LaRouche in 2004 Emergency Recovery Doctrine



Economics: At The End Of A Delusion

by Lyndon H. LaRouche, Jr.
January 12, 2002

 

The following is the the Foreword to a Special Report on economic recovery policy from the current depression, and its crucial distinctions from the Great Depression of the 1930s. The report will be available shortly from this presidential campaign.

We could recover successfully from the presently deepening world economic depression, but only if we now choose to do so. It is Hamlet's challenge again: To be, or not to be. To accept the deadly heritage of our nation's recently habituated folly, or to free ourselves from the deadly shackles of prevailing opinion, that we might ascend to the sublime, and triumph over the fatal error of our recent times.

On the time-scale of history, the terminal moment of our nation's recent follies has now arrived. Now, if our nation is to survive, we must acknowledge, that the leading trends in policy-influencing opinion, over the recent thirty-odd years, have been cumulatively disastrous in their net effect. This is especially clear when the U.S. experience of 1966-2001, is contrasted with the effect of those different policies, which were characteristic of the earlier, 1945-1964 interval of post-war reconstruction.

We must admit, therefore, that, in this matter, as Shakespeare wrote, in another of his tragedies, the fault lies not in our stars, but in ourselves. The fault lies in the wrong-headed, chiefly post-1964 choice of the policies, which have become, during the recent three decades, the prevalent, accepted habits of belief and practice, among both policy-makers and the population generally.

Since the crisis-ridden 1962-1965 years, since approximately the time a post-Kennedy U.S.A. plunged deeply into its war in Indo-China, the world has drifted into a series of radical shifts in prevailing values of that moment,[1] a set of utopian illusions, contrary to any long-term economic reality. However, since these illusions have become the axiomatic, even hysterical standard for setting economic and related policy, this cultural-paradigm-shift has acquired the character of an unfolding mass-delusion.

The economic collapse so induced, is not merely an economic collapse. It is not something the "outside world" has thrust upon us. It is a product of the delusion working from inside the minds of most of the population of the United States itself. What we are experiencing, is not an intrusion by unwanted events. It is a product of what have become our population's widely accepted beliefs. Therefore, what you are suffering today is, taken all together, the experience of living inside the fag end of a popular delusion.

We have, still, even at this late date, the opportunity to survive, but, if that is to occur, two conditions must be met. First, we must make the implied sudden, and radical, changes in the cultural paradigms governing our policy-making. Second, we must do this promptly, without whimpering delays.

Merely typical of the more recent trends of wrong-headedness of official and popular opinion, are the disastrous effects of the 1995-2001 delusion called "the new economy," or the widespread damage done to the economy, and the great and increasing suffering spread among our citizens, by such delusions as belief in "free trade," "deregulation," "share-holder values," "out-sourcing," and "globalization."

Pity the stubborn fellow who says that "we must fix the system," but, like the IMF's Anne Krueger, insists that he will not permit us to act contrary to those infectious delusions which have been, for more than thirty years, the continuing cause of the present crisis. Typical are those who now concede almost anything else, but insist that we must not depart from the bounds of that present IMF, "floating-exchange-rate" system, which has been, in fact, the chief, continuing cause of the world's onrushing monetary, financial, and economic disaster of the past thirty years! If we were to leave such still prevalent, pathological assumptions as that untouched, no economic recovery of the constitution of the present society would ever become possible.

I do not propose that we should return exactly to the previous, 1933-1945, or 1945-1964 policies. I offer a much more modest, and realistic proposal. We must learn the lesson to be adduced from comparing an earlier success, with a subsequent catastrophe. We must apply that lesson in ways which include discarding the worst of those presently prevailing beliefs which were widely popularized during the recent thirty-five years. We must build upon the recognition of those achievements of that 1933-1964 recovery and growth, which led us out of an earlier economic depression and the after-effects of devastating world war.

But, we must also go beyond those precedents, to add some improvements which were either lacking in the general policies of the 1945-1964 system, or are peculiarly appropriate to the changed circumstances confronting us as a result of recent decades' developments.

What This Report Contains

By the nature of the present world crisis, this report must include programmatic and analytic definitions of the problems and the methods of their solution. However, given the nature of competent knowledge of economics among legislators, economists, and citizens generally, the presentation of the essential elements of analytical and programmatic materials, must be supplemented by educational materials which are indispensable, if the reader is to achieve competent understanding of both the crucial features of, and solutions for this onrushing, global economic-social catastrophe.

If the reader is patient with me—when I am compelled to turn for a moment to relevant educational material which may, at some points, annoy him—we may hope that history will repay his or her courtesy to me, with the kindness of the benefit he or she will therefore receive from times to come.

This present report, taken as a whole, includes contributions by EIR economics specialists Richard Freeman, John Hoefle, and other contributors; particularly their study of some of the presently most relevant features of the successful measures of economic recovery from a general depression, which were taken under the leadership of President Franklin D. Roosevelt. A review of crucial features of the Franklin Roosevelt approach to recovery, is being supplied by those specialists.

In my part in this report, my assigned focus is limited, as much as is allowable, to those other, presently most crucial, issues of scientific method, which were either not included in that President's approach, or are changes which have not been taken into account until now.

My part features certain key excerpts from among my original contributions to economics, excerpts which not only make it possible to explain the roots of the Franklin Roosevelt reform's success from a scientific standpoint, but which also identify those features which must be added to our present monetary, financial, social, and economic policies, if we are to bring a successful economic recovery into motion, under the specific circumstances of the present crisis.

Meanwhile, it is most important for the reader, that I emphasize that which recent developments have demonstrated, and that in the most dramatic way. My qualifications for speaking with such a tone of authority on these matters, are outstanding in the world today. What I have proposed are bold, sudden, but indispensable measures; therefore, they must tend to meet stiff resistance, unless the depth and extent of my authority in such matters were clearly stated. Therefore, I must emphasize, that more than thirty years of my consistently successful long-range forecasting, has settled factually the crucial questions of the dispute between me and my opponents. The experiment has been conducted, over nearly two generations, and the results are conclusive, in my favor.

For related reasons, my part in this report must include emphasis upon certain notable elements of analytical method, which are uniquely the fruit of original discoveries made by me in the specialized field of the Leibnizian science of physical economy.[2] The combination of the present world crisis, and the changes in the physical-economic conditions of the planet during the recent half-century, present the world with problems whose significance had been overlooked in earlier times. My own special contributions to the science of physical economy, are therefore an integral part of the new subject-matters which must be included within our nation's economic-policy deliberations.

Worse Than 1930s Great Depression

For example. For reasons to be considered in the course of my account, consider the following.

At the present time of accelerating world crisis, the reshaping of the interacting, but distinct factors in our national monetary, financial, and economic policies, must go beyond what was done in organizing earlier recoveries of our national economy. Typical among the causes for the difference between the earlier and present world depression, are the following.

As I have emphasized in earlier locations, when the preceding world depression struck with global force, during 1929-1933, about a dozen years (less than a generation) had passed since the massive build-up, during the 1861-1917 interval, of European civilization's physical-economic growth of productivity, military power, and other technological advances.

Today, nearly thirty-five years have passed (nearly two generations) since the willful destruction of the per-capita physical-productive power of civilization began, a destruction typified, at the beginning, by the savagery wreaked upon the United Kingdom's economy by the first Harold Wilson government. The challenge today, is therefore of qualitatively greater relative magnitude and complexity than that confronting Franklin Roosevelt during the 1930s.

Apart from Harold Wilson's almost Luddite wrecking of the British economy, the principal other initial damage to the 1945-1964 recovery of the U.S. and world economies, was introduced by Richard M. Nixon, beginning with the impact on national policy of his 1966-1968 campaign for the Presidency. Nixon's later decision of August 1971, wrecking the original Bretton Woods system, and putting the world under the ruinous lunacy of a floating-exchange-rate dictatorship, is crucial. His launching of the present, floating-exchange-rate monetary system, then, built into the present world monetary-financial system those axiomatic features which foredoomed it to collapse, unless those changes had been reversed.

The worst damage done to the U.S. economy itself, even worse than by the Henry A. Kissinger-controlled Nixon's follies themselves, was set into accelerating motion under the Zbigniew Brzezinski-controlled 1977-1981 U.S. Carter Administration. The latter administration, following the script which Britain's H.G. Wells had presented in his 1928 The Open Conspiracy,[3] willfully wrecked the largest ration of the physical and financial infrastructure upon which both the U.S. economic recovery from the 1930 depression, and the post-war growth had depended.

The world monetary-financial system is now hopelessly doomed. It can not be reformed; it can only be replaced, by returning to something like the original Bretton Woods system of the 1945-1958 interval. During the entire period, especially during the period since Alan Greenspan's predecessor Paul Volcker introduced the present policies of "controlled disintegration of the economy" into the Federal Reserve System,[4] the 1979-2002 addition of this set of axioms into the world monetary-financial system, by Volcker, turned monetary and financial policy into an engine for destroying the real economy. This was accelerated under Presidents Nixon, George H.W. Bush, and William Clinton, beginning with two notable pieces of 1982 legislation: Garn-St Germain, and Kemp-Roth. The real economy has been accelerating downhill ever since (Figures 1a and 1b).[5]

The impact of this long wave of post-1964 destruction of the physical economy of the U.S.A. and much of the world besides, has not only introduced policy-making problems of great magnitude. Also, as I shall indicate, the measures which must be taken, to ensure a durably successful economic recovery, will take the world into new categories of activity, including new approaches to managing the biosphere. These two, respectively quantitative and qualitative considerations, point toward problems of a type which might have been safely overlooked during earlier periods of successful economic growth. It is the urgency of these new policy-making problems, which most clearly defines my contributions to the practice of economic-policy-shaping as indispensable at this time.

I recast that just stated, crucial point, as follows:

Some of the new problems to be considered here and now, involve recently emerging strategic factors, and also strategic opportunities, which had not existed, at least not immediately, over the earlier course of the history of the world since 1776-1789. These new conditions of combined threats and opportunities, have become functionally unignorable under present circumstances. That is where my original discoveries in the field perform an essential role.

Moving Safely to the Exits

The current stage of the world depression can be compared to a fire in a crowded theater. The economy in which you are seated, is that theater. Do not panic, but, rather, prepare to move, as I shall direct you, to the exits—that, in an orderly fashion, at a steady pace. First, as if to calm the nerves of the panicked fellow standing next to you, I must remind both of you, briefly, of my authority for dealing with crises of this specific type. "The doctor who specializes in such diseases, is," so to speak, "here."

To seek to calm the nerves of excitable fellows, I situate the discussion against the background of certain relevant, crucial patterns in developments over the period since the election-crisis of Nov. 7, 2000.

During the interval from U.S. Election Day, Nov. 7, 2000, through Jan. 15, 2001, I issued a series of forecasts, identifying both the issues of that election-crisis, and the expected character of certain crucial developments which would unfold during the first twelve months of the next President's term. During that period, reports documenting those economic and political forecasts appeared in such readily available website and other locations as that of the weekly Executive Intelligence Review, and publications of my campaign for the Year 2000 U.S. Presidential nomination.[6]

Today, none of those recent forecasts, nor my earlier, documented long-range forecasts, dating back thirty-five years,[7] have ever been refuted by subsequent events.

A year later—November 2000-January 2001, through November 2001-January 2002—the majority of the same set of forecasters opposed to me then, are still echoed by most of the establishment mass-mediaocracy, repeating today the same kind of foolish propaganda they were emitting a year earlier, with but one curious point of emphasis added. Earlier, that crowd had promised an early rebound of a shaky economy's financial and monetary markets; a year later, approximately the same crowd of forecasters is gushing out similarly dubious sophistries: But, the wildly hysterical mercenaries of Wall Street have added their non-sequitur. They have argued, that since the markets have taken a terrible beating over the course of the past year, now the markets have no room to maneuver; they have no way to go but up. These spinners conclude: the markets will surely go up, more or less spontaneously. With a gloat in their eye, they predict, either, that the upward bounce must come some time later this year, or, perhaps, the next.

Those who recall the 1930s, will be reminded of the 1929-1933 world depression, when, during the Hoover re-election-campaign of 1932, the Republicans and most Wall Street survivors promised the voters, "recovery is just around the corner."

Now, today, the "new economy" has collapsed, Enron is a shambles, the role of the U.S. economy as the "importer of last resort" for most of the world, has already collapsed, and will collapse much more. Unemployment zooms, as the increase in the number of employers going bankrupt, or hovering at the edge, also zooms. As governments turn to a next round of budget-cutting, they are shocked to discover that the loss of tax-revenue caused by the cuts, necessarily exceeds the amount cut from government expenditures. A sense of desperation spreads throughout the Americas, western Europe, Japan, Korea, and elsewhere.

All in all, this will look to some like a new world economic depression, like that of 1929-1933. In fact, it is much worse than was experienced in such places as the U.S.A., Canada, or Europe during the 1930s. Presently, if we put the special cases of Russia, China, and India to one side for the moment, most of the world has clearly entered the beginning-phase of what some early Twentieth-Century economists discussed under the academic heading of an hypothetical general breakdown-crisis.

Quantitative and Qualitative Recovery Measures

When compared to today's crisis, the depression of the 1930s seems relatively a problem of more sharply reduced quantity of economic activity. It would appear to those earlier economists, that, as in the case of a depression like that of the 1930s, recovery could now be effected by reversing trends in generation and flows of credit into investments in increased quantities of existing categories of physical output. Those opinions are far too optimistic. The present crisis, is essentially qualitative. In the case of the present collapse of the world's monetary-financial system, the distinction between "quantitative" and "qualitative," is crucial.

In the first, simpler case, a quantitative solution for an economy may be more or less adequate, if putting the combination of bankruptcy-reorganization of the monetary-financial system, combined with addition of protectionist measures, could utilize state-created credit to bring the reorganized economy up to a breakeven level, merely through reactivating existing productive and related physical-economic capacity.

In the second case, the combination of monetary-financial reorganization and credit-expansion, does not rise to a sufficient level of combined active and idled physical-productive capacity to reach a breakeven level of real turnover. No solution is available within the limits of existing categories of such investment, without radical structural changes in the composition of categories of investment and production.

A glance at the difference between the first, pre-war phase of the U.S. recovery measures of the 1930s, and the war-mobilization phase, helps to clarify the meaning of a distinction between a quantitative and qualitative form of economic depression. The examination of those successive intervals affords a first approximation of the distinction between quantitative and qualitative cases.

Even into the war-mobilization phase, which began in the United States even prior to the Nazi invasion of Poland, the U.S. economy was still using up significant rations of inventories of semi-finished goods dating from prior to October 1939. Even during that period, large-scale public works programs of more or less qualitative significance, such as the TVA program, did build up the base on which the later, relatively explosive war-time economic expansion was based. Indeed the war-time mobilization would not have been possible without such public works and related investment.

The explosive growth in the economic-recovery program was a characteristic of the shift of U.S. economic-policy priorities to a national "arsenal of democracy" mission-orientation. For those of us who were adults during the 1940s and 1950s, the most accessible "marker" of this "arsenal of democracy" phase, was the U.S. government's production and continued ownership of a vast inventory of machine-tools, which were, in large part, leased to private contractors as part of the package for military and related production. The early super-achievement of President Roosevelt's pre-announced targets for levels of production of military aircraft, is typical of the phenomena.

It was the combination of infrastructure build-up, heavy rations of capital-intensive production investment, and not only a massive decrease in unemployment, but an accelerating up-shift in technological categories of employment, which characterized the qualitative transformation of the U.S. economy, upward, over the 1939-1945 interval, even under the condition that about 16 millions of us were drawn out of the labor-force for military service.

I shall return to examine this matter of qualitative recovery-measures in more precise terms, at an appropriate, later point in this report. At the present moment, my point is to illustrate the distinction between merely quantitative and qualitative recovery-measures; and that, with the relatively most accessible choice of real-life clinical case.

Today, a general, qualitative breakdown-crisis is already darkening the horizon. To illustrate the nature of that challenge, I list a number of typical actions to be taken to halt the depression and launch a self-sustainable recovery.

1. We must a.) put the international monetary-financial system into immediate, governments- dictated reorganization; b.) restore a fixed-exchange-rate system; c.) establish exchange, capital, financial controls, trade controls, and fair-trade forms of protectionist measures internally and externally; d.) increase drastically rates of taxation on financial capital gains, and substitute production- and technology-oriented medium- to long-term investment tax credits to entrepreneurs; e.) generate large masses of government-created credit at rates between 1-2% for, chiefly, a combination of entrepreneurial investment production and infrastructure investment; and f.) implement a general bank-reorganization program, which keeps needed banks performing essential functions for the community while under even drastic financial reorganization.

2. We replace "free trade" with the promotion of protected hard-commodity international trade, as part of the promotion of a global, long-term economic-recovery effort.

3. We must introduce the economic equivalent of a high-technology-oriented "arsenal of democracy" recovery program, both in the domestic economy and in world trade, to provide the qualitative dimension needed to reverse the monstrous loss of technologically progressive, physical-productive capacity and potential—a loss which has accumulated in the world as a whole during the recent thirty years, especially the recent quarter-century.

We had better take such measures, to stop that process of collapse before it hits with irresistable, crushing force.

With the guidance and backing of the world's leading economist of that time, Henry C. Carey, President Abraham Lincoln made possible the U.S. economic miracle of 1861-1876, as Franklin Roosevelt, at a later point, saved the U.S.A. Under the impact of Roosevelt's intervention, the U.S.A., and the world, avoided the risk of a slide into an actual breakdown-crisis.

Nonetheless, as I have already indicated above, I say again, that there are certain crucial points of difference between the challenge of organizing an economic recovery under conditions of today's threatened breakdown crisis, and the challenge of the world depression successfully met by incoming President Franklin Roosevelt. I shall deal with the most typical such new challenges, in my section of this report.

By this means, by introducing science to replace the forms of mysticism which have become popular among most U.S. academic economists and their dupes, we aim to free the people of the U.S.A., and other nations, from the deadly grip of that delusion which has brought those dupes, like fabled lemmings, to the brink of catastrophe. Whether we purge our nation's policy-shaping of those popularized follies, or the nation destroys itself by clinging to those follies, we may safely forecast the end of a delusion, either way: by ridding the victims of their fatal follies of belief; or, by witnessing the institutions eliminating the carriers of those delusions, themselves.

The ball is in your corner.

[1] I have outlined the 1962-1965 interval, and its effects, in earlier locations, such as "Zbigniew Brzezinski and September 11," EIR, Jan. 11, 2002; and "The Continuing American Revolution," EIR, Jan. 18, 2002.

[2] The science of physical economy was originally developed by Gottfried Leibniz through a series of original discoveries of universal physical principle which he introduced during the interval 1671-1716. My intensive adolescent studies in Seventeenth- and Eighteenth-Century philosophy, made me a disciple of that great man's work, which led me, more than a decade later, into my own original, additional contributions to that field. Notably, the American System of political-economy, as associated with the work of Benjamin Franklin, Alexander Hamilton, the Careys, and Friedrich List, were largely products of the impact of Leibniz's work on those minds, each in his own time. The American System of political-economy has nothing in common with the teachings of John Locke and Adam Smith, but is directly opposed to both, on grounds of fundamental opposition respecting scientific principle.

[3] H.G. Wells, The Open Conspiracy (London: Victor Gollancz, 1928).

[4] Fred Hirsch, former editor of the London Economist, writing in Alternatives to Monetary Disorder (New York: Council on Foreign Relations, 1977), affirmed that "controlled disintegration in the world economy is a legitimate object for the 1980s." Paul Volcker delivered the Fred Hirsch Memorial Lecture at Warwick University in Leeds, U.K., in November 1978, and began his speech by citing Hirsch's dictum on controlled disintegration. Campaigning as a U.S. Democratic Presidential pre-candidate, in New Hampshire, on Oct. 16, 1979, I denounced Volcker's October 1979 actions (published in EIR, Oct. 23-29, 1979). The Carter Administration's demolition of the U.S. economy was pre-designed by the New York Council on Foreign Relations' 1975-1976 Project for the 1980s (New York: Magraw-Hill, 1977), a project co-supervised by Carter National Security Advisor Zbigniew Brzezinski and Secretary of State Cyrus Vance.

[5] The combined Nixon and Carter Administrations set into motion a set of relations among monetary, financial, and economic processes, which I have illustrated by the pedagogical chart 1a: The Triple Curve, or "typical collapse function." Speculative gains in financial markets are sustained by diverting monetary flows out of the real economy, into financial markets. This is sustained, increasingly, by looting the economic basis through large-scale attrition in basic economic infrastructure, and by driving down the net after-inflation prices paid for wages and production of operatives. Thus, we have a "hyperbolic" curve, upward, of financial aggregates; a slower, but also hyperbolic curve, upward, of monetary aggregate needed to sustain the financial bubble; and, an accelerating, downward, curve in net per-capita real output. This reflects the accelerated looting of the base (e.g., Garn-St Germain, Kemp-Roth), to sustain the financial bubble.

During no later than 1970, the amount of added monetary aggregate reached the kind of cross-over point (Figure 1b) which set into motion the Weimar Germany hyperinflationary explosion of June-November 1923. When such a cross-over point is reached, the system is doomed to an early end, a threatened breakdown-crisis. At that point, the system must be overhauled in bankruptcy, most of the financial aggregate wiped from the accounts, and a new system supplied to give the economy itself a fresh start.

[6] For the text of these economic and political forecasts, see the following issues of EIR: Dec. 1, Dec. 15, Dec. 22, 2000; and Jan. 12, Jan. 19, Jan. 26, Feb. 16, and Feb. 23, 2001. EIR's website address is http://www.larouchepub.com; the Presidential campaign site is www.larouchein2004.org. Most relevant for the topics being presented above, are the following items presented in EIR: "LaRouche Addresses Washington, D.C. Conference," (Nov. 14, 2000) on the subject of the implications of the Nov. 7 Presidential-election crisis (also webcast worldwide); my Dec. 1, 2000 "The U.S. Strategic Interest in Russia" (EIR, Dec. 15); LaRouche addresses a Dec. 12 Washington, D.C. seminar, "Presidential Election Campaign 2000: 'The Fall of Ozymandias' " (also webcast worldwide); LaRouche issues his "The Demise of an Importer of Last Resort" (EIR, Dec. 23, 2000 and Jan. 19, 2001); LaRouche addresses a Jan. 3 Washington, D.C. seminar (also webcast worldwide), and issues his Jan. 4, 2001 announcement of his official Presidential pre-candidacy for the year 2004 (EIR, Jan. 12, 2001); "We Told You So: The LaRouche Record of Economic Forecasts, Fall 1999-Election 2000" (EIR, Feb. 9, 2001); LaRouche statement of Feb. 4 "On the California Energy Crisis: As Seen and Said by the Salton Sea" (EIR, Feb. 16, 2001); LaRouche Jan. 15 address, "The New Bretton Woods System: Framework for a New, Just World Economic Order" (EIR, Feb. 23, 2001).

[7] In my conventions, a "short-term" cycle is one year; "medium-term" signifies three to seven years; "long-term" signifies a period of approximately eight to twenty-five years, or more. All my basic forecasting, since 1959-1960, has been long-term. My occasional forecasts of probable conditions to be reached within the short- to medium-term period ahead, have always been based upon a forecast for a long-term cycle. The reasons for those kinds of distinctions and forecasting practice, will be indicated within the body of this report.

 


[report]

 EIR 29# : L2004 Economics:

 

1. WHAT IS ECONOMICS?

No rational discussion of "economics" is possible, unless we define what that term should signify. Unfortunately, especially today, after the so-called "cultural paradigm-shift" which erupted during the late 1960s, most of today's generally circulating definitions of the term, are proffers of allegedly "self-evident" gobbledegook, which are not designed in a way which might provide the hearer with a sense of functional correspondence to reality.

The first thing to know, is that, contrary to some ivory-tower "true believers," the subject of economics did not exist in any rational form prior to what is known, alternately, as the Fifteenth-Century, or "Golden" Renaissance. It was that Renaissance which defines the difference, between, the essentially A.D. 300-1400 medieval history of European civilization, and its post-1400 phase, as modern civilization. Economy began with the birth of the modern nation-state, over the course of the Fifteenth-Century, Italy-pivotted Renaissance.

By national economy, I mean a continuing process of durable improvements in the potential relative population-density of the whole population and its posterity. By economics, we should signify the existence and use of some scientifically demonstrable principle, which permits us to forecast efficiently the connection between today's practices and the worsening, or improvement of the relative well-being of the present population and its posterity, as a whole, a generation or two ahead.

"Economic Forecasting," properly understood, signifies assuming accountability, in the present, for the future consequences of the choices made today. Without such accountability, there is no morality worthy of that name. That requires the existence of a form of government which holds itself efficiently accountable for ensuring such improvements, as are measurable in terms of their per-capita and per-square-kilometer physical effects. In applying that definition of "economics," it is not sufficient that that government should intend to bring about such beneficial results; the intention must be an efficient one.

Societies qualifying as such economies did not exist in ancient or medieval history. Those who ruled then, used the subject populations as virtual human cattle, for the advantage of the ruling oligarchy and its lackeys. For them, as for the notorious feudalist Dr. Francois Quesnay, the fruit of society belonged, by divine right, to the overlord; the rights of the toilers were limited to the same kind of rights a farmer accords to the lower forms of life he hunts down, or maintains, or culls as cattle. That oligarchical system is also typical of the philosophy of John Locke, and the radical-positivist definition of "shareholder value" recently upheld by the majority of the U.S. Supreme Court. The notion of accountability for the general welfare of a human population, as specifically human, as a whole, did not exist.

Although the first reasonable approximations of true nation-state economies, were those of France's Louis XI and England's Henry VII, the adoption of a the set of universal principles on which the modern sovereign form of nation-state and its economy have been based, the notion of the general welfare, had been already brought into being, earlier in that same century, largely through the leading role of Cardinal Nicholas of Cusa, as typified by 1.) His Concordantia Catholica, which set forth the principled argument for replacement the imperial system as it existed under feudalism, with a community of principle among individually sovereign nation-states; 2.) His founding of modern experimental physical science, as merely typified by his De Docta Ignorantia; 3.) His role in pulling together the circle of scientists and other influentials, on whose work Columbus, among others, depended, for the wave of great trans-oceanic explorations launched during the latter decades of that century.

The pivotal principle of law, upon which that coming-into-being of the sovereign nation-state republic was premised, was the adoption of the doctrine of natural law known variously as the general welfare or common good, as typified by the central argument of law later expressed by the 1776 U.S. Declaration of Independence, and as stated explicitly as the fundamental law of the U.S.A., in the Preamble of the U.S. Federal Constitution.

Although this involves subject-matters which are, in part, lodged in the history of pre-modern centuries, even the mere right to existence of the institution of the modern nation-state, has never been uncontested, even within globally extended European civilization, up to the present day. Brutish cultural relics of the cultural heritage of the ancient Rome and medieval feudalism, have more than merely persisted into the Twentieth Century; the effort to reverse the clock of modern history, back to brutishness, has been the dominant post-World War II trend in Anglo-American policy-shaping for about a half-century. The U.S. wars against its historic adversary, the British monarchy, is an example of the conflict between the U.S. defense of the principle of the general welfare, against that modern relic of Norman-allied Venice's pro-feudalist rentier-financier policies, which was the British monarchy. The Preamble of Constitution of that British puppet, the Confederate States of America, for example, stressed the suppression of the principle of the general welfare, in favor of the immoral John Locke's defense of slavery.

Today, those depraved relics of our ancient and medieval past, are resurgent in such forms as so-called "globalization," "shareholder value," "the rule of world law," and the effort to establish a military dictatorship in the form universal fascism. Fascism is typified today by such lackeys and cronies of the late Professor William Yandell Elliot as Henry A. Kissinger, Zbigniew Brzezinski, and Samuel P. Huntington. These are typified today by family interests, and associated major law firms, gathered around such influential institutions as the Smith-Richardson, Olin, and Mellon-Scaife foundations, and associated circles such as the Foreign Policy Research Institute, the American Enterprise Institute, the Cato Institute, and RAND Corporation. That fascist ideology is also rooted axiomatically in the doctrines of the Mont Pelerin Society, Heritage Foundation, et al.

Typical, as I have summarized this in earlier reports on the implications of the celebrated events of Sept. 11, 2001, are the views expressed by the collaborators Zbigniew Brzezinski, Samuel P. Huntington, and British Arab Bureau veteran Bernard Lewis. Inside the U.S. itself, a new, utopian military doctrine, has sought to destroy the legacy of that legacy of the citizen-soldier typified in military history by Germany's Gerhard Scharnhorst, and the republican U.S. legacy of Benjamin Franklin, Abraham Lincoln, General Douglas MacArthur and President Dwight Eisenhower.

As Huntington speaks for these often explicitly self-described universal fascists generally, their image of the role of the military harks back to the genocidal practices of the Roman legions and the Nazi Waffen-SS: legions of the professional warrior, recruited from assorted nationalities, as the instrument of death deployed by a global neo-Roman, universal fascist tyranny, which hunts, herds, and culls populations as the Nazi Waffen-SS echoed the Roman legions in this genocidal practice.

These universal fascists have appeared in the Anglo-American sphere as chiefly products of the process out of which the British Fabian Society emerged. The most influential such ideologues include Thomas Huxley's creation, H. G. Wells, whose 1928 The Open Conspiracy typifies the way in which the Fabian method promotes the universal fascist influences expressed by such Wellsian fanatics of the Brzezinski circle as the former U.S. Secretary of State Madeleine Albright, who confessed herself a Wells follower, speaking as Secretary of State, openly, in a public address. The influence of Bertrand Russell, and his Unification of the Sciences project, is an integral part of that same campaign for universal fascism detailed, step by step, in Wells' The Open Conspiracy.

The principal target for destruction chosen by these contemporary universal fascists, is always the modern sovereign form of nation-state republic, and the doctrine of the general welfare or common good. It is sufficient to study The Open Conspiracy, and to note that Bertrand Russell signed on to that policy publicly, to understand how the influences of universal fascism work intellectually, as they permeate the departments specializing in the so-called "social sciences," in academic and related life in the U.S. and its government institutions today.

In summary, these universal fascists, with their present, frantic search for an "integralist" pagan ethic," are the modern expression of the attempted resurgence of the model of the ancient Roman and kindred empires, and of the worst of medieval Europe's history. The essence of the movement for universal fascism, typified by Brzezinski et al. within the U.S.A., is a movement whose purpose for existence is to eradicate the existence of the modern nation-state from any and all parts of this planet, and to replace the nation-state with world- government over the population-controlled inhabitants of a global, dehumanized zoo.

There is no significant danger to civilization on this planet today, which could not be made manageable, were this threat to be removed. To paraphrase a famous Harvard professor, those who do not wish to recognize my emphasis upon history, may be forced to relive the very worst part of what they who presently profess "I don't go there," prefer to ignore.

Therefore, all competent policy assessments of the present world economic situation, that of the U.S.A. itself most notably, are rooted in a grasp of the continuing historical origins of modern society. The following brief summary of the point elaborated in other published locations, should therefore be sufficient here.

During the pre-Fifteenth-Century history of Europe, especially since the emergence of imperial Rome out of the its military conquests during the same general period as the close of the Second Punic War, the power to make law was invested in a figure selected to perform the function of a pagan Pontifex Maximus, an emperor whose function was centered in his authority to arbitrate disputes respecting essential matters of doctrine and related practice among the diverse religious and cultural groups of which the subjects of that tyranny were composed. In other words, like many of today's would-be busy-bodies setting themselves up as the arbiters of peace, the Pontifex Maximus imputed to his own person the right to "play God." The Roman Empire, in particular, was thus maintained as a permanent state of warfare, representing a process of hunting and culling the ranks of, even exterminating some of the sundry religious and cultural groupings, either within the Empire or at its periphery, as the associates of Brzezinski and Huntington adhere to such perspectives today..

This state of imperial depravity of ancient Empires, such as Babylon and Rome, was also characteristic of the ultramontane faction of medieval society over the interval A.D. 300-1400. It was this characteristic of medieval Europe under the Venice-Norman alliance, which led into that vast depopulation and lunacy of the mid-Fourteenth-Century "New Dark Age," a dark age of genocide which one Twentieth-Century historian has characterized as "a distant mirror" of that troubled century's likely outcome.

By its essential implications of doctrine and practice, the oligarchical interest represented by the function of Pontifex Maximus, divided the subjects of that imperium between the oligarchs and their lackeys, on the one side, and the mass of the subject population, the human cattle, on the other. The human cattle fell into two grand sub-classes, herded and hunted cattle. Thus, the imperial law of the ultramontane tradition, by reducing herded and hunted subjects to cattle, reduced the rulers themselves, including the Pontifex Maximus himself, to the axiomatically implied status of a beast like that which Britain's Thomas Huxley claimed to be, a beast from H. W. Wells' Island of Dr. Moreau.

Thus, in an imperial, or kindred social order, the mass of the human population, of all categories, was herded and culled according to the perceived interest, or merely the caprices, of the ruling authority. Thus, in imperial society (including all those societies called variously "ultramontane" or "integralist," or "globalized"), the people exist for the convenience of the ruling power. Whereas, the modern form of sovereign nation-state, as prescribed by our Federal Constitution, the state exists for the promotion of the present and future population as a whole.

I emphasize the most crucial point of relevance for shaping contemporary economic policies.

The state must therefore be subject to control by the principle of its obligation to serve the promotion of the general welfare, to serve the common good. The moral right of the government to exist, is conditional upon its efficient promotion of the general welfare of all of the present generations and their posterity. No type of rule of law may be tolerated, which violates that principle.

That notion of law premised upon the notion of the common good, is the distinction of civilized government in modern society. That is the distinction which defines the modern sovereign nation-state republic; that distinction was the essence of the continuous quarrel between the patriots of the United States and the British monarchy over the interval 1776-1901, and the quarrel between President Franklin Roosevelt and the British monarchy's Prime Minister Winston Churchill, during World War II. That is the essential difference between the American System of political-economy, as exemplified by the work of Hamilton, the Careys, List, and Lincoln, on the one side, and the neo-Venetian, British rentier-financier system of Adam Smith, Jeremy Bentham, and the Mont Pelerin Society, et al., on the other.

This function of the principle of the general welfare, is no mere precept, no mere tradition. It has a functional basis in the essential distinction between a man and an ape, between the human individual and all other living species. This connection is, as I shall indicate here, the key to understanding the physical principles of economy on which the entirety of a competent practice of statecraft, including economics, depends in a efficient and fundamental way.

For reasons included in this chapter of my report, an efficient understanding of economics, and of the economics issues underlying the present world crisis, could not be attained within that medley of mysticism and reductionist fanaticism which pervades today's usually taught classroom instruction in not only economics as such, but also the teaching of mathematics in particular and science in general. Therefore, the required understanding of the problems of policy-shaping posed to us by the present crisis, must include emphasis upon s certain issues of scientific method. The feature of economic science on which I have placed emphasis in this chapter of the report, is the deeper practical implications of the notion of physical-economic cycles, especially long-range cycles.

 

A. The Physical Basis for Economic Cycles

To serve the stated purpose of this report as a whole, I must now turn to define what I mean by the practice of a science of physical economy. I must show why and how that science is indispensable for understanding the predominant influence of long-range and other physical-capital cycles, in steering the evolution of the economy, from point to point, within such governing cycles.

Economics, when properly defined as a branch of physical science, should be understood in terms of principles defined in the same way universal physical principles are, first, hypothesized, and, later, proven experimentally, in any competent form of physical science. In practice, the measurements to be made for society as a whole, are to be made in reference to general cycles, long-range cycles, of not less than one to two generations. This means, that the measurement of performance in periods of less than a generation's span, must apply to the short-term measurements in economy, echoes of those same methods Kepler used for astrophysics, in connection with his original discovery of a principle of universal gravitation.

So, Kepler defines the universal physical principles of organization of the Solar System, from the standpoint of the long-range cycles which are commensurate with completed orbits, and with the cycle of those combined planetary, lunar, and comets' orbits, of which latter the System as a whole is visibly composed. The motion within any local, much shorter interval, must be understood as an expression of both the orbit as a whole, not, contrary to today's typically foolish Wall Street statistician, the orbit as the expression of the cumulative effect of localized motions. This is as true for economic cycles, as it is for Solar ones. This approach to the principle of cycles, was the method underlying and permeating the original discovery of the calculus, by Gottfried Leibniz.

The long cycles built into the top-down design of the Solar System, do have a determining influence upon the circumstances in which life within the Solar System depends; but, for reasons I shall identify here a bit further on, the authority of those cycles does not prevent man from changing the Solar System, including changing it for the better, if but only gradually, and over very, very long periods of sustained action.

The widely accepted methods among today's economists, of measuring economic cycles in a simple statistical way, commits the same blunder which Kepler exposed as the common, anti-scientific error of the earlier astronomical dogmas of such diverse authorities as the Aristotelean Claudius Ptolemy, Copernicus, and Tycho Brahe. The use of the mere describing of nature as a substitute for discovering the underlying universal physical principles at work, is the typical folly of those lame-brained statisticians who pretend to be economists, as it is abhorred in competent modern astrophysics since Kepler. It is for the reason of their refusal to recognize this issue of method, that all the principal forecasters opposing my forecasts, have been, at their best, simply incapable of providing competent projections of their own.

The source of the failure of those forecasters, has been, to a large degree, the incompetence of the way in which economics has usually been taught in all leading universities, and often practiced in the profession in general. For example, if they had studied and understood Kepler's founding of the first approximation of a comprehensive mathematical physics, and the developments in the same direction, through Leibniz, Gauss, and Riemann, et al., after Kepler, they would not have produced the often catastrophic effects typical of their work and its continuing influence on policy-shaping today.

The importance of Kepler for economics today, is that he was the founder of the first successful effort to establish a comprehensive form of mathematical physics, the first to establish a comprehensive method of attack which freed science from the ivory-tower mathematician's blackboard, and to civilize mathematics by bringing it into the real world, the world of universal physical principles, rather than the purely imaginary world of abstract ivory-tower mathematical speculations. The first discovery of an experimentally defined principle of universal gravitation, by Kepler, is the point of departure from which all subsequent progress in developing a comprehensive form of modern physical science has emerged. So, it is inevitable, that fertile scientific minds are impelled, repeatedly, to return to Kepler's arguments, as Albert Einstein did in his reappraisal of the importance of the discoveries of both Kepler and Bernard Riemann.

Kepler recognized certain anomalies in the orbit of Mars, which had been overlooked by Brahe. This led him to recognize, not only that the Mars orbit was elliptical in general form, but that the Sun was located at one of the two foci of that ellipse. Kepler observed that the measurements made by aid of his normalization of an observed orbit, precluded the possibility of predicting, statistically, both the position and velocity of the planet's motion within an immediately subsequent portion of the orbital cycle as a whole.

This required throwing away all as-if-at-the-blackboard varieties of Euclidean mathematics, such as those used by Ptolemy, Copernicus, Brahe, Galileo, et al. For Kepler, there must be a physically efficient intention embedded in the Solar system, which determined the characteristics of the orbit. By that use of the notion of intention, Kepler signified the existence of some corresponding, experimentally demonstrable, efficient, universal physical principle, such as his original discovery of universal gravitation. This notion of a universal quality of intention, has been the definition of an experimentally validated universal physical principle, among all competently educated persons, ever since.

Therefore, as I shall summarize the case here, anyone who would wish to become a competent economists, should study the pivotal ontological paradox, which led Kepler to a crucial discovery of a universal physical principle, in this case, gravitation.

Kepler recognized, that although the orbit as a whole was observed and knowable with experimental precision, the velocity and position of the planet at any time could not be predicted as a simple statistical projection of its immediately preceding action. Kepler's measurements led the way to Leibniz's future development of the calculus, by showing that the orbit fit such rules as "equal areas, equal times," for the case that the angular measurement was made with respect to the relatively fixed position of the Sun at one focus of the ellipse. The measurable fact of "equal areas, equal times," pointed to the existence of an efficient agency existing beyond statistical comprehension of the mere moment-to-moment motion observed for the planet itself. Kepler's development of the concept of the relationship among the harmonic ratios of orbits, in the ordering of the Solar System s a whole, was a continuation of that same method and approach.

The same class of problem confronts the attempt to solve the mystery, concerning the way in which long-term economic cycles interact with short-term changes in economic policy. In examining long- to medium-term economic cycles, we must adduce the demonstrable physical principles characteristic of each phase of the cycle, and assess the local phase of the ongoing process from the standpoint of an experimentally-based insight into the characteristics of that process which defines the cycle as a whole.

To restate that point with an eye on the referenced work of Kepler, there is something outside, "behind" the sometimes apparently simple statistical projection of trends, which controls, and accounts for the ironical, ultimately contradictory relationship between short-term performance determined statistically, and medium- to long-term cycles. The challenge presented is, therefore: Is there some ontologically paradoxical, undeniable empirical evidence, which points our cognitive powers toward an appropriate search for a relevant hypothesis, which might, in turn, lead us to an experimentally defined universal physical principle? That "external" action is embodied within the cycle itself, more or less in the same sense that it is the orbit as a whole which determines the short-term motion of the planet. In astrophysics, or economics, it is a universal physical principle, which is both embodied within the cycle as a whole, and which subsumes the idiosyncrasies observable, in effect, at each moment.

Therefore, in physical science, and the methods of mathematics appropriate to that science, the secret of competent forecasting in general, is the same which Leibniz developed in his unique and original discovery of the calculus. This was a discovery which met precisely the challenge which Kepler had bequeathed to future mathematicians. We must discover the cycle, first, and then assess the local action within that functional frame of reference.

It is the long-term cycles which are of the greatest importance. Therefore, in all my forecasting, I have always forecasted from a long-range cyclical standpoint, as Gauss, in his development of his general notions of curvature, and Riemann later, successively, perfected this conceptual approach for mathematical physics in general. Reliable long-range economic forecasting depends upon that conceptual approach.

Yes, the human will does intervene in this: but how? Effective intervention occurs by acting, in effect, upon the long-range economic cycle itself, rather than upon the local interval of that process! The purpose of economic forecasting, is to discover how to intervene, in the relatively short term, if possible, to change the characteristics of the long-range cycle in which events are currently trapped. By changing the characteristics of the long-range cycle, we are able to change the effect which the changed long-range cycle now imposes upon the local interval.

To illustrate that point:

When we discover a new universal physical principle, and then apply that principle intentionally to a process previously defined in terms of earlier discoveries of such principles, the addition of that new universal principle, changes the characteristic action in every interval of the process. It changes the characteristic effect of willful forms of human action upon the universe. The development of the notion, by Leibniz and Bernoulli, for example, that isochronic pathways in physical processes are implicitly those of a catenary, rather than, for example, a cycloid typifies the mathematical-physical idea of applying a new notion of extended magnitude (i.e., a universal physical principle) to change a previously assumed characteristic of a process.

That is the key to any competent appreciation of the role of scientific and technological progress, in bringing about a medium- to long-term trend of increase in the productive powers of labor, as this effect is expressed in the short- to medium-term. This is, in fact, the only true source of the increase in the physical-economic rate of profit.

That, in short, is what I mean by changing the cycle as a whole, as the way to alter the characteristic behavior in the localized part of that process. That is what we do, in competent economic practice, in applying a new principle, expressed as a technology, to an already established productive process or product design. I repeat, for emphasis: This kind of transformation, in characteristic, is the only true source of physical-economic profitability of an economic process. The complex of principles expressed by the process has the quality of a more or less long-range cycle. By integrating an added principle, through the medium of new technology, we transform the characteristic of that cycle, and, thus, transform the characteristic action in the local situation.

A long-term cycle is the reflection of the action performed by a complex of universal physical principles upon the universe. In scientific and technological progress, we do not change any of these principles; we bring additional such principles into play voluntarily, just as we do through the successful discovery and application of any previously unrecognized universal physical principle. Thus, by bringing an additional such principle into play, thus altering the long-term cycle, we alter the characteristic quality of action in the short term. In other words, we change the physical geometry of the system. This alteration is a typical form of anti-entropic action. Such is the nature of the determining relationship of scientific progress to physical productivity of labor, per capita and per square kilometer.

The most commonplace foolishness practiced by my opponents, in the name of forecasting and related analysis, today, is that exemplified in the extreme by the pathetic case of the Mont Pelerin Society's Professor Milton Friedman's post hoc ergo propter hoc school of forecasting. The reading of trend-line charts, for purposes of forecasting real economic processes, is a form of sheer buncombe, into which contemporary financial accountants are prone to fall all too often. The past certainly does predetermine the conditions on which the present and future will be built, but the simple statistical reading of a trend from the recent past, tells us nothing so much as the fact that the believer in such methods of forecaster has learned less than nothing from the past five centuries of scientific progress.

Thus, there is a deep scientific principle involved in that distinction of economies from mechanical systems. I summarize that crucial topic as follows.

The long-term rise or fall of economies, is determined, as I have just point out, by the fact that healthy economies are of a special quality of characteristic, which is defined by a intrinsically anti-entropic processes. In effect, any competent measurement of the characteristic features of an economy which is increasing its potential relative population-density, is a measurement of the reflection of anti-entropy in the cyclical aspects of the process as whole. It is the intervention, by means of an added universal physical principle, or a technology derived from that principle, that long-range and other economic cycles are transformed in their characteristics. The physical-economic profit generated locally, or in the large, is an expression of implicitly measurable local anti-entropy. Thus, competent long-range economic analysis, is focused upon discerning functions of technological change, which ether increase the entropy of the cycle, or its anti-entropy.

So, in summary of what has been said on this matter thus far: in defining any long-term or medium-term cycle, the immediate object is to determine whether the trajectory is toward an increase or decrease of the entropy of that cycle over its term. The function of informed intervention, to is take some action, either to remove an axiomatic feature of the cycle which increases the entropy of the cycle as a whole, or which, happily, will increase the expressed anti-entropy of the cycle. True profit, as defined from the standpoint of a science of physical economy, expresses a net gain attributable to anti-entropic action within that economy. No other definition of profit is acceptable for purposes of long-term forecasting of the course of physical economies. Belief in a zero-growth model of a stable, so-called "sustainable" economy, is not an option which will permit an economy to survive over the relevant long term.

In the matter of organizing a recovery from the physical-economic depression brought about through a defective monetary-financial system, as today, the essential mission must be to reverse the characteristic of the physical economy as a whole, from a state of self-aggravated entropy, to one of significant anti-entropy. This is accomplished, primarily, not through the simple sun-total of individual productive and related actions, but through changing the characteristic of the system considered as a whole. The value of production, is not the sum-total of estimated value added at local points. It is the relative anti-entropy of the economy considered as an indivisible whole.

The desired, happy outcome, is accomplished by a combination of measures. Increase the ratio of useful employment relative to the potential labor-force as a whole. Raise the level of technology relative to infrastructure, production, and design of products and processes, within the whole. In the course of this report, I shall clarify that approach to bringing about a general economic recovery.

Rather than merely describing my relevant discoveries respecting the specific point just made, I prefer that you should actually know what I am describing here. I describe the initial phases of my original discoveries in the science of physical economy, the discoveries on which all of my successes, relative to the work of my professional and other rivals, have depended. These are the principles upon which competence in economics depends today, especially under conditions of crisis, in which all conventional habits fail. These are the principles which dominate any competent discussion of the situation in the U.S. and world economy today.

 

- The Trouble with Sense-Perception -

The central, controlling issue of scientific principle in politics, and in economics is, whether or not man is simply another animal? Most present-day economics would not, and could not explain that difference. That is one of the e several crucial reasons for the incompetence and failures among most of our leading economists today, especially the radical empiricists such as the followers of Norbert Weiner and John von Neumann..

The principle of natural law called variously the general welfare or common good, pivots upon the evidence, that man is not merely another form of animal life, but has a distinct quality, expresses a universal physical principle which is absent in the beasts. This quality is typified by the power to generate valid, revolutionary discoveries of experimentally verifiable universal principles. The difference in effect, flowing from the acceptance, or rejection of this principle, when the principle is efficiently understood as both a universal physical principle and a principle of equity, is the proper basis for defining all civilized law.

This quality is, therefore, the essential referent for all investigation of economic cycles.

The basis for all proper constitutional law is, therefore, the notion that the conduct of man, and the rights of man, are to be derived from nothing other than the discernible implications of the specific quality of difference which sets man apart from the mere beast. The scientific, and, therefore, the legal conception of man and the governing intent of law, must always be derived from the practical implications of this distinction.

These principles of law have axiomatic authority in the domain of physical economy, and of policies of practice which affect the outcome of practice bearing upon the physical economy as a whole. Violations of those principles of physical economy, are the principal cause of all of the economic catastrophes which a modern nation-state may inflict upon itself.

The so-called "ecological" difference between mankind and the animal species, is that the sovereign power of cognitive potential, which is specific to the human individual, does not exist among the beasts. Cognition signifies the power of an individual human mind, to form a successful hypothesis as the solution to a well-defined ontological paradox, and to verify that hypothesis by the quality of experiment required to demonstrate that hypothesis to represent a universal physical principle.

From the standpoint of animal ecology, a variety of a species of beast has an ability to adapt to its environment in a way which is defined by a combination of ostensibly fixed, genetic and kindred characteristics. With mankind, it is different. Through the discoveries of universal physical principle, which are generated through the sovereign cognitive powers of the individual, mankind is able to increase what animal ecologists might describe as its relative ecological potential as a species, that in a fundamental way, a way not found among higher apes and other beasts. This is the basis for my own central contribution to the science of physical economy, the notion of potential relative population-density.

If I use "ecology" here in the sense of "animal ecology," as I do, this is not to be read as adopting the methods of animal ecology for man, quite the contrary. It is to employ the experimental implications of the Socratic method of negation, as Pasteur, Curie, and Vernadsky, et al., did, for defining the existence of a non-abiotic class of universal physical principle, a principle which does not exist within the bounds of principles extant in an experimentally defined notion of what might be assumed, often, but wrongly, to be an originally abiotic universe. That a process identified as living, is shown to be able to produce effects in an abiotic medium, which could not be generated within an axiomatically abiotic domain, is the experimental basis for the definition of life by the succession of Pasteur et al. The distinction between man and the animals, may be shown in a similar way, by showing that human behavior accomplishes an effect which could not occur within the axiomatic bounds of an animal ecology. Any competent economics is premised on an understanding of the crucial importance of those distinctions.

However, that is not sufficient. This brings us to a crucial sub-topic of my hitherto unique achievements in long-range forecasting, the functional notion that certain principles of Classical artistic composition, are also universal physical principles. Without examining economic processes from the included standpoint of the role of social relations in defining possible forms of scientific cooperation around the discovery and use of the universal physical principles of both abiotic and living organizations, it is impossible to account for the way in which long-range economic cycles, or kindred processes, have been ordered in previous history.

This functional distinction between man and the lower living species, is otherwise expressed in an essential way, by the functional distinctions between sense-perception and knowledge.

As I shall indicate here, my original discoveries in the science of physical economy, were derived from further development of the argument I crafted, first as an adolescent, and which I refreshed that at the close of the war, for refuting the attack on Leibniz by Immanuel Kant. I signify that attack which had been made the central feature of Kant's notorious series of Critiques. Through this approach, I was able to define the meaning of cognition in a fresh way, and continue to improve upon that definition later. The result was not inconsistent with the outcome of the spiritual exercises better known as Plato's series of Socratic dialogues, nor with Leibniz's insight into the principle of Plato's dialogues; but my application was original, derived chiefly in reaction to the influence of Leibniz upon my studies. This discovery defined a method which subsequently proved itself to be peculiarly best suited to the task of accounting for the essential features of long-range economic cycles.

As I have presented the case in locations published earlier, the action of generating a valid discovery of a universal physical principle, occurs only within the perfect security of the sovereign cognitive processes of an individual human mind. I shall explain some points on this matter of crucially relevance to economics, during this immediate portion of the report.

This fact of sovereignty presents us with a paradox: since no person can observe directly the cognitive process of another person's generating a provable hypothesis, how is it possible to organize effective cooperation in society's use of such universal physical principles? Discovery of principles, is always an individual act of a sovereign individual mind. However, this is paradoxical, in the Socratic sense, since technological progress in society does not occur through the bare discovery of such a principle by a single discoverer. The will, and knowledge needed for effective cooperation in use of any discovered principle, is a product of a social process, not a purely individual action. Thus, the demonstrably perfectly sovereign quality of individual cognition, presents us with a true ontological paradox.

This, in turn, generates a nice nest of multiply-connected, subsumed ontological paradoxes. For example: since we can know that a discovery is valid, only through its efficient effect in a social setting, how can cooperation in use of that principle be organized within society? Since the maintenance of the human species requires the transmission of accumulated successive advances in such knowledge of universal physical principles, it is the related social relations within a society, or among societies, and from generation to generation, which define the possibility of a society's realizing the benefit of such discoveries, and transmitting the accumulation of such cognitive experiences from one generation to the next.

Consequently, the essence of human nature, does not lie in the mere reporting of sense-experiences, or tricks, as "information," from one individual to another, but rather the prompting of the cognitive processes of one individual to replicate the cognitive act of discovery of a universal principle which has been made by another.

It is that cognitive aspect of social relations, which defines an individual's relationship to previous generations, over thousands of years, or more, and, similarly, to future generations. It is that aspect of social relations, which distinguishes the human individual, as an integral part of humanity as a whole, from the individuality of the mere beast. It is that relationship which expresses on the largest possible scale, the proof of an absolute distinction between man and the beasts.

The matter does not end there. The ability to demonstrate that transmittal discoveries of knowledge of universal physical principle, are universally efficient in this universe, is a definition of truth. For example, what I have just written is demonstrably true, but, it is nonetheless highly debated. The empiricists, Kantians, and logical positivists, like the anarcho-syndicalists, for example, disagree most vehemently with what I have just reported here. The Kantians, for example, would deny the existence of knowable truth; the radical positivists and existentialists, especially the sociologists of that curious persuasion, would go into a frenzy like that of angered rhesus monkeys in a cage, and do, if the issue of truthfulness were raised in their classroom.

The point, respecting that quality of difference between man and beast, which I have just summarized, is the most hotly contested issue of all modern civilization. It is, for example, the issue posed by the true statement, as by me, that "information theory" is one of the most monstrous, and most destructive of the hoaxes popularized during the recent sixty years. The issue arises in a general way by posing the inherently paradoxical question, whether knowledge is located within the domain of sense-perceptual experience as such, or whether human knowledge must be defined as of the form of experimentally demonstrated, cognitive generation of universal physical principles.

To understand the functional definition oft those economic cycles which increase the potential relative population-density of a society, that is, generate true physical profit, we must define the way in which individual persons are able to inject an added factor of what must be recognized as anti-entropy into the economic cycle. That brings us into direct confrontation with the popularity of the absurd currently popularized, pseudo-scientific fad of "information theory."

This issue, whether man is a creature of cognition, unlike the beasts, is inseparable from the issue, as posed by Plato, for example, of whether or not sense-perception as such, affords the mind a competent representation of that actual experience which prompts our sense-perceptual images. In the history of ancient through modern philosophy and science, the effort to reach a rational form of conclusion in this matter of sense-perception, has been reduced to two general types of results.

Among the one type of cases, we include all superficially rational systems which sought to defend sense-perception from intrusions by cognition, such as the systems of Aristotle, the modern empiricists, Kantians, and such devotees of Bertrand Russell as Norbert Weiner and John von Neumann. The most typical expression of this is therefore found in those known as the reductionists. In contrast, in the second, contrary type of cases, such as my own, that same inconsistency attracts the delighted honest thinker with the prospect of discovering some truth which overturns shopworn prejudices.

In these systems of the first type, the believer is constantly confronted with the evidence, that the behavior of the processes in which he is situated, are not fully consistent with the assumptions deduced from sense-certainty. This persistent inconsistency within the domain of sense-certainty, has repeatedly driven the philosophical reductionist into wild-eyed mysticisms, and, therefore, sometimes, also into conducting religious wars.

This was the chief characteristic error common to the otherwise incongruent systems of Ptolemy, Copernicus, Brahe, and to the empiricist Galileo. By assuming that Aristotle's method, as followed blindly by Ptolemy, was valid, or, in Paolo Sarpi's alternative, the neo-Ockhamite version known as empiricism and logical positivism, they degraded science to the mere ivory-tower way of attempting to describe nature in conformity with an adopted set of purely arbitrary, "ivory tower" assumptions. They did this without adducing any universal physical principle which would actually resolve the ontological paradoxes erupting from within the phenomena under examination.

These "ivory tower" systems, include the more extremely pathological expressions, such as explicit satanism, or varieties akin to Romanticist composer Richard Wagner's ring myth, The Lord of the Rings, the Harry Potter cult, or the axiomatically irrationalist notion of "freedom" associated with John Locke, Bernard Mandeville, Dr. Francois Quesnay, Adam Smith, et al. In these expressions of defective mental development, the victim gropes in the unseeable. Like Marlowe's or Goethe's Faust, he yearns, as the superstitious gambler does, for some magical power, perhaps satanic, outside the universe, which is wishfully presumed to act upon that universe, if one could but win that mysterious and axiomatically mystical power to service of one's desires.

The mind of that poor fellow presumes that the imperfection of sense-perceived reality, as he misperceives that reality, is sufficient evidence of the existence of some utterly irrational form of higher authority, beyond the senses. Adam Smith did this. His lunatic notion of the "invisible hand," typifies the kind of superstition to which the wishful devotee might appeal for such beneficent interventions as fixing the outcome of the role of the dice. That sort of "invisible hand," of Bernard Mandeville and Smith, is the mystical authority to loot farmers as prey, which Quesnay's laissez-faire attributes to the aristocratic landlord. So, the pro-satanic Mandeville, the official prophet of the pro-satanic Mont Pelerin Society, saw public virtues as the fruit of private vices, as Mont Pelerin's Milton Friedman promoted drug-trafficking.

The advocates of these systems, have been compelled to acknowledge the existence of some efficient agency, beyond the reach of either sense-perception or their personal comprehension, which, they assert, as Mandeville and Adam Smith did, accounts for certain patterns in sense-perceived experience. The so-called "invisible hand," among empiricists such as John Locke, Isaac Newton, and Bernard Mandeville, are examples of this. The same pathological feature appears as the crucial defect, exposed by Kepler, in the flawed physics of Ptolemy, Copernicus, Brahe, and Galileo. I emphasize: a related variety of obscenity appears in the laissez-faire of the radical pro-feudalist, Dr. Francois Quesnay, as Quesnay is plagiarized as the "invisible hand" of the British East India Company's Adam Smith.

There is a real world, beyond direct access by the senses, but it is in no sense an arbitrary concoction, as those reductionist fairy-tales are. It is a real world, a rationally comprehensive universe, once we have come to know what it is through the methods of scientific discovery of universal physical principles. In that aspect of science lie the efficient, knowable realities for which the images of sense-perception are merely shadows.

The same general problem is inherent in Euclidean, so-called non-Euclidean, and related formal systems of classroom geometry. In these ivory-tower systems, a set of definitions, axioms, and postulates are introduced arbitrarily, on the presumption that sense-perception, as supplemented by some antic inspiration, makes these assumptions "self-evident." Again, the attempt at making science from the vantage-point of such ivory-tower, so-called a priori assumptions, is self-degraded into yet another substituting of the mere describing of nature according to those arbitrary presumptions, as Ptolemy, Copernicus, and Brahe did, instead of discovering the universal physical principles at work, as Kepler did..

These ivory-tower systems have often led the classroom instructor to abuse the students with such absurdities, as assertions equivalent to, "we have not yet proven that life is possible in this universe," or, the worse assumption, that "life (or even human mentation) is a product of trillions of transactions within the framework of a purely abiotic transactions within a strictly abiotic universe."

From the contrasted viewpoint, of which my own work is typical, we have the approach which leads into that world-view which is indispensable for comprehension of the origin and functional characteristics of physical-economic cycles. In this case, the recognition of the existence of ontological paradoxes in the world of sense-perception, does not lead to faith in magic, but, rather, a search to discover experimentally valid, universal physical principles.

The most famous paradigm for this second view of sense-perception, is the use of the pedagogical ruse of the "Cave" in Plato's Republic. What sense-perception apprehends, is as but the shadows cast on the irregular wall-surface of a dimly-lit cave. The task of the viewer is to discover, and learn to control, the unseen object which the shadow reflects. The very existence of microphysics offers an elementary illustration of that point.

The role of the reductionists as the kind of lunatics which John Maynard Keynes showed Sir Isaac Newton to have been, arises from the fact that, on the one side, they are fanatical slaves to sense-certainty, and yet, at the same time, they themselves premise what they offer as the most precious parts of their theory, upon intervention by an agency from outside the reach of sense-certainty. By denying the path to sanity, in the existence and role of hypothesis, they impel themselves to worship, or fear, otherworldly, purely magical and fantastic forces and agencies, for which no experimental proof of principle ever did, or ever could exist.

Since it is in precisely those connections, that experimental method reveals and verifies the specific distinction of man from the beasts, the impact of tolerating the influence of reductionism in education and popular opinion, is the denial of the nature of man, and, therefore, of man's God. Reductionist mysticism is, therefore, a lie, and, worse, implicitly as pro-satanic as the secondary and other pupils who turn themselves into lunatic mass-killers of the current times' spread of "new violence," through such recreations as cultivated addiction to Nintendo games.

The fallacy of such ivory-tower viewers as the Aristotelean and modern empiricists, was recognized in this or kindred ways, by many ancient and other thinkers. The case of the Socratic dialogues of Plato, is exemplary. The humanism of Solon of Athens, is to be contrasted thus to the psychotic image of Lycurgan Sparta and the Roman imperial legionnaire, or the Nazi Waffen-SS model which mimicked those legions. The issue was introduced as the basis for the development of modern experimental physical science, by Nicholas of Cusa, in his De Docta Ignorantia. Followers of Cusa such as Luca Pacioli and Leonardo da Vinci addressed this. The line of development of approaches to a comprehensive form of mathematical physics, by Kepler, set into motion a process, leading through Leibniz, Kaestner, and Gauss, to Bernard Riemann's overthrow of all "ivory tower" mathematics, in his 1854 habilitation dissertation.

With Riemann, space, time, matter as many had thought we had known them a priori (with assumed self-evident certainty), were banned from all competent physics thereafter. There was no Santa Claus, but only real adults who bestowed loving considerations upon children. In place of arbitrary, ivory-tower sorts of definitions, axioms, and postulates, only experimentally validated universal physical principles were allowed.

To understand both the anti-scientific character of concoctions such as "information theory," one must focus on the characteristic problem presented to society by the question, do the individual powers of sense-perception represent a faithful image of the real universe around us, or not? Understanding this problem, shows us how technologies are generated. An understanding of the fuller implications of that matter, leads us, in turn, to a conception of the functional meaning to be attributed to the term "economic cycles." Are these notions of technology derivable from the interpretation of sense- perception, as Weiner's argument implies, or are they obtained, as they are in fact, by discovering ways for overcoming the fallacies inhering in a naive faith in sense-perception?

 

- My Attack on `Information Theory' -

One of the common pathologies of contemporary policies of practice in education, is the practice of demanding that the students learn, and pass an examination in a taught doctrine. That is essentially a dishonest practice. Teaching of ideas, is properly accomplished by inviting the pupil, for example, to experience what the teacher has experienced in the struggle to discover the relevant principle. All honest teaching is biographical, and, often, autobiographical. So, proceed as I did in making my original discoveries within science.

It happened during the years 1948-1952. It began with my reaction to an early 1948 reading of an advance-publication copy of Professor Norbert Weiner's Cybernetics. I was, at first, entertained by Weiner's discussion of some designs, but then angered by book as a whole. What angered me, was Weiner's use of both Ludwig Boltzmann, and of echoed effects of Weiner's own Faustian training under the Mephistophelean Bertrand Russell of Principia Mathematica notoriety. Weiner excluded the existence of cognition in human behavior. Cybernetics' entertaining examples aside, for anyone with actual knowledge of technological changes in physical economy at the point of production, Weiner's "information theory" dogma was a hoax, from beginning to end. For anyone who had wrestled successfully with the fallacy of Kant's attack on Leibniz, as I had been seasoned in that subject since adolescence, the diagnosis and cure of Weiner's fraud, was also evident.

We must take up this matter at this point. I emphasize, that, since the basis for systematic understanding of the function of economic cycles, depends upon an adequate comprehension of the way in which the development, or lack of development of improved technologies, determines the principal kinds of general characteristics of those cycles. My 1948 reaction against Weiner's "information theory" hoax, was therefore essential in prompting my fascination with the discovery of solutions for the then hitherto unresolved problem of redefining the general notion of economic cycles in a physically meaningful, functional way.

Qualitative improvements in productivity, are reflected at the point of production through the use of what are called "technologies." Technologies, efficiently defined, can never be reduced to the form of what Weiner et al. define as "information."

The development of any valid technology, occurs as a by-product of a special kind of proof-of-principle experiment. In the attempt to test an hypothetical form of universal physical principle. A successful series of experiments qualifying, in total, as "universal," pin-points certain features of the relevant design of the experiment, as situated within the medium employed for the chosen experimental subject. By "abstracting," so to speak, this feature of the experimental design, the discovered principle can now be employed as a technology which reflects the relevant specific hypothesis's application to the relevant medium.

In addition, not only do such discovered technologies contribute an essential part to the increase of the effective productive powers of labor. It is the additional experimentation required to define ways in which previously known and newly discovered technologies might be combined, which points to the paradigmatic character of the relationship between original discovery of some universal physical principle, and the increase of the productive powers of labor, as if at the point of production.

The significance of that experience of modern industrial production, is to be formulated as follows. The experimentally provable hypothesis, upon which the generation of individual and combinable technologies depends, is a product of a faculty specific to human individuals, the faculty of cognition, which the life's work of Russell and his acolytes Weiner and John von Neumann deny to exist. Immanuel Kant anticipated Russell, Weiner, and von Neumann,, in Kant's famous Critiques. Russell, Weiner, et al., also went much further than Kant, into the kind of radically Ockhamite nominalism associated with fanatical reductionists such as Ernst Mach and Russell himself.

To understand both the anti-scientific character of concoctions such as "information theory," one must focus on the characteristic, elementary problem presented to society by the question: do the individual powers of sense-perception represent a truthful image of the real universe around us, or not? Understanding this problem, shows us the way toward discovering how technologies are generated. An understanding of the fuller implications of that matter, leads us, in turn, to a conception of the functional meaning to be attributed to the term, "economic cycles." Are these notions of technology derivable from the raw, statistical interpretation of sense-perception, as consistency with Weiner's argument requires, or are they obtained, as they are in fact, by discovering ways for overcoming the fallacies inhering in a naive faith in sense-perception?

Contrary to the "information theory" cultists, in the history of ancient through modern philosophy and science, the effort to reach a rational form of conclusion in this matter of sense-perception, has been reduced to two general types of results. First, take a clinical look at the pathology called "information theory" from the standpoint of the transmission of knowledge of the way in which a principle was discovered and developed for use, rather than as a matter of descriptive instructions to be learned animal-training fashion. Second, look at production, and "information theory," from the standpoint of economy as a social process.

To establish the basis for long-range forecasting, as I have done, it was necessary to define the general method for integrating all the most essential parts of the set of axiomatic-like constraints, which generate the effect to be recognized as a long-term physical-economic cycle. Since all such constraints are defined for knowledge by the processes of cognition, it would be impossible to conceive an effective functional analysis of the characteristics of such cycles, except through a rigorous examination of the most relevant features of cognition in general.

Civilized society has a convenient working-model for study of the characteristics of that function of individual cognition, in the set of Socratic dialogues of Plato. In fact, those dialogues are, so far, the only known, and reasonably comprehensive model on which to premise a study of the general principles of cognitive behavior. Over the recent several decades, I have used the case of Kepler's discoveries in astrophysics, and crucial features taken from Nicholas of Cusa's De Docta Ignorantia, as the pedagogical standpoint, consistent with Plato's dialogues, from which to clarify the import of Plato's method for discoveries of experimentally demonstrable universal physical principles.

As I have emphasized in a number of published locations, my approach overlaps the views of Vladimir Vernadsky, in dividing physical space-time among three distinct, but interconnected experimental phase-spaces. The first, and crudest of these phase-spaces, is the abiotic domain implied by experiments which ignore the existence of the effects of characteristically anti- entropic living or human-cognitive processes. The second, relatively higher, is living processes and effects on the abiotic domain of those processes, which Vernadsky defines as the Biosphere. The third, the highest, is effects on both the abiotic and Biosphere domains which are uniquely products of human cognitive intervention, the domain which Vernadsky identified as the Noosphere. On the proof of the existence of the Noosphere, I accept Vernadsky's notion of the experimental proof of this; however, my own views on the internal characteristics of the action of the Noosphere, differ from that of his published accounts, in a significant way.

This threefold set of phase-spaces, then serves us as the basis for a general theory of physical economy. The characteristics which define long-range cycles in physical economy, are to be comprehended as the combination of human actions, and the reactions they evoke, from among, and within each of the three phase-spaces. These cycles are determined by the (physical) differential geometry cohering with the implicitly axiomatic features of the combined universal phase-spaces.

In the immediate discussion, on the subject of "information theory," the point to be emphasized, is that, in truth, science must explain everything in terms of experimentally demonstrable principles, always relating any such principle to a certain higher class known as universal physical principles. The relatively unique kind of common significance of my own and Vernadsky's conception of the Noosphere, is that this approach enables us to grasp all combined abiotic, biotic, and cognitive processes as both respectively distinct, and yet efficiently interconnected from the standpoint of a generalized notion of experimental development and application of universal physical principles. We must do this while considering each and all of these types as something commonly experienced in terms of equally physical products of the relevant activity.

Vernadsky's doctrine would agree, that it is cognitive action, as by discovery of an experimentally validated hypothesis, which generates new human knowledge of universal physical principles. His views I accept as corresponding to my own, insofar as we are considering the relationship between experimental proof of principle and the origin of new technologies subsequently introduced as effective innovations in both productive processes and product-design.

These cognitively generated discoveries of universal physical principles, from which technologies are generated as by-products, have the effect of changing the physical geometry of the physical domain in which human actions are located. In other words, we respond efficiently to our discovery that a previously unknown, universal physical principle was sitting out there, in the real universe, as if waiting for us to discover, and utilize its existence.

It is by these qualities of changes in our behavior, and in only that way, that mankind is able to increase its power to exist in, and over the universe. Indeed, we have reached the state of successful population of the planet, that society could not continue to exist without generating and applying, without limit, new discoveries of universal physical principle to production. Zero-technological growth, would be generalized attrition, and rapid extinction of most of the current levels of the human population, through the most horrible holocaust ever imaged. The recognition of these discoveries, and either cooperative action to employ those discoveries, or to abhor them, determines the general potential for increase or decrease of the effective productive powers of labor of an economy.

In my reaction against the obvious fraud of Weiner's "information theory" on this account, I focussed not only upon the cognitive features of the generation of technologies of design of processes and products, but on the matter of the mode by means of which cooperation in discovering and employing technologies, is fostered among human beings considered in the totality of their social existence as human beings.

 

- The Role of Art in Economics and Morals -

Consider for a moment, as part of the indictment of the charlatans of "information theory," a relevant, commonplace illustration of the kind of socially-expressed economic dysfunction, which the popularization of "information theory" and related practices, has introduced to the design and use of manufactured products.

Look at the degeneration in the functional qualities of material which so-called "tech writers" have inserted into the typical product description and use instructions, accompanying the delivery of a manufactured product. Consider also, a directly related pathology, exhibited in the past decade's often disastrous, increasingly widespread substitution of "bench marking" for competent design-engineering. Then, after summarizing that case, contrast those indicated forms of cultural decadence, to the qualities of communication which the Classical English poet Percy Bysshe Shelley identified as periods in history during which there is an increase of the power for "imparting and receiving profound and impassioned conceptions respecting man and nature."

It is readily shown, that the effort to make a separation between matters of artistic composition and subjects such as physical science and economics, reveals a moral impoverishment of the mind of the would-be scientist or economist, as it also does the decadence of he who would create a separation of art from science and economics. The result of such an impoverishment, will be contribution to society's loss of economic potential.

For an example of such a pathological influence, consider the following, relative simple quality of clinical evidence.

During and immediately following World War II, there was a significant, and expanding resort to dividing the work of the scientist and engineer who designed the product, from the writing of those descriptions and instructions supplied which were prepared for the user by persons who came to be known as "tech writers." At the outset, the resulting damage was apparently minimal. The "tech writers" tended to show actual, conscience-stricken comprehension of the product they were describing. Over the years, especially with the introduction of the unconscionable fad called "programmed learning," the always fragile functional relationship between the actual design of the product and the descriptions by the "tech writer," became an increasingly troubled one.

As it is said, the competent, or relatively competent "tech writers" of the immediate post-war period, into the 1950s, "took it from the top." In the instance of information associated with the product of any reliable firm, the reader was usually given an overview of the subject being addressed, and a sense of the relevant functional relations among the sundry components and operations referenced in that report. Over time, the quality of "tech writing" became increasing less coherent. The work-product suggested something assembled from the snippets sent in from sundry places. The effect of this loss of coherence was, that the reading the finished, combined result, suggested, more and more, the image of a collage of lines, each written by one of a scattered herd of separate writers, many of whom were apparently on poor speaking terms with one another. The end result has been often something akin to the "recurring nightmare of the guilt- ridden nerd."

This problem, which was merely symptomized by the case of the apparently disintegrating mind of the evolving species of "tech writer," was aggravated, catalytically, in the extreme, by three social factors. First, the accelerating degeneration in public and higher education, over the course of the recent thirty-five years. This is typified by the influence of the 1963 OECD report on education issued by the influential Malthusian Dr. Alexander King. Second, the disastrous effect of the post-1963 spread of the "rock-drug-sex cultural-paradigm-shift," in destroying the intellectual and related emotional mission-orientations of dedication to competence, among secondary and higher education graduates. Third, the past thirty years' process of combining intentional ruin of the former leading sector of U.S. family farming, and de-industrialization of urban industry, reflecting rabid devotion to "free trade" in general and "outsourcing," most emphatically. The effects of these trends were aggravated by the introduction of related, novel, and extremely irrational notions of the nature of "intellectual property rights." A recent novelty expressing the same pathological trend, is the idea of the patenting of John Q. Citizen's genes; this has the smell of something invented by the notorious Dr. Mengele, or perhaps H. G. Wells' "Dr. Moreau."

Over approximately the recent decade, under the impact of the process called "globalization," even the mission expected of the tech writer, and of the user of the product, have undergone an additional, qualitative change for the worse, to the effect of continually aggravated spread and intensification of functional illiteracy. From the evidence now at hand, it is implied, that the "tech writer" usually assumes that the reader should not attempt to understand the product, but that he should obey literally, and more or less blindly, the instructions supplied. Usually, the instructions themselves are incompetent in one degree or another. Implicitly, at least, the idea that the "provider" has a moral responsibility for being either coherent, or that the instructions given should be competent, has been abandoned; the peddler of the heavily "outsourced" product, shrugs off the complaint, as if to say: "Don't blame me. I don't make the stuff; I only sell it. If the instructions don't work, accept the fact, that things are tough all over."

Consider the case of problems created by the "outsourcing" of sub-assemblies. That the latter have often been assembled from other sub-assemblies, has become typical of the packaging of the process of production and distribution. The result is expressed in ways which not merely prohibit, but virtually outlaw the intelligent user's sense that he or she has a right to know what is actually inside the package he is about to ingest. At least, the putative manufacturer ought to know, but often, apparently, he, too, does not. Try to buy a replacement part from the party under whose brand-name the produced was sold; how could that putative manufacturer know where to get the part, or how to install it? He bought and installed the assembly within which that component, whatever it is, is buried somewhere, and the design of the component in some place perhaps unknown.

Such manifest trends signify, that during the recent thirty-five years, we have passed over, from a production- oriented society, to a consumption-driven society. It often appear to be a society with less concern for the nature of the stuff it is consuming, than a desperately hungry rat foraging in the garbage dump. The U.S. has been transformed from the nation of backyard repairmen, whose stubborn determination to make things work, contributed much to our capabilities for winning World War II. We are becoming a population employed increasingly in unskilled "services," who are conditioned not to wish to actually know what we are consuming, using, or doing.

"Benchmarking" carries this process of degeneration to the logical extreme implicit in the "information theory" hoax. Benchmarking's nominal designer of the product, is no longer assured the means to challenge the assumptions underlying the mathematical packages he or she is combining into the design of a product. These are often products which will no longer be tested by former standards of automobile or other manufacturer's accountability, or for even the simple safety of the prescribed use of that product. It is cheaper (ostensibly more profitable) to kill people, than to lessen the current diversion from income to "shareholder value," by spending what we used to spend to ensure the safety and other satisfaction of the user. Benchmarking virtually ensures that things move in such directions. It is been a process of slightly more than a decade, in eliminating the existence of a type recognizable as a qualified design engineer.

In summary of that and kindred observations, it is to be said, that as part of the past thirty-six years shift, away from a producer economy, to a consumer society, policy-makers and public have lost the capacity for insight into the requirements of producing the essentials of civilized life. Society has come to view the world economy itself as like nothing as much as an endless nightmare, searching for bargains amid a globalized huddle of gigantic, Orwellian shopping malls. People just don't think the way they used to, forty years or so ago, and the inhumane, poverty-stricken economic policies which they have come to prefer, shows it.

These and related trends, considered as a whole, are reduced to a single underlying issue. The fostering of the cult of "information theory," has defined a quality of society in which people's knowledge of what they are doing, or of what is being done to them, might remind us of those students in Jonathan Swift's tale of Lemuel Gulliver's visit to the Island of Laputa, where students learned by swallowing slips of paper on which was written the information they were to assimilate in that fashion. The slips of paper, might have been written by Eighteenth-Century versions of ``tech writers," who took courses in the equivalent of today's "programmed learning," instead of science and engineering Perhaps, therefore, perhaps it was Jonathan Swift, not Norbert Weiner, who invented "information theory," that as a joke on "ivory tower" varieties of Eighteenth-Century academic asses in general. The breed of such asses has not been improved since.

The pervading issue, among all of those issues listed, and also many other leading contemporary cultural disorders, is the failure of common practice to recognize the essential features of the principled distinction of the behavior of man from that of beasts. In each of the listed, and many additional examples of the same principled social dysfunction, the pathological element is the same. That essential element, is the failure to apply the processes of cognition to the formation and communication of those ideas which are of crucial importance for sustaining the viability of an existing culture.

In his celebrated essay, In Defense of Poetry, the Shelley described a renaissance, as a period which there is, as I have stated above, a general increase of the power of imparting and receiving profound and impassioned conceptions respecting man and nature. The expressions of post-1945 intellectual decadence, especially post-1962-65 decadence, which I have just sampled here, typify periods in which these moral and intellectual powers tend to vanish into a condition like that of the Seventeenth-Century Britain depicted by Hogarth, or by Jonathan Swift's Gulliver's Travels, or described by Cotton Mather for the period of decadence of the post-1688 Massachusetts Bay Colony.

In contrast to such periods of decadence, the leaders whose influence distinguished the quality of renaissances, such as the referenced case of the leaders of the Fifteenth-Century Renaissance, walked the user of a technology through the cognitive experience of the passage from the initial, ontological paradox, which prompted the search for the hypothesis which would solve that paradox, through to the experimental work which proved the hypothesis. In all known cases of a renaissance, Shelley's formulation is clearly upheld. Examples of this include, the cultural renaissance known and the German Classic which was led by such avowed followers of Gottfried Leibniz and Johann Sebastian Bach as Kaestner, Lessing, Moses Mendelssohn, Goethe, Schiller, Wolfgang Mozart, Ludwig van Beethoven, and the Humboldt brothers, for the German-speaking world. They include, the Italy-centered Fifteenth-Century Renaissance earlier.

This effervescence, shown in such renaissances, in the power of communication of "profound and impassioned conceptions of man and nature," always expresses certain specific qualities, which have a common form and character of expression, whether in physical science or in Classical modes of artistic composition. It is the dominant role of those modes within certain influential currents within a culture, which warrant describing such expressions of moral and intellectual fertility as specifically "Classical," as distinct from, and opposed to the quality of the French and English Eighteenth-Century "Enlightenment," for example, or Romantic, modernist, or post-modernist.

The principle of any such Classical productive experience is the same, in principle, as that of the students in a class who are each simultaneously experiencing the way in which some original discovery of universal physical principle was prompted and accomplished. The successful student had relived the act of discovery and empirical verification. Intellectually, "he now owned" the principle whose act of discovery he had replicated within his own cognitive processes.

The reenactment of the cognitive act of discovery, rather than "programmed learning," for example, must become recognized, once again, as the standard for transmission of knowledge within society. Probably, that sort of sanity about economics will become prevalent, only when the standards exemplified by Wilhelm von Humboldt's program for Classical humanist education, are restored as a model for what secondary education throughout humanity must become.

As a matter of first approximation, we may divide communications expressing the quality of explicitly "cognitive" activity into the sovereign personal act of discovery by an individual, and the process by means of which cooperation in use of those discoveries of principle is motivated in relations among persons within society. Classical modes of artistic composition typify the modes of cognitive cooperation. Plastic and non-plastic modes of Classical artistic composition, especially the non-plastic modes in poetry, drama, and polyphonic music, typify the form of the latter cognitive modes, but the significance of such art is that it serves society as a model for understanding history, and for formulating policies of government. Examples of this include the opening paragraphs of the 1776 U.S. Declaration of Independence, the Preamble of the U.S. Federal Constitution, and President Abraham Lincoln's 1863 Gettysburg address; each and all these examples are consistent with the intent of a renaissance.

Back during the 1948-1952 interval, as a result of seeing issues implicit in the difference between what we may recognized as a Classical humanist and contrary, morally defective forms of education, I came to recognize a lesson of crucial significance, to be adduced from comparing mathematical formulations used to describe aspects of physical processes, and the often contrasting mental image expressed by a rigorously composed verbal description of what might be presumed to be the same process.

On the surface, a good verbal description of the process and the mathematical representation, could be at least ostensibly consistent. Yet, a good verbal representation conveyed important included notions, which were lost in the translation, as if stripped away, when stated in the generally acceptable classroom form of mathematics. Over the course of the 1947-1948 interval, I approached this paradox from the standpoint of Classical forms of poetry, drama, and Classical settings of poetry as song. I posed the question: Why is good Classical poetry superior, as a disposition of mind, over mathematical language, in conveying important ideas of physical science? Years later, I discovered that like the greatest teacher of both Lessing and Gauss, Kaestner, the best Classical poets already knew the answer.

In thinking through the apparent paradox, one should come to the eerie, but therefore truthful conclusion, that the act of cognition exists only within the limits of the sovereign cognitive processes of an individual mind; but, that the possibility of the validation and realization of that discovery for social practice, lies in an aspect of "social relations" which can be generated only, paradoxically, by human individuals. When the significance of those cognitive forms of social relations are viewed in a certain special way, the individual develops a quality of personal moral character which sets him or her apart from the run of the mill among nominal leaders, as exceptionally qualified to be a leader in that society. Friedrich Schiller's follower, the Wilhelm von Humboldt who launched Nineteenth-Century Germany's system of Classical humanist education, has emphasized this same connection which I came to recognize from my own vantage-point, during the course of the 1947-1952 interval, between Classical humanist education and the development of the moral character of the student.

Up to the present time in known history, the primary distinction of the individual of truly moral character, from the more ordinary members of society, is a certain kind of impassioned attachment to his, or her personal cognitive relations to the greatest known creative thinkers of both the past and the future. By reliving the experience of replicating the act of original discovery of truly universal principles from the past, that individual brings that moment from that original discoverer into his, or her own sovereign cognitive processes. He, or she brings that cognitive moment from the mind of the original discovery to life within his or her own living cognitive processes. If the education, and related development of the young person is steered with great emphasis on this kind of cognitive act, this quality of historically determined cognitive experience affords the young person an insight into the proper definition of truthfulness.

With the ground so lain in the educational and related development of the young, that young person will soon begin to think of their own future adult life as having the character of a personal mission. The child will express that sense of mission in such forms as describing the importance of the profession, or equivalent, he or she intends to accomplish "when I am grown up." This is often expressed with a manifest aura of spontaneity and passion; one senses that that child ":owns" that sense of mission.

For the Christian, for example, the sense of Jesus Christ's gripping sense of mission, expressed in such ways as J. S. Bach's settings of the Passions of St. John and St. Matthew, typifies the sense of the immortality of the individual cognitive self residing within the mortality of the individual. Such a person lives for all humanity for all time, with special emphasis on the mission implicit in the society, the culture, with which he or she is immediately most closely associated.

The distinction of the leader, is that he or she puts that universal mission and interest foremost, and resists the diverting, immoral temptations flowing from a contrary passion for "my own and my community's immediate interests, in the here and now." The person who is incapable of meeting the requirements implicit in such a challenge, excuses himself in such forms as the following expression: ``Yes, I care about the future of my country and the world, too, but my immediate family and community interests in the here and now, must come first!" The less moral person can sometimes lend lip-service to the words: "Of course, I know that since I am mortal, I should care about the kind of world I leave behind me, but I must work within the culture of my society,"--and, there we have, once again, as in Shakespeare's case of Hamlet, the moral failure.

Hamlet is not the cause of the doom of his Denmark. He, like Fortinbras, is an expression of the fatal moral flaw which pervades the leadership and more of his culture at that time. His fatal error is to be an obedient participant in the "popular culture" of the realm; only a leader who could save the realm from itself, would have been of any use in that circumstance. Between being and not, he chose, explicitly, in the course of that soliloquy, "not to be." Only the leader who marches out of step, can bring that parade safely across that bridge of crisis to the safety of the future.

The true leader, as I have just summarily described those distinctions, is a leader because he, or she places the emphasis on cognitive relations, rather than merely sense-perceptual ones. Herein lies Leibniz's passion for the truthfulness which Kant and Kant's followers abhorred. There is a corrupted Faust lurking within the hide of every Kant. The Kantian, or his like, abhors the truth, because the truth might deprive him of his preference for those circus-like learned tricks. by means of which he hopes he might reap the sensual pleasures of Earthly Paradise.

It is when the individual view of society is that of a sovereign cognitive agency, maintaining the continuity of the development from past into future, that the individual has a sense of himself, or herself which is truly a moral one. That is to say, it is only in that view of the immortal self, the cognitive self, lodged in the mortal passage from the past, to the future, that that person is motivated to recognize his, and his society's essential self-interest. He finds that essential self-interest, in the outcome of the present for both that society in particular, and humanity in general. He locates himself, or herself, in personal devotion to the intention that society's self-interest will be honorably served. That is precisely the moral quality which the putative leadership of today's United States has lost, a quality which has generally withered away, decade by decade, since the untimely death of Franklin Roosevelt.

Now, that summary given, take into account what has been explicitly written, or referenced in this report, up to this point. The challenge of statecraft, is to effect and maintain progress in the quality of the human condition across successive generations. That must be the orbit of our intention, in the sense that Kepler introduces intention as the notion of an efficient, universal physical principle. Against the backdrop of such considerations, the relative quality of the type and mode of communication employed to organize scientific and other forms of cooperation, becomes a subject of crucial importance in itself, as I am stressing and elaborating some essential features of that argument here.

The challenge of statecraft, especially in times of crisis, is the production and role of those qualified to be leaders by their dedication to fostering the influence of the higher morality within the mass of a general population which otherwise can not free itself from the fatal trap of small-minded, and hence corrupting, intrinsically immoral obsession with personal family and community relations.

This brings us to a crucial aspect of the matter which Shelley addressed in his In Defense of Poetry, the specific role of ambiguity in the cognitive aspects of communication.

 

- Ambiguity as Truth -

As Plato echoes Heraclitus in the Parmenides dialogue, the remedy for the fatal ontological paradoxes of the Eleatics and their like, is recognition of the universal principle of change. We must recognize that, as a matter of universal principle, nothing is constant, but constant change. Thus, cognition shows us an experimentally provable image of our universe, which is unlike a naive reading of the images of sense-certainty.

In life, and in the self-ordering of the affairs of the human species, change ceases to be a nebulous idea, when that term is defined as broadly interchangeable with anti-entropic action, as I have defined such a notion for the science of physical economy. The quality of anti-entropic change specific to the human species, to society, to the sovereign nation-state republic, is knowledge of the type of cognitive action which proceeds from ontological paradox, to experimentally defined universal physical principle.

Now, look! How is the specific quality of cognitive change expressed in language? In principle, it is through the use of the subjunctive, and in the resort to the devices of irony in general, and metaphor in particular, to impose the expression of the hint or actuality of an ontological paradox upon what might otherwise be a syllogistic, or outrightly sophistical form of "spin."

In the mouth of a moral speaker, the ambiguity of these apparent literary devices, never appears, except when it occurs truthfully. Such is the specific quality of truthfulness which sets Classical artistic composition in opposition to any other mode. We must never refer to a phenomenon as ambiguous, unless the object of the statement is itself actually ambiguous.

For example, take the case of Fermat's argument for a concept of "quickest time," as opposed to "shortest distance. When Fermat compared the reflection of light with the refraction of light, the difference between reflection and refraction was, in truth, an objective ambiguity in the propagation of light. The juxtaposition of the two cases, for the propagation of light, was thus a true ontological paradox. The solution for that ontological paradox was among the most crucial of the continuing discoveries of the succeeding two centuries, from Fermat through Huyghens, Leibniz, Bernoulli, Fresnel, Ampere, and Wilhelm Weber: all dealing implicitly with the physical principles underlying electromagnetic propagation in general.

To express a phenomenon as ambiguous, as by resort to mere tricks of symbolism, when one has no knowledge on which to premise that representation, as Romantic poets and playwrights often do, and modernists do invariably, is a more or less vicious form of lying. The ability of the conventions of language to convey those objective ambiguities of meaning which qualify as ontological paradoxes, is therefore a quality of Classical modes of poetic and related composition on which we largely depend for those discoveries which lead to progress in the human condition, economic condition included.

This will brings us here to a point to be emphasized respecting difference between my conception of the social organization of the Biosphere, and that implicit, to a significant degree, in Vernadsky's writings on the subject.

Throughout this report, I return repeatedly to focus on two closely related, if distinct implications of principle, that the universe is composed of three component phase-spaces: abiotic, pro-biotic, and cognitive. In each of these three, the characteristics of the three phase-spaces are defined in terms of a common, universal standard of physical-experimental proof of universal physical principles. In each instance, in turn, the discovery of the principle demonstrated by the physical experiment, was introduced for experimental study by a preceding hypothesis. This hypothesis was provoked, in the sovereign cognitive processes of individual minds, by scrutiny of experimental evidence of an ontological paradox.

Now, respecting those processes of cognition, within which all of these discoveries of principle occur, cognition itself has internal laws, which are laws in the same sense that we define laws discovered to operate within the respectively abiotic and pro-biotic domains. The nature of those laws internal to the efficient forms of cognitive relations among individuals, are most readily identified by comparing the principles of Classical forms of artistic composition and performance, to certain intrinsic failures incurred by the very nature of the violation of an otherwise more or less indispensable and comprehensive mathematical physics of a Riemannian type.

Early during the 1948-1952 interval, my attack on the fallacy of Weiner's, and also John von Neumann's work, was enriched by my earlier attraction to William Empson's Seven Types of Ambiguity. From my special standpoint, I saw flaws in some aspects of Empson's work, but, that taken into account, it was a very good, mature, and searching piece of scholarly work. I recapitulated what I gleaned from him, by working from the standpoint of the notion of cognitive processes which I had acquired in the course of my adolescent and later pro-Leibniz attack on the absurdities of Kant's Critiques.

A truthful ambiguity, whether in the description of a rigorously defined experimental subject-matter, or in the composition of Classical poetry, has the characteristic significance of betraying the shadowy, but efficient existence of something which, in reality, exists outside the scope of a statement lacking that ambiguity.

The physical principle of ambiguity is beautifully illustrated for study, as I did during 1947, by seeking to identify the physical distinction, on principle, which sets the greatest Classical Greek sculpture from the archaic.

There is a recognizable element of imbalance in the Classical piece. It is not an arbitrary imbalance, but, to succeed, must be credibly a body caught in mid-motion. The same is the case in Bach's method of well-tempered counterpoint, in which the development of the entire composition expresses the expression of a single conception of contrapuntal development in mid-motion. In Classical poetry, it is irony, ambiguity, especially true metaphor. All Classical ambiguity is truthful, not arbitrarily fanciful; it expresses a true paradox, for which the mind must supply a solution. It is Classical art, only to the degree that the solution to the paradox, is of the quality of a truthful act of cognition.

Try an elementary, but crucial sort of experiment. Take a mathematical expression from the domain of mathematical physics. Now, think of describing the corresponding physical process as such, which leads from an initial experimental form of ontological paradox, through the generation of an hypothetical solution, to the experiment which expresses the proof of that hypothesis. Now, express that process, as a physical, rather than mathematical form, in poetry, or prose. Best of all, if you have the skill for it, compose a compact Classical form of poem, which presents each and all phases of that paradox, hypothesis, and proof. Add nothing not relevant to that mission. No symbol- mindedness, please! No frosting on the cake! If you succeed in that mission, you will probably understand the principle of metaphor as I do. Focus on the essential cognitive feature of that representation: the paradox, as I have referenced the relatively simple, but richly devastatingly significant case of Fermat's paradoxical juxtaposition of reflection and refraction.

The relative fault in the mathematical formulation, is that, when applied according to today's generally accepted classroom tradition, it lacks poetry. It lacks the obligation of the poet, to embed a truthfully stated ambiguity in the composition. It fails to compel the mind to capture the image of the idea in mid-motion, the form in which all true ideas exist. "Q.E.D." is a lie, if it is claimed on the basis of what can be demonstrated at the blackboard.

For example, the danger to the student's (and teacher's) mind, in at-the-blackboard mathematics, even mathematical physics, is that the victims lose sight of the reality of the matter, in their zeal to find literal meaning. An elementary example of this, is the attempt to teach at-the-blackboard Euclidean geometry, in which no physical action is taken into account. Kepler's observation of the "equal time, equal areas" definition of the planetary orbit, and of the harmonic ordering within the array of Solar orbits, are examples of an ironical physical principle governing the way the geometry of the situation unfolds. The function of the catenary as the relevant model for isochronic action, is among the best pedagogical exercises for showing the relationship between universal principles of geometries (e.g., orbits, cycles) and physical action.

Ideas are communicated only as what is not said. They are imparted, as Plato's Socratic dialogues do: as the stimulation of the creative (cognitive) powers of the mind by posing an ambiguity which impels the mind to generate the idea which replaces the ambiguity as such.

The point being developed should be restated for physical-science practice as follows. The characteristic activity of competent physical science, is the discovery of verifiable hypotheses which are generated as solutions for experimentally defined ontological paradoxes. This is the characteristic of an original discovery; it is also the characteristic of the individual's reenactment of a valid discovery of a universal physical principle. When we describe this characteristic feature of scientific activity to a Classical poet, such as a Shakespeare, Shelly, Keats, Goethe, Schiller, of Heine, his comment would be: "Aha! We Classical poets call that the principle governing irony and metaphor!"

Think of how much effort was expended, from Fermat, through Huyghens, Leibniz, Bernouilli, Fresnel, Ampere, et al., in search for a clearer, and deeper understanding of the ironical distinction between simple reflection and refraction. From Kepler through Gauss and Riemann, the essence of successive steps of fundamental scientific progress, it is the ontological paradoxes inherent in the mathematical notions of number and of geometry, which alarm the mathematician into recognizing that physics is not a product of the application of mathematics, but, rather, that good mathematics lies essentially in the paradoxes which overturn previously accepted teachings of that subject, paradoxes of such types as isochronism, least action, and so on, which ultimately reveal themselves to be expressions of something superior to mere mathematics, physics.

The physical world's existence, does not lie within the domain of sense-certainty as such. It exists as the reality which prompts those shadows we know as sense-perceptions. The prompting occurs by forcing sense-certainty to reveal the fact that its objects are merely shadows. We must prove the existence of that which causes the shadows, by demonstrating the efficiency of a conception through which we, physically, can control the behavior of the ambiguity arising in the domain of shadows. That is the very essence of scientific method. It is also the essence of successful modes and forms of Classical artistic composition.

The power of Classical poetry, and of the development of language under the burden of being a medium of Classical poetry, points our attention to the origin of those qualities of such a literate form of language, which make it implicitly superior to mathematics in communicating ideas about the physical universe. Language was developed as a tool of characteristic human behavior. This is more readily seen from the standpoint of Leonardo da Vinci's attention to the tuning of voices according to Florentine bel canto voice-training. The argument is much clearer, when we examine the significance of bel canto voice-training as the basis for the development of well-tempered polyphony by Bach.

The very qualities of Classical poetry, and Classical well-tempered polyphony, which offend the mathematics student's blind zeal for strictly literal meanings, does not make the student a better mathematician, only, a relatively sterile personality.

Take a lesson from a scientist who was a leader in Classical art, and also in mathematics, our friend, and Benjamin Franklin's, Kaestner. Kaestner was apparently the first to insist explicitly that we must orient future mathematics to the goal of developing an anti-Euclidean, rather than a non-Euclidean one. Great progress toward this goal was made by his student Gauss, on the subject of curvature. The objective was reached by Gauss's student Riemann, as announced in the latter's habilitation dissertation. Kaestner told his collaborators and followers, we must not attempt to improve upon Euclid, we must challenge the fallacy-ridden, aprioristic assumptions which underlie Euclid's principles, thus introducing an anti-Euclidean geometry.

Take the case of Kaestner's most famous student, Carl Gauss. What poetry there is in Gauss's mathematics! Or, the discoveries of Gauss's most celebrated student, Bernhard Riemann.

That said, on background, apply the same principle of ambiguity to a crucial problem in economics.

 

- `Free Trade' as Colonialism -

Take a typical economics example of such ambiguities. Take a factory from the U.S.A. Move it to a nation in Asia, where labor is said to be cheaper, and so forth. In this case, it will be wrongly assumed by those who do not understand economics, that that sort of "outsourcing" will increase the profitability and growth rates of the world economy.

For a comparable case, examine Henry C. Carey's book on the slave trade. The person ignorant of the ABCs of economics, tends to believe that the U.S. economy as a whole profitted from slave labor. Carey demonstrates that, while the British monarchy and some Americans were enriched by the traffic in the products of slave labor, the U.S. economy as a whole suffered a massive economic loss as a result of the looting generated as the effects of slavery. The surge of the U.S. economy to great power status, during 1861-1876, was a result of liberating the nation from these inherent effects of slavery.

Compare the case of the transfer of a manufacturing unit to Asia, from the standpoint of Carey's study of the effects of slavery on the U.S. economy.

Should we encourage the promoting of modern manufacturing in Asian nations? Yes, without doubt. The benefits of raising the productive powers of labor there, for the consumption of the internal economy, should be obvious. Should we, therefore, substitute cheap-labor production in Asia, as a source on which the U.S. depends for its products? It would be folly to do so, and of no benefit, either to Asia, or, in the end, the U.S.A., either.

By the nature of the interdependency among its political, social, and economic characteristics, a national economy is not the sum-total of its independently defined component parts, such as individual firms, but, rather represents a more or less inseparable sort of functional interdependency among the totality of its principal such components.

For example, from its beginnings as English-speaking colonies in North America, the welfare of that nation depended upon its sovereign access to the development of basic economic infrastructure, agriculture, and manufacturing, and technological progress in all of those categories. Among the related strategic features of the U.S.A. toward the close of the Eighteenth Century, was the advantage represented by the fact that the average real income was more than twice that of the United Kingdom. The cultural standard of literacy of the American "Latin farmer," typified the fact that the literacy of the U.S. household was better than twice that of the United Kingdom. The relative strength, and the interdependency of these kinds of essential sovereignty assets U.S. economy, was a characteristic of the U.S. economy as a whole. This was a characteristic of the whole which was reflected as a characteristic of the activity within the parts of the whole.

In former, saner times, not many decades ago, the prospective investor would locate the development of industries on the basis of studies of the characteristics of the labor-force, basic economic infrastructure, and so forth, of the localities compared. The level of education, and of technological aptitudes of the population generally, and labor-force more narrowly, were among the prime considerations in choosing a location for the new plant. Among these considerations, were transport of goods, in and out of the locality, the quality of the local educational institutions, and geographical proximity to relevant categories of relevant suppliers and customers.

In that practice, intelligent managements, of either government or industry, would be assessing the prospective performance of the individual enterprise, within the terms of the relative economic characteristics of each locality considered.

In assessing the potential for medium- to long-term economic development in a so-called "developing region" of the world as a whole, the same considerations are to be applied in reverse. How should the potential of the population, and of various regions, be developed, that to the purpose of optimizing the rate of improvement of the economic characteristics of the national economy?

What has tended to happen, under recent decades trends of exporting the productive capacity of the U.S. to poorer nations, is that the U.S. interests involved have mimicked the approach which the Portuguese, Spanish, Dutch, British, and French colonial powers took toward their colonies. Those powers were lustfully zealous in their zeal to extract from the colonies, but usually with more or less disastrous effects respecting the possible, alternative goal of bringing those colonies as a whole up to the level of the characteristic productive potential of a modern European society.

The referenced European colonial powers, had a certain type of practice, from the establishment of that form of colonialism beginning the late Fifteenth and early Sixteenth centuries. All were dominated by the influence of the imperialist maritime power of Venice, and most of the practice by Portugal, Spain, Netherlands, England/Britain, and France, was either done in partnership with Venetian rentier-financier interests, or explicitly modelled upon Venetian precedents for this practice. The leading exception, but not the only exception, was the development of the English colonies in North America. Thus, if we identify the prevailing practice of colonialism initiated by the Portuguese, Spanish, Netherlands, British, and French interests, as the Venetian or British model, we are not misleading anyone by stating that there are only two post-Fifteenth-Century models for development of colonial regions, the Venetian-British and American types. By types, we mean paradigms, not necessarily always the practices to be observed in the relevant locality. In this comparison, the practice of slavery, first introduced by the Portuguese and Spanish colonialists, is a manifestation of the Venetian-British type.

The American paradigm is otherwise known as the American nation-building paradigm. This means that economic and related policies are aimed at achieving a healthy form of what is called a "full set" economy. "Full set" should be taken to signify, among other things, that the economy is adapted to achieving and maintaining efficient technological parity with other nations generally, and aiming for parity in physical standard of living and relative productivity among the labor-forces.

By contrast, the British System, whose characteristic features were established under the direction of the British East India Company during the Eighteenth Century, is characterized by its design for a combination of colonialism with looting of nations through a system of international loans. The contrast between the two historically leading systems of the world during the past two centuries, the British system, loosely termed "capitalism" and the opposing American System of political-economy, is essentially the following.

The American System is premised upon the principle of promotion of the general welfare, and upon the so-called American patriotic intellectual tradition, which President Franklin Roosevelt largely defended, and of which I am a leading spokesman today. It is aimed at that social and economic result in its domestic affairs, and is inclined to promote what is termed today a "multi-polar" configuration of power, a community of principle, based upon the notion of the general welfare, among the members of a system of perfectly sovereign nation-state republics. In service of the promotion of the general welfare, the American System is intrinsically protectionist.

The British system is premised upon directly opposite fundamental principles, those of Thomas Hobbes, John Locke, Bernard Mandeville, Adam Smith, Jeremy Bentham, et al., as developed by the British East India Company's Haileybury School ideologues. It is based upon the predatory principle of conflict of each against all, and upon strictly predatory and hedonistic motivations on all accounts. It was, until recently, strictly protectionist in respect to its homeland market, but was the leading advocate of the predatory doctrine of "free trade" in matters of trade and international loans. U.S. circles which think and act in accord with the anti-American, British model, are known traditionally, as by Franklin Roosevelt and by me, as "American Tories."

The function of "free trade," in world trade and in the matter of international loans, is to force down the prices of other nations to the lowest, and to pursue this policy as a way of ensuring their relative subjugation to the imperial interests of the British system and its American Tory co-thinkers. Thus, the recent decades' Anglo-American advocates of "free trade" and "outsourcing," have dumped upon so-called "emerging markets" the opportunity to produce, but only under terms, prices, and conditions, which will efficiently prevent those "markets" from achieving the goals of their general welfare, and will enable the Anglo-American dominant interests to loot those "markets," at least for a time, more energetically and copiously in the process.

The essential premise for a policy informed by the American intellectual tradition, toward both other nations and our own, is that, in fact, the relative cheapness and quality of the product we can obtain through trade, is important to all nations. These admirable qualities are not achieving by cruelly reducing the price of labor in the vendor nations, as current IMF "conditionalities" do, but by advancing the productive powers of labor through raising the standard of living and technological practice in the vendor nations. In other words, measure how much quality can be obtained from a vendor nation, per average per- capita hour of work by the labor-force of that vendor nation. This depends upon our recognizing, that the standard of living and technology in the vendor nation will determine that nation's ability to continue to offer us that result.

Expressing the difference between these opposing roles of the American and British models, the British model assumes that the universe is a Hobbesian-Lockean nightmare, ruled by a principle of universal entropy. In this universe, one man's gain can occur only as another man's loss. This was the assumption introduced to England by the Venetian author Botero, and by the Venetian Giammaria Ortes whose English-language translation was plagiarized by the British East India Company's Thomas Malthus. The American System, whose essential features were derived chiefly from the influence of the anti-Lockean Leibniz, recognizes the effect of man's cognitive action as intrinsically anti-entropic, as Benjamin Franklin's sometime host Abraham Kaestner, the teacher Carl Gauss, did. In the American system, cognitive action generates the effects of anti-entropy. Trade among nations which is premised upon sharing the fruits of cognition, contributes to both the importer and the exporter, more or less equally. The source of this anti-Malthusian gain, is the fostering of the role of the educable creative powers of the individual human mind. This is accomplished by such means as developing the cognitive powers of the individual, and by reshaping production to rely increasingly upon forms of economic activity which incorporate more advanced expressions of scientific and technological progress.

My exception, as an American patriot, to the generally taught, loose-boweled use of the term "capitalism," should be registered again at this point. It should be sufficient to read the U.S. Declaration of Independence, the U.S. Federal Constitution of 1787-1789, the Reports to the Congress by U.S. Treasury Secretary Alexander Hamilton, the defense of the American System by Mathew Carey, Friedrich List, Henry C. Carey, and Abraham Lincoln. Capitalism, as used by the Karl Marx who, according to an knowledge study of his writings, lacked any competent knowledge of U.S. history and the American System. The term is used in similar way by not only Marx, but other admirers of the British system. That meaning is wholly antithetical to not only the American System, but the notion of the sovereign nation-state republic in general.

Instead of used the misnomer "capitalism," we should recognize the kind of division of labor between the state and private entrepreneurship described so aptly by Treasury Secretary Hamilton. Hamilton's celebrated Report on The Subject of Manufactures, is the most relevant official U.S. document on this account. We should see that not merely as peculiarly the U.S. patriotic tradition, but as the implicit design of economy under any sovereign form of nation-state republic.

Thus, from the American patriot's standpoint, the flaw in the economic design of the Soviet system, was the lack of efficient comprehension of the indispensable, voluntarist role of entrepreneurship, and of the proper role of government in preferring entrepreneurship to that implicitly oligopolist reign of financier-controlled large corporate organizations which has looted and supplanted the U.S. entrepreneur since the 1901 assassination of President. William McKinley.

This distinction is made clearer by considering my own arguments on the subject of the flaw of the Soviet economy as such. That is to say, that the goal of modern economy, as since France's King Louis XI and England's Henry VII, has been to promote the freeing of the creative cognitive powers of the individual for the development of those innovative practices through which scientific progress is realized as technological progress in development of both the processes of production and designs of products. However, since the individual entrepreneur usually represents an enterprise employing between several to a hundred-odd employees, the entrepreneur can not flourish in a natural way without extensive measures of protection, measures which can be supplied efficiently by no other agency by government.

Thus, if we consider all of the costs of production of a product, the cost of producing the same average quality of product in a so-called developing nation, is higher, if all physical-economic costs, including long-term ones, are considered. As we see in the history of European colonial practice prior to 1939, the apparent development of some local parts of the colony's economy, came at the expense the looting of other sectors of the colony. Consider, for example, the apparent development of a port-city, as in the British colonial history of rural Bengal, in light of that city's non-functional, or nearly non-functional relationship to the economy of the interior.

Developing nations should be given access to full-set capabilities, because they need those capabilities for both internal development, and to acquire the means to participate in the world economy in an equitable way. However, the real cost of production is not cheaper in those nations, except as looting of them might appear to be so for some part of the population; the average of the total social cost, is higher than in the industrially developed nation.

Those observations considered, to explore the role of ambiguity in a more thorough way, consider the import of Vernadsky's demonstration that, when viewed Vernadsky's proofs are situated from the standpoint of Riemannian differential geometry, the universe is composed of three distinct but interacting sets of universal physical principles, corresponding, respectively, to the domains of the abiotic, living processes, and cognition. The very existence of viable economies depends absolutely on ambiguities which reflect the determining role of a set of principles which today's prevalent accounting practice implicitly denies to exist: the human cognition, on whose actions the continued existence of economies depends absolutely. All competent economics focuses upon avoiding the common ignorance of human reason among most practicing economists today.

On such and related accounts, there are sundry features to realizing such objectives, but one is of both overriding and underlying importance: the development of the per-capita cognitive powers of each nation, and of humanity as a whole. The nature of these relations is made clear only when we take the nature of physical-economic cycle into account, as I have promised here. Turn to that matter now.

 

B. The Structure of Cycles

That much said, now, for this moment at hand, I focus our discussion on the relatively simpler aspect of the functional definition and role of medium- to long-term economic cycles.

Hence, from my first enterprise in forecasting, back during 1956-1957, I based my method for study relatively short-term processes, on consideration of the medium-term capital-investment cycles inhering in certain post-1954 changes in national economic policy. A study of the methods of credit-creation used for marketing of automobiles, was central to my pioneer work in forecasting for national economies

Kepler's method was based, as he insisted, upon his studies of the work of Nicholas of Cusa, Luca Pacioli, and Leonardo da Vinci. He also credits a contemporary thinker of like mind, William Gilbert, with important contributions to the content of Kepler's New Astronomy. That was also the method employed by the discoverer of the relativistic principle of quickest time, Pierre Fermat, the work of such followers of Kepler as Pascal, Huyghens, Leibniz, Jean Bernouilli, and such followers of Leibniz as Kaestner, Gauss, and Riemann. The same methodological approach must be taken in study of the underlying cyclical determination of the behavior of economic processes.

The crucial principle of a science of economics, is that the increase of mankind's power to exist, as measurable in terms of potential relative population-density. This implies the measurement of the changes in that potential within the scope of a national or regional economy, and also the impact of the same process upon the economy of the world as a whole. So defined, increase in the potential relative population-density of an economy, is interchangeable with the notion of promotion of the general welfare, or common good.

Without introducing that principle of the general welfare, or common good, no rational definition of a national economy were possible. Once the principle is introduced to any governing authority, such as the Fifteenth-Century Popes associated with the Council of Florence and Cardinal Nicholas of Cusa, and by the monarchies of Louis XI and Henry VII, all aspects of globally extended European society are defined by their relative adherence or opposition to that principle. All performance of society, including so-called economic performance, is to be judged according to the standard implicit in the notion of the overriding obligation to promote the general welfare.

Such was also the birth of the post-Seventeenth-century, more modern sovereign form of nation-state republic, as during the Fifteenth Century, as, again, in the 1776-1789 birth of the U.S.A. as a Federal Constitutional republic.

 

2. THE PRESENT NATIONAL EMERGENCY

 

A. The Structural Reform of Employment

The pivotal feature of an effective program of recovery of the U.S. economy, will be a drastic restructuring of the composition of employment within the society as a whole. The general thrust will be to reverse the post-1963-1967 trends in composition of the categories of employment. For example, essential services in the "soft" category of basic economic infrastructure, such as education and health-care, and services of physical science generally, will be rapidly increased, and employment in the sectors of agriculture, manufacturing, engineering, and general building and maintenance of "hard" forms of basic economic infrastructure. Employment in categories of sales and non-scientific professional services, will be sharply reduced. This change in structural composition of employment of the national labor-force, will be, for the immediate years ahead, the principal source of accelerating increases in the average physical productivity of the labor-force as a whole.

The rebuilding of the U.S. economy will occur as an expression of chiefly two sets of interdependent priorities. As a general rule, the primary mission of the U.S. government's role, will be to foster the conditions required by consideration of national economic security, as we used to define national economic security, during the 1933-1964 interval. The second factor will be a relatively high priority placed upon utilization of potentially useful elements of fallowed physical economic assets, such as those of neglected agricultural and industrial potential. The direction given to realization of those two objectives of national economic security, will be the development of a science-driver mission-orientation as the leading feature of medium- to long-term U.S. economic policy of development.

For obvious, practical reasons, in the present case, as during the Franklin Roosevelt-led economic recovery of the 1933-1945 interval, the principal shift will be a reflection of a large-scale increase of public and related employment in the building and maintenance of essential forms of both "soft" and "hard" basic economic infrastructure. The reactivation of idled industrial and related work-places of the private sector, will be gradually superseded in importance by additional such work-places. The most rapidly growing sectors of private employment, should be in the development of closely-held, technologically innovative entrepreneurships.

U.S. policy-shapers, and others, must be reminded, that is it not the giant stockholders' corporation, which was the driver of U.S. economic progress. It was the closely-held entrepreneurship, led by one or several personalities of some exceptional scientific or analogous talent. It was these, local community-based entrepreneurships, which provided large enterprises with the innovative technologies on which the sometimes ill-deserved good reputation of the giant corporation often depended.

Otherwise, economic reconstruction will enjoy the impulse supplied by special national mission-orientations, include space-exploration programs. These mission-oriented "crash programs," military and otherwise, modelled on such precedents as those of France under Minister Jean-Baptiste Colbert, and by Lazare Carnot and the Ecole Polytechnique later, have made decisive contributions to the leaps in productive powers of labor, and standard of living. Unfortunately, because of a lack of even elementary knowledge of the principles of technology among most professional economists today, the reason for the unique kinds of success realized by programs such as the pre-1969 U.S. space program, especially the Kennedy "crash program" for the manned Moon-landing, are not competently assessed generally today.


The platform for the 1648 Peace of Westphalia was the principle of universal love.