The following speech was delivered to an
EIR seminar in
Washington, D.C. on March 18, 1998.
We are now past the Ides of March, the 15th of March. We have now
entered into the onset of a new crisis which echoes, and is worse than,
and will be worse than, anything experienced between the middle of October
and the middle of January. At this time, what was called "the Asia
crisis" by people who wished to put their heads under a barrel, which
is really a global systemic financial and monetary crisis, will hit Europe
with harsh force. We don't know how harshly, but it will be harsh. And, it
will hit the United States in a way which makes the stock market collapse
of last year-end seem a very mild exercise, a rehearsal for what is about
to occur.
For example, you have, in Germany, two processes going on. Germany is
an export-oriented country. It can not exist, except with an export
orientation, high-tech exports. Germany's economy has two principal
markets: one, the export markets into Asia, and, to some degree, the
machine-tool industry in the United States, which is largely a subsidiary
of German machine-tool manufacturing. You scrape a U.S. machine tool on
the belly, and you will find "Made in Germany," in some
respects, there.
The second thing is the investment in global infrastructure. Now,
Germany is hit, both by the fact that Southeast Asia and Asia are
collapsing as markets, Germany's most important customer, and, also, to
some degree, France's. At the same time, the insane attempt of Germany to
meet the standard of the so-called Maastricht agreements, the so-called
"Euro" agreements, is collapsing the internal economy of Germany
at an accelerating rate, especially through the collapse of the
infrastructure sector. That, in fact, Germany is in a situation, in which
every cut in the budget made to bring the budget into Maastricht standards
of balance, causes a collapse of the economy which shrinks the tax-revenue
base by a larger degree than the cut in taxation. So, Germany is in the
position of a snake trying to survive by eating its tail: When the head
gets to the head, that's the end.
The combination of this insanity of the Euro, and the panic in Asia,
particularly in the new crisis, will hit all of Europe, since all of the
European economy depends upon the German economy. Without a healthy German
economy, there is no healthy economy in Europe. A collapse of the German
economy, means a collapse of the economy of all Europe.
There are other crises. In Southeast Asia, look at metal consumption.
The metals consumption in Southeast Asia, as a result of the last and
ongoing crisis, is down by at least 30% from what it was before the
crisis. In the case of Indonesia, the fourth-largest nation of the world
in population, the collapse is down to about 50%. This means a collapse of
markets. Nations which could export in Asia, are unable to export, even to
markets to which they could export, because the local credit is not
available to permit them to export, or to buy the resources they require
to produce for export.
This means that a chain-reaction collapse of the world economy, coming
out of East and Southeast Asia, is going to hit Europe very hard. When
Europe is hit hard, already with the effects of the Asia crisis on the
West Coast of the United States economy, you're going to find the collapse
of the U.S. economy is going to take off in a way which no one, perhaps,
on Capitol Hill is willing to acknowledge as a possibility.
This crisis has begun. We are now approaching the end of the first
quarter of the calendar year. In Japan and elsewhere, there is a great
scramble to cover their rear ends, financially, by fixing the books, as
they have to fix the books as the end of an accounting period approaches.
This is going to cause a crisis. This can be the detonator for the crisis.
In general, in Europe, in Switzerland and elsewhere, we have agreed for
some period of time, that this period, the end of March, is the dangerous
period at which we can expect the detonator to blow the system out again:
this time a much more severe crisis than anything experienced back at the
end of the year, a crisis whose reverberating effects on the world
economy, particularly in Europe and the United States, will be much
greater.
In the meantime, what is being done to manage the last crisis, is
clinical insanity. By "clinical insanity," I refer you to the
Versailles agreements, which a famous fellow, Keynes, described at the
time in a paper called "The Economic Consequences of the Peace,"
which, considering that Keynes was a very bad economist, was a very
prophetic piece of work. The most direct result of the Versailles
agreements was the 1921-1923 hyperinflationary crisis in Weimar Germany, a
crisis which could have caused a chain reaction, blowing out the entire
world economy at that time. The reason that Germany did not blow up
altogether, was that the United States, which was then the world's
principal creditor nation, stepped in with what was called the Dawes Plan,
which we created by credit agreements. Germany held its breath for a
while, until the reserves came in. The crisis abated somewhat, and then
the United States bailed out the Reichsmark, and Germany was able to
continue.
But notably, politically, at the same time that the Weimar
hyperinflationary crisis reached its peak in the autumn of 1923, we had
the first appearance, under the sponsorship of General Ludendorff, of
Adolf Hitler, as a new political figure on the European scene.
Today, what is happening in Japan, and in the New York Federal Reserve
System, is a piece of insanity, precisely like that against which Keynes
warned in the Versailles Treaty. We are back to Versailles. The arbiter of
the new Versailles, is a group of lunatics called the IMF bureaucracy.
Here we have countries which are in trouble, where their economies are
collapsing. The IMF comes in and says, "What you must do, is pay
these creditors by shutting down your economy." That was what they
said in Korea, that is what they said in Indonesia, that is what they said
in Malaysia, that is what they said in the Philippines, that is what they
said in Thailand.
That is what they said in Korea. Korean unemployment is past the 1
million level, which is already potentially a social crisis level. Under
these conditions, none of these economies can ever recover. None. This
is clinical insanity. You can not find any basis, and I shall indicate
today some of the reasons for this--you can not find any basis under which
financial reorganization of the type proposed by the IMF and accepted by
most nations, can succeed. These kinds of proposals are simply the
insanity of Versailles, re-enacted many times over.
And in the United States, we're pumping up a balloon, in terms of the
financial markets, through what? Through hyperinflationary methods. The
printing of money, to steer it into financial markets, where it is heavily
financially leveraged, and thus results in an ascending balloon, in terms
of the stock market prices, which creates the spectacle of a man clinging
to a balloon without a carriage, and without an oxygen flask, reaching the
60,000-feet level and going higher. He's going to suffocate and die, if
the balloon doesn't explode. And that's what we're doing.
There is no recovery in the United States. There never was a
recovery from the levels of the crisis of last year. But, many people
wishfully wish to believe that. Many people in the Congress, many
illiterates in the Congress--which is what we seem to be tending toward
among the younger generation there these days, people who no longer have,
a Congress that no longer has institutional memory, because the people who
got into the Congress as young people, never studied history. Most
of them who got into the Congress, they'd never had a passport before they
got into the Congress. They don't know the outside world exists. They
don't know the United States existed before they were born. They're not
even sure they were born, and they don't want to discuss it. You
ask 'em, "Were you born?" and they say, "Don't go
there."
So, that's the crisis. Under these conditions, as I shall refer to this
matter in a number of points here, under these conditions, there is no
government in the world, presently, while some of them have good ideas in
particular, there is no government in the world which has a plan of
action, a policy under which that nation, or the world community, could
survive.
We are now going into this new crisis, which will occur this spring.
Whether this will be the crisis that blows the system out entirely or not,
we don't know. There are too many unknowns in the short term, in a crisis
like this, to predict exact dates. But, we are in the spectrum of a
succession of crises, in which one of these crises, probably in 1998, will
blow out the entire system, unless we fundamentally, radically change the
rules of the game, from the bottom up, of the whole system, in the
meantime.
The meetings which are to be held here in Washington, during mid-April,
and a few other conferences scheduled in the same period, must be treated
by any serious statesman as probably the last opportunity, to prevent
this planet entirely from collapsing into a New Dark Age like that which
struck Europe during the middle of the Fourteenth Century, after a
century or almost 100 years of moral and cultural and economic decline of
Europe, since the death of Friedrich II Hohenstaufen, until the bankruptcy
of the House of Bardi and Peruzzi, in which Europe was struck by a New
Dark Age, during which 30%, at least, of the population of Europe was
exterminated by the economic crisis and disease; in which, over the 100
years since Frederick II, 50% of the parishes of Europe disappeared, as a
result of these measures; in which insanity roved the streets, as it tends
to rove the streets of the United States today; out of which we survived,
because we got a Renaissance in the following century.
We are now headed toward such a New Dark Age, coming out of the
collapse of this banking system, just as Europe was plunged into a New
Dark Age, by the detonator effect of the collapse of the Lombard banking
system in the middle of the Fourteenth Century. That's what we face.
And there seems to be, at this moment, not a government on this planet,
which has mustered the competence and will, to address the severity of the
nature of this situation, with competent proposals.
Now, in reviewing this situation--and I shall limit myself for the
presentation to the summary features of the problem--I shall make use of
something which will appear, not in this week's issue of EIR, but
in the next one. We've received, sometime past, a paper from an
acquaintance of mine, you might say a friend of mine, a Dr. Sergei Glazyev,
who is a brilliant young Russian economist, a man who reflects, if not
entirely incorporates, the thinking of the leading circle of the
scientific circle of economic thinkers in Russia. His teacher was
Academician Dmitri Lvov, of the Central Economic Mathematical Institute. I
know his acquaintances, his background: He does reflect the thinking of
this layer. He's probably one of the most competent exponents, in terms of
a young exponent who covers the spectrum.
So, we're publishing his paper, on the new measures proposed to take a
Russia on the brink of doom: those measures which would revive the Russian
economy. And so, I've published a commentary to that, a prefatory
commentary, on the implications of Dr. Glazyev's paper, which will be
published in next week's EIR.[1]
And, since the introduction to that contains the same material which is
relevant here, I shall quote myself, so to speak, in part, from the
beginning of that commentary, as follows:
"The world is waiting for the outcome of the 22-nation, Washington
(Willard Group) conference on international and financial and monetary
matters, now scheduled for April 16. All rational participants in the
preparation and conduct of that conference should agree, that there are
three leading topics of interrelated financial, monetary, and economic
policy-shaping, topics which must be considered as crucial for a true
solution to that global, systemic crisis, the which has pushed the world
to the present brink of a threatened, sudden plunge into a global New Dark
Age.
"First, the fact that the present crisis is global and
systemic, rather than regional or cyclical, must be
acknowledged. This acknowledgment is the required premise for any rational
discussion of policy to follow. Within those bounds, those recent decades'
institutionalized changes in policy, which are responsible for a
three-decades build-up of the present crisis, especially since August
1971, must be identified, and entirely removed."
That is, the policy changes, the relevant policies made since
approximately 1966-1967, in the policies of the U.S. government and the
British government, the policies which came expressed by the 1967 collapse
of the British pound sterling, the ensuing disorders in the dollar, the
first step of collapse of the Bretton Woods System in March 1968, and then
the collapse of the whole Bretton Woods System in August, mid-August 1971,
that the changes which have come in that process and out of that process,
are the cause of what is today a global systemic crisis. It is not
a cyclical crisis, it is not a business cycle crisis, nor is it regional.
It is global. The entire system has destroyed itself, and the unravelling,
which has taken over three decades, has now brought us to the end point,
to the boundary conditions of extreme turbulence, as many boundary layers
tend to be, in which we either eliminate those policy changes which
were popularized and institutionalized during the past three decades, or
this world is not going to make it, in its present form.
Nothing less than radical excision of those institutionalized practices
which are now generally accepted, will suffice to halt this crisis.
Second, the present fatally ill global financial and monetary system,
must be radically reorganized. It can not be reformed, it must be
reorganized. This must be done through the concerted actions of a key
initiating group of governments. This must be done in the manner of a
reorganization in bankruptcy, conducted under the authority not of
international institutions, but of sovereign governments. The
acceptable model for the reorganized international monetary and financial
system, is the incontestably superior successful functioning of the old
Bretton Woods System of the pre-1958-1959 1950s, over anything existing
since those axiomatic changes in direction of policy-shaping which were
introduced by the United Kingdom and the United States, during the period
1966-1972.
The required measures include:
-
periodically fixed exchange values of national currencies;
-
limited convertibilities, as may be required;
-
exchange controls and capital controls;
-
fostering of necessary protectionist measures in tariffs and trade
regulations; and
-
outlawing of the creation of markets which conduct financial
speculation against targetted currencies.
Third, as measured in physical instead of the usual monetary terms, the
world's economy is presently functioning at levels of negative free
energy, which are presently far below a breakeven point. The current
levels of net physical output are insufficient to prevent the
existing populations and economies from continuing to collapse into a
spiral of accelerating general physical-economic contraction, and ultimate
physical collapse.
Unless this shortfall in per-capita physical output is reversed and
soon eliminated, no financial and monetary system, however otherwise sound
in design, could function. No mere medication could save a man who is
being starved to death. There is no financial and monetary system which
could possibly succeed, unless it were accompanied by a general program of
forced-draft physical-economic recovery, a program which must rapidly
approach and reach the levels of sustainable, positive free-energy ratios.
This means a recovery analogous in important respects to the Franklin
Delano Roosevelt recovery in the United States, and on a global scale.
Remember, in March 1933, in the First Inaugural Address of President
Roosevelt, he announced the fact that the United States and the world were
in a crisis, a deep, severe crisis, and that he was prepared to take
drastic measures to address the issues of this crisis. He said that if the
Congress would not act, that he, as President, would act, in order to
save the United States, and rescue it from this crisis. And he did
that.
Now, he didn't do it blindly. Roosevelt, as I'll refer to this again
later, Roosevelt announced his general direction of thinking, in a paper
published in 1928, in Foreign Affairs, the journal of the New York
Council on Foreign Relations, in which he announced, in diplomatic terms,
in a sense, a complete break with the idiotic and criminal policies of his
predecessors, Theodore Roosevelt and Woodrow Wilson, toward the nations of
Ibero-America, and other nations, but focussed on Ibero-America: that we
must not become a debt collector. We must show a decent respect for the
opinion of mankind, the common opinion of mankind. We must help
nations.
We must not allow the sharks of Wall Street, who didn't like Roosevelt
too much, just as the Wall Street Journal doesn't like me, or
doesn't like Clinton today; we must not allow these people to continue the
kinds of policies which were enforced in this country, and forced upon
this country under evil Presidents, such as Theodore Roosevelt, and, in
1915, the re-founder of the Ku Klux Klan, directly from the White House,
Woodrow Wilson, who was responsible, as President, for launching the
second incarnation of the Ku Klux Klan in the United States, which reached
the level of over 5% of the U.S. adult population during the 1920s. And
Woodrow Wilson was the ideologue from the White House who did that. The
man was no good.
We had a President during the 1920s, Calvin Coolidge, who was no
better. Worst of all, we had a Secretary of the Treasury, Andrew Mellon,
who was worse. Hoover didn't cause the Depression: Andrew Mellon and
Coolidge did, helped by Woodrow Wilson.
So, Franklin Roosevelt rejected this degeneration of our policy, and
returned to the American System, as expressed, typically, by what Lincoln
and Henry Carey, the leading economist of the mid-Nineteenth Century, did
between 1861 and 1876, as reflected in the 1876 Centennial Exposition at
Philadelphia, at which point, during the period 1861 to 1876, the United
States had become the world's most powerful economy, and the economy which
was technologically the most advanced in the world.
This model, on the basis of the 1876 exposition, was the basis for the
industrialization of Japan, which used the American model to build an
economy in the Japan system. This was copied immediately by our friends in
Germany, typified by Siemens, and by Emil Rathenau, whose son was Walther
Rathenau. They copied the American System, as identified by the 1861-1876
revolution in economy launched by Lincoln, on the advice of Henry C.
Carey.
This model was also used by Russia, which was our ally against Britain
and the Confederacy during the time of the Civil War: Russia as
represented by Tsar Alexander II, as represented by the great chemist
Dmitri Mendeleyev, who was at the 1876 Exposition, and who became the
great railroad builder of Russia, and the great industrializer of Russia,
and carried the American System, as far as he could get by with it, into
Russia, successfully under Alexander II, not so successfully under his
successors.
The same policy, the American System policy of Mendeleyev, was also the
policy of Count Sergei Witte, the Foreign Minister, Finance Minister, and,
also, Prime Minister, briefly, of Russia, who was a specialist in the
writings of an American System economist of German extraction, Friedrich
List.
Every successful model of national economy which emerged in the
late Nineteenth Century and the Twentieth Century on this planet, was
based on the model of the American System, not merely of Hamilton and
Franklin, or John Quincy Adams, but on the specific form of that model
developed by Abraham Lincoln and Henry Carey during the period between
1861 and 1876. That is the American System.
That is the legacy, economic policy legacy, of the United States, a
continuation of the legacy of Franklin, a continuation of the legacy of
the Washington-Hamilton administration. This is what distinguished the
United States, which made it great. We were the only nation on this
planet, which constitutionally actually believed that every man and
woman is made in the image of the Creator, and that the responsibility
of society is a commitment to every man and woman, and to every child,
to provide those conditions and opportunities, which are consistent with
the dignity of a personality born as made in the image of the Creator.
The only nation on this planet which adopted that as a constitutional
principle of government, self-government, the American System of
political-economy, was based on that principle. It was an effort to find a
mode of economic life, as well as of political life, which was decent,
from the standpoint of this obligation: to recognize the sacredness of the
individual life, not merely as some kind of animal, but as a creature
endowed with the creative power to make and to utilize fundamental
discoveries of principle, of physical principle, and also to use, in a
similar way, the fundamental discoveries of artistic principle, and the
lessons of history.
This was our unique genius, at least among the best of us. And,
this model of economy by that great President, Lincoln, who understood and
enforced that constitutional principle, was what made us great. And, every
nation whose people aspire to have the kinds of benefits which they saw in
us, tried to copy that model, or at least assimilate its lessons into
their particular institutions, as the President of China says that his
reform is with "Chinese characteristics," but that China is
perfectly happy to accept anything good it can use from the United States.
So, we've come to a time where we need a new Roosevelt. I'll come back
to this again. That kind of decision, not the kind of shilly-shallying
decisions we get from politicians today.
To what I've said, there's an obvious objection to be expected from
most critics. The customary objection will be, that such a sudden and
radical approach is "politically impossible." Perhaps those
critics are right. Perhaps it will prove impossible politically to find a
significant number of governments willing to push through such radical
measures in a short-term period. If those critics are right on that
point, then civilization will not live out the present century in its
present form. If those critics are right, then the first generations
of the coming century, will experience a planet-wide New Dark Age, a
catastrophe on a global scale like that which Europe experienced during
the middle of the Fourteenth Century.
I would therefore respond to such critics, with the following
impassioned recommendation. I say to these critics, as President Franklin
Roosevelt forewarned the Congress, during his First Inaugural: Let
those political leaders who lack the will to carry out the measures I have
proposed, get out of the way, and pass the authority to act to those among
us who are willing and able to enact these measures, and do so suddenly.
The immediate future of this civilization, if it is to have an
immediate future, lies in the hands of those who are willing to act with
pungency and force, along the lines I've indicated. That said, let us be
optimists. Let us push the voices of those useless critics out of our
minds, and concentrate on the actions which must be taken to avert the
catastrophic economic collapse which now threatens to crush us all in the
very near future.
There's an example of this in the case of the famous German strategist,
von Schlieffen, Graf Alfred von Schlieffen, who was, until 1905, the Chief
of Staff of the German military. In 1891, it was apparent to von
Schlieffen that the efforts of the British to prevent the realization of
what we might call the Land-Bridge program, that is, the extension of
railway links across Eurasia, both to the Indian Ocean and to the Pacific,
that the British determination was to crush Germany, and that Germany must
expect that France would capitulate to Britain on this issue, and become a
revanchist ally of Britain against Germany, and that Britain and France
together, would mobilize Russia, through its pan-Slavic influences in its
military and elsewhere, to become an ally of France and Britain, against
Germany. They also took into account that Belgium would be a puppet of the
British in conducting such a war.
Therefore, beginning 1891, von Schlieffen conducted a series of
exercises among his staff, studies which were to plan the reaction of
Germany, should such an attack, a simultaneous attack by France, and
Britain, and Russia, occur. This became known, in due course, as the
Schlieffen Plan.
Had the Schlieffen Plan been executed when the British, French, and
Russians did launch war against Germany, for geopolitical reasons, then
France would have, and the British Expeditionary Force, would have been
crushed in the opening weeks of the conflict, by the hammer of the right
flanking movement from the north.
However, von Schlieffen left office at the end of 1905, and was
replaced by young Helmuth von Moltke, a man of weaker disposition, working
for a timorous, weak-minded Kaiser. Remember, the Kaiser was a descendant
of Queen Victoria. And Queen Victoria was like a cow who produces cows
with weak feet; only in this case, the cows had weak minds. And, the
Kaiser was one of these cases, as also was the Tsar of Russia, Nicholas.
Their uncle, their common uncle, Uncle Albert, later called King Edward
VII, played these two weak-minded relatives of his, like fools, and set
them to destroying each other. Russia and Germany were both destroyed, and
the kaisers of both countries were destroyed, by British manipulations
organized by Edward VII.
The difference between von Schlieffen and von Moltke, under the
influence of a weak-minded Kaiser, and other weak-minded types, was that
von Schlieffen understood, as did Hannibal at Cannae, as did Alexander the
Great outside Arbela, as other great commanders like Sherman, William T.
Sherman, one of the greatest commanders in military history, understood,
that to win war, you must take risks. Those who try to minimize risk,
lose wars. The difference was that Schlieffen's plan concentrated
Germany's limited resources on those points at which a decisive victory
could be obtained. And, this was not an impulsive action, it was a
thoroughly worked-out action. Whereas von Moltke took the Schlieffen Plan,
and diluted it to cover all possible options, to minimize all risks.
Now, the weakness of the President, is exactly that kind of problem.
The President is following in the pathway of doom, that of younger von
Moltke, of trying to minimize his political risks, which will maximize the
certainty of his defeat. Whereas, a leader is precisely a
person--otherwise, we don't need leaders--who is able and willing to take
the moral responsibility of risk. Not to take a reckless risk, but to take
a risk to win, to turn the devil away. Whereas those who temporize,
who try to be all things to all people, who try to find a consensus among
the generals--
Let's take the case of Lazare Carnot, another great commander. In the
early 1790s, France was invaded by armies of every other power in Europe.
These armies were victorious on all fronts. The defeat and dismemberment
of France were inevitable. At that point, the Jacobins appointed a man who
was a great military scientist, as well as a physical scientist, Lazare
Carnot, the man who invented the Machine-Tool Principle, among other
things. They appointed Carnot to command the reorganization of the French
army, and to direct it. Sort of like a Minister of Defense.
The thing he did: He fired major-generals in lots, in wholesale lots,
and replaced them, in many cases, with sergeants, because one wouldn't go
across the river at night, but would wait till morning; or keep the troops
in the barracks, rather than moving them out into the field; would not
make the assault when ordered; would temporize.
But, that wasn't the only thing he did. He also took a bigger risk. In
two years, in his command of defense, together with his friends, such as
his former teacher, Gaspard Monge, who later founded the Ecole
Polytechnique, the genius, the scientific genius of France, such as
survived, was mobilized to create a machine-tool industry around Paris and
other locations, but chiefly Paris. And, in two years, Carnot
revolutionized warfare, and turned certain defeat into absolute victory.
Until Napoleon ruined the French instrument, there was no force in Europe
which could defeat the French military system created by Lazare Carnot.
Every case in history, military history or political history, of a
great crisis, requires leadership which will take risk. Not foolish risk,
but necessary risk. And take precisely that risk which is necessary to
avoid a crushing catastrophe. Weak, incompetent leadership is that which
will temporize, and say, "No, we can't do that. We have to think
about this first, we have to think about this group in the
Congress, we have to think about this, our ally in Britain. We have to
think about this, we have to think about that." And such leadership,
is the leadership of a nation which has doomed itself by such leadership.
Leadership is not an unimportant thing. There's a whole theory involved in
that, the science of this.
Therefore, all rational discussion of these matters depends upon a
clear understanding of the following point: The essential moral
responsibility of the participants in these forthcoming and related
proceedings, is their obligation to recognize that the mere fact that this
is a global systemic crisis, rather than either a regional one, or merely
a global cyclical crisis, is sufficient proof-of-principle evidence, that
the causes for this crisis are the fundamental errors of judgment and
practice embedded in those axiomatic changes in official and other
thinking, about the subjects of economics, finance, and monetary policy,
which have dominated international policy-shaping during, approximately,
30 years to date. These are those axiomatic changes, first introduced
during the period 1966-1972, in the so-called cultural paradigm shift,
which hit the so-called Vietnam Baby-Boomer generation. And, those changes
in policy, away from a commitment to investment in scientific and
technological progress, away from a commitment to infrastructure
development, away from a commitment to exploration of outer space--we got
to the Moon, and then we stopped. We haven't been back there since. And
the payoff, remember, the payoff on the aerospace project, the Kennedy
acceleration of the aerospace project, the Kennedy crash program, was that
we got back over 15˘ for every penny the government put into space
exploration. At least 15˘, in terms of improvements in technology, in new
designs, in new industries, in greater productivity, in a higher standard
of living.
Under the influence, or the combined influence of the military forced
draft technological driver of the postwar period, and the combined impact
of the far superior measure of the Kennedy space program, this country
reached the highest rate of growth in its history, since at least
1861-1876. And, along came the Baby Boomers on campus, and said, "Shut
it down! Don't invest in technology! Stop wasting money on
infrastructure! Take the money back from the Moon, and bring it
here!" It never got here, as many people can tell you.
Then we set a policy. Instead of basing an economy on performance, on
what you produced, on those kinds of considerations, we based it on
psychotherapy group discussions: "Well, how do you feel, Mrs.
Jones?" We went into a touchy-feely psychotherapy mode, a politically
correct mode. No longer was telling the truth important: It was how
somebody felt about what you said, not what was the truth. We were no
longer concerned about justice; you were concerned about somebody looking
at you cross-eyed.
We stopped being a people, and we became a slime mold. No longer were
we a unified people, in which all people are equal. No; you have to be
unequal. You have to have--if you've got an emotional problem, you need a
support group. What's your support group? We divided ourselves into a zoo,
a collection of species called a Rainbow Coalition. No longer were people
equal, no longer did people have equal rights to education, equal rights
to medical care, equal rights to opportunity, equal rights to opinion,
equal rights to truth, equal rights to justice. All that passed.
Everything became a zoo. You feed this animal in this cage one thing, this
animal in this cage another thing. Technological progress is bad for your
health. Zero economic growth is good.
And, under the increasing impact of that kind of thinking, as it moved
into political and other institutions of government, and society
generally, every policy that was made, was shaped and adapted to fit these
new criteria.
This, now, is coming to an end. This began to come conspicuously to an
end in the last year-end process. We saw a turn internationally--we saw it
in Southeast Asia, for example. There's a cultural paradigm shift now
occurring in Southeast Asia, which was first led by the Prime Minister of
Malaysia, Mahathir Bin Mohamad, which is now expressed in the movement
around Habibie in Indonesia, which is expressed by the King of Thailand,
as well as other Thai officials. "This garbage doesn't work,"
they say. "The IMF doesn't work. This is a swindle, this is wrong.
All these things which are politically correct, are wrong. They are
destroying us. We want reality."
You have, in the United States itself, the issue of HMOs. You have not
only Democrats, but Republicans who are running for office, for election
in November of this year, on the basis of being against HMOs, to bring
them back under regulation, to end the free-trade system in medical care.
The issues of the American people today are becoming, more and more,
bread on the table, meat on the table, conditions of life, safety in the
school, a real education, not having a support group in place of a
teacher. Less Ritalin and more knowledge. Those are the real issues, where
people are rejecting, in the collapse of this self-discredited system,
this self-discredited culture of the past 30 years, people are saying,
"I would rather live, than be politically correct. I would
rather have my children eat, than be politically correct. I would rather
have my children not stupid, than politically correct." Reality is
asserting itself.
However, unfortunately, the people who went through the institutions,
out of universities from the 1966-1972 interval, are now occupying the top
positions in government, in business, in the media, in the professions.
And thus, you have a sort of a psychological interest group occupying the
top positions of power, along with Generation Xers, who don't know
anything, because they never studied history. They weren't allowed to!
They never got it in the school system. We destroyed the history
instruction. People passed tests, because the questions were more stupid.
We have a sliding scale, the bell curve, which runs the testing section,
and everybody's doing better on the bell curve. If everybody becomes more
stupid, everybody does better. If you have a few intelligent people,
you've killed the bell curve, and then people seem more stupid.
So, if everybody is stupid, then you can produce statistics based on
test scores which show there's an improvement in education. You put five
intelligent people into a classroom with the typical stupid people, and
suddenly, you shift the bell curve, and they begin to flunk. So the
absence of intelligent people coming out of the school system, results in
test scores which show an improvement, when they're actually becoming more
stupid. It's a swindle.
So, you have an entrenched interest in trying to defend the illusion of
the Golden Generation, which is not "golden" at all. That stuff
on the top there, on the head, was not gold, that was clay. We talk about
giants with feet of clay; then, we've got the other types, giants with
heads of clay.
So, this is the problem that we have to face. You have to go back to
performance. The question is not what is politically correct. The question
is: What is necessary, so that people can survive, so that nations can
survive? Who cares about the IMF? Indonesia represents the fourth-largest
nation on the earth, in terms of population. You want to kill it? Who
cares what the IMF thinks? Those bunch of guys, they can flip
hamburgers for a living, if they have to. (I wouldn't trust them at it,
but I'd let them do it.)
What about the whole of Asia? Asia is what? East Asia, Southeast Asia,
South Asia: What's that? That's the majority of the human race! The
archipelago, South Asia, China: That's the majority of the human race.
And, what are we doing to the majority of the human race by these IMF
conditionalities, and this Soros nonsense, and these things we are
allowing? We are murdering them, just as much as Hitler murdered people
in slave-labor camps.
We are turning entire nations into slave-labor camps. We are destroying
the standard of living. We are increasing the morbidity.
Look at the collapse, in terms of life expectancy, in Russia, under the
reforms. Life expectancy has collapsed, by more than 15 years. The
sickness rate, the death rate: We are getting an epidemic of new kinds of
diseases, and old ones, spreading around the world. Don't talk about
chemical warfare, biological warfare; we're already running biological
warfare: it's called the IMF. IMF conditionalities will kill more people
than any chemist in a biological warfare laboratory, simply by taking
people out of food, out of sanitation, and the other things which are
necessary for an enhanced life expectancy. And, the education which
enables them to function more sanely.
The discussion, therefore, in these conferences, must contrast the
generally downward trends of the 1966-1997 period, with the upward trends
which were predominant during the great postwar recovery of 1946-1966. In
face of that evidence, the notion that the present international system of
free trade, floating exchange rates, and globalization, should be saved by
a few added reforms, must be regarded as a wishful delusion, common to
those who are not yet prepared to face the reality which already grips
this planet.
Those present financial and monetary policies, of a floating exchange
rate system, are not institutions to be rescued. They are the disease
to be expunged. Unless these policies are radically excised, the
present economies and nations, will not outlive the passing of this
present century.
Now, in the current [March 20] issue of EIR, we have a reference
to two tracks of policy. One track is Franklin Roosevelt's policy, the
policy under which the U.S. recovery and the postwar plans of Roosevelt
were based. The second one, is a paper written by a Dr. Wilhelm Lautenbach,
presented at a secret conference in Germany of the Friedrich List Society
in 1931. And Lautenbach said a number of things in that paper, which
should be read by everyone in Washington today; if they don't read it, you
should kick them out of office, because they're not to be turned loose
under these circumstances. They're like firebugs: You don't want 'em in
the neighborhood.
He said the idea of cutting of production to stabilize financial
systems, is the worst idiocy you can imagine. The trick in a crisis is to
mobilize credit selectively, in a dirigist mode, as Roosevelt did,
and as every sane leader did in similar circumstances, to focus credit on
getting people off the unemployment rolls into productive work; to foster
investment in basic economic infrastructure; to absorb the unemployed in
useful work; to foster investment in technologically progressive
industries and other projects, which will raise the average productivity
of labor; and to starve--not to starve the economy to save the financial
system, but to starve the private financial system to save the economy.
Which is why Roosevelt was not popular with the Wall Street bankers back
during the 1930s, or later. They never forgave him.
And that's a recovery policy. There was thinking in that direction
around the world; it's traditional American thinking, as opposed to the
garbage that's become popular, the free-trade garbage, the insanity which
has hit the economics profession in the past 30 years. That was
traditional American policy, as I said earlier. Lautenbach, who reflects,
of course, the influence of Friedrich List and people like that in
Germany, reflects also something else.
Get back to this question of, what is the United States? This is a
very important nation. There is no nation on this planet which is as
important as the United States, for the world as a whole. We may not look
like that now; we may not be living up to that now; but that is our
heritage, and all of the great leaders of the United States, in which
Roosevelt can be included, proceeded from an understanding of that
heritage.
We are essentially a European nation. We are a nation of the European
Fifteenth-Century Renaissance. We are a nation which is born, in a sense,
of a long struggle in Western Christian civilization, to perfect a form of
society which is consistent with the proposition that all persons, men and
women, are created in the image of God. And, therefore, we cannot tolerate
a system in which some people, even the majority of people, live as human
cattle under the rule of an oligarchy. That the mass of people should not
live as human cattle, for the benefit of a ruling minority and oligarchy,
whether a landed aristocracy, a state bureaucracy, as in ancient Babylon,
Akkadia, or, a financier aristocracy, such as that of Venice, or London
today. That it is not right that human beings, who should live in the
dignity that should be accorded to people created in the image of God,
that such people should be reduced to human cattle, for the benefit of
those who belong to these classes of state bureaucracy, financier
oligarchy, or landed aristocracy.
The object was to create such a form of society, a society consistent
with this image of the nature of man, the intrinsic nature of man, man's
ability that no animal has, that no monkey has--even Prince Philip, who
professes to be a monkey, who claims to be a monkey--the ability to
discover, and validate, a physical principle. The ability in the field of
art, to take a similar contradiction, called a metaphor, and to
adduce from that metaphor a new conception, a new principle, the principle
of cognition, which governs improvement in the way people relate to each
other, in social relations; which, together with the study of history,
from the standpoint of Classical art, informs our minds of the way in
which society ought to be run: always for the single purpose to create a
form of society which is consistent with the nature of man, as Western
Christianity conceived man, as Christ conceived man. As Christianity, for
the first time on this planet, established the principle that all
persons, with no racial or ethnic distinctions, are equal in the respect,
that they are made in the image of the Creator, by virtue of this power,
which sets man apart from and above the beasts.
And, the object of society must be to take this nature of the
individual, from birth, to nurture the development of that individual, in
a way which is consistent with that: This is something made in the image
of God; treat it accordingly! Develop it! Develop those powers which lie
there. Give this creature an opportunity to perform good, to live
as an angel, who came to this life, developed, did a good that was needed,
like the Good Samaritan, and then wandered off, at the end of life, having
been a necessary person, who came as an angel, did a good, and left. And,
you said, "Wait for the next angel." And, to look at every child
as potentially that kind of person, that kind of angel. And, to live in a
society where we can regard one another in that way, and regard ourselves
in that way.
That was the purpose.
Out of this great ferment in Europe, which had a long history, we came,
in the Renaissance period, finally, to the beginnings of the modern
nation-state, European nation-state. But, that was not entirely successful
there, because, in Europe, the powers of the old oligarchy were still
great, the landed aristocracy, and the Venetian and similar kinds of
financier oligarchies. Parasites, sucking on the blood of humanity, with
great power, determined to crush anybody who would take that power, that
privilege, away from them. In Europe, that never succeeded. But, the
greatest minds of Europe brought their ideas to the United States, where
we, on this continent, with the strategic advantage of a distance from the
long arm of the European oligarchy, were able to form a nation, a
republic, which was committed to perfecting itself in the service of that
principle. And, in that period, at the end of the Eighteenth Century,
throughout Europe, all of the good people admired the United States, and
looked at the American Revolution as the great liberating experience which
they hoped would spread to Europe.
In the subsequent period, with many fits and starts, there were many
reforms introduced into Europe, in the direction of creating nation-states
there. Most of these were done in the sense of expansion of the
parliamentary representation of the people, so you have parliamentary
government in Europe, as a tradition which is really not overthrowing the
old oligarchy, but making heavier demands upon it, demanding a greater
degree of power-sharing.
As Britain, for example: The United Kingdom has no constitution! The
United Kingdom is a pure empire. That is, there is only one constitutional
law in the United Kingdom. First of all, the Act of Settlement, which put
this northern branch of the House of Welf on the throne of England, where
it sat, and sat, and sat to the present day, where the brains seep down to
the rear end, to increase the sitting power. The second thing was a
typical pagan, pantheonic institution, in which custom, social custom and
religious custom, were managed by the monarchy, by the oligarchy. And the
oligarchy was told, and the monarchy was told, "Don't offend custom
too much." In the old days of empires, that could get an emperor
killed; if he was very offensive to the customs of one of the subject
peoples, or even offended the gods, as the Pantheon prescribed, he could
be knocked off, as committing a crime. But there was no constitution, in
the sense of a positive assertion of the nature of the human individual, a
conception of the individual on which the construction of the whole
society must be based, and to which the development and functioning of
that society must be accountable.
That is our particular genius.
Therefore, under those circumstances, in the United States, some of the
greatest ideas of Europe found soil in which to flourish. Not always,
because we also adopted an oligarchy in the United States; we developed it
out of the New England opium traders, who pushed opium on China, from
India and Turkey, during the Nineteenth Century, as partners of the
British East India Company in that "noble" drug-pushing traffic,
and became wealthy and powerful, in New England and elsewhere, as a result
of it.
We had Manhattan bankers, who, beginning with Aaron Burr, largely
tended to be treasonous agents of the British Foreign Office, or the
British banks, who have no particular record of patriotism, where the
United States is concerned. (They are attracted to U.S. dollars, but not
to U.S. souls.)
Then, we have the Southern slaveocracy, and people like John Crowe
Ransom, and other people from Nashville, the Nashville Agrarians, who
represent the same kind of oligarchical decadence, immorality, the stink
of the mint julep-sipping backer--not a member, but a backer--of the Ku
Klux Klan, sitting on a Nashville porch someplace, sucking mint juleps,
whose opinion of people in this country is not too good.
Yes, we had the same affliction in our own country. We had corruption;
we have corruption today. Many parts of the permanent bureaucracy of our
government are corrupt. The Criminal Division of the Justice Department is
a monstrous cesspool of corruption, which ought to be cleaned out. Some of
us thought that maybe Janet Reno was going to clean that mess out, but she
became a prey of that, rather than its expunger. The same bunch of filth
is actually running behind this idiot Kenneth Starr--I don't think he
could even read a law book rightside up. But the people behind him--like
Hickman Ewing, a notorious racist, who is typical of the Justice
Department mafia which is controlled by the oligarchical wealthy families,
not by the people--should be cleaned out, so that we have a Justice
Department which is dedicated to justice, not the interests of Wall
Street, and particular families on Wall Street.
We have corruption throughout our government, largely embodied in
permanent bureaucracies which are not controlled by elected officials. You
elect a President: He doesn't control the Executive branch. The permanent
bureaucracies largely control the Executive branch, as in the Justice
Department, the Treasury Department, the State Department, and so forth
and so on. As the people complain, we are ruled by a bunch of bureaucrats.
What the American citizen recognizes from experience, the thing he or she
hates the most, is these blasted bureaucrats! Not as an individual, but he
recognizes that there is a slime-mold-like institution, called
bureaucracy, which invades his life and destroys it, and destroys the life
of his community, and strikes terror in the population. These are like the
lackeys, the hired lackeys in livery, of the old lackeydom of feudal
empire, the ones who ran around with the clubs at night and killed people,
who did the dirty work for the ruling landed and financial aristocracies.
And, that's what we have in many parts of our government, many parts of
our society. We have this corruption.
And, generally in our history, it's only in a period of crisis that we
in the United States, as in most other cases, have come back to ourselves.
The greatest examples of that--the greatest of all, was that of Abraham
Lincoln, without doubt the greatest President, one of the greatest
intellects, we ever had in high office in the United States, despite the
rumors and slanders against him. Look at his work, read his writings, as I
have, look at his work in that light. This man was a great, gifted, noble
genius, rarely found, and often killed, when found.
Franklin Roosevelt was a much lesser man than Lincoln, but in his time,
like an angel, he served his purpose for our nation. He recognized our
heritage, at least in part, and acted upon that with pungency and force,
despite the Congress, and despite opposition. He was a President who, had
he lived, would have transformed this world, as he threatened Churchill
with doing, to eliminate empires, to shut down, immediately, at the close
of the war, the British, French, Dutch, and Portuguese empires. To give
the people of each of these former colonies the right to their
independence, and to give them also the right to free access to the same
kinds of economic and technological advantages, for their own use, which
we prize for ourselves. And to cooperate with them, in this great venture.
That didn't happen. In the spring of 1945, Roosevelt died. And lesser
men, much lesser men, came into power: the friends of Harriman, the
friends of Teddy Roosevelt, like Stimson, for example, who was a stooge of
Teddy Roosevelt in the former period, the beginning of the century. That
kind of person. They took over. We went in the wrong direction, away from
Roosevelt's direction.
Kennedy, when he came into office, made some effort to try to turn
things back in that direction. They got rid of him. Johnson was scared. I
don't think Johnson was as bad as people think he was; the two civil
rights bills he enacted, although under considerable pressure,
nevertheless attest to a man who had a conscience, but a man who was
convinced that he, too, could be shot, just as his precedessor had been
before him. And, who got out of office, when the pressure got too great.
After that, we had essentially nothing. Reagan was relatively the best,
but we all know his weaknesses. And now, we have this President, with his
weaknesses.
But, you know, they say, "God works in mysterious ways;" and,
sometimes, you can take a weaker man, like a Clinton, a man who's a Baby
Boomer, who has many of the faults of his generation: a tendency to
waffle, a tendency to minimize risk, which is better known as waffling.
Vacillating. Crying at the fact, "I have to do this" to
somebody. Take a man of minimal, or limited capabilities, like a
Clinton--who is not intellectually a bad person; he's probably
intellectually good as any man since Kennedy who has occupied that office,
just with these peculiarities of his generation. And somebody has to touch
him, and say, "You must become this."
Those of us who went through military experience, particularly some
experience in training raw recruits, have a sense of this. Or other
experiences may give you the same sense. Someone comes into a position for
which they are ill-prepared, and someone says, "You're going to
become a soldier." And they become a soldier. "You're going to
adopt a vocation." And they adopt a vocation, and serve it at least
with good conscience, and sometimes well. It's the nature of man, that you
can call people from obscure, or improbable circumstances, and find that
they will rise to the occasion, like the person who suddenly acts as a
hero, in a fire in a theater, or something else. Persons rise to the
occasion. And, one would hope that we could touch this President, and that
he would rise to the occasion of becoming, at least, functionally
speaking, a good continuation of what Roosevelt represented earlier.
The Truman-Churchill policy was to reestablish the power of the
Anglo-American oligarchy, the financier oligarchy, over this planet. And,
a lot of evil was done. You had President Eisenhower, whom I used to refer
to as President Eisenhowever, because on the one side, he'd do this,
and on the other side, he'd also do that.
We have some good things that have happened, but we have not been
ourselves. And we have now come to a great crisis, in which people
have to be touched, like heroes who come forth in battle, to do a job. And
they will succeed, if they can pick up the great legacy of the United
States. The things that people, even in the 1940s, during World War II,
all over the world, in India, for example, and elsewhere, would, look at
me, as a soldier, and say, "When the war is over, are the Americans
going to help us get our freedom? Are they going to help us develop an
economy, a society like the United States?" We were admired; we were
loved. And the Truman-Churchill policy, which was inaugurated instead of
the Roosevelt policy, at the end of the war, caused us to lose much of
that love. Because we betrayed it. Like the husband who betrayed his wife,
we betrayed that trust and love.
But, we come to a time when we must do it again.
The problem is this. The reason I got onto this: It's crucial, to
understand the difference between a cyclical and a systemic crisis.
Now, there is nothing in economics which requires us to have
business-cycle crises. This does not come from economics; it comes from
politics. Ours is a society, including the United States, as well as
European society, which is based on two conflicting forces.
On the one side, you have the forces of national economy: These
are entrepreneurs, the people who actually produce; these
are workmen; these are normal people; these are professionals, the people
whose interest is in scientific and technological progress for the
betterment of life and for national security. These are the people who
rally to save the nation and to build it. That's their interest:
They want to make things better; they want to increase productivity, to
address problems. We call these the social forces of national economy.
If we had to deal only with the social forces of national economy, we
would never have a business cycle. The business cycle arises very simply,
because we have a parasite on our backs.
The parasite is the financier oligarchy, which exists today as a clone
of ancient Venice, which sits on top, which controls our central banking
systems, controls our private financial institutions, and exerts great and
corrupting power, which it then uses to extract usury from the real
economy. And, as these people become richer, during a period of
prosperity, the rate at which they suck blood from the economy increases.
At a certain point, the amount of rent, and interest, and other charges,
financial charges on the economy, becomes very large. And therefore, the
flow of wealth from production does not flow back into society or into
production, but instead flows into the assets of these financier oligarchy
interests, who are much too wealthy for their own mental and moral health,
who can be seen, with their degenerate practices, and so forth, displaying
them in public. They try to act like Hollywood actors and actresses, or
something, or some similar kind of degenerate.
And therefore, we have a crisis.
Now, in former times, when national security was a matter of issue, you
would have depressions, periodic recessions or depressions, which were
entirely the result of the interest and influence of this parasitical thing
sitting on top of society, whether in Europe or in the United States,
called a financier oligarchy. The loan sharks: They sucked your blood. If
they were poor and dirty and unwashed, you called them loan sharks; if
they were wealthy and powerful, you called them financiers. Same thing,
actually, when it came down to it! A loan shark is simply a thief without
a Wall Street office.
So, the characteristic of society in the Eighteenth and Nineteenth
Centuries, the Eighteenth Century in Europe, the Eighteenth and Nineteenth
Centuries in Europe and the United States, the Twentieth Century, up until
the Kennedy administration, was of a balance, where the loan sharks, the
financier oligarchy, would suck the blood of society, and have a periodic
accumulation of this blood-sucking; the economy would go into negative
growth, as a result of financial looting, and you would have a recession
or depression.
Now, along would come a crisis, such as a threat of war, or the
perception of a possible threat of war, or some other great crisis, and
you would find that the national economy forces would somehow get back
into power, in order to rebuild the economy, either to prepare for a
possible war, to conduct a war, or deal with some other provocative
emergency. So, you would have a period of growth.
If you look at the history of the United States and Europe, you would
find that pattern. When does growth occur? Is there a decennial crisis, as
Marx said? No, that was nonsense. There's a pulsation which is based on
this relationship--the intersection of political events and crises with
this economic process, which is this struggle between two political
forces: the financier oligarchy, which generally sits on top, and the
forces of national economy, whose interest is in growth, what normal
people would want.
So, the problem has been that.
Up until 1962, what was different? In 1962, certain people engineered a
nuclear crisis called the Cuban Missile Crisis, and the people who
engineered this had the objective of eliminating the nation-state, and
similar kinds of policies: people like Bertrand Russell and his
co-thinkers. Khrushchov was among the people involved in this conspiracy,
in a sense, with Russell, from 1955 to 1962-1963; Bertrand Russell and
Khrushchov were essentially a pair, an "item," so to speak, a
political item.
So, what they did, is they orchestrated a missile crisis, which
produced a great shock--a cultural shock, which made possible what
became known as the Baby-Boomer phenomenon; accumulated fear of the
postwar nuclear conflict building up in people who were born either during
the war, or after it, young people, who lived all their conscious lives in
fear that the United States was going to be involved in a nuclear war.
This terror struck the population! And suddenly one day, in 1962, bang!
It hits! For several weeks, people are going in every saloon, looking
for a church, because they think the world is going to come to an end
tomorrow. Terror! Pure terror!
Now, Kennedy did essentially the right thing. But what was said about
this conflict was something different. As a result of that, the people in
the oligarchy--McGeorge Bundy, Henry Kissinger, people like that were all
part of this--said, "Now, we have got into a position in which the
United States, Britain, and the Soviet Union have agreed to enter into a
process of détente, that because of their fear of a nuclear war, or
having visited the brink of a nuclear war, they will now no longer think
of going to a general nuclear war. We can still have war, but it will be
limited. We will tend to have surrogate wars, such as--the Vietnam War was
a surrogate war. Or, we will have other kinds of conflict, called
irregular warfare, terrorism, other kinds of things, as a way of adjusting
and shaping diplomacy, called cabinet warfare. We'll do that. But, we're
no longer in danger of a general war."
Therefore, it follows, from their standpoint, that "It is no
longer necessary to maintain the kind of preparedness of national security
economic policy which we previously have maintained. So now, we can go to
a different kind of policy; we can begin to take down industrial
society. We can begin to eliminate the strength of the forces of national
economy. We can go into a society in which people are generally serfs, or
human cattle, who stroke their forelocks and bow, as the aristocracy
arrives back in the evening--if it's not on its horses, then its Cadillacs,
or whatever."
And, the cultural change was introduced: "We're saying we are no
longer going to rally to crisis with mobilization of the economy, the way
it happened under Roosevelt, or earlier." And, that's how their
policies are introduced. This became known as the great cultural paradigm
shift of 1964-1972, so-called by the London Tavistock Institute, which was
involved in this, and which was the most avid student of this process.
And thus, you had in Europe, and the United States, and elsewhere, you
had what was called a "march through the institutions"--that the
university student-population, of the 1964-72 period, began to move out of
the universities, in a normal way, to occupy the professional positions,
and related positions in government and business and elsewhere. And so,
more and more, through the normal process of attrition and promotion,
higher and higher ranking positions in government, in business, in the
professions, were occupied by people who tended to share this special kind
of thinking which occurred in the Baby-Boomer phenomenon, in the aftermath
of the '62 Missile Crisis, the assassination of Kennedy, the assassination
of Martin Luther King, and Bobby Kennedy, and so forth. So, the population
was put into a shock.
Now, when a population goes into shock, as the Tavistock Institute
describes it--Remember, this study by the Tavistock Institute was based on
World War I experience. It was Brig. Gen. Dr. John Rawlings Rees of
Britain, who was involved in study of what were called
"shell-shock" cases, from the trenches in World War I, who
found that the shell-shock victim was a person in a heightened degree of
suggestibility and lability of behavior. And the question was: "How
could you artificially, apart from actually having trench-warfare,
how could you induce this same quality of lability and suggestibility into
a population, a large population, or individuals, without taking them out
in the trenches?" That became the concern, the stated concern,
of the Tavistock Institute.
What we had, therefore, as a result of the prolonged nuclear crisis
leading up to '62, the impact on the minds of the young, the nuclear
crisis, the assassination of Kennedy, the assassination of Martin Luther
King, the assassination of Bobby Kennedy, and the Vietnam War, you had a shock
effect on a generation which had been poorly prepared to cope with
this in childhood, because of the conditions of life in the 1940s and
'50s, and which was totally unprepared psychologically or morally to cope
with the crisis represented by this chain of events of the 1960s.
What do people do when they are confronted by that kind of shock, with
that kind of moral weakness, a weakness of character, mass-induced in our
children? They become highly suggestible, and they flee into unreality.
They flee into various kinds of virtual reality. Now, we didn't call that
virtual reality before. We used to call it make-believe. Fairy
stories: "make-believe." And, if you studied closely, as I did,
the behavior of the leading stratum of students on university campuses in
the 1960s, late 1960s and early 1970s, that's exactly what you saw.
The predominant characteristic of this student population, of that
period, was lability, suggestibility--they were changing their sex, and
their political spectrum, from one morning to the next! Always running
from one thing to another. There was extreme lability, and extreme
suggestibility. You would examine the students, as I did, and ask them
things, to find out what's going on in these funny heads of theirs, and
you would find out what there was: There was a flight into make-believe;
that the entire rock-drug-sex counterculture was a flight into pleasure,
momentary pleasure-seeking makebelieve.
The idea of happiness, as we had understood it earlier, no longer
existed. Happiness, of course, is the conception: "I'm doing good
work. I enjoy what I'm doing for humanity. I feel my life is worthwhile.
I'm doing a service. I'm like an angel, here on a mission, I'm doing just
fine. It's very good to be an angel! And this is beautiful, and that's
beautiful." That's happiness: knowing you're going to die, and
knowing that your life is meaningful, despite the fact that you're going
to be leaving it in a fairly short time. That's called happiness.
Happiness to see generations coming after you, prospering. Happiness to
see the country becoming better. Happiness to see beauty in works of art.
Happiness to have a thought which solves a problem. This is
happiness.
But these young people didn't know what happiness was. They only knew a
substitute for happiness, called "momentary pleasure," and
momentary pleasure is that--just momentary. So, once you've had it, where
do you go next? It's a short trip between filling stations. And, that's
what happened, is extreme suggestibility.
So, what we've produced in our country--the shock-effect here--is we've
produced a population which is saturated, as your entertainment media will
show you. There is no cognitive content to most entertainment on
television. None. It is a world of make-believe and pleaure-seeking, from
sensual effects in a world of make-believe. Pyrotechnics in a world of
make-believe.
And that's our population. Look at our news media; look at all our
entertainment media. Look at the behavior off the job, of people. Look at
the standards of what behavior is in the corporation or the government
office, today, as compared with the performance-period of the 1950s or
early 1960s. We do not have performance-oriented people, in terms of the
physical result of what they're doing, or the effect of what they're doing
on the physical result. We have people oriented to political correctness,
to perceptions, to fantasy, to make-believe!
Now we come into this situation, where people say, "What you have
to do in making policy, is you have to make policy to fit the
consensus." What's the consensus? It's fantasy. It's
make-believe.
Well, we're coming to a real crisis, and one must say, "Buddy, the
Mongols are here! They're gonna kill you."
"Huh? The Mongols, man? Huh?"
You get that kind of reaction.
But, as you have seen in the reaction in Southeast Asia, and elsewhere,
and also in the United States, as we closely monitor it, in this period,
there is a reverse cultural paradigm shift in process in the world today.
It's in process in the United States.
The Democratic Party is in a fight, between the old Democrats, the
traditional Democrats, who represent, in a sense, a sensitivity to
bread-and-butter issues, to real-life issues, and the New Democrats, who
are completely fantasy-ridden.
Then you have--In the Republican Party, you have several varieties of
Yahoos, plus some old Republicans, who are actually human beings, and who
are dismayed by everything going on in the Democratic Party and the
Republican Party, and among the independent voters, at the same time.
So, you have a process of tumult, in which the Republican Party, as you
see from what's happening in the Congress recently, in is the process of
fragmenting. The slime-mold principle is coming back into operation. The
Democratic Party is fragmenting. The majority of the voters aren't
associated with either party, and don't vote. And yet, the nation is in an
existential crisis. And we find that in the field, out in the field, in
the boondocks there, individual American citizens, the natural, organic
leaders, the people who tend to respond with thinking most quickly, are
responding, and they're organizing their friends and neighbors. For what?
Just to talk about ideas. But important ideas, that bear on this
situation.
You see in this attack on the President: The popularity of the
President persists, because of a reverse cultural-paradigm shift, of
disgust against Starr and Co. in the population, and against the Congress.
The HMO issue, as it spreads among Republican candidates, exemplifies the
same thing.
So, what you have to have now, is a leadership like a leadership in
warfare, which doesn't say, "What is the bell curve showing what
public opinion is up to now?" You have to have a leadership which
says, "What are the people demanding as something new, which
they want as an idea to replace that which they now fear?" The leader
is a person who stands out in front of the people.
You know the old joke of the French Revolution? A couple of guys,
political guys, are sitting in a café, discussing politics, and a mob
runs by the café. The guy says, "I gotta go out and lead
that--that's my mob." That's a typical American politician, isn't it?
He says, "Well what do I think? Well, what's my pollster think?"
Now let's look at some fun: just a few animated, or quasi-animated
charts and graphs, which give you some indication of this change which
occurred in the U.S. economy from the period of 1946, into 1966, and then
the degeneration of the U.S. economy which has occurred since about 1972.
Now, let's look at the effects of dropping the percentile of the labor
force which is engaged in doing something useful, to see what happens in
terms of some of the other characteristics of the economy, monetary
characteristics. What happens? (Figure 3) The government is still
there; it still costs as much, per capita, but, you're earning
less. What happens? The tax rate, the effective tax rate, combined tax
rate, rises, on state, local, and Federal taxation (Figure 4). It
rises, because you have fewer people actually producing--half as many,
approximately--and therefore, you're tending to double, or approximately
double, the burden, for the same government, on the citizen.
And if you compare the two curves, you will see a correlation between
this deficit (Figure 8), which began to become serious under
Carter--the time we began to get this cumulative debt was with Carter.
What you're seeing is a collapse, in the recent period, through so-called
budget-cutting, a collapse of essential services to the population.
So, you see a correlation between what people experience, and the
actual cause of this problem. People try to have a simplistic explanation,
but here's the correlation, a very simple correlation. You could enhance
this by showing more scale, but you would get the same effect: the
tax-base collapse of the recent period.
Now, the crucial point here is simple.
Let's look at the 300 pound flea on the 40 pound dog: equity, assets,
of J.P. Morgan. Look what we've got here. Now, derivatives. Look at this!
Look at this! There's the 300 pound flea!
Now, if your current obligations are several times greater than your
gross annual income, what do you call that? Bankruptcy! Every banking
system, every financial system in the world, is bankrupt. Which is why Bob
Rubin has to say, "Not a nickel to bail out the banks." Because,
what happens if you try to bail out the banks? It's a bottomless pit. What
happened with Japan? Japan is now going into a Weimar hyperinflation-style
pump-priming, to try to bail out the banks. On Wall Street, in order to
try to politically manipulate and massage the stock-exchange figures, to
manipulate the minds of dumb Americans, to get 'em for one last round:
they pump money, in a hyperinflationary mode, into the financial system,
in order to leverage, to build up a growth in the price of equities. And
people believe it!
Well, what does that mean? It means that, when push comes to shove,
when this collapses, you can not pay off any of this.
Now, suppose you had a private bankruptcy. You have a firm, or take a
bank--"bankruptcy" is named after "bank"--what do you
do? What do the auditors, what does the government do? You have to come in
and sort out the garbage. You have to decide what, in terms of policy,
you will pay or guarantee--that is, you may not be able to pay out the
savings, but you're going to guarantee them, so people now have that
saving as a credit, which can be used. You will find certain assets which,
in a recovery, will have a certain value, so you may freeze those assets,
and wait for the recovery. But, you keep those values on the books,
because the government thinks they're reasonable, that there will be a
recovery, and that these things will come back to their proper value. So,
you simply set prices.
Now, you come to the real garbage, which is sitting there at the back
of the line. "Buddy, you'd better go home. There's not going to be
anything for you, now or ever." We're going to have to wipe off the
books, over $140 trillion of dollar-equivalent value, of current financial
assets. There's nothing we can do about that! That decision was already
made, when we let it become like this. There's a consequence. If you're a
drunken driver, and you keep driving, you're going to be killed! Don't
blame the accident for your getting killed; blame yourself, for being a
drunken driver. If you're doing this, and you're doing this for years, and
you come to a catastrophe, don't blame anybody else; blame yourself, for
doing that. We have no one to blame but ourselves for this mess. The blame
lies with what we allowed ourselves to believe, or to tolerate, over the
past 30 years. We tolerated changes in policy, which no sane government or
no sane people would tolerate. The accumulated effect of these changes has
been to produce that effect: The economy is bankrupt. The banks are
bankrupt. So, you have to shut down the banks!
We've done it before: You have a general bank reorganization. The local
East Oshkosh bank is necessary, so we keep it in business. But, you say,
"It's bankrupt." No, we'll keep it in business. We'll put it in
reorganization, receivership. The banker will sit there, the depositors
will be assured that their deposits are covered. We will continue to
service the community, which you must do. We will supply Federal credit,
to make sure that this bank is able to function, has something to give to
keep the community alive! Because social policy is the question here: Are
you going to keep communities alive, or are you going to write people off?
That's what we did in the 1930s, what Roosevelt did: Find ways to keep
people employed, to keep them fed, keep things moving, and, while you're
doing that, build a recovery, which will solve the problem. And, we're
going to have to do that.
And, what the problem is in Washington, and elsewhere, is they don't
have the guts to face up to this. In Japan, as you see in the case of
Sakakibara, the minister--he's said things which show, and I know
personally, from my contacts in Japan, they know what this is about. I
warned, when I was on a trip to Japan in 1995, I met with leading circles
in Japan; I warned them exactly that this was going to happen. They all knew
it was going to happen, and it did happen. And some of them won't
talk to me now, because they lost face, because they opposed me then. It's
a very embarrassing thing, this face-losing thing. Who cares? They were
wrong, so what? They don't lose face; if they correct their errors, as far
as I'm concerned, they're as good as gold.
But that's the problem.
So, what are they doing? They are politically so involved in bailing
out banks that cannot be bailed out, that they're willing to destroy their
whole economy, in a great mass seppuku, in order to save face for
the banking system. And they'll destroy, not only themselves, but they'll
destroy, if they're able to, they'll destroy Southeast Asia and other
things as well.
This is insanity. You have the same insanity here. "Oh! Oh! Oh!
You can't do that!"
That's the difference between a leader and a weakling; that's the
difference between a commander, in the tradition of von Schlieffen, and a
muddler, who averages the risks, who loses wars and other things, like
young von Moltke. That's the difference.
Now, the key thing here, is this: recovery program.
We've been working on this for a long time; I've always known how to do
this, at least in my adult life, most of my adult life, I've been working
on it.
Let's go back to Lazare Carnot, a great commander, one of the best. A
great scientist, great military commander. He devised, as I said, the
Machine-Tool Principle. And it looks simple on the surface, but it's more
complicated than that, because he was a great geometer, among other
things. But essentially, what the French were able to do, among other
things, is to mass-produce mobile field artillery. Now, this was done by
machine-tool standardization of construction, assembly. And thus, the
French were able to mass-produce mobile field artillery. Now, if you know
the methods of warfare at that time, if you could turn up on the field of
battle with mass field artillery, you can control a lot of things; you can
sort of reshape the terrain. And these were among the things that changed
things.
At the end of the Napoleonic Wars, people left France--patriots. Some
of them came to the United States. They ended up, in part, at West Point
Military Academy, or at least advising West Point Military Academy,
particularly during the period of Commandant Sylvanus Thayer. What they
brought, is the Monge program of mathematical and engineering training:
the greatest source of engineers, which made our military excellent, that
the officers were trained to be engineers, not slobs. And the Corps of
Engineers was a product of this kind of training. So, we had an
engineering capability which, in that period, the period following the War
of 1812, and Thayer, and afterward, came to be centered in West Point.
When Annapolis was created, largely under the influence of Alexander
Dallas Bache of Philadelphia, who was a confidant of people like Alexander
von Humboldt, as well as Gauss, it was created on the same basis: of
creating a naval engineering, scientific capability, as the basic program
in the establishment of a naval academy at Annapolis.
Along came the Civil War; the United States had been kept backward, and
actually somewhat retreated, as a result of the influence of the Southern
slaveowner faction, together with the New York bankers, on the economy. We
got into a war; the Southern slaveholders had absented from the
government, so the government was now free to make decisions without
consulting the slaveholders, because there was a war between the two
forces. Under these conditions, Lincoln, advised by Henry Carey, set into
motion a program of rebuilding the economy for war, and for other
purposes. And in that process, as I said earlier, from 1861 to 1876, the
United States emerged as the world's leading economy, in economic
strength, as well as the most technologically advanced economy in the
world.
Because the U.S. program, which was based on collaboration with people
in Germany, such as Gauss and Alexander von Humboldt, German science, and
was based at the same time on the influence of the French Ecole
Polytechnique, and the program introduced at West Point, in engineering.
The United States was able, very quickly, with these cadres and with this
science, to create a machine-tool-design industry, which enabled the
United States not only to produce the logistics of warfare, but to make a
revolution in economy in the same process, a revolution which continued
beyond the war itself. That became known as the American industrial model.
The key thing is this: What defines an economy--and I'll indicate what
the relevant implication is--what makes an economy successful, is
long-term investment in increasing the investment in means of production,
in infrastructure, and in people, per capita and per square kilometer.
This means a large capital accumulation in these areas.
That's the problem that China now faces, in trying to deal with an
employment problem, a continuation of its employment program, in light of
the fact that there's not going to be any foreign capital coming in to
China, as they expected earlier last year; it's not going to be coming in.
So, China has adjusted its policy to fit the reality of the world crisis.
Now, they're going to have to rely on internal infrastructural programs,
rather than what they thought would be a transformation aided by large
influxes of foreign financial investment. It's not there anymore. So the
Chinese, being very intelligent people, have done the intelligent thing.
The leadership, Zhu Rongji, the new Prime Minister, is part of this, and
they made a change in their policy, which is not a change in policy,
because China's policy is to survive and grow. And deal with
security problems. So, they're going to continue to deal with the policy
of survive and grow, under the program of reform with Chinese
characteristics; that's going to go on, but they have to adapt that policy
to the weather conditions, and similar conditions, that hit them. And,
they're going to do that.
Now, how is China going to sustain a very large investment of
employment of previously marginal labor, in new industry? How is it going
to do that, and avoid unemployment? How are they going to empty the
parasitical aspects of the industrial rice bowl from the state industries,
and put some of the people who are living on the industrial rice bowl out
to employment in new industries? How are they going to do that? This is
going to be a very large infusion of capital, of social capital, into this
expansion of employment, under conditions where the world financial
markets are collapsing. How is China going to do that?
Well, it's very simple. If you do not have a large factor of
technological progress, you can't do that. You can only do that
with high rates of technological progress. Now, how does technological
progress occur, and what is China's problem, and how do we fit in with
this, in this case?
The secret of modern industrial economy is scientific and technological
progress. How does that work? Well, you have to improve the
infrastructure; you have to build water systems; you have to build power
systems; you have to build transportation systems, which is largely a
state responsibility. This has never happened adequately except under the
direction of government. You can not build transportation systems, you can
not build power systems, you can not build water management systems
adequate to the needs of modern society, except as the economic activity
of government, which may farm some of this stuff out to private interests,
as we did with our utilities industry. But it is government's
responsibility to have this done and to regulate it. Otherwise, no
economy. "No hands, Ma!"
The government's responsibility is also to foster a system of education
and scientific research, which will create scientific progress, and will
create a population, unlike the Russian civilian population under the
Soviet system, which is capable of assimilating technological and
scientific progress at high rates of efficiency. That's not so easy.
Thirdly, the government must provide the means for fostering the
realization of scientific research and this educational program, in terms
of investment of this technology into farms, industries, and so forth.
The result of that will be, of course, an increase in the productive
powers of labor per capita, and therefore, the trick in this is to get a
sufficiently high rate of increase of productivity, to offset the
otherwise increasing capital costs of your employment program.
Now, what's the problem then? The problem is, this requires a very
highly developed machine-tool-design industry. What is a
machine-tool-design industry? Let me walk you through this issue, very
quickly, in this concluding section.
Since the middle of the Fifteenth Century, the idea of science has been
revolutionized--what we call science today, or what competent people call
science today, is not what people thought science was generally, prior to
the Fifteenth Century--as a result of the influence of the work of one
man, Cardinal Nicolaus of Cusa, and a series of his writings, including a
work called De Docta Ignorantia, published in 1440, which created
the idea of modern experimental science, and also some of the principles
of that.
This work, for example, was studied by Luca Pacioli, who was the patron
of Leonardo da Vinci, and studied extensively by Leonardo da Vinci. This
was the work which, directly and indirectly, shaped the thinking of
Johannes Kepler and of William Gilbert and others, who were the founders
of modern science and modern technology.
The basis of modern science, is so-called experimental physical
science. What does that mean? If you are given a problem, a crisis, you
say, "The figures don't jive. The experimental evidence shows that
what we believed to be true, is not quite true. There's some error in what
we think."
So, you take this and you think about this, that is, the scientists.
And you say, someone says, "Well, I think I've discovered a
principle." And a group of people agree: "Yes, that is a valid
discovery. We go through the same exercise, we come to the same
conclusion. You're probably right."
Now, what do you do next? What you do, is you go to a very sharp
machine-tool designer--or you may do it yourself, because you have that
capability--and you build an experimental apparatus. It may be a new kind
of telescope, it may be something else. But, you build an apparatus which
is designed to test that principle you think you've discovered.
Now, when you have completed a successful test, and have proven the
principle is valid, by scientific standards, what have you got? You've got
a refined machine experimental design, which is a machine-tool design.
Now, the application of that design to any field of application, results
in the generation of a technology which can be copied from the
experimental apparatus, and put into designs of products and designs of
industry. This is true in chemistry, it's true in astrophysics, it's true
in every other department.
So, therefore, what you require, is a relationship between a
government-steered program of scientific research and advanced education
development which is science-oriented, in particular; a relationship
between that, and experimental apparatus builders, to a
machine-tool-design industry. The machine-tool-design industry turns
technology into what? It turns designs into designs of products, improved
designs, and new kinds of products. It turns these same principles into
new conceptions, and new kinds of productive processes.
The result is, that with less labor, you get better result and more
result. As a result of this transformation of ideas from the creative mind
of man, of educated man, of developed minds, you get a transmission
through the machine-tool industry, into the average practice of life, of
daily life. And if you invest in this process, if government says,
"We will give preference to the promotion of investment in useful
inventions, we will sponsor entrepreneurs who will do this, we will give
them cheap credit"--as we did during the war. We supplied machine
tools to all these guys who were bankrupt, and that's how we got our war
machine. You could go around and find machine tools all over the United
States: "U.S. government property" all over them. And, that's
how we produced. The government subsidized it. And, that's how we built
the great recovery of the postwar economy.
The problem, then, in Asia, is what? There are only several countries
in the world which have, today, an adequate or reasonably adequate
machine-tool capability. We don't really have an adequate one. These are
the United States, which traditionally was a machine-tool country, after
1861-1876. We were the beginners of this policy. Actually, it was begun by
Lazare Carnot, but we became the first ones to develop an entire economy,
based on a machine-tool-design principle.
We've lost that. We destroyed it. We can no longer make a space shot
the way we--the same space shot we made in 1969. We lost it! We lost it
ten years after that. We couldn't replicate that any more. We've lost
essential industries necessary to do that.
The other country, the leading one, is Germany. The other leading
country, is Japan. You have a small one in Korea. You have something in
Austria, you have something in Switzerland, a bit in Italy, some in
France. But generally, the machine-tool powers of this planet, are
traditionally the United States, Germany, and Japan.
Now, in the Soviet Union, and now in Russia, we have fallow what used
to be called elements of the scientific military-industrial economy, which
is the only section of the Soviet economy that really worked, where you
had scientists who were taking crap produced by the civilian economy, and
making effective weapons. This was a scientific-driven,
machine-tool-technology-driven military. The famous Soviet superweapons
all came out of this kind of stuff. This is fallow, it's not being used;
it can be revived.
But then you go to China: a great part of the human race, 20% of the
human race. Go to India, which is going to have a larger population than
China in a few years, by the end of the century. Go to adjoining countries
like Pakistan, Bangladesh. Go to Southeast Asia: Indonesia, the
fourth-largest country in population in the world. What do they have, in
terms of machine-tool capability? Not quite zilch, or quite zilch.
China has a deficit in machine-tool capability.
What is the strategic economic interest of the United States, Germany,
and Japan, and so forth, if they're using their heads? China has a
problem. China does not need vast amounts of money-capital flowing from
the United States into China. They don't need it. What they need, is
sufficient access to a machine-tool capability, and to developing their
own machine-tool industry, to expanding it, to enable them to convert high
rates of employment--the capital investment in new employment--into a
sufficiently rapid rate of increase in productivity, so that this capital
investment does not become a crushing force.
Therefore, we, who represent the pinnacle of European civilization, who
have embedded in us, at least traditionally, this machine-tool capability:
Our vital interest is to establish collaboration with the most populous
section of the world, which is largely concentrated in East and South
Asia, and to enable these people, who desperately need this kind of
assistance, to import precisely what we should be exporting.
We should not be exporting shoes, we should not be exporting consumer
quantities of this junk. We should be exporting what they really need, as
sovereign nations, for a sovereign future. We should be developing a
global partnership for the equipping of the entire planet with a
machine-tool capability adequate to meet that need.
Let me just indicate some other things that go with that. The project
to unify this, that I've proposed, my wife has worked on, and others have
worked on, is called the Eurasian Land-Bridge program. It's sometimes
called the Silk Road program. We developed this over a number of stages
during the 1970s and 1980s. In 1989, we launched it, in one form--my wife
and I, and several others--launched this package, which became first known
as the European Productive Triangle. And then later, beginning 1992, my
wife negotiated, or had discussions with people in China, on this policy.
And this was based on looking at some of the problems in the former Soviet
Union, and looking at China, and saying, "Here is a common interest
to develop the undeveloped and underutilized great area of Central Asia,
which can only be done by this kind of method. And this is something which
is in the common interest of China, of Europe, of the former Soviet Union,
as well as the United States. So, therefore, we should make this process,
which connects the largest parts of the world population to industrial
development, and takes the largest area of undeveloped area, outside of
Africa, and converts that into an area of growth, of global growth."
Now, what's needed, is several things, changes.
We need high-speed transportation. We're talking about thousands of
miles. You're talking about the U.S. transcontinental railroad system, as
it was understood by Lincoln, developed on a Eurasian scale, involving not
a few million people, tens of millions of people; but, we're talking about
billions of people. We're talking about the greatest growth on this
planet for the next century, if we do it right.
This means new transportation systems, such as high-speed
magnetic-levitation rail systems, instead of friction rail systems. This
means tremendous amounts of power. We have it: high-temperature nuclear
reactors of a new type, the HTR type, which are being mass-produced, or
serially produced, in China, and which could be serially produced--of
German design--which can be serially produced in other countries. You can
find the nuclear energy.
We need vast water management. This area is technically water-scarce.
We can solve some of the problems by water management. We also are going
to have to change the ecology of the planet. We're going to have to
desalinate vast masses of seawater in coastal areas, and save the upriver
rainfall for the upriver needs. We're going to have to pipe mined
freshwater--mined from oceans, as well as managed from rivers--into areas
which are deserts, like the great deserts of Central Asia. We're going to
have to do the same thing with Africa. And, that's what's needed.
These are great projects which, in terms of their economic impact, are
equivalent to a mobilization for general warfare, in which you have the
economic benefits, which we are accustomed to having, from technology and
otherwise, from large-scale mobilization for general warfare. We are going
to have to transform, increase our own ability as machine-tool powers.
We're going to have to revolutionize our educational systems, to become
science-oriented again. We're going to have to develop machine-tool
capabilities in countries that need it, in partnership with us.
There's going to be a need for food. There are various ways we can meet
the need for food in Asia. The great way to meet that need, is Africa. Africa
is at present the greatest potential food-grower on this planet. That
is, it has the greatest area, which is designated operational agricultural
land, which, if suitably developed, could very readily become a great
surplus food producer.
If you develop a transportation system of this type, and link the
so-called Silk Road, or Land-Bridge system, through Egypt, into a rail
link in Africa, which we could build for them--We don't have to charge
them anything. The benefits are so great, just give it to them. They don't
have any money, so give it to them. Because the benefits, the payoff is
tremendous. Once they have that kind of system, then the food-growing
potential of Africa becomes tremendous, and that becomes a basis for
rebuilding Africa, and giving it that initial start, that kick-start it
needs to enter efficiently and fully into modern society.
So, we have before us, two alternatives. We have, on the one hand, the
prospect, if we don't do what we have to do, of a New Dark Age descending
upon all of mankind, a Dark Age whose best paradigm, for purposes of
comparison, is the Dark Age that struck Central Europe with the collapse
of the Lombard banking system in the middle of the Fourteenth Century. And
that can happen planet-wide, which would mean about two generations or so
of New Dark Age throughout this planet, with the world's population
perhaps collapsing to levels of the several hundred million which was the
world population level during the Fourteenth Century. That's a likely
prospect.
On the other hand, if we cooperate with these countries of Asia, to
create a just new world economic order on the ruins of a bankrupt system,
and engage in great enterprises of the type which we've conducted before,
to develop Eurasia, and to bring justice to Africa at last; if we do these
things, then the Twenty-First Century can be the brightest century of
human existence. Because, by these means, by bringing people into this
process, we have the opportunity to establish as universal, a principle
which is universal: the principle that all persons, man and woman,
are each made in the image of God, and must be afforded a condition of
life in society, an opportunity which is consistent with a being of such
qualities, and to develop and perfect our political systems, to bring them
into accord with that objective.
This next century can be the most glorious in the existence of mankind
to date, or, it can be the most awful. The decision lies now with us in
1998: Can we summon the leaders, and the leadership, to do what many
people, still, at this moment, would consider unthinkable? To maximize the
risk, rather than spreading and minimizing it? And, by maximizing the
risk, as the great commanders in warfare, to win the war, whereas those
who minimize the risk are sure to lose it.
Thank you.
