OUR BIRTH HAS BEQUEATHED US A HIGHER DESTINY…
by Helga Zepp-LaRouche, Founder of the Schiller Institute
Were it possible for Friedrich Schiller to be a witness to the world today, what might his view on things be? We see the “Elites” on the one hand, power-hungry and corrupt; the masses on the other, base in their preferences and feeling incapable in their frustration. If Schiller already concluded in his Aesthetical Letters, that the development of the ability to feel empathy [Empfindungsvermögen] was the most pressing necessity of his time, what would he then have to say upon seeing whole generations of children and young people become practically a mere extension of their computer game console or their social network avatar, and who move about in a totally virtual world, though their emotions are “cool,” or rather, chilled?
Schiller writes in his 4th letter: It can be said, that every individual human being carries in their disposition and nature a pure ideal human being within themselves, and it is the great task of each person’s existence, through all their changes, to harmonize with this unchangeable unity. His formulation is just as valid for our time as it was for his, although it would seem to be much harder for our contemporaries to even recognize this challenge, not even to speak of fulfilling it. Our Zeitgeist – the habits and fashions of our time – prescribes the exact opposite behavior, i.e. to give in to all our sensual impulses without hesitation, and to cheer on the most perverse tastes, even distinguishing them with Oscars, Echos and Nobel Prizes.
Even though the problems of his time were admittedly mild in comparison, Schiller’s analysis and recommendations are nonetheless fundamental: only Art and Science are founded on universal principles, unburdened with tradition, convention or opinion, and therefore only through both of these can a necessary improvement of the thought of man be attained.
Schiller demands of the Artist, though he always lives in a specific time period, that he not be his era’s scion; he must renounce his Zeitgeist. He must develop himself by studying nobler, more ideal ages, and then criticize his own era from this elevated point of view, but not so that he may make others glad with his presence, but rather, terrible as Agamemnon’s son, to purify. Now, for those of us who have been too occupied with all the many talk shows, full of fluffy chatter, to ever concern ourselves with the Ancients: Agamemnon’s son, Orestes, went about purifying his paternal estate, soiled with murder and adultery, by slaying his mother and her lover.
Schiller’s advice is thus: Sapere aude. Dare to be wise. Vitality of courage is needed in order to overcome the hindrances, which the heaviness of nature and the timidity of the heart throw in the path of learning. However, this moral courage – to be committed to wisdom – and to follow that which the inner voice speaks, has far receded; pushed away by the bland soup of “appropriateness,” “ability to compromise” and “mainstream populism” which today befuddle peoples’ judgment, the recipe for which is carefully authored by PR companies and Wall Street law firms. It is they which have become the wardens of our ideas, determining what may be spoken of, and what is forbidden. Thus, freed from the heavy burden of thinking, we know which point of view to adopt if we want to belong to The Club. However, Schiller makes a distinction here, and recognizes the victims of this manipulative society; he most definitely held sympathies for those, for whom the tough battle to earn the means of living were too exhausting for them to lead the even tougher battle against ignorance. But he could only feel disdain for those relatively privileged layers of society, who of their own volition justify their privileges by defending false theories against truth, because it threatens their elevated status.
Live with your epoch, but be not it’s offspring; serve your fellow man, not with what he applauds, but with what he has a need for. That is Schiller’s advice. Provide the world on which you act, with the pathway to the good… and you are set upon this pathway, once you have successfully made that which is necessary and undying the object of your fellow man’s passions. Therefore, it is the idea of a necessary and brighter future, the hope for coming better times, which the artist and the statesman alike must awaken in the people, to make them inwardly free.
30 Years of The Schiller Institute
The idea to found the Schiller Institute came in 1983, when the crisis in Europe – in which the American Pershing-2 and the Soviet SS-20 rockets were just minutes of flight time apart – was at its climax. Because of the extremely short time margin of warning, these nuclear weapons systems were on permanent alert, called “launch on warning,” which made an unintended nuclear war a constantly present possibility. In the early 1980’s, people were not only aware of the danger and took to the streets of Germany in the hundreds of thousands, but also, resentments were rising on both sides of the Atlantic.
Even in conservative circles in Germany there was a noticeable increase of anti-Americanism, which had to do with the perception that security interests were no longer identical. After all, Germany would have become a two-fold target if any conflict broke out, and even Helmut Schmidt warned repeatedly that World War III was a present danger. In the United States these demonstrations created an anti-German and anti-European atmosphere, which can be compared with the reaction in the 1990’s to Germany and France’s neutrality in the Iraq War. Later, this would even lead to the re-christening of french fries as “freedom fries,” so as to deprive France the honor of having given the deep-fried potato sticks their name.
These tendencies of the early 1980’s, i.e. still in the Cold War period, put a spotlight on the problem Germany was faced with in the post-WWII era; the best kept secret of NATO was that Germany was still an occupied country without any sovereignty, and on the other hand, the Soviet leadership was seeking to detach Germany from the West.
The founding idea of the Schiller Institute was therefore to lift German-American relations to a completely different level, and thereby simultaneously counter the continuing influences on both sides of the Atlantic, which were a consequence of the terrible events of the 20th century. The aim of the “Association for Statesmanship,” as the Institute was also named, was that both nations should reach out to the respective best traditions of the other. Germany was therefore to orient itself towards the American Declaration of Independence and the U.S. Constitution, towards such outstanding minds as Benjamin Franklin, Alexander Hamilton, John Quincy Adams, Abraham Lincoln, Franklin D. Roosevelt, Martin Luther King and John F. Kennedy. And vice versa, the United States was to emphasize the German classics, as well as the numerous great German scientists, from Nicholas of Cusa, Johannes Kepler, Gottfried W. Leibniz to Albert Einstein, and Max Planck, naming just a few.
Then both nations could draw upon the rich foundation of both the General Welfare idea of the American Constitution and the image of humanity brought forth by German classicism’s humanism, to determine the necessary aims of the future. The cooperation between the German space pioneers Werner von Braun and Krafft Ehricke, and their American colleagues in the Apollo Program could be a role model.
The Schiller Institute’s activity was to be focused upon four areas: culture, science, economics, and history.
After about a year of organizing and preparation, the founding events of the Schiller Institute took place in July of 1984 in Arlington, Virginia, USA, and later in September in Wiesbaden, Germany, with more than 1,000 guests from around 50 nations taking part in each. However, it immediately became clear that not only were the transatlantic relations between Germany and the USA in need of improvement, but that the same was true for every nation in Europe, and much more so concerning relations between the so-called industrialized nations and developing countries.
The third Schiller Institute conference was held in November of 1984, with the participation of numerous delegations from the so-called Third World. Over the succeeding thirty years, members and friends of the Schiller Institute drew up detailed development programs for practically every part of the planet, in order to lift large parts of the world out of their current undeveloped condition – from Africa, Ibero America, to Eurasia, including a development program for Southern Europe and Southwest Asia. In these three decades the Institute held 60 conferences on four continents, sponsored numerous concerts in the Classical Verdi Tuning, translated parts of Schiller’s opus anew in several languages, organized hundreds of Schiller festivals, recitals, and competitions, as well as youth choirs in several countries which performed Bach’s motet Jesu, meine Freude, the fourth movement of Beethoven’s Ode an die Freude (Ode to Joy) and Choral Fantasy, Bach’s Magnificat, and Mozart’s Requiem, among other works.
Since the danger of war began to escalate around the situation in Syria and the tensions in the pacific because of the Chinese reaction to the American “Air-Sea Battle Doctrine,” the Schiller Institute organized six international conferences within one year; two in Frankfurt, and others in New York, Washington, San Francisco, and Los Angeles. All conferences had the specific focus to replace the current paradigm of globalization – all its monetarist axioms, its green ideology, and its oligarchical image of humanity – with completely new values.1 This new paradigm will orient toward the image of humanity Schiller developed, and toward the real laws of creation, as expressed by Cusa in his idea of the concordance of the laws of the macrocosm with those of the microcosm.
The NSA scandal especially has led German-American relations to an even more catastrophic condition than even in the early 1980s. But also relations among the European nations, which were supposed to have attained eternal peace through adopting “more EU,” are now more threatened than at any other point since 1945. The image which many in Greece, Italy, Spain, or Portugal have of Germany carries a potential danger for this very peace.
Things are even worse regarding relations between Africa and Europe, for which Lampedusa has become a most horrible metaphor. And what has America’s reputation become in the nations of Southwest Asia, where drone strikes have killed thousands of innocent civilians? The list of relations among nations that have dramatically worsened in the recent years could be continued further. The question is therefore, can something be done to improve all these situations under the current conditions, by relating to the best traditions and highest potentials of each, and by focusing on the common aims of mankind?
The answer is an emphatic yes. The human race is the only species capable of wittingly expanding the foundations of its existence, and we have proven this countless times before. In the relatively short time-span of less than 20,000 years, we have increased the population potential of the hunter-and-gatherer civilization, which was around 5 million human beings, to the 7 billion we count today. Simultaneously, we have nurtured many generations and fought many battles as a civilization, to liberate the people step by step out of the fog of mystical superstitions and irrational fears, and we have, in a manner of speaking, chiseled out individuals through the refreshing effect of the Arts and the Sciences – a process which has found many high points with the work of extraordinary genius, but these have been only a mild foretaste of the domains the human species has yet to enter in the future.
Should we therefore despair, just because humanity’s process of perfection is not progressing linearly, and we have – once again – fallen into a dark age like we had in the 14th century, or during the 30 Years War, or under the fascism and world wars of the 20th century? Or should we not rather draw hope from history, in which mankind has time and again succeeded in overcoming these dark periods, and moved forward with ever higher levels of human development? The 14th century was overcome through the Golden Renaissance of Italy, and the 30 Years War was at last put behind us by the period forged by Leibniz, Bach and the Classics. After the Second World War we experienced, at least for a short time, a foretaste of future periods of development of mankind, with the Apollo Program.
The problems with which humanity is confronted today admittedly require a possibly unprecedented amount of imagination, such that solutions become clear. The danger of war, financial crisis, world hunger, refugee crises, fascism, drugs, youth violence – one could extend the list of existential crises much further. The simultaneity of all these conditions can only be called a civilizational crisis of mankind. What is clear, is that things can not continue as they have for much longer, which means we are at the end of an era.
If humanity is not to exterminate itself, a new paradigm is needed. We must succeed in making the shift, with which we can catapult ourselves out of the current seemingly hopeless geometry, and which brings us to a higher point of view, from which all things are redefined. It means that we must lift ourselves out of the level of seemingly unresolvable contradictions, to a vision of the common aims of mankind.
Schiller made an invaluable contribution to the development of this method of thinking. His concept of the individual with a beautiful soul, who passionately fulfills obligations, and places his freedom in that which is necessary; his concept of the sublime, which allows one to cast the fear of earthly things aside, and thus, even if one can’t be physically safe, one can still be morally secure. His concept of the good Samaritan, who helps others without looking to himself at the least. His concepts of the world citizen and patriot, or his method of aesthetical education, through which one can learn how to climb out of the deceptions of sense-perception and with art, above all, into the realm of ideas; Schiller’s plays, poetry, and theoretical writings are an existential medicine for our contemporaries, considering the crippling of thought mentioned above. The Schiller Institute has taken up the task to not just be the offspring of our age, but to accept the challenge sapere aude seriously. And indeed, Schiller himself was conscious of the fact, that he would only be fully comprehended in centuries after his own.
Perhaps his poem Sehnsucht is the most beautiful metaphor, which best captures the posture of the mind needed today.
Ah! from out this gloomy hollow,
By the chilling mists oppressed,
Could I find a path to follow,
Ah! I’d feel myself so blessed!
Yonder glimpse I hilled dominions,
Young and green eternally!
Had I wings, oh had I pinions,
Thither to the hills I’d fly.
Dulcet concords hear I ringing,
Strains of sweet celestial calm,
And the tranquil breeze is bringing
Me its sweetly fragrant balm,
Golden fruits I see there glowing,
Bobbing ’midst the leaf and root,
And the flowers yonder growing
Will not be the winter’s loot.
Ah, it must be fine to wander
An eternal sunshine free,
And the air in highlands yonder,
How refreshing must it be!
Yet the current’s raging daunts me,
Which between doth madly roll,
And the torrent rises sharply,
To the horror of my soul.
I perceive a small boat swaying,
Ah! but look! no helmsman’s there.
Quickly in and no delaying,
For her sails are live with air.
Now you must have faith and daring,
For the gods accord no bond,
Only a wonder can you carry
To the lovely wonderland.
If therefore you, dear friend, also have the courage and faith to help craft a new, better age, then join the Schiller Institute!
1. All conferences can also be viewed at: http://newparadigm.schillerinstitute.com/international-conferences/↩
A Silk Road for the 21st Century
“CCTV (China Central Television) Interview with Helga Zepp-LaRouche“
Founder and president of the international Schiller Institute, Helga Zepp-LaRouche, is interviewed by Chinese host Yang Rui on CCTV. The interview was recorded during Mrs. Zepp-LaRouche’s visit to China in February and aired on April 14, 2014.
Our History in Brief
A partial timeline of the Schiller Institute
Years leading to the founding of Schiller Institute: Lyndon and Helga LaRouche meet with Prime Minister Indira Gandhi
Helga Zepp-LaRouche and her husband, Lyndon LaRouche, former US presidential candidate and physical economist known and revered globally for his prophetic economic forecasts, have provided the intellectual and political leadership in the fight for a new international economic order for the entire planet, for the purpose of ending the historic imperial control of monetarism and unleashing mankind’s creative powers as a species. This fight culminated in their first meeting with the prime minister of India, Indira Gandhi, along with several members of parliament, leading scientists, industrialists and economists.
While in New Delhi, LaRouche addresses the Indian Council of World Affairs, as well as the Institute for Defense Studies and Analysis, and the Jawaharlal Nehru University School of International Studies. LaRouche then travels to Bombay to tour the Bhabha Atomic Research Center. LaRouche’s speech to the Indian Council on World Affairs is titled “A New Approach to North-South Relations” in which he states that the program adopted at the Non-Aligned summit in Colombo must be the basic model for achieving a new world economic order, and declares: “I propose that the developing nations, and the spokesmen of them, make a unilateral statement to this effect: that there will be international cooperation on East-West/North-South development interrelatedly; that conditions of political stability and peace be premised upon the mutual self-interests of the parties in promoting economic development.”
For full document, see A New Approach to North-South Relations
Thank you, Mr. Chairman, members, and guests.
I have been involved in a significant way in the question of North-South economic development since approximately the beginning of 1974, with the aid of Helga Zepp-LaRouche… What we’ve achieved is a general comprehensive agreement along broad policy planning lines, of project objectives, over a period of 25 to 50 years. We agree, North-South and East-West, that certain general things have to be accomplished in the way of economic development projects over the next two generations; that we will organize economic cooperation, both East-and-West and North-and-South, toward the point of fulfilling those objectives; that we will organize credit mechanisms to facilitate meeting those objectives; and that we predicate our political relations and the resolution of problems of military confrontation and other problems upon this combined East-West/North-South trade…
THE ANGLO-AMERICAN STRANGLEHOLD
First of all, the dominant institutions of Western Europe and the United States are controlled by what we might call Anglo-American forces centered around the Swiss Bank for International Settlements, the International Monetary Fund, etc. These forces are absolutely determined not only to crush the developing sector, but to significantly depopulate it,u sing economic means to facilitate the depopulation. Therefore, under no circumstances while these institutions have power — while they can determine the policies of the United States and Western European countries and can dominate the international monetary system — is there a peaceful means by which the developing sector could secure significant improvement in North-South relations. Any attempt to find a pathway under these conditions is merely the search for a pathway to failure…
What we have to do is intervene in this process: a plunge toward confrontation, depression, and possible thermonuclear war. To prevent these things, then, we must situate the effort to achieve a New World Economic Order in the effort to avoid war. How do we propose to do that?
…What is the positive policy which would substantiate my proposal — the proposal, again, that we establish an East-West/ North-South three-way agreement on long-term economic development, and that we predicate political detente between and among the systems on the basis of that agreement to 20 to 50 years of development in the period ahead… History therefore shows that no nation can develop as an industrial power without looting other nations, except by following the mercantilist policies of Colbert and Leibniz, that is, what later became known as the American System.
The American economy was developed under the American System, as laid out by Alexander Hamilton in a series of reports to the Congress from 17S9 to 1791, concluding with the December 1791 Report to the Congress on the Subject of Manufactures. Up to Lincoln’s period, every period of successful economic development in the United States was done under the aegis and under the policies directly following from the American System… Let me just indicate to you what is the issue and what is the possibility of mobilizing for example, Americans, and people in Western Europe, for an American System economic policy as the internal feature of this East-West/North-South development effort.
POTENTIAL RELATIVE POPULATION DENSITY
In scientific economics, we start with only one metric. That metric is potential relative population density.
By that we mean the average number of persons we can sustain per average square mile through the productive labor of that population alone. That is, what is the ability of the population to reproduce and to maintain itself? That’s the fundamental measure of economics…
We could sustain quite comfortably tens of billions of people on this earth, at standards of living in excess of those found in Western Europe and the United States today. We have the technology. The first thing we have to do is make sure that about 35,000 to 40,000 kilowatt hours of electricity is generated per capita. If we start with this energy supply, the developing sector can very quickly bring the standard of living up to that comparable to Western Europe and the United States. We have the technology-we just have to have a little nuclear energy, otherwise we can’t do it.
In the future, we can go into space. And with what we know now, we could build earth-habitable locations in space sometime during the next century, at social costs not in excess of the social costs of maintaining a person on earth today.
So there are no limits to resources; there are no limits to population. The more creative people we have, the more creativity we’re going to have, and the faster we’re going to grow. Resources are not a problem. Our problem is to determine what policies will actively increase both the potential of the population density and the quality and opportunities of the individual in society. That’s what economics ought to be concerned with. And the monetary side of the thing comes in as a secondary consideration. That is what I define as economic science.
The way society achieves an increase in potential relative population density is chiefly by injection of new technologies, or advanced technologies, which represents man’s mastery of the lawful ordering of the universe in a more perfect way. By injecting these more powerful ideas about the universe into the practice of production in high-technology industry and basic infrastructure, we increase the average person’s power to produce, increase the number of persons we can sustain, and increase the standard of living which we are able to provide by means of that labor.
The problem is to sustain this process of injecting technology. First of all it means we have to have institutions which make technological progress the efficient instrument of national policy. Technological progress is the first proper instrument of policy of any nation. Secondly, within that, we must promote education and science comparable to what that requires. We must educate to produce individuals in whom all creative potentialities are optimized, as citizen as well as producing persons. We must educate to the level that our technology and technological progress require. We must realize that progress results from investment and reinvestment. We must have policies under which the margin of wealth-which is comparable to pro fit measured on a national scale-is invested in improving the scale and quality of production.
We must be dirigist, we must plan to cause this surplus to go into the areas which are of greatest benefit to the nation. This means technological progress in agriculture, in industry, and in basic economic infrastructure. The other investments will have to go tagging along at a lower priority…
We insist that the power to create credit must be reserved to the government alone, the government of sovereign states. The government of a sovereign state prints money. It does not itself spend the money that it prints. Rather, it loans this money, in currency notes, to a well-regulated banking system, so that the capital is made available for a few categories of projects of public and private investment, so that the capital may be available on a medium- and long-term basis at low interest rates to meet those objectives which are agreed to be in the national interest and require capital.
This arrangement must be’ put on a gold-reserve basis, otherwise we would have trouble with international relations. We require gold-reserve issues of currency by the state through a regulated banking system to provide ample credit for medium- and long-term investment at reasonable interest rates for those categories of improvement of agriculture, industry, and infrastructure which we have agreed are in the national interest. If somebody wants to borrow for something else, that’s their business, but they shall not use the funds of the state for that purpose. If somebody wants to loan their savings for that purpose, they may. These restrictions are necessary to prevent inflation and to maintain national priorities.
This is not inflationary, contrary to what the British say. If I were the head of the government of the United States, I could print as much money as I chose, and by this system I could never inflate the economy. Because before any money is spent, it must be lent to utilize idle resources, or otherwise idle parts, labor, and capacity. And it is lent only to create economic infrastructure or to create improvements in agriculture and improvements in industry, all of which are beneficial to the economy. These improvements increase national productivity, which increases national wealth per capita. And that is our credit policy.
The creation of a new economic system may be simply accomplished if those industrialized nations which either have or can have a large surplus capacity in high technology capital goods or production issue credit on a gold-reserve basis. Since they don’t have to borrow from anybody, these nations can lend it at any price they choose. The new credit could be lent at 1 percent interest, it could be lent on deferred payment terms; it’s no problem. If the state creates credit, that’s not a problem. Then this created fund, which corresponds to the otherwise idled productive capacity of the industrialized countries, is lent for long-term and medium- term credit for investment by the developing countries. I estimate that the order of magnitude of this credit-generating capacity should be between $200 and $400 billion per year added to the present level of development. That means that the governments of the developing sector will, through their national banking systems, borrow part of this amount, which is essentially borrowing the currencies of the exporting country in order to purchase exports of the type that they require from these countries. This means that these imports will be over and above the purchases that the nation would make on the basis of its current balances.
This mechanism, if it were agreed to, would ensure, I believe, an adequate level of investment. It is quite feasible in terms of the productive capacities of the industrialized countries. Adding $200 to $400 billion a year to the present level of capital goods exported from the industrialized to the developing nations I think would be adequate to reverse the pattern of the developing sector; if we are patient. In some cases it will take longer than others.
Furthermore, this would cause an economic boom in the industrialized nations-not because of profits on sales to the developing sector, but because the increased turnover of capital goods in producing industries would accelerate productivity and generate great profitability through increased productivity. This becomes now — at a point when the present international monetary system is breaking apart in a depression — the only alternative for the industrialized countries, particularly the capitalist industrialized countries, to the depression, which if it is unleashed will be worse than that of the 1930s, and much longer. It also represents, if followed through, a basis for common interest in economic development and in peace among nations of East and West and North and South.
The nations of the so-called South, or some of them, must make a unilateral statement on the nature of the crisis and what must be done to stop the world depression and to stop war. They must declare that the solution to the crisis is to be found not by peace negotiations, not by disarmament, but by creating the conditions under which peace negotiations are unnecessary and in which disarmament does not require negotiation, it simply happens. Therefore I propose that the developing nations, and the spokesmen of them, either official or unofficial, make a unilateral statement to this effect: that there be international cooperation on East-West/ North-South development interrelatedly; that conditions of political stability and peace be premised upon the mutual self-interests of the parties in promoting economic development.
Because this is a time of crisis, that which I have been proposing since 1974, which has been suppressed, rejected, which used to make me a figure of attack precisely because of prevailing institutions, may now be proven the useful solution. Now that these institutions have weakened themselves in depression and crisis, perhaps we can intervene to appeal to the conscience of nations which now themselves may despise these institutions. And if you of the developing sector begin to give leadership in this matter, at this time when your intervention is needed, perhaps we can stop World War III. Perhaps your intervention will succeed where previous paths of negotiation have failed.
For full document, see A New Approach to North-South Relations
LaRouche Meets With President of Mexico López Portillo in Mexico City
Immediately after returning from his meeting with Indira Gandhi in India, Lyndon LaRouche travels to Mexico City to meet with President of Mexico López Portillo on May 27, 1982. At a press conference at the presidential palace Los Pinos following the meeting, LaRouche proposes that the nations of Ibero-America unite to deploy a “debt bomb” against the City of London to force a restructuring of the world economic system as the means to ushering in the New International Economic Order. Multiple leading Latin American newspapers publish stories on May 28 covering LaRouche’s proposal.
Excélsior: “LaRouche affirmed that he and President López Portillo were on the same side — the side which defends peace and stability. He stressed that this is important in a moment of crisis. This alliance should also embrace India, the countries of Europe, and the Non-Aligned, since only a bloc of forces of that size could succeed, he commented. LaRouche stated the need for creating a Latin American Common Market which would give the countries belonging to it the possibility of defensing themselves in the conflicts stemming from the international economic crisis…”
Avance: “As an economist and as a friend of the Mexican President who shares his positions and his ideologies since both are for peace and stability, LaRouche offered his skills to defend the Mexican peso which has been undervalued far below its real value …. ‘The economic problem is really a highly technical one and a political conflict. Defending the value of the currency of Mexico or any other country is a task as precise as the planning of a war. This problem is suffered not only by Mexico, but by all the members of the Organization of American States.’ He concluded by saying that ‘undervaluing your currency is of no use.’ He added that the interest of the United States is for Mexico ‘to have absolute sovereignty even in its monetary and credit affairs. That is the Monroe Doctrine and that is the faith of my country and therefore I will fight like a tiger to defend the peso.'”
EI Sol de Mexico: “Defense of Mexico’s currency or any other country’s that finds itself in this situation is a very detailed job, as detailed as planning a war, said the Democratic leader, indicating that he has spoken with various leaders of Latin American countries; and he has stated that ‘this is a problem which cannot be resolved by each nation alone but requires that there be a unity among all, providing external support from those countries who are friends.’ LaRouche, who formed the National Democratic Policy Committee, stated his friendship for López Portillo, ‘I am an ally of the Mexican President in his positions and his ideology. We find ourselves on the same side, that is to say, the side of defending peace and stability. In these times, it becomes increasingly important that we bring together the peace sentiment in Mexico and the U.S.'”
LaRouche Issues “Operation Juárez” Proposal for Nations of South America
Immediately following his meeting with Mexican President José López Portillo, LaRouche issues a major policy document titled “Operation Juárez” in which he develops on his original proposal for an International Development Bank in the context of the debt crisis facing South America. LaRouche proposes that the nations of Ibero-America to use their collective strategic leverage as debtor-nations to unite in a common bloc and unilaterally declare a restructuring of their debts and the establishment of a new monetary order. The formation of an international development bank among these nations, would serve “as a coordinating agency for planning investments and trade-expansion among the member-republics,” LaRouche says. “This bank will soon become one of the most powerful financial institutions in the world.” he declares. “If a sufficient portion of the Ibero-American nations enter into such an agreement, the result is the assembly of one of the most powerful economies in the world from an array of individually weak powers… The Ibero-American continent could rapidly emerge as a leading economic power of the world, an economic super-power.”
Operation Juárez · 1982, Lyndon LaRouche
For full document, see Operation Juárez
If presently prevailing policies of the U.S.A. and Western Europe continue, it is presently just slightly less probable than certainty that there will be a general financial “crash” within the Bretton Woods system’s remains during the month of September 1982… This crash might be prevented. That prevention would require a profound shift in U.S.A. monetary policy executed during the present month…
The case of the Ibero-American external debt exemplifies an important aspect of the problem. We have a debt in the order of approximately one-quarter trillion dollars’ denomination…
COLLECTIVE NEGOTIATION OF DEBT-REORGANIZATION
Unless the bankers of the United States of America are collectively insane or babbling imbeciles, they will joyously embrace a proper proposal for collective financial reorganization of the Ibero-American debt. However, they will probably resist such a proposal to the teeth unless it is made by collective action of several prominent nations of Ibero-America in concert…
We now examine, one by one, the key aspects of such a debt-reorganization negotiation…
It is sufficient to rewrite a new series of debts, and debt-payment schedules, to replace the previously-existing debts and payments schedules. The new issues of debt replace, or “buy up” the old… However, before we can determine what will be a feasible schedule of debt-repayments, we must design a new program of investments and operating policies for the enterprise. The reasonable performance of the enterprise under that new investment and operating program informs us what a reasonable debt-payment schedule would be. We design the debt-repayment schedule accordingly…
“Common sense” may recommend to us that a great portion of the debt were better simply written off—a common condition among “least-developed nations” today.
In negotiations of such matters, we must be guided by an eye to the principle of equity.
Much of the post-1974 condition of finances of developing nations would not have occurred but for the virtual thuggery of Henry A. Kissinger and others, in enforcing the irresponsible and incompetent policies resolved at the 1975 Rambouillet conference and subsequent such conferences. Many of the debtor-nations were forced into refinancing debts at immorally usurious rates, and with other lunatic arrangements, at the point of a gun — sometimes, quite literally Kissinger’s guns. Such features of the carried-forward debt of nations can not be considered exactly a debt contracted in good faith…
The commercial banks of the U.S.A. (for example) heavily exposed in Ibero-American debts are frequently on the verge of technical bankruptcy themselves, because of margins of debt in their portfolios which are already or imminently in default. We propose to them, to help to save them from bankruptcy, if they will only be collectively reasonable, with suitable help from their federal government.
We propose to establish a mutually agreed cut-off date for further accruals of existing contracts of indebtedness of Ibero-American republics. After that date, no further interest-payments will accrue on those contracts. Effective that same date, each of the debtor-nations will deliver to the creditor-banks a portfolio of bonds equivalent in total value to the accrued value of the previous debt-contracts up to the cut-off date. The old debt is thus “sold” for the new debt.
Naturally, it is not quite so simple as that, but that is the crux of the matter.
The portfolio of bonds delivered by each debtor to each creditor will have the following most notable features.
1. The interest-rates on the bonds will be nominal, approximately 2 percent per annum.
2. The final date of payment of principal on the total indebtedness will be significantly later than the schedule indicated by the canceled contracts.
3. In some cases, there will be a period of grace, before payments mature—a deferred-payment provision
4. Maturities of debt-payment will be determined by maturity-dates of each of a series of bonds issued.
Unfortunately, more or less inevitably, some among the bankers of lesser intelligence will howl with protest: “We are being cheated out of the interest-income we would have received under the old contracts.” Such imbecilic gentlemen need to have matters explained to them in very basic terms: “Try to collect the old contracts, and you force us to default, in which case your banks cease to exist.” The advantages of the new arrangement may then begin to be apparent even to the most stupid among New York bankers…
The new bonds will have low yield, but they will be discountable for certain categories of issuance of new medium-term to long-term loans. The new bonds will be a negotiable asset in that way, and should be a very high-grade variety of asset for these bankers, provided they behave sensibly. Through a combination of debt-rescheduling and correlated economic measures, the bankers involved will have a very important market for new lending on very sound terms throughout much of Ibero-America. This lending may not be significantly profitable in terms of income on the loans themselves; however, this lending will be very rewarding to the banks’ clients among U.S.A. capital-goods exporters, and, consequently, to the banks themselves.
Unfortunately, the rotted condition of both the U.S.A. dollar and the commercial banks is so advanced, that the commercial banks could not dispose of such a debt-reorganization by then-own independent resources. If the problem were merely need for debt-reorganization in foreign accounts of those banks, what is proposed could be accomplished through negotiations with them. What is proposed would work to the advantage of the banks and the U.S.A., as well as Ibero-American republics, but this would require coordinated implementation of an already overdue monetary and banking reorganization in the United States.
We are not insisting that acceptance of these proposals by the United States, is the only hope for the Ibero-American economies. It is the best alternative to be considered, and by a wide margin. Were the U.S.A. to refuse, for a period of time, the tasks of Ibero-American republics would be much more difficult tasks, but the alternatives are both workable and indispensable. Moreover, as we shall show, the steps to be taken by those republics toward bringing about successful negotiation with the United States are the same steps to be followed should the U.S.A. refuse that proposed debt-reorganization…
IBERO-AMERICA MONETARY ORDER
The cooperating republics of Ibero-America, must each and collectively effect reforms of their credit, currency and banking institutions…
(1) In no republic must any other issues of credit be permitted, as a matter of a punishable violation of the law against immoral usury, excepting: (a) Deferred payment credit between buyers and sellers of goods and services; (b) banking loans against combined lawful currency and bullion on deposit in a lawful manner; (c) loan of issues of credit created in the form of issues of national currency-notes of the treasury of the national government.
(2) Loan of government-created credit (currency-notes) must be directed to those forms of investment which promote technological progress in realizing the fullest potentials for applying otherwise idled capital-goods, otherwise idled goods-producing capacities, and otherwise idled productive labor, to produce goods or to develop the basic economic infrastructure needed for maintenance and development of production and physical distribution of goods. This is, at once, an anti-inflationary policy, and also a steering of limited national resources into those choices of governmental and private-entrepreneurial ventures most beneficial to the nation as a whole.
(3) In each republic, there must be a state-owned national bank, which rejects in its lawfully permitted functions those private-banking features of central banking associated with the Bank of England and the misguided practices of the U.S.A.’s Federal Reserve System over the period from the latter’s establishment into the present date of writing.
(4) No lending institution shall exist within the nation except as they are subject to standard of practice and auditing by the treasury of the government and auditors of the national bank. No foreign financial institution shall be permitted to do business within the republic unless its international operations meet lawful requirements for standards of reserves and proper banking-practices under the laws of the republic, as this shall be periodically determined by proper audit (“transparency” of foreign lending institutions).
(5) The treasury and national bank, as a partnership, have continual authority to administer capital-controls and exchange-controls, and to assist this function by means of licensing of individual import-licenses and export-licenses, and to regulate negotiations of loans taken from foreign sources…
(6) The policies of taxation of the national government must be designed to expropriate ground-rent and usury income, to foster well-being of households, and to give preferential treatment to those classes of ventures which are established to be in the relatively greater national interest. Economic-development policies must inform taxation policies
(7) In a number of instances, it is simply desirable, or even indispensable, that a severe currency-reform be implemented immediately.
(8) Sovereign valuation of the foreign exchange value of a nation’s currency must be established for Ibero-American nations. The first approximation of the value of a nation’s currency is the purchasing-power of that currency within the internal economy of that nation. What are the prices of domestically-produced goods and services, relative to the prices of the same quality of goods and services in other nations. The emphasis must be upon domestically produced categories, almost exclusively, at least for first-approximation.
By this standard, many Ibero-American currencies are presently monstrously undervalued. The result of artificially depressed valuations of national currency, is that the nation is being massively, savagely looted by foreigners, especially foreign debt-holders.
The determination of exchange-rates by the IMF, etc., has often represented, during recent years especially, nothing more nor less than pure and simple theft, on a massive scale, by foreign lending institutions and others.
This commonplace swindle of developing nations is premised on the fallacious argument, that the value of a currency in international markets must be determined by “supply and demand” for that currency, rather than the intrinsic value of that currency as a medium of purchase of domestically-produced goods and services in its country of origin. By manipulating international exchange-markets, to artificially rig “supply and demand” in a currency, a “case” for devaluation is presented as a demand upon the targeted victim nation.
How much less domestic purchasing power does the Mexican peso have today, at one-third its nominal exchange-rate valuation, than a short time ago, at 24 pesos to the U.S.A. dollar? The devaluation has been an outright swindle of the nation and people of Mexico, almost at the point of a gun.
A nation must fight financial and economic warfare against those institutions which attempt to loot it and its people by such improper forced devaluations of currencies. A nation can fight such necessary warfare to defend its currency better, if it has faithful allies sharing the same enemy and the same cause for themselves.
AN IBERO-AMERICAN “COMMON MARKET”
We propose that, within the Organization of American States, such republics as may choose to do so, should form an Ibero-American “common market.” This “common market” would be based chiefly upon these institutional features:
(1) Bringing their respective, internal institutions of credit, currency and banking into order, as specified here, earlier.
(2) Establishing a common banking institution to facilitate exchange of credit, currency and trade among them, and as an institution of common defense of the financial and economic interests of the member-nations and the continent as a whole.
(3) To make more effective use of the limited resources at their common disposal, to the equitable advantage of each and all.
Taken as a whole, Ibero-America represents a spectrum of existing and potentially-existing capabilities of natural resources, agriculture, capital-goods industries, and other economic resources. What is not immediately at the disposal of the republics taken individually, is in large part at the disposal of those republics taken as a whole. Given the limited means for creating technologically advanced industries of each and all, the attempt of the republics to meet their needs in parallel represents a costly duplication of investment, by comparison with the better use of limited resources if a rational division of labor were to be developed among those republics.
What is required is: (1) Agreement to prefer to trade within the community, rather than trade without it; (2) Medium-term and long-term trading agreements, through which it will specialize for export to members of the community, thus assuring a medium-to long-term market for products produced by a corresponding investment. A nest of reciprocal, multi-national trading-agreements of this sort, are intended to foster the most efficient use of the limited capital and credit available to each and all. (3) Fair-pricing agreements, combined with cohering tariff agreements, which have the effect of establishing a customs union among the members of the agreement
If a sufficient portion of the Ibero-American nations enter into such an agreement, the result is the assembly of one of the most powerful economies in the world from an array of individually weak powers…
The keystone institution of the proposed customs union is the inter-republic bank. This bank is established by treaty, to function as the common facility of the national banks of the participating sovereign republics. Its functions are, categorically, inclusively, these:
(1) Inter-Republic Banking Functions
(a) To serve as a central clearing-bank among the participating republics’ national banks.
(b) To mediate exchange of credit and currency among the national banks.
(c) To act as a clearing institution for settlement of multi-national agreements among members respecting tariffs and trade.
(2) Monetary Functions More Generally
To facilitate maintenance of parity of exchange-values among the currencies of the member republics, and to defend those currencies as a bloc against external manipulations.
(3) A Development Bank (Investment Bank)
The bank serves as a coordinating agency for planning investments and trade-expansion among the member-republics. To aid in implementation of such agreements, the bank coordinates the mobilization of money-capital needed to ensure that all aspects of the agreed programs are adequately supplied with investment-development capital.
There are two principal sources of money-capital for expansion: intra-system, and foreign. We have specified a monopoly for creation of money-credit by sovereign governments, denying this power to any private agency. We have thus ensured that the otherwise idled, salable goods, goods-producing capacity, and labor of each and all nations shall be adequately employed, insofar as performance-worthy borrowers-entrepreneurs are willing to borrow at low interest-rates, to put those idle resources to work in a manner consistent with national priorities for categories of development.
The establishment of a customs union of the type proposed, means that the currency-notes of each republic can be issued as medium-term to long-term export-loans-capital to fund exports of its capital-goods production within the customs union. We have eliminated the need for a third-party lender among those republics. We have established a greatly enlarged autarkical development-potential among the members of the customs union.
This system of intra-bloc medium-term to long-term capital-goods-export lending will operate soundly, on condition that the payments for such loans are predefined in terms of the importing nations’ repayment through earnings from its own capital-goods or other exports within the bloc. There is, therefore, an underlying, medium-term to long-term barter basis for these agreements.
Furthermore, for this and related reasons, it is desirable that the member-republics should prefer to purchase their imports from within the bloc, rather than from without it. A sharp and growing reduction in relative volumes of imports from outside the bloc should occur relative to existing categories of imports. The extra-bloc purchasing and borrowing potential of the bloc’s member-republics should be concentrated for purchases of high-technology capital goods.
This is not a dilution of the sovereignty of the member-republics. In negotiations for lines of medium-term to long-term credit, to implement multi-member-republic projects, the representatives of each republic will negotiate sovereignly, but with backing from the common banking institution, and, thus, implicit backing from other member-republics of the bloc. However, respecting financial relations with nations outside the bloc, the sovereign member-republics seek to negotiate loans for capital-goods through the facilities of the common bank, and to clear payments against such loans through that same common bank. This strengthens the bank’s power to maintain a common defense of the currencies and credit of the member-republics. Not only are the members better defended, but the creditworthiness of each nation is increased; the creditworthiness of each and every nation of the customs union is greater than it could be outside that customs union.
To aid this, a common currency of account should be established for the customs union. Loans negotiated through the common bank will be denominated for payment in this common currency of account.
However, the bank will not be responsible for the debt of sovereign republics. Rather, the sovereign republic will settle its debt through its account with that common bank, and will settle in denominations of the common currency of account.
This bank will soon become one of the most powerful financial institutions in the world, especially in the opinion of capital-goods exporting nations.
For full document, see Operation Juárez
President López Portillo Demands New International Economic Order at UN
In August of 1982, President Lopez Portillo acts on LaRouche’s proposals as contained in Operation Juárez by adopting credit controls on Mexico’s currency, nationalizing the Mexican banking system, and announcing a debt moratorium on Mexican debt. On October 1, he addresses the United Nations General Assembly, where he declares:
“The most constant concern and activity of Mexico in the international arena, is the transition to a New Economic Order… It is imperative that the New International Economic Order establish a link between refinancing the development of countries that suffer capital flight, and the capital that has fled… Let us not continue in this vicious circle: it could be the beginning of a new medieval Dark Age, without the possibility of a Renaissance….We cannot fail. There is cause to be alarmist. Not only the heritage of civilization is at stake, but also the very survival of our children, of future generations and of the human species.”
President López Portillo Addresses UN · October 1, 1982
PORTILLO: The most constant concern and activity of Mexico in the international arena, is the transition to a New Economic Order….
We developing countries do not want to be subjugated. We cannot paralyze our economies or plunge our peoples into greater misery in order to pay a debt on which servicing tripled without our participation or responsibility, and with terms that are imposed upon us. We countries of the South are about to run out of playing chips, and were we not able to stay in the game, it would end in defeat for everyone.
I want to be emphatic: We countries of the South have not sinned against the world economy. Our efforts to grow, in order to conquer hunger, disease, ignorance, and dependency, have not caused the international crisis…
After major corrective efforts in economic affairs, my government decided to attack the evil at its root, and to extirpate it once and for all. There was obviously an inconsistency between internal development policies, and an erratic and restrictive international financial structure.
A reasonable growth policy was irreconcilable with freedom to speculate in foreign exchange. That is why we established exchange controls.
Given our 3,000 kilometer border with the United States, exchange controls can only function through a banking system that follows the policies of its country and government, and not its own speculative interests or the fluctuations of international financial chaos. That is why we nationalized the banks.
We have been a living example of what occurs when an enormous, volatile, and speculative mass of capital goes all over the world in search of high interest rates, tax havens, and supposed political and exchange stability. It decapitalizes entire countries and leaves destruction in its wake. The world should be able to control this; it is inconceivable that we cannot find a formula that, without limiting necessary movements and flows, would permit regulation of a phenomenon that damages everyone. It is imperative that the New International Economic Order establish a link between refinancing the development of countries that suffer capital flight, and the capital that has fled. At least they should get the crumbs from their own bread…
The reduction of available credit for developing countries has serious implications, not only for the countries themselves, but also for production and employment in the industrial countries. Let us not continue in this vicious circle: it could be the beginning of a new medieval Dark Age, without the possibility of a Renaissance…
We cannot fail. There is cause to be alarmist. Not only the heritage of civilization is at stake, but also the very survival of our children, of future generations and of the human species.
Let us make what is reasonable possible. Let us recall the tragic conditions in which we created this Organization, and the hopes that were placed in it. The place is here, and the time is now.
LaRouche in Rome: ‘The Theory of the New World Economic Order’
Lyndon LaRouche delivers a speech on October 20 in Rome titled ‘The Theory of the New World Economic Order’ in which he says “I shall summarize the scientific basis for the establishment of a New World Economic Order.” LaRouche states: “My chief personal role in the effort to establish a just new world economic order has been to apply my special skills as an economist to design policy-structures of economic and monetary policies.” LaRouche elaborates the scientific theory behind his Operation Juárez proposal, specifying “potential relative population density” as the necessary measure for the performance of economies, and states:
“We define economic science as a study of the manner in which the use of technological progress maintains and increases this potential relative population density.”
Lyndon LaRouche · Rome, October 1982
For text of full speech, see: The Theory of the New World Economic Order
I shall summarize the scientific basis for the establishment of a New World Economic Order.
My chief personal role in the effort to establish a just new world economic order has been to apply my special skills as an economist, to design policy-structures of economic and monetary policies. through which the general objectives of Populorum Progressio can be brought into durable reality over the period of twenty-five to fifty years ahead.
My standpoint in economic science is essentially the policy adopted by the young constitutional republic of the United States, the policy which Treasury Secretary Alexander Hamilton was first to name “the American System of political economy.” This American System was based on the discovery of economic science by Gottfried Leibniz, and was channeled into the young United States…
There was a noble effort to revive this American System policy by President Franklin D. Roosevelt. Prior to his premature death, President Roosevelt had committed himself to a post-war policy of ridding the world of the institutions and vestiges of colonialism, and what Roosevelt described as the continuing evil of British eighteenth-century methods in the world’s economic and monetary affairs. He projected what was then called an “American Century” policy for the post-war world, a policy centered around a system of great infrastructural building projects, such as transforming the Sahel region into the breadbasket of Africa.
After President Roosevelt’s premature death, the United States discarded Roosevelt’s policy, in favor of the policies demanded by Prime Minister Winston Churchill. With U.S. support and toleration, the post-war monetary order of Breton Woods became a thinly-disguised neocolonialist order…
My own efforts, especially since my Bonn, West Germany press-conference of April 1975 on this subject, have been chiefly my own work as an economist, taking advantage of my success in developing a mathematical-analytical apparatus of the sort required for a more refined application of the American System.
For example, with aid of numbers of my immediate collaborators, beginning November 1979, we have published a regular quarterly forecast for the U.S. economy. This forecast has been consistently correct, whereas all competing governmental and private forecasts published have been consistently wrong to the point of absurdity over the same period to date.
It is of practical importance that I indicate my accomplishments in economic science over other currents of poliical-economists, since the points that I have to report to you are not accepted among most economists today. Since my version of economics has produced consistently accurate forecasts, whereas my factional opponents have produced only consistent failures in forecasting, certain relevant conclusions follow logically.
All modern economic science originates with the injunction of the Book of Genesis: mankind must “Be fruitful and multiply, and fill the earth and subdue it.” That is not only Judeo-Christian doctrine; any policy which contradicts that imperative is absurd on purely scientific grounds.
In economic science, beginning with the work of Gottfried Leibniz, we measure the performance of economies by their successful increase of the productive powers of labor. This was established as the centerpiece of the American System in Hamilton’s December 1791 Report to the U.S. Congress entitled “On The Subject of Manufactures.”
The quantity we measure is probably best named potential relative population-density. In other- words. what is the average number of persons which can be sustained per square kilometer of habitable, improved land, solely by means of the changes in the material condition of nature effected by the labor of the population inhabiting the land.
In a primitive condition, such as that which the anthropologists name a hunting-and-gathering society, society can not exceed a level of about one person for an average ten to fifteen square kilometers of inhabitable land, which would mean approximately ten millions persons as the total human population of the world at any time. Without modem industry, the total population of the world could not exceed approximately one billions persons, most of which must be living in enmiserated conditions.
Mankind rose above the hunting-and-gathering level about twelve thousand years or more ago, with the development of agriculture. The earliest form of true scientific technology was ancient astronomy used for navigation of craft like the Vikings’ boats, and the adaptation of this astronomical science for the guidance of agriculture.
Through the development of the heat-powered machine, whose theoretical basis was first elaborated by Leibniz, the modem industrial revolution began in eighteenth-century France, and has brought the existing potential population level of the world up to about ten billions persons or more, on condition we widely deploy the kinds of technology which are either already in use in some parts of the world or which could be developed for general use during the remaining decades of this century. If we develop commercial thermonuclear fusion as a source of heat-energy for general human use, which can be accomplished during this immediate period ahead, that would raise the potential relative population-density of the human race to several tens of billions.
The chief among the long-term problems of economy is that without advances in technology, the depletion of certain kinds of natural resources in use raises the social costs of exploiting resources to the level that the potential relative population-density of society falls. If any society adhered to a zero-technological-growth policy sufficiently long, that lack of realized technological progress would by itself unleash the proverbial Four Horsemen of the Apocalypse upon such a misguided people.
So, since Leibniz’s discoveries, we define economic science as a study of the manner in which the use of technological progress maintains and increases this potential relative population-density.
There are several correlated facts of economic development essential to economic science. Since I have more fully elaborated this in recent publications such as Operation Juárez, I shall limit myself merely to identifying these points here, and refer you to my elaborated writings on this subject for fuller details. Here, I list merely a few of the most essential highlights of development policy, and then proceed to my concluding remarks.
The most immediate correlative of increase of potential relative population-density is an increase in the number of kilowatt-hours used both per square kilometer and per-capita. Although scientific progress enables us to use each kilowatt hour with greater efficiency respecting work accomplished per-capita, the quality of existence of the individual in a society is delimited by the level of average, per-capita quantity of kilowatt-hours used per square kilometer and per capita.
Without so-called artificial energy-sources, which means increasing emphasis on nuclear technologies, the world’s population must unavoidably collapse in level by several billions over the course of the coming decades. We require over the course of the coming two to three decades, about 3,000 billions watts of energy added by hydroelectric power generated as part of large-scale water-management projects, and between 7,000 and 10,000 billions watts of nuclear-generated energy, otherwise a new world economic order is unachievable-and hundreds of millions, or even billions of persons will die for lack of energy needed to sustain life.
Next to energy-development itself, we need great infrastructure-building projects. We need great projects of water management, great improvements in transportation-capacity, and consistent policies of improvement in the urban infrastructure essential to industrial development.
Although infrastructure does not necessarily produce end-product, consumable wealth in and of itself, infrastructure-building represents the necessary improvement of nature without which agricultural and industrial development can not prosper.
Finally, but not least, we must rid the policies of nations of those policies of practice which imply that the labor of men is the labor of a mere beast of burden. It is not simple labor which produces wealth, but rather the development of the productive powers of labor. We require populations which can produce and assimilate advances in technologies. Educational programs and correlated developments in popular culture are the indispensable human preconditions for use and improvement of productive technologies.
In economic policy-making and practice, we must never lose sight of fundamental principles. Economics is merely the indispensable means for producing the material conditions of life. It is the development of the power of reason within the individual which reflects the true, proper higher purpose of existence of nations. The individual needs the material conditions of life appropriate to the fostering of his or her divine potentialities, those potentialities which distinguish man absolutely from the beasts. The individual requires a society which gives the individual the opportunity to contribute good, a society which cherishes the good contributed by its members and at the same time discourages wickedness done by individuals. It is· the good that must be served. Economics is but an indispensable means serving that higher purpose.
Yet, economics has a moral purpose even higher than providing the material preconditions for life. In technological progress, we express mankind’s process of perfecting its knowledge of the lawful composition of creation. Through scientific progress directed to that purpose, mankind increases the individual’s powers to employ the laws of the universe, but also brings the individual will into improved perception of the lawfulness of creation, and into more perfect submission to the ordering of continuing creation in the universe. In properly directed labor, in the development of the productive powers of labor, we foster reason within society as a whole and within the individual’s development within society.
FINALLY, THE MONETARY PROBLEM
…The major portion of accumulation of internal and external indebtedness of nations, of combined public and private indebtedness, has been pyramided through lending-policies, and borrowing-policies, which increase geometrically nations’ per-capita indebtedness, while contracting geometrically the wealth-producing power of the nations per-capita.
Since the 1971-1972 monetary-policy actions and the 1975 Rambouillet monetary conference, the process of pyramiding debts while contracting production per-capita has accelerated. Since the usurious policies introduced by U.S. Federal Reserve Chairman Paul A. Volcker during October 1979, the usurious pyramiding of debt has accelerated, while investment in long-term production of wealth has collapsed, also at an accelerating rate.
We have presently reached the point, that the existing “conditionalities” of the IMF, World Bank, BIS, and GATT policies, prevent the developing nations from earning the means of payment against usuriously pyramided debt-service obligations. It is not that those nations are unwilling to pay their debts, but that they can not pay those debts without resorting to the kinds of “conditionalities” measures which mean economic mass-murder against their own populations.
This imminent financial collapse of the world economy could be prevented within a proverbial several hours of deliberation by governments, if the will to do so existed. Two sets of measures would be indispensable.
First, governments must reorganize the world monetary order. Governments must bring down the prime interest-rates of banking-systems to between 2 percent and 4 percent by political decision. The existing debts must be reorganized, through establishing a cut-off date for existing obligations, and replacing existing obligations with issues of long-term bonds at low interest-rates.
Second, the ability of nations to develop economically, and hence to pay the new debts as payments come due, requires a gold-reserve-based international monetary order, and the issuance of Treasury currency-notes by governments, to be used for long-term lending in domestic and international development-investments of merit.
The highest priorities for development must be these.
In the developing sector generally, there must be an emphasis upon increasing both the per-hectare yields of agriculture, and the number of hectares included in effecting improved yields for the nation as a whole. This must be done through aid of infrastructural projects defining the environment of agricultural development, and through injections of modem agricultural technologies to improve significantly even the relatively most primitive modes of agriculture presently in use.
A network of great infrastructural projects, emphasizing energy-development, water-management, transportation and urban infrastructure.
A-fostering of capital-goods industries in both presently industrialized and developing nations.
In brief, we must undertake the American Century policy as exemplified by the vision of President Franklin D. Roosevelt.
We may hope that fear of the chaos now on the verge of erupting will bring some of the more sensible elements of the international financial community to their senses, at last. We must welcome such cooperation, but if we are unable to defeat resistance from those rentier-financier and neo-Malthusian quarters, our civilization will die, like Sodom and Gomorrah, for want of sufficient persons with the goodness of will to render this sick civilization of ours still morally fit to survive
For text of full speech, see: The Theory of the New World Economic Order
Helga LaRouche in Paris: New World Economic Order to Stop New World War
On the eve of the 7th Non-Aligned Movement summit in New Delhi, India, Lyndon and Helga LaRouche address an international audience in Paris to signal support for the creation of the New World Economic Order from within the industrialized world. The conference is attended by Frederick Wills, former Foreign Minister of Guyana, as well as diplomats, scientists, and political leaders from over fifty countries. Helga LaRouche tells the conference, “The gigantic struggle which marks the battle for the New World Economic Order is nothing less than the fight for the survival of the human race, and a fight for the principle of the inviolability of human dignity and the rights of all peoples on this planet.” Helga LaRouche elaborates the strategy detailed in LaRouche’s Operation Juárez, stating:
“There is only one way the poor and the weak can force the world to reason: the developing countries should form a debtors’ cartel, to force through a controlled reorganization of the world economic system, and the New World Economic Order… In the next few weeks, at the summit of Non-Aligned nations, or shortly afterward, a group of developing nations must drop the debt bomb. On a certain day, Day X, these countries must announce together their incapacity to pay their debts, and, appealing to the self-interest of the industrialized nations, propose a controlled, global, reorganization of debts, and the creation of a New World Economic Order, as Lyndon LaRouche has suggested in the document ‘Operation Juárez.’”
Helga LaRouche Speech in Paris · February 19, 1983
Full text of speech: New Economic Order in Interest of North & South
If we look at the world as a whole from the standpoint of reason, the New World Economic Order is so obviously in the interests of North and South that it seems incredible that political forces in the North and the South have not long since seen its realization as of the absolutely highest priority. The world has reached such a point of crisis today that it has become clear that we either realize the New World Economic Order in 1983, or destabilization processes will begin, which will in all likelihood lead to the destruction of the human race.
The international economic crisis is now threatening the lives of millions of people in the developing sector, and unless things are immediately turned around, as many as 2 or 3 billion people will die by the year 2000. We are facing the danger of the worst holocaust of all time. This situation is not the fault of the developing sector nations, as evil Malthusians claim. It is the result of centuries of colonialism, sometimes disguised, but now quite open.
THE NEW COLONIALISM
You have to think about the brutality of British colonialism — imagine the ships laden down with precious goods which Britain literally stole from India during 300 years of savage looting, with the result that India was relatively poorer at the time of independence than 300 years previously — in order to be able to judge how severe the effects of colonialism were on the developing sector.
When many developing countries became independent, the Bretton Woods system put them at a disadvantage from the start, through unjustly calculated currency parities. The fact that the developing-sector nations are now almost bankrupt is the result of a development that has had increasing effects from the middle of the 1970s.
The developing-sector nations have been hit even worse with the results of the oil crisis by the way that the OECD nations have covered up their own economic crisis by increasing the looting of the developing sector.
With manipulated exchange rates, organized capital flight, and an ever-increasing discrepancy between the higher and higher prices of imports, and the lower prices of exports, the developing-sector nations have been further squeezed since the middle of the 1970s. The high-interest-rate policy of Federal Reserve head Paul Volcker has drastically increased the debt service to be paid by the developing sector. When the affected countries, crushed by this usury, were forced to go to the IMF, to discuss a reorganization of their debt, the IMF added the infamous “conditionalities,” forcing the devaluation of the currency and other, similar measures, putting these countries in such a bad position that their exports could be bought with the most derisory amounts of currency of the OECD countries.
If the oligarchical circles behind the IMF, the World Bank, and the Bank for International Settlements were to succeed, and were able to link the refinancing of individual countries’ debts with contracts permitting the unlimited looting of those countries’ raw materials, through a newly created world central bank, then with one stroke, colonialism would simply be reintroduced, and even the illusion of national sovereignty would be removed.
This long chain of looting and disadvantages is the reason why the developing nations are so indebted, and the reason why they simply cannot pay their debts. It is not true, as some evil journalists in the Western press claim, that “over-ambitious development projects” are to blame.
Exactly the opposite is true. The monetarist credit policy of the IMF is the reason why many promising development projects have had to be stopped. The developing-sector nations understood, at the latest since the reaction to their demands for a New World Economic Order at the 1976 conference of Non-Aligned countries in Colombo, that the leading financial institutions of the North have not the slightest interest in the industrialization of the South, but that in fact the
majority have long been ‘decoupled’ and that the transfer of technology ended years ago.
If the developing countries continue to be subjected to the International Monetary Fund’s demands for austerity, then hope for a recovery will disappear forever, and developing nations will be threatened with coups and regional wars. Mexico, for example, is threatened with destabilization just as Iran was, Central America could sink into a bloodbath, coups and civil wars are threatening Venezuela, Columbia, Brazil, Argentina, Peru, and Boliva, and the entire Ibero-American continent could go under in a “Second Pacific wai,” a scenario which Henry Kissinger has had on his desk for a very long time. India is threatened with civil war, organized by the British secret services. Africa has simply been sentenced to death by the International Monetary Fund.
All these countries are suffering from an enormous lack of development. Mexico needs nuclear power plants, transport systems, capital goods of all kinds. Ibero-America as a whole could become in a relatively short time an incredibly strong economic bloc.
If India, which already has a labor force similar to European levels, of 50 million people, could make the appropriate capital investments, it could soon become an exporter of advanced technology for the whole of Southeast Asia, and, as has been calculated in a study using the LaRouche-Riemann model, by the year 2020, could produce twice as much as the whole population of the world did in 1979.
Africa needs enormous quantities of investments in capital goods, cities, schools, railways, heavy industry, light industry, mechanization of agriculture, and so on.
NEW ECONOMIC ORDER OR WWIII
The industrialized nations depend on imports of raw materials from the developing sector, and depend equally on exporting their products to them… Would it not be in the self-interest of the North to have productive full employment, and therefore political stability? Would it not also be in the interest of the North to have a tremendous transfer of technology and an export offensive towards the South?
If some people can produce what others need, if the New World Economic Order is so obviously in the interests of all, why does the North appear not to recognize its own interests?
The problem is that not only has the South never fully thrown off the yoke of colonialism, but that the industrialized countries are not sovereign republics, but are more or less ruled by oligarchical dictatorships…
The absolutely key question today, by far the most important question in international politics today, is: Who controls the creation of credit and debts-sovereign national governments, responsible to their populations, or private financial circles, which want to rule the world through the supranational dictates of a world central bank, accountable to no one? The control of credit and debts, this is the key question. The answer is decisive to whether the result is worldwide feudalism and probably a Third World War, or a New World Economic Order.
The governments of the North and the South have the same problem: these private financial circles are the main opponents of the realization of the New World Economic Order. These circles would rather see entire economies destroyed, whole populations massacred, whole continents wiped out, rather than agree to a reorganization of their bankrupt economic system, and risk a reduction of their powers!
The cynical cold-bloodedness with which Swiss or London bankers murder whole developing countries with IMF “conditionalities” exceeds even the cold-bloodedness of Nazi killers, sitting at their desks and sending thousands to their deaths in concentration camps with just their signatures.
NECESSITY OF THE DEBTORS’ CARTEL
The International Monetary Fund is the instrument which the oligarchical circles are using to plan and carry out genocide. There is only one way the poor and the weak can force the world to reason, in the face of the overwhelming ‘ power of the oligarchical conspiracy: the developing countries should form a debtors’ cartel, to force through a controlled reorganization of the world economic system, and the New World Economic Order.
Such common action by a group of developing nations is the only way to force governments of the industrial nations by a violent shock from the outside, to defend their own interests.
If the governments of the industrialized nations were so suddenly and painfully confronted with a debtors’ cartel, an unmistakable message, all the illusions that the economic crisis could he overcome if only sufficient cuts in spending were made would cease, and then new options could be developed. It is extremely important that the members of the debtors’ cartel address the population in the industrialized countries, where people have been hard hit by the international economic crisis, and that they show them where their common interests lie. Only if the population is mobilized will it be possible to reduce the power of private banking interests.
The developing countries by themselves are too weak to resist the IMF. Only if they can create an unbreakable unity among themselves, for example, linking the fight of Ibero-America to that of the Non-Aligned Movement, and linking up with forces in the North to work together in their common interest-only then is the right combination of forces created.
The Club of Life, which has given itself the task, as it says in its founding principles, “to fight for a just New World Economic Order,” is holding conferences here in Paris, in Washington, D.C., and in about 50 other cities in the North and Ibero-America, in Asia and Western Europe, to signal international support for the upcoming conference of the Non-Aligned movement. A signal that the people in the North are not prepared to march like lemmings over the cliff, and to give up the fundamental ideas which have developed human civilization over the centuries, in exchange for the “post-industrial society.” Rather, we want to show that there are
people and political forces in the industrial sector who see the New World Economic Order as the only way out.
If the catastrophe of an international collapse imposed by an IMF-dictatorship is to be avoided, then in the next few weeks, at the summit of Non-Aligned nations, or shortly afterward, a group of developing nations must drop the ‘debt bomb.’ That is, these countries must use the only means which is feared by the oligarchical financial interests, the only weapon that can stop their plans.
On a certain day, Day X, these countries must announce together their incapacity to pay their debts, and, appealing to the self-interest of the industrialized nations, propose a controlled, global, reorganization of debts, and the creation of a New World Economic Order, as Lyndon LaRouche has suggested in the document ‘Operation Juárez’.
There is certainly no developing nation, not even those whose governments are described as reactionary, which has not asked itself the following question: What would be the consequences if we decided to resist the “conditionalities” imposed by the IMF? A total cut-off of all credit, meaning a cut-off of imports of spare parts, of food, and other essential goods, followed by coup attempts and murder-as in the case of Pakistani Prime Minster Ali Bhutto?
As India is being destabilized right now by ethnic movements controlled from outside the country, desperate attempts to paralyze India, as the most important leader of the Non-Aligned movement and host of the conference, must be expected. If some developing nations in New Delhi on or around the time of the conference use the debt bomb, it must be expected that the threats and blackmail already used against these countries will escalate dramatically.
So, if the members of the debtors’ cartel don’t waver and stand by their positions, the banks and governments of the industrial nations will have no other choice but to agree to the proposed, orderly debt-reorganization and the negotiation of new credit, or else the entire monetary system, with titles worth between $1 and $2 trillion, collapses.
The ongoing financial crisis may now be so overwhelming that a staunch debtors’ cartel were a far stronger power. This would at the same time be the punctum saliens in the centuries-long drama of the history of colonialism — the turning point, in which the heroic intervention of leading figures prevent the potential tragedy and instead give the drama a happy ending…
Should the worst case occur, and the industrial nations react to the formation of a debtors’ cartel with a total halt to credit and with trade sanctions, the developing nations would be forced to fall back on an exclusive South-South cooperation. Under such circumstances they would of course have the possibility of forming their own national banks, and creating their own credit for the financing of a multilateral, South-South cooperation.
They would, without doubt, in such a case be exposed to great hardships, but would find themselves on the path to hope, while any capitulation to an IMF central bank and thus to an explicit fascist economic system with the population reduction desired by the Malthusians, would, in a word, have genocide as its result.
It is, however, totally conceivable that the introduction of the debt bomb and the debt reorganization it would compel, would pave the way for a global overcoming of the world economic crisis.
CREATING A NEW RENAISSANCE
Creating a new renaissance If, following a global reorganization of the debt of not only the developing countries, but also the greater part of the public debts of the industrial nations, and if new credit with a low interest is created for a worldwide jobs program, for new investments in technological renewal, export capacities, technology transfer, and well-defined Great Projects, then the current depression could be overcome within weeks, and after several months the greatest economic boom in all history would be launched.
The massive development of nuclear energy in the industrial nations and the transfer of this technology to the developing sector would mean cheap energy (and a cleaner environment) for the North, and for the South, the opening up of what were till now useless areas for agriculture and settlement.
The population potential of the earth, solely through the overall utilization of nuclear energy, would increase tenfold. Human beings would no longer be viewed as “useless eaters,” but rather each new individual would be viewed in terms of his creative potential as an additional enrichment of the human species as a whole. There is no reason why we can’t in but one to two generations have created conditions worthy of human beings for all people on this earth, including those who today belong to the most poverty-stricken. In principle we could repeat all over the world the examples of the industrialization of Germany or Japan, as precisely these two countries are the proof that possession of raw materials does not equal social wealth, which is created solely and uniquely through advancing technology increasing the productivity of labor.
The gigantic struggle which marks the battle for the New World Economic Order, is nothing less than the fight for the survival of the human race, and at the same time and in every aspect it is the fight for the principle of the inviolability of each human life and the inviolability of human dignity and the rights of all peoples on this planet.
And now it has been shown that a basic principle of the Non-Aligned movement as well as the republican tradition in the industrial nations, has become a matter of life or death — the principle of national sovereignty.
The establishment of the first nation-state in France in the 15th century under Louis XI was the precondition for the declaration of human rights embodied in the first successful republican revolution, the American Revolution of 1776, insofar as only the nation-state possessing the possibility for a republican representative system protects the rights of the individual, by making the government responsible for these right&, while on the other hand calling upon the individual to assume co-responsibility.
This safeguarding of the rights of individual human beings, mediated through sovereign nation-states, is in correspondence to the demand of absolute equality of rights for all sovereign states in this world. Any forms of supranational control and dictatorship, as for example the idea of a world central bank, violate not only national sovereignty but also at the same time the human rights of the individual. That would be overall understood wherever one can be proud of a republican tradition, whether in the France of the Fifth Republic, or the American or Mexican Revolutions, or the Non-Aligned Movement.
A just New World Economic Order therefore should be founded on absolute respect for the national sovereignty of all states, and the development of the worldwide division of labor to the mutual advantage of all. This would include, for example, the idea that while certain achievements ought to be rewarded, technology must not become the monopoly of some to the injury of others.
Even if humanity appears today to be far removed from such a course, only a world order such as has been put forward in the encyclical Populorum Progressio by Pope Paul VI, or in the Grand Designs of Nicholas of Cusa, Leibniz, or Nehru, can guarantee our survival.
Precisely on account of the depth of the crisis, is the Club of Life an institution for all those who believe in the potential for reason in all human beings, whether North or South — and only on this highest plane is agreement possible — and in the possibility of a world order based on reason. Let us pledge to multiply our interventions in the fight for a new just world economic order, so that we can bestow upon mankind new intellectual revolutions and the achievements of a new world-wide humanist renaissance.
Full text of speech: New Economic Order in Interest of North & South
Indira Gandhi Hosts Non-Aligned: “New Economic Order or Nuclear War”
Prime Minister Indira Gandhi hosts the 7th Summit of the Non-Aligned Movement in New Delhi, India, where she warns, “Humankind is balancing on the brink of the collapse of the world economic system and annihilation through nuclear war” and calls for the convening of “an international conference on money and finance for development.” She specifies that such a conference “should suggest comprehensive reforms of the international monetary system [to] facilitate the mobilization of developmental finance for investment in vital areas of food, energy and industrial development.” Prime Minister Gandhi also calls for “a major debt restructuring exercise,” stating that the “debt problem of developing countries has assumed an unprecedented dimension.” She appeals to the 100 heads of state present to seize the “marvelous opportunity” before them, saying: “The eyes of the world are upon us. Let us decide here to usher in a New International Economic Order, to call for an International Conference on Money and Finance for Development.”
The ‘New Delhi Appeal’ which is adopted by the 100 world leaders present, representing almost half of humanity, echoes Indira Gandhi’s warnings of “the threat of a worldwide nuclear catastrophe” as well as her demands for an international conference on finance for development: “A thorough-going restructuring of the existing international economic order through a process of global negotiations is necessary. Non-aligned countries are committed to strive for the establishment of the New International Economic Order based on justice and equality. We propose the immediate convening of an international conference on money and finance for development, with universal participation, and a comprehensive restructuring of the international monetary and financial system.”
Lyndon LaRouche’s call for debtor-nations to unite and unilaterally declare a restructuring of their debts, as specified in his “Operation Juárez,” pervades the debate at the summit, and is raised notably by the President of Nicaragua, Daniel Ortega, who calls for the establishment of “a common organization of debtor countries” to conduct “joint efforts and actions that would induce the creditors to seriously consider the necessity of a new international economic order.” Ultimately, the Economic Declaration of the summit states: “It is essential to secure a cancellation of the external debt owed to developed countries by the least developed countries.”
Indira Gandhi’s Keynote · March 8, 1983
Humankind is balancing on the brink of the collapse of the world economic system and annihilation through nuclear war. Should these tragedies occur, can anyone of us, large, small, rich or poor, from North or South, West or East, hope to escape? Let us analyse the economic crisis. We of the developing world have no margin of safety. We shall be the first and worst sufferers in any economic breakdown. In this interdependent world, where you cannot ‘stir a flower without troubling a star’, even the most affluent are not immune to such disturbances…
The Non-Aligned Movement has stood firmly for a thorough-going restructuring of international economic relations. We are against exploitation. We are for each nation’s right to its resources and policies. We want an equal voice in the operation of international institutions. We reiterate our commitment to the establishment of a New International Economic Order based on justice and equality…
An International Conference on Money and Finance for Development which is not weighted in favor of the North is an urgent need. Problems of money and finance also burden the countries of the North and have to be solved in a mutually beneficial manner. Such a conference should suggest comprehensive reforms of the international monetary and financial system, which is now recognized as out-of-date, inequitable and inadequate. It should facilitate the mobilization of developmental finance for investment in vital areas of food, energy and industrial development. A major debt restructuring exercise must be undertaken. The debt problem of developing countries has assumed an unprecedented dimension. Its servicing alone absorbs over a quarter of their total export earnings.
Long-range solutions need time and preparation. Immediate problems brook no delay. Some countries are more critically affected than others. Some are in desperate straits. They cannot wait for action by the world community as a whole. Out Movement has an obligation to them…
Science is important for us to eradicate poverty… Science will work for our basic needs only if we direct our own scientific policies towards these problems, especially those of the smallest and poorest amongst us. Each of our countries must strengthen its domestic base of science and technology and collectively we should devise more effective mechanisms for the pooling of our experiences.
In the last few years some areas of co-operation have been identified. Effective co-operation in agriculture, irrigation, research in plant varieties, public health, technical training and small industries will reduce our dependence on the high-cost economies of the affluent on business corporations which profit from us…
Our economists and scientists should study and take a holistic view of problems relating to co-operation amongst ourselves in planning, development, and economic exchanges. The economic experience and expertise of industrialized countries are not necessarily valid in our circumstances…
Development, independence, disarmament and peace are closely related. Can there be peace alongside nuclear weapons? Without peace, my father said, all our dreams of development turn to ashes. It has been pointed out that global military expenditure is twenty times the total official development assistance. Each day, each hour, the size and lethality of nuclear weapons increase. A nuclear aircraft carrier costs $US 4 billion, which is more than the GDP of 53 countries. The hood of the cobra is spread. Humankind watches in frozen fear, hoping against hope that it will not strike. Never before has our earth faced so much death and danger. The destructive power contained in nuclear stockpiles can kill human life, indeed all life, many times over and might well prevent its reappearance for ages to come. Terrifying is the vividness of such descriptions by scientists…
The desire for peace is universal even within countries which themselves produce nuclear weapons and in those where they are deployed. The Non-Aligned Movement is history’s biggest peace movement…
The paradox of our age is that while weapons become increasingly sophisticated, minds remain imprisoned in ideas of simpler times. Technically, the colonial age has ended. But the wish to dominate persists. Neo-colonialism comes wrapped in all types of packages. It takes boldness and integrity to resist it. There are intense political and economic pressures…
Only with co-existence can there be any existence. We regard non-interference and non-intervention as basic laws of international behavior. Yet different types of interventions, open or covert, do take place in Asia, in Africa, in Latin America. They are all intolerable and unacceptable. Interference leads to intervention and one intervention often attracts another. No single power or group of powers has the justification or moral authority to so interfere and intervene. You cannot condemn one instance but condone another. Each situation has its own origins. Whatever they be, solutions must be political and peaceful. All States must abide by the principle that force or the threat of force will not be used against the territorial integrity or political independence or another State. What makes interference possible? Our economic weakness, yes, but also our differences and discords within our Movement…
How do we gain strength? By all of us striving to become economically and technologically self-reliant. By settling through peaceful discussion whatever differences we have with one another. By resisting the intervention of others in our internal affairs…
The eyes of the world are upon us. People in India and in all our countries have high expectations from our deliberations. Let us decide here:
– to demand more purposeful steps to carry forward the democratization of the international system and to usher in a New International Economic Order;
– to call for an International Conference on Money and Finance for Development, which will devise methods to mobilize finance for investments in the critical areas of food, energy and industrial; and
– to reassert our commitment to collective self-reliance.
Above all let us proclaim anew our belief that independence, development, disarmament and peace are indivisible and reaffirm our unceasing faith in the Five Principles which are the foundations of non-alignment, namely, sovereignty and territorial integrity, non-aggression, non-interference, equality and mutual benefit, and peaceful coexistence…
Nationalism does not detach us from our common humanity. What a marvelous opportunity is ours, with immense knowledge and increasing capability. Let us grasp it though it be in the midst of dangers. Faith in the future has brought so many of you across the continents and the oceans to meet here. We are here because we do believe that minds and attitudes can and must be changed and that injustice and suffering can and must be diminished. Our world is small but it has room for all of us to live together in peace and beauty and to improve the quality of the lives of men and women of all races and creeds.
The New Delhi Appeal · March 12, 1983
Our world is increasingly turbulent and insecure. International economic relations continue to be characterized by inequality, domination and exploitation. The gravity of the situation is evident… in the threat of a worldwide nuclear catastrophe.
Peace and peaceful coexistence, independence, disarmament and development are the central issues of our time. But peace must be based on justice and equality because the intolerable inequality and exploitation established by colonialism and imperialism remain the most important causes of tension, conflict and violence in the world…
The non-aligned countries, speaking for the majority of the world community, want an immediate halt to the drift towards nuclear conflict which threatens not only the well-being of humanity in our times but of future generations as well. The nuclear weapon powers must heed this voice of the people of the world…
The world economic crisis,which originated in some of the major industrialized countries, has now become truly global in character and scope. In developed countries it has led to economic stagnation and rising unemployment… In developing countries, whose economies are specially vulnerable, it has led to enormous balance of payments deficits, mounting debt burdens and worsening terms of trade due to the steep fall in their commodity prices and to the sharp rise in the prices of industrial products which they have to import. All this has brought many of these countries to the brink of disaster.
Never before have the economic fortunes of the developed and developing nations been so closely link together… Solutions to these problems must necessarily be global.
The present crisis has demonstrated the inadequacy of the existing international economic order to deal with the problems of development. A thorough-going restructuring of this order through a process of global negotiations is necessary. Non-aligned countries are committed to strive for the establishment of the New International Economic Order based on justice and equality.
Concurrently, immediate measures must be taken to start a process of recovery and to bring the world economy back to the path of sustained growth. The activation and stimulation of the growth process in the developing countries must be a key objective of this endeavor. Immediate measures are needed in several areas. Special emphasis must be placed on enabling developing countries, particularly the Least Developed Countries, to solve their acute balance of payments problems without interrupting their development process. At the same time, satisfaction of their basic needs of food and energy, enhanced access to markets and fair prices for commodities must be ensured… Many developing countries are in a tragic situation because of their inability to meet their debt obligations. This serious problem should be urgently addressed.
We propose the immediate convening of an international conference on money and finance for development, with universal participation, and a comprehensive restructuring of the international monetary and financial system…
The crisis which confronts our civilization today is unprecedented in history. Great tasks call for wise decisions… The earth belongs to us all — let us cherish it in peace and true brotherhood, based on the dignity and equality of man.
Ronald Reagan Announces the Strategic Defense Initiative (SDI)
On March 23, 1983, only days after the summit in New Delhi, President Ronald Reagan shocks the world by announcing the Strategic Defense Initiative (SDI), calling on the scientific community to “turn their great talents now to the cause of mankind and world peace; to give us the means of rendering nuclear weapons impotent and obsolete.” The policy unveiled in this historic announcement had been discussed for months in back-channel negotiations with Soviet representatives, which Lyndon LaRouche conducted personally at the behest of leading members of Reagan’s national security team.
See video: A Brief History of LaRouche’s SDI
LaRouche had proposed beginning in 1977, in a pamphlet titled “Sputnik of the Seventies” that an international crash program to develop a space-based missile defense system based on new physical principles would provide the economic driver to fuel global development. The pamphlet proposed “long-range economic and scientific collaboration with the Soviet Union among other nations, which will eliminate the danger of world obliteration” and emphasized the “tremendous revolutionary industrial implications available to this nation and the world if the political will of the United States forces a recommitment to technological progress in the form of an International Development Bank (IDB) and its national concomitant, the Third National Bank.”
On March 24, LaRouche greets Reagan’s announcement saying:
“There is, at last, hope that the thermonuclear nightmare will be ended during the remainder of this decade… The words the President spoke last night can never be put back into the bottle. Most of the world will soon know, and will never forget that policy announcement. With those words, the President has changed the course of modern history. Today I am prouder to be an American than I have been since the first manned landing on the Moon. For the first time in 20 years, a President of the United States has contributed a public action of great leadership, to give a new basis for hope to humanity’s future to an agonized and demoralized world. True greatness in an American President touched President Ronald Reagan last night; it is a moment of greatness never to be forgotten.”
Ronald Reagan Announces SDI · March 23, 1983
In recent months, my advisers, including in particular the Joint Chiefs of Staff, have underscored the necessity to break out of a future that relies solely on offensive retaliation for our security. Over the course of these discussions I have become more and more deeply convinced that the human spirit must be capable of rising above dealing with other nations and human beings by threatening their existence…. Wouldn’t it be better to save lives than to avenge them? Are we not capable of demonstrating our peaceful intentions by applying all our abilities and our ingenuity to achieving a truly lasting stability? I think we are—indeed we must!
After careful consultation with my advisors, including the Joint Chiefs of Staff, I believe there is a way. Let me share with you a vision of the future which offers hope. It is that we embark on a program to counter the awesome Soviet missile threat with measures that are defensive. Let us turn to the very strengths in technology that spawned our great industrial base….
What if free people could live secure in the knowledge that their security did not rest upon the threat of instant U.S. retaliation to deter a Soviet attack; that we could intercept and destroy strategic ballistic missiles before they reach our own soil or that of our allies? … Isn’t it worth every investment necessary to free the world from the threat of nuclear war? We know it is!
I clearly recognize that defensive systems have limitations and raise certain problems and ambiguities. If paired with offensive systems, they can be viewed as fostering an aggressive policy and no one wants that. But with these considerations firmly in mind, I call upon the scientific community in our country, those who gave us nuclear weapons, to turn their great talents now to the cause of mankind and world peace; to give us the means of rendering these nuclear weapons impotent and obsolete…. We seek neither military superiority nor political advantage. Our only purpose—one all people share—is to search for ways to reduce the danger of nuclear war.
My fellow Americans, tonight we are launching an effort that holds the promise of changing the course of human history. There will be risks, and results take time, but I believe we can do it. As we cross this threshold, I ask for your prayers and your support.
History of LaRouche’s Role as Back-Channel for SDI
For full article:The Power Of Ideas: LaRouche’s SDI Changed The World
President Reagan’s March 23 address came as the result of years of effort.
Lyndon LaRouche and his associates had been talking about ballistic missile defense, employing new physical principles, since 1977.
During the perilous years of the Carter Presidency, Mr. LaRouche had served as an unofficial channel of communication between elements inside the official U.S. intelligence establishment, and Soviet intelligence counterparts. This was part of a “fail-safe system” built up by sane individuals on both sides of the East-West divide, to minimize the danger of a misunderstanding triggering a strategic confrontation. LaRouche was solicited for this effort, in part, in response to his election-eve 1976 nationwide TV address, in which he warned of the dangers of thermonuclear war, should Jimmy Carter and the Trilateral Commission come into office.
In early March 1981, a senior Soviet diplomat posted at the Permanent Mission to the United Nations, Mr. Kudashev, approached EIR’s Asian Affairs Editor, Dan Sneider, soliciting LaRouche’s views on the new Reagan Administration. On instructions from the same U.S. intelligence channels through which the earlier Soviet discussions had been conducted, word of that approach and a detailed summary of the discussion, was forwarded to White House counsellor Edwin Meese.
By the early Autumn of that year, Lyndon LaRouche had spelled out his proposals for a joint or parallel U.S.-Soviet strategic ballistic missile defense program. During this same period, representatives of EIR held preliminary discussions with a senior diplomat at the Soviet Embassy in Washington, D.C. named Shershnev.
As the result of these developments, in December 1981, Lyndon LaRouche was again approached by senior U.S. intelligence officials and formally asked to initiate “back-channel” discussions with appropriate Soviet representatives on the possible adoption of a modification of existing strategic doctrine—ie. LaRouche’s own Mutually Assured Survival concept. LaRouche was informed that the back-channel discussions were classified as a compartmentalized secret operation known to a select number of senior officials under a code-name.
By this time, Lyndon and Helga LaRouche had met personally with CIA Deputy Director Bobby Ray Inman at the Agency’s facility adjacent to the Old Executive Office Building and the White House.
In support of his back-channel efforts on behalf of the ballistic missile defense policy, on Feb. 18-19, 1982, LaRouche participated in a two-day EIR seminar on the subject and related topics in Washington, D.C. Of the 600 or so attendees, a number were Soviet and Warsaw Pact diplomats. At an EIR reception for participants in the conference, LaRouche was introduced to Mr. Shershnev, and they had the first of a number of discussions about strategic policy issues affecting the U.S. and the U.S.S.R.
At their first private discussion, which took place in a suite at the Hay Adams Hotel in Washington shortly after the February 1982 event, LaRouche informed Shershnev that he had been designated by the Reagan Administration to conduct exploratory discussions, and that he would distinguish clearly when he was conveying official messages from U.S. government agencies and when he was providing his own personal evaluations.
In the early Spring of 1982, Admiral Inman announced his resignation as Deputy Director of the CIA effective several months later. The channels under whose auspices LaRouche had been carrying out the negotiations with Moscow representatives informed him at that point that the operation was for the time being aborted. Sensitive to the highly restricted “need to know” security surrounding the back-channel negotiations, LaRouche prepared a written memo to Edwin Meese seeking some guidance on how to proceed. That memo was hand-delivered by a representative of the National Security Council. With the appointment of Judge William Clark as Special Advisor to the President for National Security Affairs in January 1982, LaRouche representatives had established ongoing discussions with a number of NSC officers.
After Ed Meese failed to provide any clear response to the LaRouche memo, Richard Morris, the Executive Assistant to National Security Advisor Clark, informed LaRouche that the Council would take charge of the operation and that the sanctioned back-channel negotiations should continue uninterrupted.
By the Autumn of 1982, momentum had built up inside sections of the U.S. military and intelligence establishment in support of Lyndon LaRouche’s ballistic missile defense proposals. General Volney Warner, a retired head of the U.S. Army’s FORCECOM, told LaRouche associates in October 1982 that the policy was winning strong support among some of the President’s key advisors. Also in October, Edward Teller, a close personal friend and science advisor to President Reagan, threw his support behind BMD, citing recent breakthroughs at Lawrence Livermore Labs on some of the very “new physical principle” approaches advocated by LaRouche. Significantly, Teller also advocated sharing these scientific and technological breakthroughs with Moscow.
LaRouche publicly alluded to his role in the back-channel process in a Dec. 12, 1982 EIR Memorandum titled “The Cultural Determinants of an Anti-Missile Beam-Weapons Policy”:
“During the months since I first announced the proposed beam-weapons policy, since February of this past year, I have had a number of occasions to discuss this policy with Soviet and other East Bloc representatives, both in person and through relayed communications. In such discussions one must acknowledge that the Soviet representative in question is speaking as a representative of his government to me as a person whom that representative views as connected to policy influencing agencies of the United States. Therefore, the kinds of discussions which occur have two functional aspects. In one aspect, each of us is speaking for the record. I am careful to indicate what I believe to be my government’s policy, as well as I know that policy, as for the record. My Soviet discussion partner in each case will do the same. Then, apart from such statements of policy for the record, we are able to enter into a more or less frank discussion of possible other, additional policy options.”
LaRouche again addressed all of these issues in his Dec. 31, 1982 speech to the International Caucus of Labor Committees conference in New York City. Referencing his beam defense program, LaRouche observed:
“If we succeed, if President Reagan does this thing, in the coming weeks, then we shall have administered to that ancient foe of our people and of the human race—the Harrimans, et al., the Malthusians—not a killer blow, but a very deadly defeat: a sharp reduction of the Malthusian power internationally. We shall have cleared the decks, weakened the enemies of humanity, to the point that those who are not the enemies of humanity are given a greater latitude for making decisions without having to submit to the Harrimans and that crowd in the period ahead.
“It is in that sense, in that act, which, I believe—in this great tragedy through which we are now living—that choice, is the punctum saliens of our age. Either we can grab it, or I know not what we can do.”
For full article: The Power Of Ideas: LaRouche’s SDI Changed The World
LaRouche Meets With Indira Gandhi in India for Second Time
On July 13, as part of a tour of several nations in Asia, Lyndon and Helga LaRouche have their second meeting with the Prime Minister of India, Indira Gandhi. Ten days later, Indira Gandhi inaugurates a new heavy water nuclear reactor at Kalpakkam, saying:
“Our science, particularly nuclear science, is dedicated to development, the achievement of freedom from want, and the provision of essentials and an honorable life for the masses. We are to make the deserts bloom.”
In the weeks following, LaRouche issues a special report titled “A 50-Year Development Policy for the Indian-Pacific Oceans Basin” proposing three projects for the development of the Pacific region: 1) a canal through the Kra isthmus of Thailand, 2) a new sea-level canal across the Panamanian isthmus, and 3) the expansion and improvement of the Suez Canal. LaRouche specifies that the preconditions for developing the Pacific basin are the “required reforms of the international monetary system specified in Operation Juárez” which would create “a new international economic order not inconsistent with the monetary and economic policies of the American System. The paradigm for a republican monetary order is the statement of policies set forth in U.S. Treasury Secretary Hamilton’s famous Reports to the Congress, on credit, a national bank, and manufactures.”
LaRouche: General Conditions of Policy for Economic Development in Pacific & Indian Ocean Basins
For full document, see: Asia Can Lead World Economic Revival
MONETARY REFORMS REQUIRED
The general outlines of proposed, required reforms of the international monetary system are adequately specified in Operation Juarez. Therefore, we limit ourselves here to listing a succession of basic principles.
The paradigm for a republican monetary order is the statement of policies set forth in U.S. Treasury Secretary Hamilton’s famous Reports to the Congress, on credit, a national bank, and manufactures.
The political essence of the present international monetary crisis is the challenge of choosing between a world economic order resembling the looting practices associated with Hjalmar Schacht, and the preconditions of general economic recovery supplied by creating a new international economic order not inconsistent with the monetary and economic policies of the American System. Any other view of this matter misses the practical point.
In a republican order, the following leading features of monetary policy prevail.
The money supply is limited to the currency notes issued either by treasuries of governments of sovereign states, or by national banks acting as agents of those governments. The new issues of such currency notes are placed in circulation through the combined lending and rediscount functions of national banks.
Lending of new issues is limited to purposes which governments permit for loan of these issues. Except for overiding requirements of national interest, as emergency mobilization for national defense or other emergencies, these issues are loaned at low nominal borrowing costs for investments which directly promote increase of the productive powers of labor in the production of useful, physical goods. This may occur either as a direct loan by a national bank, or as national-bank participation in a loan otherwise subscribed by the private banking system.
So, money is p laced into circulation through investments which expand and increase productivity in the employment of operatives. It is in this fashion that monetary demand is generated and chiefly regulated.
Republics provide efficient methods for regulation of good order in the conduct of business by private banks. Lending by banks is limited to determined percentages of the total deposit of currency plus specie actually deposited with those banks, as combined deposits of investors and other bank depositors. The “Keynesian multiplier” is choked.
The function of government issues is to supply adequate supplementary lending power, by combined resources of the national bank and the private banking system. Inasmuch as possible, it is desirable that this lending of government issues occur as participation in loans of approved categories by the private banking system. This strengthens the private banking system, reduces the administrative burdens of the national bank respecting local features of the economy better administered by the private banks, and fosters a participation of deposited savings in those categories of investment which contribute relatively most to expansion of output and improvement of the productive powers of labor In commerce and investment among nations, it is required that stable and fixed parity-values of national currencies prevail. This stability is fostered within each nation by aid of the currency and banking practices identified above.
These policies are explicitly and efficiently anti-inflationary modes of economic growth, on condition that significant rates of advancement in available technologies are’provided. These measures implicitly require the added measures of a gold-reserve system in support of fixed parities of currencies in international commerce and investment. This permits low nominal borrowing costs to prevail, and thus provides the indispensable climate for high levels of trade and investment among nations.
This requires i matching policy of taxation. In general, it is necessary that accumulations of capital in productive investment and closely related ventures be encouraged, and accumulations through financial speculation, ground-rent price speculation, and commodity-price-fluctuations speculation, be discouraged. The investment-tax-credit device, to reward entrepreneurs and savers for investments which foster increases in the average productive of labor, is perhaps a superior choice of measure in aid of the stipulated economic object of taxation policies.
It is, of course, somewhat more than merely desirable, that current-account expenditures of governments, as distinct from capital-account expenditures, be paid out of a general revenue supplied entirely by taxation.
By aid of these monetary-policy measures, high rates of noninflationary economic growth can be promoted and sustained indefinitely, without prompting reappearance of a “business cycle.”
For full document, see: Asia Can Lead World Economic Revival
Lyndon LaRouche Addresses Conference in Bangkok on Kra Canal
Lyndon LaRouche travels to Thailand in October 1983 to address the first of several conferences in Bangkok on building the Kra Canal, jointly sponsored by EIR, the Fusion Energy Foundation, and the Thai Ministry of Communications. This conference is followed by another in October of the following year for which LaRouche writes a policy paper titled “The Pivotal Role of Thailand in the Economic Development of Southeast Asia” in which he states:
“The prospect of establishing a sea-level waterway through the Isthmus of Thailand, ought to be seen not only as an important development of basic economic infrastructure both for Thailand and the cooperating nations of the region; this proposed canal should also be seen as a keystone, around which might be constructed a healthy and balanced development of needed basic infrastructure in a more general way.”
Historical background video on Lyndon LaRouche’s role in promoting the Kra Canal project in Thailand, and its continued strategic & economic importance in the development of the Asia-Pacific
LaRouche Visits Argentina, Meets With President Raúl Alfonsín
LaRouche visits Buenos Aires the week of June 24-30, 1984, for discussions with representatives of the major political parties in Congress, the trade union movement, the scientific and cultural communities, and the Armed Forces, culminating in a meeting with President Raúl Alfonsín on June 28. [pdf] The visit comes at a time when, in the wake of the Malvinas War, Argentina is under fierce pressure from its foreign creditors to submit to the austerity conditionalities of the IMF. LaRouche was personally invited to Argentina by several private institutions whose leaders thought it urgent that his policy recommendations, elaborated in the August 1982 document Operation Juárez, and his evaluation of the world financial and strategic crisis, be widely disseminated in their country.
The trip occurs ten days after Ibero-American debtor nations met in Cartagena, Colombia, to coordinate their approach to the continent’s debt crisis; and as the Alfonsín government approached another end-of-quarter cliffhanger, in which it had to choose between paying $460 million in back interest payments, or seeing creditor banks declare its foreign debt to be non-performing. Alfonsin was wrestling with the decision to accept the IMF’s dictates, or join with the rest of Ibero-America’s debtors in a so-called “debtors cartel” as outlined by LaRouche in Operation Juárez.
In a press conference following the meeting at the presidential palace, the Casa Rosada, LaRouche declares that were he elected President of the United States, he would aid Argentina “with justice and equality to overcome the crisis unleashed by its foreign debt.” LaRouche reports that he had expressed to President Alfonsín his “respect for the sovereignty of this country,” adding that “I come as a personal friend of the Argentine President and feel that he and I are pleased to have met each other,” expressing confidence that he could be “useful to future relations between the two countries, as a public political figure whose voice is very loud, strong, and very controversial in my own country.”
“While I spoke with president Alfonsín this morning on general matters, I wanted to emphasize one point in which I and various other members of my country’s political life differ with the Reagan administration …. We do not agree with the policy of conditioning all [debt] negotiations to the suppression of Argentina’s nuclear program… We propose two basic points: unite the continent from Mexico to Tierra del Fuego, creating a customs union to promote technological and agricultural cooperation. This would favor existing barter with the installation of a new monetary system for industrial development. This is the second point: The U. S. must place the dollar on a new gold standard and thus permit the reorganization of these nations’ foreign debt… We don’t want countries to collapse one by one, that’s why the renegotiation must be done on a joint basis, but not through the international financial institutions; governments must decide and then tell the bankers, who are bankrupt and can’t handle the situation. The government of the United States and the debtor nations must decide on solutions and ship the bankers off to the zoo where they won’t be allowed near little children.”
Following a speech delivered by LaRouche to the Foundation for a Project Argentina, which included representatives of the Argentine Nuclear Technology Association (AATN), and the National Atomic Energy Commission (CNEA), a leading Argentine nuclear engineer, Dr. Cosentino, who had been instrumental in launching the country’s nuclear program in 1953, commented:
“Thirty years ago, I heard a powerful speech given by Gen. Juan Peron, when he announced his decision to initiate the nuclear program, and the strength of it has carried me though the last thirty years. Now today, I have heard a similar speech… I am amazed. We need a man like you here in Argentina.”
Leading Argentine press cover LaRouche’s visit. Buenos Aires daily Clarín, under the headline “Alfonsín Meets with U.S. Democrat,” writes on June 29:
The Democratic Party precandidate for the presidency of the United States, Lyndon LaRouche, yesterday visited President Raul Alfonsfn to express his solidarity with Argentina’s position in the renegotiation of its foreign debt and with [Argentina’s] claim to sovereignty over the Malvinas Islands. The North American politician asserted that his visit “in no way bore the smell of Yankee imperialism or arrogance,” especially considering “something that impressed me considerably in 1982: the Malvinas War in which the United States failed Argentina.”… The politician condemned the attitude of his country’s banks.and politicians in their treatment of Argentina in the renegotiation of the latter’s foreign debt.
Another daily, La Razon, writes under the headline “Lyndon LaRouche, U.S. Presidential Precandidate, Meets with the Head of State,” on June 28:
Lyndon LaRouche, pre-candidate of the Democratic Party for the presidency of the United States, stated today that were he elected, he would be in a position to help Argentina with “justice and equality ” to overcome the crisis unleashed by its foreign debt. He maintained that the amount of this debt is “truly unknown” but added that “if an accountant were to analyze it, he would find that it is really a third of the stated amount.” He mentioned that the crisis originated with the “bankruptcy of the North American banks, [who] do not believe in technological progress, and has a philosophy different from that of the Ibero-American peoples… [larouche] indicated that his conversation with the Argentine head-of-state was very useful, because he was able to explain his policies and “say some things in confidence, and establish mutual respect.”
Schiller Institute Founded: Adopts Declaration of Inalienable Rights of Man
Helga Zepp-LaRouche founds an international strategic and cultural organization, the Schiller Institute, named after the German ‘Poet of Freedom’ Friedrich Schiller. In describing the intended purpose of the Schiller Institute, Helga LaRouche states:
“Let us enter into the solemn pledge to work to end for all time every form of imperialism, and that means above all that we must bring about a just world order that will make possible the urgently necessary development of the southern hemisphere.”
The international Schiller Institute adopts ‘The Declaration of the Inalienable Rights of Man’ as its founding document, based on the US Declaration of Independence, which asserts:
“The history of the present International Financial Institutions is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States; They have refused their Assent to our plans of development, the most wholesome and necessary for the public good; They have forbidden their Banks to engage in business of immediate and pressing importance for us, and in equal terms; They have dictated to us terms of trade and relations of currency, that have relinquished our Rights as Equals in the World Community, a Right inestimable to them and formidable to tyrants only; They have overthrown legitimate governments repeatedly, for opposing with manly firmness their invasions on rights of the people; They have endeavored to prevent the necessary population increase for industrialization of these States…”
The document ends by declaring:
“We, therefore, the Representatives of the Peoples of the World, do solemnly declare… that all human beings on this planet have inalienable rights, which guarantee them life, freedom, material conditions worthy of man, and the right to develop fully all potentialities of their intellect and their souls. That therefore a change in the present monetary and economic order is necessary and urgent, to establish justice among the peoples of the world…”
Declaration of the Inalienable Rights of Man
The following declaration was adopted on Nov. 24, 1984 by over 1,500 citizens from more than fifty countries, at the Third International Conference of the Schiller Institute. The Declaration of the Inalienable Rights of Man is based the American Declaration of Independence of 1776, with only a few changes introduced to take into account different particular features of the global struggle for human freedom and dignity today.
When in the Course of human events, it becomes necessary for the peoples in the world to dissolve the political bands which have connected them with one another, and to assume among the powers of the Earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to separation We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain inalienable Rights; that among these are Life, Liberty, and the pursuit of Happiness.
That to secure these rights, governments are instituted among Men, deriving their just powers from the consent of the governed;
That whenever any Form of Government becomes destructive to these ends, it is the Right of the People to alter or abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shown, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism; it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.
Such has been the patient sufferance of the developing countries, and such is now the necessity which constrains them to alter their former Systems of Violation of National Sovereignty through the dictate of supranational institutions. The history of the present International Financial Institutions is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
They have refused their Assent to our plans of development, the most wholesome and necessary for the public good.
They have forbidden their Banks to engage in business of immediate and pressing importance for us, and in equal terms.
They have dictated to us terms of trade and relations of currency, that have relinquished our Rights as Equals in the World Community, a Right inestimable to them and formidable to tyrants only.
They have burdened us with conference after conference to discuss these matters, at places unusual, uncomfortable and distant from the depository of our Public Records, for the sole purpose of fatiguing us into compliance with their measures.
They have overthrown legitimate governments repeatedly, for opposing with manly firmness their invasions on rights of the people.
They have refused for a long time and in many instances, after such topplings, to permit other republican forces to be elected in a democratic form; whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their Exercise, the State remaining in the meantime exposed to all the dangers of invasion from without, and convulsion within.
They have endeavored to prevent the necessary population increase for industrialization of these States; for that purpose imposing forced sterilization programs and refusing the necessary technology transfer under the pretext of the so-called protection of the environment.
They have obstructed justice by giving aid and comfort to undemocratic forces whom they regarded as their “assets.”
They have made Judges dependent on their will alone for the Tenure of their offices, and the amount and payment of their salaries.
They have erected a multitude of New Offices, and sent swarms of Officers to harass our people, and eat out their substance.
They have used the military might of governments to pursue the continuation of a de facto condition of colonialism. They have in many instances furthered military forms of government to impose the demanded austerity. They have combined with others to subject us to a jurisdiction foreign to our constitutions, and unacknowledged by our laws, giving their Assent to their Acts of pretended Legislation:
For using the territory of our countries for proxy and population wars;
For cutting off our trade with all parts of the World; for imposing conditionalities on us without our consent;
For depriving us in many cases of the benefits of Trial by Jury;
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of Our Governments. They have caused conditions in our countries, which destroyed the lives of our people; they have generally caused our countries, already previously weakened and exploited by colonialism, to collapse, with methods of cruelty and perfidy scarcely paralleled in the most barbarous ages, totally unworthy of Man in civilized nations.
They have excited domestic insurrections amongst us, and have endeavored to bring on the most backward and fanatic savages, whose known rule of Warfare is an undistinguished destruction of all ages, sexes and conditions.
In every step of these Oppressions, we have petitioned for Redress in the most humble terms: Our repeated Petitions and Resolutions have been answered only by repeated injury. Institutions, whose character is thus marked by every act which may define a Tyrant, are unfit to be the rulers of free peoples. We have appealed to them in innumerable conferences, assemblies, and conventions, and appealed to their sense of justice, without any positive response.
We, therefore, the Representatives of the Peoples of the World, appealing to the Supreme Judge of the World for the rectitude of our intentions, do, in the Name, and by the Authority of, all good people of all countries, solemnly publish and declare, that all the countries of the World are and of Right ought to be Free and independent States.
That all human beings on this planet have inalienable rights, which guarantee them life, freedom, material conditions worthy of man, and the right to develop fully all potentialities of their intellect and their souls. That therefore a change in the present monetary and economic order is necessary and urgent, to establish justice among the peoples of the world.
These were in large part the formulations of the American Declaration of Independence, and no honest witness can deny that all we wish to remedy are the same unjust conditions which the Founding Fathers wished to remove when they ended their condition as colonies to establish the first true independent republic. It is this example we wish to replicate everywhere and it is these principles we wish to uphold.
And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.
Prime Minister Indira Gandhi Assassinated in New Delhi, India
On October 31, 1984, the Prime Minister of India, Indira Gandhi, is assassinated at her home in New Delhi. Lyndon LaRouche writes:
“This morning, at 9: 18 a.m., New Delhi time, assassins of a London-based terrorist cult murdered one of the greatest world leaders of our generation. India’s Prime Minister Indira Gandhi. My wife and I, who loved her dearly, can not find words adequate to express our personal grief. If India is destabilized as a result of this assassination, the effects could become quickly as dangerous as the murder of the Austrian Archduke Francis Ferdinand, on June 28, 1914, the incident which triggered World War I.”
Three days before her assassination, Mrs. Gandhi stated in a press interview with United Press International:
“If I were to die serving my country, I would be very proud… I feel I have to fight evil, I have to fight what is wrong, but you cannot be bothered about what is happening to you in consequence. You have to go on with your job.”
Excerpts: “British Assassinate Mrs. Gandhi” · LaRouche
This morning, at 9: 18 a.m., New Delhi time, assassins of a London-based terrorist cult murdered one of the greatest world leaders of our generation. India’s Prime Minister Indira Gandhi. My wife and I, who loved her dearly, can not find words adequate to express our personal grief.
If India is destabilized as a result of this assassination, the effects could become quickly as dangerous as the murder of the Austrian Archduke Francis Ferdinand, on June 28, 1914, the incident which triggered World War I…
Mrs. Gandhi was informed that an attempted assassination of her was imminent. She referred to this in an interview with UPI three days before her assassination.
“If I were to die serving my country, I would be very proud… I feel I have to fight evil, I have to fight what is wrong, but you cannot be bothered about what is happening to you in consequence. You have to go on with your job.”
I have received that message, and I shall now begin to act upon her instruction. I will tell what I know of her attitude toward President Ronald Reagan.
My wife, Helga, and I had been in occasional contact with Mrs. Gandhi since our correspondence of 1977. There were a few exchanges of letters, and, less infrequently, confidential messages transmitted through trusted intermediaries. We were friends in the time her life and that of her family were threatened, when she was out of government; we were friends when she was reelected to government.
Helga and I met with her in her office during both of our visits to India, in 1982 and in 1983. On both these occasions, I encouraged her to concentrate on developing her personal contact with President Reagan.
When I brought this up with her the first time, she nodded. She had met the President briefly during the Cancun summit and had liked him; but, she complained, those bureaucratic watch-dogs had broken up their discussion barely as it started. She said she wished an opportunity to discuss matters privately with him at greater length; I promised I would do my best to impart her view to relevant circles in Washington. Quite naturally, we returned to the same subject during our 1983 meeting…
Mrs. Gandhi was a true friend of the United States, as her father, Prime Minister Jawaharlal Nehru, had been before her. This was her policy, despite the numerous abuses India has suffered from our State Department since the time Daniel Moynihan was U.S. ambassador. She liked President Reagan personally, and she wished to develop understanding and cooperation with his administration, insults or no insults.
Small-minded idiots alleged she was pro-Soviet. Mrs. Gandhi understood clearly that although India is a superpower within the Indian Ocean region, India, like most of the world, is caught between two superpowers, and that the Soviet Union is the closer of the two geographically. Much as she liked a President such as Ronald Reagan, India must maintain a correct and cooperative relationship with the Soviet Union. Moreover, India is the largest of the Non-Aligned nations organization; Jawaharlal Nehru was one of the founders of that organization. India’s correct policy, in the eyes of every Indian patriot, is to steer a course of national interest with maximum distance from the superpower alliances as such. If our State Department had understood the realities of that region of the world, it would have understood that Mrs. Gandhi sought friendship and cooperation with the United States from the standpoint of India’s strict adherence to its position as a leading nation of the Non-Aligned group.
That was my understanding of India’s vital self-interests. That is what I understood as the view of every leading Indian patriot, including Mrs. Gandhi. I understood it to be my duty, as an informed public figure of the United States, to attempt to inform relevant circles close to President Reagan of this point of view.
Mrs. Gandhi made it very clear to me, that she understood that despite my special great affection for India and its development, I am primarily a patriot of the United States. I think she would have despised and distrusted me if I were anything different than that.
I have met numerous influential figures, many of whom I have liked personally, but Mrs. Gandhi was in a class of her own. I say this not merely out of my great sorrow; this was my stated estimation of her, in private and in print, while she was alive. Whatever shortcomings she might have had, among all nations, she was the world’s greatest statesman in the period since the death of that President Charles de Gaulle who had admired her with astonishment at the time when she, still a young woman, had spoken at a dinner at which both of them were present. I have never met another political figure with the quickness and breadth of detailed grasp of each of a variety of topics presented to her.
One of my great satisfactions was to know that the copies of Fusion magazine supplied to her were read regularly in her home, not only by her, but as source-material for her cultivation of the education of her grandchildren. She was a consummate statesman, who also found time to be efficiently a devoted mother and grandmother. Both Helga and I found that beautiful, small-statured woman to be infinitely tough-minded and also an entirely lovable personality.
She exuded brilliance of intellect, toughness, and a lovingness toward people at the same time. It was that toughness and lovingness which the poor of India correctly saw and loved in her. To them, she was India personified.
Full: The British Assassinate Mrs. Gandhi; More Ominous Than Sarajevo
Helga LaRouche: ‘Indira Gandhi Memorial Summit’ for a New Economic Order
On January 15, Helga Zepp-LaRouche addresses a 10,000 person ‘March For The Inalienable Rights of Man’ in Washington, D.C., organized by the Schiller Institute in honor of Martin Luther King, Jr.’s birthday, to call for the convening of an Indira Gandhi Memorial Summit between debtor and creditor nations “to implement a rapid program for massive debt renegotiation for a new, just world economic order.” Helga LaRouche told the rally:
“We have created a new movement, a movement for the Inalienable Rights of Man, for all people on our planet; and we will not stop fighting until a new, just world economic order has been created… I have a dream today that all men shall become brothers.”
Helga Zepp-LaRouche · Washington D.C., January 15, 1985
This is an historic day today. On the birthday of Dr. Martin Luther King, once again people from all over the United States, and from as far away as Africa, Asia, Ibero-America, and Western Europe are coming together to demonstrate in Washington.
We are coming together here, because there is too much suffering going on in the world. Millions of people are staring in Africa, because of the murderous austerity policies of the International Monetary Fund and the banking system. We have to make people feel the suffering of these nations, or else it will come back here to the United States, where there are already 30 million people beneath the subsistence level.
When this great nation was created as the first true republic in the world, the Founding Fathers said in the Declaration of Independence:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain Inalienable Rights, that among these are Life, liberty, and the Pursuit of Happiness.”
But, then, the enemies of the human race trampled on these rights, until President Lincoln revived the spirit of the American Revolution, in the famous Gettysburg Address, and ended the unworthy black slavery in the Emancipation Proclamation.
And, when these rights were trampled on once more, Dr. Martin Luther King and the Civil Rights movement revived the spirit of the American Revolution once more.
Today, the entire continent of Africa is condemned to death, and many nations are collapsing under the present monetary system. Therefore, we have created a new movement, the movement for the Inalienable Rights of Man, for all people on our planet; and we will not stop fighting until a new, just world economic order has been established.
“We, therefore, the Representatives of the Peoples of the World, appealing to the Supreme Judge of the World for the rectitude of our intentions, do, in the Name, and by the Authority of all good people of all countries, solemnly publish and declare, that all the countries of the World are, and of Right ought to be, Free and independent States.
“That all human beings on this planet have inalienable rights, which guarantee them life, freedom, material conditions worthy of man, and the right to develop fully all potentialities of their intellect and their souls. That, therefore, a change in the present monetary and economic order is necessary and urgent, to establish justice among the peoples of the world.
“And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other, our Lives, our Fortunes, and our Sacred Honor.”
There is no need for starvation and misery; let’s use American technology to develop the developing nations. Let’s put those 30 million poor Americans back to work in productive jobs, and produce the technology which Africa needs.
We appeal to President Reagan, to change the economic policy, both the trends in developing nations and here at home, as well. We appeal to President Reagan to hold, within the first 1 00 days of his second administration, a summit meeting with Third World leaders to plan out for rapid implementation a program for massive debt renegotiation and for a new, just world economic order.
This time, when civilization as a whole is at stake, we do not work only to overcome; this time, we must win.
I have a dream today, that soon there will be a world without hunger, without poverty, and with conditions for all human beings on this planet worthy of the dignity of man. I have a dream today, the dream of Friedrich Schiller and Dr. Martin Luther King, that all men shall become brothers.
Schiller Institute Conference in Rome: A New Just World Economic Order
At a conference in November attended by 800 people sponsored by the Schiller Institute in Rome, Italy, Helga Zepp LaRouche delivers the keynote titled “The New Just World Economic Order: Humanity’s Only Chance for Survival,” stating: “Only when we take the highest ideal of humanity as the point of departure for our efforts, will we be able to have a just world order based upon a community of national sovereign republics, progress among all peoples, and thus, peace.”
The conference is also addressed by numerous political, religious, and scientific leaders from Europe, Africa, South America, and the United States, who adopt a resolution addressed to Pope John Paul II, stating:
“The Schiller Institute, gathered in Rome to celebrate the 1,600th anniversary of the conversion to Christianity of St. Augustine, the father of European and African civilization, sends greetings to His Holiness Pope John Paul II, requesting him to continue to exercise his religious leadership and moral authority in the present crisis of humanity to cast out the forces of usury and to favor the creation of a just New World Economic Order for all nations.”
Helga Zepp-LaRouche · Rome, November 3, 1985
Never before in his history has man suffered more agony; never before have human beings been subjected to such misery, far surpassing the powers of imagination, with millions of the world’s citizens swept away by hunger and disease. And today for the first time, humanity is potentially confronted with its total extinction.
The moral brutalization that comes along with this, is all the worse, since it represents a step backward for our culture. Human perversion has sunk into depths of horror, which even Dante could not have imagined in the Hell of his Commedia. Leading circles,obsessed with their unscrupulous greed for power, have no compunction about exterminating hundreds of millions of human lives, or even entire continents…
Where can we find hope, that at this late and far-gone historical date, we can still swing the rudder around? Can we still find a rational solution, and indeed, might we still be able to establish a world order commensurate with the dignity of man?
If we want to solve this immense problem, then it will only be from the standpoint of the very highest moral and philosophical principles, and never on the basis of the lowest common denominator, as has been the case until now at meetings and conferences of such institutions as the United Nations. Only when we take the highest ideal of humanity as the point of departure for our efforts, will we be able to have a just world order based upon a community of national sovereign republics, progress among all peoples, and thus, peace.
It is precisely because the people and forces who personify evil in the world today, have succeeded in fomenting war between nations and civil war between competing political factions, setting tribes and ethnic groups against one another, and pitting men against their fellow men in terrorist attacks — precisely for this reason, it is imperative that we take the opposite, most exalted point of departure.
We must therefore begin with a definition of man, which derived not from below — emphasizing that which is particular and divisive — but rather a definition from above, which can characterize the highest potentials and capacities of all human beings…
Our very survival as a species will probably depend upon whether we do everything in our power to reorganize the world economy according to the economic principles of Operation Juárez, drawn up by my husband Lyndon LaRouche as concrete, practical instructions for reordering the international monetary system.
The concrete alternative is in our hands: a new, just world economic order… We have drawn up all the concrete infrastructural development and industrialization programs, which will be necessary to put an end to hunger and epidemics in the developing countries. We must avoid committing the sin of omission now, so that we may avoid bringing about our own annihilation as well.
But above all, we need that tender love for the high ideal of humanity, which filled the hearts and minds of St. Augustine and Nicolaus of Cusa, and we must passionately commit ourselves, with our entire personal existence, to the progress of all peoples, and the to the inalienable rights of all individuals on this planet. Permit me to express my thanks to St. Augustine and Nicolaus of Cusa, for having bequeathed to us the concepts that we need today, in order that we may restore the dignity of man.
Full proceedings: St. Augustine: Father of European & African Civilization
LaRouche Publishes Program for ‘The Integration of Ibero-America’
In 1986, the LaRouche movement publishes a 340-page book-length special report in Spanish, named La Integración lbero-Americana as an elaboration of LaRouche’s Operation Juárez, specifying great projects for the development the continent, including the construction of an interoceanic sea-level ‘Second Panama Canal’ . The introduction of the book states:
“During the Malvinas War, in May 1982, U. S. economist Lyndon H. LaRouche, Jr. traveled to Mexico to meet with President Jose Lopez Portillo and other important political leaders. Some of them asked him to write out his proposal for dealing with the problem of the foreign debt. Three months later, the historic essay Operation Juárez was published, in which LaRouche takes up the old integrationist idea, and poses the necessity of immediately forming a Debtors’ Club and an Ibero-American Common Market… This book intends as its primary purpose to contribute to the realization of that longed-for integration, demonstrating both the feasibility and the conceptual grounding for the Ibero-American Common Market. Its more detailed elaboration will be the task of that successful integrationist movement that we also seek to awaken and consolidate.”
LaRouche Forecasts October ‘Black Monday’ Stock Market Crash
In May 1987, Lyndon LaRouche issues a press release titled “Global Financial Crisis Predicted For October” in which he states that, under the conditions of “a continuation of the foolish international monetary policy” of the U.S. government,” an October crash would be very probable.” LaRouche identifies the IMF “conditionalities” regime under which debtor nations are forced to devalue their currency in order to obtain new lines of credit, “turning a poor debt-repayment possibility by these countries, into an impossible one, in each case.” LaRouche states:
“A ‘zero-economic-growth mafia’ inside the IMF and World Bank bureaucracies, acting with U.S. government support, has been collapsing the internal economies and world trade of both developing and Western industrialized nations, while piling up the financial obligations of both developing and industrialized nations. We have been increasing nations’ obligations to pay debt, while destroying their means for paying that debt.”
Precisely on schedule, on October 19 (now known as ‘Black Monday’), stock markets across the planet crashed, with the Dow Jones losing almost a quarter of its value in a single day. LaRouche issues a statement titled “October Financial Crisis Happened On Schedule” in which he situates the crash in the context of the failure to enact his Operation Juárez program:
“During the spring of 1982 I warned the world that a ‘debt bomb’ was about to explode in Central and South America. I forecast the explosion to begin during the period of August and September that year. At the request of leaders of some nations of Central and South America, in June of that year, I wrote a detailed report, titled Operation Juárez, explaining the nature of the crisis, and detailing the measures which both these nations and the U.S. government must take… President Lopez Portillo acted as my Operation Juárez report specified. The world was saved for another month. The governments of Argentina and Brazil promised to support Mexico’s policy, but both later broke that promise. The Reagan administration rejected my Operation Juarez option, and moved to crush and loot Mexico, and to proceed to loot every nation of Central and South America… For this five years, we have paid a terrible price. What could have been the easily manageable ‘debt bomb’ crisis of 1982, has been pyramided into the biggest financial crisis in history.”
Lyndon LaRouche · May 26, 1987
Leading European financial officials have warned my associates. that we should expect to see the beginning of the world’s biggest financial crash by October of this year. My comment on that forecast: It might not occur in just that way, but, if the Reagan administration continues its present policies, it is certain that the world’s economic situation will become much worse than it is today over the summer months…
Whether the great financial crash of 1987 erupts by October, or later, will depend upon what leading governments do at the international monetary “summit” held in Venice on June 12. Those bankers who are expecting a crash by October, make that forecast on the basis of assuming that the U.S. government’s role at Venice will be a continuation of the foolish international monetary policy which the Reagan administration has followed over the past five years. In that case, a crash in October would not be absolutely certain, but it would be, at least, a very good guess.
This forecast is based on the observation, that even now, President Reagan is clinging stubbornly to belief in a “Reagan economic recovery” which never actually occurred. The President believes in that nonexistent “recovery” for ideological reasons; he wishes, desperately, to believe that his economic policies have been successful ones. As long as the official line of the administration is to stick to the “successful economic policies” of the past five years, the Reagan administration is likely to stick to those policies. This would tum the Venice “summit” into a disaster, destroying the last bit of confidence in the U.S. dollar in international financial markets. Under those conditions, an October crash would be very probable.
THE CASE OF EGYPT’S LOAN
Take, for example, one of the most recent developments on the international financial markets. The way in which a small loan was granted to Egypt by the international bankers’ club called the “Club of Paris.”
Egypt was blackmailed into signing what is called an “IMF letter of intent.” Egypt was told, all credit would be cut off, unless it signed that letter. The letter required the consent of the Egyptian government to devaluing its currency, and shutting off the highly successful land-reclamation projects which are the only hope for a basic solution to the problems of Egypt’s economy. Reluctantly, Egypt signed, and was then promptly given new lines of credit. Egypt received, however, much less than it lost by devaluing its currency, the pound.
This has been the pattern of U. S. support for IMF “conditionalities” policy. The key margin of increase of the U. S. trade-deficit, has been the collapse of U.S. exports to, and increasing imports from, developing nations which have submitted to the terms of such “conditionalities.” The “conditionalities” have, in each case, turned a poor debt-repayment possibility by these countries, into an impossible one, in each case.
This affects the internal economy of the United States directly… Our government’s follies in international monetary policy usually come home to cause suffering inside the U.S.
A “zero-economic-growth mafia” inside the IMF and World Bank bureaucracies, acting with U.S. government support, has been collapsing the internal economies and world trade of both developing and Western industrialized nations, while piling up the financial obligations of both developing and industrialized nations. We have been increasing nations’ obligations to pay debt, while destroying their means for paying that debt.
Inside the United States itself, one of the mechanisms which has been used to prop up apparent consumer purchases, has been a process of increasing average consumer debt, while average consumer income fell. This has been the leading basis for President Reagan’s wishful belief in an economic recovery-consumers going deeper into debt to maintain ordinary levels of consumer spending, while average, after-inflation levels of household income have been falling. Now,
the growth of consumer debt has reached approximately a saturation-level.
Meanwhile, the prices on the world’s stock exchanges have zoomed into the financial stratosphere. Present stock prices are way, way above anything justified by the price-earnings ratio. The bond markets have been sliding down for weeks. About 1,500 U.S. banks are in bad trouble, and more than 200 in immediately serious trouble. Any significant rise in interest rates could sink as much as half of the savings institutions, and could blow out the banking system generally. If this inflated financial structure collapses significantly in any one sector, all sectors could blow. Any collapse would reveal quickly, that most of the values of financial paper
depend upon mere “hot air,” such as so-called “junk bonds” or similarly dubious bookkeeping accounts.
When the system blows, more than half of the more than $13 trillion of hard-core debt obligations could blow, more than half of this inside the United States.
The problem is approximately 20 years of bad monetary and economic policies by all Western industrialized nations… Technically, on any day that the U.S. government came to its senses, this crisis could be brought under control. The crash of 1987 is not inevitable. However, unless the goverments come to their senses, it is inevitable.
For full document: Global Financial Crisis Predicted for October
Lyndon LaRouche · October 1987
George Santayana is often quoted as warning that those who refuse to learn from history are doomed to repeat it. So, as a result of repeating the mistakes of Coolidge and Hoover, since the 91-point Dow Jones plunge of Tuesday, Oct. 6, the published interviews with administration officials and Wall Street financial analysts echo the wishful delusions of Coolidge and Hoover officials under similar circumstances over the period 1927-31…
Most so-called experts, including the stock brokers and the Reagan administration’s officials, make very foolish predictions about both the economy and financial markets. The root of their blundering is that they refuse to recognize the differences between real-economy and monetary processes; as a result, they confuse these two very distinct factors. As a result of not recognizing the differences, they are unable to understand how these two very different sets of phenomena interact…
THE BIG BUBBLE
To understand what has happened on Wall Street over the Oct. 6-16 period, the fundamental distinction between economy and financial markets must be recognized.
“Economy” means “physical economy”: the production and distribution of useful kinds of physical goods to productive enterprises and households.
We measure this in terms of two factors, the amount of physical production per capita, and the amount of physical production per square mile of land in use. Since human productivity is affected by the level of cultural development of the workforce and managements, as well as the physical well-being of the households from which the workforce is recruited, we include categories such as direct production management, science, and engineering, education, and health care and public health services as part of the direct labor cost of everything produced.
Every other form of employment and income-related activity is part of the “overhead burden” of the physical economy.
Over the past 20 years, especially the past 15 years, the physical economy of the United States has been in decline, but the Gross National Product has been rising during most of these years. The difference is that real growth is measured in terms of physical output and productivity rates in production of physical output; Gross National Product is measured in terms of financial data.
Without understanding the fundamental difference between the two kinds of measurement, it is impossible to understand why the world’s biggest financial crash is coming, and what happened to the stock market this month.
A purely financial market is measured in terms of what is commonly termed a “price-earnings ratio”: For example, the ratio of the price of a stock to the combined dividends and retained earnings of a corporation. Under normal conditions, “earnings” have a significant connection to real production; the net earnings of farms, industries, and utilities are a large factor in determining the market price of common stocks, and so on. Under normal conditions, a price-earnings ratio of between 10 to 1 and 20 to 1 would be competitive.
Compare such a normal range of price-earnings ratio to the price-earnings ratio on the American financial markets today. By normal standards of the 1950s or early 1960s, the market is floating in the vicinity of 1,000 to 1. The amount of combined dividends and retained earnings from production available to holders of financial paper, is floating near 1,000 to 1.
This has happened because the price-earnings ratio is being determined by financial capital gains on actual or expected resale price of financial paper. Financial analysts describe the result by saying that “financial markets are highly leveraged.” Financial paper is sold at prices based on expected financial capital gains, at a time when the ratio of expected capital gains of this sort is many times the amount of real earnings from production.
Worse, most of the holdings of financial paper are based on credit borrowed at very high prices compared to levels of interest rates during the 1950s and 196Os. This includes so-called “creative” forms of financial assets, including “junk bonds.” Raising the Wall Street stock market to above 2,700 points on the Dow Jones Index, has depended upon a massive flow of inflationary credit of this sort into markets, plus heavy inflow of cash dollar assets from Saudi Arabia, Japan, and Western Europe. The higher the price of stocks zoomed, the more inflationary credit, plus Saudi, Japanese, and European cash was needed to cause the market to continue rising.
If this did not occur, if the stock market ever slowed its rise in prices significantly, the source of new capital gains would be dried out. Without new capital gains of that sort, the market would spin into a chain-reaction collapse.
So, the growth in financial markets-in Europe and Tokyo, and well as the United States-has been a classical financial “bubble,” like John Law’s famous “Mississippi bubble” of the early 17oos, and the South Sea Bubble which popped in Britain during the same period. It is a “bubble” like the “Pyramid Club” fad which victimized many duped U.S. citizens during 1949, or the famous “Ponzi” scheme earlier. It is a “chain-letter” scam, which collapses once the market runs out of an expanding number of suckers to pay into the scam.
Sooner or later, the Wall Street financial bubble, and the giant U. S. real estate bubble had to pop, and carry the already depressed U.S. economy into a deep depression with it. By spring of this year, it was clear that the bubble had been stretched almost to the breaking point.
HOW THE BUBBLE IS BEING BURST
The bubble was ready to burst at the end of 1981. My associates and I warned this was coming at the beginning of 1982. During the spring of 1982 I warned the world that a “debt bomb” was about to explode in Central and South America. I forecast the explosion to begin during the period of August and September that year.
At the request of leaders of some nations of Central and South America, in June of that year, I wrote a detailed report, titled Operation Juárez, explaining the nature of the crisis, and detailing the measures which both these nations and the U.S. government must take. Copies of this report were delivered to both the Reagan administration and governments of Central and South America during the first week of August 1982. About two weeks after my report had been delivered, the debt bubble popped in Mexico.
During a period of about two hours, the world financial system wobbled on the brink of a “new 1931 collapse.” President Reagan telephoned Mexico’s President Jose López Portillo. This telephone call saved the world’s financial markets for a moment, but the crisis continued.
President L6pez Portillo acted as my Operation Juárez report specified. The world was saved for another month. The governments of Argentina and Brazil promised to support Mexico’s policy, but both later broke that promise. The Reagan administration rejected my Operation Juarez option, and moved to crush and loot Mexico, and to proceed to loot every nation of Central and South America.Wall Street had demanded this; the Reagan administration capitulated to Wall Street.
By various tricks, since October 1982, the Reagan administration and the IMF have bought five years of continued existence of the sick old financial system.
For this five years, we have paid a terrible price. What could have been the easily manageable ‘debt bomb’ crisis of 1982, has been pyramided into the biggest financial crisis in history.’
THE NECESSARY SOLUTION
The only alternative, is to scrap existing monetary policy, and to re-institute the strict regulations needed to stabilize currencies, government bonds, and keep open the doors of banking institutions. That would work, but it would mean scrapping every economic and monetary policy of both the Carter and Reagan administrations.
In 1787-89, the United States was at the edge of national bankruptcy. Benjamin Franklin, George Washington, Alexander Hamilton, and others recognized the nature of the problem, and organized a constitutional convention for the purpose of creating the kind of strong federal government needed to reorganize the economy.
The combination of the strong presidential system, under the new Constitution, and Washington’s and Hamilton’s organization of what was called “the American System of political economy” rapidly transformed the economic situation. In that sort of economy, described in Hamilton’s reports to Congress on the subjects of public credit, a national bank, and manufactures, was established a different sort of economy than the chaotically deregulated mess we have today. In such a national economy, accurate economic forecasting is much easier to accomplish than under the present sort of chaotic, deregulated, and bankrupted “free trade” system.
Under the American System of Washington and Hamilton, financial flows are tied very closely to both tangible investment and production rates. In that system, earnings on production and financial earnings of enterprises are very nearly in correspondence. So, in that case, an economic forecast is also a very good estimate of financial trends, as it is not under the monetary order of the past 20 years.
For that reason, if we respond to the present crash by returning to the principles of the American System — as we must if we are to get out of this depression — we can forecast the results with much better precision than has been the case over the past 20-odd years. In other words, we can promise what will work, and how well it will work, with rather accurate estimation…
For full document: October Financial Crisis Happened On Schedule
LaRouche in Bretton Woods: “A New International Economic Order”
The Schiller Institute sponsors a conference in Bretton Woods, New Hampshire titled “A New Just World Economic Order: Development Is The Name For Peace” on January 30-31, 1988. In attendance is Frederick Wills, former Foreign Minister of Guyana, who delivers a speech titled “The History of the Fight for the New World Economic Order” relating how he first became acquainted with Lyndon LaRouche and his idea for an International Development Bank. Wills declares: “It is time to return to the fundamental appreciation that money and monetary systems are the servants of humanity.”
Helga LaRouche also speaks on “The Dignity of Man in a New World Economic Order,” and Lyndon LaRouche delivers the keynote, titled “The Tasks of Establishing an Equitable New International Monetary Order” in which he describes the history of his Operation Juárez proposal, and elaborates how the President of the United States can act to create a new international monetary system to replace the post-1971 Bretton Woods system:
“As President, I would have most of the so-called “Third World” leaders meet, and settle immediately the question of restructuring and reorganization of debt. Once the United States government has entered into such an agreement with a group of developing nations on restructuring and reorganizing of their external debt, and expansion of their import capacity, and conditions of new volumes of loans for economic development, the rest of the world just has to go along with it. And, thus we would have, in effect, the basis for a new monetary system.”
Frederick Wills · Bretton Woods NH, January 30 1988
Four decades ago, when I was a student in Europe, we would meet, filled with the radical missionary zeal of youth, wanting to see the old world go spinning down, as the poet said, spinning down the ringing grooves of change, to a new economic order. We believed in those days, and we still do, that life is the fundamental essentiality of natural processes. Life has to come into existence, life has to survive, life has to grow, life has to develop. We were sure then, and I am sure now, that the assumptions of present existence are unacceptable. One only has to regard the madness that is going on outside.
I must pause and ask you to bear with me while I remember those who have fallen in this fight for a just, new economic order. There are many of them, but in particular, I want to remember Indira Gandhi, Gamal Abdel Nasser, and Marshal Tito, whom I met, as pillars of what we call the Non-Aligned Movement. They’re dead, and, as the poet said, “they shall grow not old, as we who are left grow old. Age shall not weary them, nor the years condemn, as the going down of the sun, and in the morning, we shall remember them.”
And in remembering them, I shall ask you to rededicate and recommit yourselves to the purposes of this conference, because it is clear what is happening. It is clear what the solution should be. The only problem is the will to implement it. That mankind has to intervene is obvious. The quality, nature, promptness, and efficacy of that intervention is what we are met here to consider.
There are three outstanding events I want you to recall, that happened after the Second World War. Generalized technological advance took the form of the nuclear age. That was very important. Secondly, there was a proliferation of new states in the world. I give you one example. In Africa, there were three independent states in 1939. In 1987, there are now 50. There’s an immense balkanization of Africa, and, by and large, they created not nation-states, but what I called state-nations. They deemed you to be a state, and therefore, a nation. The third thing, and that’s why we are here, and these are all connected, is the establishment of the Bretton Woods system, in a little place in New Hampshire, where they met in 1944, and concluded treaties by 1946.
I wanted to tell you this, that being a living part of the decolonization process, one of the terms of the British, and French, and Dutch, and Belgian withdrawal from colonialism was, that you must join the Bretton Woods system. That was one of the terms. You did not get independence unless you agreed to do that. It is one of the silent, unspoken premises of alleged independence.
We were filled with hopes. We were warned. I warned, that you have to be careful and let decolonization not be the transfer of a kind of pseudo-sovereignty from a metropolis in Europe to some institution. Because — I think the French have a lovely expression, plus ça change, plus c’est la même chose — independence could be one of the greatest examples of nominalist hypocrisy you could ever meet.
But, there were those, then and now, who think that you are a doomsayer. Believe you me, ladies and gentlemen, the “I told you so” guy is never liked. One of the reasons why my good friend Lyndon LaRouche is not appreciated in America, is because every time a new tragedy happens, he’s the “I told you so guy.”
THE GOAL: DEVELOPMENT
We had ideas. We wanted a new international order. We wanted to diversify agriculture, put in infrastructure: health housing, education; industrialize, bring the Third World — which is very important, the developing nations, 80 percent of mankind lives there, you know — bring them out of the 14th and into the 20th century. Grandiose ideas. Independence was not an end in itself, but only a means to an end. The end was development. Nations and peoples have to come into existence, have to survive, have to grow and have to develop. Those were our aims.
My friends, I want to suggest to you that the test of any monetary system is its capacity to enshrine institutions of credit. That’s the test. It’s not whether the U. S. dollar is doing well as against the yen, or what they’re doing to the German mark. The important thing is, what institutions of credit do you enshrine? What access do you give to those institutions? How do you distribute credit? That is the key thing about any monetary system.
It is not whether only the dollar is monetized in gold. It has nothing to do with that. The original sin of the Bretton Woods system, I found, the original sin, was that the vast majority of mankind, in the developing nations, 80 percent of mankind, were told that they could have access to international credit only at the price of the surrender of their sovereignty in determination of economic policy.
But we were sovereign, we thought. Sovereignty meant sovereignty. And then I had a phone call in 1971 from a secretary in the ministry of foreign trade, which hat I was asked to wear, by a heartless prime minister. The phone call said, Richard Nixon, Richard Milhouse Nixon, to be quite precise, has taken the dollar off the gold standard and “let the dollar float.” It used to be $35 an ounce. It shot up to $800. What that meant, of course, was massive devaluation, because we were at the time two Guyana dollars to one U.S. dollar. That was the rate of exchange.
By no act of our own, by a mere imperial order, by executive order of Nixon going on television, the money of Guyana and all the Third World was devalued. That’s the meaning of sovereignty. And there were further devaluations as you went along. By the time he was finished, and the IMF was finished, as I stand here now, it was two Guyana dollars to one U.S. dollar. It is now, officially, 20 Guyana dollars to one U.S. dollar. And unofficially, in the underground economy of dope, prostitution, gambling, and what have you, it’s 30 Guyana dollars to one U. S. dollar.
They have banned the importation of milk, so they say, to save real foreign exchange. That is what is happening. I don’t say this because I believe in evocative phraseology. I say this to remind you, those of you who prefer to live in a cuckoo world, who prefer to think that “that’s not here, that can’t happen here,” that those are “basket cases” down there. Let me tell you something, you must tell me, what is the difference between America and the Third World right now? Because, the American debt that these Reagan guys have caused, will have forced all of us in the Third World into the arms of the IMF…
Money is a political creation. Don’t get manipulated. Every time you want to present a political argument, an economic argument, you’re told, “Do not criticize economic processes. That’s the economic problem. Have a separate panel on that. Have some expert” — some denizen out of the dusty tomes of Ricardo or Adam Smith, or what have you. I have always believed, and I’m a hard case, and I will die believing, that the important thing about economics is its political equations…
The idea of the Bretton Woods system after the Russians had decoupled and gone their way with their own machinations, was that the U. S. dollar would be the only money quoted in gold, and we would all be quoted in U.S. dollars; and institutions would be set up, IBRD [the World Bank], IMF.
The important thing is, that the IMF handled credit systems, and there was bound to be a balance of payments disequilibrium, between export receipts and what you imported, and your total need to fill the gap. You needed credit, and the IMF controlled that. A kind of corrective colonialism — more calloused than the colonialism that preceded it. You all went to the IMF, and you were subjected to conditionalities. “Devalue; cut government spending” — you’ve heard this before — “fiscal discipline; untrammeled free market.” In response to which I once told an American ambassador, that I must check with my ancestor, because he seemed to have suffered terribly from an untrammeled free market system. He was a slave.
Don’t ask for all the sophisticated technology that Lyndon LaRouche has been speaking to us about. Take the California maxim. Do your own thing. Burn peat. Burn mud and wood. Import cosmetics. Don’t import medicines. Things of that kind you were told.
So I reminded them again, that slavery itself was appropriate technology. And we had enough of that. It fell on deaf ears. I was marked on by my very good friends, the British, as a person who’s never satisfied. Well, I’m never satisfied, so long as a single human being has to live in degradation. So long as we go spiraling down the corridors of ruin, I shall not be satisfied. And that’s why I am here.
THE NON-ALIGNED FIGHT
So what did we do? We said we’d use our forum in this fight. We’d go to the OAU, the Organization of African Unity; SELA [Latin American Economic System] in Latin America; we didn’t go to the OAS, for obvious reasons; CARICAM in the Caribbean, of which I was a member; the Non-Aligned group…
It was a consequence of that, that 1976 became a crucial year for me. The year started off with Marcos holding a conference in Manila. We all went down there, and gave speeches, ‘and I was asked to see the American government. So, being a difficult guy, I went ‘ round the world. I left one way through London to Manila, and I then came to California. I remember that well, because snow fell in San Francisco, and it hadn’t done so in eight years. So obviously something was afoot.
Then I came to New York. And then I went and met a guy named Henry Kissinger. You’ve heard that name, I suppose. We seem to have in the modern era in America a vast number of educated but unintelligent ‘men. It’s a phenomenon. You can’t deny that in a formal way, they have been educated. But when you examine their mental processes, their noetic processes, it’s amazing. We were discussing why Guyana doesn’t vote with America in the U. N. He wanted us to vote a certain way; we did not. I said sovereignty is sovereignty, and he cut off aid to Guyana and Tanzania and some other place.
Kissinger greets me and starts to discuss architecture, if you please. And then he starts to discuss music. I follow him. And then he starts to speak about the Periclean Age in Greece, and I follow him, but I thought, this guy is controlling the agenda. So, I must now wrest the agenda from him. Because he’s trying to impose his will on me. Understand in that kind of diplomacy, he who controls the agenda, controls the interpretation of current reality. So I said, what do you think about development in Zambesi culture? I knew he knew nothing about that. And the minute I said that, he got back to the question. He got back to why I was there. Because he wasn’t going to let me set the agenda. But you have to know how to deal with lunatics of this kind.
He said to me that America loves the Third World. And that, if we only gave America a chance. I said, yeah, but who’s speaking for America? Not you. I’ve been speaking for America more than you have. He says, I should be telling you that, to give America a chance. In my position in the Third World, you can’t tell the secretary of state, he should give America a chance. I did…
So I went to the U. N. and I asked for an International Resource Bank… In my hotel room, there were quite a few supporters, and a gentlemen, who had an amazing capacity for cutting out the crap, and dealing with reality. And he, whom I’d never heard before, visited me and was speaking — it was Lyndon LaRouche. I listened, and I wanted to know, how could the Americans indulge the luxury of not having a man like that in their government. Because I tell you this, some of these guys couldn’t get elected in the Third World.
CALL FOR A DEBT MORATORIUM
I went to the U. N. and I asked for the International Development Bank, I asked for a debt moratorium. I asked for a rescheduling and restructuring of debt, a program. I was told I was a lunatic. My friends abandoned me. The Russians called me pro-American, and the Americans called me pro-Russian. The Non-Aligned group thought I was too big for my britches. My president thought I had embarrassed him. So, I gave him a book on Dialectical Economics to read…
I want to say to you today, this. If this planet is destroyed, this planet Earth, it will be because of mismanagement of economic science and that is why we are here.
I want to say to you, that bad economic policies have led to highly suspect accounting feats, damage limitation. That’s what they’re doing. But we have now transcended the possibilities of arithmetical illusion. You can juggle books, you can work your symbolisms, but with starvation, disease, and hunger rampant, those tricks no longer work. The time for palliatives, for exhortatory, verbal panaceas, is over. This is the time for fresh procedures. And that’s why we’re here. This is a time for surgery, and that’s why we are here. Life on this planet is too valuable to be left to the idiosyncrasies and foibles, embellished and nominalist idiocies of the contemporary economists. They have failed. They and their policies must go.
It is time to return to the fundamental appreciation that money and monetary systems are the servants of humanity. They are not ends in themselves. It is time to appreciate that we have reached not only a crisis in interpretation of reality, as I said before, but that we need a qualitative change in the financial systems of this world. We need new credit mechanisms. That is why we are here. We need new mechanisms for the generation of human survival. New mechanisms for the generation of human growth. New mechanisms for the generation of human development. We need rational avenues of access, by everybody to all the new credit mechanisms we might create. The need for intervention is clear.
We cannot remain passive in the presence of impending catastrophe. Our intervention, as exemplified by this conference, must be based on reason. The choice of action by reason, over action by feelings and appetites, is not a mere choice of options, a word they like in the halls of leadership these days. When reason is ignored, the forces of nature serve up terrible reminders. Just re-read the history of the 14th century.
We must have confidence in new technologies, that illuminate man’s horizon at the moment, and all development, and the pathways to development.
Starvation, famine, disease, recession, depression, are not culturally ordained. They are not the permanent pillars of cultural relativism. Stop going down to the Third World, where 80 percent of mankind lives, and tell them, that is your way of doing things. Stop that! Stop carrying Racine and Moliere. Carry Pasteur and Madame Curie.
We must not and cannot allow the growth to degenerate into a pandemic wilderness. I say we cannot furl the flags of human progress. That is what this conference is about. Once again, we are met to establish a new monetary system. We are not here to repeat the mistakes of the old. Above all, we’re not here to deify, hallow, the assumptions of the old system. We are here because we know that mankind need not remain passive in the face of impending doom.
But if we don’t do it, there’s nobody left to do it. We are the thin, red line, standing on the lip of progress. If we lose, it’s not personal battles and personal tragedies. It’s a decision about whether mankind on this planet has a future. I therefore ask you, in the name of those present, in the name of those departed, who’ve been in this fight for a new economic order and new monetary systems and new mechanisms of credit, I ask you not to let us fail again.
I think we have the intelligence in this room, the leadership and the directionality, and the resolve to triumph over the present.
Full speech: The History of the Fight for the New World Economic Order
LaRouche in Berlin Forecasts Reunification of Germany
On October 12, 1988, Lyndon LaRouche delivers a press conference in West Berlin “on the subject of prospects for the reunification of Germany,” asserting that “the world has now entered into what most agree is the end of an era. The state of the world as we have known it during the postwar period is ended.” LaRouche states: “The economy of the Soviet bloc is a terrible, and worsening failure… The Soviet bloc economy as a whole has reached the critical point, that, in its present form, it will continue to slide downhill from here on.” Therefore, LaRouche says, “the time has come for early steps toward the re-unification of Germany, with the obvious prospect that Berlin might resume its role as the capital.”
LaRouche elaborates a program for the cooperative development of Eastern Europe as an engine for creating a new economic system:
“Let us say that the United States and Western Europe will cooperate to accomplish the successful rebuilding of the economy of Poland. There will be no interference in the political system of government, but only a kind of Marshall Plan aid to rebuild Poland’s industry and agriculture. If Germany agrees to this, let a process aimed at the reunification of the economies of Germany begin, and let this be the punctum saliens for Western cooperation in assisting the rebuilding of the economy of Poland.”
Lyndon LaRouche · West Berlin, October 12, 1988
I am here today, to report to you on the subject of U.S. policy for the prospects of reunification of Germany…
By profession, I am an economist in the tradition of Gottfried Wilhelm Leibniz and Friedrich List in Germany, and of Alexander Hamilton and Mathew and Henry Carey in the United States. My political principles are those of Leibniz, List, and Hamilton, and are also consistent with those of Friedrich Schiller and Wilhelm von Humboldt. Like the founders of my republic, I have an uncompromising belief in the principle of absolutely sovereign nation-states, and I am therefore opposed to all supranational authorities which might undermine the sovereignty of any nation. However, like Schiller, I believe that every person who aspires to become a beautiful soul, must be at the same time a true patriot of his own nation, and also a world-citizen.
For these reasons, during the past fifteen years I have become a specialist in my country’s foreign affairs. As a result of this work, I have gained increasing, significant influence among some circles around my own government on the interrelated subjects of U.S. foreign policy and strategy. My role during 1982 and 1983 in working with the U.S. National Security Council to shape the adoption of the policy known as the Strategic Defense Initiative (SDI), is an example of this. Although the details are confidential, I can report to you that my views on the current strategic situation are more influential in the United States today than at any time during the past.
Therefore, I can assure you that what I present to you now, on the subject of prospects for the reunification of Germany, is a proposal which will be studied most seriously among the relevant establishment circles inside the United States.
Under the proper conditions, many today will agree, that the time has come for early steps toward the re-unification of Germany, with the obvious prospect that Berlin might resume its role as the capital.
For the United States, for Germans, and for Europe generally, the question is, will this be brought about by assimilating the Federal Republic of Germany and West Berlin into the East bloc’s economic sphere of influence, or can it be arranged differently? In other words, is a united Germany to become part of a Europe from the Atlantic to the Urals, as President de Gaulle proposed, or, as Mr. Gorbachov desires, a Europe from the Urals to the Atlantic?
WORLDWIDE FOOD CRISIS
I see a possibility, that the process of reunification could develop as de Gaulle proposed. I base this possibility upon the reality of a terrible worldwide food crisis which has erupted during the past several months, and will dominate the world’s politics for at least two years to come.
The economy of the Soviet bloc is a terrible, and worsening failure. In Western European culture, we have demonstrated that the successes of nations of big industries depend upon the technologically progressive independent farmer, and what you call in Germany the Mittelstand- Germany’s small and medium-sized entrepreneurs. Soviet culture in its present form is not capable of applying this lesson. Despite all attempts at structural reforms, and despite any amount of credits supplied from the West, the Soviet bloc economy as a whole has reached the critical point, that, in its present form, it will continue to slide downhill from here on, even if the present worldwide food crisis had not erupted.
I do not foresee the possibility of genuine peace between the United States and Soviet Union earlier than thirty or forty years still to come. The best we can do in the name of peace, is to avoid a new general war between the powers. This war-avoidance must be based partly on our armed strength, and our political will. It must be based also, on rebuilding the strength of our economies.
At the same time that we discourage Moscow from dangerous military and similar adventures, we must heed the lesson taught us by a great military scientist nearly four centuries ago, Niccolo Macchiavelli: we must also provide an adversary with a safe route of escape. We must rebuild our economies to the level at which we can provide the nations of the Soviet bloc an escape from the terrible effects of their economic suffering.
I give a concrete example.
Recently, in response to the food crisis, I sponsored the formation of an international association, called Food For Peace. This association has just recently held its founding conference in Chicago September 3-4, 1988, and since then has been growing rapidly inside the United States and in other nations represented by delegates attending that conference.
One of the points I have stressed, in supporting this Food For Peace effort, is that the Soviet bloc will require the import of about 80 million tons of grain next year, as a bare minimum for the pressing needs of its population. China is experiencing a terrible food crisis, too. As of now, the food reserves are exhausted. There are no more food reserves in the United States, and the actions of the European Commission in Brussels have brought the food reserves of Western Europe to very low levels. Next year, the United States and Western Europe will be cut off from the large and growing amount of food imports during recent years, because of the collapse of food production in developing nations throughout most of the world.
During 1988, the world will have produced between 1.6 and 1.7 billion tons of grains, already a disastrous shortage. To ensure conditions of political, and strategic stability during 1989 and 1990, we shall require approximately 2.4 to 2.5 billion tons of grain each year. At those levels, we would be able to meet minimal Soviet needs; without something approaching those levels, we could not.
If the nations of the West would adopt an emergency agricultural policy, those nations, working together, could ensure that we reach the level of food supply corresponding to about 2.4 billion tons of grains. It would be a major effort, and would mean scrapping the present agricultural policies of many governments and supranational institutions, but it could be accomplished. If we are serious about avoiding the danger of war during the coming two years, we will do just that.
By adopting these kinds of policies, in food supplies and other crucial economic matters, the West can foster the kind of conditions under which the desirable approach to reunification of Germany can proceed on the basis a majority of Germans on both sides of the Wall desire it should. I propose that the next government of the United States should adopt that as part of its foreign policy toward Central Europe.
REBUILD EASTERN EUROPE
I shall propose the following concrete perspective to my government. We say to Moscow: We will help you. We shall act to establish Food for Peace agreements among the international community, with the included goal that neither the people of the Soviet bloc nor developing nations shall go hungry. In response to our good faith in doing that for you, let us do something which will set an example of what can be done to help solve the economic crisis throughout the Soviet bloc generally.
Let us say that the United States and Western Europe will cooperate to accomplish the successful rebuilding of the economy of Poland. There will be no interference in the political system of government, but only a kind of Marshall Plan aid to rebuild Poland’s industry and agriculture. If Germany agrees to this, let a process aimed at the reunification of the economies of Germany begin, and let this be the punctum saliens for Western cooperation in assisting the rebuilding of the economy of Poland.
We, in the United States and Germany, should say to the Soviet bloc, let us show what we can do for the peoples of Eastern Europe, by this test, which costs you really nothing. Then, you judge by the results, whether this is a lesson you wish to try in other cases.
I am now approaching the conclusion of my report. I have two more points to identify.
All of us who are members of that stratum called “world-class politicians,” know that the world has now entered into what most agree is “the end of an era.” The state of the world as we have known it during the postwar period is ended. The only question is, whether the new era will be better or worse than the era we are now departing?
The next two years, especially, will be the most dangerous period in modern European history, and that worldwide. Already, in Africa, entire nations, such as Uganda, are in the process of vanishing from the map, biologically. Madness on a mass scale, of a sort which Central Europe has not known since the New Dark Age of the fourteenth century, has already destroyed Cambodia, is threatening to take over the Middle East as a whole, and is on the march, to one degree or another, in every part of the world. As a result of these conditions of crisis, the world has never been closer to a new world war than the conditions which threaten us during the next four years ahead. What governments do during the coming two years will decide the fate of all humanity for a century or more to come.
There have been similar, if not identical periods of crisis in history before this, but, never, to our best knowledge, on a global scale, all at once.
I recall the famous case of a certain German gentleman of the Weimar period. This gentleman was persuaded that a second world war was inevitable. He searched the world for a place to which he might move his family, to be out of the areas in which the next war would be fought. So, when the war erupted, he and his family were living in the remote Solomon Islands, on the island of Guadalcanal.
In this period of crisis, there is no place in which any man or woman can safely hide in a crisis-ridden world without food. One can not duck politics, with the idea of taking care of one’s career and family, until this storm blows over. There is no place, for any man or woman to hide. There is no room for today’s political pragmatists in the leadership of governments now. If we are to survive, we must make boldly imaginative decisions, on the condition that they are good choices, as well as bold ones.
The time has come for a bold decision on U.S. policy toward Central Europe…
For reasons you can readily recognize from the evidence in view, I know my German friends and acquaintances rather well, and share the passions of those who think of Germany with loving memory of Leibniz, Schiller, Beethoven, Humboldt, and that great statesman of freedom, Freiherr vom Stein. If I can not predict Germany’s decisions in this matter exactly, I believe that if what I have set afoot here today is brought to success, the included result will be that the Reichstag building over there, will be the seat of Germany’s future parliament, and the beautiful Charlottenburger Schloss, the future seat of government.
If the conditions arise, in which that occurs, President de Gaulle’s dream of a Europe from the Atlantic to the Urals will be the peaceful outcome of thirty years or so of patient statecraft, and that durable peace will come to Europe and the world within the lifetime of those graduating from universities today.
Heute, ich bin auch ein Berliner.
The Fall of Berlin Wall Presents Opportunity for New Era
Within one year of LaRouche’s forecast of the coming reunification of Germany, mass demonstrations in Leipzig and other cities in East Germany lead to the lifting of emigration restrictions for people wishing to leave the G.D.R. on November 9, 1989. Numerous border crossings are opened, including the Berlin Wall, thus marking the end of the ‘Iron Curtain’ division between East and West.
Lyndon LaRouche immediately commissions a policy study to elaborate his proposals from the previous year to use the modernization of Eastern Europe as the “locomotive” for the economic development of Eurasia. The concept takes the form of the “Productive Triangle” linking together Paris, Berlin, and Vienna through high-speed rail, thus creating an integrated high-density 320,000 square-kilometer industrial development zone, spiraling out into eastern Europe via transport, energy, and communication development corridors. LaRouche elaborates the proposal in a policy paper composed the following year, “The Economic Development of Eastern Europe” in which he counterposes his ‘Productive Triangle’ program for development to the shock therapy plan, which he asserts is merely a different form of the same model of ‘primitive accumulation’ that brought down the Soviet state.
For full text: The Economic Development of Eastern Europe
The following memorandum should be read together with a selection of papers authored by myself, plus a letter on the subject of the Strategic Defense Initiative
(SDI) to President Ronald Reagan. My papers, written during the period 1981-84, are on the subject of prospective U. S. policy in addressing specific problems both of relations with the Soviet Union and of economic policy respecting problems of economic development of the Soviet Union and associated states of Eastern
These papers at the time centered around a project which came to be known as the Strategic Defense Initiative, so named by the Reagan administration. This project was initiated by myself beginning in 1 981 in response to an approach by a Soviet representative then based at the United Nations. As a result of this, a back-channel discussion was set up, coordinated with the national security institutions and selected high-level layers of the national security apparatus of the United States, and the Soviet government, for the purpose of exploring potential Soviet responses to my proposals.
THE ‘PRODUCTIVE TRIANGLE’
The special current relevance of these materials, which constitute in effect a kind of white paper on the background of the SDI, is that we now face a calamitous situation, in which, with the changes in Eastern Europe and the crises erupting in both Eastern Europe and the Anglo-American sector most emphatically, a new approach to the Eastern European problems, based on many of the same principles treated under the earlier SDI rubric, is now required. The new approach centers not upon the United States as the point of origin, but rather upon Western continental Europe as the point of origin, in part because Western continental Europe, together with Japan, is the only section of the world economy viable, at least to the degree of being capable, of launching the kind of global economic recovery initiative required at this time. The current approach is focused upon what is called the “Productive Triangle.”
The Productive Triangle, documented in other locations, is identified here as a small area, approximately about the geographical size of Japan, with a population of slightly over 100 million persons presently, covering an area pivoted upon three principal cities in Western Europe-Paris, Vienna, and Berlin-and including the greatest concentration of density of productive power of any comparable area on this planet. It is seen that the economic organization of Europe, if it is to have a rational form at the present time, must be viewed as a development centered within this Productive Triangle, connected to the other principal centers of Europe by what we have chosen to call “spiral arms.” The spiral arms are characterized largely by more or less broad channels of combined rails, power, and production, linking such cities as Berlin to Soviet locations such as Leningrad or Moscow, or to Kiev in Ukraine, and similarly linking other points of the triangle to other parts of Europe. The integrated economic development of Europe, by aid of the spiral arms into this triangle, is the approach which is seen as uniquely applicable to assisting in solving the present deadly crisis within Eastern Europe generally and the Soviet Union in particular.
The similarity of this triangle proposal approach to what is proposed under the rubric of development prospects under SDI cooperation, is that involves the transfer of advanced technology in soliton-like shockwave transmission from the centers of machine tool and related development into all parts along the most efficient pathways which are associated with, for example, high-speed rails, but also including inland waterways, coastal waterways, and so forth…
PRIMITIVE ACCUMULATION, EAST AND WEST
There are two principal, crushing problems with economies of the Soviet Union and other former CMEA states. One is fairly described and is understood within the Soviet lexicon as “socialist primitive accumulation,” using that term as it was employed during the 1920s and early 1930s by Soviet economist Yevgeni Preobrazhensky, a term which Preobrazhensky credited rightly to Rosa Luxemburg.
To put the matter in perspective, primitive accumulation does not have to be limited to the so-called cases of states with socialist constitutions, although it is savage enough there. We have primitive accumulation occurring under the rubric of Adam Smith policies characteristic of the Anglo-American system, the English-speaking system, especially today. It also occurs in such other, derived, Adam Smith forms as the old colonial, neocolonial systems, including the present International Monetary Fund (IMF) conditionalities and General Agreement on Tariffs and Trade (GATT) arrangements.
Primitive accumulation signifies, essentially, a modern name for, or is another term to describe, usury or the effects of usury. Usury is expressed for us, of course, simply as financial usury, but it takes three notable forms.
First and most obvious is the usury in the private financing of public debt and the rise of central banking systems from which holders of public debt, through their banks, take control of the central banking systems and control of the currency and credit mechanisms of governments and whole conglomerations of states. Secondly, usury is associated historically over thousands of years with oligarchies and monopolies, in control of marketing of essential, primary raw materials,
such as food cartels. Third, we have primitive accumulation in the form of looting, largely through financial and “free market” practices, of industry, of agriculture, and of the usage of real estate for such purposes as industry, agriculture, home rental, and what-not.
The collapse of the Soviet Union’s economy can be attributed to three principal causes: First, the use of primitive accumulation as a source of capital, in the sense that was discussed by Preobrazhensky back in the 1920s and later; second, the added burdens on Soviet capital of military expenditures, which essentially had the effect of aggravating the intensity of primitive accumulation; and, third, the inability of the Soviet system to assimilate the most essential aspects of a successful industrial society…
Reading from Soviet and Eastern European literature of today, these problems appear not to be adequately comprehended. The picture we receive from such readings and similar observation, is that even leading circles within the Soviet republics and Eastern Europe, while aware of the acuteness of the problem, really reflect a great deal of floundering as to what the alternatives might be. That is, they are aware that the old system has failed, but they are not aware of what the
alternative might be or how to get to any alternative. There do appear to be some who think they know what the alternative is, but in our view the proposed alternatives are worse than the disease.
The worst example, the most dangerous model is the so-called Polish model of Jeffrey Sadcs and company. This is the worst of all possible choices. We have, admittedly, or did have, stockpile-labor in Polish factories, as a way of absorbing unemployed into employment rolls, by simply tacking them on to the employment rosters of the plant. However, the solution is not to dump these people into the streets, but rather to absorb them immediately in relatively high-technology projects — much-needed projects in basic economic infrastructure. Otherwise, this is just adding the Adam Smith form of primitive accumulation to what might be called socialist primitive accumulation, and keeping the worst of both worlds. That is what is happening now…
Obviously, the collapse of the Bolshevik economic system in the form that it existed in the 1980s, strikes Eastern Europe and the Soviet Union with such dismay that there is a tendency to look to the West, on the presumption that Western propaganda is true and !the Voice of America is reliable, to the effect that all Western economies are successful and follow the same so-called “free market” principles.
Precisely the contrary is true, of course; but, nonetheless, it appears that in Poland and in Moscow, there is no manifest clarity, on the surface, in reported discussion, on what is the alternative to which the Soviet economic reforms ought to lead. There is a disturbing predominance of tendencies to accept the cancer of Thatcherism, as an alternative to the cancer of primitive accumulation Which the Soviet economy had already contracted, forgetting, that Thatcherism is nothing but the Western form of primitive accumulation…
THE ROLE OF THE STATE
The parallel between my proposals for development of the sm and the development of the Productive Triangle, is that both require that a state function using three principles to foster rapid growth in a manner consistent with the earliest conceptions of U. S. Treasury Secretary Alexander Hamilton and Friedrich List, and Leibniz before them. The American System is the development of basic economic infrastructure by the state, and the understanding that it is the state’s responsibility to generate the credit, the direction, and the maintenance of these projects. This is done either directly through state economic action, with the state as employer and economic entity managing these functions, or through the state creation of a relatively global system of regulation, within the boundaries of the state and in cooperation with other states. The latter allows private interests to build, operate, and maintain some infrastructure monopoly, but under state control or regulation of that monopoly, under conditions which must be fulfilled in order to continue to enjoy that monopoly. That is the American System, as implicit in the first section of Article I of the U.S. Constitution. That is one method to foster growth.
The other is of course the fostering of technological progress, which means also a fostering of entrepreneurial activities in two respects. There must be a state-sponsored, i.e., national consensus, task-oriented project orientation, which has two aspects. One is a fostering of very high technology for the small entrepreneurships, exemplified by the machine tool shops, high-technology repair shops, and so forth, and the other for private agriculture and manufacturing.
The project which comes to the core of Leibniz and of the idea which is presented here, is the SDI, as it was conceived and presented to the Soviets as well as to the United States. It was a crash program employing new physical principles developed as an aspect of strategic ballistic missile and related military defense in such a manner as to spin off into the economy new machine tool types consistent with the same technology-the idea of the laser-related machine tools, the ultra-high-temperature, high energy-flux-density plasma processes, and so forth. Those things should become the commonplace of production through spinning off the military machine tool sector directly into the civilian machine tool sector, which thus is transformed. This technology applied to the smaller machine tool field, is spun off into agriculture and industry at the same time, and thus you get a highly rapid rate of per capita growth of productivity and standard of living at the same time.
We should also emphasize that large-scale state, or state-sponsored, or state credit-sponsor, or employment, in terms of the development of infrastructure (including education and medical health care delivery), is also, a proper stimulus to the economy.
It should also be emphasized that there should be a policy of close to zero unemployment, of less than 1-2% actual unemployment of the candidates or the labor force in the economy, and this is to be accomplished by expanding infrastructural projects, not as artificial or arbitrary make-work, but as needed infrastructural projects, and expanding the completion of these projects to absorb idle labor. The stimulus to the economy provided by the employment and purchasing activity of the infrastructural projects, moves the economy as a whole.
Thus we see particularly the insanity which is developing in Poland under the Sachs model, and threatening to be a characteristic of east Germany, under the pressure of the Anglo-American so-called “free market” model — Thatcherism.
Unemployment in Poland and east Germany is actually criminal folly, in the sense that these people should not be unemployed; they may be moved out of industry, where, in the case of Poland or east Germany, there is a superfluous redundance in that big industry, but they should not be moved out into the streets. Rather, redundant workers should be moved out and absorbed appropriately in large-scale and other infrastructure projects, such as rail, water management, power, and even the construction of housing and so forth, so that no one should be unemployed, because that is an absolute waste and tends to glut the economy. There should be a very small fraction of unemployed attributable to mobility and special problems. There should be the opportunity to foster employment, by opening up the gates of employment in needed and economically justified work to absorb the idle labor.
This policy of developing infrastructure on the highest technological basis possible, together with the general view of things like SDI as the technology-driver for the economy in general, should be basic…
Primitive accumulation — the depletion of the existing man-made and natural resources, including human beings, to try to compensate (relative to the military requirement) for the lack of policy — is the central problem which has to be addressed now. What was lacking in the U.S.S.R. was an understanding of the Leibnizian principle of technology…
Primitive accumulation in these forms-that is, the depletion of resources combined with the failure to introduce the benefits of technological progress in the economy generally — results in the lowering of the actual reproduction potential of the society per capita, as is described in a recent book of mine, The Science of Christian Economy . This means that while society is maintaining a strong front (in terms of military potential), behind the military front, which is maintained in large part at the expense of the inner civilian economy, the civilian economy is collapsing. The civilian economy’s roots are rotting out, and the whole structure then topples. The problem brings about the collapse of the entire structure, to the point where we now are…
CREDIT GENERATION AND BANKING
If there is not large-scale infrastructural development of the type we have indicated in Ea.tern Europe and the Soviet Union, as well as further infrastructural development in Western Europe, which is important, the situation in Eastern Europe and the Soviet Union is more or less a hopeless one.
Perhaps the most crucial obstacle to infrastructural development is the. widespread and rather intensive belief, one may say blind belief, in the delusion that credit for large-scale infrastructural projects can be obtained only in the way in which the Bank of England, the present IMF and World Bank, and like-thinking institutions would prescribe. Fortunately, the belief is a delusion. Unfortunately, as we have indicated, the delusion is thus far widely accepted.
In the history of the past 500 years of development of the economies of Western continental Europe and the Americas, there are two opposing models for the creation of public credit for financing of basic economic infrastructure and promotion of trade. One is the familiar one, which can be called, from the history of feudal times, the Lombard model: the model of central banking based upon the principle of usury. The opposing model is sometimes identified with the American System of political-economy, that is, the system associated with Treasury Secretary Alexander Hamilton, Mathew and Henry (father and son, respectively) Carey, and with similar figures in Europe.
In the American experience in particular, this alternative to usury first appeared in the Massachusetts Bay colony in the middle of the seventeenth century. This colony, which was independent of the Parliament of Britain by virtue of a charter, and subject only to the monarchy, created its own domestic currency as a fiat currency drawn on the credit of the Commonwealth. Massachusetts Bay then used this credit by loaning it at very low prices, in the form of national banking, to foster circulation of goods produced in the Commonwealth, to foster what became a spectacularly successful growth in iron industries and other industries in the region.
This method of state credit was suppressed after the events of 1688-89, though there was a campaign for its restoration by Cotton Mather, and also in Benjamin Franklin’s famous paper on the subject of a paper currency. These methods were introduced cautiously as a form of national banking under President George Washington, at the initiative of Washington’ s Treasury Secretary Hamilton…
Thus, we have the two system of credit. One, associated with the American System, is that the state creates a currency and maintains a monopoly on that currency, forbidding the creation of currency by private banking interests, or the creation of currency in one’s own country by a foreign agency. The true national banking mechanism, including private banks which work with the national banking institution, circulates this created credit, or currency, at low interest rates to selected categories of borrowers.
The selection is based on consideration of prudence, ordinary banking prudence, and otherwise according to criteria of the type I have just indicated. These criteria are that scientific and technological progress should be fostered in a capital-intensive, energy-intensive way, such that rises in productivity and in absolute product, generated by use of credit at low interest rates, result in a greater production and rate of production of physical wealth, than is represented by the increase in debt and currency generated to foster this economic growth.
On the other side we have what might be called the British system, the Lombard system. Under this system, the assumption is made that the world must start from the fixed hoard of combined gold and paper money, and what not, in largely private hands. State works, if they are to be fostered by means other than current tax revenue, must be fostered by the sale of public debt to private holders of such hoards of gold and paper money. The government must pay whatever borrowing costs private financial markets demand.
Such are the two opposing systems of currency and credit…
NEW SYSTEM OF INTERNATIONAL CREDIT
As long as nations believe, under present international monetary conditions, that one must use what are called generally accepted current international banking practices, as the exclusive acceptable mode for financing investment into infrastructure, industry, and agriculture, Eastern Europe and the Soviet Union shall never, within the foreseeable future, achieve the necessary development of infrastructure, agriculture, and industry. And under those conditions, in the present physical conditions, the worst social and political, as well as economic, results must be expected. Thus, on this issue, there is very little room for comprise.
The fact that the Anglo-American financial system is collapsing, is the opportunity, as well as the time of necessity, for reintroducing what might be called “Hamiltonian methods” of national banking for the purpose of large-scale investment in basic economic infrastructure. To summarize what that implies:
Through national credit, we are assigning, implicitly, idle labor and idle resources to productive employment, in developing basic economic infrastructure, as well as improvements in agriculture, industry, and small high-technology enterprise. In general, we restrict the use of credit for other purposes, as much as is possible, in order to avoid the possibility that the debt caused by use of other credit might grow as rapidly as the increase of per capita output of physical wealth.
Two considerations are primary, apart from the general emphasis on scientific and technological progress in a capital-intensive, energy-intensive mode.
First of all, we must emphasize the matter of proportionality, that there is a ratio of employment in the respective categories and sub-categories of production, such as infrastructure and its sub-categories, agriculture, manufacturing, and so forth, which in effect represents a balance in the same way that the division of labor in a factory represents a balance or imbalance. A balancing of investments for the optimal effect is of course a priority, and also is the matter of the generation of flows of trade, the circulation through markets, in such a manner to stabilize the growth of the productive tax revenue base and the national credit system itself. This will require international credit, and the strength of international credit will be dependent in the medium to longer term on the success of the national credit system used in the respective countries.
For full text: The Economic Development of Eastern Europe
Helga LaRouche Initiates International Campaign for ‘Productive Triangle’
Special reports on LaRouche’s ‘Productive Triangle’ program are published in every major European language, and Helga Zepp-LaRouche launches an aggressive speaking tour campaign throughout Europe, addressing conferences in numerous capitals including in many Warsaw Pact and other Soviet countries newly gaining their independence, including Hungary and Poland, while representatives of the Schiller Institute host seminars on LaRouche’s program across eastern Europe, including in Czechoslovakia, Belarus, and Ukraine, as well as nearly every country in Western Europe.
Helga LaRouche issues a statement in which she says Germany has the opportunity to function as the locomotive for the world economy, both of the East and “above all for the development of the Southern Hemisphere,” finally rising to the moral challenge of realizing a new, just world economic order:
“Germany, the heart of Europe, must be the locomotive which raises the economic development of the whole of Europe to a qualitatively new level. The program of the ‘Productive Triangle,’ proposed by the U.S. economic scientist Lyndon LaRouche, is the crucial key to this. A high-speed rail system will not only connect the Paris-Berlin-Vienna triangle, but, simultaneously, will enclose a region with the greatest immediate growth potential, as far as industrial and labor capacities are concerned. The rapid expansion of infrastructure and, especially of a productive Mittelstand in industry and agriculture can initiate a new economic miracle here, which, through new industrial corridors, will soon be able to reach the whole of Eastern Europe, the not-so-developed regions of Western Europe, and also the Soviet Union. The great expanse of Europe, with the “Productive Triangle” as its core, will make possible such a great increase in productivity and in the output of capital goods, that it will function as the locomotive for the world economy — not only for the infrastructure and industrial development of the East, but above all for the development of the Southern Hemisphere. Our answer to this question of whether we will finally develop the countries of the so-called Third World, will decide ultimately whether or not we meet the great moral challenge of the twentieth century… It has to become the identity of a sovereign Germany, that it is the place from which emanates the practical realization of a new, just world economic order.”
Schiller Institute: Productive Triangle Cornerstone of New Economic Order
In March 1991, the Schiller Institute convenes a conference in Berlin on the ‘Productive Triangle’ program, attended by representatives from numerous newly independent eastern European nations and not quite yet independent republics of the Soviet Union, including Hungary, Czechoslovakia, Poland, Latvia, Lithuania, Russia, Armenia, Bulgaria, and Croatia. In a message to the conference, Lyndon LaRouche calls for “a sphere of cooperation for mutual benefit among sovereign states” to unite Eurasia. The conference adopts a resolution, the ‘Berlin Declaration,’ which calls for the nations of Europe to seize the “unique historical opportunity” presented by the end of the disappearance of the Iron Curtain, and states:
“We strive for a just, new economic order, which secures peace, in that all peoples are given the same opportunities for economic and social development. For, development is the name for peace.”
‘Berlin Declaration’ · March 3, 1991
What is required is a ‘grand design’ of European policy, which not only masters the task of reconstruction but simultaneously contributes to world development and peace. Such a plan is Lyndon LaRouche’s proposed “Productive Triangle” program, which foresees the construction of infrastructure European-wide, including the territory of the Soviet Union. It is a plan for peace in Europe through development.
We call on the governments of eastern and western Europe, to make the “Productive Triangle” program the centerpiece of their government policy, and to make their intention fully clear, to implement the following crucial measures:
1) Construction of a Europeanwide high-speed rail network 12,000 kilometers long for freight and passenger transportation, which links up conventional high-speed trains to the more advanced magnetic levitation technology, and reaches from the Atlantic to the Soviet Union.
2) Construction of European waterways, above all, completion of the Main-Danube canal.
3) Replacement of the technologically obsolete and environmentally dangerous nuclear plants in eastern Europe and the former G. D. R. with the construction of inherently secure, environmentally sound nuclear power plants, like the HTGR.
4) Increase in the percentage of those employed in research and development to at least 5% of all employed. Priority efforts in the fields of laser and particle beams, fusion and plasma processes, materials research (superconductors, etc.), optical biophysics, AIDS research and manned space travel.
5) A corresponding educational reform, which combines the Humboldtian education ideal with the fostering of creative thinking in the realm of modern natural science.
6) Encouragement of a productive small and medium industrial force (Mittelstand) in industry and agriculture through tax incentives and generous tax deductions.
7) Two-tiered credit system: low-interest (2-5%), long-term credit for investment in construction, trade, and production; high-interest credit for non-productive purposes.
8) New credit creation in the form of bonds from European national banks in the order of several billion DM per year, which are earmarked exclusively for productive investment in capital intensive areas, and therefore not inflationary.
A unique historic opportunity, like the one opened by the disappearance of the “iron curtain,” demands unusual steps, as, for example, in the F.R.G., the change of Bundesbank laws regarding private credit monopoly.
If Europe’s governments actually put this program into effect, they will create the conditions for immense private investments. The numerous unemployed, in part highly skilled labor, can be productively employed once again. The living standard and technological level in eastern Europe would not only reach that of western Europe, but utterly new branches of production would come into being. So, too, on a private economic basis, would a new economic miracle occur.
The realization of the “Productive Triangle” is not only the sole means to reconstruct the economy of eastern Europe and the new German states; it is also the only possibility of putting the peaceful transition from totalitarianism towards a free society in the Soviet Union on the right track, without causing civil war.
At the same time, an economic miracle in Europe is the only thing which will pull the’world economy as a whole out of the depression and transform the decades-old promise of “development for all peoples” finally into reality.
In place of the “new world order” proclaimed by the Anglo-Americans, which is supposed to emerge from the war, we strive for a just, new economic order, which secures peace, in that all peoples are given the same opportunities for economic and social development. For, development is the name for peace.
Productive Triangle Concept Extended to ‘Eurasian Landbridge’
Following the official dissolution of the Soviet Union, Lyndon LaRouche expands the concept of the ‘Productive Triangle’ to include the former Soviet territories in Russia and central Asia, and stretch all the way to the Pacific coast of China and Russia. This proposal, which becomes known as the ‘Eurasian Landbridge,’ concentrates on three ‘development corridors’ spanning the Eurasian continent: a northern route via the Trans-Siberian Railroad to Vladivostok; a central route through Ukraine, Russia, Kazakhstan, and China; and a southern route from Western Europe through Turkey and Iran into Central Asia and on to China. This plan would economically integrate the Eurasian continent, maximizing the productive potential of its territory and peoples for the common benefit of all, and resolving the artificially imposed strategic divisions among the great powers through the promotion of development in their mutual interest.
Executive Intelligence Review publishes a feature-length study elaborating this “integrated Eurasian development network stretching from the Atlantic to the Pacific,” stressing that it will serve as the centerpiece and foundation for creating “an alliance of nations committed to a common programmatic perspective for establishing a just world economic order.” This new economic and monetary order would be comprised of a “community of interest among sovereign nations committed to rapid economic development” to replace the failed financial systems of both East and West, bridging the rich and diverse cultures of the Eurasian continent and ending the legacy of the geopolitical “Great Game” policy of perpetual war.
Helga Zepp-LaRouche states that the world is experiencing the opportunity for “the beginning of a new more hopeful time and the emergence of a new, just world economic order” and issues a call for a peaceful revolution to establish an “International Coalition for Peace and Development.
Publication of Russian-Language Edition of LaRouche’s Economics Textbook
The Schiller Institute sponsors its first-ever conference in Russia, on October 30-31 in Moscow, to announce the release of a Russian-language edition of LaRouche’s textbook on physical economy, So You Wish To Learn All About Economics? . With Russia undergoing the disastrous effects of the IMF “shock therapy” policy, the conference is titled “Alternative Approaches to Economic Reform,” focusing on LaRouche’s proposals for a rapid reconstruction of the Russian economy by means of the Productive Triangle/Eurasian Landbridge program. The conference, held at the Russian State Humanitarian University, is attended by over 50 individuals representing leading political and academic institutions within Russia, and is co-chaired by Dr. Professor Taras Muranivsky, rector of the Ukrainian University in Moscow. Muranivsky delivers a speech about “establishing a new economic theory” based on LaRouche’s ideas on the science of physical economy.
In the foreword for the Russian-language publication of his economics text, Lyndon LaRouche writes:
‘The Russian edition of this textbook appears at the moment the greatest financial bubble in history is collapsing upon us. If we fail to take appropriate corrective action soon, this collapse could become the worst economic disaster in European history. Out of the wreckage of that monetary collapse, a new form of national economy must be constructed.”
Lyndon and Helga LaRouche Travel for First Time to Moscow, Russia
In April 1994, Lyndon LaRouche travels to Russia for a week of meetings and speaking engagements in Moscow, together with his wife Helga. LaRouche’s first public event is a lecture sponsored by the Economic Academy of the Ministry of Economics of the Russian Federation on April 25, where LaRouche states:
“The problems in Russia are a reflection not of conditions internal to Russia, but the reflection of a collapse in the world economy… What is going to happen, without question, is a general total breakdown collapse of the global financial system… If there is an agreement on principles of sound economy, then there can be an agreement among states to reestablish, in a very short period of time, a new world financial and monetary system to replace the old one, while we put the old one into bankruptcy.”
LaRouche also addresses seminars at three institutes of the Russian Academy of Sciences: the Institute on Scientific Information on Social Science (INION), the Institute of Oriental Studies, and the Africa Institute. At the INION, LaRouche stresses that the Russian intelligentsia must understand the collapse of the Soviet system was merely one part of a global process of collapse, caused by a general failure to abide by the fundamental laws of physical economics, which would doom the free-market system of the West as well:
“You get a reflection of a failure to comprehend this problem, and a belief that the disease which is called free trade, is the superior alternative to communism. So instead of bowing to the statue of Karl Marx, you are now supposed to bow to the statues of Adam Smith and Ricardo. This tends to create an instinctive lack of appreciation for the fact that the entire global system is now about to collapse.”
Additionally, LaRouche is hosted by Dr. Pobisk Kuznetsov at a gathering of the “Prezident” group of approximately 60 scientists . Following LaRouche’s visit, Kuznetsov publishes a report in the Russian journal Rossiya 2010 in which he calls for a new unit of measurement to be applied to physical economics, which he proposes be called ‘the larouche,’ or “La” for short:
“Let us introduce the physical magnitude of ‘a larouche,’ designated by La, which gives the number of persons who can be fed from 1 square kilometer, or 100 hectares, during one year. Our base magnitude of area is 1 square kilometer or 100 hectares. This base value of area is necessary, in order to bring all existing world food statistics to a single basis. The figures cited above… correspond to ‘potential relative population density,’ introduced by LaRouche. We have introduced the new unit of measurement, the larouche, which is the quantity of persons able to be fed from a certain magnitude of area, taken as the unit value in this system… We share LaRouche’s view that the magnitude of potential relative population density can serve as an indicator of ‘intellectual culture,’ but taking into account the quite diverse values for farv (photochemically active radiation per vegetative period), we shall compare not simply 100 hectares, but 100 hectares for a given local farv value.”
Upon his return to Washington DC, LaRouche delivers a report on his trip to a meeting of diplomats and press , where he repeats what he had stated at the Ministry of Economics in Moscow, saying:
“Have no doubt that the present global financial and monetary system is not only going to collapse, but is going to go into an absolute breakdown collapse, unless various governments, including the U.S. government, were to put the present monetary system into bankruptcy. That would stop the collapse, and nothing else will stop it. Therefore intelligent governments will consider nothing serious, except to make preparations for this collapse and to organize quickly a recovery of a new financial system and a new monetary order the instant the collapse occurs.”
Special Hearings in Russian Parliament on LaRouche Program
On February 20, the lower house of the Russian Parliament, the State Duma, holds special hearings to discuss emergency measures to prevent the disintegration of Russia’s economy. A memorandum submitted by LaRouche, titled “Prospects for Russian Economic Revival” is presented to the hearing, in addition to oral presentations made by representatives of the Schiller Institute in Moscow. In the first point of LaRouche’s memorandum, he states:
“The present phase of the economic crises inside Russia and nearby countries is the result of the interaction between the ongoing, new phase of collapse in the world monetary and financial systems, and the relative exhaustion of Russia’s ability to deliver a stream of loot to western financier interests. There exists no possible solution to this crisis, either for Russia or for the world, within the bounds of the previously accepted terms of dominant international economic and financial institutions. The present world system, as derived from the post-1971 form of ‘floating exchange-rate’ international monetary system, and present doctrines of IMF ‘conditionalities,’ is doomed to extinction during the near- to medium-term. The present system will either be brought to an end in an orderly way, through governments acting responsibly to put existing central banking and financial systems under state-controlled reorganization in bankruptcy, or through a chain-reaction form of rapid, “thermonuclear” implosion of that speculative financial bubble which the world’s financial system has become. All workable alternatives to general collapse require governments to assume responsibility for the establishment of new monetary and financial institutions to replace the bankrupt institutions which continue to dominate the world up to this moment.”
Lyndon LaRouche Makes Second Visit To Moscow, Testifies at Duma
In June 1995, Lyndon LaRouche makes his second trip to Russia, joined by his wife Helga Zepp-LaRouche, where he speaks at the Russian State Duma on the topic “The World Financial System and Problems of Economic Growth.” LaRouche also delivers addresses at the Methodological University of Russia, the Institute of Economics of the Russian Academy of Sciences, and at Moscow State University , where he states that the world is headed toward what Rosa Luxemburg identified as “a breakdown crisis” and the only solution is to declare the IMF bankrupt and initiate an international credit system to build the Eurasian Landbridge project:
“Some believe the present IMF system must be reformed but essentially only administrative reforms. Others of us take the view, as I do, that the international monetary and financial system of the world today, is totally bankrupt, and that only the elimination of that system by bankruptcy, and the establishment of a new system, is possible.”
LaRouche: Russia & U.S. Must Create New World Monetary System
Executive Intelligence Review publishes a report by Academician Dmitri Lvov, the vice-director of the Central Economic-Mathematical Institute (CEMI) in Russia, called “Toward a Scientific Grounding for Economic Reforms in Russia” . CEMI had studied LaRouche’s economic model in the 1980s at the time Moscow was examining the strategic and economic implications of the Strategic Defense Initiative. Lvov’s paper is prefaced by a short introduction by LaRouche, titled “The New Role for Russia in U.S. Policy Today” , in which he states:
“As the present, IMF-centered, global monetary and financial system disintegrates in a holocaust of reversed financial leverage, Russia’s present, most crucial predicament will be shared by every nation of this planet. The challenge will be, to prevent the collapse of the Earth’s physical economy, by launching immediately a new world monetary and state-credit system, on the basis of “American System” principles contrary to every direction of change in economic policy, under the IMF and World Bank system, during the recent thirty years . In short, the Adam Smith system is shortly to be carried away by the same Styx of dead history into which the Soviet system had been thrown an historical instant earlier.”
LaRouche Makes Third Trip to Russia for Meetings With Intelligentsia
In April, Lyndon LaRouche makes his third trip to Russia to conduct meetings with top-level academics and policy makers from the Russian intelligentsia. LaRouche participates in a round table discussion jointly sponsored by the Institute for Socio-Political Research of the Russian Academy of Sciences and the Free Economic Society of Russia, established 1765. The event is chaired by Leonid Abalkin, head of the Institute of Economics of the Russian Academy of Sciences. LaRouche’s address to the round table is on the subject “Russia, the U.S.A., and the Global Financial Crisis” . LaRouche emphasizes that a partnership between the United States, Russia, and China of the sort that Franklin Roosevelt envisioned in the 1940s for a post-colonial world, would be the combination of world powers necessary to reorganize the international financial system:
“We are in the middle of the worst international monetary and financial crisis of the century… The combination of the United States and Russia, now, as in 1945, with the cooperation of China can change the course of world history, and get out of this economic mess… Only a majority combination among great powers can break the power of these international authorities. Therefore, not in order to create another global hegemonic system, but to create a world which is safe for sovereign nation-states. We’re in a great struggle. We’re in a great, strategic world-historical struggle. And therefore, as in war, the unity of great powers can be decisive in whether you win the war or lose it, as Roosevelt understood before he died.”
Participating in the dialogue with Mr. LaRouche were Valentin Pavlov, former prime minister and finance minister of the Soviet Union, and Vyacheslav Senchagov director of the Center for Banking and Financial Research at the Russian Academy of Sciences Institute of Economics. At the conclusion of the event, Academician Abalkin stated:
“Today we are facing the necessity of developing a new paradigm in the social sciences… I see all the work of Professor LaRouche as a step on the path to this paradigm.”
Helga Zepp-LaRouche Travels to China to Promote Eurasian Landbridge
Immediately after Lyndon LaRouche’s visit to Russia, Helga Zepp-LaRouche travels to China to attend a conference in Beijing to attend the “International Symposium on Economic Development of the New Euro-Asia Continental Bridge,” sponsored by the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China. Helga LaRouche delivers a speech on May 8, called “Building the Silk Road Land-Bridge: The Basis for the Mutual Security Interests of Asia and Europe” , in which she states:
“The governments of Eurasia should agree on an integrated infrastructure program, which connects the industrial centers of Europe and Asia with the population centers in South and Southeast Asia, through ‘development corridors.’ The development of those main axes of traffic, through Great Projects for infrastructure in transport, energy, water, and communications, is the precondition, to lay the groundwork for the industrial development of the Eurasian land-mass, and can thus become the motor for overcoming the world economic crisis.”
Helga LaRouche calls for the establishment of a Eurasian Development Bank in the image of Lyndon LaRouche’s original International Development Bank (IDB) proposal, to facilitate cooperation among the sovereign states of Eurasia for development:
“The right to generate credit must be brought back under the control of sovereign governments. Through appropriate legislation, national banks must be able to generate credit lines for these projects. As these credits are related to future production, wealth is being created, and they are not inflationary… As the realization of infrastructure projects of this magnitude, will require all available industrial capacities of the participating nations, and, as new capacities have to be created, the different countries should work in a division of labor, and thereby balance existing three-way trade flows through so-called clearing-houses. A newly founded Eurasian Development Bank could take over this task.”
Finally, Mrs. LaRouche calls for the convening of “an emergency monetary policy meeting of the principal nation-state powers, for the purpose of establishing a new international monetary system, based on stabilized parities of currencies, to the purpose of fostering a global revival and expansion of agricultural and industrial production, based upon capital intensive, energy-intensive modes of investment, in scientific and technological progress.”
Special Report on ‘Eurasian Landbridge’ Released by EIR
On February 5, Lyndon and Helga LaRouche host a seminar of diplomats in Washington D.C. to announce the official release of a book-length special report by Executive Intelligence Review called “The Eurasian Landbridge: The New Silk Road Locomotive For Worldwide Economic Development”. In the introduction of this 300-page detailed ‘blueprint’ compendium of development projects across the Eurasian landmass, LaRouche is quoted: “Call together an immediate emergency conference of crucial powers, an international monetary conference setting up a new monetary system to replace the bankrupt one.”
The introduction of the report further states:
“The realization of the ‘New Silk Road’ and the ‘Productive Triangle,’ a real reconstruction of Russia and Eastern Europe, the development of the entire Eurasian landmass with the most modern infrastructure, would be the central economic issue at such a monetary conference of world powers. The connection of the new financial and monetary system, with concrete development projects which demonstrably would set a new, worldwide economic miracle into motion, would guarantee the success of the new system, overcoming the current crisis, and ensuring the fundamental economic security of the world far into the future.”
Lyndon LaRouche Issues Call For a ‘New Bretton Woods’
On January 4, LaRouche delivers an address in Washington D.C., in which he first issues his call for a ‘New Bretton Woods’ to reorganize the world financial system, calling on President Bill Clinton to convene an international conference to launch a general monetary reform for the planet on the basis of mutual development:
“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 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! Therefore, the United States must take international leadership in proposing a new Bretton Woods. We have to create new banking systems, which is very simple to do, on the basis of the Hamilton model — national banking… 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 Eurasian Landbridge concept and what it represents as a policy, as a global policy, and we’re going to rebuild this planet.'”
LaRouche elaborates on his call to President Clinton to convene an international summit “to create a new monetary system” at a conference of the Schiller Institute in February, at which a resolution titled “Urgent Appeal to President Clinton to Convoke a New Bretton Woods Conference” is endorsed by the participants. The appeal declares:
“We appeal to you, President Clinton, to use the Powers of the Presidency of the United States, to convoke, on an emergency basis, a new international Bretton Woods conference, to replace the present bankrupt monetary system with a new one. A global debt reorganization, the establishment of fixed-parity exchange rates and a new set of trade and tariff agreements are the absolute precondition for stability in world economic and financial relations, which are required for a return to economic growth.”
Lyndon LaRouche · January 4, 1997
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 of 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 1-2%, 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, an agricultural industrial labor force, with some potential…
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 be 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.
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.
Adopted at Schiller Institute Conference · February 1997
The world economy, with the exception of China, is faced with an accelerating collapse of industrial capacity and the skyrocketing of unemployment, which has led to a political mass-strike process, shaking the foundations of many governments and social institutions around the world.
The unavoidable bursting of the international derivatives bubble, or any relevant political event, could trigger a chain-reaction of stock market crashes and banking crises in many countries, leading toward the vaporization of the international financial system within a matter of days. The political, social, and military consequences of such a systemic crash would be incalculable.
Meanwhile, the tragedy of the so-called IMF reform policies in the former Soviet Union is now playing out, in the form of a monstrous collapse of production, a demographic disaster, and an unprecedented criminalization of society, which has resulted in an even worse and more rapid catastrophe than has already occurred in Ibero-America and Africa. If the present course of these international policies is not changed, entire nations will vanish from the map of the earth, as is already demonstrated in Africa. And. as the conditions in Bulgaria and Albania illustrate, even Europe can plunge into a new dark age in a very short time. Germany, for example, has reached de facto the same level of unemployment as when Hitler came to power.
Thus, many governments, parliamentarians, and leaders of social institutions are confronted with the unacceptable dilemma, that if we are to fulfill the conditionalities of the IMF, or such requirements as those of the Maastricht Treaty or the Balanced Budget Amendment in the United States, we would have to act against the most vital interests of the people, whom we represent. But the international financial institutions have no right to require that the debt to them be paid with a pound of flesh of each of our citizens…
We say, that not for “one people,” but for the peoples of the world, it has become necessary not to dissolve the political, but the financial bands with the presently hegemonic financial institutions.
Therefore, we appeal to you, President Clinton, to use the Powers of the Presidency of the United States, to convoke, on an emergency basis, a new international Bretton Woods conference, to replace the present bankrupt monetary system with a new one. A global debt reorganization, the establishment of fixed-parity exchange rates and a new set of trade and tariff agreements are the absolute precondition for stability in world economic and financial relations, which are required for a return to economic growth.
It is also required that sovereign governments have exclusive responsibility for the emission of currency and the creation of credit and that, in the tradition of President Franklin D. Roosevelt’s bold anti-depression programs, they make available cheap and long-term credit lines for large-scale investments in infrastructure, industry, and agriculture.
The outline of a new world economic system is already taking shape. Led by the initiative of the Chinese government, several countries of Asia are currently engaged in the construction of the “New Eurasian Land-Bridge.” By integrating all of the Eurasian continent economically, a similar “land-bridge” development is planned which will soon also connect the United States, via the Bering Strait, and Africa, via the Near East, bringing economic development and prosperity to all previously landlocked areas of the world.
As a cornerstone of this global reconstruction program, the economist Lyndon LaRouche has emphasized what he terms the “Machine-Tool Principle.” This principle is the recognition that the economy must be based on the fact, that it is solely the creative reason of the individual which is the source of wealth in society. It is the continued ability of creative reason to formulate adequate hypotheses about the laws of nature, which leads to scientific and technological progress. These discoveries are applied in the form of new, improved machine tools and in upgrading the skills of the labor force, resulting in increasing productivity of the productive process. The global economic reconstruction must therefore put absolute priority on Classical, unversal education and the strengthening of the creative powers of the individual.
The building of the Eurasian Land-Bridge as the cornerstone for similar infrastructure and economic programs for Africa, Australia, and the Americas is the only
way that economic development can bring peace and stability to all comers of the world. Such a policy is therefore in the strategic security interest of the United States. It is also in the tradition of the Founding Fathers as a policy for a community of principle among nations.
We appeal to you with the utmost urgency to take the necessary steps, so that your Presidency does not mark the beginning of a new dark age, but that of a new golden era of mankind.
President Bill Clinton Calls for ‘New Financial Architecture’
On September 14, 1998, immediately after returning from an official summit in Russia, President Clinton delivers a major address to the Council on Foreign Relations in New York City in which he calls for “a new financial architecture for the 21st century.” With the crash of the Russian bond market threatening to set off a chain reaction collapse of the global financial system, Clinton announces that he is convening an urgent conference of the finance ministers of the leading nations from both the developed and developing world (the G7 and the G22) to “douse the flames of the international financial crisis” and resolve “the biggest financial challenge facing the world in a half-century” — i.e. since the original Bretton Woods. Clinton states:
“In the face of this new challenge, America can and must continue to act and to lead to take the urgent steps needed today to calm the financial crisis, restart the engine of growth in Asia, and minimize the impact of financial turmoil on other nations, and to make certain that for tomorrow the institutions and rules of international finance and international trade are prepared to support steady and sustainable growth over the long term.”
At the conclusion of his address, Clinton invokes Franklin Roosevelt, saying:
“At this moment, the United States is called upon once again to lead — to organize the forces of a committed world… The World War II generation did it for us 50 years ago. Now, it is time for us to rise to our responsibility, as America has called upon to do often so many times in the past. We can, if we do that, redeem the promise of the global economy and strengthen our nation for a new century.”
Bill Clinton · September 14, 1998
This is the biggest financial challenge facing the world in a half-century. And the United States has an absolutely inescapable obligation to lead, and to lead in a way that’s consistent with our values and our obligation to see that what we’re doing helps lift the lives of ordinary people here at home and all around the world…
For most of the last 30 years, the United States and the rest of the world has been preoccupied by inflation, for reasons that all of you here know all too well — and it was a good thing to be preoccupied with. Today the low and stable inflation we enjoy has been critical to our economic health, and low inflation has also contributed to that of many other nations as well. But clearly the balance of risks has now shifted, with a full quarter of the world’s population living in countries with declining economic growth or negative economic growth.
Therefore, I believe the industrial world’s chief priority today, plainly, is to spur growth. It seems to me there are six immediate steps we should take to help contain the current financial turmoil around the world, and then two longer-term projects in which we must be involved… As we take these immediate steps, we also must intensify our efforts to reform our trade and financial institutions so that they can respond better to the challenges we now face and those we are likely to face in the future…
Above all, we must accelerate our efforts to reform the international financial system. Today I have asked Secretary Rubin and Federal Reserve Board Chairman Greenspan to convene a major meeting of their counterparts within the next 30 days to recommend ways to adapt the international financial architecture to the 21st century….
Fast-moving currents have brought or aggravated problems in Russia and Asia. They threaten emerging economies from Latin America to South Africa. With a quarter of the world’s population in declining growth, we must recognize [that] we cannot forever be an oasis of prosperity. Growth at home depends upon growth abroad. A full 30 percent of our growth, just since I became President, has been due to our expanding positive involvement in the global economy.
That’s why ordinary Americans should care if Asia or Russia or South America is on solid economic footing. These people are our customers. With one-third of the growth of our economy coming from exports, much of it from emerging markets, we know that those markets will falter as their economies flatten. When the problem is widespread and perceived to be moving in the wrong direction, we have seen that our stock market can react, having a direct and immediate impact on the wealth of the American people…
Finally, these nations are our friends, our allies and our security partners. Where economic turmoil plunges millions into sudden poverty and disrupts and disorients the lives of ordinary people, the risks of political and social instability and of a turn from democracy clearly rise. Just look at Russia. Russia is facing an economic crisis that threatens the extraordinary progress the Russian people have made in just seven years, building a new society from the ground up. The ruble and the stock market have plummeted, banks are weak, tax collections have slowed, the government has trouble paying its debts and its salaries.
Some Russians have become wealthy, but many, many more are struggling to provide for their families. I talked to some of them when I was in Russia just a few days ago.
Amid such political uncertainty and economic difficulty, some now talk of abandoning the path of reform and returning to policies of the past, even policies that have already failed. At worst, adversity in Russia could affect not only the Russian economy and prospects for our economic cooperation — at worst, it could have an impact on our cooperation with Russia on nuclear disarmament, on fighting terrorism and the spread of weapons of mass destruction, on standing together for peace, from the Balkans to the Middle East.
Now Russia has a new Prime Minister, Mr. Primakov, who’s been in office a grand total of four days. He and President Yeltsin face one of the great challenges of their time. Never has there been a more important moment to set a clear direction for the future, to affirm the commitment of Russia to democracy and to free markets, and to take decisive steps to stabilize the economy and restore investor confidence.
But if Russia is willing to take these steps, we must do everything we can to provide support to them. Because again I say, as long as ordinary people don’t feel any benefits from this, in the end it’s going to be difficult to sustain the direction we think the world should take…
Since all economies are increasingly interdependent, fear and uncertainty about the economy of one country can prompt investors to pull money out of other countries thousands of miles away.
What has been done is clearly not enough to reverse the decline in particular countries, to douse the flames of the international financial crisis, to support steady and sustainable growth in the future. In the face of this new challenge, America can and must continue to act and to lead to take the urgent steps needed today to calm the financial crisis, restart the engine of growth in Asia, and minimize the impact of financial turmoil on other nations, and to make certain that for tomorrow the institutions and rules of international finance and international trade are prepared to support steady and sustainable growth over the long term.
First and foremost, the leading economic nations must act together to spur global growth…
The second step we should take is to intensify our efforts to speed economic recovery in Asia. When countries like South Korea and Thailand have taken strong and responsible steps, the freefall has ended, progress is being made. But the human cost of Asia’s collapse is only now being fully felt. Recent press reports have described an entire generation working its way into the middle class over 25 years, then being plummeted into poverty within a matter of months. The stories are heartbreaking — doctors and nurses forced to live in the lobby of a closed hospital; middle class families who own their own homes, sent their children to college, traveled abroad, now living by selling their possessions.
It is in our interest to help these nations and these people recover. They will become once again our great markets and our great partners. It is also the right thing to do…
Today, I’m asking Secretary Rubin to work with other financial authorities and international economic institutions to enhance efforts to explore comprehensive plans to help Asian corporations emerge from massive debt where individual firms have been swept under by systemic, national economic problems, rather than their own errors. We need to get credit flowing again. We need to get business back to making products, producing services, creating jobs.
Third, Asian businesses need assistance, but so do millions of Asian families. We must do more to establish an adequate social safety net in recovering nations. Wrenching economic transition without an adequate social safety net can sacrifice lives in the name of economic theory, and, I might add, can generate thereby so much resistance that reform grinds to a halt. If we want these countries to do tough things, we have to protect the most defenseless people in the society and we have to protect people who get hurt when they didn’t do anything wrong. I think that is terribly important…
Fifth, our Export-Import Bank will increase its commitments to specific economic development projects over the next three years — three months — projects which will have concrete benefits for ordinary citizens in other countries, projects which will increase our own exports and thereby help our economy, and ones which can help to restore confidence in countries that they are not alone and that actual, specific, positive developments can occur…
I just want to emphasize again that even as we respond to the urgent alarms of the moment, we must speed the pace of this systemic work as well. That is why I have asked Secretary Rubin and Chairman Greenspan to convene the finance ministers and central bankers of the G-7 and key emerging economies in Washington within 30 days to develop a preliminary report to the heads of state by the beginning of next year on strengthening the world financial system…
For half a century now in our national economy, we have learned not to eliminate but to tame and limit the swings of boom and bust. In the 21st century, we have to find a way to do that in the global economy as well… In short, we must improve our ability to address the current financial emergency, and we must build a system to prevent such future emergencies, whenever possible, and to blunt their impact when they do occur. There is no mission more critical to our own strength and security…
We now have a chance to create opportunity on a worldwide scale. The difficulties of the moment should not obscure us to the advances of the last several years. We clearly have it within our means, if we do the right things, to lift billions and billions of people around the world into a global middle class and into participation in global democracy and genuine efforts toward peace and reconciliation. That is a possibility, but recent events show it is not a certainty.
At this moment, therefore, the United States is called upon once again to lead — to organize the forces of a committed world; to channel the unruly energies of the global economy into positive avenues; to advance our interests, reinforce our values, enhance our security.
In this room, I think it is not too simple to say we know what to do. The World War II generation did it for us 50 years ago. Now, it is time for us to rise to our responsibility, as America has called upon to do so often so many times in the past. We can, if we do that, redeem the promise of the global economy and strengthen our own nation for a new century.
Thank you very much.
Full speech: President Clinton on ‘Global Economy’ · Sept. 14, 1998
López Portillo: “World Must Listen To Wise Words of Lyndon LaRouche”
At a press conference in Mexico City, former President López Portillo joins Helga Zepp-LaRouche to discuss the urgency of establishing a New World Economic Order, asserting, “It is now necessary for the world to listen to the wise words of Lyndon LaRouche.” In an accompanying editorial published in the leading Mexican newspaper El Universal, Portillo states:
“The new economic order must be oriented to the increase of production, and not to the control of demand, the latter fundamentally directed to favoring capital (frequently, that of speculative capital) through outright depressive measures which reward profits, even if this postpones the satisfaction of real human, social needs.”
Helga Zepp-LaRouche Returns to China to Speak on Eurasian Land-Bridge
Helga Zepp-LaRouche returns to China in the end of October to participate in a second conference on the Eurasian Landbridge, called “Asia-Europe Economic and Trade Relations in the 21st Century and the Second Eurasian Bridge,” where she delivers a speech at the keynote session in Beijing titled “Principles of Foreign Policy in the Coming Era of the New Eurasian Land-Bridge” . She begins her speech saying:
“While the present meltdown of the global financial system obviously represents enormous dangers for the existence of entire nations and their populations, the profound discrediting of the institutions associated with that system, represents, at the same time, a unique and unprecedented chance, to replace the unjust principles of the old political and economic order with new, just ones, which will allow the survival and well-being of all nations on this planet.”
Helga LaRouche states that it will be through the mutual development derived from the construction of the Eurasian Landbridge project that a stable relationship between respectively sovereign nations, peacefully cooperating for their common benefit can be achieved, such that each nation’s sovereign interest will be in accord with the interests of the other:
“If the new, just world economic order is supposed to function, the ancient philosophical paradox of the One and the Many has to be addressed. The unifying principle has to be the development of mankind as a whole, and there has to be an intelligible scientific principle for how that development can be measured. At the same time, the principle of national sovereignty must be absolutely guaranteed. Universal history proves that there must absolutely not be any contradiction between these two ideas.”
Lyndon LaRouche Publishes ‘My Strategy For The Americas’
Lyndon LaRouche publishes a policy document titled “In The Footsteps of John Quincy Adams: My Strategy For The Americas” reasserting the applicability of the Monroe Doctrine for the Western Hemisphere, and defining the neccesary anti-imperial community of principle among the nations of North and South America. In the conclusion of the document, LaRouche writes:
“We have come to a time, throughout the world, at which virtually every central banking system of the world is not merely bankrupt, but hopelessly so. There is no possible way, in which the world’s currently outstanding nominal debt, could possibly ever be paid. Hundreds of trillions of U.S. dollar-equivalents, must be abruptly written off, or placed in frozen, non-interest-bearing accounts, pending future disposition in bankruptcy-proceedings…
“These actions include, the power of the sovereign government to put bankrupt institutions through government-directed bankruptcy reorganization, and to generate large masses of newly created credit, deployed through national banking methods of a Hamiltonian type, to suddenly increase levels of useful employment, rather than allow a collapse of employment and of essential services. This kind of emergency action must occur not only within nations, but in rapidly expanding hard-commodity trade among nations, with special emphasis upon lines of trade within the hemisphere… Without international cooperation among sovereign governments, along such lines the otherwise manageable economic crisis immediately be fore us will not be overcome.”
LaRouche in Sudan: New Bretton Woods & The New World Economic Order
In January 2001, LaRouche travels to Khartoum, Sudan for a four-day conference sponsored by EIR and the Schiller Institute on “Peace Through Development: Nile Valley Development & The New Just World Economic Order.” Lyndon LaRouche delivered the keynote address on “The New Bretton Woods System as Framework for a New Just World Economic Order” in which he specifies three principles which must serve as the foundation for a new international economic system:
“First, we must restore the characteristics of the old Bretton Woods system of the immediate post-war decades. That means, a system of fixed-exchange rates, capital controls, currency controls, and financial controls, and global growth fostered by the same methods employed through institutions such as Germany’s Kreditanstalt fur Wiederaufbau, to promote large-scale development of basic economic infrastructure, and to use the market potential generated by that infrastructural development, as the base for creating a still-larger rate of growth in development of agriculture and industry.
“Second, we must do as President Roosevelt had intended: all sovereign nations must be, on principle, full partners in the new international monetary system. This is the fundamental difference between the old Bretton Woods system, and what must happen now. We cannot have a system which is going to work, which does not treat the majority of the human race as full partners in the system. Otherwise, it won’t work.
“Third, we must rely chiefly on credit created by the authority of perfectly sovereign nation-state governments, to generate the medium- to long-term, domestic and international trade agreements on which the economic recovery and expansion will be centered.”
Lyndon LaRouche Returns to Russia to Address State Duma
On June 29, 2001, Lyndon LaRouche speaks before an official hearing of the lower house of the Russian Parliament, the State Duma, sponsored by Sergei Glazyev, the chairman of the Duma Committee on Economic Policy. The hearing, titled “On Measures to Ensure the Development of the Russian Economy Under Conditions of a Destabilization of the World Financial System,” is attended by 150 parliamentarians and government advisors and broadcast live into all Duma offices. Sergei Glazyev introduces LaRouche, saying: “I want to open our parliamentary hearings and to give the floor to our guest, the well- known philosopher, historian, and economist Mr. Lyndon LaRouche.”
In his testimony, LaRouche states that “nothing can save the present world financial and monetary system in its present form” and lists four necessary measures to reorganize the global economic system including the cancellation of illegitimate debts and the reorganization of the rest, stating:
“The reorganization of the world monetary and financial systems, must be based upon the use of large-scale, long-term cooperation in infrastructural development within, and among nations, and heavy emphasis upon adopted targets of scientific and technological progress. The pivot for world economic growth, shall be a new system of transcontinental cooperation among the sovereign nation-states of continental Eurasia.”
LaRouche Testifies to Duma · June 29, 2001
Presently, the world as a whole is dominated by the fact, that we are in the end-phase of the IMF system, at least as it has existed in the form it developed following U.S. President Nixon’s introduction of a so-called “floating exchange-rate” monetary order in mid-August 1971. Contrary to some hysterical propaganda coming out of the now deeply troubled U.S. Bush Administration, nothing can save the present world financial and monetary system in its present form.
A continued refusal to accept certain necessary, sweeping reforms in those systems, would bring about not only an economic catastrophe worse that the worst period of the 1930s economic depression. The present crisis, unless it is stopped by drastically needed reforms, will also be a demographic collapse more or less comparable to what is called by historians “the New Dark Age,” which dominated Europe following the Fourteenth-Century bankruptcy of the so-called Lombard banking system.
Therefore, to speak of any economic policy which does not include an early and sweeping reform of the IMF system is worse than a waste of time.
We can overcome this collapse, but only if we are able to bring about a certain degree of international cooperation around four general intentions. The four essential classes of sweeping changes in the existing monetary and financial system, are as follows.
1. The total accumulation of indebtedness in the world today vastly exceeds the amount which could ever be repaid under existing terms and conditions of repayment. If either the creditors or debtors wish to survive, much of this indebtedness must be simply cancelled, as without merit. This includes what are in fact purely gambling debts, called financial derivatives. What remains of morally legitimate debts, should be reorganized, in both amounts and terms, in the degree such reorganization is an essential precondition for sustainable physical-economic growth in per-capita output. In this reorganization we must follow the advice of former U.S. Treasury Secretary Alexander Hamilton, in insisting that the honorably contracted part of the nation’s official debt, must be defended, as a precondition for its power to create new credit in the future
2. The revision of the international monetary and financial systems must incorporate the best features of the 1945-1958 cooperation between the U.S.A., Western Europe, and Japan. This must be a vigorously protectionist form of monetary and financial system, solidly based on true partnership among perfectly sovereign nation-states.
3. This reorganization of the world monetary and financial systems, must be based upon the use of large-scale, long-term cooperation in infrastructural development within, and among nations, and heavy emphasis upon adopted targets of scientific and technological progress. The pivot for world economic growth, shall be a new system of transcontinental cooperation among the sovereign nation-states of continental Eurasia.
4. Those regions, within and among nations, which can generate “fountains” of scientific and technological output to regions which are deficient in their available supply of such technology, must be envisaged as suppliers of not money technology, must be envisaged as suppliers of not money costs, for that purpose. Continental Eurasia should be the center of such global economic recovery and growth, but all the world will benefit through participation as partners in such an effort.
Since the general cycle of development based upon the combination of infrastructure and more advanced technologies is approximately a quarter-century, the system of credit and payments should be based on cycles of about a generation, and at simple interest-rates on borrowed purchase-credit at between 1% and 2% simple interest.
Under the conditions created by a general bankruptcy now pervading the world’s principal banking systems, the required credit must be generated by political actions of sovereign credit must be generated by political actions of sovereign governments, using newly created national-banking institutions as the pivotal agencies through which relevant agreements are coordinated.
Inevitably, there will be many who scream in protest against the return to the protectionist practices associated with the names of economists such as Leibniz, Alexander Hamilton, Friedrich List, and Henry C. Carey. No amount of such screaming will change the basic fact, that the system of “free trade” and “globalization,” has proven itself a catastrophic failure, relative to the protectionist policies of the 1945-1958 interval. The U.S.A., the putatively leading economy of the world, is presently bankrupt, and under any continuation of the Bush Administration’s present policies, it is hopelessly bankrupt. In the meantime, the movement toward cooperation within continental Eurasia, already represents the cornerstone for the kind of cooperation needed to rescue at least much of the world from the presently onrushing global financial monetary, and trade crisis.
Helga Zepp-LaRouche · June 29, 2001
Since the 1995 Halifax summit, but above all, since the Russian GKO crisis and the near-collapse of the world’s biggest hedge fund, LTCM, the governments of the G7 have had recourse to only one measure: pumping unbelievable amounts of liquidity. The speculative bubble in the “New Econ omy,” which was the direct result of this liquidity pumping, has burst, and inflation, which had earlier represented asset- price inflation, is now spreading as commodity-price inflation, with a tendency towards hyperinflation. At the same time, due to internal economic breakdown, the United States is losing its role as the importer of last resort, which has hit Asian exports particularly hard: The tendency towards depression is increasing worldwide: banking crises, mass layoffs, depression. What is threatened, is a breakdown of the global financial system, of a sort not witnessed since the Fourteenth Century.
Was this development foreseeable? The answer is, loud and clear: Yes!
When, in November 1989, after the fall of the Berlin Wall, signs of the dissolution of the Warsaw Pact and the Soviet Union emerged, Lyndon LaRouche warned that it would lead to a catastrophe, if one attempted then to replace the collapsing economic system of the East, with the equally bankrupt free-market system of the West. The paradigm shift, over the preceding 25 years, which, through a long series of neo-liberal steps, had undermined the foundations of the economy, in favor of speculation, would inevitably lead to the collapse of the system
LaRouche proposed, instead, to go back to the principles of physical economy, in the tradition of Leibniz, List, Mendeleyev, and Witte. He presented the grand vision of a program for the “Paris-Berlin-Vienna Productive Triangle,” as the locomotive for infrastructural and economic integration of Eastern and Western Europe, and for the development of the East. This concept called for the integration of the no-longer-divided industrial centers lying within the Triangle — the size of Japan — and the most developed industrial capacities in the world represented there, through modern infrastructure, like the Transrapid [magnetic levitation railway]. Investments in frontier technologies were to enhance the productivity of labor power and productive plant facilities, as well as exports, especially in technology and capital-goods sectors.
From this “Productive Triangle,” so-called development corridors were to radiate out, from Berlin to Warsaw and St. Petersburg, via Prague and Kiev to Moscow, and through the Balkans to Istanbul. Integrated infrastructure projects, with high-speed railways, highways, and waterways, and computerized railway stations, were to constitute the transportation arteries of these 100 kilometer-wide corridors, along which the most modern technologies and industries could be brought into the East.
Instead of dealing an economic death blow to the allegedly obsolete industries of the Comecon, as the reformers of the IMF and shock therapy did, the industries of the East, though obsolete from a world-market standpoint, could, as valuable industries of the East, have been utilized, and could have played a meaningful role in the construction of the transportation arteries and networks; only then, after they had been “used up” in a certain sense, would they have been idled.
LaRouche’s warnings of the danger of the free-market economy, as well as his vision of the “Productive Triangle” as the motor of a reconstruction program for the East, and thereby the core of a global reconstruction program, were spread by myself and other members of the Schiller Institute to all leading circles in Eastern and Western Europe, beginning in January 1990, through numerous conferences, as well as to the broader public, through our publications. Had these programs been implemented at that time, they would have led to the biggest economic boom of the century
But the great opportunity, to place East-West relations, for the first time in the Twentieth Century, on a completely new basis, of peace through development, was missed. Margaret Thatcher, Francois Mitterrand and George Bush, chose the geopolitical option of excluding Russia as a potential competitor, from the world market, and reducing it to a raw-materials exporter. Bush proclaimed the “New World Order,” which, like globalization, turned out to be the expression of Anglo-American unilateralism.
In 1991, when the disintegration of the Soviet Union rendered necessary a new political and economic perspective, LaRouche proposed extending the “Productive Triangle” to the “Eurasian Land-Bridge,” which should run along three main corridors: “Corridor A,” the Trans-Siberian railway and the line of the ancient Silk Road; “Corridor B,” from China, via Central Asia and Eastern Europe; and “Corridor C,” from Indonesia, through India, Iran, and Turkey, into Western Europe.
Through an entire system of auxiliary corridors, the whole Eurasian continent was to be connected. These corridors were not supposed to be just transport connections, but infrastructure arteries, around which advanced technologies could be brought in, so as to no longer merely extract raw materials, but to process them on the spot, and in this way build up modern industries. So, for the first time, these landlocked areas of the vast Eurasian continent could enjoy the same geographical advantages that were previously the privilege only of territories with access to the oceans.
To service existing populations and the expected population growth, especially in the densely populated areas of Asia, approximately 1,000 cities were to be built along the corridors. Inherently safe nuclear reactor models, such as the High Temperature Reactor, were to be built to supply abundant energy to industry, agriculture, and cities. Between 1992 and today, the Schiller Institute presented the conception of the Eurasian Land-Bridge—including its extensions via the Be ring Strait into the Americas, and via the Middle East into Africa—as a global reconstruction program for a just new world economic order, to literally thousands of conference and seminar audiences in all five continents…
For full, see: Helga LaRouche Testimoy to Duma
Lyndon and Helga LaRouche Return to New Delhi, India
Almost two decades after their previous trips to India to meet with Prime Minister Indira Gandhi, Lyndon and Helga LaRouche return to India to participate in an EIR seminar at the Jawaharal Nehru University School for International Studies, and to meet with top-level officials of the Indian government including two former Prime Ministers, Chandra Shekhar and I.K. Gujral. They also meet with India’s President K.R. Narayanan, as well as leading advisors of the serving Prime Minister, Atal Benhari Vajpayee.
Lyndon LaRouche delivers a keynote address, titled “World In Crisis Needs a New Monetary System” , which he concludes saying:
“We’ve come to a time, when the alternative has failed. Free trade, globalization, and so forth, have become horror-shows, which destroy us. The floating-exchange-rate system has destroyed the world. It must end… Indira Gandhi was right, in her instinct for protectionism. Her father, and others, were right, in the Non-Aligned Movement, in saying, ‘You can not function, merely on national protectionism. You must find a new, more just world economic order…’
“And, that is exactly what we proposed in terms of the Eurasian Land-Bridge. If we can agree, and understand that the nations of East and South Asia require an early, and rapid infusion of technology, to develop these economies so that they can survive; and if this can be done through credit arrangements, extended by governments at interest rates of 1 to 2% simple interest, on long term; and if we take the great infrastructure projects as the driver force; and if we unite the need of Western Europe for markets for this type of technology, and the role of Russia, as the transmission belt between East and South Asia, and Western Europe; and if we think of this as the center of the world, and bring nations in Africa, in the Americas, into the same arrangement, then we have the basis for creating a new monetary system, under which this world can come out of this mess.”
LaRouche Returns to Moscow for Kuznetsov Memorial Scientific Conference
For the second time in one year, LaRouche travels to Moscow for a four-day visit December 10-14 to participate in a scientific conference honoring the memory of Pobisk Kuznetsov, who died the previous year. In addition, LaRouche also addresses a seminar hosted by Academician Lvov at the Central Mathematical Economics Institute (CEMI) and meets with the Mayor of Moscow, Yuri Luzhkov. The Kuznetsov memorial symposium is titled “Space and Time in the Evolution of the Global System Nature-Society-Man” at which LaRouche speaks on the subject of “Russia’s Role in Solving the Global Crisis” in which he states:
“If the world is to come out of this great financial, and monetary, and economic crisis successfully, Russia, as a Eurasian nation, must play a very crucial, central role… I have proposed, that we must develop development corridors, superseding the Trans-Siberian Railroad, across Eurasia… This would require, and would mean, the greatest transformation in the biosphere, in the history of humanity.”
LaRouche Visits Brazil to Receive Honorary Citizenship, Calls for Emergency Monetary Conference
In June 2002, Lyndon LaRouche travels to Brazil to receive an honorary citizenship from the City Council of Sao Paulo, a city of more than 18 million people, the third-largest in the world, and to participate in a series of seminars on reorganization of the world financial system. At a meeting of the Commercial Association of Sao Paulo, LaRouche calls for “an emergency monetary conference” to create a new international economic system . LaRouche states:
“Governments must act to put the system into bankruptcy reorganization… What does this mean? First, we require a global, monetary financial reform. The best model we have is the 1945-1964 system, not as a perfect model, but as a political model. Under those, we must have, therefore, financial reorganization in various countries. We require an emergency monetary conference among leading countries to immediately negotiate a general reform and bankruptcy reorganization. We must also, then, take certain steps in each country and in treaty agreements to get the world economy moving upward… We must generate a tremendous amount of capital investment. How do we do that? We must create a credit system.”
Addressing an overflow crowd of several hundred who attended the ceremony, LaRouche says that there was no way the United States would come out of the breakdown crisis, without the founding of a community of principle among the nations of the Americas. Brazil has a particular role to play in any such endeavor, as one of the few countries in the world which still retains some significant degree of sovereignty, LaRouche adds that he intends to open such a dialogue with all the nations of the Americas by personally coming to Brazil.
Lyndon LaRouche gives three other public addresses during his week-long visit to Brazil, in addition to his speech to the City Council. In each, he warns that there was no solution within the existing international financial system. You must help replace the system, he tells his Brazilian audiences, because both of our nations are heading straight towards a blow-out.
In a June 13 address to the Commercial Association of São Paulo, LaRouche says:
“This means we must think in several terms: First, we require a global, monetary financial reform. The best model we have is the 1945-1964 system, not as a perfect model, but as a political model. Under those, we must have, therefore, financial reorganization in various countries. We require an emergency monetary conference among leading countries, using the implicit emergency powers of government, to immediately negotiate a general reform and bankruptcy reorganization.
“We must also, then, take certain steps in each country, and in treaty agreements to get the world economy moving upward. That means we have to have a protectionist system, because what many people don’t understand, is the importance of capital cycles. Capital cycles generally go 25 years for long-range infrastructure development; 3-7 years for an agricultural program, even for an individual farmer; and for an industrial firm, a product-line may be 7-15 years.
“Therefore, we must generate a tremendous amount of capital investment. How do we do that? We must create the credit system, but we must have a secure credit system. You can not have international trade or loans at above 1-2% simple interest. Therefore we must have a fixed exchange rate. We probably should use a gold-reserve exchange rate. “Then, we have to make certain changes in each country. Brazil is obvious. Brazil has absolutely tremendous potential. We have two areas. We have the domestic economic areas: we have infrastructure, which is primary. The energy requirements are overwhelming. Control and development of one’s own energy resources. You need a science-driver-led program of economic development and recovery, which Brazil already has in some areas, as in the health-science area, which is crucial, for example, for Africa. You must then have an educational system which can be built to produce the cadres for this expansion.
“You must also have an emphasis on entrepreneurship. No accountant, working as an accountant, can cause an economy to grow. Growth comes from physical principles; it comes from the ingenuity of the entrepreneur. The failure of the major corporations reveals what we always knew. A successful economy is always based on the entrepreneurial basis—they are the innovators.”
On June 11, 2002, at a conference sponsored by the Alumni Association of the Superior War College (ADESG) and Executive Intelligence Review, and held in the auditorium of the Latin American Parliament in São Paulo, LaRouche states:
“First of all, you need to bring a factor of stability into the situation, and you do that best by economic measures, which are aimed at the general welfare. If you can go to a population, and convince the population that you are going to take effective action to maintain the general welfare, so that people can live in their neighborhoods in peace, so they don’t have to fight in garbage dumps for food, and that sort of thing, then you can establish a civilian authority to govern. You have credible government… dedicated to maintaining the general welfare.”
In his address to the São Paulo City Council, LaRouche stresses the Vernadskian outlook on physical economy:
“Look at Brazil: this wonderfully large, virtually untouched wilderness, with some concentrations of development, but vast, undeveloped areas, symbolized by the sheer might of the Amazon River. If you look at the Amazon region from the standpoint of the great Russian scientist, Vernadsky, who devised the terms ‘Biosphere’ and ‘Noösphere,’ you have a sense of the great power for the future, implicit in the development of that, in a scientifically sound and rational way…
“So, how is the potential of Brazil to be achieved? There must be sources of power in various parts of the country; there must be efficient communications and transportation. So the profitability of the firm, the productivity of the firm, in some part of Brazil, is not typically based on the productivity, internally or financially, of that firm. But it is the ‘artificial environment,’ which the nation creates in the form of infrastructure, which the nation creates in the form of educational programs, which the nation creates in other ways, which then enables the people of Brazil to develop the various parts of the continent to create new cities, to create new industries, to transform the Amazon region, to conquer the high plateau with its great potential: To change nature by the human will, by discovery.”
LaRouche Reasserts ‘Operation Juárez’ for Sovereign States of Americas
The LaRouche presidential campaign publishes a policy report titled “The Sovereign States Of The Americas: The Monroe Doctrine Today” in which LaRouche reasserts his 1982 Operation Juárez program:
“We must, as I proposed in my 1982 Operation Juárez, develop a new credit-mechanism within the hemisphere, through which we create and manage large flows of created long-term, low-cost credit, credit generated by sovereign governments acting in concert, for capital improvements in basic economic infrastructure and production technologies, at borrowing costs of not more than 1-2% net annual simple interest…
“We must also develop crucial fountains of technology from within various regions of the hemisphere. All of this must function within the framework of an economic protectionist form of fixed-rate monetary order among the currencies of the Americas, similar to the successful initial phase of the original, post-war Bretton Woods monetary-financial system. The development of such an arrangement and perspective within the Americas will directly complement and mesh with the similar system of continental-wide cooperation now emerging within the Eurasian continent. These two continental systems, will be the foundation for a global system.”
Lyndon LaRouche in India: Reorganizing the World Financial System
In January 2003, Lyndon and Helga LaRouche travel to India to participate in an extensive series of public and private events in several different cities including Calcutta, New Delhi, and Jaipur, on the subject of creating a Eurasian alliance to reorganize the bankrupt world financial system. The seminars keynoted by LaRouche include one hosted by the Institute of Economic Growth at Delhi University which serves as a leading think-tank for the government of India, and a conference hosted by the Political Science Department of Jaipur University. LaRouche emphasizes in his speech to the Institute for Economic Growth, titled “The Indispensible Role of the State in Reorganizing a Bankrupt System” that the “Strategic Triangle” of Russia, China, and India must be the primary engine for economic growth in the world, stating, “we must use the experience of the first phase of Bretton Woods as a model for reorganizing the international monetary and financial system, now.”
In his speech in Jaipur, titled “Globalization is a Prescription for Disaster” , LaRouche again highlighted the Strategic Triangle of Russia, China, and India “as a keystone for bringing together the nations of Asia in an alliance of mutual security and economic progress” and defined the means by which credit can be created to develop Eurasia:
“We need to go back very quickly to a fixed-exchange rate system… We need a system under which nations can cooperate, as I indicated in the case of Asia: 25- to 50-year treaty agreements of cooperation. That means that each nation wants a strong national economy, because the basis of credit will not be central banking credit, will not be private credit… On the precedent of Alexander Hamilton, the state creates the credit and provides that credit for necessary projects in national infrastructure. The second way is through treaty agreements among The second way is through treaty agreements among states. That is, two nations who agree to a project, can guarantee each other a relationship over, say, a 25-year period. That will create credit, without issuing money… Put the bankrupt system into bankruptcy, and create credit for socially significant, economically sound, long-term projects, manage them well on the objectives determined, agreements among nations made, and we can recover.”
LaRouches Return to India: Renew The Fight for New Economic Order!
In May 2003, Lyndon and Helga LaRouche return to India for the second time that year to participate in a major international conference co-hosted by the Schiller Institute and the Center for Social Justice of India. The conference is opened with a speech by Indian Member of Parliament Shri K. Natwar Singh, who was the Secretary General of the Non-Aligned Movement under the government of Prime Minister Indira Gandhi when India hosted the Non-Aligned Movement Summit in New Delhi in 1983. In his speech, Singh emphasizes the historic role of the Non-Aligned Movement as leading the fight for the New International Economic Order.
LaRouche then echoes that theme and declares:
“We must have what we fought for at Colombo, Sri Lanka in August of 1976. We must revive the spirit of Bandung, as a part of an international movement. We must revive the concert of a just, new world economic order—now!
“How can this be brought into being? We need large-scale projects, infrastructure projects. We need long-term agreements among nations on trade. We need fixed parities in currencies. We need interest rates on long-term loans which are not excessive: 1-2% simple interest rate. We need 25- to 50-year agreements and treaty agreements, among nations on trade and development. We need a monetary system, with many of the best features of the Bretton Woods system, of the immediate postwar period. But, this time, the United States can not run it, as the United States did back then… . We must have a concert of nations which does this. We must have a concert of nations take over the international financial institutions, and reform them. We must use the power of government, to put bankrupt systems into bankruptcy reorganization. We must use the power of government and treaty agreements, to create large-scale credit and credit systems, to enable these potentials to be realized.”
LaRouche also authors a written policy document for the conference, titled “A Precis: The Peaceful Concept of Technology Transfer” in which he details the necessary scientific principles to be applied in “establishing a more just, peaceful, and profitable new world economic order within a global community of perfectly sovereign nation-states.”
The conference participants endorse The Bangalore Declaration: ‘Toward a New World Political-Economic Order’ which states:
“Establishing a just and equitable economic order in the world is an urgent necessity if the vast majority of people in the world are to enjoy the benefits of human and scientific progress… Developments leading to war, especially the position adopted by some of the leading powers, demonstrate that the international order is becoming less aligned. This opens new opportunities to strengthen the process and build a more cooperative International Order. What we need is a new community of nation-states, non-aligned in military terms, but aligned against all forms of political, social, and economic injustice, and a global movement to pursue a new, just political-economical order… The conference calls upon the peace-loving people, especially young men and women, to launch a worldwide movement to achieve the above goal.”
Sergei Glazyev Issues Call for New World Financial Architecture
Member of the Russian Duma Sergei Glazyev, who had invited Lyndon LaRouche to Russia in 2001 to testify to the Russian Parliament, issues a call for a “new world financial architecture” during a press conference in Moscow announcing his campaign for President of Russia . Glazyev states:
“The key priority today in world politics, where Russia could take the lead, is the formation of a new world financial architecture… Russia could take active steps to transform the ruble into an international reserve currency, and propose to all countries to shift to an equality-based, mutually beneficial system of financial and monetary relations, rejecting the use of the national currency of any one country as a world currency. We should get away from the excessive dependence of the world financial system on the currency issues of any one country, and shift to a system of equality-based financial and monetary relations. In practical terms, it is possible to reach a consensus among a large group of countries and begin to move to a new world financial and monetary system that would be more stable, more reliable and more fair.”
LaRouche Travels to Russia, Publishes ‘Economics of the Noösphere’
In April 2004, LaRouche travels again to Moscow to keynote a conference sponsored by the Vernadsky State Geological Museum of the Russian Academy of Sciences and cosponsored by the Schiller Institute. LaRouche’s speech, “Entering the Economy of the Noösphere” and “The Dialogue of Eurasian Civilizations: Earth’s Next Fifty Years” .
During the dialogue at the conference, Lyndon LaRouche invokes the fight for a new economic order, saying, “go back to 1976 to this experience, where the Non-Aligned nations group, in majority on the initiative of India, actually, adopted a resolution on a just new world economic order.” In his speech titled “We Need a New Treaty of Westphalia”, LaRouche declares that the time for that new international order has come:
“We’re going into either a period of chaos, which could be a Dark Age, or we’re going into a period in which the assumptions of relations among states, especially respecting economic and related kinds of relations, will be changed forever… The decision is on the table: are we going to create a new monetary system, which presumes that a concert of nation-states, sovereign nation-states, will put the existing IMF system into bankruptcy receivership? In other words, governments would take these banking institutions into receivership and manage these bankrupt entities, in such a way as to promote the general welfare.”
During the seminar, Helga Zepp-LaRouche delivers a speech titled “Society Needs a New Paradigm Worthy of the Dignity of Man” , in which she elaborates the history of LaRouche’s role in leading the fight for a new international economic order and asserts the urgent need to “put the new world economic order back on the agenda,” saying:
“In 1971, when Nixon decoupled the dollar from gold, creating the private banking power over money creation in the offshore markets, LaRouche said, this will lead to a new depression, the new danger of fascism, and the danger of a collapse of society—or, the just new world economic order… In 1975, Mr. LaRouche went to Iraq, to participate in the celebrations of the Ba’ath Party. And he came back, and he made for the first time, the proposal to have the International Development Bank, as an instrument to replace the IMF, to be the vehicle for a $400 billion credit per year for clearly defined development projects. This idea, we then circulated for one year, among 85 countries, the countries of the Non-Aligned Movement. Many of these countries did feasibility studies, with the idea of Mr. LaRouche’s work. Then, in Colombo, Sri Lanka, in ’76, eighty-five nations accepted the idea of a new world economic order… Then, the next major thing was when LaRouche got the cooperation of López Portillo, to make a proposal—again, to have a new world economic order. This time coming from a debtors’ cartel, from the Latin American debtor countries: Mexico, Brazil, Argentina…”
Helga LaRouche traces this history through the collapse of, first, the Soviet Union and then the collapse of the free-market ‘globalization’ system, asserting:
“This is now the opportunity to put the idea of a just new world economic order, back on the agenda. If you want to have a just new world economic order, it’s not a technocratic question; it’s not only a question of a new financial system, a new economic system: It’s a question of a passionate idea, of the idea of the international community of people.… So, I think we need to have the discussion on this level, and put the new world economic order, back on the agenda.”
Helga Zepp-LaRouche · Berlin, January 12, 2005
What we are trying to discuss here with this seminar is a vision for the 21st Century. We are not talking just about geopolitics, financial crisis—all of this; but, in a very fundamental way, we are struggling with the question: How can we make mankind more human? How can we make the political order on this planet more worthy of the dignity of man? And that has gone completely awry…
Remember, that in the immediate post-war period, there was a completely different philosophy. You had the idea of the two Development Decades in the United Nations. A Development Decade was the idea that you would look at ten years of development, and you would expect that the life-expectancy, the living standard of the so-called Third World, would improve in a measurable way. That was normal. There was a normal understanding, that eventually, the underdevelopment of the so-called Third World would be overcome. That was the period in which you had the Non-Aligned Movement. You had outstanding leaders, like Nasser, Tito, Nehru, later Mrs. Gandhi. And even in the United Nations, under U Thant for example, you had a clear perspective of overcoming the underdevelopment of the Third World…
LaRouche had for the very first time, in 1958, forecast that the world, if it continued the then-already visible monetarist policies, would end up in the danger of a new fascism and a new depression. Then, in 1971, when Nixon, indeed, started the bubble economy—by decoupling the dollar from gold, by creating the private banking power over money creation in the offshore markets—LaRouche said, this will lead to a new depression, the new danger of fascism, and the danger of a collapse of society—or, the just new world economic order.
And, the entire LaRouche movement, internationally, was built on that idea. You had always two tendencies: You had the increase of globalization, and you had the growing LaRouche movement, being absolutely certain, that the moment which we are seeing right now, would eventually come.
So, in 1975, Mr. LaRouche went to Iraq, to participate in the celebrations of the Ba’ath Party. And he came back, and he made for the first time, the proposal to have the International Development Bank, as an instrument to replace the IMF, to be the vehicle for a $400 billion credit per year for clearly defined development projects.
This idea, we then circulated for one year, among 85 countries, the countries of the Non-Aligned Movement. Many of these countries did feasibility studies, with the idea of Mr. LaRouche’s work. Then, in Colombo, Sri Lanka, in ’76, eighty-five nations accepted the idea of a new world economic order.
Then, all Hell broke loose! I remember this, because, when the resolution came from Sri Lanka, I called up DPA, the German news agency. I said, “Oh, this is great! When will you report about the fact that the majority of mankind has decided for a new world economic order?” And the officer of the day said, “What? Sri Lanka? That’s not newsworthy.”
So, then—a gigantic counter-attack by the neo-cons, by the same people Mr. LaRouche was talking about earlier, started. They killed Bhutto, because Bhutto of Pakistan had dared to demand an international debt conference. They destabilized Indira Gandhi, because she, at that point—for various reasons having to do with her son, Rajiv, had made compromises with the World Bank, so it was relatively easy for them to destabilize her. They destabilized Mrs. Bandaranaike [in Sri Lanka], and every Third World leader who had dared to speak about the new world economic order.
Then, the next major thing, was when LaRouche got the cooperation of López Portillo, to make a proposal—again, to have a new world economic order. This time coming from a debtors’ cartel, from the Latin American debtor countries: Mexico, Brazil, Argentina. And Wall Street, at that point, was absolutely terrified, that if many countries have enough debt, they’re powerful enough to dictate the terms to the creditors. But LaRouche didn’t want to bankrupt the banks, he just wanted to reduce their power to a normal means.
Then, the same year, he made the SDI proposal, which, again, was not what it was portrayed as, “Star Wars,” but it was really the same thing as the Eurasian Land-Bridge: it was basically the idea that both superpowers would develop these modern [antiballistic-missile] weapons based on new physical principles, make nuclear weapons obsolete for the first time through the joint deployment; dissolve the Third World as proxy areas for superpower conflicts, and help the Soviet Union to use these modern technologies in the civilian economy as a science-driver, to then increase the productivity of the world economy, and have a gigantic technology and capital-goods transfer, from the industrialized world to the so-called Third World.
And this was on the verge of succeeding, because LaRouche got President Reagan, for a short period of time, to go with this program. And, again, all Hell broke loose.
Now, LaRouche, at that point, prophetically forecast that if the Soviets would refuse this, they would collapse after five years. It took six years, and then, you had the ’80s “Reaganomics,” Thatcher economics, and eventually the Soviet Union started to collapse in 1989. And there, between ’89 and 1991, you had what correctly can be called an historical chance of mankind to completely change the order on this planet! Because there was no opponent any more! You had the United States and the West; the Soviet Union, as the so-called “enemy,” had just disintegrated. And there was the absolutely incredible possibility to totally recreate the relationship between the East and West on a completely new level.
But, as we know, at that point, the neo-cons emerged in the United States, and they talked about a “New American Century” doctrine, and the chance was lost.
We, however, knew that if you would make the mistake imposing on the bankrupt Communist system, the equally bankrupt free-economic-market system, that eventually you would raise up an even bigger crisis. And that is the crisis which has arrived now…
Now, I think that what the purpose of this seminar is, and similar discussion groups which we are planning to have in the next months: We have to find a way how we make this world livable. We can not sit here, and see the world go to pieces, just because the powers-that-be decide that that should happen. We need a new paradigm. We need a new basis for society, which defines, at a point where nobody can deny that mankind is at probably the worst point of danger ever—I mean, if you think how close we are sitting to the potential of asymmetric nuclear global warfare; with madmen having their finger on the button, I think anybody who is not crazy should not sleep well! Because we are sitting on a volcano, a complete powder keg.
And, if you look at the level of governments: What are they doing about it? Do they think: How can we change a world order which clearly doesn’t function? How can we remedy something which does not allow the survival of the larger part of mankind? One-third of the entire human race is hungry, every day; one-third is barely nourished; and only one-third has enough food! Fifty thousand children die every day! This is a failed system!
I’m sorry: This present world system, is as failed and bankrupt as the D.D.R. was in the beginning days of November ’89, and it is going down in the same way.
Now, what we have to do—and I want to really say this—once we have an idea that mankind is in danger, we have to think, what are the common aims of mankind? How can we agree on principles, which mean that mankind is going to get in a condition which is human, worthwhile of the name of being human?…
Maybe this is now the opportunity to put the idea of a just new world economic order, back on the agenda: Because, why should we accept poverty? Why should we accept that the majority of the human race is living in a condition which none of the people in Western Europe or the United States who are well-to-do, would ever accept?…
PREPARE FOR THE NEW WORLD ECONOMIC ORDER
And I think what we have to do, also, with this discussion group, and similar circles, is to prepare: What can be put on the table, in the moment of the maximum crisis? Which is the New Bretton Woods idea, combined with the proposal which Mr. LaRouche made this morning, which is an addition to the old-standing New Bretton Woods idea of LaRouche, namely, to have, as part of this package, a rational agreement about the raw material distribution of mankind for the next 50 or more years to come, so that there is no war over raw materials, as part of the picture.
And each government should be induced and encouraged, to make feasibility studies about this soon-to-come eventuality. Very soon, you will see, the dollar collapse will continue, all the bubbles will start to bust, and there will come a moment of utmost crisis, but also of utmost chance…
Now, let me just say, one last thing: I think—and even if this is not the usual kind of discussion at seminars and strategic discussions and so forth—but, I think we will not get out of this without love. Look: If you want to have a just new world economic order, it’s not a technocratic question; it’s not a question of a new financial system, a new economic system: It’s a question of a passionate idea, of the idea of the international community of people. That you have to not be able to stomach it, one more day, that the world is in this wretched condition! And you have to have a vision of how the world could look like, once we make it human. Blooming gardens in places where there are deserts right now. People living decent human lives. Africa being totally, infrastructurally developed. Eurasia infrastructurally developed. Thousands of new cities we want to build—beautiful cities!
Not just Houston models, but why not take the beautiful architecture of China? Of India? And make new cities along the Eurasian Land-Bridge, and in Africa, and Latin America, using the beautiful architecture? Making them modern, with maglev trains, connected with module construction underground, so that they are totally modern, but you can make them beautiful!
I think that what is needed, is really a vision. And a love of people for mankind… So, I think we need to have the discussion on this level, and put the new world economic order, back on the agenda.
See: Society Needs a New Paradigm Worthy of the Dignity of Man
Helga Zepp-LaRouche Renews Calls for New Bretton Woods
In April 2005, the president and founder of the Schiller Institute, Helga Zepp-LaRouche, renews the call for a New Bretton Woods, issuing an international petition signed by leading elected officials and government figure, including numerous members of the Italian Parliament who had sponsored resolutions in support of the New Bretton Woods, as well economists from several western and central European countries. The petition states:
The following measures must be implemented if we are to alter the mistaken course that we have followed since President Nixon did away with fixed exchange-rates in 1971, a course that has led to the present upsurge of a grotesque and predatory form of capitalism, thanks to unchecked ‘globalization’ after the fall of the U.S.S.R. The New Bretton Woods Conference shall decide as follows:
1. There shall immediately be re-established fixed exchange rates
2. A treaty shall be enacted between governments, forbidding speculation in derivative products.
3. The debt shall either be cancelled, or reorganized.
4. New credit lines shall be opened by the State, to create full employment by investing in critical infrastructure and technological innovation.
5. The building of the Eurasian Land-Bridge, as the keystone for rebuilding the world economy, is the vision that will bring about not only a new economic miracle, but peace in the 21st Century.
6. A new Peace of Westphalia will ensure that for no less than the coming half-century, raw materials shall be extracted and processed for the benefit of every nation on this planet.
We, the undersigned, believe that so-called ‘globalization,’ this predatory form of capitalism, has shown itself beyond all doubt to be bankrupt on every front. It is Man who must stand at the center of the economy, and accordingly, the economy must serve the common weal. The purpose of a new world economic order is to guarantee the inalienable rights of Man.
Ad-Hoc Comittee for a New Bretton Woods Agreement
The paradigm shift of the last four decades, a period in which the world economy increasingly abandoned manufacturing and gave itself over untrammelled speculation, now draws to an end. The world financial system is about to implode. Gross production worldwide stands at a mere forty trillion dollars, over which looms gigantic a bubble fifty times that size, viz., two thousand trillion dollars’ worth of financial liabilities. The impending bankruptcy of General Motors and potentially, of the entire U.S. automobile industry, is but one of many factors that could well lead to the collapse of the U.S. dollar, and thereby, that of the entire financial system.
To prevent the world’s people from suffering the untold harm that the breakdown of the system would unleash, we the undersigned demand that an emergency conference be convened, to agree upon a new financial architecture along the lines of the Bretton Woods System launched at Franklin D. Roosevelt’s initiative in 1944. We stress that Lyndon LaRouche is the economist who has best grasped the causes of the systemic crisis, and who has, moreover, put forward a package of measures that would adequately deal with it: a New Bretton Woods agreement.
We the undersigned further stress that the Italian Parliament has taken up LaRouche’s proposal, and on April 6th 2005, voted up acalling for “an international conference at Heads of State level, in order to lay the basis for a new and just world monetary and financial system.”
The following measures must be implemented if we are to alter the mistaken course that we have followed since President Nixon did away with fixed exchange-rates in 1971, a course that has led to the present upsurge of a grotesque and predatory form of capitalism, thanks to unchecked “globalization,” after the fall of the U.S.S.R. The new Bretton Woods Conference shall decide as follows.
1. There shall immediately be re-established fixed exchange rates.
2. A treaty shall be enacted between Governments, forbidding speculation in derivative products.
3. The debt shall either be cancelled, or reorganized.
4. Fresh credit lines shall be opened by the State, to create full employment by investing in critical infrastructure and technological innovation.
5. The building of the Eurasian Land-Bridge, as the keystone for rebuilding the world economy, is the vision that will bring about not only a new “Wirtschaftswunder,” (economic miracle) but peace in the 21st Century.
6. A new Peace of Westphalia will ensure that for no less than the coming half-century, raw materials shall be extracted and processed for the benefit of every nation on this planet.
We the undersigned believe that so-called “globalization,” this predatory form of capitalism, has shown itself beyond all doubt to be bankrupt on every front, whether economic, financial, or moral. It is Man who must stand at the center of the economy, and accordingly, the economy must serve the common weal. The purpose of a new world economic order is to guarantee the inalienable rights of Man.
Argentine Foreign Minister Calls For New Bretton Woods at United Nations
On September 14, 2005, during a speech to the United Nations General Assembly, the Foreign Minister of Argentina Rafael Bielsa calls for:
“…an international conference of heads of state, similar to the 1944 Bretton Woods conference, to rebuild a more just global monetary and financial architecture which eliminates financial bubbles and concentrates on supporting the real economy.”
This speech, prepared in direct coordination with the Argentine president Nestor Kirchner, comes in the wake of Argentina’s victory over the international vulture funds, forcing them to renegotiate Argentina’s debt and accept a vast write-down of the face value of their claims against Argentina. Refusing to give in to the threats and ‘conditionalities’ of the IMF, Argentine President Nestor Kirchner had delivered a speech that April in which he declared:
“There is life after the IMF, and it’s a very good life. And remember, being in the embrace of the IMF isn’t exactly like being in heaven. I received an Argentina devastated by an economic program supported by the International Monetary Fund: The placing of private interests over the general interest was the expression of a specific model of society which led to generalized poverty, uncertainty, isolation, and impoverishment of life at all levels…
“As it operates today, the IMF has no future, and the developed world has to understand this. Argentina is prepared to work actively and constructively on behalf of a new world economic order.”
Argentine President Kirchner Calls for New Financial Architecture at UN
Nestor Kirchner, the President of Argentina, delivers a speech before the United Nations General Assembly on September 21, 2006, in which he calls for a “new financial architecture” to replace the failed and destructive IMF system. Denouncing the violation of national sovereignty and prevention of economic development that the IMF ‘conditionalities’ regime represents, Kirchner declares:
“There is sufficient empirical evidence to demonstrate that the participation of the international financial organizations in the promotion of development of poorer nations has not been successful, and in many cases, with their conditionalities, they have acted in a contrary sense, preventing development… That is why, together with the majority of countries, we support the reform of the international financial architecture, such that it will lead to the progress of the poorest nations. In noting the scant willingness of these international financial organizations to produce a real change in their policies, we deem it necessary to make this change, and to consider the creation of new international financial instruments that will permit the building of development projects to combat poverty and hunger in the world and to provide real options for advancement.”
Nestor Kirchner · UN General Assembly, Sept. 21, 2006
The world will only achieve peace to the extent that it promotes equality and fights to eradicate poverty and exclusion. This is as valid for the global system as it is for each individual country. Argentina supports the building of more just, more equitable societies, with a better system for distributing the benefits of economic growth. We also believe that each nation has the right to seek its own model of development, without foreign conditionalities.
We not only aspire to generate sustained development, but we also want this to reach everyone. There must be harmonious growth translated into balanced income distribution, because we know that development for a few, rather than for a country as a whole, simply doesn’t work….
The economic situation in the [argentine] Republic is very different from what it was when we began our administration…. Uninterrupted high rates of growth at between 8-9%; growing participation of investment in the GNP; record local rates of savings; resurrection of local industry; a fiscal surplus at historic levels; unimpeded access of our industrial exports to the world; systematic reduction of the domestic and foreign public debt; preventive accumulation of reserves; less foreign exposure; strong reduction of unemployment; strengthening of wage-earners’ and retirees’ incomes; an important decline in poverty….
I am forced to emphasize that these achievements have not been supported by the International Monetary Fund, which has denied us any assistance, and—I feel compelled to say this—in many cases, we have achieved this progress by ignoring, if not completely opposing, its recommendations and conditionalities.
There is sufficient empirical evidence to demonstrate that the participation of the international financial organizations in the promotion of development of poorer nations has not been successful, and in many cases, with their conditionalities, they have acted in a contrary sense, preventing development.
The world has changed, but these organizations have not. With their ill-conceived intervention, they insist on jeopardizing progress. That is why, together with the majority of countries, we support the reform of the international financial architecture, such that it will lead to the progress of the poorest nations. In noting the scant willingness of these international financial organizations to produce a real change in their policies, we deem it necessary to make this change, and to consider the creation of new international financial instruments that will permit the building of development projects to combat poverty and hunger in the world and to provide real options for advancement.
International Conference in Moscow Demands Bering Strait Tunnel
Lyndon LaRouche is invited to participate in a conference on April 24, 2007 in Moscow, Russia called “Megaprojects of Russia’s East: A Transcontinental Eurasia-America Transport Link via the Bering Strait” organized by the Russian Academy of Sciences Council for the Study of Productive Forces (SOPS), in conjunction with the Russian Ministry of Economic Development and Trade (MERT), the Russian Ministry of Transport, the state-owned company Russian Railroads, and several regional governments in Siberia and the Russian Far East. Lyndon LaRouche’s speech, prepared and submitted to the conference, is titled “The World’s Political Map Changes: Mendelyev Would Have Agreed” in which he states:
“This onrushing collapse of the world’s presently hyperinflated, disintegrating world monetary-financial system, requires early concerted emergency action by responsible leading nations… These must include the U.S.A., Russia, China, and India, as the rallying-point for a new, spreading partnership among perfectly sovereign nation-state economies. In such cooperation, the development of a great network of modern successors to old forms of rail transport, must be spread across continental Eurasia, and across the Bering Strait into the Americas… The bridging of the Bering Strait becomes, thus, now, the navel of a new birth of a new world economy.”
Lyndon LaRouche · April 24, 2007
For PDF: World’s Political Map Changes: Mendeleyev Would Have Agreed
The intention to create a trans-Siberian rail system, implicitly extended, across the Bering Strait, to North America, dates implicitly from the visit of Dmitri Ivanovich Mendeleyev to the 1876 U.S. Centennial Exposition in Philadelphia. The defeat of Lord Palmerston’s scheme for destroying the United States, by U.S. President Abraham Lincoln’s leadership, spread the influence of what was called The American System of political-economy into Russia, as also the Germany reforms under Bismarck, the industrialization of Japan, and elsewhere. These global, so-called geopolitical developments of the post-1865-1876 interval, have been the focal issue of all of the spread of great wars throughout the world from the British orchestration of the first war of Japan against China, in 1894-95, until the 1945 death of U.S. President Franklin Roosevelt.
Throughout the ebbs and flows of global economic and geo-political history, up the present day, the realization of Mendeleyev’s intentions for the development of Russia remains a crucial feature of that continuing history of the post-1865-1876 world to the present moment. The revival of the intention launched by him, now, is presently renewed as a crucial quality of included feature of crucial importance for the world as a whole today.
The same impulse toward new world wars persists in new guises today. At the present moment, the world is gripped by what threatens to be, very soon, the greatest global monetary-financial collapse in the entirety of modern history to date. The spread of warfare and related conflict out of Southwest Asia is nothing other than a reflection of the same, continuing, so-called geo-political impulse which has prompted all of the world’s major wars since the 1763 Treaty of Paris, but, more emphatically, the rise of the U.S.A.’s 1865-76 challenge to the Anglo-Dutch Liberal monetary-system.
This onrushing collapse of the world’s presently hyper-inflated, disintegrating world monetary-financial system, requires early concerted emergency action by responsible leading nations. A sudden change in U.S. political trends, back to the traditions of President Franklin D. Roosevelt, is urgently needed for this purpose. Such a change in U.S. policy must be realized through emergency cooperation which would be led by a concert of leading world powers. These must include the U.S.A., Russia, China, and India, as the rallying-point for a new, spreading partnership among perfectly sovereign nation-state economies.
In such cooperation, the development of a great network of modern successors to old forms of rail transport, must be spread across continental Eurasia, and across the Bering Strait into the Americas. The economically efficient development of presently barren and otherwise forbidding regions in entry into the urgently needed future development of the planet as a whole.
Such a plan was already crafted, during 1990-1992, under the direction of my wife, Helga Zepp-LaRouche, who remains the principal political and cultural leader among my associates in Europe and beyond. This perspective must now be revived to become a global actuality.
Technologically, the leading thrust of scientific development is located in the succession of the work of such exemplary figures as Mendeleyev and Academician V.I. Vernadsky, and the work of the relevant, but too little heralded leader in the same field, the American pioneer William Draper Harkins.
This requires the creation of long-term diplomatic agreements among nations, creating a new system of relatively fixed-exchange-rate treaty-agreements, at very low prime interest-rates, over forward-looking intervals of between a quarter to half century. These present periods covering the economic-financial half-life-span of principal long-term investments in the development of that basic economic infrastructure which the needs of the present and coming generations of the peoples of these natures require.
We have thus entered a time, measured by the clock of nuclear-fission and thermonuclear power’s development, when the long history of the domination over the land-masses of the planet by actually or implicitly imperial maritime powers, is no longer an acceptable practical proposition. Instead, the science-driven, capital-intensive mode of development of the basic economic infrastructure and standard of living of the populations, will dominate any successful form of civilized development of relations among the sovereign nations of the planet. To this end, the tundras and deserts of our planet must be conquered by the forces of science-driven technological development of the increased productive powers of labor. Development must now proceed from the Arctic rim, southwards, toward Antarctica.
The bridging of the Bering Strait becomes, thus, now, the navel of a new birth of a new world economy.
LaRouche Invited to Moscow as Featured Guest of Academy of Sciences
Lyndon LaRouche is invited to Moscow to attend a celebration sponsored by the Russian Academy of Science of the 80th birthday of Stanislav Mikhailovich Menshikov, a prominent Russian economist. The celebration is also attended by Academician Alexander Granberg who sponsored the Bering Strait forum earlier in the year, and Dr. Sergei Glazyev, also a member of the Academy of Sciences.
Professor Menshikov introduced both Lyndon and Helga Zepp-LaRouche as his personal guests. In his speech, Menshikov projected a vision of where the world could be in 2027, when he would have been 100 years old. This vision was built around LaRouche’s idea of the Eurasian Land-Bridge as the cornerstone of a new international order. Menshikov said:
“Lyndon LaRouche, who is present here today, has put forward the conception of building the Eurasian Landbridge. The Eurasian Landbridge is a program of cooperation, with the participation of the U.S.A., Western Europe, Russia, with its scientific potential and enormous mineral resources, China, and India—cooperation, for the purpose of building and reorganizing the economic infrastructure over the next fifty years. This will stimulate the progressive growth of the entire world economy. But, this plan can only be implemented, if there is cooperation among all of those countries; if their development proceeds in a conflict-free way. Lyndon LaRouche believes that one of the areas of such cooperation needs to be a monetary and financial reform, which he calls a New Bretton Woods. This means to establish a fundamentally new monetary system, which in some of its features will recall the old Bretton Woods, the system established at the end of the Second World War, which was subsequently destroyed. Such a new world monetary and financial system, once more, will have to be based on cooperation among all the countries I mentioned…
“Thus, 2027 may be a year by which the planet has been turned upside down, in terms of its economy. At the peak on top will be countries that were formerly considered the Third World, while the traditionally industrialized countries will find that their place in the international division of labor will be determined by certain highly developed, specialized sectors producing goods and services. My last pronouncement will be this: that Russia’s path will be a path that upholds these projects for world cooperation. That is, while orienting towards the Eurasian triangle of Russia-China-India, but without forgetting the industrialized countries, Russia should take part in those programs that will lead to conflict-free development that brings about a steady upswing of the world economy.”
Lyndon LaRouche makes remarks in response, in which he says:
“The time has come to change some of the axiomatic features of currently ongoing world history. Europe is a collection of failed states, west of the Russian and Belarussian border. Therefore, the United States must change its behavior, by approaching Russia, China, and India, in order to create a new order of relations in the world, bringing all the smaller nations in to cooperate with them. I think we can do it: we can change history. What I think is urgent at this time, is a program for action. First of all, intellectual action. There must be more discussion, particularly between leading layers of senior people in Russia and in the United States. We have to establish a sense of the reality of this possibility. In that case, we can probably win over the political process, under the heat of crisis, to recognize that this is the only alternative to what is presently the most dangerous situation in all modern history.”
During his visit to Moscow, LaRouche is interviewed by several Russian media, both television and print, including by economist Mikhail Khazin, during which LaRouche reviews the history of his role in shaping the economic policy relations between the United States and Russia:
“From 1994 on, since I was visiting Russia, in that period, my concern, which I shared with many of my Russian friends in high positions, was to try to get an understanding with President Clinton, and people in Russia. So, some of the key people here in Russia organized a meeting which I addressed in Moscow. They were prepared, through me, because they knew my connection to Clinton, to open a new channel of economic understanding and cooperation with the United States. [Academician Gennadi] Osipov was one of the leaders of that group, to organize it. The former Prime Minister, [valentin] Pavlov, was part of it. But the Vice President of the United States, Al Gore, was a close friend of Yeltsin, and they put pressure on Clinton not to do it. Finally, in 1998, in August and September, Clinton recognized I had been right… We must have a dialogue between Russia and the United States, involving other countries, like China, India, and so on, who understand that we believe the same thing about the present world crisis, and can understand what we must do for the next 50 years.”
Russian President Calls for ‘New International Economic Architecture’
At the annual gathering in Russia for the St. Petersburg International Economic Forum on June 10, 2007, attended by almost 10,000 people from over 65 nations (including nine Presidents, four Premiers, 44 ministers, and 40 ambassadors), Russian President Vladimir Putin issues a call for a “new international architecture of economic relations” between nations. Putin highlights the increasingly dominant role being played by the developing countries in the world economy, and states that the existing international financial organizations are in need of “serious restructuring” and that the former paradigm of international economic relations has become archaic.
President Putin declares:
“If we want to achieve sustainable development we need to create a new architecture of international economic relations based on trust and mutually beneficial integration. We cannot ignore the importance of healthy competition, but at the same time, we need to move towards forming common and interdependent interests and ties… The new architecture of economic relations implies a principally new approach to the work of international organizations.”
Vladimir Putin · St. Petersburg, June 10, 2007
The world is changing literally before our very eyes. Countries that seemed hopelessly backward only yesterday are becoming the world’s fastest growing economies today. Fifty years ago, the G7 countries accounted for 60 percent of the world’s GDP, but today this situation has been reversed and 60 percent of the world’s GDP is now produced outside the G7 countries. The developing countries are more and more active in establishing niches for themselves not just in the trade of goods but also of services. New players, including in the high-technology and science-intensive sectors, are bringing greater competition to the market…
If we want to achieve sustainable development we need to create a new architecture of international economic relations based on trust and mutually beneficial integration. We cannot ignore the importance of healthy competition, but at the same time, we need to move towards forming common and interdependent interests and ties… In an open economy, most countries depend on international trade and on how stable and sustainable are their exports and imports. Economic partners can feel a sense of security only when they have reliable and predictable relations and when buyers and sellers guarantee fulfillment of their respective commitments.
The new architecture of economic relations implies a principally new approach to the work of international organizations. It has become increasingly apparent of late that the existing organizations are not always up to the measure in regulating global international relations and the global market. Organizations originally designed with only a small number of active players in mind sometimes look archaic, undemocratic and unwieldy in today’s conditions. They are far from taking into consideration the balance of force that has emerged in the world today. This means that the old decision-making methods do not always work…
The international financial organizations are also in need of serious restructuring and modernization. They were established at a time when the world looked very different and are having difficulty adapting to the new situation of stable economic growth in the majority of developing countries and growing markets… Fluctuations of these [reserve] currencies have a negative impact on the financial reserves of countries and on the development of different branches of the world economy in general. There is only one answer to this challenge: introduction of several world currencies and several financial centers. that is why it is today necessary to create prerequisites for the diversification of assets in the world’s financial systems.
Lyndon LaRouche Forecasts the Financial Crash of 2007
On July 25, 2007, during an international webcast in Washington DC, Lyndon LaRouche goes on record stating that the banking system had reached the point where a catastrophic collapse could no longer be avoided and must be expected to occur in the immediate future. Three days later, Bear Stearns goes under, triggering a chain reaction crisis throughout the entire global financial system.
In his webcast, Lyndon LaRouche states:
“There is no possibility of a non-collapse of the present financial system—none! It’s finished, now! The present financial system can not continue to exist under any circumstances, under any Presidency, under any leadership, or any leadership of nations. Only a fundamental and sudden change in the world monetary financial system will prevent a general, immediate chain reaction type of collapse. At what speed we don’t know, but it will go on, and it will be unstoppable. And the longer it goes on before coming to an end, the worse things will get.”
Lyndon LaRouche · Washington DC, July 25, 2007
First of all, this occurs at a time when the world monetary financial system is actually now currently in the process of disintegrating. There’s nothing mysterious about this; I’ve talked about it for some time, it’s been in progress, it’s not abating. What’s listed as stock values and market values in the financial markets internationally is bunk! These are purely fictitious beliefs. There’s no truth to it; the fakery is enormous. There is no possibility of a non-collapse of the present financial system—none! It’s finished, now!
The present financial system can not continue to exist under any circumstances, under any Presidency, under any leadership, or any leadership of nations. Only a fundamental and sudden change in the world monetary financial system will prevent a general, immediate chain-reaction type of collapse. At what speed we don’t know, but it will go on, and it will be unstoppable! And the longer it goes on before coming to an end, the worse things will get. And there is no one in the present institutions of government who is competent to deal with this. The Congress, the Senate, the House of Representatives, is not currently competent to deal with this. And if the Congress goes on recess, and leaves Cheney free, then you might be kissing the United States and much more good-bye by September….
You have to change the world monetary-financial system immediately, and you can not do that with a couple of small nations. You can only do that from the top. You have to pull together the might of the world, the major powers of the world and those who will support them, and say, “We’re going to change immediately the world monetary system. We’re going to get rid of the floating-exchange-rate monetary system. We’re going back immediately to a fixed-exchange-rate system.” Because if we do not go back to a fixed-exchange-rate system, of the Franklin Roosevelt prototype, then there’s no possibility of preventing a general collapse and disintegration of the world economy. It can’t be done. Therefore, you have to have a power group which says, “We’re going to save this planet from Hell.”
One of the things which we’re going to do, which is a trigger point, is to get something done in Southwest Asia: to get the U.S. troops out of the target range, and pull them into a holding position where they become a factor in negotiating the peaceful reconstruction of the region. That will not work by itself unless you have a power group which includes four powerful nations of this planet, and others, who decide that that’s going to work. A power group which agrees that we’re going back to a fixed-exchange-rate system, by government decree, as made by governments in concert. We’re going to stop the floating-exchange-rate system, we’re going to take steps to clean up the financial mess.
Most of the financial claims and the financial assets and obligations in the world today, are worthless. You have play money; the stock market is a fraud. The Treasury Department is committing a fraud. Most governments are committing fraud, and the British government is the worst of them all. The British government and the British system is the worst offender that we have to deal with on this planet. They organized this war, they organized most of the evil that is done in the world today. So, they will not be considered as having any veto rights in this matter.
But the major powers are going to say: We’re going to have to go back to a fixed-exchange-rate system. We’re going to do it immediately, by treaty agreement, by signed agreement among countries. We’re going to freeze a lot of things, and we’re going make sure that things that have to be paid, things that have to go on, go on. That production is not cut; farming proceeds, food is produced, infrastructure is built, and so forth. And we’ll have to build our way out of this process with steps which begin with these measures. And the measures are a matter of the will of a powerful group of nations, not just the four, but a powerful group of nations who agree that this has to be done, because Hell on Earth has to be prevented. And that’s the only way it is going to happen….
The United States is disintegrating. If a depression occurs, the United States will see conditions you won’t believe. Nothing in the past century, no depression, is comparable to what will hit the United States if this system collapses now….
Helga LaRouche: Land-Bridge Is The Cornerstone of New Economic Order
The Schiller Institute sponsors a conference in Kiedrich, Germany on September 14-15 attended by 350 people from 40 nations, with presentations and papers from prominent Russian academicians and political figures, including Prof. Stanislav Menshikov of the Russian Academy of Sciences; Victor Razbegin, deputy chairman of the Council for the Study of Productive Forces (SOPS); and Dr. Sergei Cherkasov and Academician Dmitri Rundqvist, both of the Vernadsky State Geological Museum. Lyndon LaRouche delivers the keynote to conference, calling for an urgent bankruptcy reorganization of the world financial system:
“The only peaceful remedy for the present world situation, today, would be by actions which, in effect, place the present world monetary-financial system into a process of reorganization of bankruptcy; and a return to a design consistent with what U.S. President Franklin Roosevelt had intended for the Bretton Woods System, had he lived. No possible solution for this crisis exists within the structures of the present world financial-monetary system. Only a political reform of the world system, as it must be promoted by the initiative of a relevant leading group of powerful nation-states, could turn the tide of horror now gripping the fate of this planet as a whole.
Helga LaRouche addresses the conference and states that the gathering is intended to be a creation of a global forum of dialogue for the purpose of achieving a just new world economic order:
“This conference is supposed to be the beginning of a worldwide dialogue, and forum, of people who want to reconstruct the world; of putting together the combination of people who want to fight for the old idea, which used to be the agenda, for example, of the Non-Aligned Movement, to build a just new world economic order. And the key to this is building the Eurasian Land-Bridge, which, from the beginning, never was meant to be limited to Eurasia, but the cornerstone of a global reconstruction program… We have reached a situation where either we establish a new world economic order based on the Eurasian Land-Bridge, and go for global reconstruction, or we will plunge into a dark age… The question of the new world economic order has been our life’s work, and it is now the time to implement it.
I want to welcome you again, distinguished guests from many countries, and I’m actually glad to report that we have, so far, people from 29 countries assembled in this conference. This conference is taking place at a truly awesome moment in history, where even the financial media cannot fail to report that the global financial system is in an advanced stage of disintegration, of a complete meltdown of the entire system. And naturally, this is not disconnected from the fact that we are in a world situation of a heightened danger of a new war, this time against Iran. If this would happen, it would be the beginning of global asymmetric warfare, and therefore a plunge of the entire civilization into a dark age.
So, while I don’t want to play down the dangers which come from these two immediate situations, the actual purpose of this conference is a very optimistic one. We will hear in many presentations and discussions, how easy it would be to reconstruct the world. And that, provided we get through this immediate danger zone, mankind can enter a completely different phase, having rational discussions about how to build things; how to overcome bottlenecks; how to overcome poverty; how to build industries, agriculture; how to bloom and green the deserts. And the purpose of this conference is to get people optimistic, not only in the two days of this discussion, but beyond. Because this conference is supposed to be the beginning of a worldwide dialogue, and forum, of people who want to reconstruct the world; of putting together the combination of people who want to fight for the old idea, which used to be the agenda, for example, of the Non-Aligned Movement, to build a just new world economic order.
And the key to this is, obviously, the building of the Eurasian Land-Bridge, which, from the beginning, never was meant to be limited to Eurasia, but we always thought the Eurasian Land-Bridge to be the cornerstone of a global reconstruction program.
Now, to situate the conference, let me just briefly remind you of what happened in the recent weeks, which were truly dramatic.
The present world financial system is bankrupt beyond repair. And all the beautiful, creative financial instruments given to the world by Alan Greenspan—the hedge funds, the private equity funds, the conduits, the investment vehicles and whatever they’re all called—they are all basically worthless paper. Or not even paper, they’re just e-paper, electronic paper, and you can eliminate them by pushing the delete button on the computer, because they don’t exist; they’re just virtual.
Now, how many trillions of dollars are out there, nobody knows. Not one government, not one central bank—the efforts by the German government at the last G-8 meeting to at least get transparency, failed, so we are still sitting in a situation where nobody knows the exact amount of money which is presently unpayable. But what one can say is, this is several magnitudes beyond the entire physical GDP of world production. And we have now reached a situation where if the banks are trying to bail out the hedge funds and other funds, they themselves will go bankrupt.
Now Mr. LaRouche, of course, has forecast that this present financial system would end sometime in a systemic crisis. And I’m sure that there is nobody right now, of any significance in the financial world, who, when you have a crash of a hedge fund, when you have new figures of collapse, who is not thinking of this gentleman. Because he is like the incarnation of the warning that the present system cannot function.
Now, in May, when Mr. LaRouche and I were in Moscow at the beautiful occasion of the 80th birthday of Professor Menshikov, who is here today, together with his wife, he said that he expected a major financial crisis for his birthday, which is in this month of September. We took his words seriously, and I thought it would be good to have a conference around this time, so that basically we could discuss what would be the alternative. And so, here we are.
Mr. LaRouche, then, on the 25th of July, made an historic webcast in Washington, where he declared that the system had already collapsed, and that we are only seeing the aftermath, the playing out of this collapse. And he also said that American infrastructure is completely rotten, and falling apart.
And exactly two or three days later, the first hedge funds of Bear Stearns went under, as a consequence of the collapse of the subprime mortgage market in the United States. And at the same time, the bridge in Minnesota collapsed. So, he was truly prophetic. Then, also, the Japanese yen carry trade started to come to an end, and you had at that point, the trigger of what Mr. LaRouche called the “two bookends” of a reverse-leverage collapse process, and then you had unfolding what is generally called the “cluster risk”: that, because all market segments are interconnected, you had the beginning of a systemic collapse…
We need a New Deal. We need a Bretton Woods system. And Mr. LaRouche has called for a Four-Power agreement, and I’m sure he will speak about that himself: that you need a changed United States, plus Russia, plus China, plus India, because only if you put together the four most powerful nations of this world, do you have any chance to solve this problem.
Now, I want to turn to the actual subject of this conference.
THE EURASIAN LANDBRIDGE SOLUTION
The Eurasian Land-Bridge is becoming a reality. Exactly at the moment when globalization is failing, the global alternative is taking shape. This is something we have been fighting for since the fall of the Wall, in 1989-90. When the Berlin Wall came down, we proposed, and especially Mr. LaRouche proposed, the idea of a Productive Triangle, which was supposed to be the area between Paris, Berlin, and Vienna, which is the largest industrial concentration in the world, still; and to use high-technology investments in this region—high-temperature reactors, maglev trains, and similar things—to develop so-called corridors to Eastern Europe.
Now, if that had been implemented, it would have been quite a different situation than what then happened, because then you had truly the possibility to put the East-West relationship on a completely different basis.
In ’91, when the Soviet Union collapsed, we proposed the development of the Eurasian Land-Bridge [Figures 1 and 2], which was the idea to connect the industrial and population centers of Europe, with the population and industrial centers of Eurasia, through so-called development corridors. Which was the idea to take the transport arteries along the Trans-Siberian railway, and the old Silk Road, and build so-called development corridors of 100-kilometer width, where you would put in energy production and distribution, and communication, to then have in these development corridors, the condition previously found only in the non-landlocked areas of the world, so that you would open up Eurasia for development.
This idea we proposed in hundreds of conferences and seminars, and, in 1996, we participated in a big conference in Beijing, which was organized on our suggestion, by the Chinese government, with the participation of 34 countries, to discuss the economic development among the regions of Eurasia. At that point, the Chinese government declared this program to be the long-term perspective of China, until the year 2010, and as you can see, this was 11 years ago. Then several setbacks occurred: the Asia crisis of 1997, so-called; then the fact that the Chinese government, for a long period, did not want to risk their relationship to the United States by going in this direction. But then came the Bush Administration and Sept. 11 in 2001. And following, you had the war against Afghanistan and Iraq.
And then something happened which is really extremely interesting, in terms of how historical processes actually develop. Because of the policies of the Bush Administration, to turn the republic of the United States, into an empire, or at least attempting to do so, by insisting on the “unitary executive” conception of the Presidency, by trying to run world politics in a unilateral way, the countries of Eurasia moved together much more quickly than would have otherwise occurred. And a strategic partnership happened between China, Russia, and India, and the Shanghai Cooperation Organization included many more countries of Eurasia.
At the same time, you had the economic integration and cooperation in Latin America, with respect to a new Bank of the South.
So, now we have a dramatic situation, where for a long time, we were only talking about these projects, but now because the collapse of the system is becoming obvious, because it is clear that we are in a complete transformation of the historic period, all these projects are now becoming a reality.
On the 10th of April, President Putin had a Cabinet meeting in which he decided to make the railway development of Russia a priority of his Presidency. Then on the 24th of April, a conference took place in Moscow on the development of the Bering Strait, which is the idea which Mr. LaRouche has been pushing since the ’70s, which is the idea to connect Alaska, through the Bering Strait, with Siberia.
Now, this is a fantastic project. It involves, from the Russian side, the intention to build 6,000 kilometers of railway, and a 100-kilometer tunnel underneath the Bering Strait, and it obviously involves the development of the vast resources of Siberia and the Far East under permafrost conditions. In this region, you have the richest raw materials of any part of the world. But the idea is not just to loot them, but to use the tremendous scientific potential of Russia, to apply the ideas of Mendeleyev and Vernadsky to develop new raw materials, new isotopes, and really go into a science-driver for the world economy as a whole.
This is not only a fantastic project, which would really be a science-driver for the world economy already by itself, but it was put on the agenda very consciously by the Russian government as a war-avoidance policy….
Now, we have reached a historic moment, where the neo-liberal system of the free-market economy, and the unbridled free-market system, is coming to an end. Globalization, which is just another word for the Anglo-American empire, has attempted to turn the world into a global plantation to the advantage of a small oligarchy, while turning the vast majority of people into poor people, having slave labor, and cheap labor production places. And they have actually committed gigantic crimes. Don’t kid yourself! What the hedge fund system, the system of global looting which goes with that, has done in terms of crimes, in terms of killing people, has been absolutely gigantic. But this system is now coming to an end.
So, we have reached a situation where either we establish a new world economic order based on the Eurasian Land-Bridge, and go for global reconstruction, or we will plunge into a dark age. Now, we are committed to put the Eurasian Land-Bridge on the agenda in this period, as a war-avoidance policy, and establish a political order which is worthy of the dignity of man: a political order which is in cohesion with the laws of the universe. And I want to show you now a video from a speech which José López Portillo, the President of Mexico, gave on the first of October 1982 to the United Nations.
The prehistory of that video which you will see now, is that in the Summer of 1982, President López Portillo called Mr. LaRouche to come to Mexico, and he asked him to defend the Mexican economy, which was under massive attack at that point, because there was an organized capital flight out of the peso. So, Mr. LaRouche, after meeting with President López Portillo, not only wrote a program for the defense of Mexico, but for the integration of Latin America as a continent, which López Portillo then implemented on the 1st of September of 1982. At that point, there would have been the chance to have an orderly reorganization of the banking system, which actually was the proposal.
This did not function at that point, despite the fact that López Portillo implemented these measures for Mexico as a country, because at that point, Argentina and Brazil did not act in solidarity with Mexico. So 25 years have been lost. But as you can see, the question of the new world economic order has been our life’s work, and it is now the time to implement it.
Full speech: The Eurasian Landbridge Is Becoming Reality
Helga LaRouche In Rhodes: A New Westphalian World Economic Order
During the week of October 9-13, 2008, Helga Zepp-LaRouche is invited to participate as a keynote speaker at the Sixth General Meeting of the World Public Forum’s ‘Dialogue of Civilizations’ conference, held in Rhodes, with more than 700 people from 70 countries attending. The World Public Forum was founded and chaired by Vladimir Yakunin, chairman of Russian Railways, and brings together political, religious, and intellectual leaders from around the globe for annual conferences. Helga LaRouche’s speech is titled “For a New World Economic Order in the Tradition of the Peace of Westphalia” in which she states:
“An emergency conference, modelled on the Bretton Woods Conference of 1944, has long been proposed by Lyndon LaRouche… In order for this new system to have credibility and integrity, the initiating powers—the U.S.A., Russia, China, and India—have to build the core of a representative group of nations which, in the tradition and spirit of the Treaty of the Peace of Westphalia, decide on a multicultural and multinational credit system, even while the current monetary and financial system is put through an orderly bankruptcy process…. The most important principle of the Westphalia Treaty, upon which international human rights are based, was the idea that, in the interest of peace, all foreign policy must be oriented to the “advantage of the other.”
Helga Zepp-LaRouche · Rhodes, October 9, 2008
This conference is taking place at a time when even the previous advocates of the thesis that “there in no alternative to globalization,” acknowledge in terror that we are in the midst of the meltdown of this globalization, and in the midst of a chain reaction of events that threaten, in a very short time, to bring most of world production and trade to a standstill.
It is therefore a very important step in the right direction, that French President Nicolas Sarkozy, at a meeting last Saturday [Oct. 4] with the heads of government of Germany, Italy, and Great Britain, and European Union representatives, announced the convening of an international conference, using the precedent of the conference convened by Franklin Roosevelt in 1944 in Bretton Woods, to lay the basic foundations for a new financial architecture. Nothing is more urgent than this. It is also long overdue that this must be a meeting of the so-called G-14 states, and that, among others, China, India, Brazil, and South Africa should be incorporated.
It is now thus all the more important to reach a common understanding of the theoretical fundamentals and principles, upon which the new financial architecture must be built if it is to be successful. Anybody who thinks it is sufficient merely to have a few “new rules” for the hedge funds and rating agencies, suspension of the EU’s Maastricht Stabilization Pact in order to clean up the banks, and punitive reduction of the income of executives of failed companies, is mistaken.
If the world is to escape the danger of a collapse into a New Dark Age comparable only with that of the 14th Century, then the new financial system must be constructed on the basis of a qualitatively different paradigm than that of failed globalization. To attempt just to remove the most obvious, wild excesses, so as to find the quickest shortcut for returning to the old maximization of profit, can only end in catastrophe.
The parallels to the financial collapse of the 14th Century and the ensuing Dark Age certainly merit reflection: At that time, banking houses like the Bardi, Peruzzi, or Acciaiuoli had taken over all aspects of economic life: from financing the court of the King of England and the aristocracy, to the military, agricultural production, and trade. They operated according to the principle of profit maximization, without the slightest regard for the community, which they plundered beyond the point at which it could survive. They acted like a cancer which grows by taking over more and more of its victim, until the patient dies. In the end, the English King Edward III canceled repayment of the accumulated debts: That was the straw that broke the camel’s back, and the banking houses collapsed.
A collapse of civilization resulted, decimating one-third of the population from India to Iceland. The combination of the Black Plague, failed harvests, hunger, superstition, witch hunts, and Flagellants meant a collapse that became known as the “New Dark Age.” The paintings of Hieronymus Bosch vividly convey the insanity which dominated this era.
In the era of globalization, the methods of the investment banks, the hedge funds, and the private equity firms are, doubtless, orders of magnitude more complex and sophisticated, due to the advances of the electronic age. But though they operate “globally,” the principle has remained the same: the highest possible profit through control of scarcity. The principle “buy cheap, sell dear,” and the maximum extraction of profit in the “shareholder value” society, have led to, on the one side, thousands of billionaires and over 10 million millionaires; but on the other side, billions of humans living below the subsistence level.
Additionally, since the invention of “creative financial instruments” by Alan Greenspan, massive sums have come into being, whose dimensions seem to belong to the domain of astronomy: three-digit trillions or perhaps quadrillions in outstanding obligations. Due to a lack of transparency, in particular with respect to over-the-counter (OTC) trades, no government or central bank has an accurate picture.
Most recently, since the outbreak of the so-called mortgage crisis in the United States 14 months ago, it has become clear to most insiders that a large part of these 16-digit-plus “assets” is in fact “toxic waste.” The French magazine Marianne has just released figures only previously publicized by Executive Intelligence Review: The $1,400 trillion market in derivatives is 50 times the size of the combined GDP of all the world’s nations! The attempt to honor this financial paper at 100% value, as the U.S. Administration is now trying to do with the Paulson plan (which is by no means limited to $700 billion, and is actually open-ended), can only lead to a rapid hyperinflationary disintegration of the world financial system. The events in Germany of 1923 now threaten to play out on a global scale!
Even if you take into account the impressive degree of incompetence of the greed-blinded investors, it must have been clear to the chief culprits that the unrestrained granting of mortgages to people without any down payment, would necessarily lead to a collapse of the mortgage and real estate markets, as soon as interest rates rose on the credit markets. And now it is also clear to them that hyperinflation will destroy the savings and living standards of the majority of the population, and threatens famine on an unprecedented scale. If this problem is not immediately solved through a reorganization based on the right principles, it threatens to bring on a collapse of humanity into a dark age in which billions could be victims.
LAROUCHE’S NEW BRETTON WOODS
Now, it is a well-documented fact, that my husband, the American economist Lyndon LaRouche, has for a long time, and at every branching point, correctly forecast the accelerating tendency towards a systemic collapse of the financial system, on the basis of the axiomatically flawed decisions that were made; these include the promotion of consumerism in the U.S. of the 1950s, the elimination of fixed exchange rates and of the Bretton Woods System by Nixon in 1971, and the crashes of 1987 and 1997. On July 25, 2007, three days before the outbreak of the mortgage crisis, he explained in his now famous webcast, that the financial system had already collapsed and was hopelessly bankrupt, and that from then on, we would see various aspects of the bankruptcy rising to the surface.
I mention this, because in a situation so dangerous for humanity as this, it is better to listen to the solutions proposed by the economist who for decades has correctly analyzed the problem, rather than to those who, until recently, denied the systemic character of the crisis, or who still in August were saying, “The worst is already behind us.”
Such an emergency conference, modelled on the Bretton Woods Conference of 1944, has long been proposed by Lyndon LaRouche, but he emphasized the difference in the conception of Bretton Woods intended by Franklin Delano Roosevelt, and what was implemented by Truman after Roosevelt’s death, which was, in principle, a Keynesian system. It was Roosevelt’s intention to use the Bretton Woods System to end forever the colonialism of the British Empire. It is precisely this intention of Roosevelt that must be implemented today with the New Bretton Woods.
In order for this new system to have credibility and integrity, the initiating powers—the U.S.A., Russia, China, and India—have to build the core of a representative group of nations which, in the tradion and spirit of the Treaty of the Peace of Westphalia, decide on a multicultural and multinational credit system, even while the current monetary and financial system is put through an orderly bankruptcy process.
Because of the above-mentioned volume of outstanding obligations, it cannot be merely a matter of “new rules” for hedge funds and rating agencies. Instead, the financial system must be put through an orderly bankruptcy proceeding; most debts and speculative contractual obligations must be written off. Simultaneously, a system of fixed exchange rates must be established, along with National Banks for the creation of credit for productive investment.
The key to success of the reorganization, is that the new system, as a credit system, orient itself to the right that is anchored in the U.S. Constitution, to sovereign government creation of state credit, as demonstrated by the first Treasury Secretary of the United States, Alexander Hamilton, and his founding of the National Bank of the United States. In the U.S. the government can, through the Treasury, and with the authorization of the Congress, create credit, which thus becomes a legal means of payment.
The second way for credit creation to occur is by means of international treaties, which are also voted upon by Congress. Such treaty agreements by a group of leading nations, with the United States, would become formally the turning point upon which to build the alternative to the ever more dramatically escalating crisis. If a representative group of nations agrees upon a new system of credit, customs, and trade agreements, that is already a “New Bretton Woods System”—and the last chance to prevent the risk of chaotic collapse that is becoming more dramatic every day.
The new system must be based on fundamentally different principles than the just-collapsed system of “globalization.” The outsourcing of highly qualified jobs and production capacities to so-called “cheap labor countries,” with significantly lower wages, poorer infrastructure, lower taxes, and lower standards of living, has not paid off for either the industrial nations or the developing countries. For example, the United States, as a result of this policy, no longer has medium-sized industries, while China, which has produced so much for export to the U.S., cannot cover the real costs of its total national production with its export earnings.
Thus, despite China’s high growth rates of recent years, almost 70% of the population has not yet been freed from relative poverty, and China is not being paid enough for its exported goods, either to cover the costs of its cheap labor, or to cover part of the costs for the reproduction of society as a whole. And not only is the Chinese export market in the U.S. and elsewhere now endangered, but the escalation of the crisis threatens a massive loss in the value of the export earnings that have accumulated as currency reserves.
That was exactly how “market prices” ruled under conditions of globalization for most nations, but especially those subjected to diverse forms of monocultures, which meant de facto “primitive accumulation” of the national economy as a whole. The new system, therefore, must define “fair prices,” which not only make possible a strong, protected internal market for industry and agriculture by means of protective tariffs, but also take into account the costs of optimal health and educational systems.
In contrast to the insane and recently failed assumptions of the free traders, the real source of wealth in society is exclusively the creative capacity of man, which continually empowers him, through the discovery of new physical principles, to expand his knowledge of the laws of the universe. When this scientific and technological knowledge is applied to the production process, it leads to an increase in the productive powers of labor and production capacities, which in turn leads to an increase in the standard of living and life expectancy.
The fact that a world population of a few million people in hunting and gathering societies, could develop to today’s six and a half billion human beings, is proof that by the application of these discovered universal principles in production processes, productivity increases by magnitudes that are significantly higher than the costs of the discovery and the investment in its application. Certainly, the general principle of progress is also required, since at every stage of development, natural resources are relatively limited, and new resources can only be defined through a new, qualitatively higher discovery.
Human creativity is thus the motor for the increase of relative potential population-density, which in turn is the necessary precondition for the long-term survival of human species. The increase in relative potential population-density is therefore the measuring rod for economic policy decisions. The Russian physicist Pobisk Kuznetsov once said that discoveries are always named after their author, such as “watt” and “ampere,” so the concept of relative potential population-density, as an economic measure, would go down in history as the “La,” for LaRouche.
The paradigm of the new system must therefore be centered on the maximum promotion of human creativity. A nation oriented to the common good will see as its most self-evident interest, the promotion of the creative capabilities of all its citizens, and above all, its children and youth. Such an orientation would not only promote those scientific and technological areas which, as “science drivers,” optimize the character of the economy, but it would also expand the role in the universe of what scientist V.I. Vernadsky called the Noösphere. That means, it would further the process of the human race “growing up.”
The New Bretton Woods must also be built upon the principles of the Peace of Westphalia, which, in 1648, ended a 150-year period of European wars, including the Thirty Years War. The most important principle of this treaty, upon which international human rights are based, was the idea that, in the interest of peace, all foreign policy must be oriented to the “advantage of the other.” The warring parties had realized that, were the war to continue—a war in which whole areas of Europe had been decimated—nobody would be left to enjoy a victory.
Earlier, Nicolaus of Cusa, in the 15th Century, had laid the philosophical foundations for interntional law, in particular with the idea that harmony in the macrocosm can only exist when all microcosms can develop in the best of all possible ways, including viewing the development of other microcosms as in their own interest. Accordingly, peace in the world can only be achieved when all nations have the chance to realize the potential within them and their citizens, and simultaneously to promote the development of other nations. That was the same core idea upon which John Quincy Adams based his foreign policy of a Community of Principle among fully sovereign republics, which are allied by a higher interest of humanity.
We have now arrived at a point in history, at which we are confronted with the challenge with which Alexander Hamilton, in the Federalist Papers, was confronted with respect to the United States: namely, whether we are capable of giving ourselves a government and a political order which functions and is worthy of human dignity—but this time, for the whole world. At a point where the possible collapse of humanity confronts us all too clearly, can we act together in time, to give the world a political and economic order that is in harmony with the Creation and the laws of the universe?
I think we can, and that this is the purpose of the individual, and of humanity!
Lyndon LaRouche Promotes Four Power Alliance in New Delhi, India
Both Lyndon and Helga LaRouche attend a seminar in New Delhi, India in December 2008, sponsored by the Forum for Strategic Security Studies (FSSS), a leading military think tank, in addition to participating in extensive private meetings on the subject of organizing a Four Powers alliance between India, China, Russia, and the United States to lead in creating a new global political and economic order . LaRouche states in his speech to the forum:
“There are four nations on this planet, which are significantly large and important enough, that they could, if willing, make a decision which would eventually change the direction of affairs on the planet… How do we expand the capacity for carrying the world’s population in a stable, growing way, which can’t be done under the present monetary syste? If these four nations agree to form a nucleus, in recognition of defense against this crisis, then we can change the world… These four governments, the United States, India, Russia, China, can sponsor the idea of an agreement to deal with this particular crisi by creating a new credit system to replace the present bankrupt monetary system.
Helga Zepp-LaRouche: ‘We Need A New World Economic Order, Now!’
Helga LaRouche issues a renewed call for a new international economic order , specifying eight specific points which must serve as the foundation for such a new system:
An emergency conference must be called, at the level of heads of state, to establish a new financial architecture. This emergency conference for a New Bretton Woods must resolve that:
1. The present world financial system must be declared hopelessly bankrupt, and replaced by a new one.
2. It must promptly set up a fixed-exchange-rate monetary system, so that long-term investments in international infrastructure projects are possible, under predictable conditions.
3. Derivatives speculation and speculation in food, energy, and raw materials must be banned by treaty among governments.
4. There must be an immediate reorganization, including, for example, cancellation of debts.
5. In a New Deal for the world economy, in the tradition of Alexander Hamilton, Friedrich List, Henry Carey, and FDR, new credit lines must be made available for investments in basic infrastructure and technological renovation.
6. Building the Eurasian Land-Bridge, as the core project for reconstruction of the world economy, is therefore the vision that can not only bring a new economic miracle, but also bring peace to the 21st Century.
7. Food production must be doubled worldwide in the coming years
8. A new “Peace of Westphalia” must, within at least 50 years, secure the availability and development of raw materials for all nations on this planet.
We maintain that the system of globalization, with its brutal, predatory capitalism, is economically, financially and morally wrecked. Instead, man must be placed at the center again, and the economy must serve the common good. The new world economic order must guarantee the inalienable rights of all men on this planet.
LaRouche: Banking Reorganization According to Glass-Steagall Standard
In October 2009, Lyndon LaRouche outlines a program for bankruptcy reorganization of the financial system , specifying that, through the application of the “Glass-Steagall standard,” fictitious values of speculative debt will be distinguished from productive debt with legitimate economic value. LaRouche asserts that the speculative debt must not be honored or bailed out, while the legitimate productive debt must be protected and reorganized as was done by Alexander Hamilton.
“What is required is to put all regular commercial banks through reorganization in bankruptcy… The accounts which are in commercial banks will be put into reorganization in bankruptcy, such that those accounts which correspond to a Glass-Steagall standard will receive full protection and will be assigned protection under the category of a Glass-Steagall qualified account. These banks, which we will clean up in that way, have to be under bankruptcy protection, even though they’ve been purged of this garbage… We’re going to put the commercial banking system through a Glass-Steagall-standard reorganization; we’re going to use the end-product of that reorganization to reestablish the full support of the Federal system, as a credit system, not a monetary system.
Lyndon and Helga LaRouche Attend World Public Forum in Rhodes, Greece
Lyndon and Helga LaRouche are both invited to attend the seventh annual conference of the World Public Forum in Rhodes, Greece, attended by over 500 academics, religious leaders, economists, politicians, artists, and journalists, from 60 countries. Lyndon LaRouche gives an address titled “A Four-Power Agreement Can Create a New World Credit System” in which he states:
“The task is for Russia, and the United States, and China, and India, to agree, as a group of countries, to initiate and force a reorganization of the world financial and credit system, under those conditions, with long-term agreements, of the same type that Franklin Roosevelt had uttered before his death…
“The United States, Russia, China, and India, must become a bloc of countries, which each have different characteristics, but if they recognize among themselves, that they have a common interest, they will adapt to each other and respect each other’s different characteristics. The result of this, will be the elimination of the monetary system of the world that has been dominating European civilization since the Peloponnesian War.”
Helga Zepp-LaRouche’s speech is titled “New Alliances for a New World System” , which she concludes by saying:
“We must open a new era of humanity, one in which oligarchical and imperial designs have been defeated once and for all, replaced with an alliance of republics which are perfectly sovereign, yet, which are united through the higher interest of mankind as a whole. It is possible to bring this about, but it will require interventions by courageous individuals who are fired by a passionate love for mankind.
Helga LaRouche · Rhodes, October 7, 2009
Video: Helga Zepp-LaRouche Address to 2009 Rhodes Conference
Ladies and Gentlemen,
There were many important issues discussed during the last days, but I agree with Professor Dallmayr, that we cannot conclude this conference without focusing again on the reality that we, as a civilization are on the verge of thermonuclear war. The possibility of a military attack on Iran, the escalation of the situation between Syria and Turkey, the deployment of U.S. aircraft carriers in the Western Pacific close to these contested islands, and Hillary Clinton’s statement that any attack on these islands would bring the U.S.-Japan military treaty into play, the agreement of the Spanish government to participate in the NATO anti-missile defense shield, all of these developments demonstrate that we are in mortal danger.
During the last weeks, the existential danger in which the human species now finds itself has become clear for all thinking people. The almost continuous policy of “regime change,” which after the collapse of the Soviet Union, “bombed Iraq back to the stone age,” plunged Libya into anarchy, turned Afghanistan into a nightmare, and victimized the secular state of Syria with foreign intervention and religious warfare, in the case of military operations against Iran, could lead to an uncontrollable worldwide wildfire. The Near and Middle East threatens to become a new Balkans, in which existing alliances like those before World War I lead to a conflagration. The unthinkable could occur, that Mutual Assured Destruction no longer functions as a deterrent, but becomes the consequence of a war in which thermonuclear weapons are deployed, leading to the extinction of the human race. Not at some possible time — but within the next weeks.
The dynamic which is driving the war danger, is accentuated by the accelerating collapse of the transatlantic financial system. Bernanke’s euphemistically named “quantitative easing III” liquidity expansion is just as hyperinflationary as Mario Draghi’s “whatever it takes,” unlimited purchase of state bonds through the European Central Bank. Hyperinflationary money printing, in connection with brutal austerity — in the tradition of Reichschancellor Brüning — against the population and real economy has already had a life shortening effect upon millions of people in Greece, Italy, Spain, and Portugal and threatens to plunge Europe into a firestorm of social chaos.
Humanity is in the process of crashing into a brick wall at full speed. The question which we urgently must answer is whether the human species, confronted with its own self-destruction, is intelligent enough to change course in time, from the presently ruinous paradigm of attempting the consolidation of a world empire and the feigned legitimation for resolution of geopolitical conflicts by means of war, and replacing it with another, which is viable for humanity?
To solve this problem, we have to address an epistomological problem: We must repudiate the relics of the methods of thinking that are anchored in the oligarchical system, including deductive, positivist, empiricist, monetarist or linear statistic projection concepts expressing a bad infinity, as they belong to a worldview that has nothing to do with the laws of the real physical universe, nor the creativity of human reason.
Instead we must craft with the same creativity and love of humanity, as that of Nicholas of Cusa, Johannes Kepler, Gottfried Leibniz, Johann Sebastian Bach, Ludwig van Beethoven, Friedrich Schiller, Vladimir Vernadsky, or Albert Einstein, to name but a few, a vision of a better future for mankind, which of course can only be realized only when enough forces unite themselves for this good cause.
Such a vision can never be the result of Aristotelian thinking, or become a “consensus” of solutions for many small side issues, i.e., thinking from “below,” but comes from thinking “from above.” Nicholas of Cusa had, with his method of Coincidentia Oppositorum, the Coinicidence of Opposites, whereby the One has a higher order of power than the Many, laid the cornerstone on which not only the Priniciple of the Peace of Wesphalia and International Law were built, but also a universal method of problem and conflict solving, which is still valid today. This means we must begin with the definition of the common aims of mankind. What could be more important than the ontological question of “esse,” being, that we are able to secure the prolonged sustainable existence of the human species?
By virtue of the anti-entropic lawfulness of the physical universe, the enduring existence of humanity requires a constant rise in the potential relative population density and a continually expanding energy flux density in production processes. If we want to find a solution to the twofold existential threat to mankind, the danger of thermonuclear world war and the systemic economic crisis, then the new paradigm must bring itself into cohesion with the order of creation. We need a plan for peace for the 21st century, a vision, which simultaneously inspires the imagination of hopes of man.
Despite having all the scientific and technological means at hand to guarantee humane conditions of life, while there are over 1 billion people subject to hunger and malnourishment, while 25,000 children — a small city — die daily from hunger, while 3 billion live in poverty and are denied their human rights, is it not then our sacred duty to actually deploy those means? We need a large-scale development strategy, building on the ideas of the United Nations Development Decades of the 1950s and ’60s, rejecting completely the paradigm change of the past 40-50 years as the wrong track, and thus reviving the idea of “Peace Through Development.”
Such a vision could be the implemention of the World Land-Bridge with its many great projects like NAWAPA, the tunnel under the Bering Strait, the development of the Artic, expansion of the Eurasian Land-Bridge, above all into the Near and Middle East and the Indian Subcontinent, including linking Africa to the World Land-Bridge through tunnels, under the Strait of Gilbratar linking Spain and Morocco, and also between Sicily and Tunisia.
There are two large regions of this planet where lack of development cries for vengeance, one being the African continent, that was never allowed to recuperate from the centuries-long colonial exploitation; and the second being the Near and Middle East, which are currently way behind their golden periods, when Baghdad was the center of world culture, or when Pamyra Tadmur in Syria was a pearl on the ancient Silk Road. We must put on the agenda for discussion a vision for an economic and cultural Renaissance for these regions, representing an element of reason at a higher level than the local, ethnic, and historic conflicts. Were the representatives of a group of large nations to bring such a message to the world community, showing that in fact, there is a real alternative that would make possible the survival of all people on this planet, then that element of hope could be brought into the debate, which is presently completely lacking.
The same kind of thinking using the standpoint of Coincidentia Oppositorum, thinking from “above,” as applied to overcoming the underdevelopment on Earth with the World Land-Bridge, we also need for defense from the dangers to all of us on the planet which come from space. Russia, with its project for Strategic Defense of the Earth, SDE, has made a proposal for the cooperation of Russia and the U.S.A., and potentially more countries, for joint missile defense and the protection of Earth from asteroid and comet impact, which can replace the current geopolitical confrontation and the existential threat of its escalation. The SDE project is in the tradition of the SDI, the Strategic Defense Initiative, the proposal for overcoming the nuclear threat and division of the world into military blocs, which my husband Lyndon LaRouche developed over 30 years ago and which President Ronald Reagan made the official policy of the American government in 1983.
The SDE project, which includes early warning systems for manmade and natural catastrophes, as well as cooperation in manned space flight, is the absolutely necessary economic science driver that the crisis-ridden world economy needs in order to achieve higher levels of productivity and create the new scientific and technological capacities that are also needed for the solution to the problems on Earth. Joint manned space travel is the necessary next step for the evolution of mankind, and with this “Extraterrestial Imperative,” as called for by renowned scientist and rocket engineer Krafft A. Ehricke, mankind can now enter into an age of adulthood, leaving behind itself, like childhood diseases, the solving of conflicts through war.
If we promptly succeed in unifying ourselves around the vision of achieving the common aims of mankind, and consciously present this perspective as a war-avoidance strategy, then it can inspire the imagination of the younger generation, which is now threatened worldwide by mass unemployment and desperate hopelessness. If the young people develop the same passion and elevated concepts as the pioneers of space travel once had, who now are encouraged with the instruments which the Mars rover Curiosity is deploying, and which has now “shifted the sense experience of Man,” admittedly, with a 14-minute delay, the world has entered a new phase space; if young people develop that passion, then we have won. In the next phase of mankind, man will think like scientists and the composers of great works of Classical art.
We either act now, in this moment of existential danger, on the common aims of mankind, or we will not exist.
LaRouche: ‘A Revolutionary Change in International Financial Policy’
At a private seminar in Washington DC, attended by numerous representatives of the international diplomatic community, Lyndon LaRouche delivers a speech in which he calls for a “revolutionary change” in the economic system of the planet to “eliminate the tyranny of international finance.” LaRouche states:
“We need a revolutionary change in international monetary financial policy. We can not live on the kind of trends in economic policy, financial policy, which have ruled the United States since October 1987. We have to go back to a fixed-exchange-rate system of the type that Franklin Roosevelt intended… We must eliminate the tyranny of international finance, which preys upon and sucks the blood of mankind now. The authority for creation of credit lies with the sovereign nation-states. But the sovereign nation-states must have agreements among themselves, which are fixed-exchange-rate agreements…”
“This is the worst crisis in modern history; it’s also the greatest opportunity in modern history, and it depends upon consciousness and will to do some simple things in terms of policy which will fix it. And bring the trans-Atlantic region and the trans-Pacific region into harmony with each other.”
BRICS Leaders Demand New International Financial Architecture
At their fourth summit in New Delhi on March 29, 2012, the leaders of the BRICS — Brazil, Russia, India, China, and South Africa — issue a statement calling for “a more representative international financial architecture, and the establishment and improvement of a just international monetary system that can serve the interests of all countries and support the development of emerging and developing economies.”
The New Delhi Declaration of the BRICS announces:
“We have considered the possibility of setting up a new Development Bank for mobilizing resources for infrastructure in BRICS and other emerging economies and developing countries. We direct our Finance Ministers to examine the feasibility and viability of such an initiative, set up a joint working group for further study, and report back to us by the next Summit.”
Fourth BRICS Summit · New Delhi Declaration
We, the leaders of the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China and the Republic of South Africa, met in New Delhi, India, on 29 March 2012 at the Fourth BRICS Summit. Our discussions, under the overarching theme, “BRICS Partnership for Global Stability, Security and Prosperity”, were conducted in an atmosphere of cordiality and warmth and inspired by a shared desire to further strengthen our partnership for common development and take our cooperation forward on the basis of openness, solidarity, mutual understanding and trust…
BRICS is a platform for dialogue and cooperation amongst countries that represent 43% of the world’s population, for the promotion of peace, security and development in a multi-polar, inter-dependent and increasingly complex, globalizing world. Coming, as we do, from Asia, Africa, Europe and Latin America, the transcontinental dimension of our interaction adds to its value and significance.
We envision a future marked by global peace, economic and social progress and enlightened scientific temper. We stand ready to work with others, developed and developing countries together, on the basis of universally recognized norms of international law and multilateral decision making, to deal with the challenges and the opportunities before the world today.
We are concerned over the current global economic situation. While the BRICS recovered relatively quickly from the global crisis, growth prospects worldwide have again got dampened by market instability especially in the euro zone. The build-up of sovereign debt and concerns over medium to long-term fiscal adjustment in advanced countries are creating an uncertain environment for global growth. Further, excessive liquidity from the aggressive policy actions taken by central banks to stabilize their domestic economies have been spilling over into emerging market economies, fostering excessive volatility in capital flows and commodity prices.
We believe that it is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs. We draw attention to the risks of large and volatile cross-border capital flows being faced by the emerging economies. We call for further international financial regulatory oversight and reform, strengthening policy coordination and financial regulation and supervision cooperation, and promoting the sound development of global financial markets and banking systems…
We recognize the importance of the global financial architecture in maintaining the stability and integrity of the global monetary and financial system. We therefore call for a more representative international financial architecture, with an increase in the voice and representation of developing countries and the establishment and improvement of a just international monetary system that can serve the interests of all countries and support the development of emerging and developing economies. Moreover, these economies having experienced broad-based growth are now significant contributors to global recovery….
We have considered the possibility of setting up a new Development Bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development. We direct our Finance Ministers to examine the feasibility and viability of such an initiative, set up a joint working group for further study, and report back to us by the next Summit…
EIR Publishes Special Report: ‘There Is Life After The Euro!’
Executive Intelligence Review publishes a special report titled “There Is Life After The Euro: Economic Miracle For Southern Europe & Mediterranean” which details the development programs which could be built to reconstruct Europe if the European nations were to free themselves from the collapsing Euro system. In the introduction to the report, Helga Zepp-LaRouche says:
“The euro system, and the entire trans-Atlantic financial system, are in the process of total disintegration… A solution does exist. That solution, however, is absolutely impossible within our current system. The hopelessly bankrupt system of globalization, and today’s casino economy, must be replaced by a credit system that is oriented exclusively toward future investment into the real economy, with high energy-flux densities. We must return to national currencies, fixed exchange rates, and an economic reconstruction program for Southern Europe, the Mediterranean region, and the African continent…
“By implementing a two-tier banking system in the exact tradition of the Glass-Steagall standard established by Franklin D. Roosevelt in 1933, commercial banks would be put under state protection as a first step, while the entire array of ‘creative financial instruments’ and derivatives contracts would have to be struck from the books. A moratorium must be declared on all state debt, and the portion of indebtedness stemming from financing all sorts of bailout measures, would likewise be wiped from the books.”
Helga Zepp-LaRouche · June 2012
All of us—every nation in Europe, along with its citizens—now face a doubly existential crisis: The euro system, and the entire trans-Atlantic financial system, are in the process of total disintegration, which can be put off only for a few more weeks, by means of hyperinflationary injections of liquidity. This is the result of the failed system of the British Empire, which also, on the basis of the so-called Blair Doctrine, now threatens to draw us into a thermonuclear confrontation with Russia and China.
A solution does exist. That solution, however, is absolutely impossible within our current system. The hopelessly bankrupt system of globalization, and today’s casino economy, must be replaced by a credit system that is oriented exclusively toward future investment into the real economy, with high energy-flux densities. Re-attaining national sovereignty is the absolute prerequisite for both economic recovery and the preservation of peace. We need to immediately establish a two-tier banking system in the tradition of Franklin D. Roosevelt, along with a credit system in the tradition of Alexander Hamilton and the FDR-era Reconstruction Finance Corporation, and we must return to national currencies, fixed exchange rates, and an economic reconstruction program for Southern Europe, the Mediterranean region, and the African continent.
THE EURO HAS CREATED A MONSTER
One might well paraphrase the title of Francisco Goya’s famous etching to describe the result of the European Union’s current policies: “The sleep of economic reason has produced monsters.” For who could still have any doubt that the euro is a failed experiment? The situation in Greece, Spain, Portugal, Italy, and also in the Balkan states, is, in fact, hideous, and is already costing many human lives. This is not the fault of these countries’ citizens; rather it is the result of the European currency union’s flawed policies, and of the monetarist policies of the EU and of Europe’s governments, which, especially following the outbreak of the financial crisis in July 2007, have merely continued a policy favoring speculators and banks, against the interests of the General Welfare.
The Eurozone, even from its birth, was not an “optimal currency zone.” It ought to have been clear from the very outset to anyone with any economic common sense, that states with such divergent economic structures, and diverse languages and cultures, as Germany, Finland, Greece, and Portugal, could not develop harmoniously into a single currency union.
As is well known, the euro was not born out of solid economic considerations, but rather out of the geopolitical intention to bind the reunified Germany into the corset of the EU, and to force it to abandon the deutschemark. François Mitterrand’s former advisor Jacques Attali later admitted that it was clear to all participants at the time, that a currency union could not function without political union, and that this birth defect of the euro had been intentionally designed to force Europe into political union later on! Precisely that is what we are witnessing now, with the advocates of union now attempting, under extreme crisis conditions, to use the introduction of eurobonds as a final step toward a federal EU state.
The extensive powers which the European Stability Mechanism is to be granted—its governing council and directorate would enjoy lifelong immunity, and no accountability—would turn such a federal state into a total dictatorship serving the interests of the banks and the City of London. It would guarantee Europe’s plunge into economic, political, and social chaos.
Twenty years after the signing of the Maastricht Treaty, a monster has been created; and 11 years after the introduction of the euro, many Eurozone nations are in danger of descending into African-level conditions—social collapse, rising death rates, infrastructure no longer maintained, most economic activity ground to a halt, one in two or three young persons unemployed, and skilled workers fleeing their homelands because they see no future there. The alleged boom in the Eurozone’s so-called catch-up nations was in fact a bubble—and now that bubble has popped. When the flow of tourists begins to dry up, and when people can no longer afford second vacation homes, it will become clear that there was no increase in social wealth in these countries, and that there’s still no adequate infrastructure and industrial capacity. Greece, for example, does not have a single rail connection to the rest of Europe, or to Asia!
But even the citizens of the so-called profiteer of the euro, Germany, have been left empty-handed. During its 11 years with the euro, its domestic market has shrunk, real incomes have declined, purchasing power has gone down, its health-care system has grown considerably worse, and the spectrum of its employment structure has worsened in the direction of cheap labor. Its ostensible special position as the “world champion of exports”—which primarily benefited the DAX 500 corporations, and much less, the small and medium-sized industrial firms—is quite understandably collapsing, just at the point when its export markets are drying up.
The EU’s policies have not secured peace in Europe, as the propagandists of European integration would have us believe; rather, enmity among nations has never been greater since World War II. Instead of fostering the General Welfare and a sense of community, the Law of the Jungle is spreading its influence, with each out to save his own skin. A continuation of this policy, whether it be through brutal austerity in the tradition of Brüning, or in the form of a hyperinflationary collectivization of debt, represents high treason against the very idea of Europe in the Christian-humanist tradition…
TWO-TIER BANKING AND CREDIT SYSTEM
Once we have psychologically digested the fact that today’s trans-Atlantic monetary system is beyond salvation—either it will disintegrate in a sudden chain reaction, or else it will obliterate everyone’s assets in Europe and North America in a hyperinflationary explosion, such as occurred in Germany in 1923—only then will our minds be equipped to turn to constructive solutions. By implementing a two-tier banking system in the exact tradition of the Glass-Steagall standard established by Franklin D. Roosevelt in 1933, commercial banks would be put under state protection as a first step, while the entire array of “creative financial instruments” and derivatives contracts would have to be struck from the books. A moratorium must be declared on all state debt, and the portion of indebtedness stemming from financing all sorts of bailout measures, would likewise be wiped from the books.
The EU treaties, from Maastricht to Lisbon, must be canceled, and national sovereignty over monetary and economic policy must be re-established. Competent feasibility studies for a “Plan B,” comprising technical preparations for, and execution of an exit from the euro, have already been worked out by such experts as Prof. Dirk Meyer at the Federal Military College in Hamburg. An extended weekend could be utilized as a bank holiday to prepare the currency conversion, and to deal with account balances in checking and savings banks. German citizens, resident aliens, and foreign firms with German branches could have their cash assets stamped with magnetic ink. Time-limited controls on capital transfer and border traffic could prevent “non-sector” euros from being brought in, and procedures for timely reporting of assets could be adopted in the interest of preserving public order.
The exit from the euro must be followed by a transfer of the monetary sovereignty that was handed over to the EU, back to the respective national states; this can be accomplished by a quickly drawn-up resolution adopted by the European Council. A new national currency law could then legislate the adoption of the New Deutschemark, and likewise for other respective national currencies. The euro could continue to be utilized as a unit of accounting among national banks, as was done earlier with the European Currency Unit.
Our return to national currencies would generally be simpler, because we can make use of the experiences and procedures from the euro’s introduction. The resulting costs are relatively small, compared with what would happen with a chaotic disintegration of the Eurozone.
In the United States, Roosevelt, with the help of a package of measures—the Glass-Steagall legislation, the Pecora Commission, the New Deal, the Reconstruction Finance Corporation, and the Tennessee Valley Authority—successfully led his country out of the Depression. But meanwhile, as we know, Germany took the route of Brüning’s austerity policy, into Hjalmar Schacht and Hitler. Germany’s government, however, has apparently not learned anything from these various examples, and the infamous Troika—the ECB, EC, and IMF—is imposing the same policy which led to catastrophe in Germany, only now on all of Europe…
THE CREDIT SYSTEM
In 1923, Germans had to learn from bitter experience that money has no intrinsic value. Within a few short months, they saw their entire life’s work swept away, even though, nominally, they were billionaires, or even trillionaires. Today, in the age of electronic money multiplication, securitization, and derivatives contracts, the evanescent nature of most of our money is even more obvious. The bursting of various bubbles in the new market, the secondary mortgage market in the United States, Lehmann Brothers and AIG, and the imminent bankruptcy of countless banks which would have long ago gone belly-up, had it not been for “bailout packages”: In all these cases, the losses have been of virtual money, and thus they are, in fact, imaginary losses. Something that you have never actually owned, and which has only a virtual value, you’re actually not losing at all.
Today’s monetarist system has accumulated such a gigantic volume of these debt instruments in the form of outstanding derivatives contracts, securitizations, etc., that any attempt to honor all this past debt would invariably lead to hyperinflation. The only difference between now, and Weimar Germany in 1923, is that this time, we’re dealing not with just one country, but with the entire trans-Atlantic region.
The credit system which must replace this bankrupt monetarist system is based on completely different principles. Money per se has a function in payment transactions, but much more important, is the credit which a sovereign state’s national bank will issue toward future production. The goal of this credit issuance is to build up the real economy, to create full employment, and to increase the entire labor force’s productivity, by means of a scientific driver and targeted fundamental research. It is an application of the principles of physical economy, as these have been developed by Leibniz, List, Carey, Witte, leading up to Lyndon LaRouche.
The issued credits are directed toward future production—a real value, in which human productive ability, refined raw materials, and industrial capacity, create a surplus value which increases in tandem with the scientific and technological level on which that production takes place. Each country shall also create a national bank in the tradition of the first U.S. Treasury Secretary, Alexander Hamilton. This bank shall issue open lines of credit for financing well-defined projects, such as NAWAPA (the North American Water and Power Alliance), the building of a tunnel under the Bering Strait, the reconstruction program for Southern Europe, the Africa Pass, Transaqua, and so forth (see following articles). Via local and regional commercial banks, these credits will then be issued to the firms participating in these projects, and they, in turn, will contract with suppliers and hire employees, who will, in their turn, spend their income for the normal items required to sustain their living standard.
And thus, above and beyond the stimulation of production resulting directly from the projects, there will be a secondary revival of the economy as a whole. Given the large scope of the above-named and similar projects, full and lasting productive employment will be achieved, while at the same time, the employment spectrum will be shifted away from the services sector and into productive jobs in industry, research, and agriculture.
The historical examples of cases where this method of productive credit creation has been applied, demonstrate that the benefits reaped by the general economic upswing created thereby, along with the concomitant rise in tax revenues, will far surpass the volume of the originally issued credits. Contrary to the creation of money for retiring the monetarist system’s old debt, the credits issued as we have outlined here, will have an anti-inflationary effect, because the emphasis on scientific and technological progress will increase productivity.
FOR FUTURE GENERATIONS
But we are also speaking here about great projects which will improve the lives of human beings for many generations to come. For those people in the virtual stockbroker’s world, who would rather indulge in hedonistic dancing around the Golden Calf, it might come as a surprising thought, but, in fact, the underlying purpose of an economy is to guarantee the long-term survival of the human species on a level that increases from generation to generation. The purpose of a credit system is to take the wealth created by past generations and “pass it onward, increased and enriched, to future generations,” as Friedrich Schiller defined the meaning of universal history.
Mankind is not merely another species of animal which reproduces itself on the same level of development over the course of centuries and millennia; rather, man is the only species with the capacity for creativity, i.e., the capacity to develop its own natural resources to an ever higher level of organization. With our creativity, we can create something that outlasts our own lifespan: We invest in something which will benefit future generations, something which will afford them a degree of material and spiritual freedom which extends far beyond what we, as initiators, have achieved during our own lives.
The idea of a credit system is therefore by no means merely a technical improvement in our banking system; rather it is a harmonization of the financial side of our economy, with the continued existence of humanity for many generations into the future. Therefore it has, if you will, a spiritual dimension. The credit system is thus the instrumentarium which aids us in passing the value created by one generation, and enriched by us, onward to following generations. In order to make it clear that a credit system must be thought of as a human concept, one which places mankind at the very center of the economy, let me quote the concluding sentences from Friedrich Schiller’s essay “What Is, and To What End, Do We Study Universal History?”
“There must burn within us a noble yearning to take the rich legacy of truth, morality, and freedom which we inherited from our forebears, and to pass this onward, richly increased, to the future world, and also to make a contribution of our own, and to firmly link our own fleeting existence to the eternal chain that winds through all human generations. As diverse as the future careers may be awaiting you in society, you can all put something toward this! Every action of merit opens up a pathway to immortality—to true immortality, I say, where the deed lives on and speeds its way along, even if its originator’s name be left behind.”
The crisis of civilization that is plunging us into a collapse of the trans-Atlantic financial system, ought to make it clear to even the most dull-headed among us, that we must bring our political and economic affairs into harmony with the ordering of the physical universe—if, that is, we are to avoid the fate which led to the extinction of earlier species. The universe, however, is not a closed system, with a “budget that needs to be balanced,” but rather it is an anti-entropically developing, creative universe, whose energy-flux density and complexity of organizational structure is always increasing. And it is high time that we adapt our human economy to these underlying laws of the universe.
The concrete task of the credit system for reconstructing Southern Europe, the Mediterranean region, and Africa, flows directly from this universal task. On the one hand, national banking systems in each participating state must finance the projects described in the following sections of this report, by creating the required lines of credit. At the same time, long-term cooperation treaties must be concluded between sovereign states for joint work on international projects which straddle national boundaries, such as the extension of the Eurasian Land-Bridge’s transport corridors into the Middle East, and, via bridges and tunnels, into Europe and Africa. These treaties shall have realistic durations of from one or two generations.
If we abandon the idea of quick profit, and instead dedicate ourselves to the task of eliminating the wretched condition of underdevelopment, by means of a program of reconstruction that will form the crucial basis for expansion of infrastructure and for economic drivers, then, out of the present collapse crisis, together with such projects as NAWAPA and the construction of the World Land-Bridge, we can set into motion the greatest economic miracle in human history. A new era of humanity can then begin.
Schiller Institute Launches ‘New Paradigm for Civilization’ Conferences
The Schiller Institute sponsors a conference in November 2012 near Frankfurt, Germany titled ‘A New Paradigm for Civilization’ as the first in a series of international conferences . The conference is attended by over 300 participants from 25 countries in Europe, and Middle East, Asia, and the United States. Helga Zepp-LaRouche introduces the new EIR report ‘There Is Life After The Euro’ and stresses that only by adopting a development program in the common interests of mankind can global war be averted.
See the International Conference page: Forum For A New Paradigm
Lyndon LaRouche’s remarks to the conference feature the specific steps that must be taken to reorganize the bankrupt financial system:
“1. The first of the three essential preconditions for recovery is that the relevant, combined leading nations of both the United States and the leading parts of Eurasia, must immediately enact the Glass-Steagall law…
2. A recovery of the economy of the relevant nations depends upon the actual creation of a set of systems based on the principle of national credit, among respective nations. This means that the future investments must be those rightly deemed physically worthy of the credit which is uttered under the authority provided by the credit systems of the respective sovereign nations…
3. It must be recognized, that it is the increase of physical wealth which must be made practicable by the respective nations’ extension of systems of public credit. The future wealth of nations and of the enterprises must warrant the extension of national credit, within and among cooperating nations. That economic policy shall serve for both the public and private investment, in the creation of that which will exist only through the means of the productive future of the nation and mankind in general.”
Lyndon LaRouche · November 25, 2012
For PDF: The Crucial Issue of This Crisis
My subject is “The Crucial Issue of This Crisis,” and I proceed as follows:
The set of trans-Atlantic nations, and beyond, is now gripped, by the most immediate and most menacing crisis in modern history. There are three, physical qualities of economic issues to be considered:
First, we must end the current commitment to an accelerating, monetarist hyperinflation.
Second, we must end an already deep and still-deepening collapse of physical economy.
And third, we must end the presently immediate threat of the outbreak of a general thermonuclear war. That would be a war, which, if it occurs, is already an early and immediate threat to destroy civilization worldwide. Such a war, during such a brief required lapse of time, of approximately an hour and a half of thermonuclear warfare, would send the leading powers of the world to an obliteration of civilization.
These three categories of present threats to mankind are to be traced to the effects of the presently continuing, and presently accelerating, hyperinflationary policy of the United States, and the nations of the Western and Central European regions. These present trends in North America and Europe have created a presently hopelessly accelerating, hyperinflationary system. And this leads to a consideration of three conditions.
There are first, therefore, three conditions which must be adopted immediately, if the danger of an early outbreak of a thermonuclear phase of the present acceleration of a march to war is to be prevented, and if true economic recovery is to be launched instead.
The first of the three essential preconditions for recovery is that the relevant, combined leading nations of both the United States and the leading parts of Eurasia, must immediately enact the Glass-Steagall law, which is to be modeled on the successful economic recovery action launched originally by United States President Franklin Roosevelt, during the 1930s. The enacting of that Glass-Steagall law, will suffice to halt the hyperinflation which is now leading the principal nations of the north trans-Atlantic region. This will prevent them from leading into a hyperinflationary collapse, and an increasingly probable certainty of thermonuclear warfare.
Second: A recovery of the economy of the relevant nations depends upon the actual creation of a set of systems based on the principle of national credit, among respective nations. This means that the future investments must be those rightly deemed physically worthy of the credit which is uttered under the authority provided by the credit systems of the respective sovereign nations. The presently accelerating rate of trans-Atlantic-centered hyperinflation must be terminated with the appropriate full force of appropriate measures of physical reforms.
Under such a reform, the composition of national funding of sovereign national economies, will be composed of a combination of existing and supplementary modes of credit extension of the physical-economic advances for, and by, the respective nation-states as such. Think this through as follows: There exists presently a widespread practice which locates wealth, mistakenly, in money as such, or in terms of similarly fictitious assets, rather than the physically effective credit systems of the economy.
Whereas, any actual recovery will demand that presently hyperinflationary practices among nations, must be superseded by national systems, of national physical credit, from both within and among those cooperating nations.
Third: It must be recognized, that it is the increase of physical wealth which must be made practicable by the respective nations’ extension of systems of public credit. This must be a system of credit, which is duly warranted as an investment in the creation of future, physically productive, rather than merely nominalist forms of monetarist wealth, per capita and per square kilometer. The future wealth of nations and of the enterprises must warrant the extension of national credit, within and among cooperating nations. That economic policy shall serve for both the public and private investment, in the creation of that which will exist only through the means of the productive future of the nation and mankind in general.
THE UNIQUE QUALITY OF MANKIND
Now, as to essential facts for mankind on this question. The essential fact, which must be added to economic reforms among nations, is that mankind can no longer isolate itself to life on Earth alone. Furthermore, the known history of the evolutionary process of all manifest imaginations, viable ones, of living species, has thus always depended upon the relative increase of the characteristic energy-flux density of the existing categories of surviving species. The fact is, that mankind is the only living species known to us, as depending for its power to exist, through the willful development of progressively higher evolutionary states of existence of leading creatures.
The relative fact is, that for mankind, the successful future of any living species, depends absolutely on perpetual and accelerating increases in the energy-flux density, per capita, as this is expressed by the progress of the human species, to higher levels of energy-flux density. Mankind is the only known species whose existence is defined by the controlled use of fire. Mankind’s prospect of a continued existence depends hereafter on progressing beyond the limits of mere sense-perception to increasing power to command mankind’s growing, willful role, within regions beyond Earth and Mars, to other planets in the Solar System and beyond. Any contrary policy would promise to lead our human species, implicitly, through the hazards of asteroids and comets, toward the prospective human species extinction.
Now, there are certain economic trends to be considered. In the meantime, during the period since the launching of the worse-than-useless U.S. war in Indo-China, a war which was launched by means of the assassination of U.S. President John F. Kennedy—even despite the progress which had been embodied in President John F. Kennedy’s launching of the famous space program of the U.S.A—since that war in Indo-China, the general trend in the United States, and the economies of Western and Central Europe alike, in particular, has been the increasingly downward movement in net effects, measured per capita, over the course of the subsequent decades.
The loss of physical-economic potential by formerly leading nations, has been accelerating in terms of loss of actively productive skills, as measured in crucial terms of what is known as energy-flux density, over the entire span, since the assassination of President John F. Kennedy. That has produced the effect of a greater rate of net decline of physical productivity in nations, per capita, than in useful additions to productive employment made by a total labor force.
STRATEGIC DEFENSE OF EARTH
In addition to those considerations just stated, mankind’s existence is now in peril from the threats from the roles of both asteroids and comets, within the region between the orbits of Mars and Venus. We must create the needed means of program defense.
Russia’s scientists have properly referenced the need for intention of a Strategic Defense of Earth, the SDE policy, on this account. These just indicated challenges typify the necessity for those kinds of specific, physical-economic reforms, on which the avoidance of thermonuclear warfare, and that of more general kinds of threats and economic catastrophe for mankind, must be included, because they are to be considered as matters of primary means for both the defense and the improvement of the conditions on which the continued existence of human life now depends.
In particular, it is now urgent that the United States, among others, return to an expanded version of a space program, not only for reasons associated with an improved space program including defense as such, but, with the urgency of a great, and early, great leap forward in technology, in physical space generally.
Progress is not an option. The continued survival of the human species demands it, now, more than ever.
In conclusion, our policy must be as follows: Science is no longer to be limited to operations within the bounds of sense-perception. We must enter that higher domain of physical principles, which exist only beyond the reach of mere sense-perception, and thus, into the true domain of the human mind, into the domain of the discovery of true principles as such, those which reign beyond the reach of mere sense-perception. We must now enter, as Bernhard Riemann had emphasized in the closing sentence of his habilitation dissertation, into the inclusive quality of the domain of mind, as proposed by the collaboration on that specific subject, of an all-inclusive physical conception of mind, which had been implied in the pioneering collaboration between Max Planck and Wolfgang Köhler.
LaRouche Interviewed In Chinese Press: ‘Change The Direction of History’
Lyndon LaRouche is interviewed by Xinhua, the official news agency of the People’s Republic of China, on July 27, 2013 . During the interview, the interviewer Zhang Mian states “as an economist, you’ve committed yourself to establish a new world economic order” and asks him what is required to accomplish this goal. LaRouche replies:
“We have to create a new world, a new world which is based on a commitment to high technology, because only by increasing the technological potential of the nations of the planet, can we possibly work our way out of this problem. That could be done. China is potentially a very important part of this new world system. We can create an agreement among leading nations of the world, to change the general direction of the history of this planet in modern times — and China is a key nation in this whole process… The important thing is to turn conflict into a source of alliances, on this issue. And that issue will only work if we are actually promoting technologically progressive improvements in productivity.”
Chinese President Xi Jingping Announces ‘New Silk Road Economic Belt’
On his way to a meeting of the Shanghai Cooperation Organization (SCO), Chinese President Xi Jingping visits Kazakhstan on September 7, 2013 and announces his policy to push the rapid development of a ‘New Silk Road Economic Belt’ stretching “from the Pacific Ocean to the Baltic Sea.” While speaking at Nazarbayev University in Astana, President Xi states:
“To forge closer economic ties, deepen cooperation and expand development in the Euro-Asia region, we should take an innovative approach and jointly build an ’economic belt’ along the Silk Road. This will be a great undertaking benefitting the people of all countries along the route… We must expand the development of Eurasia, creating an economic belt along the Silk Road. China and the Central Asian countries are at a crucial stage; we need a broader vision for cooperation. The peoples of this ancient Silk Road together can compose a wonderful new chapter in the much-told story. Now is a golden opportunity for development.”
Helga LaRouche to UN: New Economic Order Begins With New Silk Road
Helga Zepp-LaRouche publishes an appeal to the United Nations stating that Xi Jingping’s adoption of the Silk Road policy creates the opportunity to “put the legitimate demand of the Non-Aligned Movement for a just world economic order back on the agenda.” Helga LaRouche writes:
“We all know that the current economic order in the world only allows a very small percentage of the population to live a life of luxury, that only a relatively small percentage live decently, that many languish in inhumane poverty, while what Pope Francis called “hidden euthanasia” is widespread…
“It is high time to put the legitimate demand of the Non-Aligned Movement for a just world economic order back on the agenda. Such a new order could begin with the proposal of Chinese President Xi Jinping at the latest SCO conference, to build the new Silk Road as the basis for peaceful cooperation among all the countries along that route. This proposal is totally in line with the proposal for a Eurasian Land-Bridge that the Schiller Institute advanced beginning in 1991, in reaction to the disintegration of the Soviet Union. That concept has been expanded, in the meantime, to a World Land-Bridge to bring people together, which has gained many friends and supporters throughout the world. Such a worldwide infrastructure and development program would hoist us onto the next higher economic platform, where hunger and underdevelopment could be eliminated forever.”
Helga LaRouche Appeal to UN · September 30, 2013
We all know that the current economic order in the world only allows a very small percentage of the population to live a life of luxury, that only a relatively small percentage live decently, that many languish in inhumane poverty, while what Pope Francis called “hidden euthanasia” is widespread.
Only a few people know that, just a few weeks ago, mankind avoided, by a hair’s breadth, the danger of extinction in a thermonuclear war, because that would have been the consequence of an escalation following a U.S. military strike against Syria.
Both of these dangers, which threaten the very existence of the human species, are ultimately the result of the economic system of globalization, in which “anonymous decisions”—signed by high-level officials—sacrifice man’s unique dignity and his life to Mammon, the god of lucre.
The diplomatic initiative around Syria raises the hope that the danger of a regional, and possibly, world war has been once again averted. But as urgent as war-avoidance is, it is not enough. If we, as a species, are to have a future, we need a real perspective for peace, a completely new paradigm, that leaves behind, once and for all, the geometry of solving crises through war, and replaces it by defining the common aims of mankind.
Is it not in the interest of all people on this planet to ensure energy security and raw-material security as quickly as possible, and by so doing to overcome an essential cause of hunger, and of the danger of war? Is it therefore not in the interest of all people and all nations to launch the best possible crash program for the use of thermonuclear fusion, along the lines of the “Manhattan Project” for developing the atomic bomb during the Second World War, but this time for peaceful purposes, and for the good of all mankind?
Likewise, it is high time to put the legitimate demand of the Non-Aligned Movement for a just world economic order back on the agenda. Such a new order could begin with the proposal of Chinese President Xi Jinping at the latest SCO conference, to build the new Silk Road as the basis for peaceful cooperation among all the countries along that route. This proposal is totally in line with the proposal for a Eurasian Land-Bridge that the Schiller Institute advanced beginning in 1991, in reaction to the disintegration of the Soviet Union. That concept has been expanded, in the meantime, to a World Land-Bridge to bring people together, which has gained many friends and supporters throughout the world. Such a worldwide infrastructure and development program would hoist us onto the next higher economic platform, where hunger and underdevelopment could be eliminated forever.
If the nations united in the UN General Assembly decide to replace the profoundly immoral and unjust system of globalization by an order based on an alliance of sovereign republics—in the tradition of John Quincy Adams—to work together in the common interests of mankind, our civilization can enter, consciously, into the next phase of evolution.
Why should that not be possible? We are the only creatures who, thanks to human creativity, can consciously improve the basis of our existence through scientific and technological innovation, and thus raise our living standards and life expectancy. Likewise, we are the only species which can scientifically determine with precision where the next step of research into the physical order of Creation must lie, to ensure the continued existence of our species in the universe.
The Earth is not a closed, entropic system of finite resources. Our Solar System and our galaxy are only a tiny part of the Universe, which develops itself anti-entropically. What is wonderful about our order of Creation is that there exists a verifiable concordance between the laws of the macrocosmos—the Universe—and of the microcosmos—our creative reason—which is expressed in the physical power of our immaterial ideas.
What we need today, more than anything else, is a tender love for mankind, an audacious vision for the future which looks at our planet from the perspective of astronauts and cosmonauts who see no borders, but only one mankind, while at the same time looking to the stars.
Friedrich Schiller said as much in his poem, and Ludwig van Beethoven in his 9th Symphony put those words to music:
Every man becomes a brother, …
Take this kiss throughout the world!
Brothers o’er the stars unfurl’d
Must reside a loving father.
Our tormented mankind needs courageous leaders, committed to the mission of leading the world out of the danger zones of destruction into a better future, which is within reach!
LaRouche Movement Publishes Video Detailing Thailand ‘Kra Canal’ Policy
On September 23, a feature video is published by the LaRouchePAC detailing the thirty-year history of the LaRouche movement’s leadership in the campaign to build a sea-canal across the Kra Isthmus in Thailand to connect the Gulf of Thailand with the Indian Ocean as a keystone project for the development of the Southeast Asian region. The video also reviews other key economic development projects for this region, including the development of nuclear power and rail transport. A transcript of this video is featured in Executive Intelligence Review magazine .
A Chinese-language journal Fortune Times contacts LaRouche a few months later to interview him on the Kra Canal , in which LaRouche states:
“The great boost to economic development of the South-Asia development, the massive economic advantage, and relative simplicity, of the undertaking, fulfillment, would be the exceptionally massive economic benefits such a canal represents for all of the nations of East and South Asia. There are two truly great nations in Asia: India, and the more populous China. The sheer volume of maritime trade between the two great nations of Asia, and their connections through the South Asia maritime regions, make the canal probably the most potentially beneficial, and also efficient project for the entire region of the Pacific and Indian Ocean regions, and the co-development of the major regions of Planet Earth as a whole.”
A detailed examination of the Kra Canal project and its economic importance for the development of Southeast Asia, as well as the role of the LaRouche movement in the campaign for its construction
LaRouche is interviewed by a Chinese language journal Fortune Times in May 2014, in which he states:
From my active interest in this subject, during the course of the 1970-1980 interval, I do have specific, professional knowledge concerning the importance and feasibility of such an undertaking, and its profound implications for the entirety of major neighboring regions such as, most prominently, China and India, but also the development process throughout the Pacific region generally.
1. Soon, the potential role of a well-developed Kra Canal must be among the presently best-known and most strategically important options in the underbelly of the Indian Ocean and closely related areas.
2. During a past period of my most excellent relations with Thailand, and of supporting actions pre-arranged, but disrupted, between Thailand and Mitsubishi during that past time, the feasibility and rich benefits of the completion of the Kra Canal, were among the greatest potential benefits available throughout the region of the Western Pacific and Indian Ocean waterways throughout all of Asia’s coastal regions. I had enjoyed excellent practical relations with the nations immediately associated with that project at that time.
3. Until I was targeted for virtual political elimination, by British-imperial and Wall Street interests (on the issue of an SDI agreement with the Soviet government), until a pro-British interest gained access to the Soviet system’s control, I had enjoyed often excellent cooperation with U.S. circles who had maintained close affinities with the tradition of President Franklin Roosevelt, as in opposition to enemies such as the infamous Dulles Brothers, who still tend to be represented by British-Empire-dominated interests, especially Wall Street branches of British imperial interests which have dominated the U.S. Presidency under the Bush-Cheney and Obama affinities to the British world empire today. The infamous “9-11” attack on the United States, which had been actually launched by Wall Street and British agencies through British-directed Saudi influences, remains a crucial strategic factor bearing on Asia’s future presently, for this same reason.
Under the consequent circumstances, my active connections to relevant circles in East Asia have since been greatly reduced, but, my broader strategic understanding of the East-South Asia region persists. Respecting your interest in the matter of the implications of a Kra Canal development, my broad strategic-economic competence remains relevant today.
4. Divide the maritime region of East and South Asia into three principal categories: China, a giant; India, a giant; and the maritime connection, throughout Southeast Asia’s maritime regions, today. Add the impact of such triadic maritime and related connections, to the physical-economic relations to the Americas to the East, and the Middle East’s underbelly and Africa. Then, the potency of a Kra Canal development appears not only as an eminently feasible feature, but a strategic political-economic force for the planet.
That is sufficient to present the practical, immediate, also, globally strategic considerations.
a.) The studies of the Thai government and Mitsubishi have demonstrated both the economic feasibility and awesome benefits of the completion of the Kra project. The immediate prospect of difficulties, is predominantly political, and that itself, specifically British-imperial manipulations of governmental and financial-economic interests. On the U.S.A. side, the sources to be regarded as hostile can be traced to the history of the Dulles Brothers and the Bush-Cheney-Obama, British imperial-controlled regimes (e.g., Wall Street) in the United States still today.
b.) From an engineering vantage-point, the project is probably the most feasible, most efficient, and relatively most beneficial measure for the entire underbelly of the Indian Ocean.
The most common opposition to the Kra Canal, from within that region itself, is located precisely in Singapore. The chief source of resistance from Singapore, is entirely, global, British-imperial military-strategic interests. The completion of the Kra Canal, is not technologically difficult, if and when we take into account the massively beneficial impact of the creation of such a project; it is principally the British imperial-strategic interests in the entire Indian-Ocean region, which has long remained the principal obstacle to the Kra during modern times.
c.) The great boost to economic development of the South-Asia development, the massive economic advantage, and relative simplicity, of the undertaking, fulfillment, would be the exceptionally massive economic benefits such a canal represents for all of the nations of East and South Asia. There are two truly great nations in Asia: India, and the more populous China. The sheer volume of maritime trade between the two great nations of Asia, and their connections through the South Asia maritime regions, make the canal probably the most potentially beneficial, and also efficient project for the entire region of the Pacific and Indian Ocean regions, and the co-development of the major regions of Planet Earth as a whole. Water is still the most economically efficient mode of economic transport among the regions of the planet.
Singapore itself, when freed from British strategic imperatives, will benefit far more from the success of the Kra Canal development, than without the development of the Kra!
d.) The planet as a whole, is now entering both the feasibility, and indispensably leading role represented by a Helium-3 enhanced thermonuclear fusion, development program.
Under such development of Helium-3, augmented developments of thermonuclear fusion modes, the access of mankind to control and exploitation of the immediate vicinity of the Earth orbit comes rather quickly to a mankind which inhabits Earth, but exerts increasingly efficient control over both the defense of Earth against menacing factors in the vicinity of the Earth orbit, and also the incorporation of the advantages from such developments for the development of human residence on Earth and also operations, on behalf of Earth, from nearby, and even, more distant objectives.
It is the accelerated increase of mankind’s power to act productively on, and for Earth, and that in the vicinity of Earth, which best serves the greater interest for all mankind, Singapore included.
Thank you for your question.
President Xi Jingping Calls for ‘Maritime Silk Road of the 21st Century’
Less than a month after calling for a ‘Silk Road Economic Belt’ through central Asia during his trip to Kazakhstan, Chinese President Xi Jingping follows this up with a call for the creation of a ‘Maritime Silk Road of the 21st Century’ during a speech to the Indonesian Parliament on October 3, 2013. This policy proposal would be for the maritime development of East and Southeast Asia in tandem with the policy for land development of Central Asia that he had announced the week before. During the speech, Xi also announces the creation of an Asian Infrastructure Investment Bank (AIIB) to fund these projects.
President Xi states:
“Southeast Asia has since ancient times has been an important hub along the ancient Maritime Silk Road. China will strengthen maritime cooperation with ASEAN countries to vigorously develop maritime partnership in a joint effort to build the Maritime Silk Road of the 21st Century. China is ready to expand its practical cooperation with ASEAN countries across the board, supplying each other’s needs and complementing each other’s strengths.
President Xi Jinping of China addresses the Indonesian Parliament, proposing a ‘Maritime Silk Road of the 21st Century’ as a complement to his ‘Silk Road Economic Belt’ for Central Asia
Helga Zepp-LaRouche Returns to China to Promote ‘New Silk Road’
In February 2014, Helga Zepp-LaRouche returns to China for the first time since 1998 to participate in over a dozen seminars, conferences, and television interviews on the subject of the New Silk Road. The trip was occasioned by the announcement by President Xi Jingping the previous year of his ‘Silk Road Economic Belt’ policy, which precipitated numerous invitations to Helga LaRouche from academics and policy makers familiar with her leadership role since the early 1990s in promoting the Eurasian Landbridge.
During her trip, Helga LaRouche is featured in a half-hour interview on the prime-time CCTV ‘Dialogue’ program by Yang Rui, a prominent journalist in China who has interviewed numerous world leaders and heads of state. He begins by introducing Helga LaRouche as the person “who first advocated the idea of a Eurasian Land-Bridge more than 20 years ago” and is referred to as the New Silk Road Lady. In the interview, she stresses that the extended Eurasian Landbridge can serve as the foundation for “a peace order for the 21st century” and create a paradigm shift away from perpetual war:
“We have to move away from geopolitics, because geopolitics gave the world two world wars in the 20th Century. If we stay with geopolitics, we are on the verge of a Third World War. The conception of the Eurasian Land-Bridge is larger than only the Silk Road, because it also involves the building of a corridor along the Trans-Siberian Railway, and it has many routes going all the way to Indonesia, into Africa. We are really talking about the Silk Road being the beginning of a World Land-Bridge… It is extremely important to put a peace order for the 21st Century on the table and create a level of reason, where everybody who participates has a benefit, so that historical conflicts, past wars, and all these problems are put behind us, if you build the Eurasian Land-Bridge as a totality.”
Helga LaRouche was also interviewed on China Radio International’s ‘People In The Know’ program , in which she stressed that the New Silk Road can serve as the pathway to “a new system of credit among sovereign nations” to replace the current collapsing financial system:
“The New Silk Road idea, which is really identical with our Eurasian Land-Bridge proposal of 24 years ago, would have large projects, building corridors, building fast-speed railways, building water projects to overcome the deserts. And these are projects which would be international. So you need to have international mutual credit agreements among different nations, to build these over the long term. Meaning that you cannot expect profit in two months, but you would plan these projects over 10, 20, 40, even 50 years, and you make credit arrangements among sovereign countries to accomplish that. So, we need to think about how to replace the present collapsing financial system, with a new system of credit among sovereign nations.”
China and Russia Establish Historic Strategic-Economic Relationship
Chinese President Xi Jingping and Russian President Vladimir Putin hold an historic summit on May 22, 2014 in which they significantly upgrade and solidify the strategic and economic relationship between their two nations. The two leaders issue a joint declaration giving clear support to each other’s economic development initiatives, the President Xi’s ‘Silk Road Economic Belt’ and President Putin’s ‘Eurasian Economic Union’, pledging to merge their efforts for mutual development.
At the core of the agreement is the finalization of a 30-year natural gas deal in which Russia will provide China with 38 billion cubic meters of natural gas annually in exchange for Chinese financing of necessary pipeline construction and oil field development. The economic agreements also include mutual investment in transportation, infrastructure, mineral development and “increases in the effectiveness of cooperation in areas of high technology, developing collaboration in the realization of priority projects such as the international use of nuclear energy, civil aviation, and in the program of cooperation on fundamental space research, satellite monitoring of the Earth, satellite navigation, and the study of deep space and human astronautics.”
Russia, Kazakhstan, and Belarus Create Eurasian Economic Union
At a meeting on May 29 in Astana, Kazakhstan, the presidents of Russia, Kazakhstan, and Belarus sign a treaty creating the Eurasian Economic Union. President Putin of Russia emphasizes at a press conference that this economic union will facilitate the creation of trans-Eurasian “transport-logistic routes” of global importance:
“The Treaty we signed is one of truly epoch-making, historic importance. It opens up the broadest possible prospects for economic development and improvement of the welfare of the citizens of our countries. Russia, Belarus, and Kazakhstan are moving to a fundamentally new level of cooperation, creating a common area. Our three countries will be able to conduct a coordinated policy in key economic areas such as energy, industry, agriculture, and transport. energy, industry, agriculture, and transport… The geographical position permits us to create transport logistic routes of not only regional, but also global importance that permit attracting massive trade flows in Europe and Asia.”
President Nazerbayev of Kazakhstan emphasizes that the Eurasian Union will become a new model of relations between sovereign states:
“A new geopolitical reality of the 21st Century is born fundamentally new model for good neighborly relations and interaction between peoples in the great Eurasian space.”
Majority of Planet Unites Behind Argentina’s Resistance to Vulture Funds
In response to a ruling by a New York court in favor of ‘hold-out’ vulture fund NML Capital’s usurious debt-claim against Argentina at 1,608% profit, a majority of the world’s nations unite in support of Argentina’s refusal to pay. Argentine President Cristina Fernández de Kirchner makes a speech to the G77 Summit in Bolivia in which she states:
“In this kind of anarcho-capitalism, where a small group of financiers runs the rest of humanity, a group known as ‘vulture funds’ obtained debt instruments at absurdly low prices. This small group of vulture funds is endangering not only Argentina. In reality what is at stake is the international financial system, and the international economic system more than the financial system. This is financial capitalism and the appearance of what is called financial derivatives, which began to generate, or at least make the world believe that they were generating, money without going through the cycle of the production of goods and services, which is impossible and obviously generate astronomically high profits, but also the existence of fictitious money.”
The entire Group of 77 (G-77), representing 133 nations and a total of 5.6 billion people, or 78% of the world’s population, largely overlapping in terms of membership with the nations of the Non-Aligned Movement, votes unanimously to support Argentina and stand in solidarity against the vulture funds.
President Fernández de Kirchner welcomes the international outpouring of support and stresses:
“Today the vulture funds endanger the international financial system. This is not a matter of North or South, but of a productive economy against a speculative one.”
At an emergency meeting in Washington D.C. of the Organization of American States (OAS), the acting Foreign Minister of Guyana Robeson Benn calls for a return to Glass-Steagall to defend nations from the usury typified by the vulture funds:
“I would like to pose the question as to whether we should not, out of this imbroglio, re-look at the overall question of the repeal of the Glass-Steagall Act in 1999 in the United States, which related to the activity of the banking system, the international financial institutions, mainly resident in the United States and in the United Kingdom. President Roosevelt, of the United States of America, established a banking act, signed off on the Banking Act of 1933, which set up firewalls between the activities of the banks, and on the questions of speculation in the financial system. There is, perhaps, the need now to take a look at putting back in place important sections of the Glass-Steagall Act which was repealed in 1999… We need to review the question, or call upon U.S. legislators to pursue efforts to put back in place the type of regulation in the banking system which would prevent vulture funds, which would prevent this ‘modern-day piracy’ which has serious implications for the world economy.”
Helga LaRouche: New Silk Road Is Creating New World Economic Order
On the eve of the BRICS Summit in Fortaleza, Brazil, Helga Zepp-LaRouche publishes an article titled “The New Silk Road Is Creating a New Just World Economic Order” in which she states:
“A strategic realignment of a large number of states is currently taking place… The core of this positive change is the emergence of an economic platform to develop the New Silk Road which China has made a priority of its foreign policy. Chinese President Xi Jinping and numerous government officials have repeatedly emphasized in international forums, the principles on which the New Silk Road economic zone is based: mutual development, non-confrontation, mutual respect and dialogue, respect for the other’s choice of social system, support for the strategic interests of the other state, absolute respect for sovereignty, and renunciation of any form of hegemonism…
“Various aspects of the Silk Road policy are already on the agenda: connections along the historic route in Central Asia; the maritime Silk Road, including construction of a “second Panama Canal” in Nicaragua, with Chinese help; and the strategic cooperation between Russia and China which was adopted at the summit in May between Presidents Vladimir Putin and Xi Jinping. The principle also includes the offer by Prime Minister Li Keqiang, that China is ready to connect all the African capitals by high speed rail.
“It is expected that at the summit of the BRICS countries in Fortaleza, Brazil on July 13-14, not only will the five member states intensify their cooperation according to the “Silk Road” concept, but there will also be various bilateral and multilateral meetings be tween their leaders and those of Latin America, at which large projects and contracts will be agreed upon, constituting, in combination, the beginning of a new world economic order. A BRICS Development Bank is to be established, with a starting capital of $100 billion, as well as a foreign exchange pool to better protect participating developing countries from currency turbulence. In addition, China is preparing the ground work for an Asian Infrastructure Investment Bank (AIIB), with initial capital equivalent to $50 billion. The goal of these new institutions is also to reduce dependence on the dollar and move toward trade in the respective national currencies…
“The new international economic order is coming into existence through China’s New Silk Road policy.”
BRICS Summit: Half of Humanity Launches New World Economic Order
The leaders of the BRICS nations (Brazil, Russia, India, China, and South Africa) meet on July 16 in Fortaleza, Brazil for the Sixth BRICS Summit and take actions establishing a New International Economic Order. The BRICS Summit issues a 72-point Fortaleza Declaration announcing the formation of the New Development Bank (NDB), directly echoing the proposal by Lyndon LaRouche from nearly four decades before for an International Development Bank (IDB) to create long-term, low-interest credit for capital investment into the so-called developing sector, in order to overcome the underdevelopment of Africa, Latin America, and large parts of Asia. The Declaration also announces the establishment of a Contingent Reserve Requirement (CRA) to protect nations from currency speculation and financial manipulations.
President Putin of Russia highlights these two initiatives in his address to the conference:
“We are united by a desire to act from unified positions in all issues of global development and the formation of the global financial and economic architecture… We have been able to achieve significant successes. I want to stress that all the plans we set for ourselves a year ago have come to fruition. I am referring, first and foremost, to our plans to create a new Development Bank and a Currency Reserve Pool for BRICS nations. Today, we have confirmed their founding documents. The BRICS bank will become one of the largest multilateral financial development institutions in the world. Its stated capital will be $100 billion. The scale of possible operations within the framework of the Currency Reserve Pool may also reach $100 billion. This mechanism creates the prerequisites for effectively protecting our countries from financial market crises. The bank and the Currency Pool, with combined resources of $200 billion, lay the foundation for coordinating a macroeconomic policy between our nations.”
Newly elected Indian Prime Minister Narendra Modi celebrates the leadership significance of the BRICS as defining the future, saying:
“The vision of a New Development Bank, at the Delhi Summit two years ago, has been translated into a reality, in Fortaleza. It will benefit BRICS nations, but will also support other developing nations… The uniqueness of BRICS as an international institution is that for the first time, it brings together a group of nations on the parameter of ‘future potential’ rather than existing prosperity or shared identities. The very idea of BRICS is thus forward-looking… We have an opportunity to define the future — of not just our countries, but the world at large. Coming from a land where the idea of Vasudhaiva Kutumbakam — the ‘whole world being one family’ — is rooted deep in our ethos; I take this is as a great responsibility.”
Immediately following the BRICS summit, the five heads of state hold a follow-on summit with the Union of South American Nations (UNASUR). Argentine President Cristina Fernández de Kirchner speaks to the gathering and declares the establishment of a new international financial order:
“It is with great pleasure that we salute this decision of the BRICs to create a development bank, focused on infrastructure… We are posing a new global financial order, one that is not just fair and equitable, but indispensable. What we demand from the world, is precisely the creation of a new global financial order which will permit sustainable and global economic growth…. Thus, the appeal to all nations is to join forces in this real crusade for a new global political, economic and financial organization that will have positive social, political, economic, and cultural consequences for our nations.”
EIR Publishes Updated Special Report on World Landbridge
In her introduction to a newly published special report on the World Landbridge project from Executive Intelligence Review, titled “The New Silk Road Leads To The Future Of Mankind” , Helga Zepp-LaRouche writes:
“In less than one year, an alliance of nations has been created, which has built a parallel economic order with giant steps, one which is dedicated exclusively to the building of the real economy, in opposition to the maximization of speculative monetary profit, and which now includes more than half of mankind. This new community of nations represents a power center based on economic growth, and above all, on leading-edge technology, one which belongs to the future…
“A new strategy for mankind means the ability, from now on, to see the human species as a unity, and to see that unity in the process of mutual development… This also signifies a new model of cooperation among the nations of the world. It means that all potential treaty organizations and alliances must be inclusive, that they cannot be for the security and economic interests of some nations, while excluding others. While the support of mutual development is the premise, they must nonetheless respect the different levels of development, history, culture, and social systems, and above all, respect national sovereignty. That is Nicholas of Cusa’s idea of unity in multiplicity, and it must be inspired by a tender love for the idea of the community of nations, for the idea of mankind as the creative species.”
Helga Zepp-LaRouche Tours Silk Road Route on Return Visit to China
Helga Zepp-LaRouche is invited to return again to China to tour the Silk Road route and address several high-level conferences on the Silk Road Economic Belt initiative of Xi Jingping. On September 5, 2014 she addresses a high-level forum in Beijing on the topic “One Belt, One Road” along with Col. Bao Shixiu, Professor (Emeritus) of Military Science at the People’s Liberation Army Academy of Military Science, who emphasizes in his speech the leading role of both Helga and Lyndon LaRouche in the campaign for the New Silk Road since the beginning of the 1990’s . The event, sponsored by China Investment magazine, which is an arm of the National Development and Reform Commission, the main economic policy planning commission under the State Council of the Chinese government, is the first of what is intended to become an annual event bringing together researchers from many Chinese think-tanks tasked with the mission of developing a program for President Xi Jinping’s Silk Road Economic Belt.
Helga LaRouche is also a participant in an international conference on the New Silk Road at Lanzhou University attended by representatives of the Chinese Ministry of Foreign Affairs and by the president of Russian Railways Vladimir Yakunin. Additionally, she is interviewed twice on the prime-time CCTV ‘Dialogue’ show, as well as on Chinese Radio International . During the latter interview she states:
“In these six months, tremendous developments have taken place. You had the strategically extremely important summit between President Xi Jinping and President Putin in Shanghai in May, and then in July, the equally important BRICS meeting in Brazil, which was followed by a summit between the BRICS countries and the heads of state of Latin America. And what has emerged out of this series of meetings is a fantastic development, namely, the shaping of a new financial order and a new economic system. And this is extremely important, because this has given tremendous hope to many other countries to finally go for the kind of development which is in their self-interest.”
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