Towards a Producers’ Alliance, How To Rebuild the U.S. Economy

 March 18, 2021 ·  


This is adapted from a live presentation, given on Feb. 11, 2021, available here. Just to frame briefly what I am going to be discussing, I will begin with a short quote from Abraham Lincoln: “All creation is a mine and every man a miner.”

We’re going to be discussing the field of physical economy. Physical economy dates back to Gottfried Leibniz, but really has roots that go back to the Renaissance. Today, it is a principle that needs to be rediscovered. In the last 50 to 70 years, there have been people who have understood its conceptions, people like Susan Kokinda’s friend Bill Knudsen, associated with Ford and GM and the wartime mobilization; Henry Kaiser and the aluminum industry; Jesse Jones and the Reconstruction Finance Corporation. These were industrialists who collaborated with President Franklin Roosevelt in the war mobilization and beyond. And I think that is a useful starting point: we have to rediscover what they understood, but also take it to another level, which is where Lyndon LaRouche took it, in depth.

Wealth

“Where does wealth really come from?” This is not not an abstract or academic question. If we are going to be effective citizens, if we are going to deliberate on the policies of the nation effectively; if we are going to be the candidates and elected officials who will make decisions in the public sector, and also the private sector, but also in other fields such as education; we have to know the basis upon which we can make decisions.

Today, we hear about the “gaming industry.” We hear about the “prison industry.” We hear about the “insurance industry,” the “entertainment industry,” the “tourism industry.” And then we hear all the time from ‘zillionaires’like Gates and so forth, about the Great Reset, from on-high the so-called Olympianswe hear about monetary matters, stock-market values, quarterly profit earnings, and so-forth.

All of thisor rather none of this!has anything to do with the physical economy!—with the real economy and how the real economy works. So we really must set all of that aside. It is really a relief, if you consider it, to step back and realize, ‟Oh, I can brush that aside,” as so much noise.

This is also what the assault on Trump is really all about. Because the oligarchy doesn’t want people, and they certainly don’t want President Trumpto be leading a nation on the principles that founded it, and build it! The ideas of Alexander Hamilton, Abraham Lincoln and Lyndon LaRouche.

So lets start somewhere basic: The source of wealth is human creativity. 

Human creativity is the source of all human productivity—for increases of labor power. That is, labor power not as raw power or physical muscle power, but the application of the mind to make work more effective, to develop the machines that do the work of tens, or hundreds of people, or even thousands of people.


Left, a 1602 Mariner's Astrolabe. Right, using an astrolabe to measure the angle of the Sun or a star above the horizontal. Source: Smithsonian.

If that sounds abstract, think of fire. Man invented the utilization of fire. There is no animal that can utilize fire; there is no monkey that can read a book, or write one; or create great art. From the very beginning man was beginning to create art, he was beginning to circumscribe and to encompass the world around him. Astronomynot astrology, astronomywas utilized very early on. So this was Mankind’s domain; Man’s domain was not the domain of the empirical, Man’s domain was to discover principles, hidden apparently, initially, but to discover them in a more profound way and apply them. As with the very essential principle of fire.

This is a source of great optimism! We’re not somehow stuck, we’re not somehow condemned,—as by the ‘green’ ideology of finite resources. This has been disproved again and again. Malthus was disproved—you know Malthus, that the population grows geometrically and the food supply grows arithmetically; he and his minions predicted that London would be buried under horse manure. Obviously, it didn’t happen; we developed coal. A very simple example, which many of you know.

The essential question is, how do we build our country out of the broader shambles of cultural and social discord and crisis and unite again as a nation? And play once again the role we are intent on playing, as John Winthrop called it “the City upon a Hill,” for mankind?

Tapping Our Wealth of Labor Power

Let’s start with some basic categories in terms of production, but starting with labor, starting with the human beings that compose the labor force, our labor force, our country. The same principles apply to every country regardless of their political structure; in terms of physical economy, the underlying laws are the same, and you either obey these laws or ultimately pay the consequences.

We look at the labor force, first in terms of the productive portion of the labor force. The productive portion of the workforce are those people making the physical changes on nature for society, for the future of our nation. That’s the productive labor force, and if we look at that labor force as a whole, we can look at it in a certain sense as past, present and futurethe past is our retired workforce; we have the current workforce; and the futureto beworkforce. Those are our children, our youth, who are being educated and that will become the workforce, or potentially can become the workforce.

That workforce, in the United States, is now a fraction of what it used to be. Well over 50 to 60 percent of our workforce used to be productively engaged, in the period during and after World War II and into the early 1960s. It was that platform from which we launched the space program, the ‘Moon Shot’ under President John F. Kennedy. All kinds of capabilities, strengths and limitations, but as a totality a tremendously productive workforce that emerged out of World War II.

Today, that productive workforce is something like 20 to 25 percent of the entire U.S. workforce. And if we define productive activity even more rigorously, looking at what that labor is being utilized for, and subtract out that which is being wasted on overhead, as in “endless useless wars,” as President Trump has referred to them rightfully, it is significantly less. After all, it's pretty difficult to live in a tank, or eat ammunition. Military expenditures for national security are necessary, but military expenditures to police the world for the City of London and Wall Street is an entirely different matter. This is the productive efforts of our labor force being thrown overboard.


An unproductive generation: Ironically calling themselves "The Extinction Rebellion," while demanding the global economy cease all CO₂ emissions. Source: akx media


Since 1971 we have suffered from the disease known as “financialization,” the “post-industrial economy.” We also have the ‘green’ agenda of the Great Reset. We’ve suffered with this since the first Earth Day back in the 1970s, promoted at that time by Time magazine, members of Congress, and President Carter. There has been this endless parade of individuals, media efforts and so-forth to convince us that we are using up finite resources. Today, out of Davos and elsewhere, we are told that our only future is a no-growth future.

Contrary to this view, we have before us the capability to tremendously increase our productivity. Especially if we reduce the overhead, the useless overhead, in terms of financialization, in terms of paper shuffling, of the so-called post-industrial society.

Ironically, Covid-19 presents us with an opportunity. We have perhaps 7 to 9 million Americans who are now unemployed. We have several million small businessmen whose businesses may not be coming back. We know the sectors of our economy a little bit better that have been essential. We talk of “essential workers,” and we talk of the essential productive activity of our farmers, our industry, our healthcare, and other sectors. We recognize the need to get our children back into school, for teaching to begin.

These are needs that can be met more fully, by utilizing those who are now unemployed from the service sector,—in a significant part because they are overhead. Not because they are unimportant, even the opposite. Those individuals need to be employed in productive activity, to utilize their creative capacities to more fully advance our nation and Mankind.

We can promote the rapid transformation of the United States economically, by shifting a portion of our workforce which is now in services,—what is called “FIRE”: Finance, Insurance and Real Estate. Get these people out of these areas and begin employing them in expanding the physical productive capacities of the United States.

To do this, we have to have places where these individuals can be trained; we need energy to fuel new factories, basic industry and all of this to expand. We need to integrate and train this workforce for productive employment; and we’re going to accomplish this with national credit.

National Credit

National credit is a concept that goes all the way back to Alexander Hamilton, the first Treasury Secretary of the United States. He wrote his reportsthe Report on Manufactures, the Report on National Credit, and so forthas reports requested of him by the President and the Congress of the United States. His reports were adopted almost entirely, and certainly in large partthe Report on the National Bank, the reorganization of the national debt coming out of the American Revolution. His reports formed the foundation upon which the United States emerged from national bankruptcy after the revolutionary war.

Among Hamilton’s conceptssingular concepts, drawing upon a tradition going back to Ben Franklin and before that to the Massachusetts Bay Colonywas the concept of credit, sovereign National Credit. Utilizing the nation’s future productivity, if you will, to advance credit against that future productivity. Again, this is not an incomprehensible concept at all.

If you think about it, a homebuilder goes inor used to be able to go into a Savings & Loan, and lays out plans for homes that he wants to build, on specific pieces of property that he intends to buy. He needs money to build these homes and then to sell them. A Savings & Loan or a bank would lend, based on a certain faith in, and knowledge of, the individual and the effectiveness of his plans; would lend the capital for that purpose. The contractor would then hire other peoplesuppliers, subcontractors and so-forthand build those homes. Those homes would then house other productive families, and the economy would grow.

The Savings & Loans were themselves a product of the Franklin Roosevelt era and very much promoted by Jesse Jones and others, and this was an example of the utilization of national credit. I am using a local example, but the same multiplied across the country gives you an insight into the utilization of national credit. National credit can be extended on a much larger scale, as it has been again and again. This was done by Hamilton with his First National Bank, for water projects, roads and so-forth; it was the backbone of the Lincoln Presidency;—the “greenback” policy was a national credit policy; and the Reconstruction Finance Corporation was the instrument utilized by the Franklin Delano Roosevelt administration.

We can utilize this same method today. We don’t have to go to Wall Street and beg to borrow money from them. They wouldn’t lend money to Lincoln’s Administration; they tried to screw Franklin Roosevelt over. So these Presidencies developed other means to meet the nation’s requirements, they developed other tools modeled on what Alexander Hamilton had done before. We createthe government createsnational credit, lending against the future productivity of the nation. But that of course requires the people be employed productively!

Building A New & Productive Infrastructure Platform

As we are shifting the labor force back to productive activity, we set this process fully in motion by financing large scale infrastructure projects that are required across the nation—e.g., in waterworks, in energy. President Trump calls for the rebuilding of the United States manufacturing sector, such that the U.S. becomes a “manufacturing superpower.” and he made successful efforts in this direction.

But we have to go further. Right now, we don’t have energy that is available! I’m in Texas, and I can tell you, here in Texas we don’t have a surplus of energy to fuel a rapidly expanding manufacturing sector. We are already the second largest manufacturing sector by state, but if we were to expand significantly which we really should do, and we have the manpower on the sidelines to do it, we would have to significantly expand our power plant capabilities.

In the nation as a whole, we would need something on the order of 200 gigawattsthat’s the equivalent of 200 large nuclear power plantsto provide the energy for a national industrialization and manufacturing renaissance. Rail is another example; we need to double track and triple track rail for freight, but also as an advanced mode of transportation of people. We can begin building that up on the coasts, the three coaststhe East, the West and the Gulf Coastand in the Midwest, the heartland. You already have the potential for this. National Credit could put it into action.

This is how you can train up a workforce, this is where you can train young workers, you can develop engineers in the field. We combine that with apprenticeship programs and with school-training alongside work in the field.

All of this also requires heavy industry; you have to produce the steel. We’ve shrunk in terms of our steel capacity and we have to rebuild it. We have pockets of it, such as in Arkansas where there has been an increase in new steel capacity, largely to service auto production in the South East. But we need much more steel production, high quality steel production in particular, such as needed for nuclear power plant constructionand high speed rail. This is high tech; we need special alloys and so-on and so-forth. These are the means by which we put people to work, and then as a result in putting them to work we build up our nation.

The question then arises, “But how do you pay for it?” National Credit. The extension of national credit is the means by which we set in motion the unemployed, the empty factories, and build new ones, and thereby promote the general welfare, not just for ourselves but for future generations.

Now let me just turn quickly to some other features of this.

How do we increase productivity? How do we increase productivity beyond more effectively utilizing that portion of our current workforce that is not now productively employed? How can we otherwise train up rapidly a new generation of our workforce? How do we do that?

First of all, apprenticeship programs; secondly, what’s generally termed, “mentoring;” thirdly, and very importantly, as Lyndon LaRouche pointed outgoing back to at least 1985, in his letter to Albert Shanker, then the President of the United Federation of Teachershe emphasized a much-expanded, upgraded Civilian Conservation Corps program for the United States. As an absolutely necessary element in an educational program for American youth.

This is alongside a Moon-Mars program, which of course President Trump has initiated: the Artemis program,—to land the first woman and next man on the Moon by 2024, and colonize it with a sustainable presence by 2027; and moving on from there to Mars in the 2030s, or 40s as the case-may-be. President Trump has laid that perspective out, and this is what Lyndon LaRouche had called for.


NASA's We Are Going vignette of the Artemis project to land a woman and man on the Moon in 2024.


These are the bare minimum requirements, to fire the imaginations, to mobilize not only our current workforce, but to mobilize the imaginations of our youth; to make the decision to commit themselves to building a future, a future that was not yet there in front of them, but a future that they could create.

To create; this is the basis, again, for optimism.

A Classical Educational Curriculum

In doing this, we have to make the curriculum of all these programs—apprenticeship programs; community college programs; a Space CCCas we have termed it a Space Civilian Conservation Corps program; mentoring programs, both formal and informal;—all must involve a much richer curriculum than ever before. Premised on the notion of discovery. Of reliving in the classroom, reliving in the school labs, reliving in the field projects and astronomical projects, reliving the discoveries of past generations, of past specific individuals, the unique contributions that individuals have made.

Education not by ‘drill and grill’; education not by preparing for the SAT or STAR tests or something else, but that the student, the individual student, relive the actual discoverieskey, essential discoveriesin the history of mankind. Whether it is in the Federalist Papers, the discoveries of the astronomer Kepler, or in the electricity experiments of Benjamin Franklin. All of these and more are to be explored, and it is through that process of discovery that we prepare a young, potential workforce to have the confidence, to have the self-conscious understanding of their own creative powersbecause they have experienced that process of discovery themselves, through the re-discovery of these principlesto make and apply new discoveries themselves. That is how we upgrade the educational system as a principle, as an underlying principle, applied both in terms of science, but also in terms of the Arts,—a well rounded classical education. This is essential, as a feature of what we have to do, going forward, in terms of physical economy: of upgrading and uplifting our fellow citizens, our families, and future generations.

To Raise Growing Families

Let me touch on, just briefly, families themselves. I’ll give you an example. In the area of Lordstown, Ohio, General Motors is building a battery plant for its electric cars. As many of you know, GM has recently closed, I believe, three of its auto plants, and they have switched over into investment in electrical vehicles. GM intends to pay its autoworkers in that Lordstown plantits a $2.3 billion plant they are building, and it will be opening relatively soon if it is on track$15 to $17 per hour. That’s public. They discussed that with the United Auto workers; that’s what they intend to do. Now you cannot raise a family on that—$15 to $17 dollars an hour! That is, after taxes, roughly $25,000 a year.

Joe Biden, the avatar occupying the White House and his collective, are talking about a $15 minimum wage. Now that is ridiculous, that’s not something that is going to work. You have to raise productivity and you have to raise productive employment. You have to produce wealth, physical wealth. It’s a shortcut that doesn’t work; it is a gimmick. But this is the wage level at which GM intends to employ workers in Lordstown. This is also the pay scale in other factories, such as Tesla. This is the future of the auto sector! We will be going to an even lower skill level of productivity, if we go down that road very far.

But my emphasis here is on the family. In the United States you need a $60,000-$125,000 a year income to raise a family of 3 or 4 children. In the 1960s and early 70s, families had 3 to 4 children on average; we’re now down to 1.7 children and dropping. We are now below replacement level, if you subtract immigration. We’re shrinking as a country. We’re not yet where South Korea or Taiwan or Singapore, where they are roughly down to about 1 child born per couple—or some countries in Europe that are in a similar situation. But we’re going rapidly in that direction.

We have to create the circumstances, for the sake of future productive generations of our nation, to raise the pay scale and salary level of our workforce commensurate with what is required to raise a family. We once had those standards of living. A single paycheck, a single “breadwinner” as they used to call it, should be able to earn enough to support a growing family. That also requires a stable job, not a gig economy job! It requires a stable job, in a stable neighborhood, where a home can be built or bought, and a family raised. Or the equivalent in terms of an apartment space. This is essential! These are the requirements we have to create, gladly; we can’t skate around it.

Science, Healthcare and a Bright Future

In conclusion, let’s look at employment and infrastructure, beginning with the concept of a Space CCC—a Space Civilian Conservation Corps. We have a backlog of more than $100 billion of projects already authorized by the Army Corps of Engineers that could basically be initiated ‘the day after tomorrow.’ A Space CCC program can be immediately integrated with the projects and personnel of the Army Corps of Engineers.

Let me also mention some ‘soft’ infrastructure.

Healthcare: We’re going to need another 250,000 doctors; we’re going to need another 4,000 hospitals to bring the number of hospital beds back up to Hill-Burton standards, as they existed in the 1960s. We’re also going to need a million more skilled nurses. We have 3.8 million nurses now, and we’re going to need another million. Before Covid, they were already overworked! Simply supporting “Medicare for all” is not a solution; if there are not more doctors, more nurses, and more hospitals, we can’t provide the level of healthcare which we need in America. So we need to train them and to deploy them, and they will increase the productivityagainof our nation.

All of these efforts will pay back far more than they cost. They will retire the credit extended.

Finally I would close with the emphasis on utilizing national credit to finance crash science programs, which again goes back to Lyndon LaRouche’s 1985 paper. His letter to Albert Shanker and the United Federation of Teachers, among other papers he has written. A Moon/Mars program is absolutely required to galvanize the imaginations of the American people and particularly our young people. Combined with a Space CCC program and a national infrastructure program, a crash program in space and in fusion energy development is the spear point that will drive forward productive innovation, the spillovers in terms of new science and technology. We can thereby defendwe can securethe sovereignty of our nation, the sovereignty of our credit, the sovereignty of our manufacturing and productivity, and our future.