. Business of all kinds, mining, agriculture, ranching and manufacturing literally exploded and the export trade to other lands flourished. In Northern New England ice farms were created where the ice was plowed, to get it into manageable chunks, and were shipped to far away places before the days of mechanical refrigeration. Apple growers in the state of Washington expanded their orchards and their apple production because they could export them to far away places. The results of all this expanded business activity enriched many people and helped create a more prosperous civilized society.

One could not help but wonder as to why, although free-market capitalism has helped the world so much and it has elevated the standard of living of all people, it still does not enjoy the good name it so naturally deserves but it is referred to by many people with disdain. The opinion of this writer here is that business people are very busy doing and producing and do not have the time to hit the streets with protests.

 

CLOSURE AND COMMENTS 

The American Society was formed and organized on the basis of the work ethic and strong religious roots. All of the top private universities were founded by religious orders, quite often as schools on theology. Harvard University, for example, established in 1636, although not officially associated with a church, it primarily trained Congregational and Unitarian clergy. Likewise, Yale University as well was originally chartered as the “Collegiate School” by 17th century clergymen who sought to establish a college to train clergy. Similar stories can be told about other universities, e.g. the University of Southern California founded in 1880 by the Methodist Church. The fact that these institutions of higher learning have become secular and continue to flourish bespeaks of the dynamism and the wisdom the founding business principles and spirit. It should also be noted that all these schools make it a point to have very large endowments, i.e., money.

The phenomenal growth experienced by the westward movement of the American pioneers can only be attributed to the free enterprise business spirit and its integration into the society. Self-governing communities were established with their own local legal authorities, locally controlled schools and so on. This rather unique phenomenon caused the French nobleman Alexis de Tocqueville, who was originally sent to study the American prisons, to write his famous book Democracy in America where among many other comments he exclaimed, “these people do not need an elite to govern them… Just imagine that these ordinary people organize and run their own legal and educational systems…” The common thread uniting all these new communities was that the settlers owed allegiance to the United States of America. There were few exceptions to this, such as Brigham Young’s Mormons, who originally considered themselves as independent and were busy establishing their independent country of Deseret, came around into becoming the state of Utah part of the United States.

 

SOME THOUGHTS AND IDEAS ON “AMERICAN EXCEPTIONALISM” Are Americans Really Different?

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

Americans are indeed exceptional people, i.e. they deviate from the “norm” and act quite differently from all other people in the world. They have a long tradition of doing so, from the early colonial days, through the American Revolution, the Civil War, WWII, and the Cold War and all the way to that fateful day of September 11, 2001. The fact that our President in Strasbourg, in April 2009, chose to answer a question about our “exceptionalism” by saying that “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism” does not alter the situation. In fact, he failed to take notice of the most recent “exceptional” American event, his election!

COLONIAL DAYS AND THE REVOLUTION

Whether Americans are indeed “exceptional” people, i.e. different from others, can be established by examining their actions and general behavior throughout their history, especially during its most critical periods.

From the very beginning of the colonial days settlers in the American Continent had to provide for themselves, conquer the wilderness, and also find ways to interface with the native inhabitants, sometimes peacefully and cordially and sometimes not. But in any event, without attempting here to analyze and discuss the morality of the situation, the settlers had to actively pursue their interests on their own and in the process they developed a work ethic and a sense of total personal responsibility for their own survival and advancement. If they did not do something, it simply did not happen!

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AN AMERICAN SYNERGISTIC TRILOGY: The Space Program, The Free-Market Economy And Philanthropy

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

The Space Program, The Free-Market Economy and Philanthropy, form the earth-shaking and world-shaping triumvirate of American Exceptionalism. The most important part of this “trinity” is The FreMarket Economy, for it is the beating heart that feeds everything else. Because of the aspects and practices of the free-market economy the space program was such a spectacular success and along with the numerous other attributes of the American System, to be enumerated later, vast wealth and prosperity were created that allowed an expandedphilanthropic activities, although they of themselves are the core of the greatest philanthropy known to man which is “Modern-Day Responsible Capitalism”.

A WORD ON SYNERGY 

Synergy is a mathematical concept, which specifies that one plus one is not always equal to two. Sometimes it is more in which case we say, “The total is greater than the sum of its parts”. This is known as positive synergism and there’s also negative synergism when the “total is less than the sum of its parts”.  The mathematical concept of one plus one is always equal to two is called “the principle of superposition”, i.e. putting one thing on the top of the other, so they just “pile up”. According to the principle of synergism, what the sum of one plus one is equal to depends on the particulars of the case, e.g. when one buys auto insurance as a bundle for two or more cars he saves money as compared to buying them separately. So, one can say that one plus one, synergistically, are less than two because of the lower cost or that it is more than two, because for a given amount of money one effectively buys more insurance. We have and we shall enumerate a multiplicity of items and activities within the American Exceptional System where positive synergism is at work and “like an invisible hand”, to quote Adam Smith, creates a multiplication factor that improves things and situations far and beyond any “normal” (whatever normal is) expectations.

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SOME THOUGHTS AND OBSERVATIONS ON THE AMERICAN AUTOMOBILE INDUSTRY

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

INTRODUCTORY STATEMENT 

The opinions expressed here are those of the author and they have been formulated and gathered from a lifelong experience in industry and academia. The intent here is to express these personal opinions and describe how a once shining example of industrial success and ingenuity became a mess that required massive government takeover.

A PERSONAL OPINION

The woes of the U.S. Auto Industry are solely the making of weak leaders who, for a variety of reasons, “floated” to the top. Because they lacked the vision and the imagination for the future, they became “accomodationists” instead, to the various pressure groups, be they the Government, Labor, or the Environmentalists, and forgot their real purpose, which was and still is to build and market safe, reliable and affordable products to the general consumer public.

The current practice of massive and very costly car recalls, quite often because of minor and/or isolated design flaws, can easily be remedied and the federal bureaucracy interference eliminated, if only the automakers would agree to jointly form and sponsor an independent auto test lab styled after the Underwriters and/or the American Gas Association Laboratories. Continue reading

ON PHILANTHROPISTS AND THEIR ACTS OF PHILANTHROPY

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

The purpose of this article is to propose and “make the case” for an expanded definition of the words “Philanthropy” and “Philanthropist” which, is as follows:

Modern-Day Responsible Capitalism is the best example of true philanthropy.

It creates an environment of economic progress and free enterprise which allows individuals to improve themselves, provides employment for many people, who in turn improve their lot and that of their families, expands wealth, which then provides opportunity for all, including for the “not so entrepreneurial” individuals as well.

It is to be noted from the start that we are not suggesting that there are not predatory and/or corrupt capitalists who do damage and bring shame to the free market enterprising business. But we are discussing the great value of the majority of the consumer product and/or service oriented free enterprise operations that have advanced our country and the world economy to unforeseeable heights and great prosperity to its people.

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