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Dialogue of Cultures

Schiller Institute

We Must Rebuild Bosnia to Save Ourselves

Speech by Lyndon LaRouche
January 4, 1997

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What I'll do, is deal with several things. First of all, to address the problem, to address the solution, to indicate the special implications of the Bosnia issue in overall international policy--a very special aspect of this--and to get down to some meat about economics and the kind of economics that works, as opposed to the kind of economics which is taught in universities and discussed among most Washington Congressmen, which doesn't work. Neither do they! We're going to have to send them back to the factory to get new works put in, especially from the neck up.

Now, the thing to understand about Bosnia and the Balkans, and its significance for us, is to recognize that the world is now in the grip of the greatest crisis in 400 years of European civilization and its domination of the planet, and that this system, this European system of civilization, is in the process of being destroyed. Not over a long range; we're talking about possibly months, weeks, before the whole system as we presently know it goes under, and the world can go under the water like a Titanic, not for the extermination of the human race, not because of "end-times" or something of that sort, but because we plunge back into a Dark Age.

That is, over the period since the Fourteenth Century, the population of the world has increased from about 300-odd million to 5.2, 5.3 billion today. The possibility of sustaining 5.3 billion people, as opposed to three to four hundred million people, is a result of certain advances in science, technology, and culture which have occurred, which have been concentrated largely in European civilization. And, despite the evil things that many European nations have done, including the United States, to various parts of the world, the European civilization, that is, the creation of the nation-state committed to general education and to the fostering of scientific and technological progress for the benefit of all mankind; that kind of state has made possible most of these advances in the conditions of humanity.

Today, up until thirty years ago, when we began to slide downhill, the increase in the life-expectancy throughout the planet, was increased as a result of European civilization. The condition of health, the power of the individual over nature, the ability to live more profitably on a smaller land area, the fight against disease: all of these things were accomplished because of Europan civilization's gift, addition to the gifts which we'd had in all parts of mankind earlier.

In the past thirty years, we've been going downhill. If we collapse this civilization, if we go back to what some people desire as a neo-Malthusian, environmental-friendly, post-industrial civilization, then the means to support human beings on this planet, will collapse from 5.3 billion or more, to less than 400 million. That collapse, over a period of two generations, would represent the greatest rate of holocaust and madness on this planet, in all human history and all known human prehistory.

That is, withdrawing the means of physical support of food, of defense against disease and so forth, required to sustain the present level of population, would mean a reversion to the level of culture, of technological culture on this planet, of about 500 years ago. Under those conditions, the population level of the planet would collapse. That would mean that the life expectancy on this planet would go down to between 30 and 40 years for an adult life expectancy. It would mean the infant mortality rate would zoom, in which eight out of 10 or more children born, would die; and so forth and so on.

It would mean that education virtually disappeared. It would mean that you think problems in a ghetto in the United States today are bad, where drugs and weapons proliferate? That's Paradise, compared to the kind of lack of civilization you'd get under those conditions.

The plunge of the planet into a new dark age is the threat that faces us all. What we see in the Balkans, is a reflection of policy thinking in capitals of the world, which, in I guess the words of Clark Gable, nations which don't give a damn about the conditions of humanity. Negligence: "Oh, there are too many people anyway." If you want to see a real horror show, go to Africa.

The general policy of European governments, especially the British government, especially of Prince Philip, the consort of the Queen of England, the human Giant Panda, is that Africa is overpopulated, that Africans must die. If you read more carefully into the policy declarations, back as far as 1966 in the U.S. State Department, when this began, when population policy became an axiom of U.S. foreign policy, that the way we would treat countries, would depend upon the way they controlled the growth of their population, or reduced what was considered excess population. That is current U.S. State Department policy. Not necessarily the policy of everybody in government, or of everybody in the State Department. But there's a powerful population-control, or Malthusian faction, inside the United Nations Organization, inside the U.S. State Department and other parts of government.

This is expressed, in 1974--he's not the originator of the idea, but the one who's notorious for promulgating it and for practicing it--by Henry Kissinger, then, at that time, in 1974, both National Security Adviser to President Nixon and, later, Ford, and, also, Secretary of State of the United States, who laid down a Study Memorandum in which two things are outstanding.

He said, "In countries such as Africa, people are using up resources, natural resources, which the United States and Britain will require in the future. We must stop the consumption of those resources. Africans must stop breeding so many people. They're using up resources we covet for our future."

Number two: "If these countries, developing countries, improve their technology, they will make greater utilization of petrochemical and strategic minerals in various parts of the world, especially Central Asia and Africa, which are the two largest concentrations of strategic minerals on this planet. Therefore, we must reduce these populations in Africa and elsewhere, in order to conserve natural resources."

And that's the U.S. policy for Africa. We see in eastern Zaire today, in northeastern Zaire, you see that George Bush, who is the honorary adviser and chief representative for Barrick Gold, a Canadian-based firm, is part of an operation behind the genocide launched by an invasion from Uganda, through Rwanda, into this area, using mercenaries and other folks, to take these areas over, in order to get, capture a raw materials concession which Bush and others, Anglo American from South Africa, are taking over.

They're taking over, throughout Africa, from the southern part of Sudan, down the mountain ridge, through Shaba Province in Zaire, down into the South African shield, this bunch of people, centered on London and the British Commonwealth, has taken control of the majority of the strategic minerals in all of Africa. And, they are running an operation to depopulate sub-Saharan Africa.

Bush--Sir George Bush--is an integral part of this. Sir George Bush is also involved with the same complex of companies in Central Asia, where petrochemical resources and strategic mineral resources are being grabbed.

Now, the philosophy is this. We are now not only in a collapse of economy, which we've been in worldwide for the past 30 years. That is, the physical product per capita of labor force consumed and produced, has been declining, so that in the United States, for example, it takes three jobs per family, not to reach the level of existence which was achieved with one job per family in a comparable family twenty-five years ago. Most people know that.

There has been no growth in the United States, no economic growth, for the past quarter-century. In point of fact, every year over the past 25 years, the U.S. income and production, per capita of labor force, has shrunk by more than two percent per annum. It is now zooming toward five percent per annum, the shrinkage.

We have a pattern of similar developments around the world. We are on the verge, as everyone in financial circles at top levels knows and says, we are on the verge of a disintegration of the present world monetary and financial system. In the present form, there is nothing that can prevent that collapse from occurring. Absolutely nothing. There is no trick in the book that can save the present monetary and financial system globally in its present form. Very soon, in addition to all kinds of financial market upheavals and collapses of industries and so forth, we are headed for the greatest financial collapse in all human history. Not years ahead, but in the immediate period ahead. It's already on the way.

The day that the derivatives bubble internationally, which is probably on the order of magnitude of $100 trillion of liabilities, probably, maybe more, because most of it's off-balance sheet; on the day that bubble begins to collapse, you will have, within three to five days, the vaporization of virtually every financial institution on this planet. Not bankruptcy, not "in trouble": vaporization. The doors close, it stops. You take a credit card, you put it in the machine, there's nothing on the other end to connect to.

And if you think about the dependency of people in the United States and in Western Europe on electronic transfers of money, as opposed to actual cash transfers, and realize that not only households depend upon electronic transfers in large degree, credit card debt and similar kinds of things it's called here, but also that business firms, such as the local grocery store, depend upon it. What happens on the day that this collapse occurs, and people rely upon certain grocery stores and so forth, to get their groceries? How many days' supply of groceries for a neighborhood is represented by the stores in that area? What happens when the stocks run out? How does the grocery store secure new supplies? That's the kind of problem that we potentially face

How British Geopolitics Has Targeted the Nation-State

Now, there are solutions to this, as I'll indicate. And, when you look at the problem and the solution, then the significance of Bosnia and its development become clear. It's not just a country which has a need, which we ought to, on moral grounds, assist and remedy. We need a policy which is needed to solve the Bosnia problem, but a policy upon which our survival depends as well. It's not a matter of should we or should we not help. The question is: Do we wish to survive? Because we will not survive ourselves, unless we change the policies in a way which addresses our problem. But the same policies will solve the problems of Bosnia, and, also, Africa.

And, that's the way to look at it. We're all in a mess, and we can not turn our back on a neighbor, and say "I don't have time to be a Good Samaritan." That's not the issue. If you're not a Good Samaritan, you're not likely to survive yourself. So, you are the guy who's really in need, whether you know it or not.

How did the problem develop?

Well, let me go back. There's a long problem in history, which we're going to have to face. It involves ideas which some people would call "heavy," or conversation they would call "heavy." But, this is a time when you have to face it. When you find that everything you try to do doesn't work, you have to say, "What's wrong with me? why can't I come up with a solution? Why is it that every idea I have, is worse than the one I just tried to replace it with? There must be something inside me I haven't looked at, which is causing me to generate so-called solutions which turn out to be worse problems.

Well, for 400 years, Western European civilization, despite its achievement, has been divided between two factions. One faction is a faction which is based on the nation-state. It was a new idea then, back in the Fifteenth Century, that every person in society should have a classical education. That Classical education should be the basis for creating a body of citizenry who would control the nation, rather than some feudal overlords or similar types of institutions--to get away from the imperial system, where some people ruled, some people were privileged lackeys, and the others were slaves or serfs, or something like that.

(tape change)

-- a society in which man as an individual is regarded, each individual, as sacred. That that man is sacred, that woman is sacred, because, as it says in Genesis, they're made in the image of God, to exert dominion over the universe.

Therefore, every person in society should be treated accordingly. That is, the powers in them which correspond to this gift, this divine gift, must be nurtured and developed, through education and in forms of family life suitable to the nurture of the young child. That as the child grows, the child must have a meaningful role in society. And, therefore, the society must be dedicated to providing those opportunities.

The nation, or the political institutions of a people, must express that interest. Not the opinions of the people; but express the vital interest of every family and every child, and every individual, to have access to nurture of that quality in them which makes them human, above the beast. To be given the opportunity in life and security, to live as a human being, not as a beast. And to go to their grave with a smile on their face, as the poet says, because they know that their nation, and their individual existence, had some meaningful part in human history. That they were born, and, with some implicit mission, they have spent their life, their talent, the life afforded to them, in trying to fulfill that mission. And when the time came that they died, they could be content that they had spent that talent well, that they had done something which made their having been born worthwhile.

That was the objective of the nation-state: to take the nation-state away from the power of landed aristocracy, of financial oligarchs, or the power of usury.

Now, this created, through education and promotion of scientific and technological progress, created a new form of society, which is much more powerful per capita, than any society that ever preceded it. And, naturally, the old landed aristocrats, the usurers and the landed aristocrats, tried to crush it in a great reaction. That failed, because the nation-state is more powerful per capita than any other form of society. You don't have an ignorant individual, you have a developed individual. You are developing technological progress, scientific and technological progress; mastering nature, which means you can do more with a square foot of land than any other kind of society; which means that you can develop powers beyond any other kind of society to address problems, including military ones.

Therefore, the new nation-state form was much more powerful, per capita, than the old institutions. And so, the old institutions came up with a new gimmick, called the Enlightenment. What they did, is created a society which was usury-friendly. That is, a society which had the outward appearance of a nation-state, which did, in a limited way, use technological and scientific progress, for the purpose of maintaining strategic military and equivalent capability. Not for the development of man, but in order to maintain power.

And you will find, for example, in the United States: the only time the United States progressed economically, during this century, was in the course of preparing for war. Not because it had to be that way, but because the financial oligarchy in this country was sufficiently powerful in this century, that they would prevent any significant scientific and technological progress, except for accepted purposes of war.

Roosevelt had a recovery plan, for example, from the Depression in the 1930s. He could not put that recovery plan into effect, except on a token basis, until the British and others agreed, after 1938, that the war in Europe was inevitable, and that Britain needed the United States to develop as an arsenal so that Britain wouldn't be crushed in the war in Europe. Then, we were allowed to progress.

At the end of the war, when we came back from military service, Truman, under British orders (Roosevelt was dead), shut down the economy. Those of us who came back from military service in 1945-46, found ourselves not with a continuation of the prosperity which the wartime experience had developed, but into a depression. And, that's embedded in the character of the Americans. They became cowards. Those who had not been cowards on the battlefield, became cowards in face of economic insecurity: don't do anything to jeopardize your financial security, your family security.

Then, 1948-49: the Cold War, so-called, was fully underway. In 1949, we began to retool. 1950: we retooled for the war in Korea. 1954, we shut the economy down again, 1954-56. We went into a prolonged, deep recession until 1961. Then we decided we had to close the missile gap. And, on the basis of the aerospace program, the economy zoomed, temporarily. 1964-65, we shut the economy down again, 1966 in particular.

And, from 1966 on, we have been going down. Why was it going down? Well, two reasons. First of all, from 1966 to 1989, it was the persuasion of the leading circles that the Missile Crisis and the agreements struck with the Soviet Union on nuclear and other weapons in negotiations, had produced a process of detente, such that, on this planet, there would still be wars, but the wars would be of a limited character, and would not involve all-out wars of annihilation of military force between major powers. They would be what were called cabinet warfares, not annihilation wars. Not annihilation of peoples, but annihilation of the military power of an opponent. That is, the total defeat of an opponent, where you annihilate his capability for continuing to make war. It's called an annihilation war.

The other form of war, which is the typical feudal war, is a war in which you fight only for the diplomats. The diplomats say, "Go out and shoot two bullets today, and let's see what the enemy does, and we'll tell you whether to shoot two bullets tomorrow or not, after the negotiations." We've seen that in the Balkans recently. It's called a "diplomats' war," a war of diplomacy, or "kill for the Secretary of State, he needs the votes."

So, the first phase was we shut down the economy, because, they said, we don't need to develop a high-grade strategic capability for the general contingency of general all-out war. From 1966 on, the United States economy was deliberately shrunk. For example, 1966-67, we shut down the aerospace program. We allowed it to continue to get the man on the Moon, but we cut off all the programs which went beyond the man on the Moon program. And the space program was greatest driver program for net economic growth. For example, we got about fourteen cents returned to the U.S. economy for every cent spent on the space program in that period. We shut it down.

Then, in 1989-91, when the Soviet system disintegrated, we said, "We don't need the nation-state any more!" And there began a process of full-scale destruction of the nation-state as an institution, because the likelihood of any form, the challenge from a nation-state seemed impossible. We had now entered, as Bush said, a new world order, which is a global order, in which the nation-state is to be eliminated.

In that context, you had a special problem, where the Balkan war erupted. Thatcher, who brags in her biography, quite accurately, that Bush was her puppy dog, she could control him by snapping her fingers, as only an old British nanny could do, went into things like Desert Storm, for reasons of a policy which was enunciated by the British government in 1989, in the fall of 1989. They said the danger is that with the collapse of the Soviet system, that Germany will instinctively react, by using its machine tool potential as an export potential, to open up a new phase of development f eastern Europe and the Soviet Union, too, or the territory of the Soviet Union. This must be prevented at all costs.

The British call this the "Fourth Reich issue": the danger of Germany emerging as a Fourth Reich, that is, as an economic power, through its collaboration with those sections of the former Comecon which had been part of the Soviet system earlier. That this would therefore reaffirm the institution of the nation-state. This was a geopolitical issue.

Under that policy, Bush, with Thatcher, were the mediation for ensuring that, now that eastern Europe and the former Soviet Union were down on the ground, let us keep them there forever. And every economy in eastern Europe has been significantly destroyed, relative to its level of 1989, under the so-called reform. The most savage reform, the most savage collapse of any part of eastern Europe is perhaps in eastern Germany, where the economy has been destroyed by the German government, under orders from the Anglo-Americans and the French, Mitterrand, under Maastricht. But, the same pattern exists in Poland, exists throughout eastern Europe. Romania is notorious, Bulgaria is notorious, Hungary is notorious.

Then there's another aspect to this: the Balkans. You may recall, when the war in the Balkans started, which started after Desert Storm, it was unleashed by British Intelligence, with the support of Mitterrand in France. The war cry, the original war cry used by Belgrade to justify the attack on Croatia and Slovenia, was the magic phrase, "Fourth Reich." "Germany is the Fourth Reich, Germany is the danger." That terminology was no longer used after that phase, in the Bosnia phase of the war, but it was used in the opening phase.

Now, we dealt with the British in that period, talked to them about it, to high-level people we knew. And they admitted, that the purpose of the Balkan war, the reason that they and the French organized the Balkan war, was for geopolitical purposes, identical to those which set World War I into motion, which they did, the British and French at that time, started the Balkan war of the early part of this century, and organized the Balkan war, in effect, during World War II. It was organized on the same logic, as part of the destruction of those parts of the world which might be the basis for re-emergence of nation-states. This is the same policy which is being carried out in Africa, which is a deliberate policy of genocide.

There is no intent, on the part of the British or their friends in France, or others, to allow the restoration of any state power in the Balkans. They are now in the process of putting Serbia through the meatgrinder. The opposition is legitimate, but the leadership is doubtful. It looks like another meatgrinder. It looks like they're preparing to set into motion the basis for a new Balkan war--as they did before World War I. Remember, there were two Balkan wars in that period, one set up after the other.

We know there's no intended solution for Africa.

And, that's the point. We now face a situation in which those are the realities. We are in a system which is collapsing, where the collapse of the system is imminent, the financial system. The economies are collapsing under the influence of these policies, and we have, in various parts of the world, as typified by the case in the Balkans and the case in Africa, we have parts of the world which exemplify the horror show which results from the continuation of these policies.

Needed: An Orderly Bankruptcy Reorganization
Of the
Global Financial and Monetary System

Now, what's the solution? The general nature of the solution is obvious. We had a financial system and a monetary system, from 1946 through 1966, which more or less worked. It was called the old Bretton Woods system. The system was based, not on gold currency, but on a gold reserve system. The function of the gold reserve system was to keep currencies, relative to one another, at fairly constant values. This meant that if you loaned money to someone, that the currency o the fellow to whom you loaned, would have approximately the same value five years from now, that it had today. So you didn't have a borrowing premium that you put on the loan, based on the expectation of the fluctuation of the currency.

To promote long-term trade and investment in international markets, requires stable relations among currencies. And, the function of the Bretton Woods system, the original one, was to provide that mechanism, and to induce governments to maintain stable relations, that is, discipline among their currencies on a gold reserve basis.

Under that policy, we in the United States operated on what was called a national economic security policy, which was a key part of our postwar national security policy. That is, we had a protectionist policy, in effect, and we encouraged other governments to have protectionist policies, because it was our desire that we be able to trade with these countries, which we could not do, in a stable way, unless they had fairly stable currency values. Therefore, if they needed something, if they needed to protect a certain industry, we would encourage them to do so, with tariffs and other protective agreements. We would enter into multilateral agreements, or bilateral agreements, with various countries for the purposes of mutual economic protection, to protect their sugar growth, or to protect this particular industry, and so forth, because we knew that the protection of that industry as a source of income and wealth inside the country, and on the international markets, was essential to maintain the value of that friendly country's currency. And that's the way we did it.

Also, long-term borrowing was cheap in the international markets. If you wanted to invest in a country, the long-term costs were cheap, at one to two percent, for example, in many cases. Or, you would have agreements of various kinds, which would reduce it, effectively, to that. So therefore, we could export, as the Germans could and so forth, we could export capital to developing countries, at fairly favorable terms, particularly those which had some labor force, agricultural industrial labor force, with some potential.

For example, in South America, remember that Argentina came out of the war with the fourth highest standard of living in the world, which was based on its superiority, in terms of its industrial and its agricultural potential. The United States, of course, has systematically, with the British, destroyed Argentina, since the end of the war. So, you had countries like that in South America, which had tremendous potential.

Now, the obvious thing is, what we have to do, is very simple, the first step. Two things we have to do. Number one, we have to go back to that kind of a system. What does that mean?

It means that the President of the United States, with the relevant support from people in his own country, must launch a general monetary and financial reform, to prevent a financial collapse from putting the planet into chaos. That means the President must say, "We are going to proceed to put what we know to be bankrupt financial and monetary institutions, into bankruptcy, that is, into receivership, for financial reorganization under the supervision of government," the same thing you do with a local bank if it goes bankrupt. The relevant state or federal institution must come in and put that bank into receivership, take it over, and process it, try to protect some of the depositors, and things of that sort, to prevent social chaos, to prevent that thing from becoming a spreading disease within the society, and to try to see what we can salvage out of it, in an orderly way, as opposed to a chaotic way.

Therefore, the United States must act, together with other powers, to put the world into bankruptcy reorganization. Every financial system, every banking system in the world, is presently bankrupt! Particularly those that are involved in derivatives.

Therefore, the United States must take leadership, international leadership, in proposing a new Bretton Woods, which would e a good term for it, which is what I've proposed, that we're going to go back to the principles of the Bretton Woods system in its best years, and the United States as the principal prospective partner in such agreement, will try to get every nation that's willing to go along with this idea, to assemble and do it. And, those that don't wish to go along with it, that's just tough, we're going to go ahead with it anyway.

That means that we have to create new banking systems, which is very simple to do, on the basis of the Hamilton model. We go to national banking. We use the relevant article of Section I of the Federal Constitution, to create new issue of currency, not calling in the old one, the old Federal Reserve notes, but terminating further issuance of Federal Reserve notes, using that currency on deposit with the National Bank, as a means of credit to get the U.S. economy going, and get some other things going in international trade.

To encourage other governments to do the same thing. To scrap every existing international trade agreement, including the WTO, liquidate it, it's out of -- it's out of -- it died shortly after birth. And bury it decently.

But then, set up a new set of pro-protectionist forms of bilateral and multilateral trade agreements, which create the circumstances in which the country that needs to invest in an industry, will find that there's cooperation in international protection, tariff protection and trade protection, to allow that industry to grow successfully in its own economy. And, we'll simply deal with things on that basis.

Our concern is not who's got a favorable or unfavorable balance of trade; our concern is to make sure that all the members of a community of nation-states become prosperous. And, therefore, our concern is that they become prosperous and secure, just as their concern is that we should remain prosperous and secure. And therefore, we can make trade agreements and tariff agreements on that basis.

So, when you talk about a new Bretton Woods system, you're talking about putting the old system into bankruptcy, the old banks; creating a new system of national banking in all partner countries which agree to this; setting up a new method of creating credit to get a recovery going, and to maintain the continuity of production and trade. To set up a new system of trade agreements, abrogating all the existing ones, in order to foster global economic growth.

Then we have to do -- what? We have to then say, "Well, what are we going to do, to stimulate the world economy, in terms of economic measures?" That's where the Land-bridge comes in.

Now, we were working on this problem for some years. I first addressed this back in the early 1980s, at a time that I was doing a little job for the Reagan administration in negotiating with the Soviet government, on what became known later as the SDI. And, as I told our Soviet representative that we were dealing with in early ?83, that if they turned down the SDI, or what became known as the SDI, that they could say, with the policy they were following, that within about five years, the Soviet system was going to collapse, as it did. It collapsed in six years, not five.

So, at that point, I was aware of this fact, and was concerned to develop systems, recovery systems internationally, which would bring the world out of the kind of depression crisis into which we're plunging now.

So that, in 1988, when I announced, in October, that the Comecon system was about to disintegrate, and that we would have a reunification of Germany, with Berlin as the prospective capital very soon, indicated that Poland would be the first nation in Eastern Europe to break out of the system, I proposed a set of measures to get the world economy moving. And then, at the end of ?89, when the Wall began to disintegrate in Berlin, Helga and I discussed these matters, and, with others, with collaborators, we launched what became known first of all as the Productive Triangle program, and is now known as the Eurasian Land-bridge system, developed in the flowing way.

Let me divert at this point to indicate a peculiarity of this Land-bridge proposal, which virtually no person teaching economics, or no economics textbook today will tell you. But, it's the most important thing about a modern industrial economy: the machine tool design sector.

Real Profit -- Education & Technology

The source of profit in a society, in a modern agro-industrial society, has nothing to do with anything an economics textbook in any university will tell you today. It's all bunk. Profit does not come from anything accountants or financial experts tell you. Profit of individual firms, yes. You know, the profit of the pickpocket comes from stealing. But, the net contribution to society is less than zero, because he's contributing nothing, he's taking something, and he's eating. So that's a net loss to society.

Profit comes from what? Profit can come from only one place. In order to sustain a society at a certain level of existence, you have to have infrastructure, you have to have highways, transportation systems, you have to have clean water to drink. Families require food supplies. If you want to have a productive society at a certain level, you have to have a certain level of education, a certain level of family culture. You've got to have life expectancies on the order of, in modern society, 80 to 90 years has to be a normal life expectancy. Otherwise, if you have adults dying off at the age of 40, 45, how can you have children stay in college up to the age of 25, and become professionals? It can't be done.

Therefore, you need a long-lived population, adult population, in order to have freedom for the children. We must get out of the tyranny of child labor. Look at any poor developing country, rural areas, and look at the oppression and the effects of child labor in destroying the potential development of that child. The freeing of the child from child labor is one of the most important developments of modern European civilization. The child must be educated, and must be developed.

All of this costs, not money, but physical things. Parents have to have the freedom to provide an environment of culture in the household for the development of the child. They have to have some table manners, among other things. Not just digging at the trough, or whatever -- roadkill, eh?

You've got to have a household in which ideas and development of the mind, the parents and the children participate in the child's development of its powers of mind. And sometimes the children educate the parents, which is often the case, where the child would go to school, and begin to uplift the quality of the parents, through the child's own education. The parents get involved in that.

It means you have to have schools. It means you have to have qualified teachers. It means you have to sustain those children in schools for ten, twelve or more years of their lives. It means the class size should not be more than 15 to 17 pupils per class. The teacher should spend about three hours, or not more than four hours a day teaching, of the teaching day, and the rest should be done in preparatory work. Otherwise, you don't get a good education.

The system of education must be based not on learning what to do; the system must be based on putting children through the phases of re-enacting the great discoveries upon which civilization is based, going as far back in history as we can, so that the child actually has not "learned" that someone has discovered something. It's not enough to "learn" that Thomas Edison discovered something; you've got to re-enact the process by which he made the discovery, otherwise you don't know what you're talking about. You just learned it.

It's not enough to know that the Earth is a sphere; could you prove it? A child can do that. How can you know the distance to a star, or the Moon, or the Sun? That was done by people before we had telescopes, before we had space exploration. Those things are things a child can know.

When a child is educated in that way, with teachers who are capable of doing that in class sizes where the interaction of the children permits them to develop these ideas, to know, not to learn, but to know. Then you have a child who is developed, and who, by knowing, instead of just learning, knows how to create discoveries, because the child has re-enacted discoveries. The child knows that these discoveries are valid. They may not be perfect, but they were valid. The child therefore knows a method of discovery, which is valid. Faced with a problem, the child now calls upon, not what they learned, but on knowing, the method which they've used again and again, case after case, to understand the discoveries of people who were made before them.

You need that kind of an environment for a modern society. This takes time. This takes cost.

You need cities. The city, which we're now destroying internationally, is one of the greatest cultural machines ever invented. I'll give you an example, in Germany, of just how bad it is. The city of Wiesbaden, which we know something about.

In 1975-76, ordinary people could live in the city of Wiesbaden. It's not possible any more. The land speculation has driven the ordinary people out of the city. They can't afford the rents, even in the old buildings, which have been resold and gentrified, so-called, by putting on a coat of paint. Then the rent goes up about three or four times.

So today, in Wiesbaden, a person who works in a place of employment in Wiesbaden, to get a place they can afford, will go some distance to, in the middle of the mountains, the Hunsrück, which is the nearest place where they can find land which they can afford to acquire, in which to have a house which they can afford to buy or rent. So therefore, what do they do? The German worker now commutes one to one and a half hours a day each way, to the old job he had in the factory or place near Wiesbaden.

As a result, with a negative growth in the German economy, the number of automobiles and the amount of time of automobiles on the highway has increased. Germany is one big traffic jam. The Autobahnen, the famous Autobahnen, have now become virtual parking places many parts of the day.

Do you see something similar in the United States? Do you see something similar in Washington? The population of Washington, D.C. has decreased. Where did the people go? The people were driven from Washington. Where did they go to? They went out to the outlying regions. They commute. What's the effect of taking three hours, or two hours a day additionally out of the life of a working parent, particularly in a household where two parents have to work, and some one and a half jobs or two jobs? What kind of a family can you have when you start doing that? The child has to commute to school, you commute distances, you lose time. What's your family life? What -- McDonald's? "I'll meet you at McDonald's"? Or Hardee's, or something? Then you look at the boob tube. What kind of culture do we have in the family? Nothing.

So thus, to have the conditions of life that we require for normal human beings, you require cities, well-developed cities, which are centers of education and culture, where you can walk to most of the places you want to get to, where all the facilities are there.

One of the greatest inventions of mankind is the city, where people can live together, can walk to meet their friends, can walk -- if they don't like this job, they can walk over into some other place and get another job. Where the minimum amount of time is spent on commuting and waste. And, on top of this, as I've indicated, the land waste in the United States, is enormous. We are wasting vast tracts of land, increasing the expense, making life worse for people, not better, destroying family life, all because of this crazy speculation.

But to maintain a good society, to maintain a modern city, involves a capital investment. Just imagine what it would take to fix Washington, D.C. up. To restore the hospitals which have been destroyed, which used to be here to service people, but no longer exist. They're being shut down. To restore the schools that have been destroyed, to improve the neighborhoods, to provide the kinds of things you would want to provide, to have a decent city. It costs money, or it costs physical things; effort.

So therefore, to maintain society, to have the quality of food, to have the quality of nourishment, the quality of education, the quality of opportunity, all of the things that make us productive, or make the labor force members of our society productive, requires an investment, which comes out as a bill. It's a bill of materials, things that you must provide per capita and per household and per square kilometer of land area, in order to maintain society at that level of productivity.

All right. Now, where does your wealth come from then? Where does the growth come from?

The mind of man. The thing that is never in the economics textbook, and an accountant never understands this. The accountant will tell you about the number of things that go into the point of production. He will count the things that come out. But, he will never talk about how that's generated. The mind of man. The discoveries and innovations which the mind of man makes.

The machine-tool principle is the center of this. In the United States and in Germany, during the Nineteenth Century, in a coordinated way, as typified by the case of a famous man, Benjamin Franklin's great-grandson, Alexander Dallas Bache, who, among other things, was educated at Göttingen University, which was Gauss's old university, and became associated with the circles of Carl Gauss and Alexander von Humboldt in Germany, closely associated. And, through his connection and similar connections, the development of the German and U.S. industrial system and science system worked together.

American science during the Nineteenth Century, late Nineteenth Century, was largely German science, or was German-American science. There was a direct relationship between the development, under Bache's direction of the dynamo and the electric lighting by Edison, who was a protégé of Bache and Bache's circles, and the development of AEG under Rathenau and so forth, in Germany. The two systems were closely related.

Now, the key to this, which is more concentrated in Germany than in the United States, because of a different structure, is what's called the machine tool design industry. Now, the machine tool design industry is typically headed by a scientist or engineer, or a group of people of such talents, who work as individual entrepreneurs, in translating science into innovations in design of product and in machine tools, or productivity of labor.

In production, up until 1966, in the United States or Germany, the characteristic of production was that, at every stage of the production process, the accountant didn't want to hear about it, the financial office didn't want to hear about it, but the production managers, who made the weapons and who made the products, had to deal with this. We were looking at production on the basis of equipment we had, which had a certain life. We knew the equipment would have to be replaced so many years hence. We'd had it so many years. So many buildings were of a certain age. Things were wearing out.

We were bringing on new technologies which were coming down the pipeline, which would go into effect up to five, six, seven years hence. But, we were working today on the new technologies which would be hitting the product field, and, in the terms of the machine tool sector, seven years or so from now. Typical.

And, at every step, what were we doing? We were translating inventions, discoveries of principle, natural principle and inventions, we were translating those into new designs of machine tools and products. At the same time as we reflected this progress in the school system, the educational system, we developed a labor force -- an educated, technologically apt labor force -- which was capable of utilizing those skills, which comes again to something Faris said about Bosnia, why Bosnia is different than a developing country.

Because the labor force that can assimilate these technologies, is essential. Cheap labor is not necessarily good labor. Cheap labor is generally un-productive labor, or soon will become underproductive, if it's cheap too long.

So therefore, the key to this, you say, where does the profit come from? It comes from discoveries of scientific and technological principles, and cultural principle. It comes from education, and scientific research, a certain kind of education, of universal education, where every child is entitled to that education, or access to that education. And then we provide the kinds of employment or other life activities for the child, the grown child, which fit the child's training and development. The fact that the child has been developed, means that when they go into the industrial or related environment, that they are able to assimilate the transformations in product design and technology there.

We used to have in this country, a time, when you wouldn't buy a product that you couldn't repair. Today, you buy a product, if it doesn't work, you throw it away, as far as possible. For safety reasons.

We used to fix our own cars. Not because cars were less complex then than they are now. No, we had a labor force that knew how to do it. We had 65 percent of us, when I was a young man, 65 percent of us were involved in industry and physical production in some way. If you wanted to get a job, you had to have aptitude of that type. You want to get a job in a factory? You've got to have some kind of aptitude.

So there was a relationship between the cultural development of the people in the family as potential labor force, and the functioning of that same person in the labor force in production. The gain comes from the gains in man's power over nature, through the growth and spread of knowledge, and the application of the progress and spread of knowledge, into the process of production, as better products, new kinds of products based on new principles, and as improvement in the productive powers of labor. That we have destroyed.

What we've done, is in order to cheapen production -- I'll give you two examples of this.

In the United States, or as in Germany, we've destroyed the economy, by cheapening production. What did we do? We cut out things which were essential to maintaining this productive process. It's cheaper to buy junk from a Third World country in outsourcing, than it is to pay for a machine tool factory investment in a plant here in the United States. It seems so. But then you end up, as we're ending up, as Germany is ending up, with one industry after another being looted by the hostile takeovers and the sharks, the Wall Street sharks, collapsing.

We are downsizing, and downsizing begins with the mind. We are downsizing minds, we are downsizing life, we are downsizing our industries. And, what happens in a country like a Third World country? They have no machine tool sector.

Machine Tool Capability Key to Real Development

For example, India has, relative to the size of its industry, has a significant machine tool sector. China, number two of the so-called developing countries of Asia, a machine tool sector. Three, number three, to some degree under Habibie in Indonesia, a machine tool sector. Japan, of course, has a machine tool sector which was very good, and is now being taken down. But it was very good in certain categories. High density. Germany was, of course, very good.

The Soviet system, as a comparative case, the Soviet system had two attitudes on the machine tool sector. In the military high-technology sector, where the Soviets produced the best weapons, they had special bureaus, science and technology bureaus, which would function in a way that a high-tech machine tool design sector would function in Germany or the United States. And that was only for the smart ones. For most of the Soviet population, production was based on technological obsolescence, and that was the crisis of the Soviet economy. The fact is that in the great bulk of the civilian sector, the economy was backward. And the stories about this in the Soviet literature from those days, is legendary.

So the secret here, is that when you out source into a country a Southeast Asian country, and you say, "I'm getting cheap labor to produce these products like pancakes," you're not helping the United States, and you're not helping that country. Because what you're doing, is you're engaged in primitive accumulation. You're looting the cheap labor. But, there's nothing in that economy, in that country, which has no machine tool sector, which can do what an American supplier would do in the old days, or a German supplier: constantly improve the quality of product, and the productive powers of labor. Doesn't do it.

So, you're buying into technological obsolescence. Your cheap labor of today, your outsourcing of today, is your technological obsolescence of tomorrow. And, you see, in terms of Germany, the competitive quality of German products, which used to be their world market feature, has been destroyed; because they don't use their own machine tool capability the way they used to. They've destroyed their machine tool industry.

So, those parts of the world, such as Bosnia, which have a population, unlike most developing countries, which has the potential of participating in this process, become essential. So thus, when we're talking about a Land-bridge of corridors of development, from a triangle in Germany and Austria and France; that is, the Berlin-Lille-Paris-Vienna Triangle, which was the greatest concentration of development of machine tool potential in Europe, in the world; that is, per capita, per square kilometer, the highest density of productive potential on this planet.

My concern was to say, take the machine tool sector here, this potentiality, connect this to other parts of the world by transportation grids, that is, like modern railway-centered corridors of 100 kilometers in width, shoot these across Eurasia, shoot them down into Africa, down into the Middle East, down to the Indian Ocean, and use this as a way of taking the machine tool factor of Europe in particular, and connecting it to the productive potential of countries which are underdeveloped, in terms of potentially a machine tool factor.

So that was the plan: to transform this planet by using this principle, which we in the United States used to understand, which Germany used to understand, and take this principle of productivity, and say, "We are going to become the machine tool technology design driver to get the whole world built."

Nodal Points on the Eurasian Land-bridge Route

And, if you look at the population of China, combined with Korea, combined with Southeast Asia, combined with South Asia, this is the overwhelming majority of the world's population. This is the great area of potential growth.

You have, in the case of China now, a government which is committed to this kind of growth. You have, recently, a development in India, where the President of India has indicated a desire to cooperate with China in this. And, if we develop these routes, pivoted on Teheran, which is a natural logistical center.

The crossroads of the Land-bridge, is Teheran. That's why the city is there. That's why Iran is there, historically, why Persia's there. It's the natural route, if you're going from China, and India, and Southeast Asia, and you're trying to go to the Middle East, into Europe, you have to go by way of Iran. It's the best way to go. The city which is slightly to the south of the south of the Caspian Sea, which takes you across the mountains, into Turkey, which takes you into the mountains of Transcaucasia, into Russia, which gives you connections by water across the Caspian Sea, which is connected to the greatest concentration of strategic minerals in the world in Central Asia, one of the greatest concentrations.

You're taking large areas, you're bringing materials from all over the world, into all kinds of points. Whenever you're bringing materials together of many kinds, to one point: produce! Put these material together! That's the place to produce! It's cheapest to move. A high-priced product per pound is cheaper to move than a low-priced product per pound. Increase the value. Combine the materials there. Connect it through transportation, build power links, build water links. Much of the world, if you have water desalination in water, you can transform desert into prosperous land.

And, when you come up that route, through Turkey, you go into the Balkans. The Balkans is a link to central Europe, through the Danube now. The Rhine-Main-Donau Canal, which was specified in the Eighth and Ninth Century A.D. by the government of Charlemagne, despite the Thurn und Taxis opposition, has been finally completed. At the time the canal connection was connected, was completed, the war in the Balkans broke out. Belgrade is right on that point, and that became an obstacle for movement of freight up and down the Danube. But we had, for the first time, which Charlemagne had planned, the ability to move goods by water, from the North Sea to the Black Sea, by an inland water system. That's developed.

Then you have, across the Balkans, the various routes, including the Adriatic Ocean, which you have to see as a place to move things, waterborne freight. Waterborne freight, that's your asset. Build a rail system, a development corridor. If you get into Bosnia, you're getting into an area of high degree of potential for industrial development. And the best way to build a rail system, is to build it through an area where you have a high degree of agricultural and industrial potential. That's what pays for it. Every kilometer you move, you must be increasing value, you must be generating tax revenue and income.

And, that project, in which the United States has a vital interest for our future peace, as well as for economic cooperation, that project, that Land-bridge project, is the largest single driver, not only to get the world out of the present economic depression, but to move the world ahead, into some degree of stability.

Universal Principle of Imago Viva Dei for all Mankind
Past, Present and Future

Now, finally, one point on this. The world is made up of various cultural groups. The principal cultural groups are Christian, nominally Christian, Islamic, and Chinese, which means a culture which has various facets to it, of which the most important part is the Confucian tradition.

How do we develop, in a system of sovereign nation-states, how do we develop stability and cooperation among nations which have these differences in culture?

Implicitly, between Islam and Christianity, there is no problem on these matters of policy, because both Christianity and Islam, as in the book of Genesis, recognize that man is made in the image of God, that man and woman are made in the image of God. And, therefore, the quality which enables man, and woman, to master an increased dominion over the planet, is a quality which is in the image of God. Therefore, for us, the individual human life is precious. It has a sacred quality. The development of that individual, the protection of that individual's development, and the opportunity are crucial for us. This tradition is also generally the tradition of European civilization, in its best parts.

In China, in the Confucian tradition, something similar. The question of whether Confucianism is a religion or not, is another question. But the Confucian tradition as such, supports that. You see, in the changes in China today, largely a Confucian re-emergence in opposition to the Taoist character of the Mao Zedong tradition, is what's leading.

This is key to developing an agreement on a set of what we might call ecumenical principles, principles which can be addressed by reason, not on the basis of taught doctrine, but on the basis of reason. That you can prove that certain things are true about man, we can prove that man, in a sense, as Genesis says, is made in the image of God. That's a scientific fact. No animal can do, what man can do. No animal can change its own nature.

Man is not an ecological species. Man can revolutionize his relationship to the universe; not just the Earth, but the universe, which we are at the onset of doing. We will colonize Mars. We will explore the universe, unless we go into a Dark Age. We are the masters of the universe, not because we're some kind of a macho, but because we have this quality, which enables us, through scientific discovery and related discovery, to constantly advance, constantly advance. To discover the principles of the universe, to employ them, to master them. And to begin practicing on that, by mastering the Earth.

So, we can discover that. We can show, in the history of mankind, that all kinds of people, unknown people even, have contributed fundamental discoveries, which are indispensable for us today.

For example, at least 8,000 years ago, in Central Asia, in terms of the Indo-European people, and we also can infer from Chinese astronomy, the predecessors of Chinese culture, a discovery of an equinoctial cycle of about 26,000 years, was an integral part of a system of solar astronomical calendars, discovered by such people. We can reconstruct, even if we don't know the name of the discoverers of these things, we can reconstruct how, the method by which they made these discoveries of the equinoctial cycle.

So, in the vast, distant past of mankind, there were many discoveries. The very discovery of language and development of language itself, as the great philologists can investigate this, is itself a scientific discovery. The nation-state is a scientific discover, in the department of Classical art. It's not a work of physical science, it's a work of art. But it's a work of art which is very important to us, which made possible modern society.

So, we can discover that man has, including the most remote man, the most prehistoric man, already had this creative potential. And that what we have today, is the gifts of people mostly unknown, from the vastness of prehistory and later, to which we are indebted. We can say it's the nature of man to be like this, to make these creations. We can know that. It's not just learning. We can know that, by going through the experience of re-enacting these discoveries.

Thus, why can we not agree, that the human individual is sacred? That every individual must be developed, and must be developed to be a part of the human race, by re-experiencing, in education, the greatest discoveries, the re-enactment of the greatest discoveries, on which human life based? Why can we not agree, that to do this, the child must be nurtured in a family household, which must have certain conditions of life, in order to fulfill that development?

Why can not we agree, that every child so developed, must be given the opportunity to live, and to be a useful human being, so they can face death without existentialist fear -- that is, the certainty that their life will have been a useful one, the certainty that the lives of their children, and others who will come after them, will be better than their own? Why can not we agree that that's the right?

Why can we not agree on the recognition, that the best method of organization of humanity we've yet discovered, is the nation-state, the nation-state which regards every member of its population as a citizen, and that it is the citizens as a collective body, not only the living, but their ancestors and their descendants yet to be born, who own that state, and that the state is not owned by popular opinion, it's owned by the inherent rights, inviolable rights of the individual.

Why can we not agree on that?

If we can agree on that, can we not agree, then, that the recovery of humanity from this nonsense we've been going through, from managed wars, whether thermonuclear or local or surrogate wars for geopolitical purposes; that the insanity of poverty, the insanity of deprivation of the type we see in Africa, that this must come to an end? We can't live on this planet, any more, this way!

Why can we not agree that there are certain projects, which are so essential to all of u, in all nations, that we can agree to jointly cause these things to be done, in the way we're talking about cooperation in space exploration? Why can we not talk about development of the planet, in the same way, and in coordination with development of space exploration?

Why can we not therefore share our efforts, and pool our efforts, to bring these great projects about, which will transform this planet, and give to the present generations and future generations, a sense that mankind can be rational. We no longer have to be ruled by the kinds of things by which we've destroyed ourselves.

And, I would say, in conclusion of this point, that we must look at the past period, 400 years of European civilization's history, an internally embattled civilization between the tendencies for progress on the one side, and the tendencies for usury and backwardness on the other side, at the top, we say yes, this is a contradictory period in history.

On the one side, the benefits to all of mankind, until 1966, approximately, the measurable benefits to all of mankind in every part of this planet, of this great gift of the modern nation-state, is beyond question. It's the greatest record of achievement in all human existence, prehistoric and historic existence.

But, we had a succubus, a parasite on our back: the parasite of usury, the parasite typified by the London financier oligarchy today. And, this parasite, which has dominated us, has corrupted us, has played upon our petty, invidious weaknesses, to make us behave like animals toward one another, that this thing has been the contradiction. And, our tolerating this succubus, has now brought us to the point that we stand in jeopardy of losing civilization into a Dark Age.

Can we not learn a lesson from this? Get rid of the succubus! Affirm the nation-state!

And, if we can agree to two things, as I say: If we can agree to get our President here to make the proposals he must make, first privately as exploratory discussions, and then, later, officially, to establish anew Bretton Woods, to put this whole bankrupt business, planetary business, into bankruptcy, and to re-establish a new form of economy consistent with the principles we understood, in the precedent of the Bretton Woods system; at the same time, to adopt new global projects of common interest to mankind, especially the Eurasian Land-bridge development, in which, now, you have the foreign policy segments in Russia, together with forces in Iran, with Erbakan in Turkey, forces around him, with people in India, with some people in Pakistan, as well as China and elsewhere, are in agreement.

We must do this. We may not be in full agreement yet, but we've got some agreement to begin with. And, we'll start from there. We have the basis for coming to an international policy agreement on strategy, among such powers, on an ecumenical basis, to say, "We're going to do this. We're going to take this system out of its misery, establish a new system, a new Bretton Woods. We're going to take the Land-bridge and what it represents as a policy, as a global policy, and we're going to rebuild this planet."

And in that process, we then look at Bosnia, and you see: Bosnia is not a charity case. Bosnia is one of the parts of the planet where there is a labor force, which has a fairly high level of skill as a labor force, which can be called out of its unemployment, 90 percent unemployed, I understand, called out of its unemployment, organized, with the aid of Central European machine tool capability, to become the Bosnian part of a Balkan bridge to the international Land-bridge.

If we look at the Bosnia questions in those terms of reference, then I think we have a policy on Bosnia.


schiller@schillerinstitute.org

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