Jerry Marlow, MBA
Freelance Writer

Earmark Proposal Writing Sample

To Harness the Engine of Capitalism and Free Markets...
The Soviet Union and Eastern-Europe are simultaneously in the midst of political reform, economic reform and economic ruin. If the political reforms underway are to lead to democracy, the standards of living of the people in those countries must rise. The economic engine at hand to raise their standards of living is capitalism operating in a free-market economy.

	The officials of these countries must create conditions that allow capitalism and free markets to function, and
	Managers, executives, professionals and would-be entrepreneurs must learn the skills of capitalism and entrepreneurial ways of thinking.

The first step is being taken
The Soviet Union and the countries of Eastern Europe have taken many difficult steps to create conditions in which capitalism and free markets can function. The government of Poland has freed most prices and is allowing manufacturers and store owners to charge what they want.

Czechoslovakia plans to remove most price controls, slash industrial subsidies and begin making the nation's currency convertible.

Humanity has not yet developed anything more efficient than a market economy...The prerequisite to ensure the effective functioning of the market includes dejure equality of all types of property...Revenue from property should be recognized as lawful profit.

The government of Bulgaria has announced that it wants to turn the present state-owned economy into a Western-style, market economy. The government of Hungary has decided to sell 20 state-owned companies to private investors through shares. It has earmarked 10,000 small businesses for privatization.

The government of Romania has published a privatization bill that will allow full ownership of companies by foreign investors. Half of Romania's state-owned assets are to be sold over the next three years. Free prices will be introduced for all goods and services except for some essentials.

The cognitive and psychological legacy is that the executives, managers, officials and would-be entrepreneurs in the Soviet Union and Eastern Europe have had their skills, values, beliefs, perceptual frameworks, and ways of thinking shaped and conditioned by generations of living and working in centrally-planned economies. They have been conditioned by an economic system in which the combination of monopolies, subsidies and rationing has deprived pricing of its utility as a carrier of information and of its function of allocating resources.

Managers and consumers have had their propensities for taking initiative and being decisive conditioned by an economic system in which the power to take initiatives and make decisions ordinarily has been many steps removed.

Factory workers and managers have become inured to a system in which the market value of finished goods is often less than the value of the raw materials that go into their manufacture. Economists refer to this practice as creating negative value-added.

To succeed in the new conditions that are being created, managers, executives and prospective entrepreneurs need to learn not only that profit equals price minus cost, but also the dynamics of what determines cost and what determines price. They need to learn entrepreneurial ways of thinking and behaving. They need opportunities to grasp the implications and consequences of shifting decision-making power from central ministries to managers, entrepreneurs, investors, lenders and consumers.

To expect the people of the Soviet Union and Eastern Europe to operate capitalistic enterprises successfully without enormous amounts of re-education and psychological adjustment is fantasy. This year, the people of Poland started 175,000 new businesses. 147,000 have folded.

Congress recognizes the need
The Congress of the United States recognizes the need for U.S.-based and host-country-based programs to train the citizens of Eastern-European countries in the skills necessary to make capitalism and free markets succeed. House-Senate Conference Report 101-968 on the Fiscal Year 1991 Foreign Operations Appropriations Bill states:

Practical Business Training Program

The committee believes there is a need for a practical business program to provide critically needed applied business management training skills and practical business training to the nations of Eastern Europe. Such training should encourage both U.S.-based and host-country-based activities, including internships in the U.S. private sector. It should take place at an institution or institutions with recognized expertise in business, international training, and continuing education, and should be part of a broad institutional commitment to such activities so that Eastern- European trainees, government agencies and entities can rely on long-term appropriate follow-up and consultation to ensure effectiveness of the program. Evidence that an institution has an ongoing established agreement with appropriate Eastern-European entities and agencies should be a factor in determining the siting of the program.

The 1991 Support for Eastern European Democracy (SEED II) Act brought to the Senate floor provided explicit guide- lines and requirements for the creation and funding of such a program.

New York University is prepared to begin training Eastern European managers, executives and entrepreneurs
In concert with the need that Congress has recognized, the School of Continuing Education of New York University and the Institute of East-West Business Dynamics at New York University have made the preparations necessary to begin offering an educational program that strongly meets the needs that Congress has recognized.

The program will educate Soviet and Eastern- European managers, executives, prospective entrepreneurs and officials in the practical skills of capitalism and in entrepreneurial ways of thinking. The design of the program and the resources of New York University fully satisfy the concerns and criteria expressed in the House- Senate conference report and in SEED II as brought to the Senate floor.

New York University respectfully requests that the Agency for International Development grant the University's School of Continuing Education $2,000,000 to make the program operational and to educate, house and feed 200 students in the first year of the program's operation.

The proposed course of study in New York will be for seven weeks. It will combine class-room lectures and discussions at the School of Continuing Education, visits to enterprises in the New York metropolitan area and, for each student, an internship at a firm doing business in his or her field of current or prospective occupation.

The School of Continuing Education will run the seven- week sessions four times a year. The School projects an enrollment of an average of fifty students per session.

Eastern-European sponsors will fly students to New York
The executive director of the Institute of East-West Business Dynamics at New York University has reached agreements with official and business entities in the Soviet Union, Poland, Hungary and Romania to channel students into the School of Continuing Education program. The Soviet and Eastern-European entities will assist in identifying candidates for the program, ensure that candidates can participate fully in a course of study conducted in English, obtain visas and other travel documents for the candidates, and arrange and pay for their flights to and from New York.

The School of Continuing Education will take responsibility for the students upon their arrival in New York, provide them with housing at University residence halls and meals at University dining facilities.

Four weeks prior to the students' departure from their home countries for New York, the School of Continuing Education will provide students with reading materials in English that introduce them to the vocabulary, values and language of capitalism and free markets.

	The applied skills and practices of capitalism, and
	Capitalism and entrepreneurial behavior as a way of thinking, a system of values, a constellation of concepts, a propensity for action, and a language for entering into transactions

Class-room lectures will emphasize the flow of resources and decisions through an enterprise to the ultimate decision maker--the consumer. Working professionals from the field of marketing will present the range of choices that consumers enjoy in free-market economies. They will survey the range of strategies and tactics that producers use to have consumers select their products: marketing research, product and service innovation, higher quality, offering the best price, advertising, packaging, distribution, post-purchase service and incentives.

Lecturers from the fields of law and finance will present the competing interests of owners, lenders, managers, govern- ment bodies, workers and consumers. Lecturers will explain how capitalists analyze, label and categorize the countless components that flow through an enterprise.

Lecturers will discuss how balance sheets and income statements track resources through a firm. They will help students consider how balance sheets and income statements express the outcomes of competitive transactions among the many parties to an enterprise. They will teach students how to prepare balance sheets, income statements and cash-flow forecasts; and how to analyze financial statements that others have prepared.

Professional managers will explore the work culture of the capitalist firm: How roles and responsibilities are divided and allocated. What some of the decision- making processes characteristic of capitalist firms are. How much decision- making authority managers and workers have. How a manager motivates workers--and motivates other managers-- in a capitalist firm. The strategies and techniques that managers use to change an organization's structure and culture.

Lecturers who are working professionals in information- management consulting will explain the swirl of information that must be managed at a modern firm in a competitive marketplace. They will focus on who makes what decisions in organizations and what information they use to make those decisions. They will introduce students to proven methodologies for establishing business objectives, matching information-management objectives to business objectives, planning resource acquisition and allocation, evaluating software, building teams, structuring the work force, building and designing electronic-data-processing systems and implementing systems.

Lecturers will use applications of data-management systems in manufacturing, finance, operations and distribution as windows into how competitive enterprises use information management to achieve efficiencies and competitive advantages.

Entrepreneurs and venture capitalists will lecture on the steps and procedures of starting and financing new businesses. They will explain the dynamics of a firm's growing needs for financing, sources for financing, how to obtain financing and how to manage it.

Almost every day students will visit places that illustrate the themes, concepts and practices communicated in class-room lectures. To become immersed in the plenitude of choices that consumers can enjoy in a free-market economy--and that producers must compete against--students will visit department stores, shopping malls and industrial suppliers.

To see the auction system of price determination in action, students will visit the New York Stock Exchange, a commodities exchange or dealer, and a bankruptcy auction. To experience the importance of simultaneously avoiding waste and meeting close tolerances in manufacturing, they will visit an industrial manufacturer who competes globally. To witness the importance of fast and efficient distribution, they will visit a wholesale food distribution facility.

These and other visits to enterprises are designed to challenge students' conscious and unconscious assumptions about the operation of capitalistic enterprises. Seeing American enterprises in action is likely to shock students' assumptions and ways of thinking about running businesses in ways that no in-country program can.

Each student will be placed in an internship in an enterprise in the New York metropolitan area. For parts of days and whole days, he or she will shadow a manager, owner or professional and see how that person responds to the daily demands of working in competitive market.

At the end of their seven-week course of study in New York, the School of Continuing Education will return the students to the airports from which their in-country sponsors have arranged their flights home.

NYU will build a multiplier effect into its program
Inevitably, upon graduates' return home, their friends and associates will look to them to share the practical and analytical skills they gained in the United States. Specifically to support this further transfer of knowledge, the School of Continuing Education will give each student training in how to organize discussion groups and provide practice in leading them.

The school will give each student a selection of business textbooks and reference books--the beginnings of a free- enterprise library--that they may continue their studies and intellectual development on their own once they return home.

To provide graduates with continued educational support in their home countries and to gather information about which aspects of the program are most useful and effective, the School of Continuing Education will conduct follow-up seminars in the Soviet Union and Eastern Europe for program graduates.

With two hundred or more students graduating from the program each year, the pool of graduates working in each country will grow rapidly. As the number of graduates grows and the situations facing them become better defined, the School of Continuing Education will evolve its U.S. curriculum and its in-country seminars to hone in on those challenges and opportunities.

New York University requests $10,000 per student
The program budget translates into $10,000 per student. The $10,000 will be for books, materials, tuition, housing, meals and some administrative overhead. The sponsoring entities in each student's country of origin will pay for his or her flight to and from New York. A grant of $2,000,000 will enable the School of Continuing Education to educate 200 students in the practical and analytical skills of capitalism and in entrepreneurial ways of thinking.

New York University has the resources to make the program an ongoing success
The experience, expertise and resources of the School of Continuing Education, of New York University and of the Institute of East-West Business Dynamics at New York University make the School of Continuing Education strongly capable of designing, implementing, teaching and carrying forward this program of study.

Siting the program in New York City allows the program to take advantage of immediate proximity to: the many corporations headquartered in New York, the major U.S. stock exchanges, a commodities exchange, the principle settlement mechanisms of world trade, consulates, international airports, major libraries, the world's most comprehensive and specialized bookstores and many other resources.

A U.S.-based program at New York University can make a significant contribution to the transformation of Eastern Europe to capitalism and free markets
If capitalism is to succeed in the Soviet Union and Eastern Europe, if capitalism is to pull the economies of these countries out of their decades of stagnation, if rising standards of living are to strengthen the moves toward democracy and free markets, then tens of thousands--if not hundreds of thousands--of managers and policy makers need to be educated in the basic skills of capitalism and in entrepreneurial ways of thinking.

To date, the energy and effort of many Western govern- ments, universities and other organizations have gone into providing assistance and educational programs that guide government officials and legislators in achieving the macro- economic requirement--creating the conditions that allow capitalists and free markets to function.

Relatively few resources have been directed toward meeting the microeconomic requirement--educating the managers, executives and would-be entrepreneurs of these countries in the practical skills and conceptual analysis of operating capitalistic enterprises in a free-market economy.

Both in-country and U.S.-based interventions are necessary. The magnitude and depth of this population's unprepared- ness for capitalism and free markets argue for many and diverse interventions.

Educational interventions based in country have their advantages. They readily can reach large numbers of people. Training can be related to the immediate conditions that students face. Students can arrange for their own meals and housing.

Educational interventions based in the U.S., however, have significant advantages over in-country programs. Students attending a U.S.-based educational program have the opportunity to become immersed in, experience and take part in a capitalist, free-market economy. In addition to attending class-room lectures, they can experience the plenty of the U.S. consumer markets--markets that make higher pay an incentive for workers. They can experience the decision-making authority and accountability of capitalist managers, executives and entrepreneurs.

A study of Poland's transition to a market economy that the Agency for International Development published this year states:

The speed and depth of economic change in Poland will be determined largely by how rapidly the country can create and draw upon the human resource skills necessary to an emerging private sector. The Poles recognize this need for immediate action and the dearth of training opportunities available in critical areas of the economy.

An AID study of Hungary's transition to a market economy draws a similar conclusion:

The significant and widely recognized need for the development of managers who can lead the coming economic transformation represents an important opportunity for U.S. assistance to Hungary.

No doubt the same conclusion can be reached in every country in Eastern Europe.

The greatest risk— the greatest opportunity— comes from investing in start-up operations
Today capitalism and free markets are start-up operations in the Soviet Union and Eastern Europe. Any investor or venture capitalist will tell you that investing in start-up operations is risky. The failure can be total or the return can be great. The people at New York University believe that the political risk of not investing in capitalism and free markets in the Soviet Union and Eastern Europe far outweighs the economic risk of investing.

The program at New York University's School of Continuing Education can enable Eastern- European managers, executives and entrepreneurs to return to the economic ruin of their home countries and perceive opportunities. The program at New York University can enable these people to organize their perceptions in new ways--in ways that enable them to build and manage free- market enterprises-- enterprises that can raise the standards of living of their countries.

New York University asks the Agency for International Development to help the University's School of Continuing Education help these people on their way to capitalism and democracy.

References

Steven Greenhouse, " East Europe Finds Pain On Journey to Capitalism", The New York Times, 10 November 1990, p. 4.

Gazeta International ( Warsaw), cited in "Harpers Index" , Harpers, December 1990, p. 15.

Arthur L. Warman, David Harmon and Jean Gilson, Investing in Human Capital: Poland's Transition to a Market Economy, ( Washington, D.C.: Development Alternatives, Inc., 1990), p. 33.

Kenneth J. Angell and Jerry VanSant, Investing in Human Capital: Hungary's Transition to a Market Economy, (Washington, D.C.: Development Alternatives, Inc., 1990), p. 5.

Jerry Marlow, MBA
Persuasive Writing about Complex Issues
(917) 817-8659

jerrymarlow@jerrymarlow.com

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