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Source: LaRouchePAC
March 18, 2021 | By Brian Lantz
We're going to be discussing the field of physical economy. Physical economy dates back to Gottfried Leibniz, but really has roots that go back to the Renaissance. Today, it is a principle that needs to be rediscovered. In the last 50 to 70 years, there have been people who have understood its conceptions, people like Susan Kokinda's friend Bill Knudsen, associated with Ford and GM and the wartime mobilization; Henry Kaiser and the aluminum industry; Jesse Jones and the Reconstruction Finance Corporation. These were industrialists who collaborated with President Franklin Roosevelt in the war mobilization and beyond. And I think that is a useful starting point: we have to rediscover what they understood, but also take it to another level, which is where Lyndon LaRouche took it, in depth.
Wealth
"Where does wealth really come from?" This is not not an abstract or academic question. If we are going to be effective citizens, if we are going to deliberate on the policies of the nation effectively; if we are going to be the candidates and elected officials who will make decisions in the public sector, and also the private sector, but also in other fields such as education; we have to know the basis upon which we can make decisions.
Today, we hear about the "gaming industry." We hear about the "prison industry." We hear about the "insurance industry," the "entertainment industry," the “tourism industry." And then we hear all the time from 'zillionaires'—like Gates and so forth, about the Great Reset, from on-high the so-called Olympians—we hear about monetary matters, stock-market values, quarterly profit earnings, and so-forth.
All of this—or rather none of this!—has anything to do with the physical economy!—with the real economy and how the real economy works. So we really must set all of that aside. It is really a relief, if you consider it, to step back and realize, "Oh, I can brush that aside," as so much noise.
This is also what the assault on Trump is really all about. Because the oligarchy doesn't want people, and they certainly don't want President Trump—to be leading a nation on the principles that founded it, and build it! The ideas of Alexander Hamilton, Abraham Lincoln and Lyndon LaRouche. So let's start somewhere basic: The source of wealth is human creativity. Human creativity is the source of all human productivity—for increases of labor power. That is, labor power not as raw power or physical muscle power, but the application of the mind to make work more effective, to develop the machines that do the work of tens, or hundreds of people, or even thousands of people.
If that sounds abstract, think of fire. Man invented the utilization of fire. There is no animal that can utilize fire; there is no monkey that can read a book, or write one; or create great art. From the very beginning man was beginning to create art, he was beginning to circumscribe and to encompass the world around him. Astronomy—not astrology, astronomy—was utilized very early on. So this was Mankind's domain; Man's domain was not the domain of the empirical, Man's domain was to discover principles, hidden apparently, initially, but to discover them in a more profound way and apply them. As with the very essential principle of fire.
This is a source of great optimism! We're not somehow stuck, we're not somehow condemned,—as by the 'green' ideology of finite resources. This has been disproved again and again. Malthus was disproved—you know Malthus, that the population grows geometrically and the food supply grows arithmetically; he and his minions predicted that London would be buried under horse manure. Obviously, it didn't happen; we developed coal. A very simple example, which many of you know.
The essential question is, how do we build our country out of the broader shambles of cultural and social discord and crisis and unite again as a nation? And play once again the role we are intent on playing, as John Winthrop called it "the City upon a Hill," for mankind?
Tapping Our Wealth of Labor Power
Let's start with some basic categories in terms of production, but starting with labor, starting with the human beings that compose the labor force, our labor force, our country. The same principles apply to every country regardless of their political structure; in terms of physical economy, the underlying laws are the same, and you either obey these laws or ultimately pay the consequences.
We look at the labor force, first in terms of the productive portion of the labor force. The productive portion of the workforce are those people making the physical changes on nature for society, for the future of our nation. That's the productive labor force, and if we look at that labor force as a whole, we can look at it in a certain sense as past, present and future—the past is our retired workforce; we have the current workforce; and the future—to be—workforce. Those are our children, our youth, who are being educated and that will become the workforce, or potentially can become the workforce.
That workforce, in the United States, is now a fraction of what it used to be. Well over 50 to 60 percent of our workforce used to be productively engaged, in the period during and after World War II and into the early 1960s. It was that platform from which we launched the space program, the 'Moon Shot' under President John F. Kennedy. All kinds of capabilities, strengths and limitations, but as a totality a tremendously productive workforce that emerged out of World War II.
Today, that productive workforce is something like 20 to 25 percent of the entire U.S. workforce. And if we define productive activity even more rigorously, looking at what that labor is being utilized for, and subtract out that which is being wasted on overhead, as in "endless useless wars," as President Trump has referred to them rightfully, it is significantly less. After all, it's pretty difficult to live in a tank, or eat ammunition. Military expenditures for national security are necessary, but military expenditures to police the world for the City of London and Wall Street is an entirely different matter. This is the productive efforts of our labor force being thrown overboard.
Since 1971 we have suffered from the disease known as "financialization," the "post-industrial economy." We also have the 'green' agenda of the Great Reset. We've suffered with this since the first Earth Day back in the 1970s, promoted at that time by Time magazine, members of Congress, and President Carter. There has been this endless parade of individuals, media efforts and so-forth to convince us that we are using up finite resources. Today, out of Davos and elsewhere, we are told that our only future is a no-growth future.
Contrary to this view, we have before us the capability to tremendously increase our productivity. Especially if we reduce the overhead, the useless overhead, in terms of financialization, in terms of paper shuffling, of the so-called post-industrial society.
Ironically, Covid-19 presents us with an opportunity. We have perhaps 7 to 9 million Americans who are now unemployed. We have several million small businessmen whose businesses may not be coming back. We know the sectors of our economy a little bit better that have been essential. We talk of "essential workers," and we talk of the essential productive activity of our farmers, our industry, our healthcare, and other sectors. We recognize the need to get our children back into school, for teaching to begin.
These are needs that can be met more fully, by utilizing those who are now unemployed from the service sector,—in a significant part because they are overhead. Not because they are unimportant, even the opposite. Those individuals need to be employed in productive activity, to utilize their creative capacities to more fully advance our nation and Mankind.
We can promote the rapid transformation of the United States economically, by shifting a portion of our workforce which is now in services,—what is called "FIRE": Finance, Insurance and Real Estate. Get these people out of these areas and begin employing them in expanding the physical productive capacities of the United States.
To do this, we have to have places where these individuals can be trained; we need energy to fuel new factories, basic industry and all of this to expand. We need to integrate and train this workforce for productive employment; and we’re going to accomplish this with national credit.
National Credit
National credit is a concept that goes all the way back to Alexander Hamilton, the first Treasury Secretary of the United States. He wrote his reports—the Report on Manufactures, the Report on National Credit, and so forth—as reports requested of him by the President and the Congress of the United States. His reports were adopted almost entirely, and certainly in large part—the Report on the National Bank, the reorganization of the national debt coming out of the American Revolution. His reports formed the foundation upon which the United States emerged from national bankruptcy after the revolutionary war.
Among Hamilton's concepts—singular concepts, drawing upon a tradition going back to Ben Franklin and before that to the Massachusetts Bay Colony—was the concept of credit, sovereign National Credit. Utilizing the nation's future productivity, if you will, to advance credit against that future productivity. Again, this is not an incomprehensible concept at all.
If you think about it, a homebuilder goes in—or used to be able to go in—to a Savings & Loan, and lays out plans for homes that he wants to build, on specific pieces of property that he intends to buy. He needs money to build these homes and then to sell them. A Savings & Loan or a bank would lend, based on a certain faith in, and knowledge of, the individual and the effectiveness of his plans; would lend the capital for that purpose. The contractor would then hire other people—suppliers, subcontractors and so-forth—and build those homes. Those homes would then house other productive families, and the economy would grow.
The Savings & Loans were themselves a product of the Franklin Roosevelt era and very much promoted by Jesse Jones and others, and this was an example of the utilization of national credit. I am using a local example, but the same multiplied across the country gives you an insight into the utilization of national credit. National credit can be extended on a much larger scale, as it has been again and again. This was done by Hamilton with his First National Bank, for water projects, roads and so-forth; it was the backbone of the Lincoln Presidency;—the "greenback" policy was a national credit policy; and the Reconstruction Finance Corporation was the instrument utilized by the Franklin Delano Roosevelt administration.
We can utilize this same method today. We don't have to go to Wall Street and beg to borrow money from them. They wouldn't lend money to Lincoln's Administration; they tried to screw Franklin Roosevelt over. So these Presidencies developed other means to meet the nation's requirements, they developed other tools modeled on what Alexander Hamilton had done before. We create—the government creates—national credit, lending against the future productivity of the nation. But that of course requires the people be employed productively!
Please go to LaRouchePAC to read more.
Today, we hear about the "gaming industry." We hear about the "prison industry." We hear about the "insurance industry," the "entertainment industry," the “tourism industry." And then we hear all the time from 'zillionaires'—like Gates and so forth, about the Great Reset, from on-high the so-called Olympians—we hear about monetary matters, stock-market values, quarterly profit earnings, and so-forth.
All of this—or rather none of this!—has anything to do with the physical economy!—with the real economy and how the real economy works. So we really must set all of that aside. It is really a relief, if you consider it, to step back and realize, "Oh, I can brush that aside," as so much noise.
This is also what the assault on Trump is really all about. Because the oligarchy doesn't want people, and they certainly don't want President Trump—to be leading a nation on the principles that founded it, and build it! The ideas of Alexander Hamilton, Abraham Lincoln and Lyndon LaRouche. So let's start somewhere basic: The source of wealth is human creativity. Human creativity is the source of all human productivity—for increases of labor power. That is, labor power not as raw power or physical muscle power, but the application of the mind to make work more effective, to develop the machines that do the work of tens, or hundreds of people, or even thousands of people.
Left, a 1602 Mariner's Astrolabe. Right, using an astrolabe to measure the angle of the Sun or a star above the horizontal. Source: Smithsonian.
If that sounds abstract, think of fire. Man invented the utilization of fire. There is no animal that can utilize fire; there is no monkey that can read a book, or write one; or create great art. From the very beginning man was beginning to create art, he was beginning to circumscribe and to encompass the world around him. Astronomy—not astrology, astronomy—was utilized very early on. So this was Mankind's domain; Man's domain was not the domain of the empirical, Man's domain was to discover principles, hidden apparently, initially, but to discover them in a more profound way and apply them. As with the very essential principle of fire.
This is a source of great optimism! We're not somehow stuck, we're not somehow condemned,—as by the 'green' ideology of finite resources. This has been disproved again and again. Malthus was disproved—you know Malthus, that the population grows geometrically and the food supply grows arithmetically; he and his minions predicted that London would be buried under horse manure. Obviously, it didn't happen; we developed coal. A very simple example, which many of you know.
The essential question is, how do we build our country out of the broader shambles of cultural and social discord and crisis and unite again as a nation? And play once again the role we are intent on playing, as John Winthrop called it "the City upon a Hill," for mankind?
Tapping Our Wealth of Labor Power
Let's start with some basic categories in terms of production, but starting with labor, starting with the human beings that compose the labor force, our labor force, our country. The same principles apply to every country regardless of their political structure; in terms of physical economy, the underlying laws are the same, and you either obey these laws or ultimately pay the consequences.
We look at the labor force, first in terms of the productive portion of the labor force. The productive portion of the workforce are those people making the physical changes on nature for society, for the future of our nation. That's the productive labor force, and if we look at that labor force as a whole, we can look at it in a certain sense as past, present and future—the past is our retired workforce; we have the current workforce; and the future—to be—workforce. Those are our children, our youth, who are being educated and that will become the workforce, or potentially can become the workforce.
That workforce, in the United States, is now a fraction of what it used to be. Well over 50 to 60 percent of our workforce used to be productively engaged, in the period during and after World War II and into the early 1960s. It was that platform from which we launched the space program, the 'Moon Shot' under President John F. Kennedy. All kinds of capabilities, strengths and limitations, but as a totality a tremendously productive workforce that emerged out of World War II.
Today, that productive workforce is something like 20 to 25 percent of the entire U.S. workforce. And if we define productive activity even more rigorously, looking at what that labor is being utilized for, and subtract out that which is being wasted on overhead, as in "endless useless wars," as President Trump has referred to them rightfully, it is significantly less. After all, it's pretty difficult to live in a tank, or eat ammunition. Military expenditures for national security are necessary, but military expenditures to police the world for the City of London and Wall Street is an entirely different matter. This is the productive efforts of our labor force being thrown overboard.
An unproductive generation: Ironically calling themselves "The Extinction Rebellion," while demanding the global economy cease all CO₂ emissions. Source: akx media
Since 1971 we have suffered from the disease known as "financialization," the "post-industrial economy." We also have the 'green' agenda of the Great Reset. We've suffered with this since the first Earth Day back in the 1970s, promoted at that time by Time magazine, members of Congress, and President Carter. There has been this endless parade of individuals, media efforts and so-forth to convince us that we are using up finite resources. Today, out of Davos and elsewhere, we are told that our only future is a no-growth future.
Contrary to this view, we have before us the capability to tremendously increase our productivity. Especially if we reduce the overhead, the useless overhead, in terms of financialization, in terms of paper shuffling, of the so-called post-industrial society.
Ironically, Covid-19 presents us with an opportunity. We have perhaps 7 to 9 million Americans who are now unemployed. We have several million small businessmen whose businesses may not be coming back. We know the sectors of our economy a little bit better that have been essential. We talk of "essential workers," and we talk of the essential productive activity of our farmers, our industry, our healthcare, and other sectors. We recognize the need to get our children back into school, for teaching to begin.
These are needs that can be met more fully, by utilizing those who are now unemployed from the service sector,—in a significant part because they are overhead. Not because they are unimportant, even the opposite. Those individuals need to be employed in productive activity, to utilize their creative capacities to more fully advance our nation and Mankind.
We can promote the rapid transformation of the United States economically, by shifting a portion of our workforce which is now in services,—what is called "FIRE": Finance, Insurance and Real Estate. Get these people out of these areas and begin employing them in expanding the physical productive capacities of the United States.
To do this, we have to have places where these individuals can be trained; we need energy to fuel new factories, basic industry and all of this to expand. We need to integrate and train this workforce for productive employment; and we’re going to accomplish this with national credit.
National Credit
National credit is a concept that goes all the way back to Alexander Hamilton, the first Treasury Secretary of the United States. He wrote his reports—the Report on Manufactures, the Report on National Credit, and so forth—as reports requested of him by the President and the Congress of the United States. His reports were adopted almost entirely, and certainly in large part—the Report on the National Bank, the reorganization of the national debt coming out of the American Revolution. His reports formed the foundation upon which the United States emerged from national bankruptcy after the revolutionary war.
Among Hamilton's concepts—singular concepts, drawing upon a tradition going back to Ben Franklin and before that to the Massachusetts Bay Colony—was the concept of credit, sovereign National Credit. Utilizing the nation's future productivity, if you will, to advance credit against that future productivity. Again, this is not an incomprehensible concept at all.
If you think about it, a homebuilder goes in—or used to be able to go in—to a Savings & Loan, and lays out plans for homes that he wants to build, on specific pieces of property that he intends to buy. He needs money to build these homes and then to sell them. A Savings & Loan or a bank would lend, based on a certain faith in, and knowledge of, the individual and the effectiveness of his plans; would lend the capital for that purpose. The contractor would then hire other people—suppliers, subcontractors and so-forth—and build those homes. Those homes would then house other productive families, and the economy would grow.
The Savings & Loans were themselves a product of the Franklin Roosevelt era and very much promoted by Jesse Jones and others, and this was an example of the utilization of national credit. I am using a local example, but the same multiplied across the country gives you an insight into the utilization of national credit. National credit can be extended on a much larger scale, as it has been again and again. This was done by Hamilton with his First National Bank, for water projects, roads and so-forth; it was the backbone of the Lincoln Presidency;—the "greenback" policy was a national credit policy; and the Reconstruction Finance Corporation was the instrument utilized by the Franklin Delano Roosevelt administration.
We can utilize this same method today. We don't have to go to Wall Street and beg to borrow money from them. They wouldn't lend money to Lincoln's Administration; they tried to screw Franklin Roosevelt over. So these Presidencies developed other means to meet the nation's requirements, they developed other tools modeled on what Alexander Hamilton had done before. We create—the government creates—national credit, lending against the future productivity of the nation. But that of course requires the people be employed productively!
Please go to LaRouchePAC to read more.
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