How and Why the American System Will Replace Imperial Poverty and Conflict
Were the United States to use the full powers of the American System of Political Economy—the system developed and implemented in varying degrees by people like Ben Franklin, Alexander Hamilton, Abraham Lincoln, Henry C. Carey, William McKinley, Franklin Roosevelt, John Kennedy, and Donald Trump—there would be no economic reason for any conflict with any other sovereign nation.
Lyndon LaRouche’s conception of the American System of political economy encompasses the following:
- government investment into research and frontier technologies,
- cheap credit from the National Bank to facilitate the introduction of frontier technologies into the productive process,
- government investment into basic economic infrastructure and real education,
- regulation/taxation to prevent speculative manipulations of pricing of everything from food and raw materials up through real property and financial instruments domestically, to foreign currencies internationally,
- protective tariffs to ensure that reasonably enterprising domestic industries and farms are able to persist and prosper over time,
- measures ensuring that the increasing prosperity of productive enterprises is shared with the increasingly productive workforce to the point that families can look forward to vastly improving conditions of life over the long term.
As President Trump has often said, the fact that the Germans, Chinese, Koreans, Japanese, etc. have taken advantage of the insanities made popular by the British Empire and implemented in Washington, does not make any of those foreign nations our enemies. Every sane, or even semi-sane government or enterprise, seeks to sell its wares wherever possible. That is perfectly natural and normal.
It is also perfectly natural for every enterprise or government to either develop internally, or acquire one way or another the technologies and know-how necessary to grow and prosper.
The new Trump administration, backed up by a supportive Congress and active citizenry, could quickly begin to turn around our collapsing condition by simply reinstituting the proven American System measures mentioned above. So how have we, as a society, been trapped into going along with one suicidal policy after another? Could our troubles be related to common concepts of the mystical “inherent powers of money” and the many concepts which are derived therefrom?
Notice that everything we discussed respecting the American System involves the human mind acting upon nature to expand the productive power of the citizenry of the nation. In its purest technical definition, LaRouche identified the real measure of economic activity and societal health (or lack thereof) to be the increase (or decrease) in the number of people who could be supported per square kilometer of land (adjusted for the quality of the land) using the best technology available at any particular time. That measure is called the Relative Potential Population Density of a nation or society. He didn’t say anything about money!
Actually, he did mention it. He said, “Money is an idiot!” Others have said that money is the root of all evil. It is certainly the root of much confusion and the key to the building of the Empire. Let’s examine how the Empire looks at money.
Take off your shoes for a moment. Put on the shoes of an Imperialist! Now, thinking as an imperialist, how would you build and run the Empire? Of course you need armies, navies, propagandists, spies—but all of that covers just the relatively minor players. To build the Empire, you must control PRICING! Don’t think in terms of money. Think about controlling prices. If you can manipulate prices up or down as fits your strategy of the moment, you can wipe out your targets, then swoop in and buy them out or force them into submission.
Think about what we had discussed earlier with respect to American System methods. With the exception of price changes derived from technological obsolescence of older products, the general trend in a properly working American economy is for the physical cost of production to steadily decrease and the standard of living to steadily increase as better and better science and technology allows more and better output per worker per hour.
In an American System economy, any enterprise reasonably working to advance the state of the art or catch up to the advances of others, should have no problem figuring out how to prosper in the relatively stable conditions provided.
However, you just put on the shoes of an Imperialist. In those shoes, from the perspective of the Empire, how do you destroy and take over enterprises or nations? You must introduce arbitrary instabilities. If you have the power to arbitrarily ban or undermine the nuclear industry, farming, fossil fuels, etc. you can drive down the values of your targets to fire sale prices and pick up the pieces for a song. More important than that, you can cripple any independence among nations or industries and leave them powerless to do anything but submit to your will. This is how you create oligopolies, monopolies—today this goes by the term Mergers and Acquisitions (M&A). The handy byproduct of this process is that it puts you in a position to wipe out work on scientific progress, new technologies, and new capital investments which might undermine the value and power of your old piles of property.
An arbitrary war can open up even greater possibilities for profitable instabilities.
However, all of the above pale next to the power of directly manipulating prices and borrowing costs. That is why we refer to the City of London/Wall Street Financial Empire as the modern form of the British Empire. Unlike national credit issued by Congress through a National Bank to fund creation of new physical production and infrastructure—whose value vastly more than balances against the outstanding debt created—financial debts and obligations are arbitrarily created by central banks (like the Federal Reserve) and financial institutions of all kinds.
Let’s make this more concrete: look at the current crisis in banking. During the long period of zero interest rates established by the Federal Reserve and other central banks, commercial banks and other financial institutions were lured into making loans or making investment into long term financial instruments paying very little interest. The recent actions by the Federal Reserve to raise interest rates forced banks and financial institutions to begin to pay more to gain and hold deposits. It is the classic Imperial move. The target cannot escape because the price at which it sells is below the price it must pay to stay in business.
It is an ancient game. In industry after industry, this is the Imperial game plan. It also works on nations. Once Franklin Roosevelt’s concept of the Bretton Woods fixed exchange rate system was ended in 1971, many nations were put into the same bind: by manipulation of the relative pricing of their currencies, nations could be put in the bind whereby their exports would not produce enough revenue to pay for their imports and other external obligations. That is the perfect Imperial setup.
Through the execution of the pricing setup, whole groups of nations can be brought into submission to Imperial dictates, put into internal revolutionary convulsions, or driven to war. And, of course, innumerable distinctions among people can be exploited to create conflicts advantageous to the Empire, but fundamentally, to build the Empire, you must seek to control everything, everybody, and every nation (colony or satrapy).
So, you see the contrast with the American System. Under the American System, each company, farmer, or nation controls its own destiny inside a relatively stable environment of growth and advancement, free of worries about being trapped into the Imperial setup. Under American System policies companies do not go bankrupt because of foreign dumping, “cheap labor,” or “competition,” nor is there any obligation to automatically open the American market to foreign firms. Bilateral trade agreements ensure that trade is only of the mutually beneficial type—not the predatory type.
In turn the mutual benefit of trade becomes the bedrock of friendly foreign relations upon which closer long-term relationships are built.
President Trump, with his Agenda 47 and his American System approach to the future, threatens to put an end to all the Imperial games. That is why he is under such constant attack. Don’t just count upon him to carry the ball; we must all work to better understand both the American and the Imperial perspectives, so that together we can ensure the Great American future for which we strive.
P.S. You can take off those Imperial shoes now.