10-26-2008, 10:43 AM
NEOLIBERAL DOGMA HAS FAILED NOW LISTEN TO LAROUCHE
http://larouchepub.com/hzl/2008/3542article_rhodes.html
Every participant in the Sixth Conference of the World Public Forum Dialogue of Civlizations, which took place on Oct. 9-13 after many weeks of daily reports of cascading catastrophe, respecting the collapse of the world financial system came with a shared awareness of having arrived at a turning-point in history. Speakers with the most diverse philosophical and geographic backgrounds were unanimous that the neo-liberal free-market economic dogma has been a complete failure. The conference's organizers saw this as confirmation that the goal for which the Forum was expressly initiated five years ago namely, to create a new paradigm for a more human world order has now been placed on mankind's agenda as its most urgent task.
In his opening address, Vladimir Yakunin, the Forum's president and co-founder, emphasized the existential nature of the crisis, in which the issue for mankind is "to be or not to be." As did many other speakers, he stressed that we are facing not merely a financial crisis, but a crisis of civilization, and that its underlying causes must be rooted out.
Yakunin's co-president, the Indian philosopher Jagdish Chandra Kapur, likewise a forum co-founder, saw the crisis as an opportunity to bring the future paradigm into harmony with the cosmic order, such that in this new world order, not only must every person have sufficient food, and a house to live in, but that each and all must be given the chance to realize the higher potential with which all human beings are endowed.
Russia's Deputy Foreign Minister Alexander Saltonov conveyed greetings from Foreign Minister Sergei Lavrov, who congratulated the Forum for the impressive contribution it has made in formulating conceptual and practical solutions for such fundamental questions as the coexistence of diverse social models, the preservation of nations' cultural identities under conditions of globalization, the role of religions in political life, and the resolution of regional conflicts.
Another clear expression of the changing times, were the remarks of Austrian Chancellor Alfred Gusenbauer, who took up two points: first, that the market-economy model has failed; and second, that confrontation as a means of conflict resolution has turned out to be incapable of achieving the desired political goals. And amazingly, the very same Chancellor who only recently had put his signature on the European Union's Lisbon Treaty, praised Austria's neutrality as the model for others to follow.
Even though this has so far not been expressed even approximately in the western media (which is hardly surprising), the Forum has evolved, over its five years of existence, into a significant counterpole to the neo-liberal World Economic Forum in Davos. This year, its annual conference on the island of Rhodes attracted over 700 participants from more than 70 nations, for more than four days of discussion, including two plenary sessions and eight working committees devoted to politics, economics, education, religion, law, culture, migration, the media, and, as a special committee, Chinese civilization. Even though each participant could only monitor a handful of the more than 250 speeches which were delivered, a selection of these revealed some philosophical pearls, especially, for example, some of the contributions on Chinese issues and topics.
Financial Collapse and National Security
The overriding theme, however, was the financial collapse, which each participant reacted to according to his or her own temperament and ideological orientation, ranging from scarcely concealed panic (speakers from certain western nations), to rather shortsighted Schadenfreude over the demise of U.S. claims to hegemony, to responsible concern that the failure of one paradigm does not necessary signify the emergence of a new and better one.
Many Russian speakers, especially in the committee on "Economic Parameters of the Integrated Development of the World Community," emphatically stressed that the spirit of Franklin Roosevelt is now making a comeback. Both on the Russian side, as well as interestingly enough on the European side, speakers emphasized that there is an awareness that relations between the United States and Russia have the utmost importance for the world strategic situation.
Jacques Sapir, professor of economics at the High School of Social Sciences in France, warned of the imminent danger of a collapse only days hence, if governments do not succeed in bringing the banking and liquidity crisis under control. Sapir stressed that he had to conclude that, even though he does not have anything against the European Union, the EU has collapsed since the outbreak of the crisis, and that since then, all decisions have been made on a national level. One German participant explained that the German government evidently has had no interest in intervening with German taxpayers' money in order to make up for mistakes made in other countries. There was talk of the failure not only of the EU, but also of the G7, which at its July summit in Japan had not even bothered to include the issue of the financial crisis on its agenda.
A second theme, which was only somewhat upstaged by the drama of the financial crash, was the existing outmoded systems of national security. The eastward expansion of NATO and of the EU have highlighted how quickly previously "frozen conflicts" can explode into hot ones. Salome Zurabishvili, Georgia's former foreign minister and currently chairman of the Way of Georgia Party, presented her view of the situation. Many discussion documents stated that the decision to launch Georgia's aggression against South Ossetia had been made not in Tbilisi, but rather on the level of the transatlantic command structure.
Another theme, one which is perhaps not as obvious as the end of the neo-liberal dogma and the transformation in the relative weighting of the world's nations, but one in which the current controls will no longer function, was the total lock-step control of the western media. Both inside the working committee, and in many conversations over breakfast, lunch, and dinner, the mass media as an instrument of manipulation of public opinion, was a hot topic, and this was also addressed by Yakunin in the plenum.
Hope for a Better Future
And herein, perhaps, lies the most important function of the WPFDC, in that it is far more in keeping with the actual political balance of power in the world today, than is the case with most western-dominated conferences and institutions. The United States, with its 16 Forum participants, did have the largest delegation, but also France with 13, Germany with 9, and Italy with 8 were well represented, and China and India also felt that they were adequately represented there.
The prevailing mood at Rhodes was a sense of an historic departure for a new kind of world. For this author, it brought up memories of a time which differed in its predicates, but which was similar in the systemic nature of the change under way, namely of 1989, when the Wall fell in November, and people had the profound sense of participating in an historic transformation, as they experienced the downfall of a system which everyone had thought to be unshakable, and began to feel hope for a better future. What Americans and Europeans today see as a crisis and a threat, is being experienced by the absolute majority of the nations of Asia, Africa, and Latin America, as cause for hope for a more human epoch, a dangerous situation, and yet with a perspective for new options.
Even though it may be difficult for Europeans to see it this way, what the fall of the Wall meant to people in 1989, is what is signified today, for the majority of mankind, by the collapse of the system of globalization, which has meant immense wealth for a tiny minority, but only spreading poverty, hunger, and death for billions of people.
Everything will hinge on whether the responsible people in the world's relevant institutions can grapple honestly and speedily with the question of what it was in their own thinking, that caused them to be taken in by neo-liberal dogma, and why they were incapable of taking up Lyndon LaRouche's widely circulated analyses of the problem, and of acting accordingly. There is still an opportunity, and perhaps the last, to correct this error.
FOR A NEW WORLD ECONOMIC ORDER IN THE TRADITION OF THE PEACE OF WESTPHALIA
Helga Zepp-LaRouche
http://larouchepub.com/hzl/2008/3542spch_rhodes.html
Helga Zepp-LaRouche, founder of the international Schiller Institute and of the Civil Rights Solidarity Movement (BüSo) in Germany, was among the keynote speakers at the Sixth General Meeting of the World Public Forum Dialogue of Civilizations, which was held in Rhodes on Oct. 9-13. The WPF was founded and is chaired by Vladimir Yakunin, chairman of the Russian Railways company, and, each year, brings together political, religious, and intellectual leaders from around the globe. More than 700 people from 70 countries attended this year. Her speech has been translated from German.
This conference is taking place at a time when even the previous advocates of the thesis that "there in no alternative to globalization," acknowledge in terror that we are in the midst of the meltdown of this globalization, and in the midst of a chain reaction of events that threaten, in a very short time, to bring most of world production and trade to a standstill.
It is therefore a very important step in the right direction, that French President Nicolas Sarkozy, at a meeting last Saturday [Oct. 4] with the heads of government of Germany, Italy, and Great Britain, and European Union representatives, announced the convening of an international conference, using the precedent of the conference convened by Franklin Roosevelt in 1944 in Bretton Woods, to lay the basic foundations for a new financial architecture. Nothing is more urgent than this. It is also long overdue that this must be a meeting of the so-called G-14 states, and that, among others, China, India, Brazil, and South Africa should be incorporated.
Worst Crisis Since the 14th Century
It is now thus all the more important to reach a common understanding of the theoretical fundamentals and principles, upon which the new financial architecture must be built if it is to be successful. Anybody who thinks it is sufficient merely to have a few "new rules" for the hedge funds and rating agencies, suspension of the EU's Maastricht Stabilization Pact in order to clean up the banks, and punitive reduction of the income of executives of failed companies, is mistaken.
If the world is to escape the danger of a collapse into a New Dark Age comparable only with that of the 14th Century, then the new financial system must be constructed on the basis of a qualitatively different paradigm than that of failed globalization. To attempt just to remove the most obvious, wild excesses, so as to find the quickest shortcut for returning to the old maximization of profit, can only end in catastrophe.
The parallels to the financial collapse of the 14th Century and the ensuing Dark Age certainly merit reflection: At that time, banking houses like the Bardi, Peruzzi, or Acciaiuoli had taken over all aspects of economic life: from financing the court of the King of England and the aristocracy, to the military, agricultural production, and trade. They operated according to the principle of profit maximization, without the slightest regard for the community, which they plundered beyond the point at which it could survive. They acted like a cancer which grows by taking over more and more of its victim, until the patient dies. In the end, the English King Edward III canceled repayment of the accumulated debts: That was the straw that broke the camel's back, and the banking houses collapsed.
A collapse of civilization resulted, decimating one-third of the population from India to Iceland. The combination of the Black Plague, failed harvests, hunger, superstition, witch hunts, and Flagellants meant a collapse that became known as the "New Dark Age." The paintings of Hieronymus Bosch vividly convey the insanity which dominated this era.
Globalization Today
In the era of globalization, the methods of the investment banks, the hedge funds, and the private equity firms are, doubtless, orders of magnitude more complex and sophisticated, due to the advances of the electronic age. But though they operate "globally," the principle has remained the same: the highest possible profit through control of scarcity. The principle "buy cheap, sell dear," and the maximum extraction of profit in the "shareholder value" society, have led to, on the one side, thousands of billionaires and over 10 million millionaires; but on the other side, billions of humans living below the subsistence level.
Additionally, since the invention of "creative financial instruments" by Alan Greenspan, massive sums have come into being, whose dimensions seem to belong to the domain of astronomy: three-digit trillions or perhaps quadrillions in outstanding obligations. Due to a lack of transparency, in particular with respect to over-the-counter (OTC) trades, no government or central bank has an accurate picture.
Most recently, since the outbreak of the so-called mortgage crisis in the United States 14 months ago, it has become clear to most insiders that a large part of these 16-digit-plus "assets" is in fact "toxic waste." The French magazine Marianne has just released figures only previously publicized by Executive Intelligence Review: The $1,400 trillion market in derivatives is 50 times the size of the combined GDP of all the world's nations! The attempt to honor this financial paper at 100% value, as the U.S. Administration is now trying to do with the Paulson plan (which is by no means limited to $700 billion, and is actually open-ended), can only lead to a rapid hyperinflationary disintegration of the world financial system. The events in Germany of 1923 now threaten to play out on a global scale!
Even if you take into account the impressive degree of incompetence of the greed-blinded investors, it must have been clear to the chief culprits that the unrestrained granting of mortgages to people without any down payment, would necessarily lead to a collapse of the mortgage and real estate markets, as soon as interest rates rose on the credit markets. And now it is also clear to them that hyperinflation will destroy the savings and living standards of the majority of the population, and threatens famine on an unprecedented scale. If this problem is not immediately solved through a reorganization based on the right principles, it threatens to bring on a collapse of humanity into a dark age in which billions could be victims.
LaRouche's New Bretton Woods
Now, it is a well-documented fact, that my husband, the American economist Lyndon LaRouche, has for a long time, and at every branching point, correctly forecast the accelerating tendency towards a systemic collapse of the financial system, on the basis of the axiomatically flawed decisions that were made; these include the promotion of consumerism in the U.S. of the 1950s, the elimination of fixed exchange rates and of the Bretton Woods System by Nixon in 1971, and the crashes of 1987 and 1997. On July 25, 2007, three days before the outbreak of the mortgage crisis, he explained in his now famous webcast, that the financial system had already collapsed and was hopelessly bankrupt, and that from then on, we would see various aspects of the bankruptcy rising to the surface.
I mention this, because in a situation so dangerous for humanity as this, it is better to listen to the solutions proposed by the economist who for decades has correctly analyzed the problem, rather than to those who, until recently, denied the systemic character of the crisis, or who still in August were saying, "The worst is already behind us."
Such an emergency conference, modelled on the Bretton Woods Conference of 1944, has long been proposed by Lyndon LaRouche, but he emphasized the difference in the conception of Bretton Woods intended by Franklin Delano Roosevelt, and what was implemented by Truman after Roosevelt's death, which was, in principle, a Keynesian system. It was Roosevelt's intention to use the Bretton Woods System to end forever the colonialism of the British Empire. It is precisely this intention of Roosevelt that must be implemented today with the New Bretton Woods.
In order for this new system to have credibility and integrity, the initiating powers—the U.S.A., Russia, China, and India—have to build the core of a representative group of nations which, in the tradion and spirit of the Treaty of the Peace of Westphalia, decide on a multicultural and multinational credit system, even while the current monetary and financial system is put through an orderly bankruptcy process.
A Credit System, Not a Monetary System
Because of the above-mentioned volume of outstanding obligations, it cannot be merely a matter of "new rules" for hedge funds and rating agencies. Instead, the financial system must be put through an orderly bankruptcy proceeding; most debts and speculative contractual obligations must be written off. Simultaneously, a system of fixed exchange rates must be established, along with National Banks for the creation of credit for productive investment.
The key to success of the reorganization, is that the new system, as a credit system, orient itself to the right that is anchored in the U.S. Constitution, to sovereign government creation of state credit, as demonstrated by the first Treasury Secretary of the United States, Alexander Hamilton, and his founding of the National Bank of the United States. In the U.S. the government can, through the Treasury, and with the authorization of the Congress, create credit, which thus becomes a legal means of payment.
The second way for credit creation to occur is by means of international treaties, which are also voted upon by Congress. Such treaty agreements by a group of leading nations, with the United States, would become formally the turning point upon which to build the alternative to the ever more dramatically escalating crisis. If a representative group of nations agrees upon a new system of credit, customs, and trade agreements, that is already a "New Bretton Woods System" and the last chance to prevent the risk of chaotic collapse that is becoming more dramatic every day.
The new system must be based on fundamentally different principles than the just-collapsed system of "globalization." The outsourcing of highly qualified jobs and production capacities to so-called "cheap labor countries," with significantly lower wages, poorer infrastructure, lower taxes, and lower standards of living, has not paid off for either the industrial nations or the developing countries. For example, the United States, as a result of this policy, no longer has medium-sized industries, while China, which has produced so much for export to the U.S., cannot cover the real costs of its total national production with its export earnings.
Thus, despite China's high growth rates of recent years, almost 70% of the population has not yet been freed from relative poverty, and China is not being paid enough for its exported goods, either to cover the costs of its cheap labor, or to cover part of the costs for the reproduction of society as a whole. And not only is the Chinese export market in the U.S. and elsewhere now endangered, but the escalation of the crisis threatens a massive loss in the value of the export earnings that have accumulated as currency reserves.
That was exactly how "market prices" ruled under conditions of globalization for most nations, but especially those subjected to diverse forms of monocultures, which meant de facto "primitive accumulation" of the national economy as a whole. The new system, therefore, must define "fair prices," which not only make possible a strong, protected internal market for industry and agriculture by means of protective tariffs, but also take into account the costs of optimal health and educational systems.
Creativity Is the Driver
In contrast to the insane and recently failed assumptions of the free traders, the real source of wealth in society is exclusively the creative capacity of man, which continually empowers him, through the discovery of new physical principles, to expand his knowledge of the laws of the universe. When this scientific and technological knowledge is applied to the production process, it leads to an increase in the productive powers of labor and production capacities, which in turn leads to an increase in the standard of living and life expectancy.
The fact that a world population of a few million people in hunting and gathering societies, could develop to today's six and a half billion human beings, is proof that by the application of these discovered universal principles in production processes, productivity increases by magnitudes that are significantly higher than the costs of the discovery and the investment in its application. Certainly, the general principle of progress is also required, since at every stage of development, natural resources are relatively limited, and new resources can only be defined through a new, qualitatively higher discovery.
Human creativity is thus the motor for the increase of relative potential population-density, which in turn is the necessary precondition for the long-term survival of human species. The increase in relative potential population-density is therefore the measuring rod for economic policy decisions. The Russian physicist Pobisk Kuznetsov once said that discoveries are always named after their author, such as "watt" and "ampere," so the concept of relative potential population-density, as an economic measure, would go down in history as the "La," for LaRouche.
The paradigm of the new system must therefore be centered on the maximum promotion of human creativity. A nation oriented to the common good will see as its most self-evident interest, the promotion of the creative capabilities of all its citizens, and above all, its children and youth. Such an orientation would not only promote those scientific and technological areas which, as "science drivers," optimize the character of the economy, but it would also expand the role in the universe of what scientist V.I. Vernadsky called the Noosphere. That means, it would further the process of the human race "growing up."
The New Bretton Woods must also be built upon the principles of the Peace of Westphalia, which, in 1648, ended a 150-year period of European wars, including the Thirty Years War. The most important principle of this treaty, upon which international human rights are based, was the idea that, in the interest of peace, all foreign policy must be oriented to the "advantage of the other." The warring parties had realized that, were the war to continue—a war in which whole areas of Europe had been decimated—nobody would be left to enjoy a victory.
Earlier, Nicolaus of Cusa, in the 15th Century, had laid the philosophical foundations for interntional law, in particular with the idea that harmony in the macrocosm can only exist when all microcosms can develop in the best of all possible ways, including viewing the development of other microcosms as in their own interest. Accordingly, peace in the world can only be achieved when all nations have the chance to realize the potential within them and their citizens, and simultaneously to promote the development of other nations. That was the same core idea upon which John Quincy Adams based his foreign policy of a Community of Principle among fully sovereign republics, which are allied by a higher interest of humanity.
We have now arrived at a point in history, at which we are confronted with the challenge with which Alexander Hamilton, in the Federalist Papers, was confronted with respect to the United States: namely, whether we are capable of giving ourselves a government and a political order which functions and is worthy of human dignity but this time, for the whole world. At a point where the possible collapse of humanity confronts us all too clearly, can we act together in time, to give the world a political and economic order that is in harmony with the Creation and the laws of the universe?
I think we can, and that this is the purpose of the individual, and of humanity!
NEW BRETTON WOODS MUST REVIVE PEACE OF WESTPHALIA
http://larouchepub.com/lar/2008/3542nbw_westphalia.html
Lyndon LaRouche responded today to reports of a planned "New Bretton Woods" conference of heads of state, before the end of November, by asserting that any such gathering must be based on the principles of the Peace of Westphalia, the 1648 treaty agreement that ended the Thirty Years War in Europe, and established the principle of cooperation among sovereign nation-states, around the idea of "the benefit of the other."
At the close of a heads of state summit of the 27 members of the European Union in Brussels earlier today, French President Nicolas Sarkozy, the current president of the European Union, said that a conference to establish a "New Bretton Woods" would take place in New York City within weeks. British Prime Minister Gordon Brown arrived at the Brussels meeting with a seven-page outline for a new global financial scheme, which he, too, called a "New Bretton Woods," although Brown's plan ruled out any regulation of offshore financial centers or hedge funds.
LaRouche cautioned: "If the heads of state proposing to convene this conference are, talking about some kind of negotiated set of terms, then you can forget it. It won't work. Right now, no government has genuine sovereignty. So you have to get back to basic principles, including the restoration of true national sovereignty."
LaRouche elaborated, "Any agreement, any discussion, must center around the combined benefit of all. You must start with the criterion of the Peace of Westphalia, or you will go nowhere."
LaRouche has been the architect of just such a New Bretton Woods proposal for decades. He has called for Four Powers—the United States, Russia, China, and India—to take the lead in convening a conference to carry out a bankruptcy reorganization of the hopelessly bankrupt global financial system, and to establish, by treaty agreement, a new, fixed-exchange-rate system, to end the tyranny of currency speculation. LaRouche has further emphasized that governments of the world must agree upon a series of high-priority, large-scale development programs, and establish a mechanism for issuance of long-term, low-interest credits to begin those development programs immediately.
"By launching urgently needed great projects on every continent," LaRouche declared, "we can put flesh and bone on the idea of the 'benefit of the other.' Let us take the most impoverished areas of the globe, starting with Africa, and build high-speed rail, nuclear power plants, modern water management systems. It may take us several generations to fully realize the benefits of these plans, but these kinds of efforts, starting with the bankruptcy reorganization of the present Anglo-Dutch Liberal system of globalization, free trade, speculation, and Malthusian genocide, embody the very essence of the Westphalian principle. Let us waste no time."
http://larouchepub.com/hzl/2008/3542article_rhodes.html
Every participant in the Sixth Conference of the World Public Forum Dialogue of Civlizations, which took place on Oct. 9-13 after many weeks of daily reports of cascading catastrophe, respecting the collapse of the world financial system came with a shared awareness of having arrived at a turning-point in history. Speakers with the most diverse philosophical and geographic backgrounds were unanimous that the neo-liberal free-market economic dogma has been a complete failure. The conference's organizers saw this as confirmation that the goal for which the Forum was expressly initiated five years ago namely, to create a new paradigm for a more human world order has now been placed on mankind's agenda as its most urgent task.
In his opening address, Vladimir Yakunin, the Forum's president and co-founder, emphasized the existential nature of the crisis, in which the issue for mankind is "to be or not to be." As did many other speakers, he stressed that we are facing not merely a financial crisis, but a crisis of civilization, and that its underlying causes must be rooted out.
Yakunin's co-president, the Indian philosopher Jagdish Chandra Kapur, likewise a forum co-founder, saw the crisis as an opportunity to bring the future paradigm into harmony with the cosmic order, such that in this new world order, not only must every person have sufficient food, and a house to live in, but that each and all must be given the chance to realize the higher potential with which all human beings are endowed.
Russia's Deputy Foreign Minister Alexander Saltonov conveyed greetings from Foreign Minister Sergei Lavrov, who congratulated the Forum for the impressive contribution it has made in formulating conceptual and practical solutions for such fundamental questions as the coexistence of diverse social models, the preservation of nations' cultural identities under conditions of globalization, the role of religions in political life, and the resolution of regional conflicts.
Another clear expression of the changing times, were the remarks of Austrian Chancellor Alfred Gusenbauer, who took up two points: first, that the market-economy model has failed; and second, that confrontation as a means of conflict resolution has turned out to be incapable of achieving the desired political goals. And amazingly, the very same Chancellor who only recently had put his signature on the European Union's Lisbon Treaty, praised Austria's neutrality as the model for others to follow.
Even though this has so far not been expressed even approximately in the western media (which is hardly surprising), the Forum has evolved, over its five years of existence, into a significant counterpole to the neo-liberal World Economic Forum in Davos. This year, its annual conference on the island of Rhodes attracted over 700 participants from more than 70 nations, for more than four days of discussion, including two plenary sessions and eight working committees devoted to politics, economics, education, religion, law, culture, migration, the media, and, as a special committee, Chinese civilization. Even though each participant could only monitor a handful of the more than 250 speeches which were delivered, a selection of these revealed some philosophical pearls, especially, for example, some of the contributions on Chinese issues and topics.
Financial Collapse and National Security
The overriding theme, however, was the financial collapse, which each participant reacted to according to his or her own temperament and ideological orientation, ranging from scarcely concealed panic (speakers from certain western nations), to rather shortsighted Schadenfreude over the demise of U.S. claims to hegemony, to responsible concern that the failure of one paradigm does not necessary signify the emergence of a new and better one.
Many Russian speakers, especially in the committee on "Economic Parameters of the Integrated Development of the World Community," emphatically stressed that the spirit of Franklin Roosevelt is now making a comeback. Both on the Russian side, as well as interestingly enough on the European side, speakers emphasized that there is an awareness that relations between the United States and Russia have the utmost importance for the world strategic situation.
Jacques Sapir, professor of economics at the High School of Social Sciences in France, warned of the imminent danger of a collapse only days hence, if governments do not succeed in bringing the banking and liquidity crisis under control. Sapir stressed that he had to conclude that, even though he does not have anything against the European Union, the EU has collapsed since the outbreak of the crisis, and that since then, all decisions have been made on a national level. One German participant explained that the German government evidently has had no interest in intervening with German taxpayers' money in order to make up for mistakes made in other countries. There was talk of the failure not only of the EU, but also of the G7, which at its July summit in Japan had not even bothered to include the issue of the financial crisis on its agenda.
A second theme, which was only somewhat upstaged by the drama of the financial crash, was the existing outmoded systems of national security. The eastward expansion of NATO and of the EU have highlighted how quickly previously "frozen conflicts" can explode into hot ones. Salome Zurabishvili, Georgia's former foreign minister and currently chairman of the Way of Georgia Party, presented her view of the situation. Many discussion documents stated that the decision to launch Georgia's aggression against South Ossetia had been made not in Tbilisi, but rather on the level of the transatlantic command structure.
Another theme, one which is perhaps not as obvious as the end of the neo-liberal dogma and the transformation in the relative weighting of the world's nations, but one in which the current controls will no longer function, was the total lock-step control of the western media. Both inside the working committee, and in many conversations over breakfast, lunch, and dinner, the mass media as an instrument of manipulation of public opinion, was a hot topic, and this was also addressed by Yakunin in the plenum.
Hope for a Better Future
And herein, perhaps, lies the most important function of the WPFDC, in that it is far more in keeping with the actual political balance of power in the world today, than is the case with most western-dominated conferences and institutions. The United States, with its 16 Forum participants, did have the largest delegation, but also France with 13, Germany with 9, and Italy with 8 were well represented, and China and India also felt that they were adequately represented there.
The prevailing mood at Rhodes was a sense of an historic departure for a new kind of world. For this author, it brought up memories of a time which differed in its predicates, but which was similar in the systemic nature of the change under way, namely of 1989, when the Wall fell in November, and people had the profound sense of participating in an historic transformation, as they experienced the downfall of a system which everyone had thought to be unshakable, and began to feel hope for a better future. What Americans and Europeans today see as a crisis and a threat, is being experienced by the absolute majority of the nations of Asia, Africa, and Latin America, as cause for hope for a more human epoch, a dangerous situation, and yet with a perspective for new options.
Even though it may be difficult for Europeans to see it this way, what the fall of the Wall meant to people in 1989, is what is signified today, for the majority of mankind, by the collapse of the system of globalization, which has meant immense wealth for a tiny minority, but only spreading poverty, hunger, and death for billions of people.
Everything will hinge on whether the responsible people in the world's relevant institutions can grapple honestly and speedily with the question of what it was in their own thinking, that caused them to be taken in by neo-liberal dogma, and why they were incapable of taking up Lyndon LaRouche's widely circulated analyses of the problem, and of acting accordingly. There is still an opportunity, and perhaps the last, to correct this error.
FOR A NEW WORLD ECONOMIC ORDER IN THE TRADITION OF THE PEACE OF WESTPHALIA
Helga Zepp-LaRouche
http://larouchepub.com/hzl/2008/3542spch_rhodes.html
Helga Zepp-LaRouche, founder of the international Schiller Institute and of the Civil Rights Solidarity Movement (BüSo) in Germany, was among the keynote speakers at the Sixth General Meeting of the World Public Forum Dialogue of Civilizations, which was held in Rhodes on Oct. 9-13. The WPF was founded and is chaired by Vladimir Yakunin, chairman of the Russian Railways company, and, each year, brings together political, religious, and intellectual leaders from around the globe. More than 700 people from 70 countries attended this year. Her speech has been translated from German.
This conference is taking place at a time when even the previous advocates of the thesis that "there in no alternative to globalization," acknowledge in terror that we are in the midst of the meltdown of this globalization, and in the midst of a chain reaction of events that threaten, in a very short time, to bring most of world production and trade to a standstill.
It is therefore a very important step in the right direction, that French President Nicolas Sarkozy, at a meeting last Saturday [Oct. 4] with the heads of government of Germany, Italy, and Great Britain, and European Union representatives, announced the convening of an international conference, using the precedent of the conference convened by Franklin Roosevelt in 1944 in Bretton Woods, to lay the basic foundations for a new financial architecture. Nothing is more urgent than this. It is also long overdue that this must be a meeting of the so-called G-14 states, and that, among others, China, India, Brazil, and South Africa should be incorporated.
Worst Crisis Since the 14th Century
It is now thus all the more important to reach a common understanding of the theoretical fundamentals and principles, upon which the new financial architecture must be built if it is to be successful. Anybody who thinks it is sufficient merely to have a few "new rules" for the hedge funds and rating agencies, suspension of the EU's Maastricht Stabilization Pact in order to clean up the banks, and punitive reduction of the income of executives of failed companies, is mistaken.
If the world is to escape the danger of a collapse into a New Dark Age comparable only with that of the 14th Century, then the new financial system must be constructed on the basis of a qualitatively different paradigm than that of failed globalization. To attempt just to remove the most obvious, wild excesses, so as to find the quickest shortcut for returning to the old maximization of profit, can only end in catastrophe.
The parallels to the financial collapse of the 14th Century and the ensuing Dark Age certainly merit reflection: At that time, banking houses like the Bardi, Peruzzi, or Acciaiuoli had taken over all aspects of economic life: from financing the court of the King of England and the aristocracy, to the military, agricultural production, and trade. They operated according to the principle of profit maximization, without the slightest regard for the community, which they plundered beyond the point at which it could survive. They acted like a cancer which grows by taking over more and more of its victim, until the patient dies. In the end, the English King Edward III canceled repayment of the accumulated debts: That was the straw that broke the camel's back, and the banking houses collapsed.
A collapse of civilization resulted, decimating one-third of the population from India to Iceland. The combination of the Black Plague, failed harvests, hunger, superstition, witch hunts, and Flagellants meant a collapse that became known as the "New Dark Age." The paintings of Hieronymus Bosch vividly convey the insanity which dominated this era.
Globalization Today
In the era of globalization, the methods of the investment banks, the hedge funds, and the private equity firms are, doubtless, orders of magnitude more complex and sophisticated, due to the advances of the electronic age. But though they operate "globally," the principle has remained the same: the highest possible profit through control of scarcity. The principle "buy cheap, sell dear," and the maximum extraction of profit in the "shareholder value" society, have led to, on the one side, thousands of billionaires and over 10 million millionaires; but on the other side, billions of humans living below the subsistence level.
Additionally, since the invention of "creative financial instruments" by Alan Greenspan, massive sums have come into being, whose dimensions seem to belong to the domain of astronomy: three-digit trillions or perhaps quadrillions in outstanding obligations. Due to a lack of transparency, in particular with respect to over-the-counter (OTC) trades, no government or central bank has an accurate picture.
Most recently, since the outbreak of the so-called mortgage crisis in the United States 14 months ago, it has become clear to most insiders that a large part of these 16-digit-plus "assets" is in fact "toxic waste." The French magazine Marianne has just released figures only previously publicized by Executive Intelligence Review: The $1,400 trillion market in derivatives is 50 times the size of the combined GDP of all the world's nations! The attempt to honor this financial paper at 100% value, as the U.S. Administration is now trying to do with the Paulson plan (which is by no means limited to $700 billion, and is actually open-ended), can only lead to a rapid hyperinflationary disintegration of the world financial system. The events in Germany of 1923 now threaten to play out on a global scale!
Even if you take into account the impressive degree of incompetence of the greed-blinded investors, it must have been clear to the chief culprits that the unrestrained granting of mortgages to people without any down payment, would necessarily lead to a collapse of the mortgage and real estate markets, as soon as interest rates rose on the credit markets. And now it is also clear to them that hyperinflation will destroy the savings and living standards of the majority of the population, and threatens famine on an unprecedented scale. If this problem is not immediately solved through a reorganization based on the right principles, it threatens to bring on a collapse of humanity into a dark age in which billions could be victims.
LaRouche's New Bretton Woods
Now, it is a well-documented fact, that my husband, the American economist Lyndon LaRouche, has for a long time, and at every branching point, correctly forecast the accelerating tendency towards a systemic collapse of the financial system, on the basis of the axiomatically flawed decisions that were made; these include the promotion of consumerism in the U.S. of the 1950s, the elimination of fixed exchange rates and of the Bretton Woods System by Nixon in 1971, and the crashes of 1987 and 1997. On July 25, 2007, three days before the outbreak of the mortgage crisis, he explained in his now famous webcast, that the financial system had already collapsed and was hopelessly bankrupt, and that from then on, we would see various aspects of the bankruptcy rising to the surface.
I mention this, because in a situation so dangerous for humanity as this, it is better to listen to the solutions proposed by the economist who for decades has correctly analyzed the problem, rather than to those who, until recently, denied the systemic character of the crisis, or who still in August were saying, "The worst is already behind us."
Such an emergency conference, modelled on the Bretton Woods Conference of 1944, has long been proposed by Lyndon LaRouche, but he emphasized the difference in the conception of Bretton Woods intended by Franklin Delano Roosevelt, and what was implemented by Truman after Roosevelt's death, which was, in principle, a Keynesian system. It was Roosevelt's intention to use the Bretton Woods System to end forever the colonialism of the British Empire. It is precisely this intention of Roosevelt that must be implemented today with the New Bretton Woods.
In order for this new system to have credibility and integrity, the initiating powers—the U.S.A., Russia, China, and India—have to build the core of a representative group of nations which, in the tradion and spirit of the Treaty of the Peace of Westphalia, decide on a multicultural and multinational credit system, even while the current monetary and financial system is put through an orderly bankruptcy process.
A Credit System, Not a Monetary System
Because of the above-mentioned volume of outstanding obligations, it cannot be merely a matter of "new rules" for hedge funds and rating agencies. Instead, the financial system must be put through an orderly bankruptcy proceeding; most debts and speculative contractual obligations must be written off. Simultaneously, a system of fixed exchange rates must be established, along with National Banks for the creation of credit for productive investment.
The key to success of the reorganization, is that the new system, as a credit system, orient itself to the right that is anchored in the U.S. Constitution, to sovereign government creation of state credit, as demonstrated by the first Treasury Secretary of the United States, Alexander Hamilton, and his founding of the National Bank of the United States. In the U.S. the government can, through the Treasury, and with the authorization of the Congress, create credit, which thus becomes a legal means of payment.
The second way for credit creation to occur is by means of international treaties, which are also voted upon by Congress. Such treaty agreements by a group of leading nations, with the United States, would become formally the turning point upon which to build the alternative to the ever more dramatically escalating crisis. If a representative group of nations agrees upon a new system of credit, customs, and trade agreements, that is already a "New Bretton Woods System" and the last chance to prevent the risk of chaotic collapse that is becoming more dramatic every day.
The new system must be based on fundamentally different principles than the just-collapsed system of "globalization." The outsourcing of highly qualified jobs and production capacities to so-called "cheap labor countries," with significantly lower wages, poorer infrastructure, lower taxes, and lower standards of living, has not paid off for either the industrial nations or the developing countries. For example, the United States, as a result of this policy, no longer has medium-sized industries, while China, which has produced so much for export to the U.S., cannot cover the real costs of its total national production with its export earnings.
Thus, despite China's high growth rates of recent years, almost 70% of the population has not yet been freed from relative poverty, and China is not being paid enough for its exported goods, either to cover the costs of its cheap labor, or to cover part of the costs for the reproduction of society as a whole. And not only is the Chinese export market in the U.S. and elsewhere now endangered, but the escalation of the crisis threatens a massive loss in the value of the export earnings that have accumulated as currency reserves.
That was exactly how "market prices" ruled under conditions of globalization for most nations, but especially those subjected to diverse forms of monocultures, which meant de facto "primitive accumulation" of the national economy as a whole. The new system, therefore, must define "fair prices," which not only make possible a strong, protected internal market for industry and agriculture by means of protective tariffs, but also take into account the costs of optimal health and educational systems.
Creativity Is the Driver
In contrast to the insane and recently failed assumptions of the free traders, the real source of wealth in society is exclusively the creative capacity of man, which continually empowers him, through the discovery of new physical principles, to expand his knowledge of the laws of the universe. When this scientific and technological knowledge is applied to the production process, it leads to an increase in the productive powers of labor and production capacities, which in turn leads to an increase in the standard of living and life expectancy.
The fact that a world population of a few million people in hunting and gathering societies, could develop to today's six and a half billion human beings, is proof that by the application of these discovered universal principles in production processes, productivity increases by magnitudes that are significantly higher than the costs of the discovery and the investment in its application. Certainly, the general principle of progress is also required, since at every stage of development, natural resources are relatively limited, and new resources can only be defined through a new, qualitatively higher discovery.
Human creativity is thus the motor for the increase of relative potential population-density, which in turn is the necessary precondition for the long-term survival of human species. The increase in relative potential population-density is therefore the measuring rod for economic policy decisions. The Russian physicist Pobisk Kuznetsov once said that discoveries are always named after their author, such as "watt" and "ampere," so the concept of relative potential population-density, as an economic measure, would go down in history as the "La," for LaRouche.
The paradigm of the new system must therefore be centered on the maximum promotion of human creativity. A nation oriented to the common good will see as its most self-evident interest, the promotion of the creative capabilities of all its citizens, and above all, its children and youth. Such an orientation would not only promote those scientific and technological areas which, as "science drivers," optimize the character of the economy, but it would also expand the role in the universe of what scientist V.I. Vernadsky called the Noosphere. That means, it would further the process of the human race "growing up."
The New Bretton Woods must also be built upon the principles of the Peace of Westphalia, which, in 1648, ended a 150-year period of European wars, including the Thirty Years War. The most important principle of this treaty, upon which international human rights are based, was the idea that, in the interest of peace, all foreign policy must be oriented to the "advantage of the other." The warring parties had realized that, were the war to continue—a war in which whole areas of Europe had been decimated—nobody would be left to enjoy a victory.
Earlier, Nicolaus of Cusa, in the 15th Century, had laid the philosophical foundations for interntional law, in particular with the idea that harmony in the macrocosm can only exist when all microcosms can develop in the best of all possible ways, including viewing the development of other microcosms as in their own interest. Accordingly, peace in the world can only be achieved when all nations have the chance to realize the potential within them and their citizens, and simultaneously to promote the development of other nations. That was the same core idea upon which John Quincy Adams based his foreign policy of a Community of Principle among fully sovereign republics, which are allied by a higher interest of humanity.
We have now arrived at a point in history, at which we are confronted with the challenge with which Alexander Hamilton, in the Federalist Papers, was confronted with respect to the United States: namely, whether we are capable of giving ourselves a government and a political order which functions and is worthy of human dignity but this time, for the whole world. At a point where the possible collapse of humanity confronts us all too clearly, can we act together in time, to give the world a political and economic order that is in harmony with the Creation and the laws of the universe?
I think we can, and that this is the purpose of the individual, and of humanity!
NEW BRETTON WOODS MUST REVIVE PEACE OF WESTPHALIA
http://larouchepub.com/lar/2008/3542nbw_westphalia.html
Lyndon LaRouche responded today to reports of a planned "New Bretton Woods" conference of heads of state, before the end of November, by asserting that any such gathering must be based on the principles of the Peace of Westphalia, the 1648 treaty agreement that ended the Thirty Years War in Europe, and established the principle of cooperation among sovereign nation-states, around the idea of "the benefit of the other."
At the close of a heads of state summit of the 27 members of the European Union in Brussels earlier today, French President Nicolas Sarkozy, the current president of the European Union, said that a conference to establish a "New Bretton Woods" would take place in New York City within weeks. British Prime Minister Gordon Brown arrived at the Brussels meeting with a seven-page outline for a new global financial scheme, which he, too, called a "New Bretton Woods," although Brown's plan ruled out any regulation of offshore financial centers or hedge funds.
LaRouche cautioned: "If the heads of state proposing to convene this conference are, talking about some kind of negotiated set of terms, then you can forget it. It won't work. Right now, no government has genuine sovereignty. So you have to get back to basic principles, including the restoration of true national sovereignty."
LaRouche elaborated, "Any agreement, any discussion, must center around the combined benefit of all. You must start with the criterion of the Peace of Westphalia, or you will go nowhere."
LaRouche has been the architect of just such a New Bretton Woods proposal for decades. He has called for Four Powers—the United States, Russia, China, and India—to take the lead in convening a conference to carry out a bankruptcy reorganization of the hopelessly bankrupt global financial system, and to establish, by treaty agreement, a new, fixed-exchange-rate system, to end the tyranny of currency speculation. LaRouche has further emphasized that governments of the world must agree upon a series of high-priority, large-scale development programs, and establish a mechanism for issuance of long-term, low-interest credits to begin those development programs immediately.
"By launching urgently needed great projects on every continent," LaRouche declared, "we can put flesh and bone on the idea of the 'benefit of the other.' Let us take the most impoverished areas of the globe, starting with Africa, and build high-speed rail, nuclear power plants, modern water management systems. It may take us several generations to fully realize the benefits of these plans, but these kinds of efforts, starting with the bankruptcy reorganization of the present Anglo-Dutch Liberal system of globalization, free trade, speculation, and Malthusian genocide, embody the very essence of the Westphalian principle. Let us waste no time."