LaRouche On The Record:
A New, Just, International Economic Order
For over four decades, American physical economist Lyndon H. LaRouche, Jr. has provided the intellectual and political leadership in the fight for a new international economic order for the planet, for the purpose of ending the historic imperial control of monetarism and unleashing mankind's creative powers as a species. We have divided this lengthy history into four section, by decade, and we include links from the both text and the graphics to the original documents, for you to study.
EIR Magazine’s abridged printable version
can be found here
The profound impact of LaRouche's intellectual leadership is clearly reflected in the current actions being taken by the BRICS nations and others to create a new global financial architecture and strategic alliance among nations, with the recent establishment of the New Development Bank (NDB) and related developments.
A partial timeline of LaRouche's role in leading the fight for a new international economic order is chronicled below:
1975: LaRouche Calls For Establishment of International Development Bank (IDB)
At a series of press conferences in April of 1975 in Bonn, Germany and in Milan, Italy, LaRouche presents his plan for "the immediate establishment of an International Development Bank as an agreement among the three principal world sectors-the industrialized capitalist sector, the so-called developing sector, and socialist countries." He specifies that the immediate concentration of the investment thus made possible should be industrial development and expanded food production worldwide.
LaRouche predicted that the present, or then-existing, international monetary system of the I.M.F., would inevitably go bankrupt, and should be replaced by a different credit-creating institution, namely, an International Development Bank (I.D.B.), to facilitate long-term, low-interest credit for capital investment and capital-goods transfer from the industrialized sector to the so-called developing sector, in order to overcome the underdevelopment of Africa, Latin America, and large parts of Asia.
LaRouche issued a policy document for international circulation titled "IDB: How The International Development Bank Will Work" [PDF] in which he declared that two immediate, interconnected actions were imperative:
(1) The declaration of a commitment to sweeping financial reorganization of the world monetary system, involving an orderly process of debt moratoria and the establishment of an institution such are the proposed International Development Bank (IDB)
(2) Immediate commitment to enact, within each national sector of the capitalist world, these measures of emergency financial-reorganization legislation required to facilitate immediate economic recovery in conjunction with IDB efforts.
Text of LaRouche's Press Conference in Bonn, Germany ˇ April 1975 [PDF]
We propose the immediate establishment of an International Development Bank as a three-way agreement among the three principal world sectors, the industrialized capitalist sector, the so-called development sector, and socialist countries. The Bank would discount letters of credit and bills of exchange authorized by treaty agreement among nations and self-constituted groups of nations, and would thus act as a rediscount bank for those other letters of credit and bills of exchange generated in the course of supplying needs of final commodities producers producing for bookings issued under relevant international development bank treaty agreements.
For example, several key developing sector nations have demanded that the industrialized sector negotiate interlocking agreements concerning three items: energy, raw materials. and food. Our essential criticism of this agenda is that it included only three principal items, instead of the necessary four. The fourth item should be "development." Our remarks concerning this example are not conjectural, provided that suitable initiative proposals are generated by significant forces of the industrialized sector, key forces within the so-called "Third World" will be prepared to immediately begin working negotiations along the lines of such a four-point form of general treaty agreement with the industrialized sector.
On the basis of our own organization's studies, and our discussions of these studies with governments and leading political forces within the "Third World," we have determined to the point of certainty that the activities of an International Development Bank in connection with present wishes and consumption capabilities of the developing sector, would be sufficient to generate a higher rate of industrial expansion in the advanced sector than has been seen during the most prosperous intervals of the past quarter century.
The feasibility of this proposed program demands understanding of certain often neglected ABC's of Political Economy. Without understanding those principles, we should all be hopelessly caught in the worst disaster of human history.
The basic fact on which all political economy depends is the characteristic feature of economy. That is, that a proper use of means of production and means of personal consumption generates levels of output in excess of the prime costs incurred. The second basic fact, essential to this solution, is that all general development, including industrial development depends upon creating a basis for growth in an abundant supply of adequate nutrition at relatively low social cost. To the extent that these two principles are observed in practice, and advancing technology emphasized to that end, it is feasible to generate very large amounts of long-term credit without inflationary effects.
We emphasize that a combined concentration on both industrial development and expanded food production are the absolute imperatives for this period. To the extent that long-term development credit to the developing sector places priority emphasis on rapidly increasing the amount and social productivity of world food production, any amount of credit can be issued over a 10- to 15-year term ultimately payable in expanded food, in increased masses of productive labor, and in the social productivity of human labor generally.
The immediate problem the new bank will face is this. In addition to the immediate potential for substantially increaing agricultural output and productivity generally, there are three regions of the developing sector which represent massive opportunities for increases in agricultural output. One of these, the Rio de la Plata region of South America, offers short-term major benefits for development as an agro-industrial region. The other two, the Sahel, and the India-Bangladesh-Pakistan region, represent potentially major world food-producing regions, but will require 10 to 15 years of massive engineering efforts and development to approach their enormous surplus potentials. Therefore, our problem is to provide a level of development equivalent to approximately a quarter trillion current transferable rubles annually, concentrated on low-interest loans and grants with a typical maturity in the order of 10 to 15 years required for loans.
The apparent difficulty of conducting such programs is only apparent and not actual. To the extent that the industrialized sectors can generate large surpluses in excess of immediate reinvestment requirements within that sector, that portion of surplus can be issued as credits and grants without adverse economic effects. The only real problem involved is that of raising the gross level of industrial outputs to the scale the indicated undertaking requires. . . .
For full document, see How the International Development Bank Will Work
THE IDB AS SUCH
No competent professional financier should find it difficult to understand the merits and workings of all the principal short-term features of the International Development Bank. It is merely necessary to appropriately identify those points. It is the longer-term perspective and policies of the Bank which go beyond the financial specialist's education and experience. On that aspect, we are obliged to clarify the essential scientific points...
Formally, the IDB comes into existence in a manner analogous to the effective financial reorganization of any major bank being rescued from illiquidity collapse. A new bank is created to continue the essential operations of the old, while major categories of unpayable carried-forward indebtedness are placed in a moratorium "deep freeze" and negotiations for future liquidation of that debt conducted separately from day-to-day operations of the new institution.
There are two general approached to such a financial reorganization. In one approach, which we are rejected for the problem before us, the administrators strip the operations of the illiquid bank down to a hardcore of essentially sound categories and ranges of activities - an austerity policy of financial 'debridement.' In the second approach, which we are applying to the IDB policy, the object is to vastly expand the operations of the reorganized bank beyond the scope of the bankrupt predecessor, by focusing the activities upon development polices essentially free of the policy errors which led to the collapse of the former entity. The second approach is analogous to the case of the bankrupt manufacturing firm which is successfully reorganized for expanded operations by introducing a superior set of products to its existing productive capacities.
Our core policy is this. The worldwide material preconditions from agricultural, mining and manufacturing are essentially sound. It is only the debt-ridden financial superstructure which prevents those potentialities from being realized in the form of rapidly expanded levels of output at progressively reduced net social cost of production per unit of output. In short, we reject the "Zero Growth" and "Limits to Growth" chimeras as dangerously disorienting fantasies concocted by charlatans and widely puffed by ignorant public relations agencies.
To this end, we have already identified - in consultation with some of the world's leading professionals and relevant governmental agencies - several major specific development projects which can readily (over a five to ten year period of development) yield a massive increase in the output and social-productivity of world agriculture, and thereupon premise the infrastructural basis for massive industrial development. We have similarly determined the feasibility of controlled thermonuclear reaction technology within the horizon of such development programs, such that no long-term "energy crisis" could exist except through massive incompetence by leading agencies.
Those two primary bases for development warrant a massive increase in levels of industrial output from the presently industrialized sectors. The realization of those combined objectives demands supporting activities in the form of both capital development of productive capacities and increasing the social productivity of the general population through improvements in material consumption, leisure and educational opportunities in households.
Hence, credit issued for the realization of such programs is secure and liquid, since the margin of total production obtained through the mediation of credit will significantly exceed the margin of credit issued to effect such production.
Although the decisive interconnections determining such results are international, the present mediating form of economic cooperation to such international ends is the form of de jure national economy. Moreover, the national economies principally to be considered are apportioned among states with capitalist and states with socialist constitutions. Hence, although the objectives to be realized are global, the mediation of the process of reaching those objectives must be treaties of economic cooperation to such ends among participating groups of states.
To maintain a stable international trade as the means for implementing those treaties, such treaties among states and groups of states must be directly incorporated into a single international credit agency, through which world commodity prices can be rationally pegged to the exchange values of principal commodities in terms of the most stable major currencies.
The proposed International Development Bank is therefore essentially an international treaty organization of the participating national economies (states). It acts as a planning forum for the negotiating of extended treaties of economic cooperation, and functions as a n international rediscount agency in connection with those letters of credit and bills of exchange in international trade authorized by treaty agreements.
ROUTINE BANK OPERATIONS
Each treaty negotiated within the purview of IDB operations directly subsumes corresponding "master letters of credit." For each unit of bookings and deliveries subsumed by such master letters of credit, specific letters of credit are automatically processed through the bank as the ultimate rediscount agency of international trade. Bills of exchange against those letters of credit are similarly routinely reprocessed.
The global effect of this operation is to issue credit to the account of the produced and purchaser national sectors. This IDB international central bank credit provides the means for issuing domestic credit to relevant specific producers and purchasers within the national economies affected.
Hence, provided the level of aggregate international trade is sufficiently high, the rates of production in all participating sectors are raised to levels above those prevailing in the high-points of the pre-depression period.
Provided credit is restricted to commodities of the classes directly relevant to development and at non-inflationary prices, the aggregate operations of the bank are in balance except for one major category of long-term credit balances held by the advanced sector against the development of the developing sectors. Provided that this long-term credit does not exceed the aggregate exportable social surplus product of the industrialized sector, the enlargement of such balances has no adverse effect on the industrialized sector. Rather, from traditional baking viewpoints, this mass of credit has the form of 10-to-15-year investments in the developing sector, under the conditions in which initial repayment is postponed to a forward date of maturity 10 or 15 years hence...
For full document, see How the International Development Bank Will Work
The History of the Fight for the New World Economic Order by Fred Wills (PDF)
1976: Non-Aligned Movement Summit Calls for New International Economic Order
Within months, eighty-five nations, representing 2 billion people, met in Colombo, Sri Lanka for the Fifth Summit of the Non-Aligned Movement and issued a unanimous declaration [PDF] calling for a new international economic order on August 19, 1976, identical in many regards to LaRouche's proposals spelled out in his policy document from the preceding year.
The declaration endorsed both the establishment of a new international monetary and financial system to replace the International Monetary Fund and provide capital for Third World development through the creation of a Bank of the Developing Countries, as well as a debt moratorium for the least developed countries whose outstanding debts at the time made economic development for those nations impossible. The heads of state of the Non-Aligned nations declared that this summit represented:
"...a new step for the establishment of the new world economic order, and in particular, the essential element of such a new order, a new monetary and financial system."
In her keynote address to the summit, Sri Lankan Prime Minister Sirimavo Bandaranaike endorsed the establishment of a development bank for the Third World: "The developing countries are consistently denied the true value of their output by the vagaries of the international market and the manipulations of international finance. The developed countries have shaped the international financial system to suit their interests. Should we in the developing world sustain such a system? Should we not, instead attempt to develop a system all our own? ... One area of great promise, would be the establishment of a commercial bank - a Bank for the Third World - the bank of Asia, Africa, and Latin America. This would not be another non-aligned solidarity fund. It would be a genuine commercial bank and a truly multinational enterprise."
The New International Economic Order
The Colombo Resolution declared:
The institution of a new international financial order is of the highest political importance... The solution to the economic problems of the developing countries demand the establishment of a universal and equitable new monetary system... Only a complete restructuring of international economic relations, thanks the institution of a new world economic order, will put the developing countries in a position to attain an acceptable level of development.
The Heads of State or Government of Non-Aligned Countries reaffirm that the struggle for political independence and the exercise of their sovereignty cannot be disassociated from the struggle for the attainment of economic emancipation... No lasting peace and security is possible internationally without the establishment of a just and fair society which provides its citizens the economic and social security which is an inalienable right of every citizen of this planet. Such a society should be established in the shortest possible time thus ushering in an era of prosperity and dignity for all mankind.
The achievement of the full economic potential rests on the developing countries and entails the following factors:
(a) individual self-reliance in order that developing countries may utilize their economic potential to cooperate among themselves to set up the New International Economic Order;
(b) intensification of economic cooperation between developing countries;
(c) strengthening of their solidarity and the coordination of the activities of the developing countries in a common front against all attempts of imperialists to sow division and to apply pressure.
The heads of state or government of Non-Aligned Countries are firmly of the view that nothing short of a complete restructuring of the existing international economic relations will provide an enduring solution to the world's economic problems, particularly those of the developing countries. The inadequacy and recurring failure of the prevailing economic order have been demonstrated by the recent series of crises in the developed market economy countries... These crises have also dramatized the fundamentally interdependent character of the constituent elements of the world economy, and provided the necessary impetus for the world community to conceive of the new world economic order based on equity, sovereign equality, interdependence, common interest and cooperation among all States. Faced with this chaotic situation the world has witnessed an unprecedented solidarity among the developing countries and successful assertion of their basic, economic and political rights in the international scene.
The establishment of the new international economic order calls for bold initiatives, demands new, concrete and global solutions, and is contrary to the piecemeal reforms and improvisations intended to resolve the present economic difficulties. The fundamental objective of the New Economic Order is to bring about in the international economic relations an equilibrium based on justice through cooperation and human dignity...
The Non-Aligned Countries once more reaffirm the inalienable right of all countries to exercise full permanent sovereignty over their natural and human resources ad their economic activities including possession, use and disposal of such resources and their right to nationalization...
The Heads of State of the Non-Aligned Countries reaffirm their view that nothing short of a complete restructuring of existing international economic relations will provide an enduring solution to world economic problems. They reaffirm their resolute determination to secure through collective action the establishment and implementation of the New International Economic Order. Such an order must consist, inter alia, of the following essential elements:
(A) Fundamental restructuring of the entire apparatus of international trade so as to achieve an indexation, improving the terms of trade pf developing countries and ensuring fair and remunerative prices in real terms to primary export products and an appropriate share of world trade for developing countries through the expansion of processing, diversification and full participation in transport, marketing and distribution of their products...
(B) Deep restructuring of world production on the basis of a new international division of labor through improved access to the markets of the developing countries for the manufactured products of developing countries, transfer of technology on favorable terms and conditions, redevelopment of industries from developed countries to developing countries...
(C) Radical overhauling of the present international monetary arrangements, which are characterized by the absence of a rational, equitable and universal system, the anarchy of chaotic currency fluctuations, haphazard growth of international liquidity, widespread inflation, lack of responsiveness to the needs of developing countries and the domination of decision making by a few developed countries. The new system should remove the dominant role of international currencies in international reserves, ensure parity in decision-making as between developed and developing countries, prevent the domination of any single country over decision making, and forge a link between liquidity creation and development finance;
(D) Guarantee an adequate transfer of resources for development on an assured, continuous, and predictable basis with respect to the criteria of independence and in a non-discriminatory manner not likely to create division among developing countries;
(E) Urgently determine a satisfactory solution to the problem of public debt, particularly for the least developed and most seriously affected countries.
(F) Providing adequate resources and appropriate technology on favorable terms for investment to ensure increased production of food agricultural inputs in the developing countries...
CONCLUSION: The Colombo Summit in the view of Heads of State or Government heralds a new phase in which the growing economic potential of non-aligned and other developing countries, creates a momentum for the establishment of the New International Economic Order, with a particular emphasis upon the new international monetary and financial system that is an essential element of that order. In the words of the Chairman of the Conference, Hon. Mrs. Sirvimavo Bandaranaike, 'If we really and truly want to blunt the weapons of imperialism and colonialism, we must surely fashion countervailing weapons in the areas of international money and finance.'
Resolution for a Bank of the Developing Countries
The Conference of Heads of State and Government of Non-Aligned nations,
Recognizing that financial and monetary cooperation among Non-Aligned and other developing countries is a necessary aspect of economic cooperation and a practical expression of the concept of collective self-reliance;
Conscious that the present international monetary and financial system is controlled by and directed to serve the exclusive interests of the developed countries to the detriment of Non-Aligned and other developing countries, and that this system is the product of a colonial era and imperialist exploitation of the developing countries;
Aware that monetary and financial activity in many Non-Aligned and other developing countries is still controlled by the transnational financial corporations of developed countries which generate and export excessive profits and control and distort the pattern of trade and economic activity of developing countries;
Noting that Non-Aligned and other developing countries lacking the strong bargaining mechanism of a joint banking institution have been completely denied reciprocal access to banking and other financial business in developed countries;
Aware that the Non-Aligned and other developing countries have the capacity and the political will to mobilize their collective strength to increase their control over the international monetary and financial system;
Taking note that there are growing elements of financial and monetary cooperation sub-regionally, regionally, and intra-regionally among Non-Aligned and developing countries, through the mechanisms of clearing and payments arrangements, cooperation among Central Banks and the links among national commercial banks;
Recognizing that economic cooperation among Non-Aligned and other developing countries must now move into the phase of implementing concrete proposals and that the national commercial banking systems of Non-Aligned and other developing countries provide a framework for the establishment of a multinational banking enterprise among developing countries;
Mindful of the economic viability of the opportunities available in the developing world which such a multinational banking enterprise could help to realize in a wide range of cooperative economic activities such as the finance of direct trade among developing countries, the building up of merchant shipping fleets, industrial and agricultural projects, deposit banking in developing and developed countries, merchant banking, stocking of commodities, short-term balance of payments facilities, and in other areas;
Mindful too of the role which such a multinational banking enterprise could play in the strengthening of developing countries' capacity to control the international monetary system and eventually in the evolution of new systems of international liquidity and reserve creation for the developing world;
Decides that the feasibility of establishing a Bank of the Developing Countries should be studied and that a group of experts from Non-Aligned and other developing countries should be convened to examine and make recommendations on the measures and modalities required for its establishment and operation, including the proposed statutes for such a multinational banking enterprise, and its legal status within individual countries.
Frederick Wills Calls for International Development Bank at United Nations
Immediately following the Colombo Summit, the Foreign Minister of Guyana, Frederick Wills, addressed the United Nations General Assembly in New York, on September 27, 1976, and called for the establishment of a new international economic order through the creation of an international development bank and a debt moratorium for the developing world. Wills declared that "there can be no meaningful economic advance without the implementation of the New International Economic Order."
"The IMF and the Bretton Woods monetary system must give way to alternative structures like international development banks... The crippling problem of debt and the servicing of debt has assumed a special urgency. Developing countries cannot afford to depart from their basic and fundamental demand made in Colombo earlier this year calling for measures of cancellation, rescheduling, and the declaration of moratoria. We cannot afford to mortgage the future of unborn generations to the obligations of burdensome capital repayments and crushing debt servicing. The time has come for a debt moratorium."
Frederick Wills at United Nations ˇ Sept. 27, 1976
Mr. President, recently the Non-Aligned Movement held its Fifth Summit meeting at Colombo, Sri Lanka. in the Indian Ocean... At Colombo, the golden thread running through the resolutions and discussions was the determination of 85 countries not to sacrifice their sovereignty and independence of the altar of ideological nicety. Mr. President, we of the Non-Aligned Movement have in effect chosen not to be for one side or the other. We have chosen to be ourselves. At Colombo, Non-Aligned countries denounced all forms of interference and emphasized the need for unremitting vigilance in this regard. Here in New York, at this 31st Session of the General Assembly, I call on the international community to consider in earnest, measures to safeguard the integrity and sovereignty of small states and to discourage all attempts to interfere with their right to pursue the paths they have freely chosen for themselves. This, after all, is one of the fundamental principles enshrined in the Charter to which we all subscribe.
But Mr. President, the security of developing states is inextricably linked with their economic survival and their economic advance. My delegation feels that there can be no meaningful economic advance without the implementation of the New International Economic Order as adopted at the Sixth Special Session. The Non-Aligned Movement and the Group of 77 have tirelessly sought to bring home to those in the developed world ever resistance to change, that the economic progress of the developing countries is in the security interests of the developed countries. The billions on this planet who live in the developing countries and whose existence is subjected to the constraints of the few who manipulate to their advantage the present-day economic system, have pinned their hopes on the modest program put forward in Nairobi [at the May 7, 1976 UN Conference on Trade and Development] and elsewhere. Their determination is adamant, inexorable, and relentless. The IMF and the Bretton Woods monetary system must give way to alternative structures like international development banks, which are not geared to the revival and reconstruction of Europe nor preferential arrangements for the developed market economies, but rather to the just distribution of the gains of an equitable global system.
The crippling problem of debt and the servicing of debt has assumed a special urgency. Developing countries cannot afford to depart from their basic and fundamental demand made in Colombo earlier this year calling for measures of cancellation, rescheduling, and the declaration of moratoria. We cannot afford to mortgage the future of unborn generations to the obligations of burdensome capital repayments and crushing debt servicing. The time has come for a debt moratorium...
LaRouche Declares: The United States Must Integrate Itself Into The I.D.B.
In his capacity as a presidential candidate for the U.S. Labor Party in the 1976 Presidential elections, Lyndon LaRouche celebrated the historic decisions made by the Non-Aligned Movement at the Colombo Summit saying:
"We have succeeded in mobilizing 85 countries and 2 billion people around our program. That is what I have worked for all my life. Our small organization has accomplished what many termed impossible. We must use our victory at Colombo to organize the American working class behind our program. They want to do something but the average person lacks the sense of how to fight. Colombo changes this prescription. Colombo has shown these forces what can be done on a world scale with a cadre of a handful of people... The United States will have to integrate itself into the International Development Bank (IDB)."
LaRouche Defines How United States Must Integrate Into IDB
In the wake of the Colombo Summit, LaRouche defined what the United States must do to integrate itself into the emerging dynamic for a New International Economic Order. The statement issued from his campaign read:
"Lyndon H. LaRouche, Jr., who authored the International Development Bank proposal on which the Colombo resolution was based, can assure you that the transition to an IDB economy will be smooth an orderly, as long as there is visible mass support for the IDB. Specifically, the U.S. working class must begin to mobilize around the particular pieces of legislation and industrial processes which will bring both the structure and productive capacity of the U.S. economy into compatibility with the goals of massive industrialization worldwide. The primary pieces of legislation are the National Banking Act and the Emergency Employment Act..."
"The process we propose is best conceived as a national bankruptcy procedure. occurring under the declaration of a national emergency (provided for in the Emergency Employment Act legislation). Those banking institutions which have put most of their effort into speculating, will be those destructive parts of the firm who are lopped off and out of existence as so much cancerous wood. Following the necessary surgical operations, two processes must begin immediately and simultaneously. The first is the start of negotiations on treaty arrangements with the Third World, Comecon and European nations according to the foreign policy provisions outlined in the Emergency Employment Act:
"The foreign economic policy of the United States is governed by the principle of increasing the nation's trade in raw materials and industrial commodities. with emphasis on capital goods exports, and entering into cooperation agreements with other nations, both industrialized and developing, to promote such general trade and the institutions of credit needed to facilitate it. To effect such results. the United States includes in its foreign economic policy a leading commitment to the internal and agricultural progress. using modern technology, by developing regions of the world, and pursues that policy in concert with both the developing nations and other industrialized nations. No one would deny that ample markets will be provided under such a policy...
"The second process is the establishment of national economic development through the adoption of programs which stress the fostering of basic scientific research and its applications, the expansion of industrial power on the basis of emphasis on improved technologies and capital-intensive development. and upon the development of the national infrastructure to meet those goals. Such policies will require the rapid expansion of labor power. The ruling principle of national policy concerning the labor force is to provide the improved opportunities and conditions of employment, leisure, and essential social services which foster a rising material standard of living in households, improved health and fruitful longevity of the individual, and substantial advances in the cognitive powers of the population both as a deliberating political body and as a labor force emphasizing high proportions of scientists, engineers, skilled industrial operatives, and including farmers who are both producers and available skilled cadres for assisting the development of agriculture in other nations.
"The net-result of such policies would be a growth rate of 25 per cent and above for the U.S. economy, a growth rate encouraged by a central government low-interest, high-liquidity credit regime. Because all issuance of credit will be tied to the direct production of tangible wealth in the form of expanded industrial and agricultural exports, high employment levels, and consumer goods including restoration of social services to pre-1971 levels, the very rapid expansion will be noninflationary."
1977: LaRouche Situates India's Role in New International Economic Order
In a two-part special report called "The Struggle For Indian Freedom: A New Program" [Part 1, Part 2], LaRouche states that India can lead the Non-Aligned Movement in declaring a debt moratorium as a "strategic weapon," as well as establishing the International Development Bank to promote world economic development: "The first contribution India must make in this battle is to lead the developing countries, in convert with leading Third World nations, in a declaration of moratoria on the payment of all debt to the bankrupt monetarist institutions of the IMF-World Bank and their aid consortia. The freezing of unpayable debts to the monetarists is not only morally imperative but is the strategic weapon we must wield to open the way to the establishment of a new monetary system. As the 1975 programmatic document, The International Development Bank, proposed, the central task of a New World Economic Order is to facilitate the greatest possible flow of technologies and industrial process from the advanced sector into the developing sector."
As far as the non-aligned world is concerned, the Indian leadership of that movement may rightfully claim that the fundamental conflict in the world arean at this time is not between capitalism and socialism, but between monetarism and its institutions such as the International Monetary Fund and the World Bank, and humanism as represented by both socialist republics and the workers movement and industrial capitalist factions committed to the idea of progress. India's special role in the fight for humanist goals must be one of contributing toward the formulation of a sound world monetary and commercial system that will replace the deadly and moribund monetarist monstrosity of Wall Street, the International Monetary Fund, and the World Bank.
The first contribution India must make in this battle is to lead the developing countries, in convert with leading Third World nations, in a declaration of moratoria on the payment of all debt to the bankrupt monetarist institutions of the IMF-World Bank and their aid consortia. The freezing of unpayable debts to the monetarists is not only morally imperative but is the strategic weapon we must wield to open the way to the establishment of a new monetary system.
As the 1975 programmatic document of the U.S. Labor Party, The International Development Bank, proposed, the central task of a New World Economic Order is to facilitate the greatest possible flow of technologies and industrial process from the advanced sector - both capitalist and socialist - into the developing sector. Such a new system ought to be designed to meet two primary requirements:
1) to facilitate the transfer of economic values among three generally distinct portions of the world economy, the socialist sector, the capitalist sector, and the developing sector, each of which, for historical reasons, adheres to different social-political determinations of wealth. It is therefore necessary to return gold to its historical monetary-exchange role for the final settlement of balances in exchanges among nations.
2) Such a new system must also establish criteria for short and long term credit issuance which will eliminate the practice of monetarism and fictitious money-lending and will meet the credit demands for an unprecedented drive for world industrialization. It can be done. The nature of credit is ultimately political. Whether credit will be used to promote world industrial development or monetarist looting depends exclusively on the program and moral content of the political leaderships who control the policies of credit-issuing institutions. Short of more detailed elaboration, what can by stated with respect to credit-issuing policies of such a future institution as, say the International Development Bank, is the following:
The governing body of a bank of this sort, committed to playing the role of the central credit engine for a quarter-century world industrialization drive, must essentially represent the interests of the pro-industry and pro-progress governments and leading institutions of each of the three world sectors.
The mutually agreed upon universal criteria for credit issuing policies must be the commitment of recipient nations to total mobilization of national material and human resources for technological, scientific, industrial, and agricultural progress. The policies of any national government can be judged only by those criteria of absolute profitability of the national economy which result from the mobilization of its resources. We, and any other nation, do not want charity, such as is bestowed upon the permanently immiserated. Rather than such degradation, we must demand of ourselves, a full effort toward self-sufficient development.
This is the context in which India's national revival must be forged if that national revival is to meet with success and give to the people of our nation a rightful sense of human importance, accomplishment, and indispensability in the community of nations. The key task of the leadership that India needs now is to mobilize and harness this nation's resources for that great goal...
1978: Indira Gandhi Delivers Exclusive Interview To EIR Magazine
The year before her stunning comeback victory as Prime Minister of India, Indira Gandhi delivers the first of several exclusive interviews to LaRouche's Executive Intelligence Review magazine. In the interview, conducted at her home in New Delhi, Gandhi strongly defends a return to the non-aligned foreign policy of her father Jawaharlal Nehru, and insists that only a policy of aggressive government support for investment in science and technology can save India from crushing poverty:
"...Science and technology, this is essential to fight poverty. It is ridiculous to say that you can solve rural problems without science and without industry; you simply can't. In our scheme of things, there is no conflict between agriculture and industry; they complement one another."
In another interview with EIR immediately after her victory in the 1980 elections, Prime Minister Indira Gandhi elaborates on her development policy:
"India is a developing country, and development has been rather uneven. It is obvious that where there is industry it is much easier for that area to grow and for people to get more jobs. We have a program for developing backward areas and we have made progress in it... We have to encourage investment to increase production, we have to build up the distribution system for essential commodities... We have to take up again the special programs for the poorest and weaker sections of the population."
1979: LaRouche Defines Program For The Industrialization of Africa
The Fusion Energy Foundation, an international association of scientists founded by Lyndon LaRouche, held an international conference in Paris titled "The Industrialization of Africa" on the subject of a New International Economic Order as the indispensable precondition for the development of the African continent. The proceedings of the conference were published in a book [PDF] whose preface declared: "The purpose of this present book is to make the ideas a conceptions accessible to a broader leadership and, thereby, to make it an active element in the present conflict over the New World Economic Order... The purpose is to demonstrate, in concrete form, a perspective for the development of the entirety of Africa as an alternative to Malthusian polices... to launch the industrialization of Africa in the context of the New World Economic Order in the 1980s."
Lyndon LaRouche authored a paper for the conference titled The Myth About Equilibrium Economics which contains a section called "The Hamiltonian New World Economic Order" in which he elaborates the Hamiltonian principles underlying his original IDB proposal. This document is a follow-up to a report LaRouche authored the previous year titled The Theory of the European Monetary Fund, in which he stated: "The success of the United States has been based on the same essential 'dirigist' policy outlined in the IDB proposal. This policy was articulated in Treasury Secretary Alexander Hamilton's 1791 Report on Manufactures... The crucial feature of Hamilton's Report on Manufactures is his proof that the sole source of wealth of nations is technological, capital-intensive advances in the productive powers of labor."
For full document, see The Myth About Equilibrium Economics
For more than half a century, it has been well known that the application of twentieth-century science and technology can transform the semi-arid, starving region of the Sahel into the breadbasket of the African continent. President Franklin Delano Roosevelt outlined the main features of such a post-war effort to Prime Minister Winston Churchill during their war-time meeting at Casablanca.
Each decade, governments, financial institutions, engineering firms, and others complete studies of new projects. To date, for Africa alone, we have a substantial accumulation of projects of investment which are not only technologically feasible beyond doubt, but which would produce a substantial contribution to the national surplus of the nations and the regions in which they are intended to be placed.
Indeed, at this moment we have more sound projects to launch than the combined forces of the industrialized and developing nations have the present economic means to launch simultaneously.
Our practical task for development is that of selecting a combination from among those proven projects. We must allocate limited capital resources for development to a combination of selected projects which, taken together, will have the optimal effect in raising per-capita output in the developing nations...
I refer our attention on this point to the wartime policy-proposals of President Franklin D. Roosevelt. At the Atlantic and Casablanca meetings with Prime Minister Churchill, Roosevelt informed an understandably enraged Churchill that the United States was not going to fight a second world war for the purpose of once again saving the British Empire. Roosevelt added that under his policy for the post-war world, the United States would crush all efforts by the British and others to subject the international economy to "British eighteenth-century methods."
Unfortunately, Roosevelt died on the brink of peace in Europe. To put the matter in the kindest possible terms, President Harry S. Truman was no Franklin Roosevelt.
Excepting such cases as President Eisenhower's "Atoms for Peace" policy and the policies associated with Charles de Gaulle, the post-war Bretton woods monetary system has been a cancerous revival of what Roosevelt rightly denounced as "British eighteenth-century methods." This Bretton Woods system has meant leaving former colonial nations to carry independently their accumulated debts - independent of significant assistance from the industrialized nations. This is the phenomenon which developing nations often describe as "neocolonialism." On balance, since the death of President Roosevelt, the United States government has worked to perpetuate the old British Empire in thin disguises, and has done so by embracing what Roosevelt denounced as "British eighteenth-century methods." ...Without rejecting those methods, without junking those miserable varieties of political-economy, the New World Economic Order could not be brought into being.
For such reasons, it is a wishful delusion to speak of the development of regions such as Africa without committing ourselves to the replacement and eradication of those kinds of economic doctrine associated with Cambridge and the London School of Economics.
Since I began to gain public notice for my work on this matter, about five years ago, some important progress toward a New World Economic Order has been made.
During the Spring of 1974, my associates and I proposed the immediate reorganization of the European Community's monetary structure into the form of what we termed then a "Golden Snake." We demanded the pricing of monetary gold at its price of production, not some fictitious gold valuation of the sort earlier used under Bretton Woods. We proposed that a gold-based EC currency-bloc would be made economically feasible through economic-cooperation agreements with the Comecon nations.
Happily, that 1974 demand of ours has been satisfied on the initiation of President Giscard d'Estaing and Chancellor Helmut Schmidt. The establishment of the European Monetary System, combined with new accords among Moscow, Paris, and Bonn, has established the indispensable cornerstone for the new, needed world monetary system.
During April 1975,1 announced a further proposal at a press conference in Bonn. This proposal was later publicized in a series of reports under the title of The International Development Bank...
THE HAMILTONIAN NEW WORLD ECONOMIC ORDER
The illustration I have just given I have emphasized because of its direct bearing on the New World Economic Order. The methods Roosevelt used for 1940-1945 war-mobilization in the United States are a model of reference for the methods by which I proposed to make the New World Economic Order a reality.
Contrary to official U.S. government statistics, the U.S. economy as a whole is currently operating at a net loss. The statistical reports of economic growth and profitability are largely fictitious, they are based on including within Value Added items of revenue which involve non-productive or even outrightly wasteful purchases. The agricultural and industrial sectors of the U.S. economy, in particular, are in a cannibalistic phase, where a shrinking capacity is maintained by "triaging" part of output-capacity as a whole.
Although the U.S. could secure export-contracts for capital-goods increasing the level of exports by about $100 billions annually, the U.S. economy has shrunk since 1966-1967 to the point that prompt delivery on such increased volumes of exports is presently doubtful. I emphasize the figure of $100 billions because that is the approximate level of increased annual exports of capital-goods the U.S. must contribute to launching the New World Economic Order during the course of the immediate four years ahead.
Therefore, the problem of bringing the U.S. economy to the point it can deliver an additional $100 billions of capital-goods exports annually is a problem very much like the war-mobilization problem Roosevelt confronted in 1940.
On condition that the European Monetary Fund is implemented in the way I have indicated earlier, and on condition that the United States and Japan are brought into support of the EMF, that will establish a new world monetary system, replacing the bankrupt and cancerous relics of the Bretton Woods System - the IMF, World Bank, and London financial market. This new system, being based on a true gold-reserve basis, can generate hundreds of billions of dollars-equivalent annually, provided that the credit issued is for sound projects, and that the credit is issued primarily for world-commerce either in capital goods or in commodities circulated in payment against capital-goods purchases. In other words, it is a world-wide, peaceful equivalent of a war-economy.
On that basis, anticipating nuclear-energy plants to be a large component of total increased capital-goods exports, we are projecting levels of added world commerce in capital goods in the order of between two and three hundred billions dollars-equivalents annually, as soon as production-levels can be cranked-up to meet such requirements.
East-West economic cooperation will be an essential part of this. For various reasons, the Comecon nations are not suited to become a significant part of the world division of labor in consumer products. Therefore, unless the Soviet Union, for example, were to meet its purchase obligations with a combination of gold bullion and primary commodities, there would appear to be important difficulties in the way of adequate expansion of East-West economic cooperation. However, the Comecon economies, especially the Soviet economy, have excellent potentials for producing high-quality capital goods for Third World use. Thus, the Comecon can increase its purchase of imported capital goods for its own internal development against the proceeds from supplying other capital goods exports for development of Third- World nations.
Admittedly, this effort depends upon the subordination of old Third-World debt to the long-term credits of high-technology development. With a new, gold-based monetary system replacing the cancerous IMF, the suitable reorganization of old debt-structures can be accomplished without causing dislocations in the internal banking systems of industrialized nations...
If those victimized regions of the world had lived under the hegemony of the "American System," rather than the British system, the hideous condition of much of the Third World would not exist to be remedied today...
For full document, see The Myth About Equilibrium Economics
For full document, see The Theory of The European Monetary Fund
...The new monetary system is also the basis of a new world economic order, which will conform in every essential feature to this writer's International Development Bank proposal.
That connection poses an intriguing and important problem. Although the writer's IDB proposal, first issued during the Spring of 1975, has performed a key contributing role in creating the climate for bringing the EMF into being, it would be incorrect to argue that the bulk of the persons influenced by the IDB and its side-effects have proceeded from the theoretical-economic principles embedded in that proposal. Rather, they have responded to their agreement with the policies embodied in the IDB, an agreement which is primarily pragmatic.
As the new monetary system comes into operation, it will quickly become clear that those pragmatic premises of agreement with the IDB proposal are not adequate. The theoretical-economic basis for the IDB will then begin to appear in its true importance... What this writer accomplished in his theoretical-economic work embodies one of the most fundamental scientific breakthroughs of the present century. The mere fact that such a fundamental breakthrough is embedded in the basis for the IDB proposal properly suggests the nature of the difficulty the typically miseducated economist must experience in first encountering this theoretical work...
For full document, see The Theory of The European Monetary Fund
1980: LaRouche Drafts Forty-Year Plan to Industrialize India
Lyndon LaRouche releases a program to transform India into an industrial superpower at a conference sponsored by Executive Intelligence Review and the Fusion Energy Foundation. Greetings to the conference were sent by Indian Prime Minister Indira Gandhi, who said:
"Since 1947 India has made considerable progress in science and technology. The world now recognizes the versatility and capability of our industries. Our aim is to make our country self-reliant... It is appropriate to assess our progress now and to look into the future. My good wishes to the conference on India's industrial development being held by the European Fusion Foundation and the Executive Intelligence Review."
1982: LaRouche Meets With Prime Minister Indira Gandhi in New Delhi, India
In April, Lyndon and Helga LaRouche travel to India where they meet with Prime Minister Indira Gandhi for the first time, along with several members of parliament, leading scientists, industrialists and economists. While in New Delhi, LaRouche addresses the Indian Council of World Affairs, as well as the Institute for Defense Studies and Analysis, and the Jawaharlal Nehru University School of International Studies. LaRouche then traveled to Bombay to tour the Bhabha Atomic Research Center. LaRouche's speech to the Indian Council on World Affairs is titled "A New Approach to North-South Relations" in which he states that the program adopted at the Non-Aligned summit in Colombo must be the basic model for achieving a new world economic order, and declares: "I propose that the developing nations, and the spokesmen of them, make a unilateral statement to this effect: that there will be international cooperation on East-West/North-South development interrelatedly; that conditions of political stability and peace be premised upon the mutual self-interests of the parties in promoting economic development."
Thank you, Mr. Chairman, members, and guests.
I have been involved in a significant way in the question of North-South economic development since approximately the beginning of 1974, with the aid of Helga Zepp-LaRouche... What we've achieved is a general comprehensive agreement along broad policy planning lines, of project objectives, over a period of 25 to 50 years. We agree, North-South and East-West, that certain general things have to be accomplished in the way of economic development projects over the next two generations; that we will organize economic cooperation, both East-and-West and North-and-South, toward the point of fulfilling those objectives; that we will organize credit mechanisms to facilitate meeting those objectives; and that we predicate our political relations and the resolution of problems of military confrontation and other problems upon this combined East-West/North-South trade...
THE ANGLO-AMERICAN STRANGLEHOLD
First of all, the dominant institutions of Western Europe and the United States are controlled by what we might call Anglo-American forces centered around the Swiss Bank for International Settlements, the International Monetary Fund, etc. These forces are absolutely determined not only to crush the developing sector, but to significantly depopulate it,u sing economic means to facilitate the depopulation. Therefore, under no circumstances while these institutions have power - while they can determine the policies of the United States and Western European countries and can dominate the international monetary system - is there a peaceful means by which the developing sector could secure significant improvement in North-South relations. Any attempt to find a pathway under these conditions is merely the search for a pathway to failure...
What we have to do is intervene in this process: a plunge toward confrontation, depression, and possible thermonuclear war. To prevent these things, then, we must situate the effort to achieve a New World Economic Order in the effort to avoid war. How do we propose to do that?
...What is the positive policy which would substantiate my proposal - the proposal, again, that we establish an East-West/ North-South three-way agreement on long-term economic development, and that we predicate political detente between and among the systems on the basis of that agreement to 20 to 50 years of development in the period ahead... History therefore shows that no nation can develop as an industrial power without looting other nations, except by following the mercantilist policies of Colbert and Leibniz, that is, what later became known as the American System.
The American economy was developed under the American System, as laid out by Alexander Hamilton in a series of reports to the Congress from 17S9 to 1791, concluding with the December 1791 Report to the Congress on the Subject of Manufactures. Up to Lincoln's period, every period of successful economic development in the United States was done under the aegis and under the policies directly following from the American System... Let me just indicate to you what is the issue and what is the possibility of mobilizing for example, Americans, and people in Western Europe, for an American System economic policy as the internal feature of this East-West/North-South development effort.
POTENTIAL RELATIVE POPULATION DENSITY
In scientific economics, we start with only one metric. That metric is potential relative population density.
By that we mean the average number of persons we can sustain per average square mile through the productive labor of that population alone. That is, what is the ability of the population to reproduce and to maintain itself? That's the fundamental measure of economics...
We could sustain quite comfortably tens of billions of people on this earth, at standards of living in excess of those found in Western Europe and the United States today. We have the technology. The first thing we have to do is make sure that about 35,000 to 40,000 kilowatt hours of electricity is generated per capita. If we start with this energy supply, the developing sector can very quickly bring the standard of living up to that comparable to Western Europe and the United States. We have the technology-we just have to have a little nuclear energy, otherwise we can't do it.
In the future, we can go into space. And with what we know now, we could build earth-habitable locations in space sometime during the next century, at social costs not in excess of the social costs of maintaining a person on earth today.
So there are no limits to resources; there are no limits to population. The more creative people we have, the more creativity we're going to have, and the faster we're going to grow. Resources are not a problem. Our problem is to determine what policies will actively increase both the potential of the population density and the quality and opportunities of the individual in society. That's what economics ought to be concerned with. And the monetary side of the thing comes in as a secondary consideration. That is what I define as economic science.
The way society achieves an increase in potential relative population density is chiefly by injection of new technologies, or advanced technologies, which represents man's mastery of the lawful ordering of the universe in a more perfect way. By injecting these more powerful ideas about the universe into the practice of production in high-technology industry and basic infrastructure, we increase the average person's power to produce, increase the number of persons we can sustain, and increase the standard of living which we are able to provide by means of that labor.
The problem is to sustain this process of injecting technology. First of all it means we have to have institutions which make technological progress the efficient instrument of national policy. Technological progress is the first proper instrument of policy of any nation. Secondly, within that, we must promote education and science comparable to what that requires. We must educate to produce individuals in whom all creative potentialities are optimized, as citizen as well as producing persons. We must educate to the level that our technology and technological progress require. We must realize that progress results from investment and reinvestment. We must have policies under which the margin of wealth-which is comparable to pro fit measured on a national scale-is invested in improving the scale and quality of production.
We must be dirigist, we must plan to cause this surplus to go into the areas which are of greatest benefit to the nation. This means technological progress in agriculture, in industry, and in basic economic infrastructure. The other investments will have to go tagging along at a lower priority...
We insist that the power to create credit must be reserved to the government alone, the government of sovereign states. The government of a sovereign state prints money. It does not itself spend the money that it prints. Rather, it loans this money, in currency notes, to a well-regulated banking system, so that the capital is made available for a few categories of projects of public and private investment, so that the capital may be available on a medium- and long-term basis at low interest rates to meet those objectives which are agreed to be in the national interest and require capital.
This arrangement must be' put on a gold-reserve basis, otherwise we would have trouble with international relations. We require gold-reserve issues of currency by the state through a regulated banking system to provide ample credit for medium- and long-term investment at reasonable interest rates for those categories of improvement of agriculture, industry, and infrastructure which we have agreed are in the national interest. If somebody wants to borrow for something else, that's their business, but they shall not use the funds of the state for that purpose. If somebody wants to loan their savings for that purpose, they may. These restrictions are necessary to prevent inflation and to maintain national priorities.
This is not inflationary, contrary to what the British say. If I were the head of the government of the United States, I could print as much money as I chose, and by this system I could never inflate the economy. Because before any money is spent, it must be lent to utilize idle resources, or otherwise idle parts, labor, and capacity. And it is lent only to create economic infrastructure or to create improvements in agriculture and improvements in industry, all of which are beneficial to the economy. These improvements increase national productivity, which increases national wealth per capita. And that is our credit policy.
The creation of a new economic system may be simply accomplished if those industrialized nations which either have or can have a large surplus capacity in high technology capital goods or production issue credit on a gold-reserve basis. Since they don't have to borrow from anybody, these nations can lend it at any price they choose. The new credit could be lent at 1 percent interest, it could be lent on deferred payment terms; it's no problem. If the state creates credit, that's not a problem. Then this created fund, which corresponds to the otherwise idled productive capacity of the industrialized countries, is lent for long-term and medium- term credit for investment by the developing countries. I estimate that the order of magnitude of this credit-generating capacity should be between $200 and $400 billion per year added to the present level of development. That means that the governments of the developing sector will, through their national banking systems, borrow part of this amount, which is essentially borrowing the currencies of the exporting country in order to purchase exports of the type that they require from these countries. This means that these imports will be over and above the purchases that the nation would make on the basis of its current balances.
This mechanism, if it were agreed to, would ensure, I believe, an adequate level of investment. It is quite feasible in terms of the productive capacities of the industrialized countries. Adding $200 to $400 billion a year to the present level of capital goods exported from the industrialized to the developing nations I think would be adequate to reverse the pattern of the developing sector; if we are patient. In some cases it will take longer than others.
Furthermore, this would cause an economic boom in the industrialized nations-not because of profits on sales to the developing sector, but because the increased turnover of capital goods in producing industries would accelerate productivity and generate great profitability through increased productivity. This becomes now - at a point when the present international monetary system is breaking apart in a depression - the only alternative for the industrialized countries, particularly the capitalist industrialized countries, to the depression, which if it is unleashed will be worse than that of the 1930s, and much longer. It also represents, if followed through, a basis for common interest in economic development and in peace among nations of East and West and North and South.
The nations of the so-called South, or some of them, must make a unilateral statement on the nature of the crisis and what must be done to stop the world depression and to stop war. They must declare that the solution to the crisis is to be found not by peace negotiations, not by disarmament, but by creating the conditions under which peace negotiations are unnecessary and in which disarmament does not require negotiation, it simply happens. Therefore I propose that the developing nations, and the spokesmen of them, either official or unofficial, make a unilateral statement to this effect: that there be international cooperation on East-West/ North-South development interrelatedly; that conditions of political stability and peace be premised upon the mutual self-interests of the parties in promoting economic development.
Because this is a time of crisis, that which I have been proposing since 1974, which has been suppressed, rejected, which used to make me a figure of attack precisely because of prevailing institutions, may now be proven the useful solution. Now that these institutions have weakened themselves in depression and crisis, perhaps we can intervene to appeal to the conscience of nations which now themselves may despise these institutions. And if you of the developing sector begin to give leadership in this matter, at this time when your intervention is needed, perhaps we can stop World War III. Perhaps your intervention will succeed where previous paths of negotiation have failed.
For full document, see A New Approach to North-South Relations
LaRouche Meets With President of Mexico López Portillo in Mexico City
Immediately after returning from his meeting with Indira Gandhi in India, Lyndon LaRouche traveled to Mexico City to meet with President of Mexico López Portillo on May 27, 1982. At a press conference at the presidential palace Los Pinos following the meeting, LaRouche proposed that the nations of Ibero-America unite to deploy a "debt bomb" against the City of London to force a restructuring of the world economic system as the means to ushering in the New International Economic Order. Multiple leading Latin American newspapers published stories on May 28 covering LaRouche's proposal.
Excélsior: "LaRouche affirmed that he and President López Portillo were on the same side - the side which defends peace and stability. He stressed that this is important in a moment of crisis. This alliance should also embrace India, the countries of Europe, and the Non-Aligned, since only a bloc of forces of that size could succeed, he commented. LaRouche stated the need for creating a Latin American Common Market which would give the countries belonging to it the possibility of defensing themselves in the conflicts stemming from the international economic crisis..."
Avance: "As an economist and as a friend of the Mexican President who shares his positions and his ideologies since both are for peace and stability, LaRouche offered his skills to defend the Mexican peso which has been undervalued far below its real value .... 'The economic problem is really a highly technical one and a political conflict. Defending the value of the currency of Mexico or any other country is a task as precise as the planning of a war. This problem is suffered not only by Mexico, but by all the members of the Organization of American States.' He concluded by saying that 'undervaluing your currency is of no use.' He added that the interest of the United States is for Mexico 'to have absolute sovereignty even in its monetary and credit affairs. That is the Monroe Doctrine and that is the faith of my country and therefore I will fight like a tiger to defend the peso.'"
EI Sol de Mexico: "Defense of Mexico's currency or any other country's that finds itself in this situation is a very detailed job, as detailed as planning a war, said the Democratic leader, indicating that he has spoken with various leaders of Latin American countries; and he has stated that 'this is a problem which cannot be resolved by each nation alone but requires that there be a unity among all, providing external support from those countries who are friends.' LaRouche, who formed the National Democratic Policy Committee, stated his friendship for López Portillo, 'I am an ally of the Mexican President in his positions and his ideology. We find ourselves on the same side, that is to say, the side of defending peace and stability. In these times, it becomes increasingly important that we bring together the peace sentiment in Mexico and the U.S.'"
LaRouche Issues "Operation Juárez" Proposal for Nations of South America
Immediately following his meeting with Mexican President José López Portillo, LaRouche issues a major policy document titled "Operation Juárez" [PDF] in which he develops on his original proposal for an International Development Bank in the context of the debt crisis facing South America. LaRouche proposes that the nations of Ibero-America to use their collective strategic leverage as debtor-nations to unite in a common bloc and unilaterally declare a restructuring of their debts and the establishment of a new monetary order. The formation of an international development bank among these nations, would serve "as a coordinating agency for planning investments and trade-expansion among the member-republics," LaRouche says. "This bank will soon become one of the most powerful financial institutions in the world." he declares. "If a sufficient portion of the Ibero-American nations enter into such an agreement, the result is the assembly of one of the most powerful economies in the world from an array of individually weak powers... The Ibero-American continent could rapidly emerge as a leading economic power of the world, an economic super-power."
Operation Juárez ˇ 1982, Lyndon LaRouche
For full document, see Operation Juárez
If presently prevailing policies of the U.S.A. and Western Europe continue, it is presently just slightly less probable than certainty that there will be a general financial "crash" within the Bretton Woods system's remains during the month of September 1982... This crash might be prevented. That prevention would require a profound shift in U.S.A. monetary policy executed during the present month...
The case of the Ibero-American external debt exemplifies an important aspect of the problem. We have a debt in the order of approximately one-quarter trillion dollars' denomination...
COLLECTIVE NEGOTIATION OF DEBT-REORGANIZATION
Unless the bankers of the United States of America are collectively insane or babbling imbeciles, they will joyously embrace a proper proposal for collective financial reorganization of the Ibero-American debt. However, they will probably resist such a proposal to the teeth unless it is made by collective action of several prominent nations of Ibero-America in concert...
We now examine, one by one, the key aspects of such a debt-reorganization negotiation...
It is sufficient to rewrite a new series of debts, and debt-payment schedules, to replace the previously-existing debts and payments schedules. The new issues of debt replace, or "buy up" the old... However, before we can determine what will be a feasible schedule of debt-repayments, we must design a new program of investments and operating policies for the enterprise. The reasonable performance of the enterprise under that new investment and operating program informs us what a reasonable debt-payment schedule would be. We design the debt-repayment schedule accordingly...
"Common sense" may recommend to us that a great portion of the debt were better simply written off-a common condition among "least-developed nations" today.
In negotiations of such matters, we must be guided by an eye to the principle of equity.
Much of the post-1974 condition of finances of developing nations would not have occurred but for the virtual thuggery of Henry A. Kissinger and others, in enforcing the irresponsible and incompetent policies resolved at the 1975 Rambouillet conference and subsequent such conferences. Many of the debtor-nations were forced into refinancing debts at immorally usurious rates, and with other lunatic arrangements, at the point of a gun - sometimes, quite literally Kissinger's guns. Such features of the carried-forward debt of nations can not be considered exactly a debt contracted in good faith...
The commercial banks of the U.S.A. (for example) heavily exposed in Ibero-American debts are frequently on the verge of technical bankruptcy themselves, because of margins of debt in their portfolios which are already or imminently in default. We propose to them, to help to save them from bankruptcy, if they will only be collectively reasonable, with suitable help from their federal government.
We propose to establish a mutually agreed cut-off date for further accruals of existing contracts of indebtedness of Ibero-American republics. After that date, no further interest-payments will accrue on those contracts. Effective that same date, each of the debtor-nations will deliver to the creditor-banks a portfolio of bonds equivalent in total value to the accrued value of the previous debt-contracts up to the cut-off date. The old debt is thus "sold" for the new debt.
Naturally, it is not quite so simple as that, but that is the crux of the matter.
The portfolio of bonds delivered by each debtor to each creditor will have the following most notable features.
1. The interest-rates on the bonds will be nominal, approximately 2 percent per annum.
2. The final date of payment of principal on the total indebtedness will be significantly later than the schedule indicated by the canceled contracts.
3. In some cases, there will be a period of grace, before payments mature-a deferred-payment provision
4. Maturities of debt-payment will be determined by maturity-dates of each of a series of bonds issued.
Unfortunately, more or less inevitably, some among the bankers of lesser intelligence will howl with protest: "We are being cheated out of the interest-income we would have received under the old contracts." Such imbecilic gentlemen need to have matters explained to them in very basic terms: "Try to collect the old contracts, and you force us to default, in which case your banks cease to exist." The advantages of the new arrangement may then begin to be apparent even to the most stupid among New York bankers...
The new bonds will have low yield, but they will be discountable for certain categories of issuance of new medium-term to long-term loans. The new bonds will be a negotiable asset in that way, and should be a very high-grade variety of asset for these bankers, provided they behave sensibly. Through a combination of debt-rescheduling and correlated economic measures, the bankers involved will have a very important market for new lending on very sound terms throughout much of Ibero-America. This lending may not be significantly profitable in terms of income on the loans themselves; however, this lending will be very rewarding to the banks' clients among U.S.A. capital-goods exporters, and, consequently, to the banks themselves.
Unfortunately, the rotted condition of both the U.S.A. dollar and the commercial banks is so advanced, that the commercial banks could not dispose of such a debt-reorganization by then-own independent resources. If the problem were merely need for debt-reorganization in foreign accounts of those banks, what is proposed could be accomplished through negotiations with them. What is proposed would work to the advantage of the banks and the U.S.A., as well as Ibero-American republics, but this would require coordinated implementation of an already overdue monetary and banking reorganization in the United States.
We are not insisting that acceptance of these proposals by the United States, is the only hope for the Ibero-American economies. It is the best alternative to be considered, and by a wide margin. Were the U.S.A. to refuse, for a period of time, the tasks of Ibero-American republics would be much more difficult tasks, but the alternatives are both workable and indispensable. Moreover, as we shall show, the steps to be taken by those republics toward bringing about successful negotiation with the United States are the same steps to be followed should the U.S.A. refuse that proposed debt-reorganization...
IBERO-AMERICA MONETARY ORDER
The cooperating republics of Ibero-America, must each and collectively effect reforms of their credit, currency and banking institutions...
(1) In no republic must any other issues of credit be permitted, as a matter of a punishable violation of the law against immoral usury, excepting: (a) Deferred payment credit between buyers and sellers of goods and services; (b) banking loans against combined lawful currency and bullion on deposit in a lawful manner; (c) loan of issues of credit created in the form of issues of national currency-notes of the treasury of the national government.
(2) Loan of government-created credit (currency-notes) must be directed to those forms of investment which promote technological progress in realizing the fullest potentials for applying otherwise idled capital-goods, otherwise idled goods-producing capacities, and otherwise idled productive labor, to produce goods or to develop the basic economic infrastructure needed for maintenance and development of production and physical distribution of goods. This is, at once, an anti-inflationary policy, and also a steering of limited national resources into those choices of governmental and private-entrepreneurial ventures most beneficial to the nation as a whole.
(3) In each republic, there must be a state-owned national bank, which rejects in its lawfully permitted functions those private-banking features of central banking associated with the Bank of England and the misguided practices of the U.S.A.'s Federal Reserve System over the period from the latter's establishment into the present date of writing.
(4) No lending institution shall exist within the nation except as they are subject to standard of practice and auditing by the treasury of the government and auditors of the national bank. No foreign financial institution shall be permitted to do business within the republic unless its international operations meet lawful requirements for standards of reserves and proper banking-practices under the laws of the republic, as this shall be periodically determined by proper audit ("transparency" of foreign lending institutions).
(5) The treasury and national bank, as a partnership, have continual authority to administer capital-controls and exchange-controls, and to assist this function by means of licensing of individual import-licenses and export-licenses, and to regulate negotiations of loans taken from foreign sources...
(6) The policies of taxation of the national government must be designed to expropriate ground-rent and usury income, to foster well-being of households, and to give preferential treatment to those classes of ventures which are established to be in the relatively greater national interest. Economic-development policies must inform taxation policies
(7) In a number of instances, it is simply desirable, or even indispensable, that a severe currency-reform be implemented immediately.
(8) Sovereign valuation of the foreign exchange value of a nation's currency must be established for Ibero-American nations. The first approximation of the value of a nation's currency is the purchasing-power of that currency within the internal economy of that nation. What are the prices of domestically-produced goods and services, relative to the prices of the same quality of goods and services in other nations. The emphasis must be upon domestically produced categories, almost exclusively, at least for first-approximation.
By this standard, many Ibero-American currencies are presently monstrously undervalued. The result of artificially depressed valuations of national currency, is that the nation is being massively, savagely looted by foreigners, especially foreign debt-holders.
The determination of exchange-rates by the IMF, etc., has often represented, during recent years especially, nothing more nor less than pure and simple theft, on a massive scale, by foreign lending institutions and others.
This commonplace swindle of developing nations is premised on the fallacious argument, that the value of a currency in international markets must be determined by "supply and demand" for that currency, rather than the intrinsic value of that currency as a medium of purchase of domestically-produced goods and services in its country of origin. By manipulating international exchange-markets, to artificially rig "supply and demand" in a currency, a "case" for devaluation is presented as a demand upon the targeted victim nation.
How much less domestic purchasing power does the Mexican peso have today, at one-third its nominal exchange-rate valuation, than a short time ago, at 24 pesos to the U.S.A. dollar? The devaluation has been an outright swindle of the nation and people of Mexico, almost at the point of a gun.
A nation must fight financial and economic warfare against those institutions which attempt to loot it and its people by such improper forced devaluations of currencies. A nation can fight such necessary warfare to defend its currency better, if it has faithful allies sharing the same enemy and the same cause for themselves.
AN IBERO-AMERICAN "COMMON MARKET"
We propose that, within the Organization of American States, such republics as may choose to do so, should form an Ibero-American "common market." This "common market" would be based chiefly upon these institutional features:
(1) Bringing their respective, internal institutions of credit, currency and banking into order, as specified here, earlier.
(2) Establishing a common banking institution to facilitate exchange of credit, currency and trade among them, and as an institution of common defense of the financial and economic interests of the member-nations and the continent as a whole.
(3) To make more effective use of the limited resources at their common disposal, to the equitable advantage of each and all.
Taken as a whole, Ibero-America represents a spectrum of existing and potentially-existing capabilities of natural resources, agriculture, capital-goods industries, and other economic resources. What is not immediately at the disposal of the republics taken individually, is in large part at the disposal of those republics taken as a whole. Given the limited means for creating technologically advanced industries of each and all, the attempt of the republics to meet their needs in parallel represents a costly duplication of investment, by comparison with the better use of limited resources if a rational division of labor were to be developed among those republics.
What is required is: (1) Agreement to prefer to trade within the community, rather than trade without it; (2) Medium-term and long-term trading agreements, through which it will specialize for export to members of the community, thus assuring a medium-to long-term market for products produced by a corresponding investment. A nest of reciprocal, multi-national trading-agreements of this sort, are intended to foster the most efficient use of the limited capital and credit available to each and all. (3) Fair-pricing agreements, combined with cohering tariff agreements, which have the effect of establishing a customs union among the members of the agreement
If a sufficient portion of the Ibero-American nations enter into such an agreement, the result is the assembly of one of the most powerful economies in the world from an array of individually weak powers...
The keystone institution of the proposed customs union is the inter-republic bank. This bank is established by treaty, to function as the common facility of the national banks of the participating sovereign republics. Its functions are, categorically, inclusively, these:
(1) Inter-Republic Banking Functions
(a) To serve as a central clearing-bank among the participating republics' national banks.
(b) To mediate exchange of credit and currency among the national banks.
(c) To act as a clearing institution for settlement of multi-national agreements among members respecting tariffs and trade.
(2) Monetary Functions More Generally
To facilitate maintenance of parity of exchange-values among the currencies of the member republics, and to defend those currencies as a bloc against external manipulations.
(3) A Development Bank (Investment Bank)
The bank serves as a coordinating agency for planning investments and trade-expansion among the member-republics. To aid in implementation of such agreements, the bank coordinates the mobilization of money-capital needed to ensure that all aspects of the agreed programs are adequately supplied with investment-development capital.
There are two principal sources of money-capital for expansion: intra-system, and foreign. We have specified a monopoly for creation of money-credit by sovereign governments, denying this power to any private agency. We have thus ensured that the otherwise idled, salable goods, goods-producing capacity, and labor of each and all nations shall be adequately employed, insofar as performance-worthy borrowers-entrepreneurs are willing to borrow at low interest-rates, to put those idle resources to work in a manner consistent with national priorities for categories of development.
The establishment of a customs union of the type proposed, means that the currency-notes of each republic can be issued as medium-term to long-term export-loans-capital to fund exports of its capital-goods production within the customs union. We have eliminated the need for a third-party lender among those republics. We have established a greatly enlarged autarkical development-potential among the members of the customs union.
This system of intra-bloc medium-term to long-term capital-goods-export lending will operate soundly, on condition that the payments for such loans are predefined in terms of the importing nations' repayment through earnings from its own capital-goods or other exports within the bloc. There is, therefore, an underlying, medium-term to long-term barter basis for these agreements.
Furthermore, for this and related reasons, it is desirable that the member-republics should prefer to purchase their imports from within the bloc, rather than from without it. A sharp and growing reduction in relative volumes of imports from outside the bloc should occur relative to existing categories of imports. The extra-bloc purchasing and borrowing potential of the bloc's member-republics should be concentrated for purchases of high-technology capital goods.
This is not a dilution of the sovereignty of the member-republics. In negotiations for lines of medium-term to long-term credit, to implement multi-member-republic projects, the representatives of each republic will negotiate sovereignly, but with backing from the common banking institution, and, thus, implicit backing from other member-republics of the bloc. However, respecting financial relations with nations outside the bloc, the sovereign member-republics seek to negotiate loans for capital-goods through the facilities of the common bank, and to clear payments against such loans through that same common bank. This strengthens the bank's power to maintain a common defense of the currencies and credit of the member-republics. Not only are the members better defended, but the creditworthiness of each nation is increased; the creditworthiness of each and every nation of the customs union is greater than it could be outside that customs union.
To aid this, a common currency of account should be established for the customs union. Loans negotiated through the common bank will be denominated for payment in this common currency of account.
However, the bank will not be responsible for the debt of sovereign republics. Rather, the sovereign republic will settle its debt through its account with that common bank, and will settle in denominations of the common currency of account.
This bank will soon become one of the most powerful financial institutions in the world, especially in the opinion of capital-goods exporting nations.
For full document, see Operation Juárez
President López Portillo Demands New International Economic Order at UN
In August of 1982, President Lopez Portillo acts on LaRouche's proposals as contained in Operation Juárez by adopting credit controls on Mexico's currency, nationalizing the Mexican banking system, and announcing a debt moratorium on Mexican debt. On October 1, he addresses the United Nations General Assembly, where he declares:
"The most constant concern and activity of Mexico in the international arena, is the transition to a New Economic Order... It is imperative that the New International Economic Order establish a link between refinancing the development of countries that suffer capital flight, and the capital that has fled... Let us not continue in this vicious circle: it could be the beginning of a new medieval Dark Age, without the possibility of a Renaissance....We cannot fail. There is cause to be alarmist. Not only the heritage of civilization is at stake, but also the very survival of our children, of future generations and of the human species."
President López Portillo Addresses UN ˇ October 1, 1982
PORTILLO: The most constant concern and activity of Mexico in the international arena, is the transition to a New Economic Order....
We developing countries do not want to be subjugated. We cannot paralyze our economies or plunge our peoples into greater misery in order to pay a debt on which servicing tripled without our participation or responsibility, and with terms that are imposed upon us. We countries of the South are about to run out of playing chips, and were we not able to stay in the game, it would end in defeat for everyone.
I want to be emphatic: We countries of the South have not sinned against the world economy. Our efforts to grow, in order to conquer hunger, disease, ignorance, and dependency, have not caused the international crisis...
After major corrective efforts in economic affairs, my government decided to attack the evil at its root, and to extirpate it once and for all. There was obviously an inconsistency between internal development policies, and an erratic and restrictive international financial structure.
A reasonable growth policy was irreconcilable with freedom to speculate in foreign exchange. That is why we established exchange controls.
Given our 3,000 kilometer border with the United States, exchange controls can only function through a banking system that follows the policies of its country and government, and not its own speculative interests or the fluctuations of international financial chaos. That is why we nationalized the banks.
We have been a living example of what occurs when an enormous, volatile, and speculative mass of capital goes all over the world in search of high interest rates, tax havens, and supposed political and exchange stability. It decapitalizes entire countries and leaves destruction in its wake. The world should be able to control this; it is inconceivable that we cannot find a formula that, without limiting necessary movements and flows, would permit regulation of a phenomenon that damages everyone. It is imperative that the New International Economic Order establish a link between refinancing the development of countries that suffer capital flight, and the capital that has fled. At least they should get the crumbs from their own bread...
The reduction of available credit for developing countries has serious implications, not only for the countries themselves, but also for production and employment in the industrial countries. Let us not continue in this vicious circle: it could be the beginning of a new medieval Dark Age, without the possibility of a Renaissance...
We cannot fail. There is cause to be alarmist. Not only the heritage of civilization is at stake, but also the very survival of our children, of future generations and of the human species.
Let us make what is reasonable possible. Let us recall the tragic conditions in which we created this Organization, and the hopes that were placed in it. The place is here, and the time is now.
LaRouche in Rome: 'The Theory of the New World Economic Order'
Lyndon LaRouche delivers a speech on October 20 in Rome titled 'The Theory of the New World Economic Order' [PDF] in which he says "I shall summarize the scientific basis for the establishment of a New World Economic Order." LaRouche stated: "My chief personal role in the effort to establish a just new world economic order has been to apply my special skills as an economist to design policy-structures of economic and monetary policies." LaRouche elaborates the scientific theory behind his Operation Juárez proposal, specifiying "potential relative population density" as the necessary measure for the performance of economies, and states:
"We define economic science as a study of the manner in which the use of technological progress maintains and increases this potential relative population density."
Lyndon LaRouche ˇ Rome, October 1982
For text of full speech, see: The Theory of the New World Economic Order
I shall summarize the scientific basis for the establishment of a New World Economic Order.
My chief personal role in the effort to establish a just new world economic order has been to apply my special skills as an economist, to design policy-structures of economic and monetary policies. through which the general objectives of Populorum Progressio can be brought into durable reality over the period of twenty-five to fifty years ahead.
My standpoint in economic science is essentially the policy adopted by the young constitutional republic of the United States, the policy which Treasury Secretary Alexander Hamilton was first to name "the American System of political economy." This American System was based on the discovery of economic science by Gottfried Leibniz, and was channeled into the young United States...
There was a noble effort to revive this American System policy by President Franklin D. Roosevelt. Prior to his premature death, President Roosevelt had committed himself to a post-war policy of ridding the world of the institutions and vestiges of colonialism, and what Roosevelt described as the continuing evil of British eighteenth-century methods in the world's economic and monetary affairs. He projected what was then called an "American Century" policy for the post-war world, a policy centered around a system of great infrastructural building projects, such as transforming the Sahel region into the breadbasket of Africa.
After President Roosevelt's premature death, the United States discarded Roosevelt's policy, in favor of the policies demanded by Prime Minister Winston Churchill. With U.S. support and toleration, the post-war monetary order of Breton Woods became a thinly-disguised neocolonialist order...
My own efforts, especially since my Bonn, West Germany press-conference of April 1975 on this subject, have been chiefly my own work as an economist, taking advantage of my success in developing a mathematical-analytical apparatus of the sort required for a more refined application of the American System.
For example, with aid of numbers of my immediate collaborators, beginning November 1979, we have published a regular quarterly forecast for the U.S. economy. This forecast has been consistently correct, whereas all competing governmental and private forecasts published have been consistently wrong to the point of absurdity over the same period to date.
It is of practical importance that I indicate my accomplishments in economic science over other currents of poliical-economists, since the points that I have to report to you are not accepted among most economists today. Since my version of economics has produced consistently accurate forecasts, whereas my factional opponents have produced only consistent failures in forecasting, certain relevant conclusions follow logically.
All modern economic science originates with the injunction of the Book of Genesis: mankind must "Be fruitful and multiply, and fill the earth and subdue it." That is not only Judeo-Christian doctrine; any policy which contradicts that imperative is absurd on purely scientific grounds.
In economic science, beginning with the work of Gottfried Leibniz, we measure the performance of economies by their successful increase of the productive powers of labor. This was established as the centerpiece of the American System in Hamilton's December 1791 Report to the U.S. Congress entitled "On The Subject of Manufactures."
The quantity we measure is probably best named potential relative population-density. In other- words. what is the average number of persons which can be sustained per square kilometer of habitable, improved land, solely by means of the changes in the material condition of nature effected by the labor of the population inhabiting the land.
In a primitive condition, such as that which the anthropologists name a hunting-and-gathering society, society can not exceed a level of about one person for an average ten to fifteen square kilometers of inhabitable land, which would mean approximately ten millions persons as the total human population of the world at any time. Without modem industry, the total population of the world could not exceed approximately one billions persons, most of which must be living in enmiserated conditions.
Mankind rose above the hunting-and-gathering level about twelve thousand years or more ago, with the development of agriculture. The earliest form of true scientific technology was ancient astronomy used for navigation of craft like the Vikings' boats, and the adaptation of this astronomical science for the guidance of agriculture.
Through the development of the heat-powered machine, whose theoretical basis was first elaborated by Leibniz, the modem industrial revolution began in eighteenth-century France, and has brought the existing potential population level of the world up to about ten billions persons or more, on condition we widely deploy the kinds of technology which are either already in use in some parts of the world or which could be developed for general use during the remaining decades of this century. If we develop commercial thermonuclear fusion as a source of heat-energy for general human use, which can be accomplished during this immediate period ahead, that would raise the potential relative population-density of the human race to several tens of billions.
The chief among the long-term problems of economy is that without advances in technology, the depletion of certain kinds of natural resources in use raises the social costs of exploiting resources to the level that the potential relative population-density of society falls. If any society adhered to a zero-technological-growth policy sufficiently long, that lack of realized technological progress would by itself unleash the proverbial Four Horsemen of the Apocalypse upon such a misguided people.
So, since Leibniz's discoveries, we define economic science as a study of the manner in which the use of technological progress maintains and increases this potential relative population-density.
There are several correlated facts of economic development essential to economic science. Since I have more fully elaborated this in recent publications such as Operation Juárez, I shall limit myself merely to identifying these points here, and refer you to my elaborated writings on this subject for fuller details. Here, I list merely a few of the most essential highlights of development policy, and then proceed to my concluding remarks.
The most immediate correlative of increase of potential relative population-density is an increase in the number of kilowatt-hours used both per square kilometer and per-capita. Although scientific progress enables us to use each kilowatt hour with greater efficiency respecting work accomplished per-capita, the quality of existence of the individual in a society is delimited by the level of average, per-capita quantity of kilowatt-hours used per square kilometer and per capita.
Without so-called artificial energy-sources, which means increasing emphasis on nuclear technologies, the world's population must unavoidably collapse in level by several billions over the course of the coming decades. We require over the course of the coming two to three decades, about 3,000 billions watts of energy added by hydroelectric power generated as part of large-scale water-management projects, and between 7,000 and 10,000 billions watts of nuclear-generated energy, otherwise a new world economic order is unachievable-and hundreds of millions, or even billions of persons will die for lack of energy needed to sustain life.
Next to energy-development itself, we need great infrastructure-building projects. We need great projects of water management, great improvements in transportation-capacity, and consistent policies of improvement in the urban infrastructure essential to industrial development.
Although infrastructure does not necessarily produce end-product, consumable wealth in and of itself, infrastructure-building represents the necessary improvement of nature without which agricultural and industrial development can not prosper.
Finally, but not least, we must rid the policies of nations of those policies of practice which imply that the labor of men is the labor of a mere beast of burden. It is not simple labor which produces wealth, but rather the development of the productive powers of labor. We require populations which can produce and assimilate advances in technologies. Educational programs and correlated developments in popular culture are the indispensable human preconditions for use and improvement of productive technologies.
In economic policy-making and practice, we must never lose sight of fundamental principles. Economics is merely the indispensable means for producing the material conditions of life. It is the development of the power of reason within the individual which reflects the true, proper higher purpose of existence of nations. The individual needs the material conditions of life appropriate to the fostering of his or her divine potentialities, those potentialities which distinguish man absolutely from the beasts. The individual requires a society which gives the individual the opportunity to contribute good, a society which cherishes the good contributed by its members and at the same time discourages wickedness done by individuals. It isˇ the good that must be served. Economics is but an indispensable means serving that higher purpose.
Yet, economics has a moral purpose even higher than providing the material preconditions for life. In technological progress, we express mankind's process of perfecting its knowledge of the lawful composition of creation. Through scientific progress directed to that purpose, mankind increases the individual's powers to employ the laws of the universe, but also brings the individual will into improved perception of the lawfulness of creation, and into more perfect submission to the ordering of continuing creation in the universe. In properly directed labor, in the development of the productive powers of labor, we foster reason within society as a whole and within the individual's development within society.
FINALLY, THE MONETARY PROBLEM
...The major portion of accumulation of internal and external indebtedness of nations, of combined public and private indebtedness, has been pyramided through lending-policies, and borrowing-policies, which increase geometrically nations' per-capita indebtedness, while contracting geometrically the wealth-producing power of the nations per-capita.
Since the 1971-1972 monetary-policy actions and the 1975 Rambouillet monetary conference, the process of pyramiding debts while contracting production per-capita has accelerated. Since the usurious policies introduced by U.S. Federal Reserve Chairman Paul A. Volcker during October 1979, the usurious pyramiding of debt has accelerated, while investment in long-term production of wealth has collapsed, also at an accelerating rate.
We have presently reached the point, that the existing "conditionalities" of the IMF, World Bank, BIS, and GATT policies, prevent the developing nations from earning the means of payment against usuriously pyramided debt-service obligations. It is not that those nations are unwilling to pay their debts, but that they can not pay those debts without resorting to the kinds of "conditionalities" measures which mean economic mass-murder against their own populations.
This imminent financial collapse of the world economy could be prevented within a proverbial several hours of deliberation by governments, if the will to do so existed. Two sets of measures would be indispensable.
First, governments must reorganize the world monetary order. Governments must bring down the prime interest-rates of banking-systems to between 2 percent and 4 percent by political decision. The existing debts must be reorganized, through establishing a cut-off date for existing obligations, and replacing existing obligations with issues of long-term bonds at low interest-rates.
Second, the ability of nations to develop economically, and hence to pay the new debts as payments come due, requires a gold-reserve-based international monetary order, and the issuance of Treasury currency-notes by governments, to be used for long-term lending in domestic and international development-investments of merit.
The highest priorities for development must be these.
In the developing sector generally, there must be an emphasis upon increasing both the per-hectare yields of agriculture, and the number of hectares included in effecting improved yields for the nation as a whole. This must be done through aid of infrastructural projects defining the environment of agricultural development, and through injections of modem agricultural technologies to improve significantly even the relatively most primitive modes of agriculture presently in use.
A network of great infrastructural projects, emphasizing energy-development, water-management, transportation and urban infrastructure.
A-fostering of capital-goods industries in both presently industrialized and developing nations.
In brief, we must undertake the American Century policy as exemplified by the vision of President Franklin D. Roosevelt.
We may hope that fear of the chaos now on the verge of erupting will bring some of the more sensible elements of the international financial community to their senses, at last. We must welcome such cooperation, but if we are unable to defeat resistance from those rentier-financier and neo-Malthusian quarters, our civilization will die, like Sodom and Gomorrah, for want of sufficient persons with the goodness of will to render this sick civilization of ours still morally fit to survive
For text of full speech, see: The Theory of the New World Economic Order
1983: Helga LaRouche in Paris: New World Economic Order to Stop New World War
On the eve of the 7th Non-Aligned Movement summit in New Delhi, India, Lyndon and Helga LaRouche address an international audience in Paris to signal support for the creation of the New World Economic Order from within the industrialized world. The conference is attended by Frederick Wills, former Foreign Minister of Guyana, as well as diplomats, scientists, and political leaders from over fifty countries. Helga LaRouche tells the conference, "The gigantic struggle which marks the battle for the New World Economic Order is nothing less than the fight for the survival of the human race, and a fight for the principle of the inviolability of human dignity and the rights of all peoples on this planet." Helga LaRouche elaborates the strategy detailed in LaRouche's Operation Juárez, stating:
"There is only one way the poor and the weak can force the world to reason: the developing countries should form a debtors' cartel, to force through a controlled reorganization of the world economic system, and the New World Economic Order... In the next few weeks, at the summit of Non-Aligned nations, or shortly afterward, a group of developing nations must drop the debt bomb. On a certain day, Day X, these countries must announce together their incapacity to pay their debts, and, appealing to the self-interest of the industrialized nations, propose a controlled, global, reorganization of debts, and the creation of a New World Economic Order, as Lyndon LaRouche has suggested in the document 'Operation Juárez.'"
Helga LaRouche Speech in Paris ˇ February 19, 1983
Full text of speech: New Economic Order in Interest of North & South
If we look at the world as a whole from the standpoint of reason, the New World Economic Order is so obviously in the interests of North and South that it seems incredible that political forces in the North and the South have not long since seen its realization as of the absolutely highest priority. The world has reached such a point of crisis today that it has become clear that we either realize the New World Economic Order in 1983, or destabilization processes will begin, which will in all likelihood lead to the destruction of the human race.
The international economic crisis is now threatening the lives of millions of people in the developing sector, and unless things are immediately turned around, as many as 2 or 3 billion people will die by the year 2000. We are facing the danger of the worst holocaust of all time. This situation is not the fault of the developing sector nations, as evil Malthusians claim. It is the result of centuries of colonialism, sometimes disguised, but now quite open.
THE NEW COLONIALISM
You have to think about the brutality of British colonialism - imagine the ships laden down with precious goods which Britain literally stole from India during 300 years of savage looting, with the result that India was relatively poorer at the time of independence than 300 years previously - in order to be able to judge how severe the effects of colonialism were on the developing sector.
When many developing countries became independent, the Bretton Woods system put them at a disadvantage from the start, through unjustly calculated currency parities. The fact that the developing-sector nations are now almost bankrupt is the result of a development that has had increasing effects from the middle of the 1970s.
The developing-sector nations have been hit even worse with the results of the oil crisis by the way that the OECD nations have covered up their own economic crisis by increasing the looting of the developing sector.
With manipulated exchange rates, organized capital flight, and an ever-increasing discrepancy between the higher and higher prices of imports, and the lower prices of exports, the developing-sector nations have been further squeezed since the middle of the 1970s. The high-interest-rate policy of Federal Reserve head Paul Volcker has drastically increased the debt service to be paid by the developing sector. When the affected countries, crushed by this usury, were forced to go to the IMF, to discuss a reorganization of their debt, the IMF added the infamous "conditionalities," forcing the devaluation of the currency and other, similar measures, putting these countries in such a bad position that their exports could be bought with the most derisory amounts of currency of the OECD countries.
If the oligarchical circles behind the IMF, the World Bank, and the Bank for International Settlements were to succeed, and were able to link the refinancing of individual countries' debts with contracts permitting the unlimited looting of those countries' raw materials, through a newly created world central bank, then with one stroke, colonialism would simply be reintroduced, and even the illusion of national sovereignty would be removed.
This long chain of looting and disadvantages is the reason why the developing nations are so indebted, and the reason why they simply cannot pay their debts. It is not true, as some evil journalists in the Western press claim, that "over-ambitious development projects" are to blame.
Exactly the opposite is true. The monetarist credit policy of the IMF is the reason why many promising development projects have had to be stopped. The developing-sector nations understood, at the latest since the reaction to their demands for a New World Economic Order at the 1976 conference of Non-Aligned countries in Colombo, that the leading financial institutions of the North have not the slightest interest in the industrialization of the South, but that in fact the
majority have long been 'decoupled' and that the transfer of technology ended years ago.
If the developing countries continue to be subjected to the International Monetary Fund's demands for austerity, then hope for a recovery will disappear forever, and developing nations will be threatened with coups and regional wars. Mexico, for example, is threatened with destabilization just as Iran was, Central America could sink into a bloodbath, coups and civil wars are threatening Venezuela, Columbia, Brazil, Argentina, Peru, and Boliva, and the entire Ibero-American continent could go under in a "Second Pacific wai," a scenario which Henry Kissinger has had on his desk for a very long time. India is threatened with civil war, organized by the British secret services. Africa has simply been sentenced to death by the International Monetary Fund.
All these countries are suffering from an enormous lack of development. Mexico needs nuclear power plants, transport systems, capital goods of all kinds. Ibero-America as a whole could become in a relatively short time an incredibly strong economic bloc.
If India, which already has a labor force similar to European levels, of 50 million people, could make the appropriate capital investments, it could soon become an exporter of advanced technology for the whole of Southeast Asia, and, as has been calculated in a study using the LaRouche-Riemann model, by the year 2020, could produce twice as much as the whole population of the world did in 1979.
Africa needs enormous quantities of investments in capital goods, cities, schools, railways, heavy industry, light industry, mechanization of agriculture, and so on.
NEW ECONOMIC ORDER OR WWIII
The industrialized nations depend on imports of raw materials from the developing sector, and depend equally on exporting their products to them... Would it not be in the self-interest of the North to have productive full employment, and therefore political stability? Would it not also be in the interest of the North to have a tremendous transfer of technology and an export offensive towards the South?
If some people can produce what others need, if the New World Economic Order is so obviously in the interests of all, why does the North appear not to recognize its own interests?
The problem is that not only has the South never fully thrown off the yoke of colonialism, but that the industrialized countries are not sovereign republics, but are more or less ruled by oligarchical dictatorships...
The absolutely key question today, by far the most important question in international politics today, is: Who controls the creation of credit and debts-sovereign national governments, responsible to their populations, or private financial circles, which want to rule the world through the supranational dictates of a world central bank, accountable to no one? The control of credit and debts, this is the key question. The answer is decisive to whether the result is worldwide feudalism and probably a Third World War, or a New World Economic Order.
The governments of the North and the South have the same problem: these private financial circles are the main opponents of the realization of the New World Economic Order. These circles would rather see entire economies destroyed, whole populations massacred, whole continents wiped out, rather than agree to a reorganization of their bankrupt economic system, and risk a reduction of their powers!
The cynical cold-bloodedness with which Swiss or London bankers murder whole developing countries with IMF "conditionalities" exceeds even the cold-bloodedness of Nazi killers, sitting at their desks and sending thousands to their deaths in concentration camps with just their signatures.
NECESSITY OF THE DEBTORS' CARTEL
The International Monetary Fund is the instrument which the oligarchical circles are using to plan and carry out genocide. There is only one way the poor and the weak can force the world to reason, in the face of the overwhelming ' power of the oligarchical conspiracy: the developing countries should form a debtors' cartel, to force through a controlled reorganization of the world economic system, and the New World Economic Order.
Such common action by a group of developing nations is the only way to force governments of the industrial nations by a violent shock from the outside, to defend their own interests.
If the governments of the industrialized nations were so suddenly and painfully confronted with a debtors' cartel, an unmistakable message, all the illusions that the economic crisis could he overcome if only sufficient cuts in spending were made would cease, and then new options could be developed. It is extremely important that the members of the debtors' cartel address the population in the industrialized countries, where people have been hard hit by the international economic crisis, and that they show them where their common interests lie. Only if the population is mobilized will it be possible to reduce the power of private banking interests.
The developing countries by themselves are too weak to resist the IMF. Only if they can create an unbreakable unity among themselves, for example, linking the fight of Ibero-America to that of the Non-Aligned Movement, and linking up with forces in the North to work together in their common interest-only then is the right combination of forces created.
The Club of Life, which has given itself the task, as it says in its founding principles, "to fight for a just New World Economic Order," is holding conferences here in Paris, in Washington, D.C., and in about 50 other cities in the North and Ibero-America, in Asia and Western Europe, to signal international support for the upcoming conference of the Non-Aligned movement. A signal that the people in the North are not prepared to march like lemmings over the cliff, and to give up the fundamental ideas which have developed human civilization over the centuries, in exchange for the "post-industrial society." Rather, we want to show that there are
people and political forces in the industrial sector who see the New World Economic Order as the only way out.
If the catastrophe of an international collapse imposed by an IMF-dictatorship is to be avoided, then in the next few weeks, at the summit of Non-Aligned nations, or shortly afterward, a group of developing nations must drop the 'debt bomb.' That is, these countries must use the only means which is feared by the oligarchical financial interests, the only weapon that can stop their plans.
On a certain day, Day X, these countries must announce together their incapacity to pay their debts, and, appealing to the self-interest of the industrialized nations, propose a controlled, global, reorganization of debts, and the creation of a New World Economic Order, as Lyndon LaRouche has suggested in the document 'Operation Juárez'.
There is certainly no developing nation, not even those whose governments are described as reactionary, which has not asked itself the following question: What would be the consequences if we decided to resist the "conditionalities" imposed by the IMF? A total cut-off of all credit, meaning a cut-off of imports of spare parts, of food, and other essential goods, followed by coup attempts and murder-as in the case of Pakistani Prime Minster Ali Bhutto?
As India is being destabilized right now by ethnic movements controlled from outside the country, desperate attempts to paralyze India, as the most important leader of the Non-Aligned movement and host of the conference, must be expected. If some developing nations in New Delhi on or around the time of the conference use the debt bomb, it must be expected that the threats and blackmail already used against these countries will escalate dramatically.
So, if the members of the debtors' cartel don't waver and stand by their positions, the banks and governments of the industrial nations will have no other choice but to agree to the proposed, orderly debt-reorganization and the negotiation of new credit, or else the entire monetary system, with titles worth between $1 and $2 trillion, collapses.
The ongoing financial crisis may now be so overwhelming that a staunch debtors' cartel were a far stronger power. This would at the same time be the punctum saliens in the centuries-long drama of the history of colonialism - the turning point, in which the heroic intervention of leading figures prevent the potential tragedy and instead give the drama a happy ending...
Should the worst case occur, and the industrial nations react to the formation of a debtors' cartel with a total halt to credit and with trade sanctions, the developing nations would be forced to fall back on an exclusive South-South cooperation. Under such circumstances they would of course have the possibility of forming their own national banks, and creating their own credit for the financing of a multilateral, South-South cooperation.
They would, without doubt, in such a case be exposed to great hardships, but would find themselves on the path to hope, while any capitulation to an IMF central bank and thus to an explicit fascist economic system with the population reduction desired by the Malthusians, would, in a word, have genocide as its result.
It is, however, totally conceivable that the introduction of the debt bomb and the debt reorganization it would compel, would pave the way for a global overcoming of the world economic crisis.
CREATING A NEW RENAISSANCE
Creating a new renaissance If, following a global reorganization of the debt of not only the developing countries, but also the greater part of the public debts of the industrial nations, and if new credit with a low interest is created for a worldwide jobs program, for new investments in technological renewal, export capacities, technology transfer, and well-defined Great Projects, then the current depression could be overcome within weeks, and after several months the greatest economic boom in all history would be launched.
The massive development of nuclear energy in the industrial nations and the transfer of this technology to the developing sector would mean cheap energy (and a cleaner environment) for the North, and for the South, the opening up of what were till now useless areas for agriculture and settlement.
The population potential of the earth, solely through the overall utilization of nuclear energy, would increase tenfold. Human beings would no longer be viewed as "useless eaters," but rather each new individual would be viewed in terms of his creative potential as an additional enrichment of the human species as a whole. There is no reason why we can't in but one to two generations have created conditions worthy of human beings for all people on this earth, including those who today belong to the most poverty-stricken. In principle we could repeat all over the world the examples of the industrialization of Germany or Japan, as precisely these two countries are the proof that possession of raw materials does not equal social wealth, which is created solely and uniquely through advancing technology increasing the productivity of labor.
The gigantic struggle which marks the battle for the New World Economic Order, is nothing less than the fight for the survival of the human race, and at the same time and in every aspect it is the fight for the principle of the inviolability of each human life and the inviolability of human dignity and the rights of all peoples on this planet.
And now it has been shown that a basic principle of the Non-Aligned movement as well as the republican tradition in the industrial nations, has become a matter of life or death - the principle of national sovereignty.
The establishment of the first nation-state in France in the 15th century under Louis XI was the precondition for the declaration of human rights embodied in the first successful republican revolution, the American Revolution of 1776, insofar as only the nation-state possessing the possibility for a republican representative system protects the rights of the individual, by making the government responsible for these right&, while on the other hand calling upon the individual to assume co-responsibility.
This safeguarding of the rights of individual human beings, mediated through sovereign nation-states, is in correspondence to the demand of absolute equality of rights for all sovereign states in this world. Any forms of supranational control and dictatorship, as for example the idea of a world central bank, violate not only national sovereignty but also at the same time the human rights of the individual. That would be overall understood wherever one can be proud of a republican tradition, whether in the France of the Fifth Republic, or the American or Mexican Revolutions, or the Non-Aligned Movement.
A just New World Economic Order therefore should be founded on absolute respect for the national sovereignty of all states, and the development of the worldwide division of labor to the mutual advantage of all. This would include, for example, the idea that while certain achievements ought to be rewarded, technology must not become the monopoly of some to the injury of others.
Even if humanity appears today to be far removed from such a course, only a world order such as has been put forward in the encyclical Populorum Progressio by Pope Paul VI, or in the Grand Designs of Nicholas of Cusa, Leibniz, or Nehru, can guarantee our survival.
Precisely on account of the depth of the crisis, is the Club of Life an institution for all those who believe in the potential for reason in all human beings, whether North or South - and only on this highest plane is agreement possible - and in the possibility of a world order based on reason. Let us pledge to multiply our interventions in the fight for a new just world economic order, so that we can bestow upon mankind new intellectual revolutions and the achievements of a new world-wide humanist renaissance.
Full text of speech: New Economic Order in Interest of North & South
Indira Gandhi Hosts Non-Aligned: "New Economic Order or Nuclear War"
Prime Minister Indira Gandhi hosts the 7th Summit of the Non-Aligned Movement in New Delhi, India, where she warns, "Humankind is balancing on the brink of the collapse of the world economic system and annihilation through nuclear war" and calls for the convening of "an international conference on money and finance for development." She specifies that such a conference "should suggest comprehensive reforms of the international monetary system [to] facilitate the mobilization of developmental finance for investment in vital areas of food, energy and industrial development." Prime Minister Gandhi also called for "a major debt restructuring exercise," stating that the "debt problem of developing countries has assumed an unprecedented dimension." She appealed to the 100 heads of state present to seize the "marvelous opportunity" before them, saying: "The eyes of the world are upon us. Let us decide here to usher in a New International Economic Order, to call for an International Conference on Money and Finance for Development."
The 'New Delhi Appeal' which was adopted by the 100 world leaders present, representing almost half of humanity, echoed Indira Gandhi's warnings of "the threat of a worldwide nuclear catastrophe" as well as her demands for an international conference on finance for development: "A thorough-going restructuring of the existing international economic order through a process of global negotiations is necessary. Non-aligned countries are committed to strive for the establishment of the New International Economic Order based on justice and equality. We propose the immediate convening of an international conference on money and finance for development, with universal participation, and a comprehensive restructuring of the international monetary and financial system."
Lyndon LaRouche's call for debtor-nations to unite and unilaterally declare a restructuring of their debts, as specified in his "Operation Juárez," pervaded the debate at the summit, and was raised notably by the President of Nicaragua, Daniel Ortega, who called for the establishment of "a common organization of debtor countries" to conduct "joint efforts and actions that would induce the creditors to seriously consider the necessity of a new international economic order." Ultimately, the Economic Declaration of the summit stated: "It is essential to secure a cancellation of the external debt owed to developed countries by the least developed countries."
Indira Gandhi's Keynote ˇ March 8, 1983
Humankind is balancing on the brink of the collapse of the world economic system and annihilation through nuclear war. Should these tragedies occur, can anyone of us, large, small, rich or poor, from North or South, West or East, hope to escape? Let us analyse the economic crisis. We of the developing world have no margin of safety. We shall be the first and worst sufferers in any economic breakdown. In this interdependent world, where you cannot 'stir a flower without troubling a star', even the most affluent are not immune to such disturbances...
The Non-Aligned Movement has stood firmly for a thorough-going restructuring of international economic relations. We are against exploitation. We are for each nation's right to its resources and policies. We want an equal voice in the operation of international institutions. We reiterate our commitment to the establishment of a New International Economic Order based on justice and equality...
An International Conference on Money and Finance for Development which is not weighted in favor of the North is an urgent need. Problems of money and finance also burden the countries of the North and have to be solved in a mutually beneficial manner. Such a conference should suggest comprehensive reforms of the international monetary and financial system, which is now recognized as out-of-date, inequitable and inadequate. It should facilitate the mobilization of developmental finance for investment in vital areas of food, energy and industrial development. A major debt restructuring exercise must be undertaken. The debt problem of developing countries has assumed an unprecedented dimension. Its servicing alone absorbs over a quarter of their total export earnings.
Long-range solutions need time and preparation. Immediate problems brook no delay. Some countries are more critically affected than others. Some are in desperate straits. They cannot wait for action by the world community as a whole. Out Movement has an obligation to them...
Science is important for us to eradicate poverty... Science will work for our basic needs only if we direct our own scientific policies towards these problems, especially those of the smallest and poorest amongst us. Each of our countries must strengthen its domestic base of science and technology and collectively we should devise more effective mechanisms for the pooling of our experiences.
In the last few years some areas of co-operation have been identified. Effective co-operation in agriculture, irrigation, research in plant varieties, public health, technical training and small industries will reduce our dependence on the high-cost economies of the affluent on business corporations which profit from us...
Our economists and scientists should study and take a holistic view of problems relating to co-operation amongst ourselves in planning, development, and economic exchanges. The economic experience and expertise of industrialized countries are not necessarily valid in our circumstances...
Development, independence, disarmament and peace are closely related. Can there be peace alongside nuclear weapons? Without peace, my father said, all our dreams of development turn to ashes. It has been pointed out that global military expenditure is twenty times the total official development assistance. Each day, each hour, the size and lethality of nuclear weapons increase. A nuclear aircraft carrier costs $US 4 billion, which is more than the GDP of 53 countries. The hood of the cobra is spread. Humankind watches in frozen fear, hoping against hope that it will not strike. Never before has our earth faced so much death and danger. The destructive power contained in nuclear stockpiles can kill human life, indeed all life, many times over and might well prevent its reappearance for ages to come. Terrifying is the vividness of such descriptions by scientists...
The desire for peace is universal even within countries which themselves produce nuclear weapons and in those where they are deployed. The Non-Aligned Movement is history's biggest peace movement...
The paradox of our age is that while weapons become increasingly sophisticated, minds remain imprisoned in ideas of simpler times. Technically, the colonial age has ended. But the wish to dominate persists. Neo-colonialism comes wrapped in all types of packages. It takes boldness and integrity to resist it. There are intense political and economic pressures...
Only with co-existence can there be any existence. We regard non-interference and non-intervention as basic laws of international behavior. Yet different types of interventions, open or covert, do take place in Asia, in Africa, in Latin America. They are all intolerable and unacceptable. Interference leads to intervention and one intervention often attracts another. No single power or group of powers has the justification or moral authority to so interfere and intervene. You cannot condemn one instance but condone another. Each situation has its own origins. Whatever they be, solutions must be political and peaceful. All States must abide by the principle that force or the threat of force will not be used against the territorial integrity or political independence or another State. What makes interference possible? Our economic weakness, yes, but also our differences and discords within our Movement...
How do we gain strength? By all of us striving to become economically and technologically self-reliant. By settling through peaceful discussion whatever differences we have with one another. By resisting the intervention of others in our internal affairs...
The eyes of the world are upon us. People in India and in all our countries have high expectations from our deliberations. Let us decide here:
- to demand more purposeful steps to carry forward the democratization of the international system and to usher in a New International Economic Order;
- to call for an International Conference on Money and Finance for Development, which will devise methods to mobilize finance for investments in the critical areas of food, energy and industrial; and
- to reassert our commitment to collective self-reliance.
Above all let us proclaim anew our belief that independence, development, disarmament and peace are indivisible and reaffirm our unceasing faith in the Five Principles which are the foundations of non-alignment, namely, sovereignty and territorial integrity, non-aggression, non-interference, equality and mutual benefit, and peaceful coexistence...
Nationalism does not detach us from our common humanity. What a marvelous opportunity is ours, with immense knowledge and increasing capability. Let us grasp it though it be in the midst of dangers. Faith in the future has brought so many of you across the continents and the oceans to meet here. We are here because we do believe that minds and attitudes can and must be changed and that injustice and suffering can and must be diminished. Our world is small but it has room for all of us to live together in peace and beauty and to improve the quality of the lives of men and women of all races and creeds.
The New Delhi Appeal ˇ March 12, 1983
Our world is increasingly turbulent and insecure. International economic relations continue to be characterized by inequality, domination and exploitation. The gravity of the situation is evident... in the threat of a worldwide nuclear catastrophe.
Peace and peaceful coexistence, independence, disarmament and development are the central issues of our time. But peace must be based on justice and equality because the intolerable inequality and exploitation established by colonialism and imperialism remain the most important causes of tension, conflict and violence in the world...
The non-aligned countries, speaking for the majority of the world community, want an immediate halt to the drift towards nuclear conflict which threatens not only the well-being of humanity in our times but of future generations as well. The nuclear weapon powers must heed this voice of the people of the world...
The world economic crisis,which originated in some of the major industrialized countries, has now become truly global in character and scope. In developed countries it has led to economic stagnation and rising unemployment... In developing countries, whose economies are specially vulnerable, it has led to enormous balance of payments deficits, mounting debt burdens and worsening terms of trade due to the steep fall in their commodity prices and to the sharp rise in the prices of industrial products which they have to import. All this has brought many of these countries to the brink of disaster.
Never before have the economic fortunes of the developed and developing nations been so closely link together... Solutions to these problems must necessarily be global.
The present crisis has demonstrated the inadequacy of the existing international economic order to deal with the problems of development. A thorough-going restructuring of this order through a process of global negotiations is necessary. Non-aligned countries are committed to strive for the establishment of the New International Economic Order based on justice and equality.
Concurrently, immediate measures must be taken to start a process of recovery and to bring the world economy back to the path of sustained growth. The activation and stimulation of the growth process in the developing countries must be a key objective of this endeavor. Immediate measures are needed in several areas. Special emphasis must be placed on enabling developing countries, particularly the Least Developed Countries, to solve their acute balance of payments problems without interrupting their development process. At the same time, satisfaction of their basic needs of food and energy, enhanced access to markets and fair prices for commodities must be ensured... Many developing countries are in a tragic situation because of their inability to meet their debt obligations. This serious problem should be urgently addressed.
We propose the immediate convening of an international conference on money and finance for development, with universal participation, and a comprehensive restructuring of the international monetary and financial system...
The crisis which confronts our civilization today is unprecedented in history. Great tasks call for wise decisions... The earth belongs to us all - let us cherish it in peace and true brotherhood, based on the dignity and equality of man.
Ronald Reagan Announces the Strategic Defense Initiative (SDI)
On March 23, 1983, only days after the summit in New Delhi, President Ronald Reagan shocked the world by announcing the Strategic Defense Initiative (SDI), calling on the scientific community to "turn their great talents now to the cause of mankind and world peace; to give us the means of rendering nuclear weapons impotent and obsolete." This historic announcement was the result of years of back-channel negotiations which Lyndon LaRouche conducted personally on behalf and at the behest of leading members of Reagan's presidential team.
See video: "A Brief History of Lyndon LaRouche's Strategic Defense Initiative", on the LaRouchePAC website.
LaRouche had proposed beginning in 1977, in a pamphlet titled "Sputnik of the Seventies" [PDF] that an international crash program to develop a space-based missile defense system based on new physical principles would provide the economic driver to fuel global development. The pamphlet proposed "long-range economic and scientific collaboration with the Soviet Union among other nations, which will eliminate the danger of world obliteration" and emphasized the "tremendous revolutionary industrial implications available to this nation and the world if the political will of the United States forces a recommitment to technological progress in the form of an International Development Bank (IDB) and its national concomitant, the Third National Bank."
On March 24, LaRouche greeted Reagan's announcement saying:
"There is, at last, hope that the thermonuclear nightmare will be ended during the remainder of this decade... The words the President spoke last night can never be put back into the bottle. Most of the world will soon know, and will never forget that policy announcement. With those words, the President has changed the course of modern history. Today I am prouder to be an American than I have been since the first manned landing on the Moon. For the first time in 20 years, a President of the United States has contributed a public action of great leadership, to give a new basis for hope to humanity's future to an agonized and demoralized world. True greatness in an American President touched President Ronald Reagan last night; it is a moment of greatness never to be forgotten."
Ronald Reagan Announces SDI ˇ March 23, 1983
In recent months, my advisers, including in particular the Joint Chiefs of Staff, have underscored the necessity to break out of a future that relies solely on offensive retaliation for our security. Over the course of these discussions I have become more and more deeply convinced that the human spirit must be capable of rising above dealing with other nations and human beings by threatening their existence.... Wouldn't it be better to save lives than to avenge them? Are we not capable of demonstrating our peaceful intentions by applying all our abilities and our ingenuity to achieving a truly lasting stability? I think we are-indeed we must!
After careful consultation with my advisors, including the Joint Chiefs of Staff, I believe there is a way. Let me share with you a vision of the future which offers hope. It is that we embark on a program to counter the awesome Soviet missile threat with measures that are defensive. Let us turn to the very strengths in technology that spawned our great industrial base....
What if free people could live secure in the knowledge that their security did not rest upon the threat of instant U.S. retaliation to deter a Soviet attack; that we could intercept and destroy strategic ballistic missiles before they reach our own soil or that of our allies? ... Isn't it worth every investment necessary to free the world from the threat of nuclear war? We know it is!
I clearly recognize that defensive systems have limitations and raise certain problems and ambiguities. If paired with offensive systems, they can be viewed as fostering an aggressive policy and no one wants that. But with these considerations firmly in mind, I call upon the scientific community in our country, those who gave us nuclear weapons, to turn their great talents now to the cause of mankind and world peace; to give us the means of rendering these nuclear weapons impotent and obsolete.... We seek neither military superiority nor political advantage. Our only purpose-one all people share-is to search for ways to reduce the danger of nuclear war.
My fellow Americans, tonight we are launching an effort that holds the promise of changing the course of human history. There will be risks, and results take time, but I believe we can do it. As we cross this threshold, I ask for your prayers and your support.
History of LaRouche's Role as Back-Channel for SDI
For full article:The Power Of Ideas: LaRouche's SDI Changed The World
President Reagan's March 23 address came as the result of years of effort.
Lyndon LaRouche and his associates had been talking about ballistic missile defense, employing new physical principles, since 1977.
During the perilous years of the Carter Presidency, Mr. LaRouche had served as an unofficial channel of communication between elements inside the official U.S. intelligence establishment, and Soviet intelligence counterparts. This was part of a "fail-safe system" built up by sane individuals on both sides of the East-West divide, to minimize the danger of a misunderstanding triggering a strategic confrontation. LaRouche was solicited for this effort, in part, in response to his election-eve 1976 nationwide TV address, in which he warned of the dangers of thermonuclear war, should Jimmy Carter and the Trilateral Commission come into office.
In early March 1981, a senior Soviet diplomat posted at the Permanent Mission to the United Nations, Mr. Kudashev, approached EIR's Asian Affairs Editor, Dan Sneider, soliciting LaRouche's views on the new Reagan Administration. On instructions from the same U.S. intelligence channels through which the earlier Soviet discussions had been conducted, word of that approach and a detailed summary of the discussion, was forwarded to White House counsellor Edwin Meese.
By the early Autumn of that year, Lyndon LaRouche had spelled out his proposals for a joint or parallel U.S.-Soviet strategic ballistic missile defense program. During this same period, representatives of EIR held preliminary discussions with a senior diplomat at the Soviet Embassy in Washington, D.C. named Shershnev.
As the result of these developments, in December 1981, Lyndon LaRouche was again approached by senior U.S. intelligence officials and formally asked to initiate "back-channel" discussions with appropriate Soviet representatives on the possible adoption of a modification of existing strategic doctrine-ie. LaRouche's own Mutually Assured Survival concept. LaRouche was informed that the back-channel discussions were classified as a compartmentalized secret operation known to a select number of senior officials under a code-name.
By this time, Lyndon and Helga LaRouche had met personally with CIA Deputy Director Bobby Ray Inman at the Agency's facility adjacent to the Old Executive Office Building and the White House.
In support of his back-channel efforts on behalf of the ballistic missile defense policy, on Feb. 18-19, 1982, LaRouche participated in a two-day EIR seminar on the subject and related topics in Washington, D.C. Of the 600 or so attendees, a number were Soviet and Warsaw Pact diplomats. At an EIR reception for participants in the conference, LaRouche was introduced to Mr. Shershnev, and they had the first of a number of discussions about strategic policy issues affecting the U.S. and the U.S.S.R.
At their first private discussion, which took place in a suite at the Hay Adams Hotel in Washington shortly after the February 1982 event, LaRouche informed Shershnev that he had been designated by the Reagan Administration to conduct exploratory discussions, and that he would distinguish clearly when he was conveying official messages from U.S. government agencies and when he was providing his own personal evaluations.
In the early Spring of 1982, Admiral Inman announced his resignation as Deputy Director of the CIA effective several months later. The channels under whose auspices LaRouche had been carrying out the negotiations with Moscow representatives informed him at that point that the operation was for the time being aborted. Sensitive to the highly restricted "need to know" security surrounding the back-channel negotiations, LaRouche prepared a written memo to Edwin Meese seeking some guidance on how to proceed. That memo was hand-delivered by a representative of the National Security Council. With the appointment of Judge William Clark as Special Advisor to the President for National Security Affairs in January 1982, LaRouche representatives had established ongoing discussions with a number of NSC officers.
After Ed Meese failed to provide any clear response to the LaRouche memo, Richard Morris, the Executive Assistant to National Security Advisor Clark, informed LaRouche that the Council would take charge of the operation and that the sanctioned back-channel negotiations should continue uninterrupted.
By the Autumn of 1982, momentum had built up inside sections of the U.S. military and intelligence establishment in support of Lyndon LaRouche's ballistic missile defense proposals. General Volney Warner, a retired head of the U.S. Army's FORCECOM, told LaRouche associates in October 1982 that the policy was winning strong support among some of the President's key advisors. Also in October, Edward Teller, a close personal friend and science advisor to President Reagan, threw his support behind BMD, citing recent breakthroughs at Lawrence Livermore Labs on some of the very "new physical principle" approaches advocated by LaRouche. Significantly, Teller also advocated sharing these scientific and technological breakthroughs with Moscow.
LaRouche publicly alluded to his role in the back-channel process in a Dec. 12, 1982 EIR Memorandum titled "The Cultural Determinants of an Anti-Missile Beam-Weapons Policy":
"During the months since I first announced the proposed beam-weapons policy, since February of this past year, I have had a number of occasions to discuss this policy with Soviet and other East Bloc representatives, both in person and through relayed communications. In such discussions one must acknowledge that the Soviet representative in question is speaking as a representative of his government to me as a person whom that representative views as connected to policy influencing agencies of the United States. Therefore, the kinds of discussions which occur have two functional aspects. In one aspect, each of us is speaking for the record. I am careful to indicate what I believe to be my government's policy, as well as I know that policy, as for the record. My Soviet discussion partner in each case will do the same. Then, apart from such statements of policy for the record, we are able to enter into a more or less frank discussion of possible other, additional policy options."
LaRouche again addressed all of these issues in his Dec. 31, 1982 speech to the International Caucus of Labor Committees conference in New York City. Referencing his beam defense program, LaRouche observed:
"If we succeed, if President Reagan does this thing, in the coming weeks, then we shall have administered to that ancient foe of our people and of the human race-the Harrimans, et al., the Malthusians-not a killer blow, but a very deadly defeat: a sharp reduction of the Malthusian power internationally. We shall have cleared the decks, weakened the enemies of humanity, to the point that those who are not the enemies of humanity are given a greater latitude for making decisions without having to submit to the Harrimans and that crowd in the period ahead.
"It is in that sense, in that act, which, I believe-in this great tragedy through which we are now living-that choice, is the punctum saliens of our age. Either we can grab it, or I know not what we can do."
For full article: The Power Of Ideas: LaRouche's SDI Changed The World
LaRouche Meets With Indira Gandhi in India for Second Time
On July 13, as part of a tour of several nations in Asia, Lyndon and Helga LaRouche have their second meeting with the Prime Minister of India, Indira Gandhi. Ten days later, Indira Gandhi inaugurates a new heavy water nuclear reactor at Kalpakkam, saying:
"Our science, particularly nuclear science, is dedicated to development, the achievement of freedom from want, and the provision of essentials and an honorable life for the masses. We are to make the deserts bloom."
In the weeks following, LaRouche issues a special report titled "A 50-Year Development Policy for the Indian-Pacific Oceans Basin" [PDF] proposing three projects for the development of the Pacific region: 1) a canal through the Kra isthmus of Thailand, 2) a new sea-level canal across the Panamanian isthmus, and 3) the expansion and improvement of the Suez Canal. LaRouche specifies that the preconditions for developing the Pacific basin are the "required reforms of the international monetary system specified in Operation Juárez" which would create "a new international economic order not inconsistent with the monetary and economic policies of the American System. The paradigm for a republican monetary order is the statement of policies set forth in U.S. Treasury Secretary Hamilton's famous Reports to the Congress, on credit, a national bank, and manufactures."
LaRouche: General Conditions of Policy for Economic Development in Pacific & Indian Ocean Basins
For full document, see: Asia Can Lead World Economic Revival
MONETARY REFORMS REQUIRED
The general outlines of proposed, required reforms of the international monetary system are adequately specified in Operation Juarez. Therefore, we limit ourselves here to listing a succession of basic principles.
The paradigm for a republican monetary order is the statement of policies set forth in U.S. Treasury Secretary Hamilton's famous Reports to the Congress, on credit, a national bank, and manufactures.
The political essence of the present international monetary crisis is the challenge of choosing between a world economic order resembling the looting practices associated with Hjalmar Schacht, and the preconditions of general economic recovery supplied by creating a new international economic order not inconsistent with the monetary and economic policies of the American System. Any other view of this matter misses the practical point.
In a republican order, the following leading features of monetary policy prevail.
The money supply is limited to the currency notes issued either by treasuries of governments of sovereign states, or by national banks acting as agents of those governments. The new issues of such currency notes are placed in circulation through the combined lending and rediscount functions of national banks.
Lending of new issues is limited to purposes which governments permit for loan of these issues. Except for overiding requirements of national interest, as emergency mobilization for national defense or other emergencies, these issues are loaned at low nominal borrowing costs for investments which directly promote increase of the productive powers of labor in the production of useful, physical goods. This may occur either as a direct loan by a national bank, or as national-bank participation in a loan otherwise subscribed by the private banking system.
So, money is p laced into circulation through investments which expand and increase productivity in the employment of operatives. It is in this fashion that monetary demand is generated and chiefly regulated.
Republics provide efficient methods for regulation of good order in the conduct of business by private banks. Lending by banks is limited to determined percentages of the total deposit of currency plus specie actually deposited with those banks, as combined deposits of investors and other bank depositors. The "Keynesian multiplier" is choked.
The function of government issues is to supply adequate supplementary lending power, by combined resources of the national bank and the private banking system. Inasmuch as possible, it is desirable that this lending of government issues occur as participation in loans of approved categories by the private banking system. This strengthens the private banking system, reduces the administrative burdens of the national bank respecting local features of the economy better administered by the private banks, and fosters a participation of deposited savings in those categories of investment which contribute relatively most to expansion of output and improvement of the productive powers of labor In commerce and investment among nations, it is required that stable and fixed parity-values of national currencies prevail. This stability is fostered within each nation by aid of the currency and banking practices identified above.
These policies are explicitly and efficiently anti-inflationary modes of economic growth, on condition that significant rates of advancement in available technologies are'provided. These measures implicitly require the added measures of a gold-reserve system in support of fixed parities of currencies in international commerce and investment. This permits low nominal borrowing costs to prevail, and thus provides the indispensable climate for high levels of trade and investment among nations.
This requires i matching policy of taxation. In general, it is necessary that accumulations of capital in productive investment and closely related ventures be encouraged, and accumulations through financial speculation, ground-rent price speculation, and commodity-price-fluctuations speculation, be discouraged. The investment-tax-credit device, to reward entrepreneurs and savers for investments which foster increases in the average productive of labor, is perhaps a superior choice of measure in aid of the stipulated economic object of taxation policies.
It is, of course, somewhat more than merely desirable, that current-account expenditures of governments, as distinct from capital-account expenditures, be paid out of a general revenue supplied entirely by taxation.
By aid of these monetary-policy measures, high rates of noninflationary economic growth can be promoted and sustained indefinitely, without prompting reappearance of a "business cycle."
For full document, see: Asia Can Lead World Economic Revival
Lyndon LaRouche Addresses Conference in Bangkok on Kra Canal
Lyndon LaRouche travels to Thailand in October 1983 to address the first of several conferences in Bangkok on building the Kra Canal, jointly sponsored by EIR, the Fusion Energy Foundation, and the Thai Ministry of Communications. This conference is followed by another in October of the following year for which LaRouche writes a policy paper titled "The Pivotal Role of Thailand in the Economic Development of Southeast Asia" [PDF] in which he states:
"The prospect of establishing a sea-level waterway through the Isthmus of Thailand, ought to be seen not only as an important development of basic economic infrastructure both for Thailand and the cooperating nations of the region; this proposed canal should also be seen as a keystone, around which might be constructed a healthy and balanced development of needed basic infrastructure in a more general way."
1984: Schiller Institute Founded: Adopts Declaration of Inalienable Rights of Man
Helga Zepp-LaRouche founds an international strategic and cultural organization, the Schiller Institute, named after the German 'Poet of Freedom' Friedrich Schiller. In describing the intended purpose of the Schiller Institute, Helga LaRouche states:
"Let us enter into the solemn pledge to work to end for all time every form of imperialism, and that means above all that we must bring about a just world order that will make possible the urgently necessary development of the southern hemisphere."
The International Schiller Institute adopts 'The Declaration of the Inalienable Rights of Man' as its founding document, based on the US Declaration of Independence, which asserts:
"The history of the present International Financial Institutions is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States; They have refused their Assent to our plans of development, the most wholesome and necessary for the public good; They have forbidden their Banks to engage in business of immediate and pressing importance for us, and in equal terms; They have dictated to us terms of trade and relations of currency, that have relinquished our Rights as Equals in the World Community, a Right inestimable to them and formidable to tyrants only; They have overthrown legitimate governments repeatedly, for opposing with manly firmness their invasions on rights of the people; They have endeavored to prevent the necessary population increase for industrialization of these States..."
The document ends by declaring:
"We, therefore, the Representatives of the Peoples of the World, do solemnly declare... that all human beings on this planet have inalienable rights, which guarantee them life, freedom, material conditions worthy of man, and the right to develop fully all potentialities of their intellect and their souls. That therefore a change in the present monetary and economic order is necessary and urgent, to establish justice among the peoples of the world..."
The following declaration was adopted on Nov. 24, 1984 by over 1,500 citizens from more than fifty countries, at the Third International Conference of the Schiller Institute. The Declaration of the Inalienable Rights of Man is based the American Declaration of Independence of 1776, with only a few changes introduced to take into account different particular features of the global struggle for human freedom and dignity today.
When in the Course of human events, it becomes necessary for the peoples in the world to dissolve the political bands which have connected them with one another, and to assume among the powers of the Earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to separation We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain inalienable Rights; that among these are Life, Liberty, and the pursuit of Happiness.
That to secure these rights, governments are instituted among Men, deriving their just powers from the consent of the governed;
That whenever any Form of Government becomes destructive to these ends, it is the Right of the People to alter or abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shown, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism; it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.
Such has been the patient sufferance of the developing countries, and such is now the necessity which constrains them to alter their former Systems of Violation of National Sovereignty through the dictate of supranational institutions. The history of the present International Financial Institutions is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
They have refused their Assent to our plans of development, the most wholesome and necessary for the public good.
They have forbidden their Banks to engage in business of immediate and pressing importance for us, and in equal terms.
They have dictated to us terms of trade and relations of currency, that have relinquished our Rights as Equals in the World Community, a Right inestimable to them and formidable to tyrants only.
They have burdened us with conference after conference to discuss these matters, at places unusual, uncomfortable and distant from the depository of our Public Records, for the sole purpose of fatiguing us into compliance with their measures.
They have overthrown legitimate governments repeatedly, for opposing with manly firmness their invasions on rights of the people.
They have refused for a long time and in many instances, after such topplings, to permit other republican forces to be elected in a democratic form; whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their Exercise, the State remaining in the meantime exposed to all the dangers of invasion from without, and convulsion within.
They have endeavored to prevent the necessary population increase for industrialization of these States; for that purpose imposing forced sterilization programs and refusing the necessary technology transfer under the pretext of the so-called protection of the environment.
They have obstructed justice by giving aid and comfort to undemocratic forces whom they regarded as their "assets."
They have made Judges dependent on their will alone for the Tenure of their offices, and the amount and payment of their salaries.
They have erected a multitude of New Offices, and sent swarms of Officers to harass our people, and eat out their substance.
They have used the military might of governments to pursue the continuation of a de facto condition of colonialism. They have in many instances furthered military forms of government to impose the demanded austerity. They have combined with others to subject us to a jurisdiction foreign to our constitutions, and unacknowledged by our laws, giving their Assent to their Acts of pretended Legislation:
For using the territory of our countries for proxy and population wars;
For cutting off our trade with all parts of the World; for imposing conditionalities on us without our consent;
For depriving us in many cases of the benefits of Trial by Jury;
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of Our Governments. They have caused conditions in our countries, which destroyed the lives of our people; they have generally caused our countries, already previously weakened and exploited by colonialism, to collapse, with methods of cruelty and perfidy scarcely paralleled in the most barbarous ages, totally unworthy of Man in civilized nations.
They have excited domestic insurrections amongst us, and have endeavored to bring on the most backward and fanatic savages, whose known rule of Warfare is an undistinguished destruction of all ages, sexes and conditions.
In every step of these Oppressions, we have petitioned for Redress in the most humble terms: Our repeated Petitions and Resolutions have been answered only by repeated injury. Institutions, whose character is thus marked by every act which may define a Tyrant, are unfit to be the rulers of free peoples. We have appealed to them in innumerable conferences, assemblies, and conventions, and appealed to their sense of justice, without any positive response.
We, therefore, the Representatives of the Peoples of the World, appealing to the Supreme Judge of the World for the rectitude of our intentions, do, in the Name, and by the Authority of, all good people of all countries, solemnly publish and declare, that all the countries of the World are and of Right ought to be Free and independent States.
That all human beings on this planet have inalienable rights, which guarantee them life, freedom, material conditions worthy of man, and the right to develop fully all potentialities of their intellect and their souls. That therefore a change in the present monetary and economic order is necessary and urgent, to establish justice among the peoples of the world.
These were in large part the formulations of the American Declaration of Independence, and no honest witness can deny that all we wish to remedy are the same unjust conditions which the Founding Fathers wished to remove when they ended their condition as colonies to establish the first true independent republic. It is this example we wish to replicate everywhere and it is these principles we wish to uphold.
And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.
Prime Minister Indira Gandhi Assassinated in New Delhi, India
On October 31, 1984, the Prime Minister of India, Indira Gandhi, is assassinated at her home in New Delhi. Lyndon LaRouche writes:
"This morning, at 9: 18 a.m., New Delhi time, assassins of a London-based terrorist cult murdered one of the greatest world leaders of our generation. India's Prime Minister Indira Gandhi. My wife and I, who loved her dearly, can not find words adequate to express our personal grief. If India is destabilized as a result of this assassination, the effects could become quickly as dangerous as the murder of the Austrian Archduke Francis Ferdinand, on June 28, 1914, the incident which triggered World War I."
Three days before her assassination, Mrs. Gandhi stated in a press interview with United Press International:
"If I were to die serving my country, I would be very proud... I feel I have to fight evil, I have to fight what is wrong, but you cannot be bothered about what is happening to you in consequence. You have to go on with your job."
VIDEO: The Power Of Labor (1984)
Excerpts: "British Assassinate Mrs. Gandhi" ˇ LaRouche
This morning, at 9: 18 a.m., New Delhi time, assassins of a London-based terrorist cult murdered one of the greatest world leaders of our generation. India's Prime Minister Indira Gandhi. My wife and I, who loved her dearly, can not find words adequate to express our personal grief.
If India is destabilized as a result of this assassination, the effects could become quickly as dangerous as the murder of the Austrian Archduke Francis Ferdinand, on June 28, 1914, the incident which triggered World War I...
Mrs. Gandhi was informed that an attempted assassination of her was imminent. She referred to this in an interview with UPI three days before her assassination.
"If I were to die serving my country, I would be very proud... I feel I have to fight evil, I have to fight what is wrong, but you cannot be bothered about what is happening to you in consequence. You have to go on with your job."
I have received that message, and I shall now begin to act upon her instruction. I will tell what I know of her attitude toward President Ronald Reagan.
My wife, Helga, and I had been in occasional contact with Mrs. Gandhi since our correspondence of 1977. There were a few exchanges of letters, and, less infrequently, confidential messages transmitted through trusted intermediaries. We were friends in the time her life and that of her family were threatened, when she was out of government; we were friends when she was reelected to government.
Helga and I met with her in her office during both of our visits to India, in 1982 and in 1983. On both these occasions, I encouraged her to concentrate on developing her personal contact with President Reagan.
When I brought this up with her the first time, she nodded. She had met the President briefly during the Cancun summit and had liked him; but, she complained, those bureaucratic watch-dogs had broken up their discussion barely as it started. She said she wished an opportunity to discuss matters privately with him at greater length; I promised I would do my best to impart her view to relevant circles in Washington. Quite naturally, we returned to the same subject during our 1983 meeting...
Mrs. Gandhi was a true friend of the United States, as her father, Prime Minister Jawaharlal Nehru, had been before her. This was her policy, despite the numerous abuses India has suffered from our State Department since the time Daniel Moynihan was U.S. ambassador. She liked President Reagan personally, and she wished to develop understanding and cooperation with his administration, insults or no insults.
Small-minded idiots alleged she was pro-Soviet. Mrs. Gandhi understood clearly that although India is a superpower within the Indian Ocean region, India, like most of the world, is caught between two superpowers, and that the Soviet Union is the closer of the two geographically. Much as she liked a President such as Ronald Reagan, India must maintain a correct and cooperative relationship with the Soviet Union. Moreover, India is the largest of the Non-Aligned nations organization; Jawaharlal Nehru was one of the founders of that organization. India's correct policy, in the eyes of every Indian patriot, is to steer a course of national interest with maximum distance from the superpower alliances as such. If our State Department had understood the realities of that region of the world, it would have understood that Mrs. Gandhi sought friendship and cooperation with the United States from the standpoint of India's strict adherence to its position as a leading nation of the Non-Aligned group.
That was my understanding of India's vital self-interests. That is what I understood as the view of every leading Indian patriot, including Mrs. Gandhi. I understood it to be my duty, as an informed public figure of the United States, to attempt to inform relevant circles close to President Reagan of this point of view.
Mrs. Gandhi made it very clear to me, that she understood that despite my special great affection for India and its development, I am primarily a patriot of the United States. I think she would have despised and distrusted me if I were anything different than that.
I have met numerous influential figures, many of whom I have liked personally, but Mrs. Gandhi was in a class of her own. I say this not merely out of my great sorrow; this was my stated estimation of her, in private and in print, while she was alive. Whatever shortcomings she might have had, among all nations, she was the world's greatest statesman in the period since the death of that President Charles de Gaulle who had admired her with astonishment at the time when she, still a young woman, had spoken at a dinner at which both of them were present. I have never met another political figure with the quickness and breadth of detailed grasp of each of a variety of topics presented to her.
One of my great satisfactions was to know that the copies of Fusion magazine supplied to her were read regularly in her home, not only by her, but as source-material for her cultivation of the education of her grandchildren. She was a consummate statesman, who also found time to be efficiently a devoted mother and grandmother. Both Helga and I found that beautiful, small-statured woman to be infinitely tough-minded and also an entirely lovable personality.
She exuded brilliance of intellect, toughness, and a lovingness toward people at the same time. It was that toughness and lovingness which the poor of India correctly saw and loved in her. To them, she was India personified.