LaRouche: FDR Methods
Can Lead the World Out of the Nightmare
Lyndon LaRouche addressed a forum in Rome on Feb. 28, on "The International Systemic Crisis and the Rooseveltian Way Out," held in rooms provided by the Italian Senate. The event was attended by around 40 people of various institutional, political and economic stating. It was introduced and moderated by Claudio Celani, and included several questions from the audience. Interpretation between Italian and English was sequential.
The two-hour event was recorded by Radio Radicale.it, and is posted on their website in mp3 format (62 MB); it can be listened to or downloaded here.
Lyndon LaRouche: On the 25th of July last year, I gave an international webcast, announcing that we were on the edge of the immediate collapse, of the greatest collapse in modern history, of the world present financial-monetary system. Within a week, that collapse began. It began particularly with the collapse of a real estate bubble which had been building up in the United States for some time.
But that bubble was only a weakest point in the entire world system. The entire international financial system is now in the process of disintegrating. There is no possibility for the continued survival during the period of months ahead. And there are certain reactions by leading forces which recognize, exactly, that months ahead, this whole system in its present form will disappear. The development of the election campaign in the United States currently, and also the developments around the Lisbon 2 agreement being proposed, which would eliminate the existence of nation-states in Continental Western Europe, are symptoms of this kind of preparation.
This has a long history, which I could explain, but we have limitations of time here, and also since we have to do the sequential translation, I will play down some things which are extremely important, which may come up in discussion.
I'll indicate what the two great problems are: First of all, you have both events are being steered from London, not from the United States, but from London. Both represent the fact that, especially since 1971, the United States' dollar has nominally been a leading factor in the world, but it has not been a U.S. dollar, it has been an international dollar. I'll describe the one well-known feature defining that difference between the 1968 picture of the dollar, and the 1971-72 picture. Up to the middle of 1971, the U.S. dollar had been a keystone of a fixed-exchange-rate system. Up until the assassination of John Kennedy in the United States, that has been a solid arrangement. A wave of assassinations, including that of Kennedy, changed the world situation politically, and the result of the assassination of Kennedy, we had the so-called prolonged Vietnam War, Indo-China War.
Then we had, in 1968, the breakdown of the political system in part with the 68er phenomenon. The political structure of the system began to crumble with '68. Nineteen seventy-one, the floating of the dollar, led to another big swindle, which, most people have not recognized yet: Most people should know that the British paid the Saudis $3 for each barrel of oil the British take from the Saudis. And by the time that oil reaches the market in Amsterdam and similar places, it's now $100 or approximately that. A very unmagical trick.
So, the entire system is fraudulent, but what happened was, to cause this, was that we had a so-called "oil price crisis," in the early 1970s as a result of the '71-'72 change in the monetary system. Then we had the orchestrated "oil price shock" of the '72-'73 period. As a result of that, we had the creation of the "Amsterdam dollar," and we can say, in an English pun, that was the beginning of the "damn dollar" to replace the U.S. dollar. So, from that point on, the U.S. dollar was no longer U.S. property, in effect, but became an Anglo-American dollar, controlled through the oil spot market out of Amsterdam and similar places. There were chain reactions centered largely on London, in the international markets on all kinds of commodities, which erupted from that point on.
And in this process, you had a fundamental shift occurring, between 1968 and 1975, in which, instead of having the nations of Europe and the United States as being the prime drivers of the world physical economy, there was now a great shift in progress. You've seen that in Italy, where in northern Italy at least, there was a significant improvement in industrial and agricultural activities into the late 1970s. Since the 1968 period-1975 period, there has been a general decline in the physical productivity in agriculture and industry in Europe and North America, in particular. What has happened is, production has been shifted to the cheap labor markets of the world. In fact, China, for example, is actually losing money on its relationship with the United States. Because the money that China as a nation gets for producing for the United States, is less than what it costs China to produce that product.
You have a similar situation, but a different one, in India. India has 1.1 billion people, which is compared to 1.4 billion people in China. In India about 70% of the population is extremely poor, as poor as it was years ago, and the most acute expressions of poverty are increasing and spreading. It's like Africa: We have parts of the world which are producing products cheaply for the world market: But! if you look at the population of the countries which are doing this, they are not able to sustain their own population from this production.
There has been no success in the world economy since the end of the 1960s. There has been contentment for some people who are very rich, and a diminishing quality of life for those who are not very poor. For example, just looking at the price and availability of health-care in countries such as Italy and Europe, or the United States: We have, for example, the Mayor of New York, who in my view never earned any money at all, was confronted with the fact that he alleged is worth $11 billion. He protested: "I am not worth $11 billion! I'm worth $40 billion!"
Now, I should tell you that this same Mayor of New York, which is to come to another part of this point, is by Italian standards of the 1930s: He is a fascist. His policy is that of corporativism, the same thing as Mussolini and Volpi di Misurata. The same program that was brought into Hitler through Schacht. There's a similar policy that's coming out of London under different names right now. And London is also running Bloomberg in New York. London is also working now, in the public press, actually, to destroy one of the leading candidates in the United States: Barack Obama. But at the same time, London is also supporting Obama against Hillary Clinton. The intention is to make Bloomberg the leading national candidate in the United States.
Well, this is not unusual for European experience, for those who know the history of Europe in the 20th century. Periods of great financial crisis, particularly financial breakdown crisis, lead to desperate measures by those relevant financier interests who have political power. And throughout the euro system, that is already present, at the same time, that it's happening inside the United States. However! There's a problem: The present financial crisis can only be compared to what happened in Europe when the Bardi bank from Lucca collapsed, and Europe went into a dark age, the so-called new dark age, where half the parishes of Europe disappeared, and one-third of the population disappeared. We face potentially a greater crisis than that, today.
But there are alternatives. There are solutions: What I propose in particular, to all relevant circles, is that the United States government undergo a change of heart, and of personnel, in which, in this year, in the first half of the year, the United States government should be induced to approach Russia, China, and India, to enter into a new agreement on a fixed-exchange-rate system.
You have to look at two key facts about the world situation to understand this: First of all, there has been no global prosperity in the past 20 to 30 years. There have been pockets of actual income, and some artificial income, which is purely monetary but not real. For example, the housing boom in the United States and Europe is totally fraudulent. But the cost of housing is greater than the salary-incomes of the people who can sustain it. And these prices are not real prices, they're inflated prices. As you see now, the prices of real estate will tend to collapse back to one-quarter or one-fifth of what they are today. And even that amount of economic activity, is not based on reality, it's based on credit. It's based on credit which is purely fictitious. It's on bills that could never be paid, credit that could never be repaid. On top of that, the total nominal income or obligations of the world, are in hundreds of trillions of dollars, and in dollars it's up in the quadrillions. So that, under these conditions, there's no possibility that you could ever resolve this debt in its present form.
All right, at the same time that we've got a worse crisis than in the 14th century, we have the major producing countries of the world, like China, India and so forth, operating below breakeven for the population as a whole. In other words, the shift of production from Europe and the United States, into the developing sector, was not based on competitive considerations! What the conditions were, that production was exported from Europe and the United States, to countries which had not received sufficient income to maintain their own populations. So therefore, the collapse of Europe and the U.S. in particular, would mean a chain-reaction collapse of the economies of Asia, as well as Africa and South America. You have to look at Europe in the terms of the 14th century, to understand this phenomenon.
This is a 21st century new dark age potential!
Now, if you study the rate of collapse of population in the Middle Ages, in the middle of the 14th century, which is something Italian historians ought to be able to master, when the chain-reaction collapse of the Lombard banking system occurred. The collapse of credit resulted in a beginning of an increased death rate in the population of Europe as a whole. This rate of decay, this rate of shrinkage of the population, then accelerated into a steep decline in population. Half the parishes of Europe vanished! The population of Europe collapsed by one-third, within a period of about a generation. And then, continued to collapse at a more leveled-off rate. This is the typical S-curve of collapse of a population of this type: a slow decline, then a steep decline, then a slower decline. The world population today, under these conditions, is between 6.5 to 7 billion people. What happens with this kind of collapse? You get a global new dark age collapse if we allow it to occur. Civilization as we know it now would disappear. The level of population would ebb toward about 1 billion people.
But there are solutions for it, as the Renaissance showed, and that's why my proposal for the United States to Russia, China, and India, is very important. As you know, Europe no longer—that is, west of Russia and so forth—no longer has any real sovereign independence in dealing with these kinds of problems. Globalization has undermined, grievously, the sovereignty of the European states.
But we have an irony at the same time: China knows, more clearly than any other country, its vulnerability to this kind of crisis. India has a slightly greater resilience in its system. But the threat is existential, nonetheless. The basic problem is, that the world is not presently producing the amount of physical wealth, including infrastructure required to sustain a population of over 6.5 billion people.
But! In Europe and in North America in particular, we have the potential in terms of technology, embedded in the people, embedded in the culture, to have a revival of physical economic output. As you look at the history of the Mussolini regime, you know you can't do it with just infrastructure. You have to do with the kind of infrastructure, which is based on increasing manufacturing and agriculture output. It means high-technology innovation. European civilization has still the ability, under emergency conditions like Roosevelt used, to reactivate the potential of productivity in the European population: a reversion to modern, mass-transportation as opposed to reliance on the automobile; unleashing the now-largely suppressed nuclear energy potential. The actual cost of nuclear power, which is reported to be high is a fraud: It is not that high, it's artificially high! If you actually put a mass investment into nuclear power, you will convert the world from dependency upon petroleum into developing not only nuclear power for local use, but for the generation of synthetic hydrogen-based fuels, to replace petroleum.
We have, admittedly, a population which has lost production skills—they've been out of work for 25 to 30 years. They depend upon old men, you know, like me to get production going again. But, we know how to do that, from past experience. Roosevelt did that, with the recovery in the United States.
So therefore, if we have 30- to 50-year agreements, with China, with India, and with other countries—long-term monetary and financial treaty agreements—China in particular has a great need for European technology, to deal with its own internal population crisis. And since Deng Xiaoping, this has been their policy. India is committed to going to the thorium cycle in nuclear power, for small-scale thorium plants. Because the people in India are very poor and very unskilled, as you find, generally, in Africa. The African farmer is productive by African standards, but he lacks the infrastructure to make his productivity efficient. So we in Europe, if we are wise, and in the United States, can make agreements with these countries: We have a great need for imaginative leaders, who will react to the stupidity of much of our politics over the past 30 years, for programs we already have developed, but we know exist. There is no problem that humanity has which is not potentially solvable under good leadership of a tradition type that we used to have in the United States.
Now the problem is this—my concluding point here—is this, we have a crisis in elections and government in Europe and in the United States. We have it on both sides of the ocean. It's acute. We have a threat of a return to fascism on a scale far beyond anything that we've known before in the past: You have a dictatorship threatened for Europe, under the new treaty agreement, the Lisbon agreement— no longer will there be any government control over the government of Europe. At the same time, we face that in the United States in the current election campaign.
All right: Obama is not going to be elected. Obama is being backed by London to bring down Hillary Clinton, and then they're going to put him out of business. Look at the leading British press: The scandal is brewing, they're going to bring him down. They've been backing up Obama to bring down Hillary Clinton. If they think that Hillary Clinton is brought down, they bring him down. Then the Mayor of New York becomes the Democratic Presidential candidate. And his program is fascist, just as fascist as you can imagine from past European experiences. So naturally, I'm part of the organization inside the United States, determined to make sure this sure this does not happen. And there are a great number of people in the United States of influence who share my concern, including senior figures who've been part of government or the institutions of government over a long period of time. I'm determined to crush this. And I'm doing everything possible to goad my friends into joining me in doing it.
My concern, also, at the same time, is, though I admit that Western Continental Europe does not have much political power any more, and if this Lisbon agreement goes through, we'll have a lot less. But I think we can mobilize things, and build up the confidence to take the measures which are needed to lead the world out of this nightmare, by methods of Franklin Roosevelt. The nations which represent European civilization must awaken to their mission, of restoring the kind of technological progress, which made Europe great in the past.
And you can count on one thing: We can all go to Hell, in a sense, but we have a chance to win. The chance to win lies in the achievements of our culture, and if we can awaken ourselves to confidence in our cultural legacy, we can win! It is a war we can win, but it is a war we could lose! Do we have the will to win? That's my message.
Dialogue with LaRouche:
Revive the Principles of the Renaissance
Italy's Undersecretary for Economics Alfonso Gianni, and Young Entrepreneurs'Association head Catia Polidori made remarks to which Mr. LaRouche responded:
LaRouche: I would say in response to this, that there's one underlying issue here, which is most important: and the significance of the meaning of culture, the actual meaning of culture. The success of European civilization, in the times that it has been successful, is a development of culture. For example, you have essentially, a very long dark age, despite Dante's great work, until the beginning of the Renaissance with 1439. There's a great gap in European history between the breakdown of culture about 200 B.C., until the Renaissance in 1439 and so forth. But it's possible to understand this cultural phenomenon, if we look back far enough, say about 3,000 years. Because European culture was formed by certain maritime agreements among certain powers in Europe about that time, about 3,000 years ago, about 7,000 B.C., with the Etruscans, the Egyptians, and the Ionians, which led to the emergence of what is a specifically European culture. There were earlier roots of this, but it took place about that time. It's the post-Homeric period, which comes out of a period of crisis before then.
So therefore, with the ebbs and flows of the success of European culture, its defeats, its retreats, European culture has been the source of all of the successes of Europe. Now this culture's gone along with another problem. The problem of the separation of the rulers from the ruled. And the great periods of European culture have always been periods in which the people themselves are uplifted into an integrated population. For example, Dante tried to start that, and made a legacy which is still alive today. The Council of Florence was a great watershed of all European culture, modern European culture.
So that we have, in European culture, we had the most magnificent development out of many periods of crisis. And we in the United States had a very special advantage. Most of the people who came to settle the United States were not running away from failure in Europe. The colonization was motivated by the desire to find a place away from Europe, in order to get away from the oligarchy! And the distinction of the United States from Europe, is that we don't have an oligarchical tradition in the United States. We don't have a Black Nobility—we don't have any of these curses! When we want a curse, we import it from England. [laughter] They follow us.
The key thing here, is the question of culture, and culture means the difference between man and an animal. It means that we try to organize the work and the life of people, in depth in communities, so that the creative factor of the individual mind is the dominant expression of what they're doing. For example: In employing people, if you employ people with the idea, they're going to do their work and shut up, you're not a good leader. If you're a leader in a community or in a business, you're doing the most to promote the development of the employees. Animals are the same from one generation to the next. People are not animals. [respond to audience joke] Well, some politicians I know are, but that's a different matter. [laughter] But the function of society is to promote the development of the creative powers of the mind of the individual, and to promote in work, promote as much creativity as possible in work, in addition to simply doing their job, to enrich the community with ideas.
And this is where the society succeeds or fails. In which you have the greatest amount of participation of the individual in development, their own development and that of others, is the primary source of success, because that's where profit really comes from.
And this is where the loss occurs, is this idea of cheap labor being good. Cheap labor is not good. What does cheap labor mean in terms of the community, the children of the community? What does it mean to be bestialized by routine? And the promotion of culture, and the use of a language-culture and its development as the way of promoting that, is the most crucial thing, which we have losing in Europe, especially since World War II.
Just take Classical music as an example: Should we make noises like animals, or should we use the Classical culture? And do we promote these kinds of cultural activities among the people who are doing the work in the community? A respect for the mind of a human being, in terms of a culture which goes on from successes to successive generation. The great-grandfather said, "I did this for my grandchildren." People coming into the United States would come in as laborers, and their grandchildren would be doctors and scientists. Success in the ordinary sense is not the standard: It's the improvement of the development of the individual mind, the culture development, which is precious. If that is the political standard of behavior, then I think everything would work. This is the only expression of love of humanity, is this form.
Moderator Celani fielded questions from three individuals, to whom Mr. LaRouche responded at the end—on nuclear energy, FDR/Keynes issues, and banking and monetary policy.
LaRouche: There are three questions before this one, which I want to address and then I'll take this one up.
First of all, there is no relationship between Roosevelt's design and Keynes's design. Keynes presented his design originally, in Germany, in Berlin, in an edition of his famous book, in which he said that he was publishing the book in Germany, because he thought that under Nazism, his ideas would have a more favorable hearing than in a democratic state. In principle, Keynes was correct in his estimation.
Now, on the question of the Bretton Woods systems: The Bretton Woods system was not a Keynesian system. Keynes made a presentation in 1944 at the Bretton Woods conference, and the speech is on record—there's no doubt of that. But those who were trying to equate Keynes with Roosevelt's conception of Bretton Woods, are really trying to walk an elephant through a mouse trap.
There's a point of history here, which is the most fundamental thing to understand about the entire period of history from the 1920s, from the end of World War I. The whole history as generally taught is completely nonsense. Mussolini and Hitler were both put into power by the British monarchy. And the biggest supporter of Mussolini from England was Winston Churchill, until the verge of the war. On the inside of Italy, for example, a British agent, who's a known British agent, involved in the Young Turk operation of the British monarchy, Volpi di Misurata (later called Di Misurata) was the key architect of the Mussolini leadership, and he was the actual guy on the inside, who ran it during much of the 1920s and 1930s!
Hitler was brought into power by the British monarchy. They changed their mind later, but they put him in power. He was personally put into power by head of the Bank of England, whose agent was Schacht. What you call "fascism in economics" is Schachtianism. Mussolini got his fascism from Britain! It was a product of Versailles! 'Cause the whole thing was banished, and of course some Black Nobility along with it.
Now, on the case—what happened here was simply is that, Roosevelt and Churchill, Roosevelt and the British had no agreement whatsoever. Roosevelt hated the British, as all patriotic Americans do: because we hated their damn colonial system, their imperial system. We knew there would never be peace in the world until we could bring justice to people who were victims of colonies. See, Roosevelt's policy from the beginning of the war, was to shut down the British Empire at the end of the war! My life has been—I've been on the Roosevelt side against the other side on this thing ever since then. The Roosevelt policy was, as he said to Churchill: When this war ends, there are not going to be any more colonies! "You have to understand, Winston, when this war ends..." [laughs] all right.
So therefore, what happened is, now Roosevelt died. Now, I happened to belong to the faction which was the pro-Roosevelt faction against Truman faction. And actually Truman was backing the U.S. faction that was backing Hitler, up till Roosevelt made him stop! So now, 1944, Roosevelt had made the Bretton Woods design. The Bretton Woods design and the statement on the forming of the United Nations are the same thing. First, with the United Nations was to create an alliance of states which would prevent the existence of colonialism. The intention of the United States was to use the great military power we had, military-industrial power, by converting military power back to technology power, which include a long, big project for Northern Africa. And for the entire world.
All right. The minute Roosevelt died, the policy went in the opposite direction. Therefore, under Truman and his followers, they interpreted Bretton Woods against Roosevelt, and for Keynes!
Now, on the question of nuclear power: People should study Vernadsky, the great Russian scientist Vernadsky, who defined the fact that the universe is composed of three known different qualities of universe: The non-living, which comes from the Sun; it includes fusion and nuclear power. Our Solar System is a product of nuclear power. everything in depends on nuclear power. Now you have a second thing which is higher than nuclear power: Living processes. And you can not get living processes from non-living processes. No one has ever derived a living process from a non-living one and no one ever will! — contrary to Microsoft. [laughter]
Also, there's a third quality: Human beings are not animals. We have animal bodies, which we lose fairly easily. But the quality of humanity is immortal: It's the power of human reason, the creative power of human reason.
When you look at our planet, we have three components to this planet: We have the non-living components, things that are derived from not from living processes. The planet was originally chiefly composed of things which had not been derived from living processes. Now we have a second thing that developed, called the Biosphere. The Biosphere is composed of both living processes, and things which come into existence only as products of living processes. If you study the isotope structure of the Periodic Table, you will see there's a clear distinction of this type. Certain isotopes themselves are specific to living processes. As a matter of fact, one of the most important developments of nuclear development, is the development of radioactive isotopes which are used to treat cancer and other problems.
Now, there's a third category, which was called the Noösphere. This discovery was made uniquely and entirely by Vernadsky.
So, you have three layers on the crust of the Earth, which is a thin part of the total. One, is you have a non-living material; chemically non-living. You have a second part, which is increasing, which is the Biosphere. Everything, including the atmosphere, the oceans, the seas, the lakes, belong to the Biosphere. A third element which is growing rapidly, is the Noösphere, things that come into existence only as a result of peculiar characteristics of the human mind. And we depend, now, if we're going to continue to maintain a population in excess of 3 billion people on this planet, you're not going to do it without nuclear power. So tell me: Which 2.5 billion people you want to kill?
So, the question is: Are we going to organize an organization of nation-states on this planet, which will do this, and prevent crisis? Are we going to run like rabbits from danger, or are we going to take charge of the planet? Our job is to get the nation-states together to create an order among nation-states on this planet which is fit for human beings to live in!
And finally, on this question of debt: We're going to have to have, one way or another, most of the monetary aggregate in existence today is doing to disappear—one way or another. Nobody can prevent this. Don't defend the banks in that way! Don't defend the financiers. What we have to do, is simply do what Roosevelt did, and had done before: We have to create a new monetary-financial system. And in the transition, we have to make sure that life goes on in an orderly fashion for people.
For example, I have three proposals now, on the table in the United States, for adoption. Number 1, the Homeowners and Bank Protection Act. No evictions. Postpone all resolution of household debt. Provide absolute protection to the homeowner by the government. Then secondly, protect the banks—the banks as instruments of credit. If you don't protect the banks, you're going to lose everything. You have to have a bank there, doing the job, in the community, of keeping the community alive.
Second, set up a two-tier credit system. Government-approved credit at no more 1-2% interest rate, for all things which are in the public interest, the social welfare.
Thirdly, create a new world monetary system. The United States should immediate approach Russia, China, and India, to form a bloc of four countries, who will bring the other countries in to set up a new world monetary system. And create a system of credit, of long-term credit agreements, to transform the planet in the way required to sustain more than 7 billion people on this planet: Which means, put European civilization back to work! Do what it's supposed to do. Keep the nation-states—just make sure they cooperate. And don't shoot each other!
