LaRouche in 2004 Emergency Recovery Doctrine

Economics: At The End Of A Delusion

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

 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