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Can't Globalization Work?

At the June 9, 2006 Washington webcast by the LaRouche Political Action Committee, Lyndon LaRouche was introduced by his national spokeswoman Debra Freeman who chaired the seminar. An excerpt from dialogs with Mr. LaRouche is presented below.

Listen to the: Webcast - transcript of the webcast

A Message From Sen. George McGovern

I also have a very brief contribution from a former Presidential candidate and United States Senator that I'll just read to you quickly. This is from Sen. George McGovern. His name may be familiar to some of you, although certainly for the LaRouche Youth Movement, he was an "item" before you guys were born. It says:

"In a discussion with one of Lyndon LaRouche's representatives this morning regarding the U.S. Economic Recovery Act of 2006, former Senator and Presidential candidate George McGovern said that he thought people attending this meeting would be interested in a bill that he had sponsored when he first entered the Senate. It was called the Economic Conversion Act of 1963. He had about 30 co-sponsors for this bill, which included a section which called for workers in each factory, discussing with Congress their input about how to convert the crucial World War II machine tools into new peacetime uses in agriculture, industry, and infrastructure. As the Vietnam War escalated after President Kennedy's assassination, most of the co-sponsors of his bill faded away. If this bill had been passed, it would have become a normal precedent for government-labor-industry cooperation, and would have averted the kind of crisis we are faced with now.

"Senator McGovern has been travelling, and has not had a chance to go through the draft U.S. Economic Recovery Act of 2006 thoroughly. He especially wants the LYM members whom he talked to at the Massachusetts Democratic Convention, to know that while he was signing autographs in the big crush after the meeting, he misplaced the pamphlet they had given him to study. But now that he is back in South Dakota for a few days, and has the legislation in front of him there, he wanted the LYM members to know, that he intends to give it his careful attention."

So, we thank him for this contribution to the meeting. And I think now the LYM members know they can expect a direct response from Senator McGovern, soon.

Can't Globalization Work?

Debra Freeman: Now, the first question that we have for Lyn, comes from someone who's currently at the Brookings Institution, who's associated with the new Hamilton Project there. And he has submitted what he calls a "basic economic question."

He says: "Mr. LaRouche, for those of us in this field, the choice between globalization, on the one hand, and strong national economies, on the other, represents a choice between two diametrically opposed philosophies of political economy.

"But this is not necessarily immediately obvious to the layman. Most of the opposition to globalization that we see among the population comes from those whose opposition is born of job-loss as a result of outsourcing, but their overall understanding is fairly limited. The question that comes up repeatedly, is: Why not reorganize the world economy in such a way that is 'more efficient'? Let Latin America produce our food, let Asia make our cars and our clothes, and let the U.S. move beyond that to a 'New Economy.'

"I think it's very important for you to take this up, because what may be obvious to us, is not obvious to everyone. Why not do it this way? Must each nation be able to produce adequate food, energy, and other such necessities within their own borders? Or can we move to this kind of rationalization of the global economy, and live happily and healthily? Please respond."

LaRouche: One of our biggest problems today, relative to what we used to have as problems, prior to 1968, is typified by what I first encountered around Harvard Business School, and MIT also, in the late 1950s and early 1960s: That I wouldn't give you two cents for corporate management today. There's no comprehension in what you get from the garbage of techniques in management and so forth, then or now—it is worse. For example, in the case of the auto industry, I said, it's obvious to me that you fire all of the top management, on the basis that Enron was no good! Because there's no difference between the thinking, which is like a Pyramid Club-thinking going on in top management in these large corporations, and what was going on at Enron. The Enron philosophy pervades the United States!

Now, the result of that is, that the essential problem of management is no longer understood. Management used to be leadership, when it was good. And if it wasn't good, it went bankrupt. Because, leadership meant providing ideas, or coordinating people in developing ideas. You didn't have this kind of touchy-feely kind of management, mixed with whips and lashes. It's nonsense! It's pathetic! It's a '68er mentality.

Now, the problem here, is that most managements don't know anything about anything of importance. They're good at grabbing money, but that's all. You look, for example, at the rate of profit, or profit margin today. It's absurd! You can not run an economy on those kinds of profit margins! You have very little product cost and much margin. And it works on the basis of so-and-so owns this, and so-and-so owns this, and everybody has their "take" on top of cost of the product. I used to say, back in the early 1980s, the way the U.S. economy was going, you were going to end up with Detroit with one giant skyscraper. And this skyscraper would have different layers of offices and management on each floor. In the basement, you have one guy with a hammer, producing the product! And that's the direction we've been going in!

What is not understood, because of the way in which economics is taught, and management is taught, especially economics, people don't understand the relationship between infrastructure and production. For example, if I take two plants, and I put people in who are trained to do the same thing in these plants, as workers; if I put it in one location, one part of the country, I will get high productivity. If I put it in another part of the country, with the same kind of program, same investment, I'll get low productivity. What is the cultural level in the schools? What is the cultural level in the neighborhood? What are the quality of the schools? What are all the things that go together to make life? See, life is not going to work, and doing a job and leaving. Life is life in a community, a functioning community. And if you have a community which has a high level of infrastructure, quality of infrastructure, good schools, good education, a stimulating intellectual environment—.

You saw the thing, the "Go South" operation, and the first stage of globalization was going South. You move the factories from the North, where you had infrastructure, and fresh water, to places where they had stinking water, and very little infrastructure! And you said, "Now, you're going to save money." The runaway textile industry was a pioneer, going South on that. Then the things came in after them. You get poorer production.

Production is dynamic, the organization of good production is dynamic. You don't have one guy following a recipe to do one thing, when some guy is standing over him, to direct him. You have an interaction of things. How intelligent are the people in your neighborhood? How intelligent are the people in your town? What's their standard of living? What is their ability to innovate?

We used to have the thing, I used to study, in the old days, Soviet literature—translations of Soviet literature; I never learned Russian; but translations—on reports by Soviet authorities themselves, on the problems of management in Soviet factories. And the typical story was, that a new machine was brought into a factory. And the "woikahs" in the factory didn't like the new machine because it wasn't like the old machine! And they would find some way to push the new machine aside, and say, it doesn't work, and demand a replacement for the old machine! In other words, the characteristic of the Soviet economy as a whole: You had a military sector on a very poor productive base, which performed scientific miracles in terms of producing military capabilities. But at the same time, the production of civilian goods, under the management of the "woikahs," stunk! Because the idea of management and the idea of creativity, the idea of leadership—you're taking a population in Russia which can come one or two generations out of poor peasantry, almost slave peasantry, and you put them in a factory, to run a factory, in the way the workers are going to run the factory—it's not going to work! They need leadership! Because they're not familiar with the ideas of science. They're not familiar with the ideas of technological progress. Only a minority are.

And the key thing is, in the old days, you wanted to build an industry: Look at the local schools; look at the local hospitals, libraries; what's the thinking in the community? What are the kinds of social activity going on in the community? You would search the whole community before putting it in that area, because you wanted to know what was the total dynamic environment in that community. Because you're going to move a few key people in there, where you're going to find people who would be agreeable to the kind of production you were doing. If you needed a high degree of innovation, and this became more and more characteristic to maintain U.S. industry, you need more innovation! Well, an innovation factor, means that the cost factor that you build into total production, is higher. You had much more on research and development, much more on science, much more on advanced training; you send your people out to be trained in advanced courses in this and advanced courses in that, to new experiences; ship them over to see what the other guys is doing. And you get a higher potential for creativity, and just plain innovation in production, in a quality of product.

You would have, in a good factory, in the old days, with the suggestion box or other methods, you would find out that you had a high degree of improvement, in quality of production and technology through the workers themselves! Because you had a stimulation. People would be staying up nights on weekends, working out something they were going to put in the suggestion box. The auto industry in particular, particularly from the World War II experience, was full of this stuff!

And when the industry began to go to hell, we began to lose to the Japanese, is when that stopped. With the Black Lake project, where people began to say, "No! We got to drive these guys, harder, harder, get more! Speed up! Speed up!" You have some jerk with a clipboard running around. called an "engineer"; and he's got an incentive to cut the pay, or to speed up the job. And you get junk.

I remember in the 1950s, surveying the auto industry on the retail end: You would find Coke bottles and sandwiches in the car, because somebody had put their lunch down, and it had gotten trapped in the process of assembling this particular vehicle—"what's the stink here? Oh! That's the Coke bottle." The speed-up was crazy! Whereas originally, the idea was, you had a craft—yes, you worked hard—but you had a craft, a sense of pride in the product you were producing. And having pride in the product you're producing, you pay attention to things that are not on the schedule! You know it's going to make the product bum, so you don't let that go out! You take pride in your work. You're concerned about the quality of life your family has, not just, you know, what it's like to go home and drink a beer in front of the television set, or something. That's not the important thing.

Because you're going to die someday. And the biggest problem you had with industrial workers in the old days, is, they died too quickly once they retired. You get the gold watch, and then two days later—die! Because they're cranked up to work like hell, and they come to retirement age, and they take the first vacation—beep! Gone!

Because then life is not organized in such a way that they have a personal life in which work is simply an essential part of that personal life. But they have primarily a personal life. They think about the life of their children, not just sending their kid to be successful: But a personal life, a community life.

And so what good management represents, is an understanding that there are certain costs, which cheapskates don't like to pay, the time-study people don't like to have paid. But these costs are not really lost costs: These costs are factors which, properly understood, become the basis for the improvement in product and design of product. You want to develop the people. And that is good management.

Sure, not waste, not slop. That's easy to get it. But people today think in a mechanistic way about production. And production is dynamic. It's human production. Why not hire gorillas? Why not have chimpanzees? Why do you have people? Why not have automatons? What do you want people for? Because people have creative powers in their mind. You want to develop those creative powers, and you want to, above all, not merely produce a product which you sell—yes, you do want to sell it—but you want to produce a product which improves the people who make it. Because it challenges them, and gives them a sense of satisfaction: "I made it better."

This was, you know, in World War II, this was the pride. We could produce something out of nothing, and make it work, and make it better!

Everyone's going to die: So what kind of a life are you leading that's leading to death? Are you a chimpanzee, an animal? Or, are you a human being? Or do you have a sense of some kind of immortality embedded in your living? Are you trying to do something which is good for all time for mankind, in your own way? In some degree? Something that your descendants can be proud of? Something your community can be pleased with?

And it's the motivating of this intellectual power, this creative power in the individual, which is absent in the animal, which is the essence of good management. It's the subjective factor of management, and that's what's missing.

And therefore, the problem today is, is we need to think about designing production—first of all—this is an important question. Let me take one other aspect of this thing.

What Is the Division of Labor?

Look at the world—because it's implicit in the question. The world today, the question is, what is the division of labor? Let's take the case of China and India. Now, China and India are not wonder-miracle stories. Yes, the Deng Xiaoping leadership in China, was part of a change in the character of Chinese production, Chinese economy. It was in a certain sense successful, but don't exaggerate that. There are lots of problems.

One of the biggest problems is that China is leaving a lot of its population undeveloped, while using a lot of its population as cheap labor to produce American and European goods by cheap labor for an American and European market. What happens if the European market and the U.S. market collapses, what happens to China? Not very good. What happens to India, which is a somewhat different case, but has a somewhat similar problem?

What's the problem? Well, in China there's not adequate development of water management. Well, they're working on that with these large dams, like the Three Gorges Dam, things like that. Absolutely essential. No excuse for not doing it. But they don't have enough power. What do they need? They need nuclear power, lots of it! India's prepared to go with a nuclear power program, a high-temperature thorium reactor from 120 MW up—in multiples, 100, 200, 400, 800. You can produce synthetic fuels, you can produce from water, you can produce hydrogen fuels. Ah! Water! Well, we've got a water shortage all over the world! You can't get drinkable water! We've lost it in the United States. So, what do we need? We need nuclear power to produce potable water so you can get safe drinking water out of the faucet again, as we used to be able to do, 40 years ago. Can't do it any more—get worms, instead.

So therefore, what you have, is you have a Chinese population of 1.4 billion people probably, at this stage, or more; over 1 billion people in India. The rest of Asia in a similar condition. What are you going to do!? You're going sit back and say, "We're talking about competition"? Hey, you're an idiot! We're not talking about competition: We're talking about survival of the human race for the future! These people need more raw materials. To raise their standards of living, to develop their economy.

The population is going to increase: We're headed toward 8 billion people on this planet! We're already beginning to draw down the best natural resources at rates more rapidly than we can replace them. So what're we going to have to do? We're going to have to have within 25 years, we're going to have thermonuclear fusion. Why? Because we're going to have to use plasma torches to reprocess poor-grade raw materials, and turn them into high-trade raw materials. To deal with the water problem, you've got to have high-temperature gas-cooled reactors, in order to take salt water, other kinds of water that's not drinkable, usable, and process it.

You're going to use petroleum forever? Move this petroleum in cans all over the world? Cheap stuff like petroleum, move it at high prices in cans? When it's becoming more expensive? No! You're going to have a different fuel: You're going to have a much more efficient kind of chemical fuel, hydrogen-based fuels. How do you make hydrogen-based fuels? With a high-temperature gas-cooled reactor: 800 degrees, that sort of thing.

So you can produce hydrogen-based fuels locally, by the same power station, nuclear power station, that produces your power, that produces industrial process heat for your factory production, and so forth and so on. Now suddenly, you have, instead of a dirty community, you have a clean community.

All right, therefore, we have Europe, we have the United States. Reorganize the United States to say, cut this cheap labor out. We don't want Americans doing cheap labor. We'll do what we have to do to maintain the economy, but no more cheap labor policy!

We now go to a high-temperature gas-cooled reactor type of technology; high capital-intensive technology! We have a cultural standard that enables us, as I've proven it with these young guys, in our educational program for the Youth Movement: We can do it! We can produce a better educational program for science orientation and cultural orientation, than exists in universities today! We know how to do it! We're already in that direction. We're going to do it! We can take the existing population, inspired by young people in their 20s, to get off their butts and begin to think again, begin to feel it again. We can start, and shift the United States into a high-gain, capital-intensive, science-intensive production, to produce the needs of the world! Together with parts of Europe which have a similar capability.

Therefore, we're going to specialize, not in dividing product among this nation and that nation. We're going to specialize in being—we are going to be the planetary science-driver capability.

What we need is a Congress which gives up its '68er, masturbatory policies. Gets back to reality, despite being born as a '68er. You're going to have to orient this economy for an emergency, to prevent a general collapse which is coming on now! It's coming on this year, unless we change.

So anybody who doesn't change, now, from the current trends in the Congress, is an idiot—or worse! Therefore, we're going to have to do it. What are we going to do? We're going to adopt a policy, beginning with rescuing the machine-tool capacity associated with the auto industry now, for new products which will provide the ground base for a high-intensity driver program for the U.S. economy. We are going to enter into 25- to 50-year contracts, long-term agreements, treaty agreements with Asian countries and others, on long-term development, at 2% credit rates, borrowing costs for long term. Because we don't need a high profit rate: We need a high growth rate. That's the difference.


About LaRouche - the American economist and statesman that has become a legend in our time in the fight to advance civilization, protect mankind, and create a new renaissance: 

"We are at a point in world history. 
At the present time, the international monetary financial system
of the world is in the process of disintegration. That does not mean the end of the world. It means that we either make certain changes, or this
planet will go in fact into a prolonged new dark age, comparable
to what happened to Europe during the middle to late part of the
14th century." (LaRouche, June 15, 2006)

About the series: Truth versus Guns,
 presented by Rolf A. F. Witzsche

About Rolf A. F. Witzsche

Rolf A. F. Witzsche, is an independent researcher, publisher, and author of eleven novels. The novels are focused on exploring the Principle of Universal Love, the principle that is reflected to some degree in every bright period throughout history, with the added challenge for today to give our universal love an active expression with a type of 'Universal Kiss' for all mankind. 

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