Now a group when it gets together, if it's got the idea of where it's going and what it is doing, and if it isn't all individuated one from the next and so on, can normally pull together so that it eventually will make it. For instance, in the Sea Org we've been crawling up toward a two year survival, and we're just making the grade. You see people around, they're not too well uniformed at the present moment, because there's no edge, there's no margin.

OK, this is the twenty-fourth of January AD21. And just as I predicted, and horribly as that may be, sure enough I had to give a lecture now on the HAS.

We'll eventually make this. We're in the teeth of not only a relentless enemy who, unfortunately we hear his, a death rattle amongst his midst every once in a while. But we're in a world which is very topsy-turvy economically and otherwise and so on, just buying survival. And it's a minimum survival of just two years without making a penny.

As soon as we had the system, why I thought, "Well everybody'll understand that, that's very simple." Do you see? You just get a product and the org officer comes along behind you and puts the organization there so he can get that product and straightens it out. That's very simple. And then I found out after I worked for a little while; I'll be truthful, I figured out I'd have to say something about the product officer, because that seemed to be in doubt a little bit. So eventually I worked at it myself to get a good grip on this subject of product officer, and pushed it on through, and gave a talk on the subject, and thought everything would be great, and org officer, and so forth. And what'd I run into then? Why I ran into the org officer wasn't really understood, so I gave you a talk on the org officer and got that straightened out. And then HAS has reared its ugly head. So I'll try to straighten out the role of the HAS.

You can do that, you'll survive. And during that two years you can get busy. And first, I'll give you an idea of how rickety things can get. For some reason or other cash/bills were so bad over the world that I didn't expect Scientology organizations to survive, as of October 1969. And I don't know who was, who was saying what about which, but boy they certainly were, by anybody's criteria, insolvent. Their cash/bills ratio was crossed, they were in a horrible condition. It was a mess. Ghastly.

We are dealing with product one, product two, product three, product four. And product one is the establishment, and product two is the product of the establishment, what does the establishment make? What does it produce? And product three, that is the correction of the establishment. And product four, that is the correction of the product.

Mary Sue originated, as part of the LRH programs, and didn't take full credit for it, FP number one, the LRH ED which is financial planning, program number one. And she put that out, and she rode that hard, and so on. And as of now the stats may not look all that great across the world and so forth, but those orgs are all solvent. She achieved that in seven or eight months of very hard slug. Back and forth, back and forth.

Now to look at this very rapidly, we find out that it's necessary when we have a product to get out, that an organization get it out. Now to give you a stable datum, if you want to improve the volume of production you have to organize. If you want to improve the quality of a product, you have to organize. If you want to improve the viability of a product, you have to organize. If you're being served a lousy dinner, seldom, at great expense, the answer is organize, organize, organize. No volume? Well, organize it up so the raw materials come in, so it goes down on a proper assembly line of preparation, and comes out at the other end as a product. If you want to improve the quality, why go down that line, find out who hasn't got the tech of making soup. And you also improve the quality of the steps and the exactness with which they are done, and you will come up with a better quality of product.

And she was dealing with the cost of the organization in almost every case. And she found out that most organizations had a very unreal idea of how much they cost. They didn't really know how much they cost to run a week, so they didn't know how much money they had to make.

And, once more, if you want to improve the viability you have to be able to scout the various logistics involved in the raw material, and you have to take the excess steps and the excess do-less motions out of the line, that finally winds up in a dinner, and you will wind up with a cheaper dinner.

Now if we've achieved that, we will achieve the next step. Which is just this, that it is not good enough to make as much money as you need for the next week, you have to buy survival. And your survival is a minimum of a two year run without a penny ever walking in the front door. And that's a minimum. And that would get you over most political, other crises.

Now the trick is to wind up with lots of dinners, of good, acceptable quality, and a viability of getting dinners. In other words, viability comes down to when it comes to finance, the outgo/income law applies. And if you only ever knew this about finance, why you would actually have it made. There's practically nobody in the world has actually learned this about finance. And it is a very elementary thing to learn. And it is simply that income must exceed outgo. And outgo must be less than income.

So let's look at this. Let's take a look at this various criteria. These are the hard facts of life. Now you're up against the hard facts of life. So how much establishment can you afford? Well you obviously cannot afford an establishment which doesn't produce.

Now if you've learned that you become a financial genius. Now from where do we go from there? Where do we go from there? Well then we really get to be a financial genius, and money starts shooting out in all directions, and you don't know what to do with the stuff, and that is to say you; and this is where the production officer functions; he recognizes that his losses are the losses in money he doesn't get. Those are the losses. The losses are not in the paper clip package for two cents when it could be bought for one cent, although that is an economy which is necessary to know. It is the junior economy. And nobody knows this other economy at all. It's a complete stranger.

And you obviously cannot afford people in the establishment which doesn't produce. And you obviously can't afford to harbor machinery which doesn't produce, and offices which have no service use. And these are the things you can't afford.

Every week that your org does not make three thousand dollars and only makes two thousand dollars, you are running at a loss of one thousand dollars. I don't care what you've got in the bank, I don't care how smug everybody looks, if your org has a potential of twelve thousand dollars a week and you only make three thousand dollars a week, you are losing nine thousand dollars a week cold, hard, spendable cash. If your org and your skills and capability and so forth would run at twenty-five thousand dollars a week, and you are only getting five thousand dollars a week, you are losing twenty thousand dollars a week cold, hard cash. When the stat goes down from eighty-nine hundred dollars to seventy-nine hundred dollars, it isn't pretty good, you have just lost one thousand bucks. Now that is the way you handle production money. And what that requires from the production officer; now hold your hat now, hold your hat; it requires a big idea. And it doesn't require somebody sitting around saying, "Well, if we could just make the paper clips for two cents a pack, and we actually are spending now, we could save one mil, and so forth. And therefore our profit will be..." That's what's wrong with capitalism, they're always worrying about profit. Don't every worry about profit, worry about millions. See, worry wrong target.

There was a trick that Johannesburg, in its early forming days when it was under Jack Parkhouse, used to pull, which was, I was horrified at, is they balanced their books by firing staff members. So that as the stat went up and down, they would fire staff members and take on staff members in order to balance their books. Well now that's the wrong way to do this. The way you do is hat, train and get better on post, the staff members you have.

So when you really know this about income and outgo, now you are a screaming financial genius. Now you really are one. So, look it over.

Now a manager always has the responsibility of providing work for his workers. And that is something that somebody had better learn in Russia. Just that. A manager has a responsibility. You find yourself, it works two ways. It's how much establishment, well it's how much production. Now we're back to resources. What resources does the HAS have that can be utilized by production?

Now, the realm of income/outgo is what difference is between income and outgo. Now if your income is two cents higher than outgo, you say, "We're solvent." Heh heh heh heh! Oh you nuts! You may be solvent at that existing instant, but you are not viable. What

Now you think, boy you must be in the airy(c)fairy world and so forth, and that it must be terribly difficult and so forth. No it isn't terribly difficult, it's very, very simple. Our average income for the last three months was X, therefore our expenditure and establishment for the next three months must be one half X, and our income must be 2X. And you're immediately at a quarter. And you target it and try to strive for it.

does it take in this universe to be viable? Boy, this is, this is quite a universe! This is quite a universe. And if you look this universe over very carefully you will find out it has all kinds of wild ramifications. If a farmer wants to wind up viable, and he calculates very carefully that he will need twenty tons of wheat to see him through the year, he's a god damn fool if he doesn't raise two hundred and fifty tons. I didn't mean to be profane. You can cut that off the tape. But he is, he's a fool. He's a fool if he doesn't raise two hundred and fifty tons. He needs twenty tons of wheat, so he's, gone.

So, it's not very difficult to work out. You will find when you first face an organization that it's inefficient in the extreme, and you're not the hard hearted whip master that says immediately, "This many must go because we don't have," the General Motors answer. See? "We're closing five plants now, ha ha, ha ha, ha ha." Idiots. I use the word advisedly. Actually it's an insult to idiots. That's about the lousiest management that anybody ever heard of. Look, they've got that much establishment. Now what; now let's get it worked in reverse. What responsibility does this hand to the product officer of that org? He's got to get it consumed. He's got to get his product consumed, not reduced. You don't reduce production, you increase consumption.

If I could just get your wits to sort of separate on the idea of what viability is, your org should be able to run without any trouble whatsoever for at least two years without ever making a cent or firing a person. And about then you might have achieved better survival. You got the idea?

Every time you find yourself thinking in terms of, "Well we've got too many auditors and so forth now, and so on, and therefore," and so on. No, you've got resources. Resources have been furnished to you, you have to quick like a bunny figure out where's this production going to go? So it's one thing just to produce, and it's another thing to produce with some place to put your production. So when you're dealing with commodity of auditing hours it doesn't seem to occupy much storage space, but actually you have a total vacuum. What are you going to do with this? We got twelve auditors, and we don't have any more work than for six auditors. Wow! Wow! We're not going to lay off six auditors, we're going to get the consumption increased for those idle auditors. And that is a responsibility of managing. And a good manager, and a good production officer, and a good organizer will

People who sit around and live one of these hand to mouth existence is like saying, "Our cash/bills ratio, that's pretty good now. Cash/bills ratio, we owe one hundred dollars less than we've got, and we're doing great." Boy, you died. Death was several months ago. Get your think, get your think different.

balance these factors out.

Now if you ever wonder about why you don't have enough money to do everything you want to do and bribe all the senators you want to bribe, and buy all the prime ministers you want to buy and so forth, it is just that piece of think.

Now you go down to the dist division, or you go over to promotion somehow or another, and you're going to increase that, and that is why PR is so very, very, very important. You've got to know reliably what people want. You've got to estimate what they want and predict what they want. Interesting?

I'll tell you a great oddity about this world. You think if you would decrease prices you will make more money. Ha ha ha. You can too much increase a price and you will immediately dive your income. You can too much increase a price, you will immediately dive your income. Increase or decrease your prices too greatly, and you mess up your income. If you want to shut your income off, why just raise your prices unexpectedly. But in a world of inflation, money is worth less and less and less, so how are you going to compensate for the fact that the money you are getting is buying less and less and less, and your prices are decreasing consistently? Well that's an interesting idea.

Now you don't think we've ever done this. Oh boy, yes we have. What do people want? Well they want new tech. But the answer to wanting new tech is the old tech hasn't been produced. And they don't necessarily want new tech at all, they want tech. And they hope that the new tech will produce more than the old tech. The factor missing there is quality. Quality of tech.

If somebody came along right now and said that an automobile, the X-model automobile cost twice as much as it was going to cost last year, that's horrible. People stay away in droves from X, because they've increased the price of it. Even if you put out model X-1, so you've got to put out a spoofer car. Brand new creation. And it is so great it cost fifty times as much as an X-mobile. Now you get some buyers. Man is not rational where it comes to pricing. People do not sit around and figure it all out.

We've got somebody walking around this ship right now being talked to by the master at arms and other people, and so forth. Trouble with her is, is she never had an engram run and erased. Tough problem. Really tough. We got a thirteen year old auditor that would probably run rings around any HDC in the world. She could sit there and run an engram out, except nobody's ever gotten her to an auditing session by an auditor who would run an engram out. Most of your basic problems of production are never connecting up, see, never connecting up the guy who can do it and the guy who wants it. It's simply that, see?

Now this is no advice, to kite your prices up into the sky and not give any service for it, god knows. You give service of a caliber that would get you ten times as much as you're getting, and you'll get the ten times as much, providing as you don't tell people you've raised the price. So therefore you don't dare raise the price, so therefore you have to do something else. You have to reprice. So it requires re-pricing, repackaging.

Now you try to connect up a guy who can't do it to a guy who wants it, and you're immediately going to have production problems, boy. You're going to have the fullest qual you ever heard of.

Now this is a world of airy-fairy, god 'elp us, because you ask people for a survey on this subject and they give you nothing but lies, so you're never able to establish it. So it all has to be by doing, and you offer this other package of something else, and then you will find out what your pricing is.

Very funny, recently we were talking about stalled cases and difficulties, and so forth. The failure of quals, over a period of time, was the failure to use the primary tool of qual. And I was, just investigated this about seventy; oh I don't know how long ago it was. Fifty days ago. Now you know that the primary tool of qual is a green form. And the green form was turned out for qual. Now a survey of the situation shows that the use of the green form was used like this. They'd start in at number one on the green form, go to number two on the green form, go to number three on the green form. By that time they're into, they're just into rudiments, see? And then you get an F/N on the rudiments. You try to go any deeper into the green form, and for some peculiar reason or another, why the TA will go up or something like that will happen. The net result is that only the first page and a tiny margin of the second page of the green form have ever been used. And if you look in all of the stuff; now this doesn't seem to you to be a production/consumption problem, but it is. How do we get green forms consumed? Actually the problem was how do we crack some of these cases. I think I was cracking cases like this that walk up, you know, and they seem to me awful bad off cases. Boy!

Now this might not work in the commercial world of automobiles, except it would. I think the Rolls Royce is the biggest swindle in the world. I do. They do things like lock the bonnet so nobody but a Rolls Royce mechanic can touch it, because it's so fragile. And they give some kind of spring suspension so that the chassis is independent of the body. I've driven them. They've got no pick up. They sure ride nice. An old lady's car. But, they sure cost.

So, a type of assessment was adapted to this which all of a sudden gave us back the green form in its totality. It is do a green form once through, take the best read. Bang, you'll crack the case every time, if the auditor can read the meter. If he then runs the process he's supposed to run for that. Consumption of green forms.

Now they've made a price reputation very high, because the quality is such that the deterioration is very slight. And then they never change their model, so they never build in any obsolescence. So it's nothing to be asked twelve thousand, five hundred pounds for a second hand Rolls Royce. Jesus god, twelve thousand, five hundred pounds for a second hand Rolls Royce! Bah! People would ask you with a straight face, you know? A Buick will run rings around it. It's got name, it's got quality, its deterioration is terrific, and it's driven by the Maharajah of Spangpour. There's status involved in it, and so on.

You could actually, on terms of consumption; let's look at this now. Alright, here's a little technical breakthrough. It isn't much of a; it's a breakthrough just to the degree that this 1965 development, or I think it was even before that, is suddenly used. Now we're going to use it. Now do you get this? Do you get this? You've had it all this time. All of a sudden we look this thing over, how are we going to use this? And that is most of your big ideas that you get in production, is something you already got, and you're going to get the idea of how are we going to use this? You got it? So you look around and you will always find resources of this character. So you start a hell of a campaign. Start a hell of a campaign. Free green form. I'm just giving you an idea. Free green form. Only green form wasn't popular. People got awful tired of these green forms because they never had a green form. People began to shudder when you said green form. So, it's a free case analysis. A case cracking analysis. Dream it up any way you want to. "Anybody who appears at the organization between four and six in the afternoon and so forth will be given a case cracking analysis. Present this card."

So there are all kinds of factors in this subject of pricing. But if your pricing is something you can't fool with, you can fool with volume. But you have to make sure that your costing is adequate. And out of all of this that I've just been giving you; this is not a lecture on economics; this is what establishes how big an establishment you're going to maintain.

Now if you're going to do that, somebody's going to have to run like hell to put the lines in. So that is why your org officer is not your establishment officer. Because the establishment is hard enough to maintain with all these wild hats running around in it, without also having an org officer and a product officer who are getting ideas. So you're going to have to put in some temporary line. It's just a temporary line. You're going to have to beef it up more.

The products officers' capability of getting the stuff out, and getting it out economically in volume, high quality, can determine the potential viability. Now the usual method of a firm is followed by governments also. And they expand to absorb all of the income. That is the rule under which most organizations operate. Expand internally, administratively, with duplications, to absorb all of the income that is coming in. So there is a counter rule which works on this planet. Why, I wouldn't even bother to inquire. And I've never bothered to inquire. An organization tends to spend a bit more than it makes, and it is the operating rule under which all organizations function. And you will find it is never violated. So the organizing officer's job is to violate it. Do you see?

So the org officer of the organization always to ask the problem of, "How are we going to get this temporary line in in order to handle this new consumption of product? So a consumption of product here is vitally necessary. Now how are we going to get these people received?"

Now the big idea that the product officer got; you say, "Well heaven's sakes, what do you mean the big idea of the product officer? This is all established by somebody else at a higher echelon, and nobody gets any idea." No look, even a guy in the, even a guy in division two, a bird in division two who is working on his post there, he can get a big idea in the field of promotion.

They walk in with this card, they show this card to reception. Well does reception leave them there for two hours? No, now somebody's got to have that reception, and this person doesn't know his way around through the organization, so somebody's got to escort him down to this terminal, and then there's got to be an auditor who sits there, and that auditor has to know how to do a once through assessment on the thing. And then there's got to be some PR person perhaps there to say how great that is. But then that wouldn't give you that somebody ought to lead him back to the registrar about this time. So the registrar gives him his results. Well if a registrar gives him results, the registrar can say, "Buh! It'll only take five hours to handle this. Twenty(c)five hours to handle this." It doesn't much matter what the registrar says. Or the registrar says, "Well that actually, that actually carries along with it the case cracking intensive, which is of no specified number of hours at all, but it just costs X dollars. You're not under any obligation to pay it. Feel better now don't you? Very good. That's fine. Oh you do, you want that. Oh, well alright. Here, sign on the dotted line and so forth, and go on down the line and pay the cashier and so on. I'm very glad you are. Thank you." And you've got to have that line in.

The registrar sitting at her post, she can all of a sudden get a big idea, and put it into effect without any further nonsense. And people in the assembly lines, they can sit there and look at this, and all of a sudden get a big idea. It's all in the field of A big idea is how to get, usually, more consumption of what you're producing. And an organization doesn't run without these big ideas popping up here and there. Usually they're not germane because they don't apply to consumption. So all the big ideas you get must apply to consumption. So you're always on the outlook for big ideas that have to do with consumption of your product, 'cause that gives you the margin where you can push your product volume up.

If you haven't got that line in, all the ideas that the production officer gets to increase consumption and get the six auditors busy will fail. We had the most marvelous, marvelous caper one time, it was called a hospital caper. And we had volunteer auditors all over the place, and a certain number of hours of the day they were going into hospitals and seeing patients, and pepping them up and patting them on the back and so forth, and giving them little cards. Marvelous! The person in charge of the project broke it right in half and crashed the project right down through the middle, in spite of the hard work put in by these people for weeks. You know how he did it? There was no reception sitting at the other end of the phone number these people were being given, and the office he had had and was rented, was never manned. They couldn't reach it by phone, they couldn't reach it by feet. So the org officer is responsible to make sure that these lines exist.

And therefore you can maintain your viability.

Now the HAS would eventually incorporate this kind of thing into his organization. Now he's busily running an organization. So therefore, an HAS has to have HCO expediters who can then put together immediate types of lines and set ups to handle special traffic. They usually send them into file and CF, when years ago they should have had two file clerks in CF. And they're usually used, expediters, to put together what HCO should have long since had as establishment.

So if the big ideas which you accept as an executive is for the increase of consumption, and it's direct and immediate of the thing which you are consuming, why great. The promotion people who all of a sudden get out a leaflet that everybody stuffs very, very swiftly into their pocket rather than throws into the waste basket has of course increased the consumption of leaflets. And you'll find out that will go much further.

Now an HCO expediter is somebody who goes down and gets in the special line and sits in as a special escort who handles the special action, so that you don't have to remove people from key posts in order to fit out these wild ideas. Otherwise, the HCOAS is going to get very impatient with you. "What, you need another receptionist? Well, we'll take one of the letter reg typists. Yeah."

So all of your big ideas, the real big ideas, have to do with the increase of consumption. And a product officer operating on Flag is how do we increase the consumption of Flag products? It exactly defines it. And it defines it department after department in an org. How do we increase the consumption of this product?

Now he should have some HCO expediters, and if those people are not totally employed all the time then they ought to be studying. So any slack time they have, any slack time they have during the day, then they ought to be studying. If he's going to have any full time people on course who are going to something or other something or other, and he doesn't think he can afford full time people in course, why'd he make them HCO expediters? And then not send them off to fix up a file someplace, but use them, put in special traffic lines.

Now, when it comes down to the final analysis is when an increase of product is such that it starts injuring the viability of the org, it must be an uneconomical product. And it must not have very much to do with the final production, and we're talking about, believe it or not, HCO. We're just talking about how much org.

Now an HCOAS therefore has to maintain the establishment. The establishment is pretty well established by org board. That org board is not an arbitrary which simply sets up, there is, actually was production oriented. And the end of every one of those departments had a product. When we state that thing loud and

So the expansion that you're trying to increase is in the field of consumption, and then in the field of production to meet that consumption, and then an economical furnishing of that production in order to meet the consumption. Works backwards, don't you see? It is not the purpose of an organization or HCO to put as much organization there as it, the organization makes. I would say that a safe average to work on to begin with would be about fifty percent. And then I would say just for fun that one should aim toward a third. And as it goes on up in volume, one should be aiming toward a quarter. The cost of the establishment is a quarter of the income of the establishment is what I mean.

clear, and start to work it all backwards, we wind up with the same '67 org board we had in the past. What do you know? Somebody must have been bright someplace.

Your first and primary target is not one hundred percent, and it never is one hundred percent, and it certainly is never two hundred and twenty-five percent like governments run. So your legitimate target of HCO is furnishing an organization, the total cost of which is about fifty percent of the income. And that would be its initial, primary target.

Anyhow, so he's actually organizing backwards, even though he's organizing, he thinks, front-wards. Because he's got a canned org board that he puts there, and bang, that org board is spot on is no reason that makes him the first action. He builds that org board backwards. How does he fill it? He fills it up to the degree that it is demanded by production. So he expands his establishment by increasing the posting of his existing org board. And he too must have resources. And I've given you one of his pools of resources.

And now he starts in HCO, the HAS, he says, "Well wait a minute, wait a minute. The HAS, what do you mean? The HAS, the finance is in division three isn't it?" No, it's in the HCO/HAS hat. It's got to be, because he says how much organization you've got. Now you tell me somebody in treasury who ever told anybody how much organization you had? All they do is grumble. You ask treasury, treasury varies. Treasury varies from total neglect to grumble. That is the tone scale band they run. And that's natural. "The staff has not been fed for three weeks, could we please have ten cents to buy a loaf of bread?" Grumble. I mean that's natural.

Now very often, as you will find in the personnel series, you have personnel people who think each division, particularly the better running divisions, are personnel pools. And if you've ever seen screams go up in all directions, it's missionairing in the Sea Org. This is a horrible chapter of something or other from the viewpoint of people who are trying to hold the organization there and keep it going, because missionaire has priority. And this makes a mad mess. One day you've got a captain, the next day you haven't. You know? I mean it's that kind of thing, it's that ghastly. And don't think it doesn't just rip everything to ribbons. But it is necessary to do so, because production in the Sea Org comes first. Production happens to be Scientology around the world, and it is now expanding to be Scientology around the world. So, a missionaire has to go, has to go, has to go. Well that's that. Alright, the rest of us will cope, one way or the other.

There are two people you never want anywhere near an organization in control of that organization. Two people. They do not establish management policy. One of them is accountants, and the other is lawyers. And this isn't my datum, and it's not built out of my antipathies to either of these people. The attitude of an accountant has to be the attitude of an accountant. He had got to make sure that the money due and owing to this organization is collected, and that the bills of this organization are paid, and that there is some money to put in reserve.

Now actually it puts too heavy a burden on, in the Sear Org, the division is the third mate, the HCO. Now it puts too heavy a burden on him, and so on. But, he should get clever. He should get clever. There are some old FOs that talk about a missionaire unit. So he's got a second pool, a second pool he has. So he's got a missionaire unit.

Now the various functions of accounts include of course going through purchasing, because they can buy things cheaper, and this, that and the other thing. But accounts is established by FP. And I call to your attention that FP is an activity, FP is an activity which is shared in by the head of each division.

Now in view of the fact there's a heavy demand on highly trained personnel, your missionaire unit spend most of its time at home on guard duty and study. And therefore you have very highly trained people, and you can circulate people who are successful missionaires and also holding executive posts, or less exhaulted posts, you can circulate them into the missionaire unit and so on, and take people in the missionaire unit and put them on up. There are ways and means by which you can shift this sort of thing around. But it gives the personnel pool.

Now you're liable to see something new about FP and divisional heads, and that is each production branch should have the status of a divisional head. Your ad council should be about the same tech/admin ratio of the org. And that should be your ad council. You should not have two tech people and seven admin people, because it'll give you an unbalanced FP. You look this over. It'll give you an unreal ad council action. Do you see? There's not a possibility of; your production division then is totally overwhelmed by the remaining committee action. So that production, nobody has his eye on production, people have their eye only on administration.

So the main problem of an HAS is personnel pools, because his main flub, exclamation point, is destroying whatever organization has been put there.

Administration is important. If you pull the people off of administration and you put them only on production, why you will find that the org will go downhill. The administrators are vital to that org. But if production, there's two opposite ends. The Aristotelian, Aristotle's pendulum, the two extremes have a mean between them, and we've been running where administration, and administrative divisions thought more and had more say than the production divisions. Well we have to even it up, and we have to bring it back considerably, and we have to swing it so that it doesn't quite go to such extremes.

Alright, somebody is working, working, working, working, working, to put a qual there. And they work hard and they get the people trained in and grooved in, and then next thing you know HCO regards qual as a personnel pool. Or there's another thing, because qual

Now we could swing it so that only production divisions, this would be the tendency, only production divisions may say what we can buy and do and do with our money because they make it. You know what political philosophy I have just described? Communism. The woiker. That political philosophy is so lousy that they can't buy shoes. That's all that's wrong with it. It isn't that it violates the rights of man or anything of the sort, it just is non-productive. It's a non-productive system. And what's wrong with extreme capitalism and so forth is it's non-productive system. And there are two extremes, one, the administrator; not even the administrator. It swung clear over to the guy who happens to have a couple of quick bucks. And then he lives off the interest of these bucks, and he figures out how he can swindle some companies into borrowing some of these bucks so he can foreclose and get the company, and sell it and make some more bucks. And that's capitalism. It has nothing to do with production, it just has to do with bucks.

can be doubled in brass with tech in an organization, you get the disgraceful action of, "We've got a backlog now, so I have all the qual auditors and so forth. They're going to have to audit on the tech lines." Oh boy, that's nuts! But it says the person in charge of HCO has not allowed for an ebb and flow of traffic, and does not have any auditor pool. So who does it say is out? The HAS. He did not predict. So he's operating on no resources.

So similarly, you can get an organization which is run by accountants, and they will talk about nothing but bucks. It's grim. It gets very grim, but they have their point, and they have a very important role. They're supposed to sit there and make sure that that dough is actually collected. And do you know that a lot of treasuries, they don't make sure the dough is collected? Wow! You talk about neglect.

Now what are his basic resources? His basic resources, you say of treasury or money. No, that's also the HASs resources. People, hatted people, trained people, very valuable people, people of all sorts and descriptions, not just this blank file filled up with a body. I told you the other day, you can find all the bodies you want in a mortuary.

Now, to the degree they don't collect the dough they will enforce economy on the org. So you actually mustn't, mustn't put them in charge of the org. And reversely, the same thing, you can't have a run away org which has no financial checks and balances in it. Now I can do that, by the way, run a run away org that has no financial checks and balances in it, but then there's a hidden, built in computer at work, 'cause I can tell you any org I'm running, I can tell you about what the logistics are of the org, and about what its financial position is, and when the accountants say it is something else I make them immediately go back to their desks and start figuring. And they will come out at the other end of the line, not because I say so, but with a picture much closer to what I've got, because I know what margins I'm operating on, I know how much we should be making, I know how much we shouldn't be making.

So, he must be running some kind of an HCO which is a poverty HCO, because he doesn't have the resources that you would expect from an HCO. So he has to unmock what he builds. That's kind of crazy. A fellow builds a house, then to build a second house he has to take all the timbers out of the first house to build the second house. And then he takes out the... It's nuts. And somebody comes along one day and says, "Say, simple Simon, why don't you have a pile of spare lumber?" "Oh I couldn't do that, I couldn't get that through FP. Yeah well, they can't afford that." Oh I wouldn't say can't afford that. If I were an HAS at that point I would shake my head at every FP meeting, sadly, while looking at the production officer. Sigh. I wouldn't ever say anything.

Alright, within that framework then I can suddenly tell people to buy things and do things, and that sort of thing, that appears to be uncontrolled, mostly because it doesn't pass through FP or something like this. Well, the statistic involved in the thing is the test of the pudding. Any org I'm running starts accumulating reserves, accumulating reserves, they finally find out we've run out of this bank account because it's too full, and that bank account, and what country can you put it in now. And that is the way that one ought to run. But you would have to have yourself; I'm not trying to post you up as a financial genius, I just happen to be one. But you, you've got to, when you're running an org you've got to know about where you stay. And then somebody; this is always the little secret computer that's sitting on your desk. You know the financial position of this org, and its bank balances, and what it's spending, what it can afford, and what its costs are, and what is its potential of production and that sort of thing.

Any time anybody asked me for anything I would say, "When you fellows get around to producing something you can come back and talk to me. Why don't you produce something with what you've got?" would be my standard attitude as an HAS. "I must have, instantly and at once, twenty spares." "Twenty spare what?" "Twenty spare staff members." "Yeah, what for?" "For having spares." "Yeah I know, but there's only fifteen staff members in the org." I'd say, "I know. I'm tired of transferring fifteen transfers every week. You must be running a thirty-five man org. That must be what's wrong with this place, that's the why. You're trying to run a thirty-five man org with fifteen men. And yet we don't seem to have enough money here to deal with, not making very much money. All seems to be very sad. I wonder if we shouldn't train up a production officer?" See, this kind of thing, you know? It could get dirty after a while.

You know these things, bang, bang, bang. And somebody comes up to you and says, "We're going to put a new wing on the building. And this new wing on the building is going to house eight hundred and fifty-two new desks of some kind or another, and we're going to something." And I'd say, "What the, what, woah. What is this all about?" In other words, it's the ability to recognize a proposal for establishment which is unreal as far as the production goes, 'cause your eye is on the production.

But when production is not adequate for the establishment, then the establishment goes poor in all of its resources. And its main resources of course are trained staff members, willing auditors who want to come on staff. It includes the estate being coaxed into looking around and see if there aren't any cheap empty office building around here. It's looking around and seeing whether or not there aren't some thisas and thatas, and how can we get a bunch of file cabinets. The wrong way to go about it is to present to FP eight thousand, six hundred and fifty-five dollars for three new steel desks for the product officer, org officer and HAS. That's not quite the way to go about it.

Somebody walks up to me and says, "Well, what we ought to do actually is put in twenty new auditing rooms, and so on." "Alright, what's the cost twenty new auditing rooms, and so forth? That's fine. Let's work on that. That's great, OK, twenty new auditing rooms." Somebody talks about putting in new service space and so on, "Well great, great, service space. What's the logistics of the service space? Fine, fine." That's all legitimate. Somebody talks about putting in new Coca Cola vending machines along the desks of the typists and I say, "What? Why?" And they say, "Well, I have a friend and he sells these machines, and..." So I'd be likely to do a survey of the thing, and I'd find out that they have to walk two and a half blocks in the hot sun, or something like that, to get themselves a Coke, something like this, so I'll put in chocolate bar machines and a Coke vending machine, and hot drink vending machines and so forth. As a matter of fact, you can remember times when this has occurred. That's just staff service. And they wound up not costing money, and so on, in other words all the factors balanced out and that was fine.

The fellow is now pulling the incredible. And the incredible is, is trying to spend money you don't got. And it can be done in this society, to show you how clever the society is. They're always willing for you to spend money you don't have. So you have to safeguard that, and we are ourselves and we are solvent, and we do exist and we do still own our souls, and we are not in the pockets of the international bankers, solely because we make everything make its own way. And that is the basic action that; I have heard actually that some members of orgs wonder why I don't pay them better. It will be somebody in Keokuk or Cococomo, see? Why I don't pay them better. I don't know, I'm not even in charge of their board of directors.

You could furnish a service, it pays for itself one way or another, so on. But I don't ever consider an organization able to afford anything, even burnt match sticks, unless it's got a couple of years of reserve for its total establishment outlay. When I've got that I know I'm working at a bare minimum, and at that moment why I start to get loose with money. And of course I'm not above shooting the moon on this sort of thing. It's not the type of thing that an accountant approves of. And as a matter of fact I have often seen a look of absolute but hidden horror on the face of accountants and so forth, when I have said, "Yes, well alright. Well so and so, and etcetera." And they get hopeful that this will at least go through FP, and it doesn't. And it comes out on the other end that we have put in this many thousand, and we have gotten back at the other end oh my god! Because it would be a project which increased consumption, or met a consumption which could be brought about. So what consumption can be brought about is one of the first thoughts of a production man. Otherwise he will run out of space to put his products. He doesn't care how many products he makes as long as they don't sit there.

The answer to the question of how they aren't; see they're asking the wrong question. The answer to the question is, why don't they wear their hat and do their job in a quantity so that eventually the org will get more money, and they can be paid more? See, elementary. The answer to the question is right on their skull.

Now I'm sure the production manager of the Ford Motor Company never gives a second thought to Fords being consumed by the public, only he ought to. He ought to. If Edsel Ford, which is one of the biggest mechanical blunders of history, and one of the biggest production blunders of history was the Edsel. If Edsel Ford had known anything whatsoever about his business, and if he'd ever probably read his grandfather's notes, or whoever, whatever he was to Henry Ford, he would have found that Henry Ford operated on the policy of America on wheels. Small, cheap transportation. And right at the time he was building the Edsel and so forth, America was going into small, cheap transportation, but they couldn't get any in America so they bought foreign cars. It's nuts. He could have built a tin lizzy designed in Milan that would have sold like hot cakes and so on, but he would have had to have looked over his market. What could his market have consumed? So he would have had to have his eye on the main chance of production.

Now this is then the ecology that economic, dog eat dog framework, or dogs eat cats and cats eat rats or something, the ecology if this universe in which we are dealing. And the ecology of the universe is that staff members who produce get paid, HASs that put an establishment there that is hatted and trained to function and so forth, has a heavy income potential, and a production officer who is able to spot production and get the production out of that line, and who is able to persuade consumption, persuade those people he has in PR, promotion, distribution, wherever he has. If he can persuade consumption to occur as he raises his production, why he is all set. And people will just get paid more and more money, and the next thing you know a staff member is declasse who doesn't drive up in a Rolls Royce. But you have to think in that way in order to bring about that result.

Instead of that, he built something was a cross between a Buick and a Mercury, and it was rather indistinguishable from a Mercury, and it was a terrible lemon. And he built it without any idea of consumption survey or anything else, see? He didn't have any idea. So chains of dealers went broke in all directions. It was a terrible catastrophe. He didn't even run a pilot project. Why didn't they hand build it? It would have been much cheaper. Why didn't they hand build one of these damn things and run it out on the street, and ask anybody if he wanted it? I mean, that's the most elementary pilot project I could think of.

Now in view of the fact that we aren't aiming for Rolls Royces, but we have an entirely different target, therefore it goes into the field of volume and quality. Viability will pretty well take care of itself, if your volume and quality is adequate. So your first point that you always; now let me give you a letter reg sequence here. This is for an HAS, what would he be persuaded to do? He could instant hat letter reges. That's going to give you volume. He mini hats them, that gives you some quality. He really hats them, that gives you viability. The first one is volume. And you as a manager always demand first and foremost volume as your first demand. And then when you've got your volume you demand as your second action, quality of the volume. And then your third action you've got to calculate and so forth, as viability.

So, you've always got a department function, and it's called the special program section. And if an org doesn't have any special program sections it's goofy. And every time you get one of these wild ideas, you put it into special programs, and it'll wind up not wrecking you.

Now if you don't calculate it somewhat backwards, and figure out what your viability prediction is, you also will have an awful time of it. But right now we have an organizational runaway pattern that is fantastic. It's AOLA, and in just a few successive weeks they have a vaulting height. Their peaks, although they sink from the peaks, the peaks on those weeks give you a curve that says within about seven or eight weeks something on the order of about fifty thousand, within two or three months it says something like about eighty thousand, and certainly within five months it will be hitting a hundred thousand. I wonder what the third mate at AOLA is doing, what he's thinking, what he's worrying about? He doesn't think it's any part of his hat. And, if he doesn't wear that as his hat and take that predicted vaulting, it tells you that the organization reached its make/break point, as far as staff members were concerned, certainly at about forty thousand. And that put that whole staff under considerable strain at about that, because they didn't have quite all of those posts covered, and they didn't have this and they didn't have that, and they really had to get down and sweat to keep the lines running and to keep their quality up. Well that would be a breakdown of the HAS.

Well that would have been special programs, Ford Motor Company. Let's hand build one of these things, these monsters, and run it out on the street and see if somebody wants it. And they run it out on the street, and the little boys all throw stones at it. Give it to a good looking young man and he can't pick up a girl the whole length of Main Street. You know, run some practical tests.

So it tells you that at AOLA, within five months they have to have double their staff, double the trained auditors they have, double the space they have, and look, it takes months to get people recruited, trained and so forth. Who is sweating on it? And I'll tell you at this moment there isn't anybody worrying about it but me. Do you see what the prediction is?

And they finally would have monkeyed around, and they probably would have built something like a Milan, Italy designer's horror, with sweeping fenders that come up from the bonnet and a half an inch road clearance between its crank case and any spare rock-that's a Lancia. And build something like this, and thrown it together, and wondered how cheap you could throw this thing together, and find the cheapest motor that you could probably get, and finally find it's a washing machine motor, something like that. And throw it under the bonnet of the thing, and run it out into the street, and give it to the handsome young man, and it's immediately, completely busts is springs with loads of girls. And they try to offer it to anybody in sight, and they immediately starts reaching in their pocket book for a check, or something, buy it with small change and so on. Gee dogs! Do you see? But that would have been through special programs. So, any production action through the org must remember to have special programs.

So, that is what an HAS has to do, he has to think in terms of. And there isn't any HAS thinking in those terms. Actually there's been no hat written in these terms, because this is your product/org officer system, but this is the hat so there's no condemnation of that. But that is the terms of that, because he has to furnish the establishment. And if he has to furnish the establishment, the wrong time to furnish the establishment is after it's hit. Three times what the organization can possibly handle, and when it's hit that, to do the organization and establishing that you should have done five months ago. Oh god, this behind hand action is pretty horrible.

Now there's a terribly funny story about this. Diana of course has as C/S 6, a special programs section. And early on we didn't know much about how this artistic idea of Celebrity Center would go. A very short time ago, after it's been going for all this length of time, I say, "You know, it's funny. I understand Celebrity Center now has quite an establishment there, and it's got about ten or twelve orgs. And it's branching out, and it's got now ten or twelve of these, and they seem to have quite a bit of income, and we seem to have people involved with this, and so on. Who's got this around here? I mean it doesn't seem to be our account." Diana says, "I have." She's been sitting there as promotions, busy managing this whole network, and she and Yvonne Gilliam apparently just running with the ball and so on. That's the other mistake, they never turned it over to management. Here's this expanding network of orgs suddenly emerging, growing up and mushrooming all over the place here and so forth. She's been doing it quite competently, and Yvonne has been doing it quite competently. Establishing new centers, everything's going along fine. It's still running in special programs.

Now I can tell you right now, we're cracking the roof on Europe. Europe's going to be a run away. We do have a Scandinavian team in training, of four people. That's a Scandinavian team, of four people. Oh. We have got a project going right at this moment that's going to knock the spots off of Europe. All books, courses, we're setting up and we're engineering it one way or the other. We finally found out how the slots drop into place, and how financing, not financing but how we are going to build up to this line. We don't have to worry about the financing, it's just taken care of in a normal course of human events.

So if something is successful in special programs, it will force itself on your attention. Yeah, I just suddenly realized it didn't have the main line of command and control. Its reports didn't come in through the channels any one expected its reports. Not that we weren't paying attention to it, not that we didn't appreciate it, we thought it was great, but I'd never, it never had an aides meeting on Celebrity Centers or anything like this. I just woke up, all this machinery of control is missing. Who had it? Special programs.

We're translating into each principle European language, the lot. An OEC, SHSBC, HAS course, books. Only previously it was not translatable because of the fantastic printing cost that it would have involved. The viability factor then did not forgive it. You could have put out a million dollars translating and publishing books and that sort of thing. It would have been fabulous.

Well now that's a test of success. And it's about time then that management reaches into its hip pocket and brings out its wallet, and says, "Let's turn this thing loose. Let's get this thing going."

Somebody reaches in his pocket and does this. No, you have to wait for an idea. And think up an idea of how you can do this. Tapes, site translation, like they do at the United Nations. I got the idea last February. It's taken us a while to get us underway here.

Now therefore, all new types of expansions are piloted. They are piloted, otherwise you'll go broke, because you're testing consumption. Now it's one idea to get an idea concerning consumption, it's another idea to find out if it is. It never, the idea, the big idea you get is not necessarily sent through special programs, but if it is so strange and bizarre that you don't know what to do with it, and it looks like it has an interesting ramifications, and it doesn't fit any place, why don't go for broke on this thing, put it through special programs, and set up a little unit in special programs and so forth, and let them pilot the thing. And then don't forget about it, find out how it did.

Site translation. A site translator can hear the thing in his ear and, when he's really trained, spit it out in the other language. So, it's just going right over onto tapes. Then we can copy the, most tapes, and we can sell tapes. And we make it mandatory for every one of those orgs to buy a complete new set of all of their tapes, every three months. They'll wear them out. We get their promotion projects and so forth going, they're all on tapes. We don't have to translate anything on paper. And so on. We're gearing up and alerting Scandinavian orgs right now in the Swedish area, "Start figuring out how you're going to get your tape recorders, kids. And what you're going to be doing." There will be other projects to graduate them into it. And all of a sudden in their midst, why they will have HAS and other materials, and they'll all be in Swedish. Same thing's going to happen in France, same thing will happen in Germany, and so on. We've busted the language barrier. It's always been a worry about how we were going to do this. Alright, we do it.

But your big ideas that you get along this line are very often the most banal big ideas you ever heard of. They're just based on how to get more people to walk into the org. But every once in a while you'll get a big idea in the field of production, it will have to do with promotion or what you are offering, or how you will handle this or that, or something of this sort. All of which is perfectly allowable within a framework which you probably regard as perfectly rigid. The framework is quite rigid, and the big ideas aren't. And after you get this all straightened out and tested, why it is time to put some establishment there. So things that move from special programs in, have to be provided for by the HAS. As elementary as that. Things that you move into the establishment as an establishment, and they are legitimately part of the establishment, then those things become the things allowed for by the HAS. And it's up to the HAS to keep the establishment below, way below the cost figure of the income. And a good target is fifty percent.

Now the only other thing we've got to worry about is how do we get a multilingual LRH comm who is a site translator, can take the dispatches of that organization and translate them on tape, or send it on through for his administrative act. Probably be nobody in the organization speaks any English at all. Dianoutex!

You say, "Yeah, but the HAS, he mostly has to do with ethics, doesn't he?" No, he doesn't have anything much to do with ethics. Ethics officer has to do with that. Ethics is how you hold the edges. The ethics officer is the god of the edges. "This thing must flow down this channel, and hit these spots. And these spots must be there." And that is sort of the; he is the last word in edges. That may sound esoteric, but people use him to monitor behavior, and I never heard of anything so nutty in my life. Who cares about behavior? It's pathetic. You once in a while will see somebody in control of things who is very concerned with whether two terminals get along with each other. Well fine, spend some time, have a third party investigate it. So, so what? Very little to do with it. Interpersonal relations are only good in the presence of successful production. And the thing which you want to do is increase production. And that handles all the interpersonal relations you have anything to do with.

And when we get it into Russian, that's it. Probably we'll put it in Lithuanian, Polish, borderline. So, we're hitting into a boom in this in Russia. Russia's booming on the subject. They're fumbling all around trying to figure out what the psyche is all about. They find out that that's a legitimate sphere of research the government isn't controlling. So into the middle of this boom we simply release Russian Scientology.

No, the HAS would determine the size and type and kind of the establishment which could be afforded. And he would have to have to do with logistics. And he may be running much less establishment than he could afford. His first economy, traditionally, has been very erroneously on HAS itself. And I'm always asking HCO area secretaries, "How can you possibly have too few people in HCO? How the hell can you do this?" It absolutely assaults my reality. It's something like somebody standing up and saying, "This is blue," when it is scarlet. It is a complete and utter and total disobedience of all points of reality. And I'll tell you why. He's the guy who recruits personnel. He's the bird who controls establishment. He's the bird who says how many people should be where. And he comes around to me and he tells me he hasn't got anybody in HCO.

So anyhow, we've been trying to figure out how to, how to penetrate that zone and area. Now the only reason you're not making any penetration in some areas is because no materials are there. Nobody has totally translated what we're doing into what we are doing. We're putting out knowledge, and with that knowledge, and with the actions which that knowledge has you can get gain, production, case change, ability and that sort of thing. But the basic of it is knowledge. And when you get it right down to it and do an analysis of the thing, why here is a product called knowledge. And the consumption of that knowledge is guaranteed.

Once in a while, once in a while somebody walks up to you and brags that he isn't doing his job. Well that is HCO's method of not doing their job. That's a brag. "Well we haven't got anybody in HCO. Nobody here," and so forth. "Don't have any facilities, haven't got any. It's tough. Haven't got file cabinets to keep anything in, there's no place to file anything here in HCO." Wow.

But look, you have to have the bulletins, you have to have the tapes, you have to have the course supervisor who says, "And you read this bulletin now." And then see that the student reads that bulletin now. That'd be something new. And who doesn't assign him a condition of enemy because he doped off midway to, but goes over and asks him what is misunderstood.

Now immediately, out of that one thing, do you have some idea of what the HCOAS should be doing? The ne plus ultra of his not doing his job would be no manned and operating HCO. That would be the irreducible minimum of his job would at least be a manned and operating HCO. That is irreducible minimum. A fully manned, perfect HCO is the irreducible minimum of his doing his job.

Alright, what kind of organizational structure does that make? What is the establishment structure? Did you notice that I included the OEC? It would be fatal not to put the OEC in with it.

Now if he's got that, he should get on with it and do his job, which is put the establishment there. And that is why HCO is the command channel, and you say, "How possibly could HCO possibly build up an organization." Well Christ! It's in charge of the org boards, it's in charge of the personnel, it's in charge of hatting, it's in charge of the communication which gives it the communication lines, 'cause an organization consists of the lines.

Now I can tell you something else that's fatal. You put in a fragment of something, and it'll boom and collapse. So if you put in a fragment of what your org could be exporting with knowledge, it will boom and it will collapse. If you put in a fragment of your product; if I weren't talking to you now about the responsibilities of establishing establishment, I know it seems very rambling when I talk to you about this because you say, "The HAS has nothing to do with finance." And boy, he doesn't. He can spend you poor, boy. "Well we just, we've got these sixty staff members. I don't know why we're; we got 'em, we got the staff members. No auditors amongst them. Don't have course supervisors, ha ha. No hats. Um, we got establishment, there's sixty staff members." Sixty unhatted people would behave like about sixty enemies, man. To each other, they'd be at each other's throats in no time. So he doesn't have a sixty man staff, he has a sixty man mob. So he doesn't have an establishment. Yes, he has a great deal to do with this sort of thing, so somebody's got to take responsibility for the establishment, and I've elected him it.

And it's in charge of inspection, so that it knows it, and it's in charge of ethics so it can hold the edges of this thing, and so on. And when you've done all that you probably have missed the one point by which HCO builds, holds, maintains, mans and controls the organization, and it's the orders issue section.

Now if the org officer takes responsibility for the establishment across the line, he will cease to help the product officer. And you know very well that if he ceases to help the product officer, the product officer will start falling on his head. So the wrong division of duties, obviously, is the org officer taking responsibility for the establishment. The right division of duties would be for the HAS to take responsibilities for the establishment, and get one there that functioned. And get the people hatted and checked out.

Now if you want to know how bad off an area is organized, or an organization is organized, look at its orders of the day and find out whether or not it controls any establishment orders. And if it doesn't contain any establishment orders, then the HCOAS is not building an organization, so who is building an organization? And the answer is nobody. So what's going to happen to this organization? It's not going to exist.

The wrong action for an org officer would be to turn around to an HAS and say, "Give me three staff members at once, because I have got to beef up the empty, fast flowing posts of...", and for the HAS to pick off people off of other fast flowing posts and give them to the org officer. That's nuts.

Now how much organization he can build is determined by viability. Financial viability. Limitations on personnel is mostly imaginary. It has to do with, "We don't like people." Did you ever see that marvelous little cartoon of the fellow sitting in the box and saying, "I hate everybody." You know? Marvelous little cartoon. Well you don't want one, you don't want a department one like that. A department one must be prepared to take anybody on, even though they have to shove half of them out through department three.

The HAS would have to look around and find where he had some people. And if he looks around and finds he hasn't got any spare people, he's one of these poor sods that's just standing in a bread line, clear at the end, with only a gallon of coffee and a half a loaf of bread to give out to a hundred men. He's poor. We ought to give him special clothes, you know with ragged cuffs and...

Now if you have an HCOAS who knows his business, then the orders, organizationally, to put the establishment there, from the data which is given one way or the other through the lines, and the tip offs which are given by production, and the requirements of production and so on, why he can put an organization there. So he's actually an organization builder. And there's the point of the establishment product one builder. And he builds an organization.

If you turned around to treasury, and you had to run a mission or something of the sort, and you said to treasury, "We need two hundred and fifty dollars in order to pay the expenses of this."

With an HCOAS around, and days go by and I don't see a manned division two, I begin to wonder, "Is this guy waiting for an order to put up an org board for division two? What the devil is he involved in? What's he so involved in he can't do his job? Where's the org board, and where's some personnel in this division two? Is he waiting for orders to put an org here?" No, he's got the orders to put an org here, he's in charge of org boards. Yeah you say, "Well he's not in charge of buildings, and he's not in charge of this," oh yes he is. Orders issue section. And when they're issued they can be inspected, and if they happen there's a time machine, and so forth.

And treasury said, "I'm sorry, don't have any money, because we didn't make any provision for this. And all our money's in the bank, and there isn't any way to do it," they'd say he isn't doing his job. Well look at the HAS, look at the HAS. Resources. What are the realities?" "Now let me give you a little piece of stuff which emerged out of socialism. There's a few bits in socialism which are sound think. The most of it is balderdash. But this is very sound think. "The wealth of the world are the real things in the world. And that is wealth. And money is only a substitute for wealth, and is not itself wealth." And that is true.

I can take an HCO, I can build quite an organization with an HCO. It's what's the viability of this organization would be the only controlling factor. Organization that's new, young, something like that, why sometimes I might fudge over into seventy-five percent, but it would certainly soon be very rapidly down to somewhere around fifty percent of its income would the cost of the organization. And if it really got to running I'd ashamed of myself if the organization was running at any higher cost than about twenty-five percent. Be ashamed of myself. I'd think I just didn't know my business at all. What the hell's going on? Doesn't anybody get an ideas around here at all? You know? What's going on? Production must be zero, consumption isn't figured out, the production isn't matched up to the consumption, do you follow? There's something out of gear here some place. Great big why, see? How come we're spending fifty percent of what we make? That's silly.

Money is only valid to the degree that it can substitute for actual wealth. Money is only of any use to the degree that it can purchase things of value. Value is established by things that are wanted. Value is established by wantedness. You can then fluxuate value by making scarcities and demands and so forth, but it is basically wantedness.

Also, walking up and down the org and so forth, and seeing that staff isn't getting more than they used to get and so forth, and they aren't getting more than they need and so forth, that's also silly. What's the matter? Of course we've got the answer to that. We've had the answer to that here for some little time. The income per staff member only sixteen to eighteen pounds didn't mean orgs were over manned, it means people weren't wearing their hats, and there was no production orientation. It's incredible. You can't pay somebody twenty pounds a week if he himself is only making, on the average for the organization, sixteen pounds a week. So if people say, "Well, they pay us badly," who the hell's they? We're looking at they right between the eyes, sitting right back of that typewriter, boy. Why don't you pay yourself better? If you turned out a little bit higher quality letter perhaps you would be. Who knows?

Kensian philosophy, which he tried to say was economics, is valid, unless you put it in the field of economics. It is valid in the field of production, it's not valid in the field of money. And I think he must have gotten a couple of things crossed, but as far as production is concerned, you also have to create want. What you are selling is absolutely priceless. What we're selling here on Flag, I think you will agree, is priceless. There isn't any possible price could be placed on it. So it's price is what can be received for it. Not what is it worth, but what can be received for it, greater or lesser. So pricing is based totally really not on value but what can be received for it. And that value is totally how much it is wanted. And out of a very, very close knowledge of those, and once you get all of these factors disentangled, and all added up in your skull, you can establish how much establishment the HAS can put there. Has nothing whatsoever to do with any firm factor of, "Well, I'm an HAS, I will now put up an org board. And this org should be manned with fifty people, and we will now put some down the line, and we will put the people, there's blank spaces on this org board. And we'll put the people in those blank spaces, and so forth." No, right thing to do is to put up the org board, and then post it to the degree that it is required to back up production. And you build it up.

You expect some great god to descend from heaven and magically wave a wand and so forth? What the devil is the expectancy here? A fellow would have to do productive work. And then the production would have to be of a quality and a desirability to bring about consumption. Any way you look at it, I don't care if you're looking at this in a moneyless society, that is the way it works. If this village with its garden plots doesn't raise more than four or five such villages could possibly eat, it will be a bunch of poor, down trodden, starvation, famine faced peasants. They won't even be able to afford bicycles. Maybe there's no money involved at all. Maybe they never see a drachma or a durum or a ruble, from one year's end to the next. But you look around there, and this has been true for thousands of years. And it was true in the Euphrates, and was true in any other zone or district on this or any other planet.

Now you'll find that command lines of the org board will go absolutely mad if you don't build in from the top, so obviously the first production man that you put on is in charge of everything, and does the production. You've got one auditor. He obviously is in charge of all auditing while he is doing all the auditing, and he is obviously the production man for all auditing. So it's built from the top to that degree. But then, when there's more auditing, why it must be because there's more demand for auditing. So want has been created about auditing, and that is basically done by the circulation of books. Books always run out in front of the organization. The stats of an organization are actually almost monitored by the degree that the knowledge has been circulated. They are a direct coordination. It's actually not even by the degree of sales talk put out, it's stats of an organization are proportional to the amount of knowledge circulated by the organization.

One of the reasons the United States is having problems right now, and it must cause the suppressives just fantastic problems, is one man can now raise enough food to feed forty-seven. It used to be that one man could raise enough food to feed four. And this is causing terrible problems, and has total economic strains on the government right now. It's awful. But the damn fools keep shipping over seas money. Why are they shipping money over seas? They haven't got that. So, that any of these economic criteria just have to do with just these very, very, very plain factors.

So the HAS builds, according to the stats he can build by. If he builds an organization at the cost of fifty percent of the income of the organization, he's really doing great. A rich HAS is one who has reserves, resources.

You cannot pay a worker more than he makes. And that is all there is to that. So this guy sits there, and he's supposed to punch holes in belts, so he chews up belts, so he throws them out the window, so he throws them in the garbage can, and no belts arrive at the other end of the line, and there's no belts to be consumed and so forth. About that time he starts whinnying about how he's underpaid. I don't have any sympathy at all. I'm not being the hard hearted task master, I just know more about life than he does.

Now the wealth of the world are actualities. An HAS is wealthy to the degree that he has trained staff members, that he has trained staff members in reserve. "Special products is being asked to please find work for five fully trained auditors we are not using at this moment on the production line." How would you like to hear a remark like that? Wouldn't that be remarkable? But that could be a statement which is made by the HAS. "I got five auditors, I don't want to assign them into the administrative lines. Haven't you got some kind of a project where they can go out and audit ARC breaks or something? Do something? Or can't you think up something, or something?"

It's fantastic. In the United States you look around and you see some of these young squirts hitting papa up for a new Jaguar or something like this, and so on. I often wonder how long they're going to go. It's sort of like a circus, you see a not too competent performer on a high wire. Which performance and at what point of the wire is he going to go all the way down to the sawdust? It's one of these things.

Now you can run it the other way too. "Look, I want to have here a fifty(c)five man organization, and we've only got a thirty man organization. And at the present moment we can only afford a thirty man organization. Can't we increase production, or demand, or something in some way, so that we can increase our numbers organizationally so that we do get up into a zone where we are running where we have a few reserves, instead of just asking me to pull musical chairs every day, any day of the week? That would be a very comfortable position, so please can't we get the income up, huh?"

Now there's been all kinds of Katzenjammer kids running around, telling people lies about economics, but there are other people running around telling people about the poor, down trodden worker. After they get their worker's paradise in Russia they all starve to death. Trouble in Russia right now is they got no shoes to keep out the snow-nicks. Not that you have to have a great deal of shoes, but if you will go around with a body you might as well produce enough to keep it going.

I noticed when we were collecting stats last week, I've got it here. Where is this stat here? Yeah, oh yeah, hm, yeah. Letters out, letters out dropped. "Yes I know, but we're trying to get quality in." Ooh! First you get in volume and then you get in quality, and then you will have viability.

Now he's dealing with some interesting coins. How many auditing hours can the organization furnish? How many instructor minutes can the organization furnish? How many student hours can the organization furnish? How many public courses per unit per person can the organization furnish? And that would be a resources survey of an HAS. How many hours, how many hours. Well that's monitored by how many auditing rooms, how many auditors, how many this, how many that and so forth.

So, an HAS should know the resources of his organization. He should know its actual wealth. That he has fair resources or additional resources depends upon his knowledge of the existing resources. Never saw such a silly thing in my life as a set of graphs come in here one day. An organization had about ten auditors who were auditing six hours a week each. Oh, who's kidding? There must have been somebody in that area that was just throwing the gold coins of that organization right over the side.

Boy, he was just throwing them into the sewer just as fast as he could pick them up and throw them away. Six auditors, count 'em up. How many auditing hours should six auditors furnish? That's a hundred and fifty auditing hours. Or six auditors at twenty-five hours a week. Very well done auditing hours too. Resources.

This organization can furnish that, these auditing hours are worth this much, unless we're selling by packages. So we ought to be selling by packages, we shouldn't be selling by hours because it's too expensive, and it appears too expensive to the public to sell these auditing hours in this fashion, so we probably should sell by packages and so forth. So therefore the package selling, and so on and so on and so on.

But nevertheless, the coins, the gold coins which that organization is spending and has to spend are auditing hours. And if they're not spent this week, they can't be spent, ever again. Funny money. It's real wild money. If you don't spend it you haven't got it. How many student hours can this organization deliver? Hours of students on course. Alright, there's only room for twenty students in this organization, if you jam them in with a shoe horn. Now each student is going to spend eight hours a day on class. So each student is worth eight hours, and they're going to be twenty students, so you can furnish what? In a day, how many student hours. Those are your coins.

Now do you understand why I say the HAS is very poor if he does not have resources? Those are his resources. Supposing he's got a hundred and sixty staff members, and he has as organizational production coins, twenty-five. Twenty-five auditing hours. Supposing he has one instructor for seven courses. Now that's instructor minutes per course. Now you subtract that down to instructor minutes per potential student. So he's got one course supervisor, and he's got one auditor, and he has a hundred and sixty staff members. Does that sound crazy to you? Well I exaggerated a bit so that it sounds real crazy. The organization'd be broke in no time. Do you see that? Uh! There's nothing to deliver. How the hell could he deliver anything?