to Lyndon LaRouche's "New Bretton Woods" policy proposal.
interview appears in the November
10, 2000 issue of Executive Intelligence Review.
With a New Bretton Woods,
Argentina's Opportunities Are Great
Oct. 31, the following interview was conducted by telephone with former
U.S. Presidential pre-candidate Lyndon LaRouche, and broadcast live on
Carlos Gamero's hour-long "Economic Agenda" program on LU5 Radio
in the southern Argentine province of Neuquén. Neuquén is a major
oil-producing region, and it also has significant capabilities in the
nuclear field, including a major heavy-water plant. LU5 Radio is one of
the largest stations in the area, and it reaches most of southern
Argentina; the estimated audience for the well-publicized LaRouche
interview was of about a half-million listeners.
was interviewed by a panel of local dignitaries, most of whom were already
familiar with LaRouche's writings, and who wanted to question him about
his views on the world and Argentine crises. They included:
Aníbal Rodríguez Luppo, an engineer and professor at Comahue
Zingoni, president of the Rural Society of the Patagonian Northeast.
Carlos Kreplak, Vice President of ACIPAN, the regional chamber of
Rousillón, an engineer and a regional councilman for the Peronist
party, and a former foreign trade secretary of Neuquén province.
Ferrín, EIR's representative in Neuquén.
text of the interview follows:
LaRouche, please make an opening statement on your views with
regard to the international financial situation. What is the status of the
oil price crisis, and will this in fact lead to a crash of the dollar, as
you have stated in some of your writings?
Well, we are in fact on the edge of, not a collapse like that of 1929-31,
but a general disintegration of the entire international monetary and
financial system in its current form. Now, while we cannot say exactly
what week or day the system will disintegrate, if you watch the market
movements very closely, internationally, as I do, you see, over the past
two years since the crisis of 1998, the August-September crisis, an
increasingly desperate money-pumping by the United States, and the looting
of the euro and the Japanese yen to try to boost the dollar, and looting
of every other part of the Americas, as well as Asia and Europe.
is a greatly increasingly volatility and instability in the system. Any
disturbance at this point, of any significance, and the whole system will
blow. We can't say when, but it will blow.
those who are intelligent in this business are not worrying when or how
the crisis is going to occur. More and more, all leading circles in Europe
and the United States, etc., share my view. The thing to think about, is
not when the collapse occurs, but what do we do immediately
afterward. When the crash comes, it will be the biggest financial crisis
of European civilization in three centuries, with accompanying tremendous
political and social instability throughout most parts of the world.
the oil crisis itself, that, of course, is a by-product of this
speculation. It has nothing to do with the supply of oil. At present,
outside the United States, there are long-term agreements being negotiated
to take the trade of petroleum out of the hands of the speculators and put
it in the hands, again, of government-to-government agreements.
example, at the present time, there is a long-term, 20-year negotiation
being set up between western Europe and Russia, and also involving
countries in Asia, for 20 years of petroleum from Central Asia in return
for technology. That kind of thinking is in OPEC extensively. And while
such agreements will not solve the financial problem, they will introduce
an element of political stability in relations among states.
think we are headed to the possibility of an end to globalization, and a
return to more emphasis on nation-to-nation trading agreements in the
medium- and long-term.
course, we require a new monetary system, a New Bretton Woods system, a
return to the kind of policy that we had between 1945 and 1964. On that
basis, we can rebuild a new system and get out of the mess. The question
is, do we have the politicians and political power who have the courage
and the intelligence to make that kind of reorganization?
can only say, in conclusion on this point, that this is the worst crisis
in three centuries, but I personally am optimistic.
You made statements recently in a radio interview in Caracas, Venezuela,
where you said that the rise in the price of oil was due to speculation,
and you called for a return to government-to-government oil deals between
producers and consumers. Is the price of oil going to break $40 per
It's headed in that direction. You have to wait to see what happens
immediately after the U.S. Presidential elections next week. We're in a
highly artificial situation, where the U.S. government is doing everything
possible to try to prevent a crisis until after the Presidential elections
have been concluded. Once the election is concluded, then the tendency for
great instability will explode again. Unless the correct action is taken
among governments, you are going to have an explosion of the general
hyperinflationary tendency in world commodity prices, including petroleum.
example, the United States' real inflation rate, its commodity inflation
rate, is right now over 10%. Many categories are 20-30%. A few categories
are over 100%. This tendency is inevitable, unless we straighten the
the point is, will the governments negotiate, or will they not? The
inclination in Eurasia is to negotiate--that is, across all of Asia. The
problem is that in the United States, there is a determination not
to negotiate, and for that reason, many in Europe and elsewhere are
forecasting the likelihood that the United States dollar will crash.
Sometimes a desperado shoots himself.
In the interest of overcoming our problems in countries such as Argentina,
the problems of development, we wonder what advice you have for us. In
part, you've answered that in what you have already said, in discussing
the New Bretton Woods. Is such a New Bretton Woods system actually the way
out for the developing sector, and in particular for Argentina--a country
which is undergoing a recession, which is undergoing an invasion of
foreign products as a result of globalization? What do you recommend that
We are going to have to have what I proposed essentially back in 1982, the
draft proposal which I named "Operation Juárez," in honor of
the relationship of President Abraham Lincoln and President Benito Juárez
of Mexico. That was done in the context of the Malvinas War, in which I
was very much involved politically in that period. What we need is a
regional organization among many of the states of the Americas, with full
respect for their sovereignty, as a cooperative agency to undertake the
regional tasks of rebuilding each of these nations. Such a development, if
it occurs, will occur in cooperation with a group in Asia which is called
the ASEAN-Plus-3 group [Association of Southeast Asian Nations plus China,
Japan, and South Korea], which has been emerging as a very important group
in their common defense.
have a gigantic agreement being developed now between people in the
European Union, Russia and other countries, on a Eurasia-wide, OPEC-linked
oil-for-technology agreement. I think these ideas, which in some parts of
the world are closer to realization than in others, at a moment when the
present United States' policies are discredited worldwide, under
conditions of crisis, will either come to agreement, or we won't. If we
don't, the whole world will go into a Dark Age--not in the distant future,
but rather immediately.
we agree, then these regional blocs, which are emerging now, will become
the negotiating instruments through which we create something equivalent
to a New Bretton Woods. This would require a return to the pre-1965 ideas
about how to run an economy, which means to develop the prosperity of
agriculture, of industry, of technology, of infrastructure. This means, in
turn, to create long-term credit from state credit, within countries and
among countries. This means, essentially, a system of 25-year-long,
long-term, low-cost infrastructure and related credit policies.
objective would be to do, on a global scale, what the United States did
between 1945 and 1965, in the relation between Europe and the United
States. It will be a great challenge to do that, but it can succeed if
we're stubborn and patient at the same time. I think in one generation, we
can get out of the Hell we've been living through increasingly in the past
35 years. So, I'm optimistic.
Luppo: In the 1950s, Argentina was a pioneer in the area of nuclear
fusion as a source of cheap energy. It's our understanding, Mr. LaRouche,
that you have a Fusion Energy Foundation which is dedicated to the study
of these matters. Can you tell us something about this?
The Fusion Energy Foundation in the United States was shut down by the
government in a political operation, by the friends of George Bush, Sr.
and Henry Kissinger. But the work goes on. The fusion work has been
postponed, because of these delays over the years. The capabilities exist
and are still being worked on.
or at least in many parts of the world, there is a renaissance in nuclear
technology. Now, of course, in Argentina, in the Patagonian area in
particular, it's very important to have high-density energy sources in
areas that are presently very remote, because obviously, in order to
develop these areas, you need a reliable energy source in those areas.
presuming that we get a New Bretton Woods System, such programs in
Argentina and elsewhere--Brazil, of course--become possible.
have areas which cannot be efficiently developed without nuclear energy,
as in the case of India, for example. Even if you could do it without
nuclear energy, it would not be economical to do so. So, presuming we have
the political situation back under control, that is, a pro-development
orientation, obviously any economist who looks at the prospect for
development of Argentina--and particularly the underdeveloped areas, where
large-scale infrastructure development is indispensable--the
revitalization of the economy of Argentina would obviously mean a large
emphasis on this area of work.
conditions like that worldwide, the fusion question can then come back
seriously. The problem is that there is no money going into that area, and
not enough people working in it. And, of course, this requires the
revitalization of universities as well. I think the future of the fusion
program depends upon those kinds of considerations.
I would like to discuss the current situation facing Argentina, which has
been in a deep recession for the last two years. There's a fixed exchange
rate vis-à-vis the dollar. Ten years ago, a protectionist state policy
was dropped in favor of a free-market approach, but no efficiency
developed, as we had been promised. The result has been dumping and
contraband, small businesses are being wiped out, there's 15% official
unemployment (and 20% real unemployment), and all the productive sectors
are falling apart. The state is also inefficient: Total state indebtedness
is 50% of GNP.
1991, Mr. LaRouche, you forecast that Russia would end up in chaos and
economic catastrophe if it implemented IMF policies. Without trying to
make a mathematical equivalence between Russia and Argentina, what is your
view, as an international observer, of what awaits Argentina? Is there a
way out? What should our policy be? Can we grow to bring welfare to our
The problem is entirely the fact that, since 1989-90, there has been a
sort of syndicate of British, French, Canadian, Australian, New Zealand,
and Wall Street interests. They have set up a kind of international empire
of finance capital. There was an acceleration under these conditions of
what was called a radical, free-trade globalization policy. The problem
didn't start in 1989-90, but it was accelerated by the collapse of the
Soviet system. The process actually started about 35 years ago; it
accelerated in 1971, with the break-up of the old Bretton Woods agreement;
it accelerated greatly in the 1980s. So, every part of the world,
including the United States itself, is being ruined, bankrupted, by these
of a certain hatred against Argentina by the English-speaking powers,
Argentina has tended to suffer a little bit more than some of the other
countries. But every country in the world is suffering from this.
collapse of the system would mean a bankrupting of those financial
interests which have been running the world for this period. Very much
like the hatred against bankers which erupted with the 1929-31 collapse,
under those conditions, political forces would have the ability to
challenge the authority of finance capital. The simple salvation of
peoples would demand that new measures be taken which would essentially be
a return to the kind of thinking that existed 35 years ago and earlier.
if this present system were to continue, there would be no chance for any
country. Now, we have the worst financial collapse in modern history going
on right now. Very soon, this will strike with a certain finality. This
will give us the opportunity to turn the clock back to sanity, if we have
the political will to do so.
you look around the world as I do, you can see signs around the world.
People, not only Mahathir of Malaysia but others, are beginning to say,
"No, no, no! This is bad; we're going back to a better system."
Those voices can be heard in western Europe, in Russia. They're heard in
Japan, they're heard in Korea, they're heard in China. This is the mood
which is growing around the world, despite what we might hear from some of
the U.S. press.
a question of whether we can muster the political will and the optimism in
the population, to do what experience should have taught us we should do:
to create state credit to stimulate the entire economy with large-scale
necessary infrastructure projects, to promote the increased production of
food in a food-hungry world, to develop our industries again, and to
especially develop the high-technology frontier of technological progress.
And, not unimportant, is to give people back their pride.
such conditions, I think we have the opportunity, at least, to reverse
this situation. And my concern is to encourage people to realize that they
have reason to be optimistic, to admit that the financial system is
admittedly a disaster, but also to recognize that the collapse of the
financial system is an opportunity to return to sane policies we otherwise
would be unable to do.
from a Caller: Argentina today has serious social problems. The
economic targets of the government are not being met, or have no solution.
They're seeking new credits abroad. The question is, what is the view
internationally, the forecast, with regard to Argentina's future? And
again, what would be the proposals in your New Bretton Woods type of
The future of Argentina, at this point, depends entirely upon what happens
when, and after, the crash occurs, which is now oncoming. One would hope
that the crash would discredit the present international policies, and
would therefore generate a consensus among many nations to return to the
kind of system we had 35 years ago, or earlier. In that case, the
opportunities of Argentina are great.
Over recent years, Argentina's agricultural sector has transferred income
to other sectors of the economy, which is equivalent to the foreign debt
of Argentina. Argentina, unlike other countries, has no subsidies for
agricultural production, but taxes increase. It has very high interest
rates, which are usurious. The policies of the Banco de la Nación have
been a disaster. The question is: What message do you, Mr. LaRouche, have
for farmers and other producers, and even to the government, with regard
to these policy areas?
We have a very serious worldwide food shortage. Argentina is one of the
areas which has developed to expand its agricultural production. In some
way, we have to get some loans of between 1-2% over 25 years, and some
protection otherwise for agriculture--for example, stability of markets.
Under these conditions, I think we could have a very rapid expansion of
agriculture, and a stable one, in Argentina. It was done before, and we
can do it again.
We were laughing among ourselves when you mentioned interest rates of
1-2%, because the last refinancing of the agricultural debt that occurred
here was at 8% interest rates. But my question to you is with regard to
Malaysia, and what Prime Minister Mahathir has done. Understanding that
there are differences, is it feasible for other sovereign nations to do
what Malaysia has done?
Mahathir is a man of courage. He also had a certain sympathy and support
from Japanese and other interests. Malaysia has special characteristics,
stemming from the way it developed in the postwar period. Under these
conditions, with an unusually good leader and support and sympathy from
other countries, Dr. Mahathir had the courage to do what was needed, and
so far he has enjoyed sufficient support to succeed. It's different from
Argentina, as you say, but there are lessons to be learned which can be
applied in Argentina.
And what would those lessons be?
First of all, strong national spirit, confidence, friendly and cooperative
neighbors, and a less brutal attitude from the great neighbor to the
north. These things, I think, would be enough for success.
You were talking about alliances. This was of particular interest,
especially the question of Europe and Russia having oil-for-technology
deals. This has often been referred to as "compensated trade" in
economic discussions. Are these the kinds of measures to which we should
Absolutely. People should look at their friends in Italy, in the Italian
Parliament. You will find similar thinking right there.