L. Ron Hubbard and the Zen of Org Economics

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While compiling information on the economic model of Scientology, I found a fascinating 1970 HCO PL (scroll down) in which L. Ron Hubbard emphasized that the economic viability of an Org trumped posh quarters. Wanting to wring the maximum amount of cash out of Scientology’s Orgs, Hubbard was a pragmatist when it came to the matter of dwellings. This is why Hubbard could live in a rented house in Elizabeth, New Jersey; his manor at St. Hill; on a ship; in nondescript apartments in Queens, Culver City, or Hemet; or in a Bluebird motorhome. Hubbard was also quite willing for Scientology’s facilities to be merely adequate.

In Miscavige era Scientology, this policy has been reversed. Thus, while the Ideal Orgs are posh, they are essentially empty, nonviable, money-losing operations. As such, the Ideal Orgs are not financially sustainable or even justifiable; particularly as these Orgs must increasingly rely upon IAS subsidies or simply begging public Scientologists for subsistence money to pay their utility bills.

Beginning in 2002, David Miscavige bet hundreds of millions of dollars on his Ideal Org strategy. This strategy has proven to be a staggering failure insofar as Scientology membership and the reputation of the Church of Scientology continues to plummet in a free fall. Scientology’s psycho-terrorism of Fair Game and the enslavement and utter exploitation of Sea Org members are mutually contradictory with its goals of growth and expansion and “good PR.”

The Church of Scientology is hopelessly mired in a series of conflicting goals. Scientology cannot possibly hope to create a world without war, crime, or insanity when it is perpetually at war with Culture and governments; engaged in the criminality of financially raping its own members; and perpetually behaving in an insane manner. This self-destructive operating basis is unworkable and cannot possibly be called a technology.

And as membership and cash flow continues to exponentially diminish, the IAS reserves will be increasingly relied upon to fund daily operations, i.e. OSA’s disastrous campaigns of psycho-terrorist Fair Game; endless lawyers; damage control; creating hate websites; the dissemination of the usual PR lies; the enslavement and utter exploitation of Sea Org members; and the subsidizing of both new and existing empty Ideal Orgs.

Bottom Line: Given the Church of Scientology’s system of cruelty and greed created by Founder L. Ron Hubbard it really doesn’t matter if Scientology is ensconced in palaces or housed in decaying strip malls. The System of Scientology itself is doomed to failure and is in a state of decay, stagnation, and collapse. This collapse is dramatically accentuated by staggering revelations of Scientology’s enormous depravity and cruelty.


HUBBARD COMMUNICATIONS OFFICE
Saint Hill Manor, Bast Grinstead, Sussex
HCO POLICY LETTER OF 23 SEPTEMBER 1970

Remimeo
Estate Bureau
LRH Comm Hat
OES Hat
ED Hat
CO Hat

QUARTERS, POLICY REGARDING
HISTORICAL

In twenty years an enormous amount of experience has been gained regarding the quarters and housing of orgs.

From this experience there are only a few clear-cut lessons. These follow:

A. VIABILITY of the org (its economic survival including its security from political-enemy-motivated attack) is the first and foremost consideration. In terms of quarters an org can afford just so much expense. Therefore, viability is the first consideration—not how posh or what repute or what image. Thus, we have the policy that:

THE FIRST CONSIDERATION IN PROCURING QUARTERS IS THE VIABILITY OF THE ORG.

Example: Stockholm took very posh, fancy quarters. Up to that time it has been viable. The overload of expense rapidly upset the salary sum, the staff began to moonlight (work on other jobs), and the org all but collapsed until cheaper quarters were found.

Example: Phoenix 1955. A beautiful, big building at small expense was found. It was very prominent. Enemy local attack was stepped up in the area including door-to-door black propaganda by psychiatrists and a campaign by commie newspaper reporters. The full reserves of the org went into furnishing these quarters. The area had to be abandoned,
losing all reserves. Elizabeth, New Jersey, 1950. The shabby quarters there made lots of money. Beautiful country quarters were under survey for purchase. The psychiatric block, much stronger then, began action in Trenton, New Jersey to invoke a law against medical schools. If the better quarters had been purchased, they would have been lost. The org foolishly moved to New York City across the river where the New York Org owned a building.

CONCLUSION: Viability of economics must not exceed the income of the org. The SAFE figure for rent and mortgage payments must not exceed 15 percent to 17 percent of the gross income of the org.

Political security must be attained by counterattack and if not attained or is risky, no heavy property investment or renovation should be programed.

If a country itself is liable to fall, property investment and renovation should be held to a minimum as viability is under the general political threat to the country itself.

B. Quarters must be close to ample and cheap student and pc housing, restaurants and transport.

Example: Abellund in Denmark, 1969, was a lovely place. The org there failed because it was 42 kilometers in the country without transport or taxis or buses, had no student housing nearby and had no restaurants. It was lovely but hated by students and pcs. Its isolation and general atmosphere promoted idleness and the org was down to half rations and no pay when forcefully moved by Flag into Copenhagen where in very bad quarters and bad housing it became viable. Student housing and feeding is very expensive and facilities scarce even so and still hurts the org income greatly.

Example: Elizabeth, New Jersey 1950. The org was located amid square blocks full of rooming houses and at the city center of three railways and bus lines. The students’ own rooms were used for auditing which permitted org expansion. Nothing was posh. Everything noisy. The org was very viable and had streams of people.

Example: SH 1960-1968. The presence of lots of rooms for students in the town and cheap living despite the lousiness of the quarters gave SH in England its greatest periods of affluence. Political attack barred out foreign students, and the town people came at length to petition the government to remove the ban. (The closure of the 1955 Phoenix org also caused 35 small-town businesses to close in the org vicinity.)

CONCLUSION: The presence of ample, cheap housing and restaurants and general and local transport is a main factor in the viability of an org.

C. Image is a secondary consideration.

Example: Hotel Reycar Alicante Spain was relatively cheap. It was quite posh. Students complained as it cost a bit more than they were willing to pay. Image in this case worked against the org,

Example: Johannesburg’s three old buildings foolishly sold and the money squandered has yet to attain the income it made in its “old, horrible quarters” despite its newer image.

Example: The beauty of Saint Hill in England is secondary to its viability and student housing.

CONCLUSION: One does all he can by staff work to improve the image. If image is the reason why one must move from an area where the org was viable or had student housing, forget it. Polish up what you have already, Image is gratifying. If A and B exist, one can think about image. Image of the outer building does not much affect A and B. Cleanliness and order of what you have is the image to concentrate upon. Staff pay and food and cheap student housing do more for an org than a posh building.

D. DON’T SELL IN ORDER TO RENT IF YOU’RE VIABLE.

Example: London about 1965 agreed to sell its buildings. Three years later by agreement it had to vacate. It squandered its money so made and has rented quarters and has not done well since.

Example; Johannesburg sold its buildings in the late 60s for a profit, blew the profit on old bills instead of making the money and has been on a struggle ever since.

Example: Reversely, Washington, DC has paid for its buildings in rent several times over and has nothing and is in sporadic trouble, probably exceeding its 17 percent of gross for quarters.

CONCLUSION: Purchase is superior to renting unless political viability is very bad. And when an org owns quarters and is viable, it is not clever to sell and rent.

E. Expensive office equipment is not a first priority.

Example: Camden, New Jersey 1954 bought beautiful desks and chairs and cabinets. When it moved they were seized on a landlord pretext. All its reserves were tied up in furniture which can’t be resold anyway.

CONCLUSION: Enough desks and chairs and furnishings is far superior to top-grade office furniture. Reserves tied up in furniture is never recoverable. Furniture quality does not influence production. Furniture lack does reduce production.

F. Renovations are destructive if extensive.

Example: London 1958-59 rented 7 Fitzroy. Contrary to orders which were to hire a man and do one room at a time, it went all out with contractors and even rewired the place and went broke on renovation bills. It took three rough years to get the org out of debt. Then when the building was given back to the owners (Church of England), they charged huge building damages which had to be paid although they had a new, sleek building in return for an old wreck it had been.

Example: Phoenix 1955 cost all the org reserves to renovate a building then lost.

Example: A ship was fully renovated before use and wound up costing more than a huge, usable ship.

CONCLUSION: Don’t renovate at vast expense. Use and make it better as you can with your own people.

G. Other businesses or rentals to support an org wind up very costly.

Example: Hickstead Garage was bought to support Saint Hill. Was a horrible drag and distraction and supported nothing, not even itself. Saint Hill Special Briefing Course supported Saint Hill.

CONCLUSION: Schemes to use other than Scientology actions or partial rentals, etc., can be a bad nuisance. Scientology supports Scientology orgs and we learn this over and over.

H. Depending on political viability, it is better to buy than rent. If political viability is shaky, it is better to rent than buy.

Example: Spain’s Hotel Reycar was a great success as a rental, getting org quarters so students would rent rooms. However, the Spanish government was worked on by the South African ambassador who was worked on by the World Federation of Mental Health stooge Stander, a commie in South Africa. The org was subjected to surveillance and upset and moved. It could not have moved easily had it owned.

CONCLUSION: In politically troubled areas use a downstat hotel and promise student room rentals. One can move in hours. Or one can stay. This would apply to the Middle East or to any country, like Spain, subjected to political menace. (Spain is intolerant of religions, and its officials are bought easily and is caving in to Russian pressures and
probably won’t live as a government beyond Franco’s death.)

I. Where possible, don’t split up units of the same org unless you have to.

Example: Notting Hill Gate 1955 was rented. Half the org stayed a bus ride away at 163 Holland Park, London. Denied some of the services of an org, each part had a rough time.

Examples: The HGC Los Angeles from 1956 for some time was separate. This was not too bad and it paralleled an earlier 1955 separate building HGC in Washington. But the secret here was the personal competence of the HGC D of P and when that person was promoted to Los Angeles the HGC did much less well. The separate HGC in LA got
into out-tech.

CONCLUSION: The functioning public line units (Academy, HGC) should not be in separate buildings from the org. However, working units such as Mimeo or even Div 2, except the Body Reg, have sometimes been separate from an org and no trouble was experienced. Housing and food for a staff can of course be separate and should be.

SUMMARY

The above are the major policies relating to obtaining and situating quarters.

A and B are much more important than the remainder.

An org which adventures more than 15 percent of its current gross income
for rent or purchase payments can get into far more serious trouble than an org
with a poor building image. Hopeful thinking contrary to these policies, especially
A and B, can smash an org,

The switch of address alone can cost an org a great deal unless loudly remedied.

One maxim is, if you have a going concern with enough income and pay,
don’t monkey with it until you can realize a total purchase price with A and B
in mind.

L. RON HUBBARD
Founder

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