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ITillContents

Departments Economics

Photo and graphic credits: Cover, 14 Report from Rio 4 LaRouche warns: Abandon NASA. Pages 7, 19, 32 (Toffler) , Brazil responds to reality . the monetary Titanic 45, EIRNS/Stuart Lewis. Page 9, The myth of a "loan assassin" of EIRNAIBirgit Vitt. Page 32 15 Report from Bonn Barings Bank is pretty much (Russell), Library of Congress, About-face in the financial crash. buried. Will people now finally Prints and Photographs Division. admit that LaRouche was right, Page 33, EIRNS. Page 51, 52 Books Received while'they were wrong? Coordinaci6n de Material Gnifico. 6 WalJ Street's eyes are on Correction: The graph on our 53 Northern Flank Argentina cover last week should have been Sweden's new militant neutrality. labeled "World Annual Growth Rates, 1986-94." 64 Editorial 7 Italy at the crossroads: More sanity needed. Bar(ngs or LaRouche?

8 Deindustrialization takes toll in Germany The case of the city of Essen.

10 EPA's reformulated gasoline edicts begin to cause widespread revolt

12 Inside the cyclotron A report from the DESY research institute in Hamburg, Gennany.

13 Currency Rates

16 Business Briefs Volume22. Number 12. March 17. 1995

Feature International National

42 Collapse of Russia's 56 As GOP 'Contract' falters, economy reach� point of Kissinger jumps on board no return Gingrich and the former secretary Documents submitted to the of state deserve each other, since Russian State Duma by expert they serve the same interests of the working groups under the direction British oligarcby. of Sergei Glazyev provide shocking evidence of the nation's declining 58 Gingrich g�g attacks food physical output. stamp program Cosmonaut Valeriy V. Polyakov looks out of Russia's Mir space station during rendezvous operations with 44 the U.S. Space Shuttle Discovery on Feb. 6. 'We must shift from a 59 House POPUlists protect criminal to a ciVilized· Wall Street'speculators 18 Prospects for Russian economy,' Russians say The centerpiece of the new legal Deputies of the lower house of the economic reVival reformschemeds the "Attorney Russian Parliament, Adrian This memorandum by Lyndon H. Accountability Act," whereby the Puzanovsky and Nikolai Chukanov, LaRouche, Jr. was submitted to a loser of a civil Jawsuit pays the together with Gennadi Sklyar of the special hearing of the lower house legal fees of th� opposing party. Obshchestvennaya Palata, a of the Russian Parliament on Feb. government advisory body, visited 20, by representatives of the 60 Congressional Closeup Washington on invitation from the Schiller Institute. ''There exists no Schiller Institute. possible solution to this crisis, 62 National News either for Russia or for the world," writes LaRouche, "within the 50 Mexico: Jose Lopez Portillo bounds of the previously accepted takes the gloves off terms of dominant international Documentation: Selections from economic and financial the recent press interviews by institutions . " former President Jose LOpez Portillo.

54 International Intelligence I �TIillEconoDlics

LaRouchewarns: Abandon the monetaryTitani¢ by Anthony K. Wikrent

On Feb. 27, U.S. physical economist and presidential candi­ tax on financial transactions is "all overblown ....I think date Lyndon LaRouche declared that "with the Bank of people will weather it througq, and they won't change the England's announcement of the Barings bankruptcy, in Lon­ system at the end of this bad patch." don earlierthis morning, all major financialmarkets interna­ Some, such as U.S. Federal Reserve Chairman Alan tionally are braced for a major meltdown of derivatives and Greenspan, slyly used the chaos to advance their political related investments as the likely scenario for the period agendas. In testimony before the House Budget Committee through March 10. What has erupted over the past weekend on March 8, Greenspan linkejj the collapsing dollar to the is far worse than the famous U.S. stock-market panic of defeat of the Balanced Budge1 Amendment. Pointing to the 1987, and will have far more devastating, deep-going effects. futures markets, where dollar contracts did not decline until This crisis was not caused by some single, errant employee of just after the amendment was voted down, Greenspan de­ Barings' Singapore office;it is a new phase in the worsening, clared, "There was apparent ooncern in the international fi­ global, systemic collapse in the London-centered, worldwide nancial markets that something significantwas happeningto network of derivatives markets which began with the Orange our resolve with respect to coming to grips with the balanced County [California] and Mexico crises." budget issue." Within days, the world's monetary and financial system was beset by a "dollar crisis" so severe, that even currency The lunatics have taken over the asylum traders were screaming for government action. Following Then there was the establishment press. Not quite know­ threeconsecutive days of setting new record lows against the ing what to make of the collapse, the New York Times, in an deutschemark and the Japanese yen, the dollar fell to an all­ editorial entitled "Let It Drift, " declared that "no one knows" time postwar low of DM 1.345 and Y 88.7 on the morning why the dollar continues to slide, so intervening might do of March 8. Then, traders, suffering physical exhaustion, more harm than good. The Wall Street Journal began a front­ seized on a series of statements by officials around the page article, "This is getting serious-fast," and warnedof a world-no doubt hastily concerted in desperate secrecy­ "full-blown global currency crisis that will drag down stock for a temporary reprieve. and bond markets around the world, disrupt international But the miserable poltroons who have led the world into trade, and bring the economies of half a dozen countries to a this mess, who are still unwilling to face the reality of the grinding halt." Nick Knight of Nomura Securities was quoted cataclysm they have created, quickly put forward a panoply saying, "The thing is just madness. The lunatics have taken of rationales for the pandemonium enveloping the markets. over the asylum." First, there were those of Sir Christopher Jeremy Morse, Those directly involved illl the disorder appeared closer non-executive director of the Bank of England and former to panic. David Gilmore, a partnerin a New York City firm chairman of Lloyds Bank, who told a caller on March 8 named Foreign Exchange Analytics, told the Journalo/ Com­ that talk of a return to the gold standard, the reform of the merce on March 8 that the Group of Seven, scheduled to International Monetary Fund and World Bank, and even a meet in Halifax, Nova Scotia in June, "must find a way to

4 Economics EIR March 17, 1995 stabilize the financial markets because what we are living are Germany and Japan. They're in a relatively weakened with is unacceptable." Franc;oise Soares-Kemp, a senior state, but compare them to Britain. The British Isles are manager at the New York City officeof Credit Suisse, said, a complete garbage heap, a garbage heap which has been "The situation is out of hand, and unless we hear some noises produced by those policies of Margaret Thatcher, which are that the centralbanks are working together to save the dollar, the policies of Newt Gingrich and Phil Gramm ....If we there will be a meltdown of confidencein paper money." continue to tolerate the kind of thinking which these neo­ Robert D. Hormats, vice-chairman of Goldman Sachs, conservatives of the Mont Pelerin Society brood of chicks, told the New York Times, "This can only go on for so long. such as Gingrich's followers and Gramm's followers contin­ The U. S. cannot preserve the value of the dollar as a strong ue to push, there's no hopefor the U.S. or the U.S. economy. reserve asset and a strong transaction currency without mus­ "The essential thing to remember about this crisis is not tering a solid defense at these levels. We need the financial what's going to happen to money figures, or what's going to equivalent of Desert Storm, a coalition to defend the dollar." happen to this; it's all going to happen, buddy! . . . This crisis is going to continue to rock the .world through at least They were forewarned most of this month and beyond. Things are going to happen What about the one man who warned that it would hap­ which were considered unthinkable lin financial markets a pen? In an interview on March 8, LaRouche stated, "If you few weeks ago. It's inevitable, it cannotbe stopped, until the look at the world economy, you see that what is happening political institutions agree that they were wrong, and I was is that the British System is collapsing . . . at a time that right. there's a major war going on between London and Washing­ " ...There are things we can do, but they're not within ton, particularly between London and the Clinton adminis­ the existing rules of the game ....I'm afraid you've come tration. to that time when people are going to have to be put through "The crisis in Mexico and the crisis of Japanese invest­ an emotional wringer before they're willing to give up some ments by Barings and so forth , were in part colored by the of those stupid ideas which they support. . . . fact that the British are trying to run politicalwarfare through "What is required, is that a group of governments agree financial means, against the United States, the Clinton ad­ that the present shattered, disgustingly bankrupt international ministrationin particular. financial and monetary system, including the U. S. Federal "In that shot, Barings got stuck in Mexico, because the Reserve System, is bankrupt. And tlJIat it's the function of President of Mexico didn't tell Barings they were going to governmentsnow to put the existing central banking systems, do what they did. So Barings couldn't get its money out of including the Federal Reserve of the United States, and major Mexico, except at a loss. Barings was also involved mas­ financial markets, into a systematic bankruptcy reorganiza­ sively in Singapore, and no one has actually seen the bottom tion. Under those conditions, a group of nations can bring line on this one. This is not a couple of billion dollars they this crisis under control, using policies which Phil Gramm lost, they really are up to the wazooin this one .... would never tolerate, which Newt Gingrich would probably "So, you have the collapse of a financial system, which never tolerate. You've got to abandon, write off, your finan­ was inevitable, given the policies, and given the unwilling­ cial commitments, the policies you've been running under ness of Americans among others to come to their senses on recently. [Instead,] rely upon your t¢hnology, your indus­ this insane derivatives policy. But the complicating factor is try , your infrastructure development. But we're not going to that at the same time you've got three British monarchical solve our international financial proqlems, unless we get a banks. One has gone belly-up [Barings] and one is staggering group of nations together, to say, 'Let's get rid of this damn around like a chicken that has lost its head, S.G. Warburg . British System now!! Let's get away from the Adam Smith That's two out of the three banks, the third being Coutts, free trade lunacy system, and let's go back to production; which is out of National Westminster now. The British mon­ let's go back to the system which used 'to be called the Ameri­ archy banks are in trouble. can System. ' Anything else is going to the market to see what "You've got this derivatives crisis, which I warnedabout your loan rates are on buying a ticket for a better stateroom in 1992. And you saw how much attention I got from the on the sinking Titanic. voters and others in the political class, in warning, quite "You want to get out of the mess? You must give up the accurately, about this danger. things that are destroying you. You want to survive? Buddy, get offthe Titanic, and get in the lifeboats, and stop talking Will people admit LaRouche was right? about how to get a better stateroom. Get to the lifeboats: It's "Now the danger has hit. Are people willing to line up finished. and say to me, 'You were right, and we were wrong'? No. "And the sooner we're offthe Titanic-that is, the mone­ All right, until they're willing to do something which is tarist tradition of Thatcher and Gramm and Gingrich, and the tantamount to that, this crisis is going to become worse. Wall Street Journalcrowd-the sooner we have a chance of "The two strongestindustrialized economies in the world surviving. Until we do that, nothing counts."

EIR March 17, 1995 Economics 5 afloat and reportedly need another $2 billion over the next fe w weeks. Yet on March 8, Cavallo announced thereis only $200million leftin the bank safety net and urged the creation of a new trust fund that could serve as a "lender of last resort " Wall Street's eyes for banks.In two months, the n\lmberof banks in the country has dropped from 168to 14 1. areon Argentina What Cavallo doesn't want to admit is the likelihoodthat both the government and the ptivate sector won't be able to by Gerardo Teran Canal meet their foreign debt obligatiqns this year. The government must pay $1.7 billion on March 31, and there is $400million in maturing debt due on the sadieday by the private sector. "Argentina has been spotlighted by investors as the Latin American economy most likely to crack next," the Financial Chaos reigns Times of London warned on March 8. The Wall Street Jour­ The tenuousness of the situation is seen in what happened nal added on the same day that "investor fears that Argentina during the week of Feb. 26 to March4, when it appearedthat could face a financialmeltdown such as Mexico's have been everything was out of control. On Feb. 28, the stock market building for two weeks." As the country's markets gyrate, fell by over 7. 7%-bringing thf!year's drop to 40%. Interest and even shut down as the Buenos Aires stock market did rates hovered around 50% and, according to one business abruptly on March 7 after dropping 7.7%, international fi­ source, bankers were calling �p company executives and nancial observers are noting the country's severe liquidity offering interest rates as highi as 30% if those companies crisis, the drop in reserves by $3 billion this year, and grow­ would deposit their funds in the banks. By March 2, the ing capital flight. interbank lending rate known as "call money" had shot up to In question, they say, is whether the government's con­ 55%, Some companies had to pay as high as 90% interest for vertibility plan, which by law establishes a one-to-one parity 30-day loans needed to pay off debts first borrowed at less between the peso and the dollar, can survive under these than 30%. Credit is simply not available. circumstances (in order to prop up banks, the central bank On Friday, March 3, at 3:00p. m., the Buenos Aires stock has already taken steps which violate the plan's charter). market dropped by more than 18% and rumors flew through Secondarily, can President Carlos Menem, whose fate is tied the financialdistrict about the dpath of the convertibilityplan. to the success of the convertibility plan, be reelected in May, Reliable sources told this pr�s service that Cavallo even if the plan does not survive? had his plane tickets in hand and was prepared to leave the Wall Street analysts are also chewing their nails over the country, to takeup a new posit.on at the International Mone­ fact that Argentina has $9 billion in principal and interest tary Fund (IMF). Businessme� ran to withdraw funds from payments to meet this year. Can it pay? Not even the severe the banks based on the rumor tlhat the governmentwas plan­ austerity package announced by Finance Minister Domingo ning to do what it had done ip. 19 89 (also under Cavallo's Cavallo on Feb. 27, intended to raise an additional $3.5 supervision): freeze fixed-termdeposits and pay depositors billion in revenues, has inspired the required "investor con­ with dollar-denominated foreign debt bonds, Bonex, in order fidence"which Cavallo so frequently mentions. The default to inject liquidity into the ba�ing system. on $63 million in foreign debt by the Alto Parana, S.A .paper The day was only saved When at 3:05 p.m., the IMF company in late February fueled panic that more companies announced that it would allow fArgentinato access $420 mil­ will follow. lion in "undrawn resources" from a $3.7 billion loan it had The possibility that Argentina will be the next to fall is received three years ago. In ,addition to this, Menem an­ keenly perceived locally. On March 5, one of the country's· nounced that the World Banklwould also grant a $1 billion oldest and most prestigious newspapers, La Nacion, resorted loan for the reform of provinci!al banks. to the symbol first used by economist Lyndon LaRouche Euphoria returned only briefly. At the beginning of the when it published a picture of a sinking Titanic next to an following week, the markets dropped again. And now, the article entitled "Industry-Everything Is Shaking." The daily finance minister is singing ai somewhat different tune. In documented the dramatic collapse of Argentina's physical statements to the Congress on March 8, he warnedthat "reali­ economy and corresponding decline in consumer demand, ty is serious.. ..There is a cri�is in the internationalmarkets evidenced by a sharp drop in sales. which can worsen in the comjng hours.... We are living Cavallo and other governmentofficials describe the situa­ through extremely critical tim�s in which we could fall apart tion as a "crisis of confidence"by foreign and national invest­ in a very costly fashion and fiJildourselves at the bottom of a ors. Between Dec.20 and Feb.27, some $3.7 billion fledthe well out of which it would take a very long time to climb." domestic banking system- 7% of total assets. Banks have Admitting that Argentina mayinow face a recession, the min­ already used $1 billion of a safety net set up to keep banks ister demanded that "structural reform" be accelerated.

6 Economics EIR March 17, 1995 Italyat thecrossroads: Barings or LaRouche? by Liliana Celani

The alternative of the title was clearly posed at a conference organized by EIR and the Italian Movimento Solidarieta which took place on March 2 in Rome to present Lyndon LaRouche's evaluation of the present disintegration of the financial system and the possible solutions, as well as the Italian edition of his book The Science o/Christian Economy. Many among the diplomats , journalists, and industrialists attending the conference remembered very well a previous EIR conference which took place in Milan in June 1993, in which a total disaster for the lira and the Italian economy was forecast, unless the financialdisi ntegration due to derivatives Former Prime Minister Giulio Andreotti: His trial in Sicily is apparently aimed at eliminating Catholic politicians fr om any role speculation and the British plot to deindustrialize Italy with in government. privatizations, discussed at a secret summit on the royal yacht Britannia off the coast of Italy near Rome in June 1992, had been halted . deindustrialization. The case of Warburg is indicative: This "LaRouche was completely right then , and is completely is the bank which was financially strapped before Barings, right now in demanding a tax on derivatives, as the Barings and which in June 1992 organized the Britannia yacht sum­ collapse demonstrated to all of us," was the comment of mit. Warburg was assigned by the Ciampi government to many people attending, who remembered very well his pro­ privatize IMI, one of the main state banks at the top of the posal . "How can it be that we learn about derivatives and list of British asset stripping. No wonder that Merrill Lynch about all those great infrastructural projects being discussed would advise Italy to quickly privatize its pension funds (and in the European Union from EIR, and not from the daily maybe invest them in derivatives in Singapore?), and cut its press?" was one of the many questions posed. budget. In order to understand why this is the case, it was enough Amazing is the fact that there are still Italian political to watch the Italian news telecasts during those days. The leaders who not only ask them for advice, and follow it, but same day Barings was declared bankrupt, one of the three who even go to the City of London to take their marching main national news programs , TG3 , interviewed of all people orders , as was the case for the head of National Alliance, the head of Merrill Lynch in London, to ask him what Italy GianfrancoFini . Fini was in London on Feb . 14-15 to address should do to stop the collapse of the lira, which since the the Royal Institute for International Affairs, and have a pri­ British have been "advising" Italy, has been devalued by vate meeting with the Rothschild Bank. On Feb. 23, Lord almost 50%, falling from 700 liras to the German mark , to William Rees-Mogg, former adviser to Margaret Thatcher, 1,200 liras in the firstdays of March. endorsed Fini in a London Times commentary calling for an "Do you agree with the International Monetary Fund del­ Italy-Britain axis against Germany and France. As a senior egation which was in Rome today, that the only way to save Christian Democratic politician told EIR, "There is at present the Italian economy is to privatize the pension system too , a total disorientation in Italian politics. People believe that and to move the austerity budget of 1996 up to 1995?" was the Italian lira is collapsing for domestic reasons, because the question asked by the correspondent in Rome to Merrill they cannot see beyond their noses, and do not see the col­ Lynch. He obviously agreed , and denied that the Barings lapse of the financial system. Parties do not count any more: collapse had any implication at all for free market economics, They are all split internally around the question of whether or that any regulation would be necessary . there should be a left-wing government or a right-wing gov­ With such friends, Italy certainly needs no enemies, since ernment, although both have the same program, and it's the it is precisely the counsels of Merrill Lynch, Warburg , Leh­ City of London's." man Brothers , and Goldman Sachs which brought the Italian "After the Barings collapse you would expect to see Great lira to the level it is, and the Italian economy to the brink of Britain finally as the 'Naked England' [a pun on Goya's

EIR March 17, 1995 Economics 7 "Naked Maja"-ed.], since the cover of the Windsor monar­ chy is falling down, but on the contrary, people are so blind The Case of Essen and eager to make a career that they still believe in what they are told to do," he added. Inside the PPI, the Popular Party which replaced the Christian Democracy, there is a fight over whether the PPI Deindustriallization should join the so-called "moderate pole" led by former Prime Minister Silvio Berlusconi in the next national elec­ takesto llin Germany tions, expected when the Dini government falls, or join the "leftpole" led by Romano Prodi, former senior adviser to the by BirgitVitt Goldman Sachs investment house, who is pushing for a North American Free Trade Agreement-like free trade treaty, and promises to be more loyal to the City of London than Fini. Elections to the state parliamentiare coming up on May 14 in Also inside the PDS, which used to be the Communist the key German industrial state pfNorth Rhine-Westphalia, Party, people are very angry at the new secretary Massimo and the state's supremo, Gov. J

8 Economics EIR March 17, 1995 people active in industry. The total shrunk from 126,235 to 79 ,695 (down 36.9%). When we look at specificsectors , the operations of raw materials and goods producing firms lost 15,902 jobs, while in capital goods production, 12,294 work­ ers were laid off; in mining, 11,657; and in consumer goods producing firms, 6,824. The unemployment rates in Decem­ ber 1977 were at 6.4%, and they climbed continuously to 15.8% until 1987. They sank during the next five years to 10.4%, but since December 1992 they have climbed again . The drop in this figure was certainly a result of the short­ term positive effects of German reunification . In absolute numbers , we end up with a rise in joblessness of 107%, in other words, the region went from 22,240 unemployed in 1977 , to 46 ,064 in June 1993. The ratio between the number of jobless and the number of available jobs (to say nothing of the type of work) climbed from 6 to 19 per job. This observation must be seen together with population trends . The number of inhabitants of the Essen industrial­ In a protest against deindustrialization in the Rhine region, commercial district shrank during the period of the study by steelworkers "bury" German anthracite coal at a demonstration 4.9%, from 1,082,854 to 1,030,256. This would be an even in Bonn in 1993. more negative statistic except for the shift after the fall of the Iron Curtain. Even here, the Essen IHK district, in compari­ the whole period of the Rau state administration's so-called son with the Ruhr (-0.3%), the whole state of North Rhine­ restructuring policy. Westphal ia ( + 3 . 8 % ), and the states of the former West Ger­ many as a whole (+6.4%), is much worse off. Developments since 1977 Energy demand sank by 43.2%. According to studies, The figures for the Essen industrial-commercial district the reason for this is better energy utilization, changes in can be compared with the trends in the same timeframe in structural processes, the shutdown of operations or sectors , the nearby Ruhr region; in the state to which both districts and conservation measures. The lion's share of it, however, belong-North Rhine-Westphalia; and in the German Feder­ is due to decreased production of coal and coke, because al Republic as a whole. By and large, the Essen district comes among others , Thyssen ceased its steel production in Ober­ out the worse in all these comparisons. hausen. At the outset of the period studied, more than 50% of the The inferences which are drawn from these trends in the official workforce (those who pay into the social insurance Chamber of Industry and Commerce study show clearly what system) were active in the sectors of energy , mining, indus­ the problem of economic policy is in Germany. Above all, try , and construction. In 1992, this "blue collar" ratio had they lack any broader vision for economic development out fallen to 39.3%. The service sector had increased its job beyond the state borders of North Rhine-Westphalia or the offerings in the "general services"-which includes, for ex­ Federal Republic of Germany. Since they stay within the ample, tax consultants, lawyers, medicine (+45 .7%), credit existing fr'lmework of thinking, what comes out is a mixed institutions and insurance (+25 .7%), as well as the public bag of good and bad proposals. Thus the proposals range and semi-public sector (+27.6%). For the individual cities from seizing onto the environmental market as the motor for the following shiftoccurred: In Essen in 1977, some 53.7% growth , to more useful ideas such as strengthening small and were active in services, but in 1992 this climbed to 64 .1%. medium-sized businesses, setting up job retraining pro­ In Miihlheimin 1977 , some 57% were active in production, grams , reducing environmental taxes, and improving the and 15 years later, 9% fe wer. In Oberhausen, 63% of the transportation grid. active workforce was employed in productive industry in The fact is, as long as the basic principles of physical 1977 , and by 1992, only 46% . This trend is also manifested economy are not scrutinized, and first and foremost, as long in the gross production of goods. In Essen, the share of the as there is no clearheaded analysis of the scissors relationship producing industries in the gross product stood at 38%, in between production and financial development which cur­ Miihlheim42% , and in Oberhausen 38%. In the Ruhr region rently prevails internationally, and also in Germany and it was 41%, in North Rhine-Westphalia 43%, and in the North Rhine-Westphalia, the spokesmen for the economy, Federal District (around Bonn), 42%. The Essen IHK District the political parties, and other social organizations will not therefore gets the worst of the comparison. be able to put forward any proposals which will lead to the This , of course, has also had its impact on the number of solution of the crisis and the elimination of joblessness.

EIR March 17, 1995 Economics 9 EPA's reformulated gasoline edicts beginning to cause widespre

I On Feb. 24 , the U.S. Environmental Protection Agency anol-derived) additive. In .ny event, Administrator (EPA), in the face of growing opposition to its mandated use Browner, along with the MTB� and ETBE producers, de­ of "reformulated" gasoline (RFG) during the winter months fended these additives, and gav� Governor Thompson less­ in the nine smoggiest urban areas of the United States, re­ than-satisfactory answers to th� health concerns he raised. leased Milwaukee and its urban area from the requirement, Meanwhile, the governor has state officials examining the and is allowing the sale of non-reformulated gasoline there. health complaints, and the atmosphere around the governor's Wisconsin Gov. Tommy G. Thompson (R) wrote a letter mansion is less than friendly toward the EPA. on Feb. 10 to EPA Administrator Caroline M. Browner de­ Additionally, the traditional petroleum refiners com­ manding that the program be suspended throughout the state. plain, with justification,of the �normous direct and indirect Thompson himself was feeling the political heat from the subsidies which the ethanol prooucers have been given by many thousands of phone calls and letters that have poured the federal government (and to some degree by many state into the state capital of Madison since the program began on governments),going all the way back to the Carteradminis­ Jan. 1 this year. tration. More and more motorists in other regions of the country are also making their voices heard. Even before the national What are RFGs? program officially began on Jan. 1, several regions in Penn­ The latest variations of the; reformulated gasoline pro­ sylvania and New York that had previously volunteered to gram emanating from the Environmental Protection Agency be included in the EPA plan opted out, afterofficials no doubt have come in response to the r�quirements of the Amended sensed the building ire of their citizens. Clean Air Act of 1990 to reduce pollution. Generally, the Complaints about RFGs run the gamut from higher pric­ current attempts to provide a clelilner-burninggasoline consist es, reduced mileage, and noxious fumes to rough-running of formulating a liquid fuel containing more oxygen-bearing and/or ruined engines.Many, if not all, of the complaints are molecules. The feedstocks ofi such molecules have been probably true.For example, although EPA officialssaid that methane gas (a molecule of whi!ch contains one carbonatom the price increase of gasoline at the pump, due to reformulat­ and four hydrogen atoms bond� to it), which comes mainly ing, should be between 3 and 6¢ per gallon, a spokesman for fro� oil and gas wells in the Earth, and ethanol (a molecule Governor Thompson said in February that price increases in of which contains two carbon atoms, six hydrogen atoms, Wisconsin have been as high as 17¢ a gallon. and one oxygen atom), a liquid, Ethanol is the same as ethyl Another complaint, that the RFGs cause reduced mile­ alcohol, the ingredient of alcoholic beverages, and com fer­ age, is admitted to be true by all sides, because it is simply a mentation is the primary source for fuels. matter of the chemistry involved. Supplying some of the Methane is used to produce methyl tertiary butyl ether, oxygen for combustion from within the molecule, as is the an oxygenated additive. The petroleum refiners have pro­ case with two RFG additives, methyl tertiary butyl ether posed this additive, and over the1course of the last decade they (MTBE) and ethyl tertiary butyl ether (ETBE), rather than have invested many billions of cilollarstoward its production, from ambient air, necessarily reduces the latent heat content costs which show up at the pump in higher prices. within the substance. The oxygen within the molecule replac­ es a combustible, such as carbon or hydrogen, resulting in Archer Daniels Midland! gets into the act reduced mileage per unit volume, or "less bang for the buck." But another part of the EPA program is its longstanding Many in Wisconsin have complained of nausea, dizzi­ and mindless promotion of so-¢alled renewable energy, and ness, and headaches from the RFG fumes, which may be from that springs the schemes to use ethanol and ethanol either from MTBE (methane-derived) additive or ETBE (eth- derivatives. And behind the scenes there have been several

10 Economics EIR March 17, 1995 decades of untrammeled skullduggery and unabashed lies, as bloc 'carpetbaggers' to plan out a scheme for sending U.S. we shall see. government-subsidized grain to the Soviet Union in return In December 1993, the EPA issued a proposed regulation for the delivery of hundreds of thousands of Soviet Jews to which mandated that for calendar year 1995, some 15%­ Israel. and rising to 30% for subsequent years--of the oxygen con­ "With these kinds of friends and ¢redentials, it's no won­ tent of reformulated gasoline must be provided from ethanol der that Andreas has systematically poured enormous or its derivative ethyl tertiary butyl ether. This proposal was amounts of money into both major nolitical parties over the set in stone in June 1994, when the EPA filed its final ruling. past decade to insure that his 'intetests'-like the ethanol In response, on July 13, 1994, the American Petroleum scheme-are protected no matter which political partywinds (API) and the National Petroleum Refiners Association up on top at any given moment." (NPRA) issued a press release announcing the immediate Finally, on Feb. 16, 1995, the three-judge panel at the filing of a lawsuit in the U.S. appeals court in the District of federal appeals court began hearing oral arguments on the Columbia, asking the court to set aside that part of the EPA API/NPRA lawsuit against the EPA. The judges were ex­ ruling mandating the increased use of ethanol and its deriva­ tremely skeptical of the arguments Qfthe EPA's representa­ tives in making reformulated gasoline (arguing that the Envi­ tives in favor of expanded use of "reQewable"energy sources ronmental Protection Agency had no statutory authority un­ (ethanol and ETBE). Judge David Sentelle questioned the der the Amended Clean Air Act to dictate the type of rationale behind therequirement to raise the ethanol additive oxygenated fuel to be used), and therefore seeking a stay to to 30% from 1996 on and was given;no satisfactory answer. stop implementation of the mandate. Judge Stephen F. Williams was quoted as saying, "It seems In the joint press release, NPRA President Urvan R. Sten­ to me EPA is in outer space." fels said, "We are confident the court will see the justice of However, nothing was decided except to continue the our position, and will bar hijacking the taxpayers' highway stay, and a finaldecision is not expe¢ted for several months. construction and transportation funds for a political pay­ back." API President Charles J. DiBona was equally outspo­ Malthusian twins: EPA and Dept. of Energy ken: "The clear winner from the mandate is a single corpora­ Disregarding for the moment the pernicious operations tion, Archer Daniels Midland. ADM controls two-thirds of of Dwayne Andreas and his grain carteland organized crime­ U.S. ethanol production-and ADM would receive more linked cronies, we find the malthusian ideology deeply em­ than half of the money generated by this decision. " He contin­ bedded in the two federal agencies most relevant to the RFGs ued: "It really amounts to . . . an outrageous forced transfer scheme: the Department of Energy and the Environmental of hundreds of millions of dollars each year from consumers Protection Agency. The policies of these two agencies inter­ and taxpayers to ADM, with absolutely no environmental twine so as to ensure decreasing energy availability and in justification." the name of "protecting the environqtent." In September 1994, the court issued the stay and set The Department of Energy camt1into being in the 1970s further hearings for this year. largely as a result of the contrived Middle East "oil crises" There is a strong stench from the promotion of ethanol as orchestrated by Henry Kissinger aM his controllers. The the primary RFG additive, which cries out for investigation. department's ostensible purposewas to develop and increase This author shed some light on the ADM and the ethanol domestic energy supplies with the u�imate aim of achieving hoax in an article for the weekly newspaper New Federalist, "energy independence." on Jan. 23, headlined "Andreas and the Gasohol Fraud: Mil­ The crisis-however contrived--:-provided an ideal op­ lion$ Hijacked from Taxpayer": portunity to commit the nation to a growth-oriented, nuclear­ "ADM is the personal fiefdom of former Cargill grain based energy policy. However, the opposite course was cartel executive Dwayne Andreas, a political heavyweight struck, and we now reap the whirlwind. Two simple examples with longstanding ties to the organized crime-linked Anti­ serve to illustrate the point: The United States now imports Defamation League of B'nai B'rith. In congressional testi­ more of its oil supplies (in gross tonnage and percent) than it mony in the late 1980s, Andreas described himself as the did before the creation of the Deparllment of Energy. At the devoted political protege of former ADL National Director same time, domestic oil and gas exPloration and production Ben Epstein, a member of the ADL's 'Minnesota Mafia'that are withering. In the northeast Unite4 States, electrical utilit­ sponsored money launderer Robert Vesco's entry into the ies which were, in the 1970s, judiciously adding nuclearpow­ world of offshore finance and was intimately tied to the er plants to meet demand, have long since abandoned that Meyer Lansky National Crime Syndicate. course. Instead, we see the spectacle of them buying signifi­ "Andreas was described in the late 1980s by the Wall cant amounts of electricity from Cap.adian sources. And of Street Journal as Mikhail Gorbachov's 'closest pal in the course, the nuclear-power plant-manufacturing capabilities West' after he held a meeting with Seagrams Corp. chairman of Westinghouse, General Electric; and General Atomics and ADL moneybags Edgar Bronfman and several other East have likewise withered. Some "energy independence"!

EIR March 17, 1995 Economics 11 Inside the cyclotron

Anno Hellenbroich reports on DESY, one qfthe worlds biggest cyclotron installations, operating in Hamburg, Germany.

I During the winter months, maintenance work is carried out are constituted? What are the _oms that make up our exis­ at the major research institute called DESY, Deutsches Elek­ tence? What are the laws accordlng to which they are formed, tronen-Synchrotron, located in Hamburg, Germany. This of­ change, and then fall apart again?" asks the 1993 DESY fers a favorable opportunity for the visitor to climb down annual report. Lines of research with similar experimental even to the heart of this installation, into the over-6. 3 kilome­ objectives are being pursued iI) six other institutions in the ter-long elementary particle accelerator 30 meters below United States, England, Russia, Japan and in the European ground. Center for Nuclear Research (OERN, the European Union's This part of the cyclotron, which was 90% federally fund­ nuclear research center) in Geneva. ed, first came on line in 1992. This is the only place in the whole world where electrons and protons are accelerated al­ Synchrotron light: I most to the speed of light and 30 billion electron volts (Be V) fascinating 'supermicroscope' of energy and more, shot against each other and collided. With With the development of DESY (founded in 1959), the detectors and complicated methods of evaluation, it is hoped exploitation of certain properti�s of an energetic electron led that the subatomic structures of the components of matter as to quite new research results: iIf an accelerated electron is we know it and the interacting forces inside protons and elec­ forced onto a curved path, it radiates energy. Since this light, trons can be better known and better demonstrated. "synchrotronlight, " has a very broad spectrum-frominfra­ Above all, it is startling to learn that with one hand, one red, below visible light up to gamma rays-i.e., stretched can almost put one's arms around the electron storage ring; over 30 octaves of the wave-length spectrumand bunched up powerful energies are packed into such a small space. The like a laser, this light can be employed as a research tool in proton storage ring, which runs its course above the circular surface physics, chemistry, molecular biology, crystallogra­ electron path, is considerably thicker, because a good deal phy, medicine, and geophysios. For this reason, recently, more energy is needed for the acceleration of particles 2,000 one of the earlier smaller ring accelerators, DORIS ill, has times heavier. Superconductivity is used for the sake of econ­ been converted to the productibn synchrotron light. Thirty­ omy. If the electromagnets could be cooled down all the nine workstations have now })qen set up in this second sup­ way to absolute zero, then current could flow through them porting leg of DESY, the HAStrLAB. More than 900 scien­ without loss, so that one would only need the initial current. tists from 23 countries are at work in the most diverse Hence, in the only European experiment on this scale, the branches of research. proton storage rings and the electromagnets have been cooled As theDESY annual report, mpressively documents, new with helium as the refrigerant to -269°C, or 4° above abso­ insights have just been gained into cell organelle and cell lute zero. The electrons are accelerated from 12 to 30 BeV membrane research. Since the electronsfly around in "cloud and the protons from40 to 820 BeV. packets," the million flashes per second can also be used So that the electron and proton beams will not be contami­ for slow-motion snapshots, an10utstanding means for better nated by air molecules, 2,000vacuum pumps are in operation grasping processes of change" Thus, a Max Planck group to achieve the most disturbance-free possible cycle of the working on ribosome structure�nder the leadership of Israeli tiny "electron clouds." Prof. Ada Yonath is achieving:decisive progress in the geo­ This, then, is the "great experimental apparatus," the metric and functional constru¢tion of ribosomes. Here the supermicroscope, with the help of which more than 1,000 scientists are seeing paths to kIlowledgewhich, for example, scientists from 17 countries are investigating the structure of can lead to the production of �ffective antibiotics or to the matter. "After all, what affects the existence of man more retarding of undesired protein production in cancer cells. than the question of the origin of matter, from which not only Since the reunificationof Germany, DESY has drawn the the world around him, but also all living things and he himself High Energy Physics Institute qf the former East Germany in

12 Economics EIR March 17, 1995 Zeuthen into collaboration. Among the fruits of the growing scientificrelations with the former Soviet Union is collabora­ urre tion on an international research project into cosmic back­ C ncyRates ground radiation in Siberia, among others. At the bottom of Lake Baikal, at a depth of 1,300 meters, neutrino detectors The dollar in deutschemarks (collectively a "neutrino telescope") were installed, with New York lateafte rnoon fixing whose help it is hoped to obtain the signatures of neutrinos, I which are very difficult to detect in space. 1.70

i Strengthening basic research 1.60

We hope that the public will show more interest in the - I.SO -"'- progress of this basic research. The more so since it is precise­ ...... ,.;;: -, ly in collaboration and openness of interchange of scientific 1.40 discoveries (there is obligatorypublication) with guest scien­ : tists of other nations that a model will be created of how 1.30 mankind should jointly explore the decisive issues for the 1118 1/Z5 211 2115' 311 future that confront man and nature. This is credibly report­ ed, at least, in the DESY annual report. That this no longer The dollar in yen New Yorklate afternoon fixing can be taken for granted, one can see in the repeated concern in the DESY annual report to justify basic research and the 1� funding it requires (250 million marks a year).

Afterthe enumeration of various possibilities for applica­ 120 I tions in medicine and technology, under the title " An Essen­ I tial Element of the Human Quest," the report reads: "All 110 I these arguments ought not, however, to conceal from view tOO that the essential motivation for elementary particle research - lies in the desire and thecuriosity to understand nature. Were 90 : one to seek to measure the value of this knowledge-oriented � l/ZS research only by its practical uses, and only orient oneself 1118 211 2115' 311 to that, an essential element of the human quest would be The British pound in dollars ' excluded, an essential element of that which ultimately con­ New York late afternoon fixing stitutes man. The effort to penetrate the secrets of nature for their own sake is a tradition which, after being cautiously 1.80 founded in antiquity, has powerfully and continuously ad­ I vanced, from generation to generation, since the Renais­ 1.70 sance. We are confident that even the discoveries which we , 1.60 are today achieving will one day belong to the self-evident - """"'- - wealth of thought and knowledge of mankind, even if today I.SO they appear occasionally abstract and not so easily accessi­ ble." (DESY Annual Report p. 12.) 1.40 One hopes that the newly created technology adviser to 1/18 1/Z5 211 2115, 2122 311 the Federal Chancellor will not follow so much the fruitless pragmatist spirit of the times (the ozone hole issue, etc.) The dollar in Swiss francs New York late afternoonfixing or implement downright punitive malthusian obstructionism (the ban on the HTR nuclear reactors, for example), but I.SO rather will make it possible for researchers to answer the truly fundamental questions of our future existence. For example, 1.40 the "cold fusion" phenomena which have been rejected by established science give a totally different insight into the 1.30 --..... play of forces of atomic and molecular interactions, than the '- experiments based on the generally accepted standard models 1.20 - can ever show. I It is probably also no accident that the DESY scientists 1.10 have founded a very successful chamber orchestra. 1/18 1/Z5 211 2115 2122 311 318

EIR March 17, 1995 Economics 13 Reportfr om Rio by Geraldo Lino

Brazil responds to reality fim Netto defined derivatives as "a Fear of a Mexican-style crisis has provoked a shift even on the monster, something like an abstract part of some dyed-in-the-wool monetarists . and mutan� virus," and pointed to the bankruptcies of Orange County, California lj.nd Barings Bank as the result of e�cessive speculation with these inst�ments. "People are in­ The recent shocks delivered to the speculators' interest, it is dangling the duced to thijnk that there is a supreme international financial system are possibility of privatizing the Compan­ entity call� the market, described causing those Brazilians who had al­ hfa Vale do Rio Doce, owner of the 200 years ago by Adam Smith, " he lowed themselves to be seduced by world's largest iron ore reserves at added, and · warned that "the market "neo-liberal" free-trade economics to Serra dos Carajas in the Amazon. The needs natiol:tal regulation. It needs a wake up to harsh reality. Even Presi­ overall privatization program will also strong state ." dent Fernando Henrique Cardoso has be accelerated in tandem with efforts However, the editorial in the Feb­ been forced to recognize the gravity to pass constitutional amendments in ruary issue I of Ombro a Ombro, the of the crisis and impleme nt what his the Congress to eliminate state mo­ newspaper Iwhich circulates among advisers euphemistically call "correc­ nopolies in the energy, telecommuni­ the Armed forces, better reflects the tions" to the Real Plan, in an attempt cations, and oil sectors. views of those who seek a radical , to avoid the type of crisis which hit Recent developments have also positive ch�nge in the financial sys­ Mexico last December and now provoked an intense debate on the tem. "MexiFo's financial crisis was a threatens Argentina. highly speculative character of the stark demohstration of the failure of On March 6, afterthree months of world financial system, bringing im­ the neo-liberal model which has been trade deficits and capital flight which portant sectors of the local establish­ popularize4 among the developing na­ caused a $3 billion drop in foreign re­ ment into a discussion which just a tions and adopted by their credulous serves, the government was forced to few months ago was limited to iso­ or subservitnt elites as the 'last word' implement a "phased" devaluation of lated nationalist groupings. As some in economi¢ policy," the editorial stat­ the national currency, the real, dan­ in these circles fear that a deepening ed. Theref(J)re, "the results obtained gerously overvalued by an estimated crisis will lead to a general ques­ show that t/le neo-liberal model, and 30% . By adopting a system of "fluc­ tioning of the globalist, neo-liberal by extensi

14 Economics EIR March 17, 1995 Reportfr om Bonn by RainerApel

About-face in the financial crash The fatal flaw of all these propos­ German bankers are nervous after the Barings collapse, but als, including Issing's, is that they keep the grand illusion that by con­ most want to keep patching up the system. taining or regulating one of the bigger phenomena, one can bring the whole disease under control. Fortunately, there were some T he collapse of Britain's Barings tailed reports, and timelines on what voices that were more skeptical about Bank underlines that the growth of "these derivatives" are, where they the options to repair the system from volatile speculative derivatives has come from, and the risks. The term within. The Die Woche weekly wrote reached such a scale that the world "derivatives" became a household on March3 that the Barings case illus­ financial system is threatened, which word within two or three days. The trated, once again, how far the world means that decisive action has to be media also used the term "casino" to financial system has slid, that more taken to draw a clear line around the depict the practices of traders like Bar­ spectacular defaults are certain, be­ speculators and cut their influence ings Bank's Nicholas Leeson. The cause the world economy has been over the derivatives market down to daily Die Welt even wrote on Feb. 28 taken hostage by � "giant, $35 billion zero. This is what Otmar Issing, mem­ that "gambling at the casino is even steamroller" wreaking havoc around ber of the German central bank direc­ safer than speculating in derivatives." the globe .. torate, said in an interview March 3 The Franlifurter Rundschau, an­ There can lle no remedy, Die with the Bavarian radio station, which other of Germany's leading dailies, Woche wrote, unless the system as a was then picked up nationally by wrote on Feb. 28 that the case of Bar­ whole, not just the derivatives aspect, many other media. ings proved that if a "real bank" (as op­ is brought under control. This view Coming from a senior banker who posed to "non-banks") can go under, was also reflected in an analysis pub­ before March 3 had earnedthe dubious thenthere are weak points in the world lished by the Swiss Neue Zurcher Zei­ distinction of denying any such "sys­ monetary and banking system of deriv­ tung daily on March 6, saying that it temic risk," this interview marked a atives trading as a whole: 'The finan­ is time to get prepared for "worst case dramatic shiftin the public debate here cial revolution is eating its own scenarios"-whi¢h implied the col­ about money market policies and her­ children." lapse of not just one big bank, but of alded the spread of the "about-face" Finance Minister Theodor Waigel the entire world financial system. phenomenon in Germany. chose to give interviews at least once Handelsblatt,' Germany'snational For example, in September 1993, daily, saying he ruled out categorical­ business daily, wrote on March 7 that Mrs. Ingrid Matthaus-Maier, finan­ ly that "anything like that could hap­ given the profound transformation of cial and budget spokeswoman of the pen in Germany." But there have al­ the world financial system over the opposition Social Democrats (SPD) in ready been big defaults in Germany, past 10 years, a single action to con­ the German parliament, in a discus­ like the spectacular DM 2 billion loss tain derivatives would have to fail. If sion with an EIR representative at the in oil derivatives which the U.S. one left the entire system as such un­ SPD's national convention, vehe­ branch of Metallgesellschaft reported touched, the only remedy left, the dai­ mently rejected having a debate in in early 1994. ly wrote sarcastically, would be to Germany like the one that then-U.S. By the end of the first week after make stickers warning investors that House Banking Committee Chairman the Barings affair, calls for emergency "the finance minister warns that trade Henry Gonzalez (D-Tex.) had started regulations on the financial markets with this bank is hazardous to your over derivatives and the state of the and taxation on derivatives could be financial health." world monetary system last year. heard almost everywhere. In an un­ These more realistic views pose Now, one day after the news of the precedented two-hour live radio spe­ the question of finallystarting a serious collapse of Barings Bank broke, she cial on Germany's national DLR pro­ debate about proposals which Lyndon was among the first to call for emer­ gram, on March 3, even the moderator LaRouche has made. Almost 20 years gency action against these "highly of the show posed the "question, as have passed since he called for an "In­ dangerous" financialinstruments. The kind of a trial balloon, whether one ternational DevelppmentBank" and a media broke a longtime taboo and pre­ shouldn't just ban derivatives alto­ new world economic system, at a sented their audiences with charts, de- gether." Bonn press briefi�g in April 1975.

EIR March 17, 1995 Economics 15 BusinessBrief s

I Energy hopes to reduce average spacecraft cost from tially different." $590million to $200 millionand average de­ "Itis mtpossible [for the space program] California utility plan velopment time from eight to four years, and to live on � basis of month-to-month financ­ more found to violate law to increase the number of missions per year ing," Koptev stressed,"the so when this fromtwo to eight. How much science research has to bepleJtded for ." He stated that "the gov­ can be conducted in these "faster, better, ernment meetingtoday has shown thatthere is The Federal Energy Regulatory Commis­ cheaper" spacecraft remainsto be seen, but it some undeJ1tanding. Nobodydenied the need sion (FERC) ruled on Feb. 22 that the Cali­ is hoped that more frequent missions will bal­ to pursue th¢se activities. But so far there isno fornia Public Utilities Commission (PUC) ance the fact thateach is less capable thanthe sense that space activities should be anational violated federal law in rulingto compelelec­ Viking, Voyager, MarsObserver, and Galileo priority, an4there have been nopractical steps tric utilities to purchase powerat rates above spacecraft. to back it u� financiallyand by creatingfavor­ their "avoided cost," that is, if the power Other Discovery missions underway in­ able [economic] conditions" for industry. were purchased at a cheaper rate from out­ clude the Mars Pathfinder, which will launch On Fe�j 23, Koptev testified before the side or generated by the utility itself, Mining in November 1996 and land on Mars in July Duma (par�ament), and warnedthat the Rus­ Week reported in late February . The decision 1997, and the Near Earth Asteroid Rendez­ sian space program could collapse within a sets back a plan which would destroy the vous, which will orbit the asteroidEros in Jan­ matter of mPnths unless there is a substantial electric grid system, by forcing utilities to uary 1999. NASA has requested$10 3.8 mil­ increase in funding. Yuri Semenov, chief of buy power from uneconomical, non-utility lion for the Discovery Programin the FY 96 the mannedlspaceprogram run by RKKEner­ "renewable" resource producers. budget, comparedto $129 million for FY 95 , gia, stated �t the current crew will beevacu­ FERC stated that the PUC had not con­ but it hopes to add a second series of small ated fromt4e Mir space station because there sidered all potential sources of electric ca­ planetary spacecraft in its New Millennium is not enou� money for supplies. Koptev and pacity. In their petition to intervene, Western Spacecraftpro ject. Semenov b1>th said that the scheduled March Fuels and the National Coal Association 14 Soyuz rendezvouswith Mir,in which U.S. pointed out the availability of coal-fired ca­ astronaut � Thagard is to participate, is pacity at 3¢ per kilowatt-hour. The PUC or­ now injeoWudy. der had artificially iIiflatedthis to as high as Russia 6.6¢ per kilowatt-hour, by adding in super­ fluous"environmental costs," increasing the Space agency faces rate consumers would have to pay , so that Health more expensive "renewables" would be severe problems "competitive." The PUC had limited the bid­ Hope for vaccine ding on new capacity to what are called Russian Space Agency head YuriKoptev out­ rises "qualifying facilities," meaning non-utility lined the severeproblems faced by theRussian agains� tuberculosis companies. spaceprogram,andreportedon ameeting with I government officials to tryto keep the civilian Researcher$ at the University of Californiaat space effort alive, in a press conference in Los Angel" Schoolof Medicine, led by Mar­ Moscow on March 2. Koptev said that the cus A. Horpwitz, say they have successfully Space agency was given only atokenamountoffunds tested a va

16 Economics ElK March 17, 1995 Brilifly

• GAMBLIlNG at the casino is saf­ er than specul�tingin derivatives, the German daily Die Welt wrote in an editorial on Feb. 28 on the collapse of lost were "all those who borrowed short-term Real Estate Barings bank; The daily Frankfurter money and bought long-term." Rundschau editorialized, "The fi­ "Itis like a depth charge: First the small Crisis in France nancial revoh.tion is eating its own fish, then the big ones come up dead to the children." is intensifying surface," Leuschel said. "We are starting to see the deadbig fish." When asked if War burg • J.P. MOItGANand CO.'s credit is next, he said, "IfI knew, I would bemaking French banks have accumulated about FF 200 rating has beeh downgraded by Stan­ a lot of money. Remember, all crashes come billion in realestate loans, relatedto realestate, dard and podrs from AAA to AA, suddenly." It is a bubble like many in history, and 90% of them are bad loans, the French because of Mbrgan's increasing reli­ and "bubbles grow and collapse." The main daily LeFigaro reported on March 1. ,ance on derivatives and proprietary cause of the bubble is the U. S. Federal Re­ Over 1986-91, the amount of credit to trading,the Feb. 28 Wall Street Jour­ serve's "easy money" policy of the last year, real estate promoters increased from FF 18 nal reported. The triple-A rating is which hasallowed speculatorsto borrow mon­ billion to FF 175 billion. Since 1991 , French particularlyimportant for derivatives ey at almost zero cost. When asked if it is like banks and insurance companies have suf­ dealers. fered from real estate losses worth $19 bil­ 1929, when peopleborrowed money to play the stockmark et, Leuschel said, "It is, but it lion, and they are now facing another $12- • ZAMBIA Consolidated Copper is you who has said that." 13 billion in losses. According to the French Mines, whose nationalization in 1974 weekly L' Evenement du Jeudi, the bad real symbolized Zambia's independence, estate loans on the books of Credit Lyonnais will besold, Mssibly to theSouth Afri­ are farbeyond the roughly $6.25 billion ac­ can giant Anglo-American, from knowledged so far . The bad loans of other whom it was I)riginally taken, as part banks include BNP (FF 32 billion), Paribas Medicine of an economi¢ reform package. Some (FF 26 billion), Suez (FF 25 billion), Credit 90% of Zambia's export earnings Agricole (FF 24 billion), Societe Generale First artificial come from th� mines; unions had al­ (FF 23 billion), and Comptoir des Entrepre­ kidney developed ready agreed to a 1O,OOO-man cut in neurs (FF 11 billion). the 55,OOO-manworkforc e. On Feb. 28, the "flagship French finan­ cial services and investment group," Suez, U. S. physician David Hume has developedthe • THE RUSSIAN parliament has reported losses for 1994 of FF 4.7 billion. first artificial kidney, SAD news service re­ excluded tourists from an obligation Suez shares were suspended from trading on portedon March2. Itcombines the functioning to have an AIDS test before entering the Paris stock exchange. of living tissue and technology. If it works in the country. :Only foreigners who humans, it will help millions of people who stay longer than three months must are suffering with severe dysfunction of the prove that they are HIY -negative. kidneys, many of whom must have dialysis Diplomatic personnel are not affect­ Economic Policy treatment several times a week, and whose ed by the law, which is expected to only hope has beenfor a donor kidney. take effect in August 1995. Crash is coming in bits According tothe SAD report, Hume was able to breed cells of the so-called "proximal • BRITISH' municipalities are and pieces, says Leuschel tubule" in his laboratory, which play a crucial fleeingout of �l merchant banks after rolein the kidney. His artificial kidneyconsists the Barings coUapse, according to in­ "Get Ready, the Crash Is Coming in Bits and of many tiny tubules , which the blood floats formedrepo rt$. "This, if it escalates, Pieces," was the headline of a front-pagearti­ through, and which are covered with cells, could erode �e capital base of the cle in the Italian Catholic daily A vvenire on which also cover the inner walls of human entire British merchant banking sys­ Feb. 28, an interview with Roland Leuschel, bloodvessels in orderto preventclotting. This tem," one soutce said. head of BelgianBanque BruxellesLambert. first filteris linked to a second system, which 'TheBarings bank is thefinancial heart of contains millions of kidney cells. • THE AF$HAN Red Crescent the British Empire. A battleshipis sunk. Is the Inthe coming sixmont hs, Hume will test Society is fighpng a tuberculosis epi­ crash coming?" the paper asked. Leuschel re­ furthermaterials for his filtertubu les, and then demic that aff�cts up to 80% of fami­ ponded, "It is not like in 1929, it is rather a he wants to starttests on humans, firstoutside lies in rural ateas. One official said salami crash. Firstwas the [Germany's] Met­ the bodyin combination with a normaldialysis that poverty, �or diet, and a short­ allgesellschaft, whichcrashed because of de­ machine. If this experiment goes well, he age of medicipe are contributing to rivatives specUlation. Then Orange County, wants his "kidney" to take over entirely the the high rate. JIn 1994 alone, 720,000 [California] , forthe same reason, then Mexi­ work of the dialysis machine, and if this func­ patients were treated, twice the total co." Leuschel estimatedthat $3.5 trillionhas tions, thebio-artificial organ will beimplanted for 1993. beenlost in the bondmarket sofar. Those who into a volunteer.

EIR March 17, 1995 Economics 17 TIillFeature

Prospects for Russian economic revival by Lyndon H. LaRouche. Jr.

This "Memorandum to Professor Taras Muranivsky" was presented by represen­ tatives of Mr. LaRouche and the Schiller Institute to a special hearing of the lower house of the Russian Parliament, the State Duma, on Feb. 20, convened to discuss measures to prevent the disintegration of Russia's (!conomy. Oral presentations were also made to the parliamentarians by Dr. Jonatfl,anTennenbaum and Schiller Institute Moscow representative Dr. Taras Muranivsky.

In my estimate, the most crucial facts posed by the present economic situation in Russia. and in eastern Europe,and the former Soviet Union generally, are in the following order of descending strategic weight:

1.0 Russia is trapped in the new phase bf a worldwide . monetary and financial collapse

1.1 The present global monetaryand financial ortler has recently entered a new phase of collapse, as marked by such promi)nently discussed examples as (a) the long slide downward in bond mark�ts, (b) the waves of collapse caused by "derivatives" speculation, such �s the Mexico crisis, and (c) other impending. similar crises in nations �f South America, Italy. and some former Comecon-member countries in eastern Europe. (Contrary to the hysterical. and demonstrably futile attempts to deny this fact, the cur­ rent, new round of bankruptciesor near-ban1¢uptciesof both governmental and private institutions is not a mere coinci�ence of separate and distinct local problems, but, rather, this pattern of l increasing local crises is the result of an epidemic: a systemic disorder of the worldwide financial and monetary system as a whole.)

1.2 The present phase of the economic crises inside Russia and nearby countries is the result of the interaction between the ongoing, new phase of collapse

18 Feature EIR March 17, 1995 Prof. Taras Muranivsky (at podium), Schiller Institute representative in Moscow, greets Lyndon LaRouche at an international conference of the Schiller Institute in Northern Virginia in 1994. On Feb. 20, 1995, Professor Muranivsky submitted this memorandum by LaRouche to a committee hearing of the Russian State Duma, and presented testimony of his own on the science of physical economy.

in the world monetary and financial systems, and the cial system has become . relative exhaustion of Russia's ability to deliver a 1.4 All workable alternatives to general collapse require stream of loot to western financier interests. Thus , governments to assume responsibility for the estab­ the shrinking of the relatively depleted economy of lishment of new monetary and financial institutions to Russia is an important feature of the current down­ replace the bankrupt institutions which continue to ward pressures upon London-centered world financial dominate the world up to this moment. markets. This has a reciprocal effect: At the same time, the so-called reform-process in Russia is put on 1.5 The special problem of Russia, is that whereas west­ its death-bed by the inability of the western side of the ern Europe , North America, Japan, and also the Peo­ financial system to supply sufficientassi stance to keep ple's Republic of China still have some significant, if the Russia reform-process alive in its present form . shrinking margin for maneuver in the short- to medi­ um-term, Russia is among the growing roster of na­ 1.3 For related reasons, there exists no possible solution tions whose margin for existing under the rules of the to this crisis, either for Russia or for the world, within present IMF conditionalities is virtually exhausted. the bounds of the previously accepted terms of domi­ nant internationaleconomic and financial institutions. The present world system, as derived from the post- 2.0 The strategic peculiarities of Russia's 1971 form of "floating exchange-rate" international present situation monetary system, and present doctrines of Interna­ tional Monetary Fund (IMF) and related "conditional­ To define the cure for the sickness, we must always ad­ ities ," is doomed to extinction during the near- to dress the nature of the disease. To cure the sickness of Rus­ medium-term. The present system will either be sia's economy today, we must identify the causes of this brought to an end in an orderly way, through govern­ sickness accurately. ments acting responsibly to put existing central bank­ Some have said that the sickness of Russia's economy ing and financial systems under state-controlled reor­ was that it had failed to adapt to the principles of the more ganization in bankruptcy, or through a chain-reaction successful western market economies. This might remind us form of rapid, "thermonuclear" implosion of that of the story of a man who went to a doctor seeking help to speculative financial bubble which the world's finan- overcome a cold. The man took the medicine the doctor

EIR March 17, 1995 Feature 19 prescribed, and the cold turned into pneumonia. The doctor cies mirrored the similar thinking of France's Foreign then told him it was necessary to increase the dosage of the Minister Gabriel Hano ux, Russia's Count Sergei same medicine. The man accepted this advice, and died. Witte, and others, duri g the 1890s. During those However, that is not the end of the story. The dead man's same months , this first pe of policy was violently family invited the doctor to the funeral, but the doctor had a opposed by the British onarchy, on "geopolitical" conflicting appointment. The doctor had been taking the grounds. During the cl sing months of 1989 , Mrs. same medicine, and was attending his own funeral. Thatcher's government ssued the most violent state­ That is Russia's experience with the western ments, warningagainst y large-scale economic de­ "physicians' " so-called miracle cures for the economy. That velopment projects b se on cooperationbetween the is the former Comecon sector's experience with deadly medi­ former Comecon state� and Germany. President cine once advertised as the so-called "Polish Model" of Prof. George Bush suppo Mrs. Thatcher in this and Jeffrey Sachs and the IMF. By 1989, what Yevgeny Preo­ similar policies of her own and John Major's govern- brazhensky once named "socialist primitive accumula tion" ments. ! had led to a politically acute state of economic illness i 2.22 throughout the Comecon sector ; since 19 89, the effect of The Thatcher-Bush poli' y toward the fo rmer Come­ Mrs.Margaret Thatcher's and George Bush's "Mont Pelerin con sector's economy, as "slash and bum." It was Society" version of market-economy "medicine" has been ' a policy best described as a theorem in geopolitical nearly fatal. When we look at economies and markets around algebra premisedupon ose same axioms of Halford the world, we see that foreign nations, the so-called magi­ Mackinder on which the 1945 "Morgenthau Plan " fo r cians of "freetrade economy," have themselves become sick occupied Germany was premised. During la te 1989 fromtheir own medicine. Perhaps, if we knew what kinds of and 1990, London, sup rtedby Bush and other pro­ monetarist forces insideithe U.S.A. and U.N.O. , in­ policy the collapsing western economies need to overcome 1 the effects of their own medicine, that is the policy which troduced the IMF/SaCh "shock therapy"pol icy , first Russia needs, too. Perhaps, we, and those wizards of London to Poland, and then thr� ughout the former Comecon and New York are all victims of the same, worldwide epi­ sector, forcing a large- cale collapse within existing demic of collapse of the current, 19 7 1-95-style models of agro-industrial production capacity. deregulated post-industrial utopias. 2.23 "Shock therapy" has be�n accompanied by a program Therefore: of intensive "capitalist Wimitive accumulation": Vast 2.1 To define the causes and remedies for the present amounts and varieties of1the former assets of Comecon crisis in the Russian economy, we must begin by rec­ member-states have bel)n dumped on the world mar­ ognizing that no competent analysis of the past de­ ket at ridiculously low prices, providing a small mar­ cade's collapse of former the Soviet Union and Rus­ gin of foreign exchange into the bank accounts of sia's economy is possible, unless we view the collapse Russian and other spec1Jfatorsengaged in selling valu­ experienced by Russia as a special phase within an able assets of Poland, llussia, and Ukraine on world ongoing process of collapse of the world economy as markets. The motive fo� this British looting policy is , a whole. not only subsidizing a s.gging westerneconomy with this margin of colonial�t-style looting of the former 2.2 The crisis of Russia could not be understood, nor Comecon sector, but all>o "geopolitics": Weaken the competent corrections defined,if we did not recognize economy of the eurasian "heartland," and strengthen a second, added factor: that the worst features of the relatively the margin of future world hegemony for 19 89-95 collapse of Russia were the re­ the London-led oligarchical interests based upon the accelerating, . sult of the openly stated, hateful intentions of the so-called "rim." government of Britain's Prime Minister Margaret 2.3 Thatcher and the most important accomplice in her Since mid- 1994, Rus$a's economic opportunities anti-european Russia policy, U.S. President George have been improved pptentially by U.S. President Bush. Clinton's July 1994 act.ons at the Naples G- 8 confer­ ence, and in Bonn and Berlin, establishing a new 2.21 During the final three months of 19 89, two opposite "u. S. specia l relationsqip" with Germany, ending the policies toward the former Comecon sector appeared "special relationship" With Britain. The U.S. Presi­ in western Europe. One, typified by the respective dent's actions show th� the principal function of the proposals of Deutsche Bank President Alfred Herr­ new U.S. "special relationship" with Germany is to hausen and the Schiller Institute, projected east-west provide a life-line of ec<)nomiccooperation witheuro­ cooperation in large-scale infrastructure-development pean states to the east of Berlin. Although these are programs in the former Comecon sector ; these poli- beneficial changes in direction, Russia so far has

20 Feature EIR March 17, 199 5 gained from these policy-changes much more in pos­ side, a set of axioms and postulates, and, on the other side, sibilities than in actual substance. the open-ended list of numerous �eorems which may be shown to be consistent with that set �faxioms and postulates. 2.31 So far, the substance of these changes is chiefly the In physical science generally, or in tconomic science in par­ following. President Clinton has broken the United ticular, we should employ the wordj "principles," to take the States' ties to the 1989-92 geopolitical policies estab­ place which a set of axioms and postulates occupies in a lished under Mrs. Thatcher and Mr. Bush; that is the formalist geometry. The particulat1 policies, or "economic key to the savage attacks on the Clinton presidency by 'blueprints,' " which can be showh to be not-inconsistent the British monarchy and its assets, such as George with specifiedprinciples, takethe p�ce of the provable theo­ Bush, the fascistic neo-conservatives, and the leading rems of a specificchoice of formaliat geometry. news media inside the U.S .A. Over murderous British (It is relevant to note the following, rather little-known objections, Mr. Clinton and German Chancellor Hel­ fact of scientific method. In Plato'� work, the term identi­ mut Kohl's government have taken important steps fying any particular, constant set of Ilxiomsand postulates of toward pushing forward some of the elements of eur­ a formal system, is termed an hypothesis, as the term is also asian infrastructure cooperation proposed by the used, for example, by Bernhard Rilimann in his June 1854 Schiller Institute's 1990 "Productive Triangle" draft habilitation dissertation: "Uber die Hypothesen, welehe tier and the later "Delors Plan." Although the latter are Geometrie zu Grunde liegen," and »is "Versueh einer Lehre still limited initiatives, they are important and promis­ von den Grundbegriffen der Mathematik und der Physik als ing parts of any future recovery-program instituted Grundlage fUrdie Naturerkliirung, 'I Gesammelte Mathem­ within the former Comecon region. atische Werke, H. Weber, ed. (Stuttgart: Verlag B.G. Teubner, 1902]. See reprint editions of this: [New York: 2.32 The new "special relationship" between the U.S.A. Dover Publications, Inc., 1953], [Liechtenstein: Sandig Re­ and Germany is a good change for Poland, Russia, print Verlag Hans R. Wohlend], ,p. 272-87 and 521-25. Ukraine, and so forth; it gives hope that the geopoliti­ This is the only etymologically and bistorically correctusage cal looting begun under Thatcher and Bush might end. of "hypothesis," contrary to the US!e of this same word by The proposed railway-corridor and other development the aristoteleans, empiricists, and Itheir followers. A new projects in which Russia will participate are part of hypothesis, in Plato or Riemann, sigpifies an improved set of any economic recovery in Russia and adjoining na­ axioms and postulates, introducedtCil bring mathematics into tions. However, although these developments are conformity with physical reality.) , necessary steps in the direction of an economic recov­ In economics, as in physical science in general, whenever ery, they do not, by themselves, reach the threshold we are confronted with a failed e periment, we are faced at which a genuine economic recovery would begin. JCj with two types of possibilities.The 6rst possibility is that, in These changes in U.S.A.-Germany policy toward the design or the conduct of the expe(iment, some established easternEurope, although beneficial directions in plli­ principle of scientificmethod was viplated; the second possi­ cymaking, do not yet address the crucial task upon bility is, that, in this case, we have encountered a circum­ which a general reversal of the collapse-process de­ stance in which there has occurre� a failure of what have pends absolutely: the long-overdue reorganization of been, until now, generally acceptecil principles of scientific the present, intrinsicallybankrupt, globally hegemon­ method. The present world economic crisis is a case of the ic monetary and financial order. second type; nature is showing us th*t the choice of generally accepted principles of economics, 1$ taught currently in ev­ 3.0 Plans may vary; correct principles are ery leading university in the world� has been a potentially constant fatal error. I In this circumstance, the most fC!l<>lish thing any govern­ As one approaches the duties of shaping of economic ment could do, would be to consult leading professional policy under conditions of crisis, it is indispensable to distin­ economists, as if to ask them, "Wh�t must our government guish between sound principles, on the one side, and, on the do to correct our mistakes?" Whate¥ier advice the doctrinaire other side, the variety of policies which would each and all economists-the "free traders," thei"systems analysis" spe­ be consistent with those principles. One must understand cialists, and so on-give would be a$suredly another disaster clearly the distinction between sound principles and the alter­ for the government duped into acc�pting advice from such native choices of good policies which may be based upon a source. The result would be, th�t tomorrow we would those principles. The most useful illustration of this distinc­ experience an economic disaster ev�n worse than the crisis tion is found in the difference between axioms and theorems the world is suffering today. in a formal, deductive geometry. In this circumstance, the correct� alternative question aft In any schoolbook geometry, we are given, on the one intelligent government must ask, is !"What is the reason for ,

EIR March 17, 1995 Feature 21 the incompetence of all the world's generally accepted eco­ chants. This majority was usually a stratum of lackeys, nomics textbooks?" The only significantmistake the govern­ whose principal function was to assist a relatively tiny ruling ment has committed is to listen to the advice of those econo­ class in the administration of society as a whole. In known mists who are generally accepted as expert. That is the societies, the ruling class usually existed in the form of a mistake not to be repeated. collection of privileged families. Those families, who ruled If the principles (the axioms and postulates) of a geometry capriciously over society with the insolence attributable to are good, any theorem consistent with those principles will the mythical gods of Olympus, cbnstituted an oligarchy. be sound. The question to ask, is not "Do we have a good This characteristic model of'ancient barbarism and feu­ economic policy?" We should ask, instead, "Do we have a dalism became famous, through 1Ihenegotiations betweenthe policy which is consistent with sound principles?" Persian Empire and King Philip of Macedon , as the oligarchi­ In this circumstance, do not ask merely for "economic cal model, as typifiedby the traditions of ancient Babylon and 'blueprints' "; seek to discover the scientificprinciples which the Canaanite maritime-financier power of Tyre. Lycurgan must replace the generally accepted teachings of the econom­ Sparta's slave-society belongs to the type of the same oligar­ ics textbooks and internationalmonetary and centralbanking chical model. institutions. To illustrate the point: Presume you have been This oligarchical model of society persistedas the domi­ delivered a "blueprint" for a policy dedicated to economic nant form on this planet through and beyond the Roman recovery; by what set of principles would you judge whether empires, into the fifteenth centuJiy of european history. Dur­ that "blueprint" should be considered sound, or incompetent? ing the recent five centuries, that traditional oligarchy of Therefore , before asking for "blueprints," settle the issue of barbarism and feudalism, has adlipted itself, as a dominating principles. Once the right new principles have been chosen, parasite, to the institutions of the modem nation-state and any choice of policy consistent with those principles will be economy. During the course of the recent four centuries, a sound policy. the center of this oligarchy has been shifted, from the Tyre­ Once sound principles have been adopted, policies may like, Mediterranean maritime-tiPancier power of eleventh­ vary on condition they are consistent with those principles; through sixteenth-century Venipe, to relocate the world's sound principles must not vary until science had discovered center of oligarchical power in, the aggregated families of a better set of principles. an international, royal, aristoctatic and financier-nobility, Fortunately, the required new choice of principles is all orbitting, during the twentieth century, around theBritish readily discernedfrom a brief examination of the changes in and Dutch monarchies. Through the influence over ideas, the human condition introduced by modem european history. monetary institutions, and int�ational finance, which it has gained during successive wars of the recent centuries, this oligarchy penetrates its influence powerfully into the 4.0 The proven principles of economy affairs of most nations, and dominates the world's affairs Until certain fundamental changes in principles of state­ today. , craft firstintroduced to practice during the fifteenthcentury , Nonetheless, despite that cohtinued existenceof interna­ 95%, or more , of the population of every society, of every tionally powerful oligarchical institutions, fundamental cultural strain, was condemned to live in a condition of serf­ changes in the form of society were introduced during Eu­ dom, slavery, or even worse. The accompanying charts and rope's mid-fifteenth century. Astudy of those changes, and diagrams (Figure 1, Table 1 and Figure 2) illustrate the their results, is the key to addqcing the kinds of principles evidence which summarizes the factual basis for this argu­ which must define economic policy-shaping for us in this ment. Those changes in the principles of the modem nation­ present crisis. state first introduced in fifteenth-century Europe, and later The principal such changes are the following: spread throughout virtually all of the planet, definethe differ­ ence between modem civilization and all human existence of 4.1 The potential relative population-density of earlier times. mankind has been increased at hyperbolicaUy Throughout the past period of approximately 10,000 rising rates years , prior to modem society, in all human existence prior to Europe's fifteenth century, the strata of society living Were mankind a mere b¢ast, a type of higher ape, as above the level of relatively traditional forms of rural toil did Britain's Royal Consort,:Prince Philip, has repeatedly not exceed 5% of the total population. This contrasts with insisted that he himself is. then mankindwould exhibit underdeveloped economies today, in which as high as 80% the potential relative population-density of a higher of the labor-force is committed to labor-intensive forms of ape: never more than severalmillions living individu­ rural toil. Of the more privileged 5% of persons implicitly als at any time during !be recent 2 millions years of belonging to the available labor-force, the majority were the Cenozoic. We see thatthe human population had typified by clerks, priests, military professionals, and mer- reached up to levels of several hundred millions indi-

22 Feature EIR March 17, 1995 RGURE 1 i 700 Growth of European population, population-density, and life-expectancy at birth, estimated for 100,000 B.C.-A.D. 1975 600

500

400

300

200

100

Population I} (Millions) 10 0 8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 I!) 6 Paleolithic I Mesolithic NooI,." Q 0 0 0 0 0 0 0 0 0 0 0 I!) 0 I!) I!) 0 I!) 0 I!) I"- m C\J ci C\J «t <0 00 0 ,.... C\J C') «t I!) <0 00 m m 4 Pop. Pop. « ,.... ,.... 2 - 1 00, 000 1 -250,000 t � 120 0 i i i I} 100,000- 10,000- 100 10,000B.C. 5,000B.C. � � �. � � 80

60

40

20 _.--....._-l- --PPo�p �ulation-density 3 &=�:;�::;:�:;=4::����----�T-����T_�- (A�vg�po�p �/km�2 L) � 2 Paleolithic Mesolithic � � � I}I �I}: I 60� o i i i" * i i i r 1 I 50 40 30 � Life-expectancy J(Years) 20 10

All chartsare based on standard estimates compiled by existing schools of demography. None claim any more precision than the indicative;however, the scaling flattens out what might otherwisebe locally, or even temporally, significant variation, reducing all thereby to the set of changes whic� is significant, independentof the quality of estimates and scaling of the graphs. Sources for Figure 1: For population and population-density, Colin McEvedy and Richard Jones, Atlasof World Population History (1978); for life-expectancy, various studies in historical demography, including Gy. AcsAdi and J. NemeskM, Hi�tory of Human Ufe Span and Mortality (1970); Peter R. Cox, Demography (1976) ; Jacques Dupaquier, La population ruraledu Bassin parisiena /'epoque de Ld/JisXIV (1979); Jacques Dupa­ quier, Introduction a la demographie historique (1974); D.v. Glass and D.E.C. Eversley, eds., Population in History (1965); T.H. Hdllingsworth,Historical Demogra­ phy (1965); Roger Mols, S.J., Introduction a la demographie historique des villes d'Europe du XIVe au XVllle siecle, (1955); HenryiS.Shryock et aJ., The Methods and Materials of Demography (1976) ; E.A. Wrigley, Population and History (1967); E.A. Wrigley and R.S. Schofield, The Populatio(l History of England, 1541-1871 (1981). Note breaks and changes in scales.

viduals during the thirteenth century. Since the middle from about 300millions persons, to more than 5 bil­ of the fourteenth century, the human population has lions presently, with a potential for more than 25 bil­ risen at hyperbolically rising curve of increased rates lions living prosperously, provided the technologies of population-densities. So, during the recent five developed by about the end of the 1960s had been centuries, the world's population has been increased fully realized.

EIR March 17, 1995 Feature 23 TABLE t Development of human population

Life expectancy World at birth Population density population (years) (per km2) Comments (millions)

Primate Comparisoll ! Gorilla 1/km2 .07 Chimpanzee 3-4/km2 1+ I Maa Australopltheclnes 14-15 1/ 10 km2 68% die by age 14 .07-1 B.C. 4,000,000-1,000,000 I I Homo Erectus 14-1 5 1.7 B.C. 900,000-400,000 , Paleolithic (hunter-gatherers) 18-20+ 1/ 10 km2 55% die by age 14; average age 23 ' B.C . 100,000-15,000 I I Mesolithic (proto-agricultural) 20-27 4 B.C. 15,000-5,000 i Neolithic, B.C. 10,000-3,000 25 1ikm2 "Agricultural revolution" 10 I , I Bronze Age 28 10/km2 50% die by age 14 50 B.C. 3,000-1 ,000 Village dry-farming, Baluchistan, 5,00l.B.C .: 9.61/km2 Development of cities: Sumer, 2000 . c.: 19.16/km2 Early Bronze Age: Aegean, 3,000 B.q.: 7.5-13.8/km2 Late Bronze Age: Aegeat\;' 1,000 B.� 12.4-31 .3/km2 Shang Dynasty China, 1000 B. C. : 5/k� 2: Iron Age, B.C. 1,000- I 28 : I 50 Mediterranean Classical 25-28 15+ikm 2 Classical Greece, Peloponnese: 35/k�2 100-190 Period Roman Empire: B.C. 500-A.D. 500 Greece: 11/km2 Italy: 2411< 2 Asia: 30/km 2 Egypt: 1 : 9/km2 * Han Dynasty China, B.C. 200-A.D. 200f 19.27 Shanxi: 28/km2 Shaanxi: !24/km2 Henan: 97/km2 * Shandon�: 118/km2* * Irrigated river-valley intensive agriculture I European Medieval Period 30+ 20+ikm 2 40% die by age 14 220-360 A.D. 800-1300 Italy, 1200: 24/km2 Italy, 13 0: 34/km 2 1340: 85/km2 11374: 35/km2 Tuscany, Brabant, j Europe, 17th Century 32-36 Italy, 1650: 37/km2 France, �650: 38/km2 545 Belgium, 1650: 50/km2

I I I Europe, 18th Century 34-38 30+ikm 2 "Industrial Revolution" I 720 Italy, 1750: 50/km2 France, 1750: 44/km2 1750: 108/km2 Belgium, I Massachusetts, 1840 41 Life expectancies: "Industrialized," ri�ht; United Kingdom, 1861 43 90+ikm 2 "Non-industrialized," left 1,200 1893 I Guatemala, 24 I 1896 European Russia, 32 I Czechoslovakia, 1900 40 I Japan, 1899 44 I United States, 1900 48 ! Sweden, 1903 53 France, 1946 62 India, 1950 41 2,500 1960 73 I Sweden, I 1970 1975 3,900 I 71 26/km2 United States I West Germany 70 248/km2 I Japan 73 297/km2 I China 59 180ikm 2 I India 48 183/km2 Belgium 333/km 2 4.2 The quality of household life has improved per square kilometer, increases, and must increase. In similarly combined physical product, �d also in the exception­ al services of education, heaJth-care, and science and The most critical demographic parameter of develop­ technology, the physical coqtent of the per-capitaand ment is the number of infants and children who sur­ per-household market-baslret of consumption in­ vive to child-bearing age and beyond (e. g., above 14 creases, and must increase. years of age) . New discipline supporting improve­ I during ments in sanitation and nutrition, introduced 4.4 Measuring physical econc)mic growth Europe's fifteenthcentury and beyond, have been the greatest single factor of change permitting the im­ 4.41 The foregoing measuremen�s are made in terms of provement of the standard of family life in the indus­ units of demography of famdy units, in units of water, trially developed, and other regions of the world dur­ power, ton-mile-hours of tr�sportation: all per capi­ ing the interval 1440- 1963 . (The reason for the date ta, per household, and per square kilometer. Market­ 1963 will be indicated below.) It is that improvement baskets of households are Illeasured in these demo­ in longevity, combined with technological progress graphic terms. of productionof infrastructure, agriculture, manufac­ 4.42 These measurements lead tq a general measurement turing, and other industry (such as construction) to be made: a comparison o� the variable, necessarily which has been the principal caUse for the absolute rising cost (as measured in lists and quantities of items superiority of rates of increase of potential relative of consumption) of reproduQing the entire society, as population-density over all pre- I440 forms of society compared with the society's ,total production of those in every part of the world. items accounted as elements of necessary costs. This represents a social-reproductive cycle. We have thus 4.3 The change in social division of labor two primary terms. First, the necessary social cost, The percentile of the labor-force required to supply measured in terms of standard market-baskets, of re­ production of the nece!\sary foodconsumption of the producing a labor-force and productive capacities of whole society has declined from over 90% of the a quality needed to maintain a given level of produc­ b available total labor-force, toward 2-5%. This has tivity per capita, per househ ld, and per square kilo­ been made possible through improvements in basic meter. Second, the output qf that society, measured economic infrastructure and science and technology. in those same terms. Eithe� there must be a gain of This has required the introductionof compulsory uni­ output over input, or the sobiety will degrade in the versal secondary education, and increase of higher direction of collapse. Desiglllate input as correspond­ education enrollments, increasing thus the percentile ing to "energy of the system," and the margin of gain of the population aged 5-25 enrolled in education, as of output over input, as rel�tive "free energy." The ra,e of change of the ratio distinct from the labor-force. The percentile of the resulting measurement is of "fr ee energy," so defined, to "energy of the labor-force required for development and mainte­ sys­ tem, " also so defined. nance of basic economic infrastructure (including ed­ ucation, health-delivery facilities, and science and That latter measurement, constructed in the man­ technology) has increased, and must continue to in­ ner we have just reviewed, above, is the "rule of crease. The capital-intensity of employment has in­ thumb" measurement requiIFd for discussing princi- i creased,and must continue to do so. The power-inten­ ples of economy. sity per capita oflabor-force and per square kilometer, 4.5 'Not-entropy' in the econ mic process increases, and must increase. The usable water, in b cubic meters per year, per capita, per household, and Not the exact amount, but the timgeof relative potential

Sources for Table 1: For world population and population densities, McEvedy and Jones, op. cit., and Colin Clark, Population Growrh and Land Use (1967). For pri­ mate comparison, estimates presented by George B. Schaller, The Year of the Gorilla (1965). For life-expectancies: for prehistOriC man through the European medi­ eval period, Acs8dl and Nemeskeri, op. cit., and Kenneth M. Weiss, DemographicModels forAnthropology (1973); for Bronze and! Iron Ages, additionally J. law­ rence Angel, "The Length ofLife in Ancient Greece;Journel of Gerontology, Vol. 2, Nos. 1-4 (1947); for classical period, additionallV J.C. Russell, "Late Ancient and Medieval Populations; Tra nsactions of theAmerican P hilosophicel Society, New Series, Vol. 48, No. 3 (1958); for 17th and 18th centuries, Wrigley and Sch0- field, op. cit., and Glass and Eversley, op. cit. ; for 19th and 20th centuries, Weiss, op. cit., and T.E. Smith, "The Control of Mortality,;Annals of theAmerican Acade­ my of Political and Social Science, Vol. 369 (Jan. 1967). For area studies: for Mesopotamia, Robert J. Braidwood and Charles A. R$ed, "The Achievement and Ear­ ly Consequencesof Food-Production,· in Cold SpringHarbor Symposia on Quantitative Biology, Volume XXII (1957); for the Aeg . n, Colin Renfrew, The Emergence of Civilisation: The Cyclades and thaAegean in the Third Millennium B. C. (1972); for the Peloponnese, Clark, op.cit.; r the Roman Empire, Karl A. Wittfogel, "The Hydraulic Civilizations,· in Man's Role in Changing the Face of the Earth, ed.by William L. Thomas, Jr. (1956); for �ina, John D. Durand, "The Pop- ulation Statistics of China, A.D. 2-1953,· Population Statistics, Vol. 13, No. 3 (March 1960). .

EIR March 17, 1995 Feature 25 FIGURE 2 Post-Renaissance population vs. predecessor civilizations: continued growth vs. cyclical collapse

Modern Europe A.D. 1400-1 900 (millions)

400

350

300

250

200

150

100

50

o 1400 1500 1600 1700 800 1900

Charlemagne's Europe A.D. 900-1400 (millions) 25 20 15 10 5 o 900 1000 1100 1200 300 1400

Caliphate (excludes Spain) A.D. 600-1400 (millions) 24

22

20

18 600 700 800 900 1000 1100 1200 1300 1400

China: T'ang-Sung-Yuan dynasties A.D. 800-1400

26 Feature EIR March 17, 1995 Roman world 200 B.C.-A.D. 600 (milliions) SO 45 40 35 30 2S 200 100 1 100 200 300 400 SOO 600 A.D.

China: Han-Sui dynasties 100 B.C.-A.D. 600 (millions)

70

60

SO

40 100 1 100 200 300 400 500 600 A.D.

Ancient Greece 1000 B.C.-A.D. 600 (millions) 3.0 2.S 2.0 1.S 1.0 O.S 0 1000 800 600 400 200 1 200 400 600 A.D.

Mesopotamia: Baghdad region 4000-1000 B.C. (thousands)

80 60 40

not are Adams, Land Behind Beghdad: A History of Sen/ement on the Diyala Plains (1965). For Clark, Taylor, "Some Aspects of Population History," Canadian Journal of Economics and Polffical Science, Vol. 16, No. 3 (Aug. 1 "How the Romans Nearly Destroyed Civilization," in EIR Special Report: The Genocidal Roots of Bush's 'New World Order' Yuan dynasties: Durand. op. cit.

The cycles of population growth and decline in various civilizations show that the impulse fo r technl)lo!?fCIJI greater human populations, while present in pre-modem societies, could not be sustained, as it was in throughs of the Council of Florence.-N ote the various scales fo r population and time periods.

EIR March 17, 1995 Feature 21 population-density of an animal species is fixed, as if geneti­ of a true rate of profit, as definable in physical-economic cally. The known features of the demographic history of terms. Rate of profit for the sOfiety (e.g., economy) as a mankind, as compared with the data for higher apes, indi­ whole signifiesthe same thing, in! firstappr oximation, as per­ cates in rough form , but clearly enough, the point which capita rate offr ee energy to energy of the system. To address might be proven otherwise in a more rigorous way (see Table the point presently under consideration, let us limit our atten­ ; 1). The archeologically and otherwise known demographic tion to the relationship between that variable general ratio history of the human species simulates a succession of suc­ and qualitative changes in the range of potential relativepop­ cessively higher animal species, a series of successively ulation-density. In this case, this ratio is the rate of profit of higher ranges of potential relative population density. the physical-economic system. I� that setting, it also repre­ Rather that say "genetically," let us say "axiomatically," sents the relative "not-entropy"l of the society (economy) l in the sense of a formal theorem-lattice in geometry, as de­ taken as a whole. , finedby an underlying set of axioms and postulates. It can be The source of this "not-entroh" of society is the impact shown, as I have outlined this proof in several published of the generation, regeneration, and assimilation of an accu­ locations, that the series of increases in range of human po­ mulated, growing mass of known axiomatic-revolutionary tential relative population-density correspond to a series of discoveries over hundreds and �ousands of years to date. changes of hypothesis, which, from the standpoint of formal These discoveries areof the form which B. Riemann address­ theorem-lattices, appear as a succession of changes of es categorically in his referenced habilitation dissertation. axioms. These are not limited to the eq�ivalent of relatively valid ' This succession of combined pre-historical and historical discoveries of scientificPrinciPl ; rather, thegeneral case of transformations in the potential relative population-density valid axiomatic-revolutionarydi overies in physical science of society, is not only an analog of the cumulative effects of may be identified as a type of m ntal act which includes the successive fundamental scientificdiscoveries in physics, but same form of discovery in the dr: main of Classical forms of it is a series of that same type; it is a series ordered by the the finearts . : same principle as original, valid, axiomatic-revolutionary Against the background of those considerations, look at changes of principle in physical science, and analogous the fifteenth-century revolution in statecraft introduced to I forms of discovery in the Classical forms of finearts . France under Louis XI, the beginning of the modem nation­ It is the increase of mankind's increase of power over state (commonwealth). This ev�t, together with other im­ nature, as expressed in terms of per capita (of available labor­ pacts of the A.D. 1439-40 ecum�nical Council of Florence, force), per household, and per square kilometer of area in marks the singularity, the point of separation of modem use, resulting from technological revolutions, chiefly in pro­ european civilization from feu4alism, the beginning of a duction and organization of production of the means of soci­ process aimed at the eliminatiot of the oligarchical model ety's existence, which underlie the advances in potential rela­ of society. i tive population-density. It was the role of the new fot of state (commonwealth) This power for effecting valid, original discoveries of in assuming responsibility for direction and development of higher principle, for effecting valid axiomatic-revolutionary general public education, of ba�ic economic infrastructure, discoveries, is a peculiarity not of the society, but of the and fostering of the participation of the whole population individual person within the society. Each discovery occurs in the scientific, technological" and related innovations in solely within the sovereign mental processes of the individual individual and social practices!, which is the distinction discoverer; each such discovery, when effected by an indi­ which marks the absolute increase in power of modem euro­ vidual, can be communicated to others only by prompting pean culture, compared to all preceding existence of man­ the hearer to replicate the experience of discovery enjoyed kind. The directing action of the !State to foster the activation by the firstdiscoverer. of the creative potentials of the I}!latively maximum number Thus, the increase of a society's potential relative popula­ of individual minds of the peoqle, rather than leaving the tion-density is dependent upon the corresponding quality of mental life of most to a stagnapt combination of tradition organized social relations in that society. That is, it is the and orders from above, which is the secret of the superior fostering of the individual's potential for generating and re­ power of modem european culthre. creating such individual mental acts of axiomatic-revolution­ ary forms of valid discovery, by the society, which governs 4.6 Commonwealth forms �f money and credit the possibility of significant improvement in the potential relative population-density of that society. This is a quality, 4.61 Here , we have already in�icated that all of the proper and a social form of relations among individuals, which is measurements in econorr\.y are based on non-money manifestly not possible within any known species but parameters: per-capita market baskets of both house­ mankind. hold and productive cons�mption and output, percap­ That said in summary of this point, examine the source ita of the labor force, pe� household, and per square

28 Feature EIR March 17, 1995 Representatives of the American System of political-economy, left to right: Germany's Friedrich List, Russia's Sergei Witte, and America's Henry Carey .

kilometer of area used. All the essential measure­ (non-interest-bearing government fully negotiable ments to be made should be made first in these terms , notes) issued by the government as credit to worthy without regard for prices. This was the traditional enterprises within the nation. Issued in this manner, approach of the commonwealth society from the be­ and under governmental protection respecting their ginning. This approach came to be known, during the circulation in domestic and foreign commerce, such sixteenth into the early nineteenth century as "camera­ notes are issued at a pace in keeping with the amount lism." The Constitution of the United States under the of increased production of wealth their issuance fos­ first President was a "cameralist" constitution, whose ters; they are inherently non-inflationary if used intel­ implicitly prescribed economic system was identified ligently in this way. officiallyby that administration as "the American Sys­ tem of political-economy," a system represented later 4.63 In contrast, the British system, a model oligarchical by such economists as statesmen as Friedrich List, system derived from venetian (e.g., "Lombard") pri­ Henry C. Carey, and Russia's Sergei Witte . That vate banking oligopolies, presumes the implicit exis­ "American System of political-economy," so defined, tence of some "original hoard of money" in private is the standard of reference for contrast to the presently hands, and seeks to maintain a private monopoly over collapsing worldwide system, the British system of national and world currency and credit through oligar­ "free trade ," of Adam Smith and his sundry varieties chical, private monopolies over central banking. In of followers . the aftermath of the 1789 establishment of the success­ ful , and influential American System of political­ 4.62 The monetary system prescribed by the combined au­ economy, it became more or less conventional to refer thority of the U.S. Federal Constitution, and the ad­ to a difference between the "national banking" princi­ ministrations of President George Washington (1789- ples of Hamilton et aI ., and the "central banking" 97) took its historical precedent in the successful poli­ monopolies of the oligarchical financial interests. The cy of issuance of paper currency by the pre- 1689 Mas­ U.S. Federal Reserve System, as established in 1913, sachusetts Bay Colony. This highly successful inno­ is an oligarchical central banking system, existing vation by that semi-autonomous English colony in literally in direct violation of the explicit language of North America used fiat money, created by the gov­ the U. S. Federal Constitution, existing because the ernment as credit solely for circulation within the anglophile oligarchy within the U.S. had seized pow­ economy , to foster successfully the relative maximum er with the 1901 assassination of U . S. President Wil­ exchange of goods, and thus the greater fostering of liam McJ(inley. the use of available productive capacity. Money should come into existence solely as a form of credit 4.64 It is the worldwide system of central banking which

EIR March 17, 1995 Feature 29 I is now threatened either with government-directedre­ Antonio Conti, operated in Italy!, France, England, and Ger- organization in bankruptcy, or, the only alternative, many (i.e., Prussia) through wh' t became known to scholars near- to middle-term disintegration of the monetary as Conti's salon. Conti's salon continuing operations after and financial system through a sudden "thermonucle­ his death in 1749, coordinated uch figures as Abbot Guido ar" chain-reaction implosion of "reversed financial Grandi at Pisa, Montesquieu, V ltaire, Giovanni Casanova, leverage." the Physiocrats, and Caglios in France, King Frederick the Great's lackeys Francesco Algarotti , Maupertuis, and 4.7 The dual character of modern economy Euler in Berlin, and the influerce of Giammaria Ortes in London. I The venetian oligarchy's initial response to the anti-oli­ This network of Conti's salo was built around a,Europe­ garchical Council of Florence and the launching of the com­ wide project for seeking to dest y the influence of Gottfried monwealtR by Louis XI's France, was to attempt, at first, Leibniz. It built an anti-Leib 'z "Enlightenment" around simply to crush the unwanted revolution, and, from the time Paolo Sarpi's empiricist meth s. This used the figures of of the anti-Venice League of Cambrai (1508-10), to set the Sarpi's personal tool, Galileo, ance's Rene Descartes, and allies of the League against one another by such means as the image of "the English Gal leo," Isaac Newton, as the Venice's creation of the Protestant Reformation, and then chosen anti-Kepler, counter-Le bniz symbols of the Venice­ acting to place itself also in the camp of the Counter-Refor­ created "Eighteenth-Century E lightenment." This form of mation. (As British Prince of Wales Albert Edward [King the Eighteenth-Century Enligh nment, as shapedby Conti's Edward VII] acted to set France, Germany, and Russia salon, gave the world the d 'nes associated with such against one another, from 1898 onward, to remove the threat figuresof modem radical empiritism and positivism as David that the principal nations of the continent of Eurasia might be Hume, Fran�ois Quesnay, Adam Smith, the French encyclo­ united in economic development, contrary to the perceived pedists, Jeremy Bentham, IIn�nuel Kant, G.W.F. Hegel, "geopolitical" interests of the neo-venetian British Empire .) Karl Savigny, Pierre LaPlace,! and the nineteenth-century From 1582, there was a radical shift in the policy of the French, Swiss, and Austrian �sitiVist movements. In Brit­ majority faction of Venice's ruling oligarchy: From then on, ain, the influenceof GiammarilljOrt es, in particular, gave us Paolo Sarpi led in establishing a new policy of creating a the economics of Smith, the s ' ial theory of Bentham, the venetian-style maritime and financial power in the Protestant popUlation theory of Malthus, d so on. north of Europe, based upon Venice's seizure of control over The venetian influentials ff Sarpi through the death of the monarchies of the Netherlands and England. Ortes in 1790, ensured that eve leading British institution Since 1582, the entire history of european civilization of politics, philosophy, scienc , art, and social theory was has been characterized by a continued coriflict between the politicized according their vene ian design. What came to be heritage of the commonwealth tradition of Louis XI et al . a generally accepted emPiriCiS r positivist view of history, and the Venice-rallied, oligarchical opponents of the com­ of "human nature" and scienti c method, was designed by monwealth tradition. The distinctive feature which Sarpi's these venetians, over these tw centuries, as an attempt to faction introduced was Sarpi' s attempt to check the forces control the unconscious behaf . or of entire populations of behind the new , modem form of nation-state, by seizing Europe. ' controlling influence over governments, Classical fine arts , In effect, these venetians de�cended upon various nations and science from the inside of those institutions, rather than of Europe like "body-snatchers from outer space," taking relying upon crudely reactionary methods to attempt to crush over the minds of selected key bersons and salons which, in the new forms of government and science from without. tum, became leading influenceJ upon the educated and other Venetian oligarchical emphasis on corruption of its enemy strata of society around them. What they did, literally, to this from within his own institutions, became the prevailing day­ effect, was to implant a set of Uiomatic assumptions. These to-day characteristic of the oligarchical side of this conflict. were the axioms of, first, the empiricist and, later, theradical­ For example, the transformation of Tudor England's empiricist, or positivist worldf.outlook. Whoever adopted London into the capital of an eighteenth-century founding of those axioms was implicitly cqmpelled to choose, as theo­ a British Empire, began with Paolo Sarpi's personal role rems of their belief, those kindS of propositions which were in establishing the government of James I, and continued consistent with the empiricist �ioms. through the reign of the Venetian Party's imported William As part of this, empiricism ivas injected with what might of Orange, establishing the preconditions on which the 1714 be described as an "immunizihg factor" of self-protection creation of the United Kingdom was premised. against the future influence of �ratic reason. This built-in, In science, Paolo Sarpi's creatures in founding empiri­ self-protecting assumption wa� the dogmatic assertion that cism included, most notably, the anti-Kepler ideologues the axioms of empiricist theorepts (hypothesis) do not exist. Francis Bacon, Robert Fludd, and Galileo Galilei. During This is illustrated by the fam<)us slogan adopted by Isaac the early eighteenth century, a Venice intelligence chieftain, Newton: Hypothesis non jingol. Empiricism asserts that its

30 Feature ElK March 17, 1995 axioms are not willfully artificed axioms, but only the mani­ Mazarin, and Colbert, and the conception of natural law ' festly self-evident principles of sense-perception and individ­ offered by Gottfried Leibniz, in op sition to that proposed ual human nature . Some might conclude from this, that em­ by the empiricistJohn Locke. The U. . War ofindependence are � piricism and positivism vicious forms of insanity, was fought, in fact, against those licies set forth in East delusional states; whatever the outcome of that view, the fact India Company apologist Adam Smifb' s 1776 Wealth of Na­ remains that this we have described, is the character of the tions. U.S. Treasury Secretary Alekander Hamilton's Re­ empiricism introduced to England by the venetians of Paolo ports to the Congress on the subjec$ of Credit, A National Sarpi and Antonio Conti's salons. Bank, and Manufactures identify �e American System of The cleverness embodied in this venetian tactic is, that political-economy, as U .S. economi� policywas understood any person who blindly accepts empiricist axioms as self­ by all U.S. patriots, including U.S. President Franklin Roo­ evident, will tend to behave in a way which is convenient sevelt (in opposition to Britain's PHme Minister Winston for the oligarchical strategic interest. The effect of Russia's Churchill), from 1789 through 1963; acceptance of the radical-empiricist doctrines of free-trade Then, during the interval I964-7�, a reversal of this U.S. economics as the basis for the policy of reform, is an example cultural and economic tradition waf> set into motion. The of how this venetian method of manipulation works still London Tavistock Institute and its oollaborators sometimes today. referred to this change as a "cultu1-paradigm shift." This The rise of the British monarchy to global imperial pow­ "cultural-paradigm shift" is the key tp the presently ongoing er, through chiefly the eurasian wars of the late-eighteenth spiral of collapse within the global �onetary, financial, and and nineteenth centuries, and the successful corruptionof the economic systems. i leading, anglophile financier families of the U.S.A. during The work of the World Wildlife fund of Britain's Prince and beyond the course of the two general eurasian wars of Philip and Netherlands' Prince BeI1Ihard, was part of this this century, has enabled London to bring the entire world effort to tum back the clock of histo� to feudalism, or even today under the domination of the combined British empiri­ to earlier models of barbarism. This was known as the "rock­ cist traditions in political-economic dogma and the legacy of drug-sex counterculture." It was cal� by the Ford Founda­ the Versailles agreements imposed at the close of the first of tion, in 1964,"The Triple Revoluti1n." In 1967, one advo­ those general wars. cate, Zbigniew Brzezinski, called it I 'the technetronic age:" Consequently, the past 500-odd years of modem europe­ Fascist ideologues such as the Londqn Times' Lord William an civilization have been characterized by a conflict between Rees-Mogg identify this New Age with Alvin Toffler and two principal, opposing impulses within that civilization: the U:S. Speaker Newt Gingrich's "Third Wave." It is the "ecol­ insurgent new principles of the commonwealth institutions, ogy movement" launched in the Uni1!edStates at the close of and the opposing form, in which the opponents of the com­ 1969 . It is otherwise known as Cambridge University models monwealth, centered around the venetian oligarchical tradi­ of "systems analysis." It is known g�nerally as "post-indus. tion, have struggled to establish and maintain control over trial" utopianism. It is the policy of the fascist Mont Pelerin the political and other key institutions of the new form of Society of Prof. Milton Friedman and the late Friedrich von nation-state. Hayek. It is our failure , thus far, to free modem society from the Once the United States and the S()vietUnion had reached grip of this oligarchy, which has brought this otherwise most certain agreements in the wake of the Cuban missile crisis of powerful and most successful modem form of society to the 1962, it was the belief of the London-centered international present brink of doom. It is this unresolved conflict which oligarchy that London's establishm�nt had the post-1945, has imparted to the past 500years of the history of european nuclear balance-of-power game adequately under its influ­ civilization a distinct, cyclical character. Thus, the im­ ence. In the view of these circles in London, and their co­ pendingdoom of this civilization (at least, in its present form) thinkers in the U. S.A. , it was no longer necessary to maintain gives to the past 550 years the appearance of a long dynastic those rates of physical-economic growth and technological cycle of rise to a relative zenith of power, and then a descent progress which would have been required were the threatof into ensuing collapse. a general war still believed to be a rlikely prospect. It was believed that the Pugwash doctrine for a new form of British 4.8 The 1963-95 'cultural paradigm shift' "balance of power, " a geopolitical balance of mutual thermo­ nuclear terror, was securely in place. With brief exceptions, the central issue of the U . S. Decla­ It was believed, that this had realized the strategic goals ration of Independence, War of Independence, and adoption which Bertrand Russell had articulated in such public loca­ of the 1787-89 Federal Constitution was a commitment to tions as his 1946 contribution to the Bulletin of the Atomic that tradition of the anti-oligarchical commonwealth associ­ Scientists. It was believed in thpse circles, including ated with King Louis Xl's France, Jean Bodin's SixBooks of McGeorge Bundy and Bundy-associated British agent Henry the Commonwealth, the "dirigism" of France's Richelieu, A. Kissinger, that the likelihood of ail actual general warhad

EIR March 17, 1995 Feature 31 Masterminds of the cultural-paradigm shift toward a new Dark Age, left to right: Alvin Toffler, MC(.e,ore'elll'un.'1V been eliminated . It was believed, as Russell had projected he did much of the orchestratiJn of the U.S. anti-warmove­ this about 20 years earlier, that, over the longer term, the ment of the 1965-68 interval , including the funding of the institution of the nation-state would be superseded by the group which became the Weat erman terrorist organization. establishment of actual world-government under the United The same forces which had brchestrated the 1965-68 anti­ Nations. war movement, next launched lthe so-called "ecology move­ i Therefore , during the months immediately preceding ment." The seed-crystal for a mass-based "ecology move­ the assassination of President John F. Kennedy, it became ment" was assembled from among the year 1970's somewhat the opinion of the New Age advocates, that emphasis upon shattered fragments of the anti-war movement. The "post­ science and technology was no longer needed , nor even desir­ industrial" battering-ram of thb irrationalist "ecology move­ able . Industrial development no longer desirable. The 1964 ment" has supplied a batte 1 of well-funded operations Triple Revolution report, published by the Ford Foundation's against the key institutions of� odern society. Each and all Fund for the Republic , echoed this post-industrial sentiment. of these operations, over th 1970-95 period, have been As a corollary of that same opinion, it was believed that the based upon outrightly anti-so�entific hoaxes; each and all quality of rationality in education and public life generally, have been aimed to destroy industrial society, step by step. At needed for a modem industrial society's labor-force and fam­ the present stage , in conjunction with Prince Philip's World ily households , was no longer necessary , or even desirable. Wide Fund for Nature (the former World Wildlife Fund), The test-tube in which a mass-based form of irrationalist, these "ecology" operations ard being deployed with the spe­ counterculture movement was brewed, was the anti-war cificintent of destroying national sovereignty throughout this movement of 1965-68. planet, through the establishmbnt of ecological preserves un­ One-time U. S. National Security Adviser McGeorge der international supervision at the borders of nations, or in Bundy is at the center of the exemplary events of the 1963- internal zones of crucial natio al mineral, forest, and hydro­ 68 tum. Bundy virtually authored the U.S. military commit­ logical reserves. ments in Vietnam. As soon as he had committed President Through these and related kinds of qualitative changes Johnson to the war in Vietnam which he desired, Bundy left in economic , monetary , and I financial policy, the leading government, and headed up the Ford Foundation, from which political institutions of nations have been corrupted into a

32 Feature EIR March 17, 1995 The environmental terrorist group Earth First! conducts a demonstration against logging in Ft. Bragg, California, 1990. The ecology movement was assembledfrom the fragments of the anti­ war movement, and is being used as a battering-ram against industrial society.

state of virtual insanity. This can be described more precisely which virtually owns political figures and parliamentary fac­ as a systematic decoupling of the determination of financial tions has been decoupled from the profitability of the real growth from the growth of real economy, and the related economy. decoupling of political institutions from responsiveness to Thus, during the interval 1964-95 , european civilization the real conditions of life of the nation and the majority of its in its present form has been shifted into an end-phase. The constituent social strata. Comecon was already visibly affected by the radiation of Until 1963, the nominal value of aggregate financial this shift by no later than the early 1970s; how, the states holdings within the U.S.A., and most other nations, was tied which were formerly within the C.omecon region, Russia to the profitability of agro-industrial enterprises and public notably, are gripped by the effects of symbiosis with the utilities. With the compounding of the influence of "post­ global system in its end-phase. industrial" trends by introduction of a "floating exchange­ rate" international monetaryorder, and by rampant measures 4.9 The net result of this lesson of deregulation of financial and other markets, the value of financial paper generally became increasingly decoupled The gradual progress under the modem, commonwealth from the profitability of useful production and public-utility form of constitutional nation-state republic, toward compul­ operations. Beginning 1970-7 1, and accelerating after the sory universal education, in a climate of commitment to ben­ October-November 1979 introduction of Paul A. Volcker's efits of scientific and technological progress, gave modem Federal Reserve policies of "controlled disintegration of the european civilization (until recently) the highest rates of fun­ economy," the correlation between growth of financial ag­ damental progress in science and technology, and the greatest gregates and produced goods ceased. rates of increase of the power over nature represented by the More recently, in the U.S.A. and western Europe , as in average human being. For all the evil which the european Russia, profitability is derived chiefly from those forms of oligarchical interests have succeeded in fostering, the fact expansion of financial aggregates which occur through con­ remains, that modem european civilization has advanced the traction of the real economy. acceptable standard of life of the individual person generally Under these circumstances, national and local politics far above the standard represented by any earlier culture. within the United States, as in Britain, has also been system­ When we balance the achievements of modem european atically decoupled from reality, as the financier interest civilization, against the evil accomplished by its oligarchical

EIR March 17, 1995 Feature 33 component, it appears incontrovertible that the available it must adopt a form of rnational political-economy pathway to recovery from the presently onrushing global consistent with the princi�les underlying the U . S .A. 's disaster, is to revive the commonwealth aspect of this civili­ "American System of podtical-economy." Second, it zation, minus the oligarchical parasite. must secure a sufficiently powerful circle of friends Whatever were a better form of society for the more and economic partners an10ng nations abroad that this distant future is not presently a practical question. Whatever new choice of politiCal COnomy by Russia might that distant future might be, we shall not realize it unless we benefit from a favorable� global climate. Neither of survive to reach that point in time. We shall not reach that these two conditions we likely to be achieved, un­ point unless we prevent that catastropheof a prolonged,glob­ less the principles governing the change in political­ al "New Dark Age" which presently menaces us. We must economic institutions ar� stated openly, in both the proceed fromthe proven principles which the course of recent national and world com unity, with pungency and centuries has demonstrated beyond reasonable doubt. force. We must learn from the failure of our predecessors to 5.11 Itmust be stated, that the bysmal failure ofthe advice defeat the London-centered international oligarchy before of Adam Smith and his p� ent -day monetaristfollow­ this. The lesson of this century is that the nations which fell ers obliges Russia to ado t the principles of the only victim to such traps as King Edward VII's Anglo-French � proven, non-imperialist odel of economic success Entente Cordiale, committed the error of being lured into of the past two centuries the dirigist models of the pursuit of perceived specific interests, disregarding the con­ U.S.A. 's "American Sys m of political-economy," sequences of abandoning concernfor principle in this way. as this is described by su h authorities as U.S. Trea­ We must recognize a crucial precedent for the folly of the sury Secretary Alexander, Hamilton, Mathew Carey , Triple Entente. In A.D. 1509 , the League of Cambrai had Henry C. Carey, German ' s Friedrich List, and others defeated Venice, and was ready to deliver the crushing blow. �! in that tradition. Venice's ability to escape destruction in 1510 was its success in corrupting some of the members of the League of Cambrai 5.12 It should be qualified, th�t Russia, like most nations against Venice's principal adversary, France. During the in­ formerly members of the �omecon, is being crushed terval 1894- 1907, Britain, led by the Prince of Wales who by the same, global finandial maelstrom which is cur­ became Edward VII, played France, Germany, and Russia rently causing the collapse of an increasing number of (among others) against the most vital strategic interest of nations, in every sector oM the planet. each and all, by playing upon the susceptibility of each to The present combination, of history's most bloat­ become so obsessed with some petty policy-interest that they ed and dangerous financiaJbubble of speculation, and could be self-blinded to their most vital interest. the descent into the was eland of a "post-industrial If there is one lesson to be learned from modern history . utopia," represents an intolerable burden and life­ which might be fairly described as "fundamental," it is the threatening condition r virtually every family repeated spectacle of that unhappy fate often suffered by f� household and person in every part of Russia. the nation which puts aside principles, regarding principles wrongly as "too theoretical ," in the apparent practical interest During recent years� these circumstances and of some perceived, specific, narrower policy-interest. We trends, combined with attempts at "shock therapy," see, as in the case of the Triple Entente, or the dissolutioh of have collapsed the net pllysical production and con­ . the League of Cambrai earlier, that the nation which prefers sumption of Russia, and of sundry neighboring na­ the "practical" to the "theoretical" in this way, will probably tions, apparently to not better than one-quarter the find itself, like Czar Nicholas II, hors de combat in the next levels, per capita, per household, and per square kilo­ strategic catastrophe . meter, of 1989. The first principle to be adduced from five centuries of The evidence is clear:; For Russia, for the former modern history, is that the oligarchical model as such is the member-states of the Comecon, and also for most of enemy to be crushed; our most vital and urgent true interest the world at large, the cent, monetarist forms of now, is to revive what was good from the present wreckage IJ economic, monetary, and. financial policies of the in­ of modern history . ternationalmarket-place have proven a global failure, a global social catastroph¢. 5.0 A strategy for recovery 5.2 The constitutional politiicaI structure of the 5.1 The general institutional basis for the recovery economy

From the standpoint of principle, there are two pre­ What is required is not that Rlilssiabecome a carbon-copy conditions for the economic recovery of Russia. First, of the United States during the best periods of the U.S.A.

34 Feature EIR March 17, 1995 Russian naval offi cers in the United States in 1863 . Czar Alexander I/ dispatched his Navy to assist President Abraham Lincoln (inset) during the U.S. Civil War.

Rather, Russia's rational alternative to the presently ongoing which the framers of the U. S. Declaration of Indepen­ economic catastrophe , is to adopt a Russian system which dence and Federal Constitution rejected in favor of embodies the same proven principles of success which have Leibniz's alternative. been tested and proven sound in not only the experience of 5.22 As can be seen from the vantage-point of Treasury the United States' wiser periods, but of other nations which, Secretary Alexander Hamiltpn' s relevant three reports for a time, also applied their own version of the same princi­ to the U.S. Congress, the general basis for the " Amer­ ples of national economy. ican System of political-economy" is outlined within Perhaps not coincidentally, the best periods of the United provisions of Article I of the Federal Constitution. States were those times when the U.S. and Russia govern­ ments were on the relatively best terms. The good relations 5.23 These reports and those constitutional provisions between the U.S. and Russia governments of the 1790s re­ should be considered together with the relevant histor­ flectedRussia 's crucial assistance to the cause of U.S. inde­ ical evidence not only from United States, but also pendence: the League of Armed Neutrality. Czar Alexander from relevant foreign examples, including nationalist II, who once again liberated the serfs of Russia, was a valu­ periods in the history of France, since Louis XI, Ri­ able ally of President Abraham Lincoln's U.S.A. at a time chelieu, Mazarin, and Colbert, and later periods of that the forces of Palmerston's Britain, Napoleon Ill's revival of Colbertist traditions, through President France, and Spain were allied in a plan of naval aggression Charles de Gaulle. This evidence includes the rise against the United States. Why should Russia not benefit of Germany under the influence of the policies of from contributions to economic science by an old friend? Friedrich List; it includes the case ofMeiji Restoration The following observations should not be read as an in­ Japan. It includes the kindred policies of the collabo­ tent to suggest a "blueprint" of reform , but rather to illustrate rators D.1. Mendeleyev and Sergei Witte in Russia, as some relevant principles. the eurasia-infrastructure-building policies of Witte's implicit key collaborator, France's Foreign Minister 5.21 Under the U.S. Constitution's provisions, the basis Gabriel Hanotaux. for the form of economy known as "the American System of political-economy" originates in the so­ 5.24 The implicitly constitutional form of political-econo­ called "general welfare clause" of the Preamble to my represented by the American System's successful that Constitution. This is to be recognized, for this applications in various nations, is centered around a purpose, as an affirmationof Gottfried Leibniz's prin­ division of the total national economy between re­ ciples of natural law , in opposition to that empiricist spectively public and private sectors . The applicable doctrine ("life, liberty , and property") of John Locke , physical principle is the fact, that the effective devel-

EIR March 17, 1995 Feature 35 opment of the total area of a nation can not be achieved 5.31 National economic growtIb.and "free trade" are impla­ as the chaotic sum-total of the infrastructural deci­ cable adversaries. During ! all of modem history, until sions and actions of the private owners of small patch-­ the 1963-95 continuing ' aradigm shift," economic es of the national territory. To wit: measures of protectionis were the hallmark of the victorious economy, and freetrade" the policy which (a) The Federal government exerts a monopoly ' imperial Britain dictated those nations which were over the creation, issuance, and regulation of a nation­ its intended victims. If I the world's governments al currency, and regulation of both public and private accept "free trade," all 0 the world's economy will banking and credit. The preferred mechanism used be plunged into a general ollapse as a result. for distribution of newly created currency, whether specie or Federal notes, is regulated lending by a na­ The necessity for an '-"free trade" measures of tional bank which acts (inclusively) as a depository economic protection is th t no branch of industry can for the national issue of currency. survive, if it does not en oy a price for its products which exceeds the neces ary cost of the production. (b) The Federal government and governments of Similarly, no national e onomy can prosper , if it the state share and divide responsibility for the cre­ allows to be dumped upo its shores goods which that ation, improvement, and maintenance of basic eco­ nation can not afford to p chase, except by curtailing nomic, physical, and political infrastructure of the its purchases of some es ential items. The primary sundry Federal, state, and municipal organizations. function of protectionist easures of tariffs and tra de The Federal governmentassumes responsibility auto­ regulation, is not to establ sh a supplementaryor alter­ matically, by the U.S. principle of Federal responsi­ native source of tax reven es: It is an economic-plan­ bility for interstate commerce ; otherwise, what is not ning function employed y every sane modem gov­ assumed as the responsibility of the Federal govern­ ernment. ment, is leftto the responsibility of the governmentsof the states. This includes, most notably, the following The primary beneficiafyof such economic protec­ economic categories: the military, police forces, jus­ tion is the average famil� household of the relevant tice, water management, general sanitation, general nation. The argument on �is point is virtually identi­ transportation, generation and distribution of required cal to that Henry C. CarfY and others made on the power-supplies, general communications, public ed­ issue of chattel slavery in �e United States. ucation, last resort for medical services, and promo­ If another nation supp ies products at a lower price tion of scientific and technological progress. � than our own, and acc�mplishes this because of (c) In the areas of basic physical-economic infra­ cheapness of labor and lack of paid infrastructurecosts structure, the governmenthas the option either of con­ in that other nation, bottinations are ruined by this structing and operating the element of infrastructure exchange. The other natibn is kept in backwardness itself, or of delegating this function to a government­ and a poor level of existe�ce of the relevant sectors of regulated, totally or partially privately owned public its labor-force, whereas �ur labor-force's quality of utility. The governmentmust never divest itself of the life is lowered to a level tnore nearly resembling the powers to satisfy its accountability for the good and misery of those employM in the relevant foreign otherwise rational development of the whole of the cheap-labor operations. !Thus, for example , "free territory of the nation, state, and municipality. trade" is directly in viola�ion of the "general welfare clause" of the Preamble to the U.S. Federal Consti­ (d) The other areas of agriCUlture, mining, indus­ tution. try,banking, commerce, and commercialized servic­ I es, constitute, in principle, the private sector of the Thus, the traditional torms of protectionist tariff national economy. Governmentis not prohibited from and trade policy practiced formerly by the U.S. gov­ ownership within this sector, but should avoid this ernment are legitimate, indispensable, and one of the in cases in which an adequate supply of the type of more powerful tools of �overnment in the domain production or service required by the nation is provid­ of national economic-dev¢lopment planning. Without ed by .private means. such means, government kan not defend the value of the national currency e tively. ffef;I 5.3 The methods for supplying direction to 5.32 As to fostering the internal development of the nation­ economy al economy, there are fcl>ur aspects of the national Once again, not to provide a "blueprint," but to illustrate economy's public sector through which government relevant principles: action can have the relatively most powerful and dura-

36 Fe at ure ElK March 17, 1995 ble stimulus to higher rates of both production and methods of tranches used custf western european in­ exceptional case, in which the credit relieved a critieal land waterways launched by <[:harlemagne. bottleneck, as in the instance in which a significant 5.42 Typically, today, the width df that corridor may ex ­ shortage of some requirement were relieved. tend to approximately 50 kildmeters on either side of 5.33 On condition that the state outlaws the substitution that "spine." Associated witlll that "spinal column," of central banking for government monopoly over or central right-of-way of the corridor are pipelines, creation and issuance of currency, national banking power-transmission lines, an4 parallel trunk highway puts at the disposal of the state the most powerful segments. Along the length :of the spine, there are administrative devices for effecting a non-inflationary nodal foci of development ; f1X,tending like ribs from stimulation of real economic expansion. the spine, are the feeder link� into the flanking tissue of the corridor on either side of the spine. The mechanism of lending of state-created curren­ I cy through national-banking facilities, virtually elimi­ 5.43 The choice of a network of Plodern such "develop­ nates the state's reliance upon the open market for ment corridors" involves twq crucial factors of Rus­ bonds as a source of its lending-power. The state's sia's economic development jas a whole. First, ade­ currency-notes can be put into circulation, through quate development of Russi�'s economy across its lending, at rates which reflect only the consideration vast stretches of relatively lpw population-density, of combined risk and administrative costs. State credit would not be possible withou� both large-scale devel ­ becomes the cheapest form of credit in the market. By opment of Russia's vastly un�erutilized hydrological restricting the categories of loan of this state-credit, potential, and the development of an efficient set of government can orchestrate the growth of the public trans-eurasian railway-spinttd corridors. Second, sector directly, and also structure the investment op­ without the development of tl).e inland waterways and portunities afforded to the private sector of the econo­ rail nets from Berlin through Poland, into Russia and my. By restricting the issuance of this credit to the Ukraine, there can not be rul economically efficient

ElK March 17, 1995 Feature 37 commerce between westernEurope and Eurasia gen­ clusters of HTRs has a great potential inside the kinds erally; without that, the development of Russia's of development corridors required for the efficient economy would be relatively crippled. development of the RusSia economy in depth.

Exemplary is the region of Central Asia associat­ The function of corridors defined in these and re­ ed with the presently spoiled Caspian Sea and the lated terms, is to transfqrm what might appear to be ruined Aral Sea. The water levels of these seas, the vast disadvantages of Russia's space, into an ad­ and the levels of water-tables in adjoining areas vantage. must be raised. The use of no more than a significant fraction of the vast amounts of flow presently 5.5 The essential economic function of the space · dumped into the Arctic Ocean would serve to flush program both of these seas, and would also feed a broader network of inland (barge) waterways and other The common fault in the thinking of self-styled "practical economic and household uses. men" is indicated by the fact th�t nearly all species of beasts, excepting perhaps a relative hlUldful of species, such as the The crucial, more general problem addressed by foolish pandas, are far more '�practical," and much more Eurasia "land-bridge" and other developmental corri­ consistently so than even the mcpst"practical" among human dors is that low population-density tends to increase beings. The most practical man pn Earth is theserf-like peas­ the cost of production significantly. The factors of ant working in traditional agriQulture, sometimes almost in cost are typified by the increase of the amount of beast-like ways; if he has his �ay, his condition of life will inventory which must be supplied to the transport never be improved significantly, even over thousands of "pipeline," relative to the level of production-output years to come. A beast, unlik� the Eratosthenes from the involved, and by increasing the cost per ton attribut­ ancient Academy at Athens, wCiluld never depart from being able to movement of freight. "practical," to suspect that the Earth was a sphere-likeob ject, There are several ways this problem may be ad­ to say nothing of measuring � Earth's diameter to within dressed successfully; these solutions are all to be about 50 miles errorat the pole�. Similarly, peoplewho have found in principle within the notion of the develop­ yet to learn the ABCs of the s¢ience of physical economy, ment corridor: think that an extensive govemm�nt-sponsoredspace program is either simply a military, or p<)litical-prestige program, but I (a) The development corridor provides the means otherwise a waste of money. for establishing designed, high-density complexes of On the condition that a cdmpetent economic-recovery production within the most efficient modes of trans­ program is set into motion �n Russia, the continuation port and supplies of water and power (and, also, com­ and expansion of Russia's s�ace program is one of the munications). By this method, the corridor is a means most useful contributions to � the successful growth of by which an efficient form of high-density area is Russia's net output per capita, per household, and per developed within a larger low population-density square kilometer. It is relevan. to examine here summarily area. the proposition, that Karl Marx, like the Physiocrats, (b) The "spine" provides means for gaining the Adam Smith, and David Ricardo before him, never under­ benefits of economy of scale in respect to trunk-line stood the source of physical-e,conomic profit generated in transportation, communications, and production and a modem economy. The benefits of a properly directed distribution of powerand water supplies. space program are of this nature; we find a comparable case in certain vast economiq benefits which the United (c) The development of high-speed magnetic levi­ States has gained repeatedly tlrom large-scale investments tation, and the serial/mass production of the new, in the production of the fordt of waste known as high­ Julich type of high-temperature reactors (HTR) in the technology military expenditulres. 100-200megawatt range, transforms the vast, under­ developed spaces of Russia into a network of develop­ 5.51 The economic pheno enon ment corridors of rich potential. Virtually no other q. nation in the world could benefit as much from the It used to be a margirj.al advantage of the United advantages of maglev speed as the area of the former States, that we emerged fromthe costliest of our major Soviet Union. Given the costs of transport of fo ssil wars, including the Civil War, far more prosperous fuelsfor production of power, and the greatly superior than we had entered it. :The U.S. trade unionist and energy-flux densities of the HTR over fossil-fuel others, used to be bemused by the curious fact, that plants, the gains in efficiencygained through the gen­ large-scale, crash-progtam war-expenditures made eral use of power-complexes built up modularly of the United States more prosperous, whereas periods

38 Feature EIR March 17, 1995 of peaceful disarmament were usually associated with which can not presently be addressed in any other I recession or even depressions! mode. The solution for this apparent paradox ought to The relevant policy con�iderations are shown be considered elementary: The only source of actual most readily from the vantage1P<>int provided implic­ physical-economic profit is that marginal increase in itly by B. Riemann's treatmentof the fallacies usually the productive powers of labor which is attributable associated with formal matherhatics, in his 1854 ha­ entirely to the generation and assimilation of scientific bilitation dissertation. The qualitative aspect of the and technological progress. This is what the pro-feu­ progress of mathematical physics is located in certain dalist Physiocrats, of the Fronde tradition, refused to experiments which have a unique significanceamong accept, as did all of the British empiricists such as experiments in general. Modem english-speakingus­ Smith and Ricardo, and as Marx , in his Capital, ex­ age among physical scientists �ms to preferthe term plicitly pushed aside this implication of technological "crucial" over "unique." progress. I To put the relevant cruci� point as succinctly as The same kind of benefit was realized by the Unit­ seems fe asible, let us brieflyrqstate Riemann's thesis ed States economy from President Kennedy's "crash­ in my own preferred terms. jfhis leads directly to program" commitment to a manned Moon landing. identifying the unique import�ce of space programs Over ten cents was returned to the U.S. economy as a for stimulating growth within �odem economies. result of the "spin-off' benefits generated by each penny of expenditure for that 1960s aerospace It were perhaps more or le$s inevitable, that in its program. baby-steps, science would bl�nder into the error of attempting to reduce PhYSic cience to the terms of 5.5l How the benefit is transmitted a naive sort of formal geome� , one axiomatically of zero-curvature. This is the g metry, not of vision, The transmission of scientific discovery to become but of the naive variety of Visu� imagination, in which increased productivity per capita and per square kilo­ space and time are extended ,indefinitely in perfect meter, is mediated typically through a section of in­ continuity: forward, backward, side-to-side, up-and­ dustry broadly identifiedas the "machine-tool sector. " down. The physical objects and events we attributeto Typically, a perfected laboratory apparatus, con­ our senses, or also to our iIJllagination, are simply structed for a proof-of-principle demonstration, located within a zero-curvatuI"c:lspace-time so defined. ' serves as the model for a new machine-tool principle. We then perpetrate the naiv� blunder of assuming That machine-principle, incorporated, in tum , in ma­ that processes occurring in nature can be described chine-tool designs, becomes the medium for effecting adequately in terms of the m�hematical mapping of increases in the productive powers of labor. Military objects within the zero-curvalure space-time of the investments in advantages of technological attrition visual imagination. Thus, nai�e error wrongly attri­ have thus the same type of indirect but substantial butes to the schemas of Gali1�o, Fludd, Newton, et benefits to the economy as space programs. Military al. , the quality of physical spdce-time. and space productiondelivers this ("spin-off') benefit I through the quality of stimulation such production If we examine this matter ftom the formalist stand­ provides to the machine-tool �ector. It is the new ma­ point of analysis, the following picture emerges from chine-tool designs so stimulated, which are the gener­ study of unique experiments, We discover, that in al source of the increase of productivity. each of these instances, physics presents us with prop­ ositions which can not be reconciled with the set of 5.53 How space programs must be defined axioms and postulates of a Ilaive (e.g., Cartesian) mathematics of space-time. .In formalist terms, we From this vantage-point of the economist, space pro­ can acknowledge the anomalous evidence withwhich grams have a twofold peculiarity. From the stand­ nature has confronted us, only �y a new hypothesis. in points of both science and engineering, space pro­ Plato's or Riemann's sense oftlheterm "hypothesis": a grams are anomalous in all respects. The putting of new set of axioms and postu ates, replacing that of objects and persons into space exploration, is already f naive mathematical physics. !. anomalous; this requires a virtually endless series of successive confrontations with circumstances which Then, we no longer have a simple, zero-curvature man has never addressed before . The chief purpose space-time. The combinatiOI� of all of the changes of space exploration, is the exploration of physical in axioms and postulates imposed by a reconciled anomalies in our universe, touching areas of physics succession of unique experim�nts. results in attribut-

EIR March 17, 1995 Feature 39 ing to our thus modified notions of physical-space­ recovery can occur in no way btU through government initia­ time some definite, non-zero value of curvature. In tives of the form of mobilizing $emi-idle and idle productive that transformation, the naive, neo-aristotelean, and related resources, to bring �ogether by command the es­ mechanistic form of mathematical notions of causali­ sential elements of materials, m�chinery, labor, and so forth, ty,such as those introduced by Sarpi-Gali leo, must to resume production on a scalttapproximating some earlier be replaced by a notion of the function of universal point in time, prior to that COllapse now being reversed. Reason, in the sense this notion was adopted by Afterthat initial phase, the robilized state is maintained Kepler. through shifting toward relianc� upon a system of purchase orders and credit for weekly �ayroll, materials purchases, Thus, is fun $mental progress in science ordered. and so on. A reasonably good pproach to the mobilization So, consequently, is technological progress supplied � during the initial phase of economic recovery would resemble a sense of ordering-principle. in a significantdegree the initial. 1940-42phases of pre-war For reasons recognized by Riemann, the kinds of and wartime mobilization of theiU .S. economy for combined experiments and kindred observations which address military and civilian logistics of wartime conditions. this matter of curvature more directly, are located at those extremes which lie beyond the direct power of 5.61 Some useful models f1r comparison our sensory apparatus, in the remotenesses of astro­ During recent decades, have recommended study of physics and microphysics. This should not astonish � the mobilization of the conomy of France, first by us, since the firststeps toward a mathematical physics, f Lazare Camot in his rol as "Author of Victory," and as Plato's Academy illustrates the point, were accom­ q also through the combi ed influence of Camot and plished through inferential studies of astronomy. The � the Monge-Legendre Ec le Poly technique during the study of the characteristic distinctions of living from p interval 1794-1814. The�e methods were assimilated, non-living processes, in these terms of reference, through the assistance pf associates of Camot and completely maps the frontiers of research in which Monge, by the post- 18114 U.S. Military Academy at the richest production of original, valid, fundamental West Point under co andant Sylvanus Thayer. discoveries will occur. Over time, the lessons tf the Germany and the joint How life presents itself to us in the remotest Prussia-Russia mobiliza ion of 1812- 13, under the di­ smallness of microphysics, and man acting upon the rection of Friedrich Schilt' ler's friends, for the Libera­ astrophysical vastness, are the expression of that ex­ tion War against Napo on Bonaparte's oppression, ploration of scientific frontiers. were assimilated to kin td effect. The CamotlEcole model is the classical c se, since it was the first in­ Now, then, briefly: The frontiers of scientific stance of a military mObifization based upon a science­ progress are expressed by man, including his most technology-driver pivot � intimate microphysical aspects, acting upon the most i anomalous phenomena to be found in the vastness of Other models of rele�ance include the U. S. mobi­ astrophysics. Cosmic rays, the spectroscopy of the lizations for war, 19 14- t 8 and 1940-44, and military perimetry of so-called "black holes," the shedding of and quasi-military scien(j.ficmobi lizations such as the rotation by fast-rotating binary stars, the full range of Manhattan Project and i the Apollo program of the spectroscopy of interstellar space, and so on and so 19 6Os. Also of relevanc¢ are the pre-Hitler Germany on. Here man will uncover the unique anomalies recovery program de�eloped for the pre-Hitler which lead to an increase of the power of mankind to Schleicher govemment j the one which the Anglo­ exist on Earth. Here, the clues to the greatest benefits Americans toppled, in Qrder to bring Adolf Hitler to to the economy of Earth will be uncovered. These power, and both the "hk:avy franc" reform, and the clues will be explored successfully, only by aid of dirigist program of industrial and fo rce de frappe de­ successful, increasing large-scale space programs. velopment which Prcl;ident Charles de Gaulle launched for the FifthR �public. 5.6 The analog of war mobilization 5.62 Does mobilization au r dictatorship? The paradoxical advantage and risk of any competent � effort to reorganize an economy as shattered as the Russia The social characteristic� of these exemplary past mo­ economy today, is that this can be accomplished in but one bilizations, are of special significance because of the way, by methods adapted from the world's rather rich mod­ understandable fears which will arise, that an eco­ em experience with war-economy. nomic mobilization of �is sort augurs the possible, The point is that the initial phase of a process of economic even probable emergence of a new dictatorship. This

40 Feature EIR March 17, 199 5 report concludes with an appended comment upon the continuity of the national culture is �e peculiar function of relevant historical view of this issue . that portion of the intelligentsia whiFh is committed to the principle that knowledge can be rendered intelligible through the agency of the creative faculty of the individual human 6.0 The 'national party' in modern european intellect. It is that portion of the intell�entsia which sees man history not as a beast, a wretch, but a creative intellect made in the The distinctive, collaborative roles of D.I. Mendeleyev image of God the Creator. The portion of the intelligentsia and Sergei Witte in the development of railways and industry constitutes what I designate as the social basis for "the nation­ in pre- I905 Russia typify a phenomenon characteristic of the al party" of a nation. appearance of the modem form of nation-state during the That portion of the intelligentsia in each language is the recent period of slightly more than six centuries, since the bearer of the continuity of the natibn. As this portion of collapse of the great Lombard debt-bubble during the middle the intelligentsia responds to that impulse within itself, it of the fourteenth century. This phenomenon I term the "na­ constitutes the organic leadership of a "national party."It is tional party," both as it sometimes appeared on the surface such an intelligentsia which writes Fuch documents as the of history, as a formal political movement, or operated as Preamble to the U. S. Federal Constitution ; it is the slave­ an organic phenomenon with society, as the collaboration holders, the dictators, and actual or would-be feudal aristo­ between Mendeleyev and Witte illustratesthe latter variant. crats, who would write the opposing preamble to the empiri­ It was customary, in pre- 1812Europe , to speak of Germa­ cist Constitution of the Confederate States of America. ny as a nation of poets and thinkers . Yet, from the beginning, it The relationship of the circles of Mendeleyev, Witte, and was always the poets and thinkers of every nation who actually \ later V.I. Vernadsky to the actual national party in post­ fosteredthe modem commonwealth form of nation-state. But Napoleon III France of 1871-9 8, as me Pasteur circles exem­ for a rare few exceptions, such as France's Louis XI, it was plify this traditionof the Carnot-Monge-Legendre Ecole Po­ not the kings and oligarchs who maintained the continuity lytechnique of 1794-1814, is an exerqplarysubject for study. of literate forms of language and other features of national We who in fact are organically representatives of the "nation­ european cultures, but always the poets and thinkers. al party" factions in our respective �ations should come to Dante Alighieri is one such pre-shaper of the modem understand more clearly and profo�dly, this historic basis commonwealth, and Petrarca after him . The Golden Renais­ for our natural inclination to collabor4te in the mutual defense sance and Louis Xl's commonwealth of France were made of our nations against the depreda�ions of the adversary, possible by the classical humanist teaching-order, the Broth­ oligarchical party . erhood of the Common Life. The Council of Florence was The question whether an attempted economic recovery organized by leaders such as Nicolaus of Cusa and the later initiated through an emergency mobi'ization will lead to true Pius II (Piccolomini). The spread of the new commonwea lth liberty,or todictatorship is a questio�of the socialcomposi­ institutions was fostered by such associates of the Oratorian tion of the agency which directs tQat mobilization. If the order as Erasmus of Rotterdam and Raffaello Sanzio. The directing agency thinks like a part, ora lackey of the oligar­ resistance against the venetian oligarchica l takeover of chical party, that agency will tend tq use the assembly of its England was led by figures such as the playwright Chris­ forces into a commanding position to �stablish a dictatorship, topher Marlowe and the composer John Bu ll. or something akinto it. The national ipartyin command, will In France, the erasmian associate of the Oratorians, Fran­ respond differently. The key to the pistinction between the cois Rabelais, churchmen such as Richelieu and Mazarin, two qualities of leadership, is the di!>tinction between those plebeians such as Jean-Baptiste Colbert, and anti-empiricist who see ordinary men and women I4s cattle to obey orders, scientists such as Desargues, Fermat, and Pascal typify the and those who see the creative inteillect of individual men resistance to oligarchism. and women as the great moral force fo r good which must be In modem Germany, it is the cases of Gottfried Leibniz, awakened , and set into motion. J. S. Bach, Lessing, Moses Mendelssohn, and the circles of Thus, for that reason, and in that Iltnse,I do not trustmen Schiller, his sometime collaborators (such as Goethe), his and women in power who aretoo mhch the busy-busy-busy friends,such as Wilhelm von Humboldt and von Wolzogen, practical politicians. One must pref�r men and women who and his followers, such as Beethoven and Schubert, who have learned the importance of proc�ding fromprincipl e to exemplifythis. Later, there is the great Gauss, Lejeune Dir­ action, rather than viewing "princip1e" as rhetoric produced ichlet, Wilhelm Weber, and Riemann, and later, the last to justify what one has done out of purely practical considera­ leading bastion of resistance against the dog-packs of the tions. I place some value on politicaliparties,but I do not like oligarchical philosophy of positivism, Max Planck. them too much. I prefer political movements, which arese lf­ The history of the nation is not the kings, princes, and governed by passion for the practic� realization of the com­ aristocrats, for whom the nation is but a feudal estate, or the monwealth principle of the moderni. scientifically progres­ financier nobility, who loot it with usury. The renewal of the sive form of nation-state.

EIR March 17, 1995 Feature 41 �TIillInternational

Collapse of Russia's ecponomy reaches point of no returnI by Jonathan Tennenbaum

The awesome pace of Russia's economic disintegration has rted to earn foreign curren Y often at ridiculously low � ' definedthis year, 1995, as the punctum saliens for the coun­ {nlces. F' try's future. Either the process of disintegration will behalted Thus, for example, light inklustry collapsed by 47% from by an abrupt change in policy, in the direction of a state­ 1993 to 1994, dropping to a �re 26% of its 1990 output. In directed mobilization to revive industrial production, or the the one year 1994, the output of machine-building and metal­ potential for any future recovery will be irreversibly de­ working fell by 40%, chemicaliand petrochemical production stroyed. This is the essential conclusion of documents, sub­ by 30%, construction and matctrials by 31%, wood and paper mitted this month to the Russian State Duma (the national by 31%; food processing fell by 21%. By comparison, pro­ parliament) by expert working groups under the direction duction of fuels and nonferro�s metals collapsed by "only" of Duma Economic Committee head Sergei G1azyev. The 11% and 15%, respectively, ft1<>m 1993 to 1994. recently released documents fully confirm the evaluations of While the relatively smalldst decline occurs in raw mate­ . EIR , while providing some valuable additional information rials and other export-oriented roduction, the worst collapse which we summarize in this article. has occurred in the sectors eml loying the most highly quali­ The latest data demonstrate not only a sharp acceleration fied manpower-high technol , gy, science-based industries. in the rate of decline of physical output over the last year, but Here the decline exceeds 70% lin many categories, including also a qualitative disintegration of the economy, which is machine tool production and tonstruction of machinery for rapidly devolving from a technology-based industrial econo­ light industry, construction, tt-ansport, and agriculture; and my into a "Third World" -style supplier of raw materials and communications technology, dlectronics, and electro-techni­ "services." But, rather than converging upon some lower, cal equipment. hypothetically stable level, the Russian economy is devolv­ The dramatic "quantum-jUmp" contraction of industrial ing in an accelerating series of downward "shocks," each one output within a single year, toming on top of the already steeper than the preceding one---exactly the type of non­ disastrous collapse of the preceding three years, stands in linear collapse process which Lyndon LaRouche described stark contrast to Russian Pres�dent Boris Yeltsin's promise long ago, in his fundamental works on physical economy. of "stabilizing of the economy." And it can in no way be attributed simply to the closin� down of military-relatedpro­ Full extent of collapse is masked duction, as some would like todaim. On the contrary, essen­ According to Economic Committee estimates, industrial tial categories of durable constfuler-goodsproduction arealso production collapsed overall by 21 % in 1994 alone, to less collapsing: While the productibn of refrigerators in 1993 was than half the level of 1991. But the full extent of the collapse 92% of the 1990 output, it cdllapsed to 70% by the end of is masked by the relatively slower disintegration of primary, 1994. The manufacture of washing machines had fallen by raw materials-related production compared to the down­ 1993 to 72% of the 1990 output, but by the end of 1994 it stream sectors of production. A large part of the raw materials was only 39%. Similarly for other consumer goods, taking formerly consumed by domestic industry, is now being ex- 1990 as reference-point:

42 International ElK March 17, 1995 1993 1994 ally every market -basket category, with relativeluxury items Electric vacuum cleaners 83% 35% such as personal computers consti�ting rare exceptions. Electric irons 86% 31% Only a tiny percentage of the popul�on has enjoyed a sig­ Sewing machines 82% 23% nificant increase in personal consumption, while the vast Synthetic detergents 45% 33% majority is much worse off, materially, than they were in the Bath soap 43% 30% 1980s under the Soviet system. The income gap between the Tape recorders 64% 21% upper and the lower 10% of the population grew by 11-15 Radio receivers 49% 18% times in the course of 1994 alone. Incomes continue to slide further and furtherbehind the inflationrate, which is official­ The Duma documents characterize the situation in the ly estimated at about 11% per mon�, or nearly 350% per agricultural sector as a "national emergency." Deliveries of year. tractors to the agricultural sector have fallen to 17% of the The wholesale collapse of living standards in Russia has 1990 level, deliveries of combines are down to only 8%, the reached the pointthat the country is �ing literallydepopulat­ supply of mineral fertilizers is now 13% of its level in 1990. ed. In 1994, deaths exceeded births by nearly a million per­ At the same time, the total land area cultivated has dropped sons! But, the full effects of the 1994 "shock" collapse of by 12%. The fall of agricultural output itself has been slower, living standards and rise in mortality rcttes will appearafter a "only" 8% in 1994, compared with a fall of 4% in the preced­ certain time delay-many of them are already beginning to ing year; however, the depletion of machine parts and materi­ show up this year. The nutritional le�l of thepopulation has als stocks, inadequate fertilizer use, and other factors, add already fallen below the critical minimum, and health care up to a catastrophic collapse in food production further down standards have collapsed. In 1994 al9ne, the mortality from the line. infectious and parasitical diseases grew by 15%, while the Total capital investments in the Russian economy fell by production of essential categories of antibiotics and other "only" 26% from 1993 to 1994, the largest drop since 1992, medicines fell by more than 70%. when investment droppedby half. The percentage of invest­ ment into the productive sector of the economy declined from A personal observation 60% to 56%. The portion of private investment going to the In the context of the above sulIlIll$"y,based on documents productive sector is continuously falling, and is now less than recently released by the Duma, thi� author would add the a third. Private money is pouring instead into various forms following observation: of speculation,fore ign currency-denominatednonproductive According to estimates of some Rl1ssianeconomists, only investments, and outrightcapital flight. At the same time, an 40% of an average family income tcl>day comes from "offi­ increasing portion of the already-declining state investment cial" salaries. The rest is "extra" income derived from buying into the economy, is being diverted away from the productive and selling, odd jobs, and black market activities of the most sector. varied sorts-the sorts of activity knQwn in the black ghettos of the United States as "hustling. " O�r the last few years,the Dramatic fall in scientific investment wholesale looting of the country, an4 speculationassocia ted The decline in state investment has been particularly dra­ with that looting process, has provi�ed a significant source matic in the domain of scientific research, where the former of income trickling down through c�ains of "service sector" Soviet Union once rivaled, and in some fields surpassed, the companies and informal channels which have multiplied United States. For example, the budget of scientific labora­ overnight in the context of the "reform." tories of the Russian Academy of Sciences was reduced in For a significant section of the ypung urban population, the course of 1994 to a mere 5% of what it had been even in as well as others, this income flow ltas provided a "buffer" 1993 ! In the context of a recent controversy concerning the against the grim realities of the economic collapse, feeding activities of speculator George Soros's "International Sci­ magical fantasies of an affluent, ''y,ppie-like'' existence as ence Foundation," leading Russian academics declared to the featured in the western movies and spap operas, which form press that, without massive financing from abroad, "science a large part of the Russian televisiCl)n programming. What in Russia is finished." happens when the stocks of material assets in Russia become While internal production collapses, foreign goods have depleted, whose liquidation for sale! abroad has propped up beenflooding into the Russian market. The share of domesti­ the flow of "extra" income for an entire section of the popu- cally producedgoods as a percentageof total goods purchases lation? i on the domestic market, has declined from 79% in 1990 to One thing is for sure: The respopse of the Russian elite 51% in 1994, and is projected to decline again rapidly in and the Russian popUlation generall1, to the series of violent 1995. The influx of legal and illegal imports, however, by shocks delivered by the economic cpllapse process, will be no means fills the gap leftby collapsing internal production. shaped by deeper cultural impulses than a few years of expo­ On the contrary,per capita consumption has plunged in virtu- sure to Hollywood movies and soap pperas.

EIR March 17, 1995 International 43 'We must shift from a criminal to a civilized economy, ' Russians i say Deputies of the State Duma of Russia, the lower house of Meanwhile, over 28% of the pOpulation is below the poverty parliament, Adrian Puzanovsky and Nikolai Chukanov, to­ level. People counted as middle-income receive incomes gether with Gennadi Sklyar of the Obshchestvennaya Palata, barely covering a subsistence minimum. These are not the a governmentadvisory body, visitedWashington the week of kind of reforms we were looki�g for. Feb. 27 on invitation from the Schiller Institute. Mr. Puza­ We do not forget, howeVejl", that we are surrounded by novskyis the vice-chairman and Mr. Chukanov a member of the big world, which has its problems. It is one of those the Duma's Economic Policy Committee. All are signers of problems that brought us tq Washington-the problem a call fo r the exoneration of Lyndon LaRouche. On March around [American economist] Mr. [Lyndon] LaRouche. 4, the Russian visitors had a roundtable discussion with the We view him as a promin1!nt American scientist, a hu­ EIR staff, which we excerpt here. manist, and a democrat, whose ideas are of great signifi­ cance, including for my counttjy. We are here to say that the Adrian Puzanovsky LaRouche case should be reo�ned; that in a countrycalling My country is in a very difficult situation today. We are itself the basis of world democr�cy-and that is how America not looking for scapegoats; we understand that we ourselves is viewed in my country-the LaRouche case is not tolerable. are at fault for our tribulations and hardships today. We are I cannot tell you what actions Will follow, but we discussed guilty of having been too trusting and having delegated too this frankly in Washington, in the belief that people like many rights and too much responsibility to those we believed LaRouche would do honor to the citizenship of any country. capable of taking the right decisions. This refers not only to [former Soviet President Mikhail] Gorbachov, but also to Nikolai Chukanov those who are at the center of power today, representatives I would lik� to touch on �n important question, which of the elite which said it knows which way to go. also concerns you. I am convihced that there is a conflictof The firstconclusion everybody is drawing in Russia today two ideologies in the world tbday. One holds that people is like the Russian proverb: Trust, but verify. [Former Presi­ should live in the kind of comp€jtition,where one personis the dent Ronald] Reagan, an American, knew that proverb and rival and enemy of another. BUt there is a differentideology, made better use of it than we did. We have decided in the where people are a big family, Md should help each other. If future to do more checking on those in whom trust is placed. there be competition-for without competitionit is impossi­ The electoral process makes this possible. ble to adopt effective decisions in any area-it should be Today, people in Russia very much look forward to the based on a principle that is eJt.pressed well in the Olympic elections to the State Duma next December, and hope that Charter: From the victory of each, all should win. those elections will take place. We drew attention to this Therefore , as an economislt,I would like to say that the when we were visiting congressmen and senators this week. ideology chosen as the basis of our reforms was the former We hope that these elections bring forward political forces of these two. It was largely borrowedfrom the Chicago mon­ who better know the life of the people and will be prepared etarist school; that was the dbminant influence on all the to adopt laws and decisions in the people's interest. They reforms in Russia. At our press conference and in meetings will also be pro-reform and pro-democracy, but in favor of with congressmen, I tried to bring to their attention the nega­ reforms which do not reserve the fruits of reform for a select tive consequences of the Chic�go monetarist school. few-the new Russian oligarchy. Let me give you a brief account of what happened in our In Russia today, 7-8% of the population controls around country during these reforms. In little more than three years, 54% of the national wealth. This is an incredible percentage. the standard of living of most of the population has fallen

44 International EIR March 17, 1995 "The LaRouche case is not tolerable," three Russian offi cials told the National Press Club in Washington, D.C. on March 2. Left to right: Gennadi Sklyar of the Obshchestvennaya Palata, a government advisory body; Rachel Douglas of the Schiller Institute, who served as interpreter; Adrian Puzanovskyand Nikolai Chukanov, both deputies of the State Duma of Russia.

threefold. Our economic capacity has been over half-de­ tempted forcible elimination of one's opponent. Therefore I stroyed, a destruction which exceeds that during the war believe that we should join efforts in this respect and expose against fascism. the flaws of that school of economics, so that the citizens of I fear that this type of economic approach will lead to the both Russia and America may see where this ideology leads. destruction of economic and intellectual potential all over the Without an understanding of its flaws, it will be impossible world. to avert the same catastrophe that has struck Russia .. Our scientists now have nothing to live on. Young teach­ ers receive $70 per month. They cannot make ends meet. Gennadi Sklyar Now we face the obvious task of changing the course of We came here to tell the truth about the situation in our the reforms. It has become clear to everybody in Russia that country , because only the truth will be able to help you in the team which relied on monetarist theory has proven to be your deliberations . And the truth is bitter, indeed. incompetent. I want to tell you why our economy is still A majority of the people in my country made a personal breathing, just barely: only because enterprises are willing decision to try another way of life. Some abandoned their to ship goods without payment and workers come to work previous selves and way of life. And when we say that the without receiving wages . If enterprises were to stop shipping younger generation has betrayed its fathers , this is the truth . goods without payment and workers ceased working without But, unfortunately, the older people, as well, those who pay , there would be total economic paralysis. voted for [Russian President Boris] Yeltsin, also thought that Essentially we broke up the old planned economy system, one little betrayal in their lives would make it possible for but we built no market economy . This is not an economic them to live better. They thought that everything would be crisis, but economic chaos . like it is in the United States or Sweden, and now they are Why do I say that we have a shared task, in this sense? bitterly disappointed. They are suffering most of all . Because the influenceof the Chicago monetarist school today Nikolai Chukanov talked about people not receiving their will lead to the destruction of the world economy, as well, wages. We can say a lot about what people are not receiving: and is also capable of rapidly destroying the U. S. economy. They have stopped listening to music, they stopped going I believe that the LaRouche case is an instance of at- to the movies, they stopped reading, they ceased normal

EIR March 17, 1995 International 45 recreation. This depression is the most horrible thing that has Sometimes people just can t take it any more, and we seized society. There is, of course, some hope, because the have the outbreak of strikes, as ith the mines right now. potential of the nation is very great and we think that new Puzanovsky: I would add an ther aspect. It is not only a people and new ideas are still capable of taking society in a question of human psychology, but also a national character­ rational direction. istic of the Russians, who are e tremely patient. Sometimes I remember fiveyears ago, when we were arguing about they prefer to place themselve in an intolerable situation, the further development of Russia. There were various argu­ than to resort to open oppositi n to those in power. This is ments. But only now have I come to understand that we were inherited from our past, this s cial respect for the central lacking something very important. We saw the West as a authorities. I would not call it ti , although that also occurs. homogeneous, gray mass, where there was just one type of You know the work of Che v, the remarkable Russian idea or evaluation. We were in no position to tell our people writer, who was not involved i politics. He once said that that there were other types of thinking in the West, other the most terrible thing is to fee slavery within oneself, and people. The acquaintance we have made with LaRouche's he wanted to squeeze that slavi hness out, drop by drop. work has been a big help to us. This quality of long-sufferi g patience is both good and There are political forces in Russia today who are capable bad. If you have good rulers, i is a good quality. But if the of leading society forward. I won't give a big political analy­ leaders are of a different sort, I then it is just the opposite. . sis here , but I would say that there are four basic tendencies. Worst of all is when the authori es abuse their power, taking There are the political forces who three years ago told advantage of the patience of population. This occurs in the people, "Trust us, and everything will be great." These Russia. political forces will be rejected by the majority. Then we have a small segment of the political forces who say, "We EIR: Would you comment on e murder of Vladislav Listy­ should return to how things were ten years ago, and the ev, the journalist, in Moscow? good life will come back." But this viewpoint is not widely Sklyar: I just discussed how rganized crime has attained accepted. You cannot swim in the same river twice, nor can enormous influence in Russia. he redistribution of property you returnto your youth, even if it was really fine. which has taken place, and co tinues, in the country, and So the question arises of which ideas will prevail. We do largely takes the form of thieve� , has led to the flare-up of a have political forces who call themselves "patriotic ," and type of struggle which is neces�arily criminal. there is a big nationalist element there . It is possible for them Listyev was not the victim !of a political contest, but of to receive the support of the insulted and the injured. This is an internecine conflict among groups which were divvying a serious danger. That is why we are building support for the . up the proceeds of the virtually unregulated revenues from political forces of the center and left of center, who talk about television advertising. Now his tIeathis simply being exploit­ national priorities, social guarantees, culture, education, and ed in the political struggle. the development of the country and society. We do have such Furthermore , it is important for officials to cover up the possibilities. We hope that these forces will prevail. fact that his murder had this criminal background to it, be­ But I think that there may be some very harsh methods of cause otherwise they would hav� to admit the criminalization action. You should be prepared for this. This is because our going on. And the authorities ate not yet prepared to take on country, to a large extent, has become a country run by the mafia,because state officialsat all levels have developed criminals and corrupt officials. You cannot defeat that kind close links with organized crime. of force by friendly persuasion and signing decrees. It will We expect there will be othtr such deaths. This one hap­ also be necessary to apply force. pened to receive a lot of publici�y. But when we openup any This is very hard , but without such a cleansing we shall Moscow newspaper, every day we read about one, two, or not be able to advance, because our people will never under­ three murders of entrepreneurs ,I directors of companies. This stand, if we tell them: Your neighbor stole a lot and became is how they settle conflictsamopg them. extremely wealthy. He stole from you, too. Let's forgive him Chukanov: I would add that tilis is a very serious question, and go on living. It would be very hard for people to agree because it has to do with the entire model of reform that was with that and unlikely that they will. Any cleansing is a implemented. The model we �opted was that the govern­ difficult thing, but it is necessary if we want to develop ment stops planning productio� or setting prices, and stops according to rational concepts and laws. giving money to the enterprises J We have termed this a primi­ tivist reform: Do nothing and give out no money. As a result EIR: If people are working without pay, how do they eat? of this reform, all the enterprises and banks in the country Chukanov: It is amazing, how people can adapt to various became ownerless and unsupervised. The management of conditions. Some people live on their parents' pensions. these enterprises and banks enj�yed the positionof favorites; Some people have potatoes stored up from their garden patch­ without being proprietors , they! were also not subordinate to es. Some people findwork here and there. anybody.

46 International EIR March 17, 1995 But I think that there may be some very harsh methods qfactW n. Yo u should be prep aredjor this. This is because our country, to a large extent, has become I a country run by criminals and corrupt qjJicials. Yo u cannot dej eat thatkind qf jo rce byjriendly persuasion and signing decrees. It will also he necessary to app lyjorce. I

These were ideal conditions for organized crime. The some reason, they don't talk about Lpndon as much. entire reform became the criminal redistribution of this own­ Sklyar: When the Gaidar reforms !Were being developed, el'less. state property. Both the murder of Listyev and the our mass media often said, "Yes, �ere will be looting and events in Chechnya are cut of the same cloth. criminal capital. But there is no other way! Because this has The events in Chechnya were not a conflictof the Chech­ always happened in other countriesi'This philosophy was en people with the Russian state, but a conflictbetween the of great significance in suppressing the internal resistance biggest center of the criminal accumulation of capital and that our people felt. People nurtured jllusions in this respect. state power. This criminal center accumulated so much mon­ They did not envision this total crimiinalization. ey, that they could maintain their own professional army, As for the fact that this was �ing run from London, where soldiers of fortune were paid as much as $1 ,000a day . or how it works in general-nobody told them about that. These cases demonstrate that we have ended up in a Nobody talked about why there wOl1ld be people who had criminal state with a criminal economy. Now we have the such a philosophy as their fundamentalvalue . But I promise task of developing a program not for the transition from a you that during the coming electoraJ campaign, we will be planned to a market economy, but from a criminal economy talking about this. to a civilized one. This needs to be solved by a special ap­ proach, not through conflictsas in Chechnya. EIR: What is the attitude of the average Russian citizen, of Sldya..: Let me give you two examples. The main opponents your constituents, to the United S�tes as compared with of [Gen. Dzhokhar] Dudayev are in Moscow. It is the central three years ago? authorities versus organized crime in [the Chechen capital Puzanovsky: This is a very good question-the attitude of of] Grozny. But Dudayev' s main friends are also in Moscow. Russians toward Americans. It is no exaggeration to say that Through Dudayev, arms were being sold, diamonds, we are very similar in our characteI1 and outlooks. Perhaps drugs-all this was flowingout of the country as ifthrough a we began life in equally difficultcir¢umstanc es: You devel­ hole in our pocket. People, including in high offices in Mos­ oped a new continent, we Siberia. This continues to this day, cow, were raking it in fromth is. although you have had more successesthan we with respect Another example, which may seem wild to you: Every to the standard of living, and so fortQ . high-ranking official who has access to fundsfrom the [state] Long before Gorbachov, most of our popUlation did not budget finds some means of transferring these funds to pri­ view America as an enemy. We rememberthe Second World vate financial institutions for purposes of speCUlation. From War very well, and we remember that we met on the E1be; there he puts them in an envelope or a suitcase. that meeting on the Elbe plays a gTeiIlt role in the life of the This kind of truth makes us think seriously about how to Russian people. Believe it or not, I h.ve in my closet at home accomplish what Nikolai Chukanov just talked about, how underclothes sent from America during the war. My relatives to make a nonnal society out of a criminal one. It is a very received them and I inherited thern. We have many films serious problem. about these events. But I must say that in the most �ent period, especially EIR: You are talking about a criminal economy. Milton during 1994, questions are entering; into people's thinking: Friedman, of the Chicago School, is an open proponent of Why are things so bad for us? Wh�re did these proposals the crirninalizationof the world economy. To what extent do come from, on how to carry out these reforms? policymakers in Russia appreciate that the British wanted Why-let me speak frankly here-didwe , having pulled this criminalization to occur and that Britain is the center of out of easternEurope , broken up the Soviet Union, and aban­ those forces in the West wanting to see this? doned the Baltic states, not meet with understanding on ques­ Chukanov: People have cooled toward these theories in tions of developing our econom)f? We dismantled the Russia today, but they attribute the horrible results to the planned economy and centralized mlPlagementof the econo­ entire West, especially the United States, and Israel. For my. We carried out a colossal priva*ation. Even the Assyr-

EIR March 17, 1995 International 47 ian kings did nothing like this when they conquered coun­ snapped up immediately and peoplewere asking wherethey tries. Nothing like this has been done in China, but we are could get more copies. I not given credits and China receives credits. On the prospects for the Ilractical development of this So the question arises: Who is to blame for this? Suspi­ program, in the first phase th+se ideas will be reflected in cions arise that there is an outside hand at work here , includ­ the reconstruction of railroad� in the CIS [Community of ing that of the United States. Because Russians can see that Independent States] countries+Russia and her neighbors. In there is just one superpower in the world today, the United particular, the famous railroa4. stretching from Moscow to States. This country bears a super-responsibility for the state Vladivostok. of affairs in the world. Whatever might happen in the world We are also trying toset up � commission with representa­ today, does not happen without some American role. This tives fromRussia , Ukraine, Mqldova, Romania, and Bulgar­ idea of things occurs in the popular consciousness. ia to study a plan for a railroa4 into the Balkans. This is an As a Deputy, I sometimes spend a lot of time explaining ancient Slavic route. We would like to have better infrastruc­ that we must firstseek the causes at home and only then look ture along this axis, as well. to our surroundings. But you, as Americans, also know that Together with colleagues trpmArmenia, we arestudying we would like to have genuine partnership and friendship. It the possible construction of a Highway from Rostov-on-Don is a question of what must be done to achieve this. through Georgia and Armeniai into the Middle East. These projects are at the stage of coordinated design and discussion. EIR: You mentioned the grip of ideology. You arrived in So, the impulse that was given will be developed, but Washington and have seen the grip of ideology on the U.S. don't think that this can be don� rapidly under currentcondi- government. Could you share your impressions or reactions tions. I to what you had to say, by people in the government, given I how much of it is contrary to what they hear from the media EIR: You mentioned the pos�ibility of harsh actions being and the experts? required to remove the crimi_al element. Where does the Sklyar: There are several myths in the heads of congress­ military itself stand on this figHtagainst mafiacontrol? men, senators, and members of the administration. Many of Sklyar: There areseveral lev�s of criminality: streetcrime , them really do not know what is happening in Russia. organized crime, and corrupti� which has struck theinstitu­ The problem is thatduring recentyears , the same people tions of the state. The methdds of struggle against these ,from Russia have visited the United States again and again. different species of crime are idifferent. But for a start, the People here got the notion that reform meant Gaidar, Chu­ most important thing is to rem�e the conditions which breed bais, and nobody else. But we tried to show them that there more crime every day. If we c�ntinue to carveup property in are other forces, and to treat them with some truth. We tried the fashion Nikolai Chukano� described, this process will to show what needs to be done in Russia and what role give rise to more crime. America might play-both the administration, and the Con­ This must be stopped, Wh ' h means the adoption of ap­ gress. propriate laws. Afterthat, it w· I be possible to begin to clean out the Executive branch insti utions. We still have no law EIR: There have been many warnings in recent months requiring officialsto declare th� irsources of income. Nobody about a coming social explosion in Russia. Is it inevitable? is held responsible for illegal income. Chukanov: Nothing in the world is predetermined. The des­ This all has to be introduc� at once, as a package. We tiny of Russia and the entire world depends on the concrete have to suppress the criminal $Toups. The relevant agencies actions of concrete people. If certain things are done, things know who they are. But the� are heavily armed. It is my will go well. But if not, yes, there will be a social explosion personal view, that this cannot !bedone without the participa­ in Russia. tion of well-trained Army unit •. The people will reach a certain point at which their pa­ Speaking as the son of ani officer and twin brother of a tience runs out and there will be a Russian rebellion. There­ colonel in the Russian Army, I can say that the Army hates ' fore we, have an enormous responsibility, to apply every what is being done to the cou� and hates the fact that in a effortto divert events fromthat path, including with the help poor, destroyed country, the f\rmy is being humiliated. It of U.S. congressmen and the public. And so we are here. will support these efforts and Will take part. But it will pose the demand that this be done �y properly trained units, and EIR: Mr. LaRouche's proposals were recently presented it will take part in these actions if it is visibly a national beforea committee of the State Duma in Russia. Could you commitment. say what possibilities there are for promoting the railroad development policies of the "Productive Triangle"? EIR: Is not the recovery of �ussia impossible without the Puzanovsky: The report was received with great interest, Academy of Sciences, the scie*tificintelligentsia? The scien­ after it was summarized in Russian. The English text was tific institutions ' and the mili� industries that work with

48 International EIR March 17, 1995 them have been the best-functioning thing in Russia since the I may have a more acute evaluation than othersdo on this 18th century, but now it's being destroyed. The scientists question. The problems of science are not readily apparent are emigrating, or working as chauffeurs. These institutions to someone looking from the sideline$, because this is intel­ would seem to be almost destroyed already, yet Russia has lectual labor. no future without them. Puzanovsky: I would emphasize one other aspect. During Chukanov: First, I would note that it is impossible to wipe one of our discussions in Congress, an aide suddenly made out intellectual capacity overnight. Yes, peoplemay go work an unexpected observation when we werediscussing science as chauffeurs, but it is a more prolonged process involving and military capabilities in connection with Chechnya. He the generational turnover. Itis a more prolonged process than asserted that the Russian Army has woven to be weak and the destructionof an economy. incapable of carryingout military missions. The situation can be changed with a relatively small team, As a Deputy of Russia, I am obligeJjto emphasize to U . S. which knows what conditions to establish upon coming to citizens that this person in governrrumt is misguided in a power, so that things startfunctioni ng. As soon as we might way that could have far-reaching cons¢quences. If somebody put into effect a package oflegislation that would make useful suddenly wants to test whether or not this is really the case, I activity profitableand criminal activity not, we could have a dareto assure you that thisis a highly i�correctconclusion for recovery very rapidly. Then we will need the labor of people which one shouldn't go seeking som¢ kind of experimental who now have been forced to abandon the science-intensive evidence. sectors of industry. The Chechnya fighting was an i�ternal problem where This requires a special state program, which totally con­ special units were deployed, but it di� not involve the strate­ tradicts what the Chicago School stands for. Basic science, gic level, the strategicreserve , nor manyother of our capabil­ culture, education-these are requirements of society which ities. It would be a good idea to enlighten congressmen on only the state can provide. They are not valued on the market. this fact. What is the market price of Mendeleyev's periodic table of elements? In reality, its value is significantly higher than EIR: At your press conference on M$1'ch2, I was impressed any given project. Those social requirements which theindi­ by your emphasis on the importanc� of the constitutional vidual citizen or firm is not capable of valuing must be the election process for the State Duma. in December and the responsibility of the state. This is why the state exists. presidential elections next year. That is why I attribute great importance to the creationof Could you brieflygive a sense of �e new emerging politi­ powerful scientific centers to counter the Chicago School. cal institutions you see as playing a prominent role if those The new, opposing school needs to train its own disciples, elections go forwardand what their alternative policy would who will be capable of taking the reins of governmentin any be? country. I am sure that, being rather more attractive to the Sklyar: The shiftof public opinion to the left will be a big population, it will prevail. factor in the elections, meaning a strengtheningof the forces Sklyar: We should be aware that there are various spheres of the center and left-of-center. Secqndly, I would note the of science. Economics is somewhat more dynamic in Russia growing role of the regions and therflgional elit es. at present. The defeat of the radical liberal forces, whose symbols I live in a city which was built up as a major science are Gaidar and Chubais, has led them to try to changetheir center. I see what is happening in the scientific collectives stripes. There is no limit to their cyQ.icism. They are afraid involved in physics, chemistry, metallurgy, medicine, and of being held responsible. other disciplines. What's the problem here? Right now, sci­ As for new names, I think that it i� worth paying attention entists are selling what they created in previous years. They to Ivan Rybkin, the Speaker of theD�ma, andYuri Skok ov, are looking for buyers. Those who have something to sell who expresses the interests of goods producers, of domestic can still survive today. production. Sergei Glazyev, who heaps the Duma's Commit­ But nobody is working on new ideas. Young peopleare tee on Economic Policy, is very in�resting; he is a young, not going into science. The equipment of the experimental well-educated technocrat. Ramazan Abdulatipov, the vice­ scientific units is wearing out. Therefore your concern is speaker of the Federation Council, thpupper house of parlia­ well placed, and we share it, that the technical sciences, ment, enjoys great authority among iOur national republics. basic science today is on the verge of losing its potential We also have strong regional leaders �n Sverdlovsk Province, to develop. Orlov Province, Novosibirsk. Their influence will be in­ Anybody who has worked in a scientific laboratory creasing. knows that you cannot re-create a scientific team. All the We hope that in the domain of tile major new policy we scientists who used to work in military-linked laboratories are discussing, where all of us are i� general agreement, we are extremely pessimistictoday . They cry to us, and it is my will be able to form a capable team1 That is our hope for a view that they must be saved immediately. rational development of events.

EIR March 17, 1995 International 49 Also indicted on charges cJ,f covering up Raul Salinas's Mexico role in the assassination was �ario Ruiz Massieu, who was deputy attorney general in Cl\rlos Salinas's administration and brother of the murdered PRiIofficial . Mario Ruiz Massieu was arrested by U.S. Custom!! agents in Newark, New Jer­ sey, as he attempted to board a plane without declaring that Jose L6pezPortillo he was carrying thousands of dPllars in currency. It has since been made known that Ruiz Massieu has millions of dollars takesthe gloves off deposited in accounts in the Uiited States, which authorities suspect are pay-offs to him for allowing cocaine shipments by Carlos Wesley from Colombia to enter Mexicb. President Zedillo warnedtltat "no one is above the law" in the investigations of the three murders which have convulsed Former Mexican President Carlos Salinas de Gortari was told Mexico since May 1993: thos4 of Jose Francisco Ruiz Mas­ to shut his mouth and allow incumbent President Ernesto sieu, PRI presidential candidate Luis Donaldo Colosio, and Zedillo to get on with the job of dealing with the massive Roman Catholic Cardinal JUad Jesus Posadas Ocampo. The crises now facing Mexico. The broadside against Salinas was investigations have hit direct� at the British intelligence­ leveled in an interview by his predecessor's predecessor Jose backed political apparatus whiCh has tried to dismember the L6pez Portillo (President, 1976-82). Mexican nation-state through la two-pronged offensive: the "The job of an ex-President is to be prudent, serve Mexico imposition of "free market" lu�acy, and the activation of the by being silent, and not create more problems for the current narco-terrorist Zapatista insurtency in Chiapas in January President who has the responsibility and deserves the same 1994. I opportunity to serve the country that he had," said L6pez Authorities are also movin� on other cronies and relatives Portillo in the interview, published on March 3 by the daily of the Salinas brothers. Jaime Ide la Mora G6mez, a Salinas Excelsior. L6pez Portillo, whose administrationwas the last brother-in-law who co-found¢d the leftist Torre6n Group one to make any significant investment in Mexico's industrial with Raul Salinas, and served ias assistant secretary of agri­ plant and physical infrastructure, blamed the current crisis culture in Carlos Salinas's adbtinistration, was recently ar­ on forces outside Mexico, not on any mistake committed rested on charges of misappropriationof funds. Another Tor­ by President Zedillo. In 1982, after meeting with American re6n Group co-founder, HugoiAndres Araujo, had to resign statesman Lyndon LaRouche, L6pez Portillo nationalized as head of the National Peasant Confederation, an arm of the Mexico's banks and took other nationalist measures to deal PRI. with a financial crisis not unlike the current one. But other Although former Presiden� Salinas has not yet been offi­ Ibero-American leaders failed to back him, and his two suc­ cialy implicated in his brother1s alleged crimes, the issue of cessors-particularlythe Harvard-trained Salinas de Gortari, the weekly Siempre which hit the newsstands on March 1 one of the fair-haired boys of the Bush administration­ editorialized that "if Carlos siaIinas wasn't the intellectual handed the economy over to foreign speculators and free­ author of [Colosio's] murder, he did cover it up." trade privateers. While the popularity ofPre�ident Zedillo rose in the wake "Speculative financeis vicious, and did us no good," said of the arrest of Salinas and hi� cohorts, the disastrous eco­ L6pez Portillo, who described Salinas as "a good student of nomic situation is promotink instability. The peso has the International Monetary Fund and the U.S. Treasury." dropped to about one-third of its value of last December, Salinas has been insisting that the devaluation of the peso interest rates on inter-bank Imtns have zoomed to 75%, and that started when the Mexican debt bomb exploded this past the government announced another devastating austerity December, was not due to his policies, but to those of Presi­ package on March 9, in exchange for a $50 billion financial dent Zedillo, who took officejust days before the crisis hit. package from the United States and the International Mone- tary Fund. I The Salinas drug connection President Zedillo said on March 7 that there is the danger Salinas went to the extreme of declaring a hunger strike of a global crisis because of die "systemic" problems of the in order to force Zedillo to take the blame for the economic international monetary system, and called on France to join crisis and to force the authorities to exonerate Salinas from Mexico to work on reformini the volatile world financial criminal charges. The strike lasted but a few hours. On Feb . system. 28, his brother Raul Salinas de Gortari was arrested for order­ ing last September's assassination of Jose Francisco Ruiz The LaRouche factor Massieu, secretary general of the ruling Revolutionary Insti­ In Monterrey, Mexico's second-largest industrialcenter, tutional Party (PRI). businessmen declared themselves "fed up" with the policies

50 International EIR March 17, 1995 Then-President Jose Lopez Portillo during a Sept. 3, J 982 rally in Mexico City'shuge central square to celebrate his nationalization of the banks three days earlier.

imposed by the IMF, and staged a protest on March 8. Hours Mexicans should "stop blaming ourselves [and] losing before , Lyndon LaRouche was interviewed on Monterrey's national pride ...so that we can join with other countries in Radio Metropolis. He said that the Mexican government our condition in search of a better world order." (El Sol de must take "protectionist measures to protect the essential Mexico, Feb . 20) industries of Mexico from being disintegrated because of the While Mexico had opened its economy to globalization temporary financial situation." "prematurely"-former President Carlos Salinas "was a good student of the International Monetary Fund and the U.S. Treasury' "-Mexico's repeated economic crises over the past 20 years are not the result of any specific measures Documentation applied internally. Rather, it is a country in the process of development which "cannot complete it, because the interna­ tional monetary order is not made for that, it serves capital, In interviews with the daily EI Sol de Mexico on Feb. 20, it disdains and forgets labor and the developing countries." and with the daily Excelsior on March 3, fo rmer Mexican "Mexico is a developing country which is being incorpo­ President Jose Lopez Portillo broke a 12 -year silence he had rated belatedly into the modern world ....The parity with kept since he left offi ce at the end of 1982 . He described his gold was broken, the tremendous inflation of the 1960s and country's current economic crisis as the result of Mexico's early 1970s came on; an inflation which blew up the Bretton fa tal turn to neo-liberalism, and at a moment of extreme Woods system and spread over the world like a plague that danger, the fo rmer President called fo r Mexicans to rally caught up with us." With the oil crisis of the 1970s, "I saw a around their President and national institutions. crack in the world of the capitalist wall, and I tried to get in there to find a system of financing for our development. On the economy ...We achieved an interesting period of development of By allowing itself "to go from its national revolution to a Mexico; we doubled our industrial plant, we created more neo-Iiberal regime recommended by the internationalorgani­ than 4 million jobs-and I maintain, in Mexico, to govern is zations and by the Great Power, and receiving good conduct to create jobs." awards for opening up the economy to free trade , to privatiza­ "Speculative finance is vicious, and did us no good. Let tion and to turning over development to private initiative," us not tear ourselves apart ! Let us not sacrifice generations Mexico "fatally collapsed in the face of the worst vices of and generations of Mexicans condemning them as the cul­ capitalism: speculative and sterile capital . ... If there is prits. We cannot take the step forward , while the world is not anything great about capitalism, it is its productive capacity. organized for it. Therefore , our obligation is: We must have If it has anything hateful, it is its sterile and abusive specula­ solidarity with those who are in our condition. We should tive capacity." understand this, and pose it as a conscious problem, as we

EIR March 17, 1995 International 51 tried to do in a North-South meeting: Establish an order lating its sovereignty, and the $overnmenthas the obligation which serves all countries, and does not make the rich richer, to maintain sovereignty in all �ational territory. . . . It is not because while we are using speculative capital, and getting only a right, but an obligation. This is the lamentable case in wretched countries to compete one with another, which we Chiapas." I have to accept to cover our deficits, it leaves whenever it "Jobs ! Jobs! is theonly y we have to be just and to pleases. Let us not blame ourselves. It is an order with which guaranteefreedom. To create · bs in Chiapas and in orderto we have to live, and improve." create them there we have to d it all over Mexico." (Excelsi- "Speculation is a mirror image; it is capital which does or, March 3) � not create wealth, it just multiplies its image. It goes around I the world ruining countries, as it just ruined ours." (Excelsi­ or, March 3)

On deploying the Army to defend Chiapas Books Recei,ed Chiapas is "a territory which contains one of the greatest Gentleman Spy: The Lifer of Allen Dulles, by Peter energy potentials in the country, both in terms of petroleum Grose, Houghton Mifflin, �ew York, 1994, 641pag- and hydraulic power, which are basic for Mexico's develop­ es, hardbound, $30 i ment and which cannot be put at risk." How Pasteur Changed tOry: The Story of Louis "Sovereignty is not only de jure, but de facto and this Pasteur and the Pasteur I titute, by Moira Davison implies supporting it by force ....And when the public � Reynolds, McGuinn and cGuise, Sarasota, Fla., r force is used, it is not out of sport, but of the necessity to give 1994, 151 pages, paperbOUnd, $14.95 security to the law. If it is used, it must be to win. There is no other way." Sly and Able: A Political Biography of James F. The Zapatista movement in Mexico is an artificiallycreat­ Byrnes, by David Robe�on, W.W. Norton, New ed excrescence of the leftwhich since 1968 has had "a passion York, 1994, 639 pages, h�dbound, $29.95 for impotence. " Stalin and the Bomb: The Soviet Union and Atomic "They gave their youthful passion to essentially circum­ Energy, 1939-1956, by David Holloway, Yale Uni­ stantial causes which were unwinnable .... It is a very versity Press, New Haven,r Conn., 1994, 464 pages, interesting case of renouncing life and loving death." hardbound, $30 In Chiapas, "enough time has passed without decisively The Bell Curve: Intelligence and Class Structure in concluding the dispute over sovereignty. It was high time to American Life, by Richard J. Hermstein and Charles decide. A year of hesitation is more than enough. I always Murray, The Free Press, New York, 1994, 845 pages, recommend putting out matches before they set off a bon­ hardbound, $30 fire." (EI Sol de Mexico, Feb . 20) "There must be trust in the institutions. I believe this is Race, Evolution, and Behavior, A Life History Per­ the time in which all Mexicans should be supporting our spective, by J. Philippe Ru�hton, Transaction Publish­ institutions which, at this time, President Zedillo embodies. ers, New Brunswick, N.J., 1994, 334 pages, hard­ The country will find the continuity of its destiny, on the bound basis of its institutions and the leader who is at its head." Making Schools Work: Improving Performance LOpez Portillo refrained from giving advice to Zedillo, and Controlling Costs, byiEric A. Hanushek, Brook­ because "the job of an ex-President is to be prudent, serve ings Institution, Washington, D.C., 1994, 195 pages, Mexico by being silent, and not create more problems for the hardbound, $34.95 current President who has the responsibility and deserves the Creating a New CivUization: The Politics of the same opportunity to serve the country that he had." I was at­ Third Wave, by Alvin and Heidi Toffler, Progress tacked "brutally, without mercy," when I Ieftoffice , he added, and Freedom Foundation, :Washington, D.C., 1994, I but "I shut my mouth, endured the beating," because that is 98 pages, paperbound one of the implicit rules of the presidential system; "this is the , way which an ex-President has of serving his country." Foreign Affairs Agenda" 1995: Critical Issues in So what about the accusations against the last President's Foreign Policy, Council on Foreign Relations Press, family? "The law is being enforced. . . . The law is the law, New York, 1995, 256 pag�s. paperbound, $9.95 although it is harsh." Democracy and Violence in India and Sri Lanka, No matter that there exists a strong base of"irrationality�' by Dennis Austin, Royal lnstitute for International which supports the Chiapas uprising, "this is a problem of Affairs/Council on Foreign Relations Press, New sovereignty. . . . When a group of Mexicans attempt, York, 1995, 101 pages, paperbound, $14.95 through war, to separate a part of its territory, they are vio-

52 International EIR March 17, 1995 Northern Flank by Ulf Sandmark

. Sweden's new militant neutrality caused by minke whales. The same British and Russian strategists are cheering the shiftin day, the government attacked Bildt for his letter to Russian President Stockholm, but the Baltic states are worried. Yeltsin based on PIe earlier evalua­ tion. This letter was leaked to the press, and the whdle affair developed T he Swedish Foreign Ministry has until September 1994, he had taken a into a brawl, which culminated with dramatically shifted its policy in re­ very active role in supportingthe Bal­ the new Foreign Policy Declaration of cent months, from an orientation to­ tic states in the negotiations about Feb. 22. ward the western powers, back to the Russian troop withdrawal during In truth, such dramatic shifts in rigid "neutralityat any cost" that char­ 1991-94. Sweden had taken on this the foreign policy �f the Scandinavian acterized the Cold War period. This role in a division of labor with both the countries are usually reflections of change is fraughtwith dangers, during German government and the Clinton changes in policy of the larger pow­ a period when numerous scenarios for administration. ers. Such considerations have been East-West confrontation remain live, In 1992, Sweden had left the Cold very much presenttin Stockholm in the ranging from British geopolitical de­ War formula of strict neutrality for a recent period, as British Foreign Min­ signs to spark renewed war in former more flexible position, with the stated ister Douglas Hurd showed up on Feb. Yugoslavia, to Russian threats against purpose of being able to give support 14 to meet with Rqssian Foreign Min­ the Baltic states of Latvia, Lithuania, to the Baltic states. There was no talk ister Andrei Kozytev. Hurd's discus­ and Estonia. of military support for the Baltic sion with his Sw�ish hosts was also A very explosive situation exists states, but the comparison was drawn about security questions in the frame­ around the ethnic Russian minorities to the Swedish "voluntary" military work of the Maastricht Treaty of Eu­ in the Baltic states, as well as around support for Finland during the "Win­ ropean Union. On Swedish TV, Hurd the negotiations concerning Russian ter War" of 1939-40. came out praising Swedish neutrality. traffic through Lithuania to the Rus­ That new flexible foreign policy Swedish neutrality is also in line sian enclave Kaliningrad, a major mil­ was maintained all through the negoti­ with the Russian : policy to stop the itary base. ation process and referendum to join expansion of NAtO. Then the Clin­ Sweden's shift away from sup­ the European Union in November ton administratiort dropped the inef­ porting the Baltic states in military 1994. In fact, Social Democratic fective Partnershi� for Peace arrange­ emergencies is therefore a matter for Prime Minister Ingvar Carlsson stated ment. The expan&ion of NATO was particular concern. Foreign Minister as late as Dec. 14, 1994 that Sweden high on the agelitda when German Lena Hjelm-Wallen stated in her For­ was "pursuing a maximal liberty of Chancellor Helmllt Kohl met with eign Policy Declaration to the Parlia­ action in defense policy. " Two President Bill CliJilton in Washington ment on Feb. 22 that the old formula months later, that policy has changed. on Feb. 8. The Russian side has been is still in effect, according to which The general understanding in consolidating rellations with both Sweden is nonaligned in peace, in or­ Sweden is that underlying this shift is Ukraine and Belarus, and has even der to be neutral in war. "To contrib­ part of a domestic quarrel. The Social gone so far as to bring up the old neu­ ute to security stability, it is required Democrats tried to tar Carl Bildt, a trality clause with Austria. that our actions be predictable," she Conservative, for having accused A Russian str�egist, Sergei Kara­ said. She also put an end to the Swed­ Russian President Boris Yeltsin of ganov, argued in a symposium in Ber­ ish opening to increased military and continuing submarine incursions in lin, according to $venska Dagbladet, security cooperation with the West, Swedish waters. On Feb. 10, Com­ for a 1,500-km-fNide neutral zone which came with Sweden's recent en­ mander-in-Chief Owe Wiktorin pub­ across Europe. This is the old Soviet tryinto the European Union. "Sweden lished his yearly report about inci­ nuclear-free-zone : scheme, revived is not aspiring to membership in nei­ dents involving foreign military now to stop the expansion of NATO to ther NATO or the Western European powers on Swedish territory , in which the East. The new Swedish neutrality Union," the foreign minister said. he revealed that, of six incidents in position clearly s ' ports these efforts, This new line was named the "in­ 1992 and 1993 that had been evaluat­ undermining the tability of eastern ed as confirmed submarine activity, l difference doctrine" by opposition Europe, and espe ' ially that of the Bal- leader Carl Bildt. As prime minister five were later reevaluated as being tic states.

EIR March 17, 1995 International 53 InternationalIntelligence

AmoQg the issues fueling the revolt, is RPF arrests agricultural Communists return to that parents are protesting budget cuts in scientist in Kigali power in Poland education. Ecological and animal rights is­ sues, for which large numbers of traditional Dr. Martin Bicamumpaka, regional coordi­ The Polish parliament approved, by a vote middle-class people are turning out, are nator for the Prapace regional network, part of 272 to 99 with 13 abstentions, a new more exptessive of a general mood of dis­ of the InternationalPotato Center headquar­ left-wingcabinet led by new Prime Minister content than of support for the issues as tered in Lima, Peru, was "disappeared" on JozefOleksy on March 4. Oleksy is a mem­ such, wrc)te the French journalist. Up to Feb. 4 in Kigali, Rwanda, and there is no ber ofthe Senior Democratic Left Alliance now, Le Monde concluded, violence has word on his whereabouts, the U.S. weekly (SLD), composed mostly of ex-commu­ been limited to supporters of rival football newspaper New Federalist reported on nists, and is a formersenior Communist Par­ teams an� similar manifestations. Feb. 27. ty official. Nonetheless, Oleksy vowed on He was arrestedby the Rwandan Patriot­ March 3 to pursue a market economy and ic Front (RPF) while attending a meeting on integration with NATO and the European Britishplay allsides the "Seeds of Hope Project" for Rwanda. Union. The project is an International Agricultural Twelve of the new cabinet's 19 mem­ in Fre"ch election Research Centers Initiative to assist Rwanda bers are holdovers from the previous cabi­ in reconstituting genetic diversity of food net. The most prominent newcomer is the After months of seeming to favor the presi­ crop varieties, since the Rwandan civil war foreign minister, Wladislaw Bartoszewski, dential campaign of French Prime Minister of last year, and to multiply minimum quan­ who is Poland's ambassador to Austria. He Edouard Balladur, the British establishment tities of seed to relaunch foodcrops produc­ is an Auschwitz survivor who spent seven has started to spread out its options in the tion. Dr. Bicamumpaka participated in the years in Communist prisons after World hope of assuring an "Entente Cordiale" be­ conference to present his program on the use War II. tween the ItwO countries. In a March6 com­ of the Irish potato and sweet potato. mentary, �ord William Rees-Mogg, a se­ Dr.Bicamumpaka had returnedto Rwan­ nior spokesman for British intelligence, da as the Prapace regional director in 1990 French paper sees U.K. pushed the candidacy of Paris Mayor (and after receiving his doctorate at Cornell Uni­ former Prime Minister) Jacques Chirac in versity. But that fall, he was forced to move middle-class in revolt the London Times. Prapace headquarters in northern Rwanda The eIbction for the French head of state to Kigali, when the Ugandan-backed RPF British Prime Minister John Major is facing to a seven-year term will come up in May invaded Rwanda. In mid-May 1994, Dr. Bi­ a generalized revolt from the same middle­ 1995. If $alladur wins, his crony, Interior camumpaka, a Hutu, and his wife fled to class base, living in residential suburbs, that Minister Charles Pasqua, could be the new Uganda. backed his fellow Conservative and forerun­ premier, �ut the duo has been hurtbadly by Dr. Bicamumpaka arrived in Kigali Jan. ner in office, Margaret Thatcher, and al­ political sj;andals. 31, and was arrested on Feb. 2, although lowed her to defeat the Labour Party in Rees-tJ.ogg wrote that "important news there had been previous government assur­ 1979, London correspondentfor Le Monde from Fral).ce" is that the latest polls show ances of his safety. He was held at the Nya­ Patrice de Beer reported on March 7. Chirac ah�ad of Prime Minister Balladurby mirambo Police Brigade until Feb. 4, when , The mood among this middle class is a 59 to 41 tuargin. In his view, bothBalladur he was moved to Kigali Central Prison. He rage at the direction of the country under and Chirltc are "Anglophiles." Balladur has not been heard of or seen since. Inquiries Major, according to the article in the French could pass for a British politician, with his have been made to the International Red daily. There is growing talk in the British London-nltade suits and behavior; while Cross, the U . N. High Commission on Refu­ press of the "ugly face of capitalism" in the Chirac pl$yed a "friendly part" when then­ gees, and the U.N. Human Rights Office in United Kingdom. Thatcher and Major pion­ French President Georges Pompidou ar­ Kigali, to no avail. eered the "Conservative Revolution" poli­ ranged to get Britain into the EuropeanEco­ Rwandan Prime Minister Agathe Uwil­ cies now being promoted by GOP insurgents nomic COimmunity. Neither of the two has ingiyamina, leader of the Democratic in the U.S. Congress. "the prejqdices against Britain which are Movement, was murdered in Kigali in April The opinion-makers are clearly backing quite wid�spread in France." Chirac as a 1994. The social-democratic wing of the the shift, because a London Times poll has "conserv�ive populist" is better than the movement released a declaration denounc­ been put out, showing that traditionally "bureaucmtic centralist" Balladur, wrote ing the "assassinations, the massive slaugh­ Conservative voters are deserting the party Rees-Mogg. ters, the disappearances, and arbitrary im­ en masse, a move benefitting Labour Party "New openings for Britain" will develop prisonments of which the RPF continues to leader Tony Blair. Major's own support rat­ on the EUropean continent in the coming be gUilty." ings in polls have dropped to 10%. months, he opined, ifChirac wins in France,

54 International EIR March 17, 1995 • POPE JOHN PAUL II has re­ scheduled his trip to the United States, which was cancelled in fall 1994 for health teasons, to October 1995 . He will address the U.N. Gen­ and if a coalition governmentcomes to pow­ result of "rigorous misconceptions of nour­ eral Assembly at that time. er in Italy joining the Forza Italia of Silvio ishment," Hansjosef Boehles stated. : Rickets used to be the sickness of the Berlusconi with the National Alliance of Gi­ • THE UNIT�D NATIONS sum­ very poor. Today it is mainly children of anfranco Fini (whose February trip to Brit­ mit meeting thislmonth in Copenha­ wealthy intellectuals , called "vegans," who ain was sponsored by Rees-Mogg). gen on social de�lopment is offering refuse to feed their children any kind of food little to the developing world, coming from animals, including cheese, charged the aid organization Oxfam. Peru, Bolivia, Colombia milk, or eggs. Such children suffer sev re � Britain will be represented by Baron­ health damage and are generally far behmd ess Lynda Chalker, protector of the seek anti-drug summit in their development, Boehles charged. butchers of Rwanda. Meanwhile, a team of British anthropol­ Three Andean nations which are the world's ogists claims that the move away from an • AFTER THE KARACHI, Paki­ largest producers ofcoca and cocaine issued all-vegetarian diet triggered the growth of stan shooting dqaths of two United a joint statement on March 4 rejecting asser­ the human intellect. Because meat is easier States consulardmployees on March tions in a recent U. S. government report to digest, meat eating required smaller stom­ 8, the U.S. is offering up to $2 mil­ that they are not doing enough to fight drug achs and intestines, which led to a metabolic lion in reward f(\lr information lead­ trafficking, and demanded a hemispheric energy surplus that was used to feed the ing to the killers' arrest. summit on drug smuggling. The joint state­ human brain. ment declared that "some of the criticism Anthropologists Leslie Aiello of Uni­ • ALGERIA'$ military govern­ formulated [in the U.S. report] is inexact versity College, London and Peter Wheeler ment said on M.trch 4 that 6,388 ci­ and unj ust and shows us that it is necessary of John Moores University, Liverpool date vilians were kill�d in 1994 by terror­ to overcome unknowing and uncompre­ the first wave of increase in brain size back ists, and anoth¢r 2,289 wounded, hending attitudes regarding the fight in 1.8 million years ago to Homo erectus. The including 11 for4igners. which we are involved." The statement was second wave of human brain increase would , signed by the Presidents of Peru, Colombia, have begun about 400-500,000 years ago, • U.N. SANCTIONS against Iraq and Bolivia, and also by Paraguay. when man's predecessors began to use fire come up for a vote this month, and This came in response to the U.S. State and cooked food. Their study was the sub­ U.S. Ambassa40r Madeleine Al­ Department's decision, announced on ject of a syndicated article from the London bright was touring Security Council March 1, to grant Peru, Bolivia, and Colom­ Observer Service by Robin McKie, which member states lin early March to bia a "national interest waiver" as part of the appeared in various newspapers on line up supportI for their continua­ narcotics certification procedure conducted March 3. yearly by the U.S. administration. The tion. Iraqi Deputy Premier Tariq waiver stops just short of de-certification. Aziz accused the United States of A Senate Foreign Relations Committee Greenpeace pol tangled pursuing the goal of "turning Iraq into a refugee camp," but said he report on Feb. 28 dubbed Col�mbi� a "narco-democracy ." Denial of certificatIOn up in fu nds scandal is hopeful that the Security Council would mean cutting off all but anti-drug aid will seriously stUdy the embargo on to the country . Colombia's Samper Pizano Monika Griefahn, the ex-chairwoman of April 10. government has been lobbying mightily in German Greenpeace, and now environment THE JOINt FRAMEWORK Washington in recent weeks to forestall an minister in the state of Lower Saxony, was • aid cutoff. forced to resign on March 7 from the chair Document for al peace settlement in of the organizing committee for the Expo Northern Irelandwas unveiled aftera 2000 world fair over conflict-of-interest long delay on Feb. 22 by British Vegetarianism called charges relating to her husband, Michael Prime Minister )ohn Major and his Braungart. Republic of Ireland colleague, John a 'fo rm of child abuse' Braungart, director of the Hamburg­ Bruton. The d6cument took more based ecology studies institute EPEA, had than two years tq be producedby both Vegetarianism for children is a "strongform received a contract to take over the overall governments. of child abuse," said the president of the management of the exposition. Since many German Organization for Nutritional Medi­ of the "future projects" displayed there are • SOUTH AFRICA and Mozam­ cine (DGEM) at its annual meeting in Darm­ designed by the EPEA, this would yield a bique signed a treaty on March 1 to stadt. Rickets, a sickness that is caused by net profitof DM 620 million to his institute. combat cross-border drug traffick­ undernourishment and was very common Griefahn and her spouse were exposed on ing, gun smuggling, and car theft. afterthe war, is coming back massively as a page 15 of EIR's Sept. 23, 1994 issue.

EIR March 17, 1995 International 55 �TIillNational

'Contract' falters, As GOP KiSSinger jumps on boar, d by Edward Spannaus

There was a time when Henry Kissinger was detested by the Mass.) said on March 8, "�is is Congress operating at its more conservative elements of the Republican Party. When worst. This is overturning 2ndonFinancial Times. Hill, and Gingrich's own popularity is plummeting. As Reu­ ! ters put it on March 8: "The more Americans see of Newt 'I would have gone an�where' Gingrich . . . the less they like him." A poll taken by NBC Gingrich recounted his �action when he learnedthat he and the Wall Street Journal Poll showed that Gingrich's dis­ would have the opportunity to be introduced by Kissinger, approval rating shot up 11 points, to 43%, since a similar and to be thanked by former Nixon and Carteradministr ation poll in January. official James Schlesinger: "As a mere assistant professor at The defeat of the Balanced Budget Amendment in the a state college, the idea of bfing flanked by two eminences Senate on March 2 appears to have marked a turning point, of that caliber, I would have fone virtually anywhere for the with the Gramm-Gingrich gang now backing off of many of opportunity. " ] their campaign promises from last fall. Most notable is the While the overawed Gin$rich addressed the audience in embroglio over term limits in the House, where politicians the manner of a college1ectuItr,babbling on about the "Third who were elected on promises of strict term limits find the Wave" information age theo�es of Heidi and Alvin Toffier, idea less appealing once they get settled in on Capitol Hill. the Aztec,S and Incas, Adam $mith, Pitt the Younger, and so But these same pseudo-populists have no problem in on, Kissinger and Brent Scowcroft were "sitting in the front handing Wall Street a bonanza in the form of "litigation rows like dutiful students," remarked the Financial Times. reform ," which is designed to virtually bar the courthouse Newt's alter ego on the S�nate side, Phil Gramm, is also door for aggrieved citizens who want to avail themselves of a big fan of Kissinger and S9owcroft, according to a March their traditional right to sue for damages in cases of personal 1 column in the Washingto1 Post by Lally Weymouth, in injury, product defects, or fraud and misrepresentation by which she said that Gramm pad solicited advice from Kis­ securities dealers (see p. 59). As Rep. Edward Markey (D- singer and Scowcroft , and revealed that "Gramm says Scow-

56 National EIR March 17, 1995 croft would be part of his team" if elected. Scowcroft was gling for appointment as its chairman. Remember the great Kissinger's deputy in the mid- 1970s, and later ran the Wash­ job Henry did last time, with the National Bipartisan Com­ ington office of Kissinger Associates. "I learned everything mission on Central America (the "Kissinger Commis­ I know from Henry ," Scowcrofttold the conference. sion")-which gave us drugs, terrorism, the "black econo­ There should be no surprise in any of this. In EIR ' s Feb. my," and Oliver North? 17 Feature, "Phil Gramm's Conservative Revolution in America," Lyndon LaRouche traced the Venetian model of The Anglo-American alliance feudalist reaction-the prototype of today's Conservative Much of Kissinger's March 5 column is devoted to an Revolution-from the opposition to the Council of Florence, attack on the alleged passivity and "multilateralism" of the through the collaboration of Prince Metternich and Lord Clinton administration, which is the cover under which Kis­ Castlereagh, up through today's Gramm-Gingrich gang. In singer bemoans the decline of the "Atlantic Alliance"-by the course of this, LaRouche noted that the views of the which he means the British-U. S. "special relationship." Kis­ "fascist forerunners Metternich and Castlereagh" have been singer accuses the administration of puttingtoo much empha­ devoutly admired for more than 40 years by HenryKissinger. sis on "placating Russia"-this from someone who used to profess that the dynamics of history were with the Soviet Henry rides the 'Third Wave' Union, and that the United States should make the best deal Chairman Kissinger tapped himself to give the luncheon with the Soviets while there was still time! keynote the next day. He couldn't help but remark a number Henry's attacks on Clinton administration foreign policy of times as to how "eloquently" Gingrich had presented cer­ as undermining U.S. national interests, are pure hypocrisy. tain ideas the daybefore . Kissinger's speech was an incoher­ It was Kissinger who, on May 1 0, 1982, gave an addressat the ent synthesis of the Gingrich's Third Wave-Information Age Royal Institute ofInternationalAffairs iI).London , in which he drivel, combined with Samuel Huntington's "clash of civili­ admitted that throughout his career, he ,had been serving the zations" thesis. Huntington's contention, that the fundamen­ interests of British intelligence. While he was national securi­ tal conflict in the post-Cold War era is between cultures, ty adviser, Kissinger told his British cQntrollers, "I kept the especially between Christianity and Islam, fitsright into Kis­ British Foreign Office better informed fUld more closely en­ singer's portrayal of a world of conflictinggeopolitical blocs, gaged than I did the American State Dtlpartment." which must be played off one against another. Kissinger has been fulminating for months against Presi­ Then, so as to inflict his ravings on a wider audience, dent Clinton for breaking the "special relationship" with Brit­ Kissinger used his March 5 internationally syndicated col­ ain. In his columns following Clinton's establishment of a umn to endorse Gingrich's "Contract with America" and its new partnership with Germany last summer, Kissinger blast­ so-called National Security Revitalization Act. What Kis­ ed Clinton for abandoning the "special !relationship" and as­ singer especially professes to admire about the bill, which signing a special role to Germany in dealing with eastern passed the House on Feb. 16, are the provisions which restrict Europeand Russia. U.S. involvement in United Nations peacekeeping, its call Kissinger's ideal world is one in ; which Britain leads for the immediate expansion of NATO, and its creation of a the United States around on a leash thrpugh the geopolitical bipartisan commission to define an overall national strategy. sandbox. Clinton has broken the rules Qf the game, and Kis­ Kissinger's sly advice to the Clinton administration, is singer is counting on the Conservative aevolutionaries of the that rather than rejecting these provisions, and regarding Gramm-Gingrich stripe to get the Unittld States back in line. them as an intrusion, it should use them "to try to achieve a Clinton's latest affront to the "speqial relationship" was new bipartisan consensus on the nature of post-Cold War his March 9 decision to grant a visa t;o Northern Ireland's foreign policy." Gerry Adams and to invite Adams to d;le White House. The What Kissinger is probably referring to is that, while the British press on March 10 was full of reports of "fury" and National Security Revitalization Act was being debated in the "dismay" on the part of British officialqom, and a Conserva­ House, two top administration officials-Defense Secretary tive Partyparliamentarian was quoted ih the London Guard­ William Perry and Secretary of State Warren Christopher­ ian as calling Clinton's move "a stab in the back from our held a joint press conference to denounce the proposed bill closest ally." as an unconstitutional infringement on the power of the Presi­ A senior Conservativeparliamentarian told EIR that what dent over the Armed Forces of the nation. Perry had earlier Clinton has done "undermines the British government" and threatened to resign over the proposed creation of a blue­ lets down Prime Minister John Major, and that Major's gov­ ribbon commission to oversee defense policy-something ernment could fall in the near future. His only hope, he not very differentfrom the bipartisan commission created by said, is that Gingrich and crowd would "keep Clinton on the Revitalization Act as passed by the House. the rocks," and neutralize the President's actions against the Kissinger's repeated praise of the national bipartisan U.K. "Gingrich and friends are doing a great job," he blurted commission just might lead one to suspect that he is wran- out.

EIR March 17, 1995 National 57 nators William Weld (Mass.) and John Engler (Mich.), had lobbied hard to include food stamps in the block grant "re­ forms ." They do not wish ilieir plans for further reduction and outright elimination of �elfare assistance undermined, by the escape valve of increased federal food stamp allot­ ments. Even though the HoUse Agriculture Committee re­ fused to turn the food stamp program over to block-grant Gingrich gangattacks control by the states, the planinow being considered includes some provisions to enforce greater poverty nonetheless. food stampprogram The Gramm-Gingrich gahg of thieves proposes to count energy assistance payments as income-and include them as by H. Graham Lowry "personal assets" in determining food stamp eligibility! In some northern states, such payments account for as much as 26% of cash welfare benefit$, simply to enable the poor to The Gramm-Gingrich gang is still storming about the halls heat their dwellings and avoid freezing to death. To receive I ofthe U. S. Capitol, waging a merciless war against the poor. food stamps, recipients currently cannot have assets worth Despite the Senate's defeat of the Balanced Budget Amend­ more than $2,OOO--or$3,00

58 National EIR March 17, 1995 product liability and personal injury cJaims are settled. All parties admit that this system is in need'ofrepair, but the fee­ shifting provisions of the "Contract" proposal would put a gun to the head of any litigant who cannot afford to lose a House populists protect suit. The Wall Street Journal has pointed out that the benefi­ ciaries of this scheme would be the large investment houses Wall Street speculators and financial cartels, which would be able to run rough­ shod over competitors by engaging in predatory business by Leo F. Scanlon practices, and responding to complaints with "an offer that can't be refused." An increasingly maniacal Republican majority in the V.S. A companion bill, HR 1075, would put caps on product House of Representatives enacted a package of legal refonns liability claims (which are usually paid out by insurers , not in early March which overturn the American tradition of free manufacturers) and this bill is similarly flawed. Liability access to the courts , and insulate securities speculators from lawsuits are in fact the nightmare of all businesses, large the consequences of their investment decisions. The Clinton and small. Doctors live in fear of bogus malpractice claims, administrationhas charged that the bills (HR 988, HR 1075, technical innovators are threatened witjhruin by any techno­ and HR 1058) contain elements which are "alien to the phobe who can hire a lawyer, and usefUl medicines are with­ American legal system" and which "represent a disturbing held from the market through fear of arbitrary jury decisions and unprecedented federal encroachment on 200 years of in injury claims. well-established state authority and responsibility." None of these problems is addressed bycapping punitive The rhetoric supporting the legal package of the "Con­ damage awards. Punitive damages-awarded to "teach a les­ tract on America," which portrays a legal system crumbling son" to an offending individual or corporation found negli­ under the weight of increasingly irrational civil litigation, gent in an injury suit-are ·inherentlY arbitrary, and are a originates with cartel-financedthink-tanks such as the Ameri­ relatively new feature of V. S. civil law . But behind most of can Legislative Exchange Council (ALEC), but sheds no the horror stories about "runaway juries" making outrageous light on the actual problems facing the V.S. legal system. damage awards, there are two basic problems. First, it is often true that the health insurance system, and corporate English rule versus U.S. legal tradition managers, will abandon someone who is pennanentlyhandi­ The centerpiece of the legal refonn scheme is the "Attor­ capped or injured by an industrial accident or through faulty ney Accountability Act" (HR 988), which imposes the so­ products, and juries attempt to compensate for that. Second, called "English rule" -where the loser of a civil lawsuit pays juries are often whipped into irrational.action by the prevail­ the legal fees of the opposing party. The measure allegedly ing "hate propaganda" and "victim mentality" which penne­ would reduce the incidence of "frivolous" lawsuits in the civil ates media news coverage in general. The point is that neither courts . Tort law (cases involving civil disputes with monetary of these elements belongs in a courtroom in the firstpla ce. damages) has historically been in the bailiwick of state courts The danger with product liability suits is the growing in America. The Republican refonns would federalize those tendency of the courts to rely on the fqlUdulent and manipu­ cases involving a multiplicity of jurisdictions (under the pro­ lated pseudo-scientific theories of envi;ronmentalists and so­ visions of the interstate commerce clause, thus covering most ciologists to justify radical and arbitrary rulings which nega­ product liability and related disputes), and would put such tively affect regional economies, whole school systems, or cases under a new set of rules. These rulesrequire the plaintiff entire industries. The "Contract" bills would respond to this to settle for whatever amount the defendant offers, or risk by enacting a recent Supreme Court ruling which said that paying full legal and court costs if he loses. only "peer-reviewed" science is admissable as evidence. Of This proposal gives the lie to all the "states' rights" rheto­ course, the worst environmentalist theories are thoroughly ric of the Conservative Revolutionaries, and imposes a heavy "peerreviewed ." burden on anyone who would challenge an opponent who The most absurd of the refonn bills is one which would has the means to mount a high-powered legal defense. It is provide immunity to brokers and accountants charged with the insurance industrywhich is lobbying most heavily for the fraud in securities lawsuits. It was th� Thornburgh Justice refonn, in the hopes that the provision will enable it to beat Department which demanded far-reaching conspiracy laws back the demands of claimants in personal injury and product in order to target accountants and lawyers as the guilty parties liability cases. in S&L failures, in order to protect the Federal Reserve and This refonn will overturn the historic V.S. approach, the bankrupt, deregulated banking system. The Republicans which allows any claimant, no matter how poor, a "day in now find themselves answering Thomas More's rhetorical court," no matter how powerful or wealthy the defendant. question, "When the last law is down IUld the devil turns on For better or worse, this mechanism is the means by which you, where will you goT'

EIR March 17, 1995 National 59 Congressional Closeup by William Jones

Repeal of Glass-Steagall but under a holding company. and resCission package for fiscal year banking act proposed Senate Banking Committee Chair­ 1995 that cut total federal R&D fund­ Treasury Secretary Robert Rubin on man Al D'Amato (R-N.Y.) and Rep. ing by $13.3 billion, or 2%. This is Feb . 28 submitted the Clinton admin­ Richard Baker (R-La.) have intro­ just tht1first installment. " istration's proposal to repeal the duced identical bills allowing non­ Using Congressional Budget Of­ Glass-Steagall Act, which would financial companies to merge with fice aQd Treasury Department esti­ eliminate the legal barriers that have commercial banks, as well as securi­ mates, :Srownproduced a table show­ separated U.S. commercial banks , ties firms and insurance companies. ing th.t existing budget caps, the securities firms, and insurance com­ D'Amato praised Rubin's plan for Balanct:d Budget Amendment, and panies since the 1930s. the similarities to his plan: "His sup­ the los� of funds due to Contract with The administration proposal port for key provisions of my bill Amerida-inspired tax cuts, will mean would allow banks to "affiliate" with is the first indication from this ad­ that $11.7 trillion in budget cuts will securities firms, insurance compa­ ministration that it will join in a have to be made by the year 2002, if nies, and other financial firms. Banks bipartisan effort to create a more entitlerpentsare to be protected. Non­ could also sell securities, insurance, innovative and competitive financial defens4 across-the-board cuts in dis­ and other financial services. The services industry." cretionfU)' spendingwould lead to the . larger outfits among the 'banking, R&D c�ts, Brown stated. securities, and insurance firmspraised the administration's plan, while smaller banks and insurance agents I strongly criticized the plan as a threat Brown scores 50% decline to their operations and bad public in R&D under 'Contract' En�angered Species policy. Ranking minority member of the Act ntay be weakened Rep. Charles Schumer (D-N.Y.), House Science Committee George Bracin$ for a Republican attack on the citing what had just happened to Bar­ Brown (D-Calif.) stated on March 2 controversial Endangered Species ings PLC because of its risks in deriva­ that federal funding for research and Act, �e Clinton administration on tives, said, "You could end up with a development would decline by 50% March � said it was prepared to weak­ crisis that makes the savings and loan over the next fiveyears , from $72 oil­ en the law to give more consideration crisis look tame." lion to about $35 billion, under the to busi�ess activity. The new propos­ Paul Equale, of the Independent Contract with America. als wo�ld exempt small landowners, Insurance Agents of America, said big "Republicans in Congress are who rur often unable to pay the costs banks would begin demanding their leading the nation down a path that of the �aw's mandates, from the law; customers buy insurance from affili­ will do serious damage to the R&D requirei . stricter evidence to declare ates as a condition for granting infrastructure of the United States," specieS in danger; and give state and loans. "It's absolutely incredible to Brown stated. "The pillaging offeder­ local officials a bigger role in imple­ me that we have a Democratic ad­ al R&D programs comes at a time menting the law. ministration that does not see the when foreign competition is severely Th.s act, more than any other sin­ dangers . . . to have cross owner­ impeding the ability of the private sec­ gle issue, fed the anti-government ships at the expense of Main Street. tor to make the R&D investments nec­ hysterillwhich helped propelRepubli­ They're sacrificing economic inter­ essary to remain competitive in do­ cans tcp their current congressional ests in the name of international mestic and global markets. The majori�. Weakening the legislation competition," he said. consequences will be devastating." could 4eprive Republicans of an im­ Other bills to repeal Glass-Stea­ Brown added, "I do not believe portantelectoral issue. gall are already in Congress, includ­ Americans voted in the last election Un�er the administration plan, ing two different Republican bills that to throw away our future .... The most �ctivities on single-household are working their way through com­ dismantling of the nation's scientific tracts

60 National EIR March 17, 1995 retary Bruce Babbitt, the darling of State for Near Eastern Affairs Robert by the Clinton administration as an in­ the environmentalists, said, "Most Pelletreau rejected any impulsive ducement for Jordan to sign a peace species won't survive on small tracts moves against Russia for alleged vio­ treaty with Israel. President Clinton of land ...and it's not fair to tie up lations in their sale of nuclear techno­ had warned Congriss against making small landowners . " logies to Iran. the cuts, and Isra�li Prime Minister The position contrasted sharply Yitzhak Rabin telephoned President with that of House Speaker Newt Gin­ Clinton to express bis concern. grich (R-Ga.) who, after discussions Israeli Deputy ! Foreign Minister Dole urges bearings with Israeli Likud leader Benjamin Y ossi Beilin warnedin a televised in­ on affirmative action Netanyahu in February, began threat­ terview, "There is a sort of lack of ening sanctions against Russia for al­ understanding regarding the terrible Senate Majority Leader Robert Dole legedly aiding Iran in its nuclear pro­ price-also in modey-that the Unit­ (R-Kan.) called on Labor and Human gram. On a February visit to the ed States could p�y if, God forbid, Resources Committee Chairman Nan­ United States, Netanyahu, the heir to there is another w in the region or cy Kassebaum (R-Kan.) and Small � the radical expansionist ideology of in other regions." ,eilin said that the Business Committee Chairman Ariel Sharon , had warned that Iran relatively small sums are essential in Christopher Bond (R-Mo.) to hold was developing a nuclear weapons ca­ "creating a better :atmosphere," and wide-ranging hearings to evaluate pability, and called it the greatest described the congressional clim�te programs within each committee's threat facing the world. Gingrich and created by the Replilblicans as "a dan­ purview that grant preferences to Senate GOP leaders have called for a ger not only for us iO the Middle East. " individuals on the basis of race, cutoff of aid to Russia. gender, 'or other factors . "The bot­ "With respect to nuclear weapons tom line is that no federal program and other weapons of mass destruc­ should be immune from congression­ tion, the Iran-Russia act defers com­ arkey wot d regulate al scrutiny," Dole said. He had earli­ M d pletely to other statutes," said Pel­ derivatives de ers er ordered such a review of all feder­ � letreau, "Based on the information Ed Markey (D-M�ss.), the ranking al programs, rules, and orders. available at this time, we have con­ member of the Te1ecommunications In letters to the two chairmen, cluded that sanctions against Russia and Finance sub 0mmittee of the DoIOOskedthem to investigate wheth­ 4 are not currently mandated under any House Commercei Committee, an­ er there are "other, more equitable of these statutes." Russia has said that nounced on Feb. 27 that he was intro­ ways to expand opportunity for all its deals with Iran only involve the ducing new legislation to regulate de­ Americans, without resorting to strat­ development of Iran' II civilian nuclear rivatives dealers. egies that rely on providing preferenc­ energy program. Markey said tHat the collapse of es for individuals simply because they Barings Bank "underscores the risks belong to certain groups." inherent in failing tp assure that regu­ Civil rights groups have decried lators have adequate tools on hand to the Republican attack on affirmative minimize the potential for OTC [over action programs as an attempt to tum srael warns Congress the counter] deriva,tives to contribute back the clock to the pre-Kennedy era, I on Mideast aid cuts to a major disruptibn in the financial the time when affirmative action was israeli leaders have reportedly given markets, either ttrrough excessive firstinstituted . firm warnings of the serious dangers speculation and qverleveraging, or to the Mideast peace process if the Re­ due to inadequat� internal controls publican-controlledCongress cuts aid and risk managem�nt on the part of to Middle East countries, particularly major derivatives �ealers or end us­ Administration downplays those involved in the peace process. A ers ." He said thatl his legislation is Russia-Iran nuclear deal GOP-controlled House subcommittee "aimed at providing a framework for In testimony before the Near Eastern has voted to cut promised debt relief improved supervision and regulation and South Asian subcommittee of the to Jordan from the agreed-upon $225 of previously unreaulated dealers and Senate Foreign Relations Committee million, to $50 million. assuring appropriate protections for on March 2, Assistant Secretary of The debt relief had been promised their customers. "

EIR March 17, 1995 National 61 National News

prevent illegal border crossings and 100new second ol?tion, Phil Gramm would be the patrol agents are being trained for that state. revolutionary." Gramm's chances for the But, Fornos said, "assigning 162 new agents presidenc s "good, better than those of Florida hospitals serving is tantamount to treating cancer with band­ Dole . Gr will be strange for Europeans aids . Maybe we 'd do better to recall a U.S. to unders d, but in an American context, irradiated poultry Army division from overseas for border pa­ he's plauSible." He said the Adam Smith Several Florida hospitals have started to trol duty." Naturally one would expect a Institute E�aintained regular contact with serve irradiated poultry to patients because, malthusian group such as the Population In­ Gramm's �ircle of advisers . as one hospital dietician told the Food Ser­ stitute to promote the line that "the most vice Director newspaper on Feb. 15, "We effective contribution toward reducing im­ must take every safety step available to us migration in the long term would be a mean­ to avoid foodborne illnesses." Low-level ir­ ingful reduction of population growth ." radiation at standards set by the USDA and While giving lip service to develop­ N.Y. ardinal: Contract the Food and Drug Administration kills ment, saying it can be "marginally helpful � 99 .5% or more of harmful bacteria, and in reducing migration pressures," and "only with 4merica is immoral does not affect the taste or texture of the if it can be adapted to various settings," the In his wee�ly column in Catholic New York, poultry . For the seriously ill, such as cancer Population Institute promotes insane ideas New Yor�'s Cardinal John O'Connor con­ patients , the guarantee of bacteria-free food such as "eco-tourism" for creatingjobs and demned t�e Contract with America as "im­ is a Iife-or-death issue. conserving the environment in the Caribbe­ moral in its virtually inevitable conse­ Food poisoning now kills about 10,000 an and promoting argicultural projects quences,' according to a front-page article Americans each year, and an estimated 20 aimed at reducing emigration from southern in the Ne York Times on March 5. O'Con­ million persons suffer from foodborne ill­ Asia. nor singl out the targeting of teenage wel­ nesses yearly. In terms of the economy , the fare mot rs , saying that the terms of the United States now loses $13 billion a year Contract ould lead to a major increase in because of foodborne illness, as measured abortions in health care costs and lost productivity. The b�ast made neo-conservative educa­ Much of this illness would be eliminated if 'Citizen Newt' compared tor and rmer Bush education secretary irradiated poultry , meats, and seafood were William ennett uneasy when asked about widely available . One estimate is that if only to French Jacobins it by NB "Meet the Press" host Tim Rus­ 10% of U.S. poultry were irradiated, that "Newt Gingrich was absolutely right in sert on arch 5. Bennett, who appeared would save $50 million a year in iIIness­ opposite� , rmer governor and fellow Catho­ comparing what he 's doing to what hap­ related costs. pened in the French Revolution," a top ideo­ lic Mario] Cuomo (D), responded: "I dis­ In the United States, irradiation is now logue at the Adam Smith Institute in London agree wiQl the cardinal . ...I don't argue approved for pork, poultry , fruits, vegeta­ told EIR on March 6. "Gingrich, like the that if we took this policy approaching wel­ bles, spices, and grains, and approvals are Jacobins, is going through everything . Re­ fare that J..e might not see some more abor­ being considered for meat, seafood, and member what they did then: They changed tions in t� short run. I think in the long run, eggs. the calendar, they changed the metric-they we woulcIi see fewer abortions." changed everything !" When he was remind­ On F�b. 28, New York's bishops had ed that they also changed a lot of peoples' met with pov . George Pataki (R) for three anatomy , by cutting off their heads , he shot hours to t�1I him that his proposed deep bud­ back, "Oh, but that came later." get cuts would be devasting to the state's Population Institute: Use He also put a positive "spin" on the ideas poor. Bis�op Howard Hubbard of Albany of Alvin Toffler: "It's understandable that told the · press before the meeting that Army to stop immigrants Gingrich would like him. Toffler stresses Pataki's is "a much meaner budget than The Population Institute held a news confer­ the need to be flexible, for there to be free we 've settn probably ever in the history of ence on March 3 to warnabout the imminent markets and adaptability . Nothing is fixed. the state ," dangers of migration, terming it one of the It's an understandable way of thinking for a "powderkeg issues" of the industrialized time like this." world . The news conference was given by Americans will respond to the economic ! institute President Werner Fornos, who in­ crisis in one of two ways, he said: "The first I troduced a report, "Moving On: The Global is that in times of instability , people turn SuprElme Court stay of Migration Phenomenon ," which warned to a safer pair of hands , more or less the that one in five people in the world are mi­ paradigm of Franklin Roosevelt and the execution cuts two ways grants . New Deal . But there is a second school, The U. S . !supreme Court on March 3 stayed President Clinton, he continued, has or­ that people turn to a radical solution. That the execution of a Texas man, whose motion dered 62 border patrol agents to Arizona to depends on the national psychology . In this was sup,*rted in a brief filed by two British

62 National EIR March 17, 1995 BriljIy

• A CALIFORNIA MAN was sentenced to 25 years in prison under the new "three strikes" law, for steal­ lawyers on behalf of the Bar of England Rep. Peter King (R-N.Y.), who has in­ ing a slice of pizia from some teenag­ and the Wales Human Rights Committee. troduced legislation prohibiting federal con­ ers. Jerry Williams, 27, who has two Clarence Lackey claimed that his l8-year tracts with "extremist groups," had com­ prior felony convictions, is planning stay on death row constitutes cruel and un­ plained that the HUD review skirted the to appeal the sentence. French TV usual punishment in violation of the Eighth employment discrimination issue. "These compared the c.se to Victor Hugo's Amendment. reports seem to be going into the quality of novel Les Miser'ables. In his motion, Lackey's attorney Brent the work. They never looked into the em­ Newton, cited a ruling in a Jamaican case ployment discrimination." But Cisneros re­ • FEDERAL I SCHOOL lunch by the Privy Council, Britain's highest sponded that HUD had not received any dis­ money is alread going to friends of court, that keeping someone on death row crimination complaints from tenants against r Newt Gingrich. Marvin Schwan, of for an inordinate amount of time was cruel the contractors. Moreover, he noted, the Schwan Sales enterprises, built up and unusual punishment. "We are not taking Nation of Islam is not on the FBI's list of his $1 billion frozen food business in the position that just because you've been hate groups. 1984 by offering to run public school on death row a long time that it's cruel and lunch programs: at a discount in ex­ unusual punishment to execute you," New­ change for gov¢rnment cheese allo­ ton said. "We are arguing that when a guy cations, which �e used for his pizza is on death row for a long time as a result of company. Schwan Sales has given delays solely attributable to the state, that is $297,000 to Girlgrich organizations, when the Eighth Amendment kicks in and it Red-faced liberals push including his : soft-money outfit becomescruel ." GOPAC. The irony of the case is that it will EIR's Bush biography undoubtedly be used as an argument for A new left-liberal publication whose advi­ • QUBILAH SHABAZZ, the limiting appeals and for swift executions. sory board includes some very old leftists, daughter of the : late Malcolm X, is grudgingly concedes that EIR's George seeking dismissal of the federal Bush: The Unauthorized Biography , is chargesagainst her that she hired one "must" reading. The publication, Prevail­ Michael Fitzpatrick, a longtime FBI ing Winds Research, (PWR) markets books "informant," to llssassinate Nation of and pamphlets exposing establishment Islam Minister Louis Farrakhan. She Cisneros defends HUn skullduggery; its advisory board includes is charging "outrageous governmen­ contracts with Muslims Carl Oglesby, Peter Dale Scott, Oliver tal misconduct. '1 Stone, and Dr. Cyril Wecht. Housing and Urban Development (HUD) The promotional reads: • PRIVATIZ�TION ofthe Pinck­ Secretary Henry Cisneros told a congres­ "Using exhaustive official documenta­ ney, Michigan SjChool system by Ed­ sional hearing on March 2 that he found no tion, [co-authors] Webster Tarpley and An­ ucation Alternatives, Inc. was de­ evidence that Nation of Islam security ton Chaitkin have broken through the aston­ feated in late Jltnuary, EIR has just guards recruit for their faith while patrol­ ishing wall of silence around George Bush. learned. Associates of Lyndon ling housing projects. With one exception, Here are the details on: How the Bush family LaRouche mad¢. the Pinckney case he said, the firms with federally funded promoted the Nazi war machine; Jupiter Is­ a cause celebre, long before EAI's security contracts were entirely separate land; Skull and Bones; the 'war hero' story; record of covflrlng up lower test entities from the Nation of Islam. He Zapata oil; the Watergate burglars; Iran­ scores and hea�y involvement with acknowledged that HUD's six-week re­ Contra; Third World genocide; and Bush's derivatives trading brokerages be­ view of the contracts was somewhat limit­ Leveraged Buyout Mob. Very strong re­ came widely known. ed, but said, "Going any further than this" search. Since the authors are connected to would "persecute an organization" that has (egads!) the LaRouche group, you have to • NEWT Gingrich was an early been effective in stamping out crime in read between the lines now and then, and proponentof leg�lizing marijuana for low-income housing. recognize the ideology for what it is. But the "medical" reasons, according to the The demand for congressional investi­ plentiful footnotes do check out, and that's Nation magazirie. Liberal attorney gation of the contracts was organized as part what counts. . . . William Kunstictr told the magazine of a hate campaign by the Anti-Defamation "(Okay, let's get one thing straight: that, "on Sept. 16, 1981" Gingrich League of B'nai B ' rith directed at Louis Far­ PWR is not involved with LaRouche­ introduced "a bql 'to provide for the rakhan. Cisneros rejected the ADL's tac­ honest Chip [Berlet] , we really aren't. If therapeutic use of marijuana involv­ tics, saying, "I abhor the tendency toward someone on the politically correct left ing life-threatening or sense-threat­ division in our society. When I hear some would write a book on this subject, we'd ening illnesses and to provide ade­ of the expressions by Minister Farrakhan, love to distribute it. But the leftdropped quate supplies oIfmari juana for such they obviously grate . But we've followed the ball, and you can't blame Tarpley and users.' " the law." Chaitkin for picking it up, now can you?)"

EIR March 17, 1995 National 63 Editorial

More sanity needed

The defeat of the Balanced Budget Amendment-even would so discredit himself that he was not a serious by only one vote�onstitutes an important victory for threat, no matter what the cnildely vicious insanities he national mental health . But the war, so to speak, is by peddled before he came to p�wer. no means over. Not only has the fetish of a balanced The Conservative Revohhion is as fascist in its ide­ budget not been exorcised, but the amendment itself ology as the agendas pushed by Hitler and Mussolini. can be put on the table again, at any time Senator Dole There is precisely the samt stench of populist rage decides. against the poor, the weak, �nd perhaps not Jews, but The amendment would deprive the United States certainly Mexicans and Afriqan-Americans, as we saw of one of the crucial instruments of sovereignty-its among Hitler's radical supporters . How else can we ability to call upon national credit-and for this reason understand the willingness of GraI)1mand his followers it is without doubt unconstitutional. But a Congress to starve hapless children wpose parents might be too i which rej ected the Fourth Amendment of the Constitu­ poor, or even incompetent, to adequately provide for tion (which protects against illegal search and seizure) them! when it was offered as an amendment to discredit the Gramm has actually play�d an evil role in American excesses of the new crime bill, cannot be expected to politics. In 1981, he co-authored the unworkable be any more careful of the Constitution in this instance . Gramm-Rudman Act. The final result of this artificial Should it pass the Senate at some future date, and be cap on government spendin$ was that the federal debt signed by the President, it will go down in history as doubled, and state finances were bankrupted by hun­ the Unbalanced Mind Amendment. dreds of billions of dollars in unfunded mandates. Which brings us to the question of Phil Gramm's In 1982, then Vice Presitlent George Bush wrote a presidential campaign, which is being orchestrated preface to a book of philosqphical garbage written by around his drive to impose the lunatic fiscal irresponsi­ Gramm . Today , not so sUrprisingly, Texas Gov. bility otherwise packaged in the so-called Contract with George W. Bush is out there vigorously campaigning America. Gramm has yet to learn poor Ollie North's for his father's protege. While Henry Kissinger has lesson, that the American population has not yet gone come out endorsing William Weld for President, so far down the road to perdition that it will stomach an Weld's statement that he wjll not be running in 1996 overt attack on Social Security benefits; nor are voters has led some to speculate on that hair-raising horror, a stupid enough to accept the verbal assurances, which Gramm-Weld ticket with the backing ofthe Bushes and the Republicans refuse to put into writing, that they Henry Kissinger. have no intention of raiding the fund . Already more and more Americans are waking up Gramm exudes malice . But there is also a carnival to the monstrousness of the '1new conservatives" whom sideshow quality to his presidential candidacy. Lyndon they elected. They are beginning to recognize that the LaRouche has described his posturing on the platform Balanced Budget Amendment is no quick fixfor their as "a goose in heat." Others have remarked on how economic problems and their fears over the future , and much he resembles Lady Thatcher. One wag was heard that it is no more acceptable � solution than Auschwitz. to say, "Oliver North was a drug runner, but Phil As the enormity of the fin�cial crisis becomes too Gramm is a dope !" large to pass off as a series of random episodes, more Because he is such an unappealing character, it and more Americans will be forced to look for serious would be, an easy trap for a more serious candidate to solutions to socio-economic, calamity. Then it will cer­ feel that Gramm would make an ideal opponent in the tainly be "Goodbye Phil," �s it was "Goodbye Ollie. " next election . This is, however, a great mistake, akin But perhaps by then it witl be too late to right the to that made by Germans who believed that Hitler situation except at a terrible ,cost.

64 National EIR March 17, 1995 LAROUCHE ON CAB L E TV

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We re you shocked? AND ACf WE MUST, for our own sake as well as Russia's. As LaRouche himself said: "Although we are While you were shocked, EIR was acting. Informed by focused upon the subject of Russia, only charlatans could nearly two decades of analysis of the Soviet Union by such speak of the future of Russia without taking into account leading thinkers as American economist Lyndon LaRouche explicitly the factors which are of immediately decisive and Germany's Gen. Paul-Albert Scherer, EIR 's European importance for each and all nations of this planet. Indeed, staff put together this report to warn western policymakers the present crisis within Russia (as of all of eastern Europe) that the countdown was on to what could be the century's is a relatively mild form of the catastrophe which is soon to biggest strategic disaster. strike down every nation upon this planet. Theway we Then Lyndon LaRouche, released from confinementas a treat the problems of Russia today is the mirror of the political prisoner in January 1994, traveled to Moscow with early- to medium-term future of China, of Japan, of North his wife, Schiller Institute Chairman Helga Zepp-LaRouche, America, and of western Europe."

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