Michael Hudson says he testified before grand juries to convict Lyndon
LaRouche
Newsletter published on May 27, 2020
(1) Asia Model economies based on Friedrich List, not Adam Smith, or
Karl Marx
(2) Asia Model economies - derived from Friedrich List or from Confucianism?
(3) Ilana Mercer depicts EU as a Nazi project inspired by Friedrich List
(2005)
(4) REPLY to Mercer: Protection and Free Trade - Friedrich List's
"National System" (2006)
items 5 to 7 are from newsletter b2042, dated Jan 1, 2012:
(5) Asia Model economies - derived from List or from Confucianism? -
John Craig
(6) National System Economics - Don Veitch and John Seale
(7) Genre and Background of the National System Economics article
items 8 to 13 are from newsletter from b2043, date Jan 2, 2012:
(8) Japanese imperial system was based on the PRUSSIAN system - Elaine
Supkis
(9) Michael Hudson tells two interviewers "I'm Leon Trotsky's godson"
(10) Michael Hudson says he testified before grand juries to convict
Lyndon LaRouche
(11) Michael Hudson says he asked ADL to help expose LaRouche; ADL were
Schachtmanite Trots
(12) Asia Times was edited by ex-Larouche member Uwe Parpart - Larouche
website says so
(13) EX-LAROUCHE writers
(1) Asia Model economies based on Friedrich List, not Adam Smith, or
Karl Marx
by Peter Myers, May 27, 2020
This newsletter has been running for over 20 years. In years past we had
debates about economics.
Arno Mong Daastoel of Norway was Moderator of the Gang8 forum on
Economics (a Yahoo group). Michael Hudson was a participant. Both were
in this mailing list too.
Arno introduced the ideas of Lyndon Larouche to this newsletter. Michael
Hudson objected, because he'd had a very personal clash with Larouche,
and testified against him to have him jailed for fraud.
Larouche and Hudson were both Trotskyists. Larouche was a devotee of
Hudson's father Carlos, a Trotskyist leader in the Minneapolis strike.
Carlos Hudson used to visit Trotsky when he was in Mexico city. He used
to take Trotsky to visit Frida Kahlo. He even took Michael to Mexico to
be 'christened' with Trotsky as his 'godfather'.
Michael Hudson's middle name is 'Huckleberry'. That's because his
father, a romantic, was captivated by the story of Huck Finn.
Michael has written a number of book on economics, including two about
the American System Economics developed in the mid to late Nineteenth
Century. That theory was the driving force behind US economic
development up to World War I. It was not based on Adam Smith or David
Ricardo (Free Trade & Comparative Advantage) but on the nationalist
economic ideas of Friedrich List and Matthew Carey. Those ideas can be
called National System Economics.
Australia also used such ideas in its economic development, from
Federation in 1900 until Deregulation and Privatization in the late 1980s.
Larouche wrote a lot about National System Economics. His economic
theory is nowhere as advanced as Hudson's, but Larouche specialised in
promoting massive infrastructure projects.
Larouche writers promoted the concept of a Eurasian Landbridge. They
envisaged standard-gauge high-spped passenger and freight rail networks
spanning Eurasia, and from there to the Middle East, Africa, and even to
the American mainland via Alaska.
When China adopted their ideas, in the form of the Belt and Road,
Larouche writers switched from their anti-communism of the years 1988 to
1993, to being avidly pro-China by 1995. Whereas in 1989, Lartouche's
flag publication Executive Intelligence Review ran many articles about
the Tiananmen massacre, in recent years its articles have been
republished in China Daily. See for yourself: search Google for
"Larouche" "China Daily".
Executive Intelligence Review is archived at https://larouchepub.com/
Some of their articles from 1989-1990 are
Putin had cold feet about giving up the break-of-gauge; Russia has long
found its 5 foot rail gauge a protection against invasion. So trains
from Beijing to Moscow will undergo two gauge-changes.
Michael Hudson is also enamoured of the new Chinese regime. In a recent
interview with Max Blumenthal and Ben Norton he said:
The Hard Fist of American Imperialism
By Michael Sunday, April 26, 2020 Interviews
Moderate Rebels, 24 April 2020
PART 2 OF 2 (Interview recorded on April 13, 2020)
Transcript – How The US Makes Countries Pay For Its Wars: Economics Of
American Imperialism
With Michael Hudson
MICHAEL HUDSON: What makes China so threatening is that it's following
the exact, identical policies that made America rich in the 19th
century. It's a mixed economy. Its government is providing basic
infrastructure at subsidized prices to lower the cost of living and
doing business, so that its export industry can make money. It's
subsidizing research and development, just like the United States did in
the 19th century and early 20th century. [...]
I have gone back to China very often. I'm a professor at Peking
University, and I have honorary professorships in Wuhan.. There are a
number of articles on my website from the Chinese Academy of Social
Sciences on de-dollarization, essentially how China can avoid the use of
the dollar by becoming independent in agriculture, technology, and banking.
{endquote}
Yet Hudson does not realize that China's Belt & Road is based on the
ideas of his old rival, Lyndon Larouche.
Both Hudson and Larouche are Marxists and yet followers of National
System Economics.
In 1978, when Deng Xiaoping visited Japan and saw its economic miracle,
he decided to switch China's economy to that model. But for the first
ten years, his workers had to do menial jobs in coastal free-trade
zones, for foreign multinationals and nearly no pay.
China's transformation in the 40 years since 1978 has been a 'miracle',
but it was modelled on another 'miracle', the Japanese postwar one. And
that one was based on another 'miracle, Hitler's 'miracle' economy from
1933.
So, the miracle was achieved by a switch from Marxist economics to
National System Economics.
Unlike other National System Economies, (Nineteenth Century USA, Postwar
Japan, Australia from 1900 to late 1980s), in China's case
totalitarianism remained part of the mix.
But that was also the case with Nazi Germany. Both regimes combine
National System Economics with totalitarian repression. John Garnaut, an
experienced Australian diplomat, son of Australia's Ambassador to China
1985-8, called China's new system "National Socialism with Chinsse
Characteristics":
National Socialism with Chinese Characteristics
Meet He Di, the insider trying to save the Chinese Communist Party from
itself.
BY JOHN GARNAUT | NOVEMBER 15, 2012, 4:50 PM
Why would Larouche writers deny the Ukraine famine, and the Uighur &
Tibet genocides?
For the same reason that Western Leftists in the 1930s denied the
Ukraine Famine. And why many pro-China leftists now deny the Tiananmen
Massacre 1989.
Larouche writers supposedly uphold the economy of List & Carey, not Marx
& Stalin. So why defend Stalin? Here's Lyndon Larouche on List and Carey:
What Connects the Dots?
by Lyndon H. LaRouche
Executive Intelligence Review
February 17, 2006
{p. 10} All the crises inhering in the currently prevalent principal
conflicts in so-called "economics" ideology, are rooted in the
irreconcilable differences of moral and scientific principle which,
categorically, separate the American System of political-economy of
Franklin, Alexander Hamilton, Frederick List, Henry C. Carey, Abraham
Lincoln, Franklin D. Roosevelt, et al., from the caricature of what had
been then the already wretched British doctrine which has been promoted
lately as the virtually economic-suicidal perversity of performance by
the current U.S. Bush Administration.
One question that arose in debates in this newsetter, years ago, was
whether the Asia Model economies should be considered as mainly
List-based or Confucian-based. That issue is taken up in items 2 to 5.
(2) Asia Model economies - derived from Friedrich List or from Confucianism?
The Japanese economic system is Prussian, based on List's ideas,
although at times Laissez-Faire has been ascendant.
You can read List's main book at
The National System of Political Economy
by Friedrich List, 1841
translated by Sampson S. Lloyd, 1885
(3) Ilana Mercer depicts EU as a Nazi project inspired by Friedrich List
(2005)
Adieu to the Evil EU
by Ilana Mercer
Posted on June 10, 2005
[...] The sovereignty of European non-members is already constrained by
the EU’s burgeoning jurisdiction. But if ever its constitution goes into
effect, the EU will assume unlimited powers – its laws usurping all laws
enacted by national parliaments – and will concentrate these in a few
unelected, grubby hands. (The Charter of Fundamental Rights and the
Constitution, which will subsume the Charter, have been drafted without
the consent of the people they will irrevocably bind.)
Dissembling Eurocrats justify this usurpation by claiming the EU would
prevent wars in Europe. How exactly would they achieve this noble end?
Why, by substituting the nation-state with deracinated, supranational
institutions. They assert that national identity causes bigotry and
bloodshed, hence, in Chancellor Helmut Kohl’s words, "We have no desire
to return to the nation state of old." Other neo-communists such as
Romano Prodi have seconded the sentiment – and their quest to engineer a
single European identity.
However, in his examination of the The Tainted Source of the Idea of
European Union, classical liberal philosopher David Conway finds little
to laud. The idea of the EU Conway traces to the writings of Friedrich
List in the first half of the 19th century. "[A]s far as List was
concerned, the main reason for European states to enter into such union
was not to prevent war between them. It was, rather, to enable them
better to wage economic war against other more economically advanced
states, in List’s day [and today], Britain and the USA."
Like the bureaucrats of Brussels, "List’s vision of European union was
less Anglophobic than anti-liberal." His ideas were seized upon by the
Nazis – they referred to List when outlining their aspiration to create
a European economic and monetary union. A July 1940 memorandum, written
by the Reich Chancery, elaborates on a vision for a united Europe in
which economic development is strictly supervised by the state and in
which a fixed rate of exchange is mandated. (All the better to
manipulate the money supply to fund the central government’s profligacy.
States can’t fight inflation because they are forbidden to adjust
interest rates). The Nazis also cited "lasting peace … freedom,
prosperity, and security" as the impetus for European union. [...
(4) REPLY to Mercer: Protection and Free Trade - Friedrich List's
"National System" (2006)
Date: Sun, 15 Jan 2006 11:24:27 +0100 From: "Arno Mong Daastoel"
> List's vision of European union -
> Vintage American propaganda from last June
> Adieu to the Evil EU
> by Ilana Mercer, AntiWar.com, June 10, 2005
>
>"[A]s far as List was concerned, the main reason for European states
to enter into such union was not to prevent war between them. It was,
rather, to enable them better to wage economic war against other more
economically advanced states, in List's day [and today], Britain and the
USA."
Correct. But this was a war of defence against an established and
superior force .
> "List's vision of European union was less Anglophobic than
anti-liberal."
List was certainly no anti-liberal. He repeatedly explained that "free
trade" and a "universal republic" was the ultimate goal. Indeed, he
criticised repeatedly England for being protectionist, thereby creating
a "dictatorship". He was expelled from Baden-Würtemberg (Germany) to the
USA for his liberal-democratic activities.
> the present European Economic Community is simply a continuation of
the Nazi project.
And....?
Reply (Peter M.):
But that article is just "Vintage American propaganda".
Karl Marx also advocated European Union.
In your article FRIEDRICH LIST, THE ULTIMATE GLOBALIST
http://arno.daastol.com/artprof/listfree.html, you write:
The first part of List's program, a customs union, would potentially
shut out English goods, thereby threatening British power and welfare.
The second part, railroad construction, would create effective markets
in countries where there formerly were none, would elevate the
productivity of business in these countries, would make army and supply
movements within these countries much more efficient, and when laid into
underdeveloped areas would open up new markets for the industry attached
to this network. This would strengthen the industrial and political
competitors of Great Britain. When these "new" areas happened to be
adjacent to a British dominated territory, India, where both the Berlin-
Baghdad railway and the Trans-Siberian were pointed more or less, this
could easily be seen as a provocation and a direct threat.
The third reason, naval construction, was a direct threat to British
naval supremacy and questioned the British tradition of setting the
terms in all areas attached to the global seas. Additionally it
challenged British defence of domestic supplies and communication with
its overseas territories.[xx]
Therefore, all these three part of List's strategy of developing Germany
and the European Continent, contributed to these two wars since their
implementation challenged the hegemonist of world power. Whether List
was right or wrong in promoting his ideas is certainly a matter of
dispute. Nevertheless, there never was, nor is, any objective reason why
one nation should monopolise technical and economic progress and thereby
dominate world markets single-handed. List himself comments that,
At all times the weaker countries in Europe have collaborated to defend
themselves against the pretensions of a dominant state. This has been
called the balance of power. In the same way there has been united
opposition to England's dominant position with regard to industry and
trade. England has become so powerful economically that she is able to
bring good fortune or ill-fortune to other nations, so long as those
countries act in isolation. ... An attempt to set up a new Continental
System, however, would endanger the prosperity not only of England but
of all nations and ... the only satisfactory solution to the problem
would be the establishment of world free trade. ...
In the face of strengthened American economic power, List advises
England to ally with the powers on the European continent and become
"the first among equals". However, Churchill later wrote that, "Whenever
we have to choose between the Sea and the Continent, we shall always
choose the open sea." (According to memory). This seems to have been
right so far, but the development of modern transportation may slowly
change the British sentiment in this regard. The Tories has been more
Sea-oriented, following the strategy that Churchill pointed to. This has
focused on the traditional link to the USA and the British Commonwealth,
and in particular the dominions. The Imperial Preference policy was a
pre-EU outgrowth of this policy, as is the efforts to construct a
Trans-Atlantic Economic Project ("TEP") today. In their adherence to the
Anglo-American "special relationship", the Tories have been trying to
copy the Greek strategy of "Roman muscles, Greek Brains". Though their
success in "guiding " the actions of their big brother has often been
faulty. The Labour party has been more eager to connect firmer also to
the Continent in order to secure benefits for domestic industry and
secure some say on the continent - for instance in guiding the EU into
the cover of the umbrella of the Anglo-American TEP, mentioned above.
List actively favoured an alliance between Britain and Germany -, as did
Hitler later on. Both had, however, little understanding of the dominant
British elite mentality and the lack of interest in any compromise and
sharing of power with the Continent. List had perhaps forgotten the
content of some of his earlier writings, quoted above. (* 1827 a, Letter
II). (* 1841, pp.368-69) (* 1841, p.402) ... {endquote} ==
items 5 to 7 are from newsletter b2042, dated Jan 1, 2012:
(5) Asia Model economies - derived from List or from Confucianism? -
John Craig
From: "John Craig" <john.cpds@gmail.com>
Cc: "Arno Mong Daastoel" <arno@daastol.com>,
"Dick Eastman" <oldickeastman@q.com>,
"Michael Walsh" <euroman_uk@yahoo.co.uk>
Subject: RE: Japan and China to trade in Yen and Yuan without using dollars
Date: Sun, 1 Jan 2012 15:15:51 +1000
Peter
Japan's recent moves to encourage the use of the Chinese yuan for
international trade (mainly in Asia) are simply a continuation of its
efforts in recent decades to change the nature of international
financial systems from one based on Western methods (which encourage
initiative by rational individuals) to one based on decisions through
intuitive groups – see
Invisible Clash of Financial Systems.
The latter includes reference to Fingleton's conclusion that the
economic models that have been used in Asia were originated by the
Japanese military in Manchuria in the 1930s (and, if so, their
dissemination is likely to be simply a continuation of Japan's pre-WWII
vision of an Asian Co-prosperity Sphere). Those methods have their
foundation in Confucianism (as a traditional East Asian technique for
accelerating learning within hierarchical social networks) – see
East Asia in Competing Civilizations
This can't be interpreted in terms of List's ideas about tariff
protection as a means of providing security for capitalist investors. In
Japan as in China national savings have been mobilized through
state-linked banks and provided to state-linked (ie cronyist)
enterprises that were expected to pursue nationalistic / mercantilist
goals with limited regard to capitalistic considerations of profit. Thus
opening one's currency as a basis for international trade is extremely
hazardous for countries such as Japan and China (eg see
Heading for a Crash?). The problems go well beyond questions about
property bubbles. It is noteworthy that Japan has apparently set up
China as the fall guy – ie the yuan, rather than the Yen, would take the
major role (see
Asian giants strike currency deals in move away from US dollar). Japan's
reasons for preferring this are pretty obvious from
Why Japan can't deregulate its financial system.
It was recently argued that China's leadership was very worried about
the future - even though many other countries are worried about China's
competition
Kid gloves for a cooling China]. Their focus, it was suggested, is on
internal problems (eg dependence on high growth driven by exports to
maintain social tranquillity; resistance to currency manipulation;
inequality; the need for shifting to domestic demand; inflation and
housing bubble; political transition in near future; pollution; aging
population; protests; and international isolation). In my opinion
China's biggest problem lies in the incompatibility of the social
equality that is the basis of its nominal Communism and the social
hierarchy that is intrinsic to the neo-Confucian system of
socio-political-economy that Japan persuaded China's leaders to adopt
discretely in the 1970s to generate an economic miracle (see
Versus Confucianism: The Continuing Contest in China)
Regards
John Craig
Reply (Peter M.):
Confucianism provides the cultural/psychic/civilizationa
Asia Model, with Daoism contributing too.
But the economic side draws on List and the National System school of
economics. However, the derivation from List is in a tree-like structure
(with him as root). Thus there's variation among the leaves/branches of
the tree; implementation invoves casting the ideas within a cultural matrix.
Other thinkers elaborated along the way, and this varied from country to
country - eg see Michael Hudson, America's Protectionist Takeoff
1815-1914: The Neglected American School of Political Economy. He writes,
"The leading American protectionists centred first around Matthew Carey
in Philadelphia and included Hezekiah Niles, Daniel Raymond and
Friedrich List, and later around Matthew's son Henry" (p. 19).
Australia's Protectionist and Developmentalist economy also derived from
List and other thinkers he'd influenced. Alfred Deakin, King O'Malley
(founder of the Commonwealth Bank), Denison Miller (head of the
Commonwealth Bank), John Curtin, Ben Chifley and Jack McEwen were all in
this tradition.
Australia itself had an "Asia Model" type economy from the 1940s to the
1980s, without the Confucianism. The memory of those days is what drives
me - we did not know how lucky we were. That's why I become so annoyed
with Americans who rant against "Socialism". They need to investigate
their own Economic tradition, in the century before 1914; Michael
Hudson's book would be a good place to start.
(6) National System Economics - Don Veitch and John Seale
The authors were ex-Larouche writers who retained Larouche's basic ideas
but split from the cult. They came out against Larouche's affiliate in
Australia, the Citizens Electoral Councils, and later contributed to an
ABC Four Corners documentary damning the Larouche movement in Australia;
it was a hatchet job - the Larouche people were not given the chance to
respond - Peter M.
National System Economics: The Executive Summary
by Don Veitch and John Seale
Published and distributed by David Syme College of National Economics,
Public Administration & Business Ltd.
{p. 6} National System economics, until now not identified by that
label, emerged as a coherent economic approach in the northeast of
America in about the 1790s and developed through to the 1870s. Its chief
advocates there were John Rae, Daniel Raymond, Friedrich List and Henry
Carey.
The economic outlook of this 'school' spread to Germany, Japan and
Russia. In Australia the chief spokesman for this school was David Syme
through pages of The Age.
A Brief History Of Modern Economics
In the early period of England's growth, up until the 1840s, England was
a mercantilist state, meaning the government promoted industry. Many of
these laws she had learned from the practices of the Venetians and the
successes gained from Jean-Baptiste Colbert (1619-1683), the King of
France adviser, and the works of the English Mercantilists, Thomas Munn
(1571- 1641) and William Petty. The mercantilists, like Munn, argued
that a nation must have a surplus balance of trade, this would ensure
the inflow of gold to England and build up the power of the monarch and
the state.
A new tradition of economics developed, challenging the mercantilist
view. The Physiocrats in France, argued that the soil was the source of
all wealth, they constructed the first 'circular flow' model, and the
writings of those like Thomas Mandeville (1670-1733) who argued in his
Fable Of The Bees (1705) that private vices led to public virtues. Thus
was born the early
{p. 7} morality of the emerging economics: follow individual
self-interest, and the economy will prosper. Both Mandeville and the
physiocrats provided much of the basis for Adam Smith (1723-1790) who
wrote the Wealth Of Nations. Adam Smith's economics are the spiritual
basis of modern economics.
With the successful conclusion of the American War of Independence
(1777-1782), largely fought over Britain's economic relationships with
America (taxation, imports), the American colonies sought a path of
industrialisation and economic development. Such a path was argued by
Alexander Hamilton (1757-1804), George Washington's most influential
economic adviser. In the 1790s Hamilton wrote a number of reports to
Congress, calling for a national bank and manufactures. In his writings
he argued for a strong federal government and praised the beneficial
effects of industry on developing the talents of the nation's people. He
also praised Colbert. His advice was accepted by the young republic.
Hamilton was the first of America's National System economists.
We now change the focus back to Britain. Adam Smith's advocacy of free
trade, was gaining ground as policy, only delayed by the Napoleonic wars.
Jeremy Bentham (1748-1832) was to add his contribution arguing that man
is an economic creature pursuing pleasure and avoiding pain, thus was
born the utilitarian branch of liberal economics. In the 1820s Thomas
Malthus, (1766-1834), a teacher at the British East India
{p. 8} Company's school (Hailebury College), continued the physiocratic
arguments and wrote of the fine balance between population and economic
resources, he argued against the poor laws, claiming that they only
encouraged the poor to breed. David Ricardo (1772-1823), a former
stockbroker, clairred that rents and profits declined over time and that
the economic problem was one of distribution of produce amongst three
competing classes, landowners, labourers, and proprietors. John Stuart
Mill (1806-1870) a lifetime employee at the London HQ of the Brltish
East India Company, consolidated this liberal economic traditlon arguing
for market forces, but incidentally, defending the East India Company's
opium monopoly.
These British economists, along with Nassau Senior, James Mill, J.
McCulloch met in the Freemason's tavern in Great Queen Street, they were
one of the first free trade 'think-tanks'. We can find their
contemporary counterparts in the Mount Pelerin Society, Sydney
Institute, the Institute of Public Affairs, the Tasman Institute and others.
In 1820 the merchants of London organised a petition demanding free
trade as a matter of national policy. The petition was written by Thomas
Tooke (1774-1858), but organised by Alexander
{p. 9} Baring (of Baring's bank) and read in parliament by David
Ricardo. In October 1838 the Manchester cotton merchants met to form an
association which later became the Anti-Corn Law League, the first
modern mass agitation organisation. Their aim was cheap corn prices, and
thus cheap wages. Its leader was Richard Cobden (1804-1865), a
Manchester cotton merchant. They organised agitation for a repeal of the
Corn Laws, later to follow was the repeal of the Navigation Acts, and by
the early 1840s free trade was accepted national policy.
Free trade dogma was then forcefully instituted throughout the western
world and particularly, the British Empire. Its golden rule was 'buy
cheap and sell dear', and its effect was to cheapen wages and generally
force prices down.
At this time British economics was a rigid, deductionist school that
relied on a number of unchallengeable laws or axioms (class division,
scarcity, declining rent, rational economic man, the existence of a
benevolent 'invisible hand' - the market).
Back to America. The tradition of Hamilton, who died in a duel in 1804,
was continued by Tench Coxe, Hamilton's assistant, who, it is claimed
did much of the preparatory work for Hamilton. In 1787 Coxe had outlined
similar ideas at a meeting in Benjamin Franklin's house.
Alexander Hamilton, and others, founded the Society For Establishing
Useful Manufactures (SUM). It was to be capitalised at one million
dollars and factories and mills were to be established at the Great
Falls of the Passaic River, it was a grand plan to industrialise that
part of the USA.
Henry Clay (1777-1852) argued for tariffs in Congress and was the first
to use the term 'American System Economics', referring to a program of
internal improvements' (what we would call
{p. 10} infrastructure today), and measures to build industry. His
speech in Congress (30th-31st March 1824), is a classic argument in
favour of tariffs: the need to develop the home market; the power of
domestic production; a harmony between agricultural and secondary
industry; the power of machinery.
In the 1820s and 1830s, opposition to British Imperial economics and
support in favour of the development of native industry was nurtured in
northeast USA by the circle around Mathew Carey (1760-1839), a confidant
of Benjamin Franklin. Mathew Carey had been exiled from Ireland for
political and economic agitation. Members of this 'salon' included,
Alexander Everett, Willard Phillips, Francis Bowen. Essentially this was
a salon for New England industrialists. They spread the word about the
benefits of protection and the dangers of free trade. They provided the
inspiration for the Wharton School of Business. In 1824 they were joined
by the German exile, Friedrich List.
Friedrich List (1789-1846), who had led a campaign to develop a German
Customs Union (the Zollverein), had been hounded out of Germany because
of his advocacy of economic reform. He settled in America from
1826-1832. During that exile he developed one of America's first rail
lines and was a forceful advocate of America's industrial development.
He returned to Germany and is considered to be the father of German
railways. In 1841, List published his classic work The National System
Of Political Economy, in which he attacked Adam Smith's 'cosmopolitan'
economics system, a system that measured 'exchange' rather than a
nation's productive powers'. List defended an historical-inductive
method and condemned the 'deductive' a prion reasoning, a reasoning
{p. 11} that relies on flawed axioms and ignores reality.
Other significant writers who associated with this group were Daniel
Raymond (The Elements Of Political Economy, 1821 ) who brilliantly
attacked the principles of free trade and Smith's deductive method, and
outlined a comprehensive system of producing public wealth through
improving the quality of effective labour, both physical and mental
qualities. Some 110 years before Keynes, Raymond anticipated the key
role of consumption in economics. John Rae in his Principles (1834),
attacked the axioms of Adam Smith and developed a new theory of capital
accumulation which was taken up by neoclassical writers and the
Austrians in particular (Boehm-Bawek).
In 1841, Henry Carey ( 793-1 879), the son of Mathew, published perhaps
his most significant work, The Harmony Of Interests. This was a classic
defence of tariffs, an outline of a theory of productive powers,
highlighted the need for the producer to be close to the consumer, and
proposed that a 'harmony of interests' between sectors of the economy,
especially farmers and industry, was more in keeping with natural
economic laws than the 'division of labour' and the 'class divisions'
claimed by Malthus and Ricardo. He developed an argument about the human
power of association, and advocated a development of the home market,
where both buyers and sellers gained. Carey's book is a brilliant
statement about the benefits of co-operation, as against competition.
A later writer in this tradition was Erasmus Peshine Smith (1814- 1882),
who argued in A Manual Of Political Economy, that innovation is a source
of progress, and that population increases (contrary to Malthus'
assertions) are beneficial. Peshine Smith
{p. 12} became an important adviser to the Japanese Meiji Government and
it is possible that he influenced Japan's economic development. He was a
fierce advocate of natural law and wrote: "government is successful in
the degree to which it becomes unnecessary!"
The writings of Friedrich List and Henry Carey were helpful in the
economic development of Japan, and Russia. Carey's works were widely
distributed in Japan after the Meiji restoration (1870s onward) In
Czarist Russia, Count Serqei Witte (1849-1915) was a devotee of
Friedrich List.
Sun Yat Sen, the founder of modern day China advocated an infrastructure
program for China and was sympathetic to National System ideas.
{p. 13} The Influence Of National System Economics In Australia
Australia was founded, primarily, as a dumping ground for convicts.
Plans such as that advocated by James Matra (1784), George Young (1785)
saw Australia as an emporium, or a source of raw materials, or of
commercial opportunities for aristocrats dispossessed from America, and
Jeremy Bentham, in his Panopticon Versus New South Wales, advocated that
New South Wales should be converted to a giant legal 'panopticon' where
convicts either work for their bread or starve.
Other 'schemes' directed Australia to serve the interests of a few
privileged people. George IV granted one million acres to the Australian
Agricultural Company and 300,000 acres to the Van Diemen's Land Company
to develop agriculture with convict and aborigine slave labour. The
Wakefield scheme in the 1830s envisaged keeping land expensive and tying
immigrants to feudal-like obligations.
But the gold rush changed the economic direction of the nation. David
Syme challenged the land monopoly, and argued for industry to give
opportunities for migrants.
David Syme (1824-1908), a migrant from Scotland via Germany and the
Californian goldfields, from 1860 until his death in 1908
{p. 14} pursued an advocacy of the major principles of National System
economics: a national bank, infrastructure, science and technology,
improve the quality of labour, high wages, tariffs, and opposition to
laissez-faire economics. Syme even opposed the way in which
laissez-faire economists thought, that is, deductive reasoning (belief
in a few unchallengeable 'laws'). In his book, Outlines Of An Industrial
Science, a book that was acclaimed in the USA and northern Europe, Syme
attacked the flawed axioms of Adam Smith's school and argued for
judicious government intervention to develop a nation. He systematically
demolished the concept of supply and demand, and man as a rational
economic beast. He pointed out that competltion, which is the survival
of the fittest, leads to monopoly. In his book and other writings, Syme
acclaimed the works of Hamilton, Henry Carey and Horace Greeley.
The free trade lobby organised to combat these ideas. They clrculated
the Cobden Club's ideas in the colonies - William Hearn (1826-1888), a
free-trader became the first professor of economics at Melbourne
University, writing Plutology: Or The Theory Of Efforts To Satisfy Human
Wants, one of the first neoclassical texts. In it he heavily plagiarised
the works of John Rae.
But David Syme's influence spread. He was an early influence on Alfred
Deakin (1856-1917), converting him to protectionism during a famous walk
over the Swanston St. bridge. Deakin visited India, and the USA
investigating irrigation, infrastructure, and his influence was later to
be felt in the policy of 'New Protectionism' in the first decade of the
Commonwealth. A policy that matched tariff
{p. 15} protection with the payment of a liveable wage. His
preoccupations were with protectionism, irrigation, factory legislation
and federation.
Thus Syme is a founder of the liberal tradition within the conservative
parties. Syme has also been categorised as a 'colonial socialist'. It is
an interesting proposition that from the Syme tradition comes both the
liberal and labor traditions in Australia. John Curtin (1885-1945) a
great Labor Prime Minister, was a copy-boy at the offices of The Age.
The Syme policies advocating tariffs, Hamiltonian banking, industrial
development, high wages for workers, and opposition to laissez-faire
continued when the colonies federated. The battle for 'New
Protectionism' was won by Deakin's allies, Hamiltonian banking was
introduced by King O'Malley (1858-1953) who proclaimed 'I am the
Alexande Hamilton of Australia', Andrew Fisher (1862-1928) developed
paper money for Australia. Billy Hughes used the Commonwealth Bank to
finance the Trans-Continental Railway, the purchase of ships for the
nation's shipping line and to finance much of the war effort. In the
1920s Earle Page developed the rural credits divlsion of the
Commonwealth Bank, and in the 1930s Edward 'Red Ted Theodore proposed a
fiat note issue as a means of alleviating unemployment in the
depression. All of these policy formulations come from a National System
tradition.
Between 1942 and 1949 the Curtin and later Ben Chifley (1885- 1951)
Governments initiated an extensive program of postwar reconstruction and
development. This envisaged the
{p. 16} revolutionary concept of full employment, a new central bank
issuing credits for secondary industry, rural reconstruction
infrastructure through a program of public works, a new national railway
grid, a regional form of government encouragement for secondary industry
especially an aluminium industry, motor vehicles and aircraft, and a
special priority for northern development. The Snowy Mountains
Hydroelectric Scheme, financed by the Commonwealth Bank was initiated In
this period.
At the same time popular writers such as lon Idriess were advocating the
Bradfield Plan for irrigation in the Murray-Darling Basin and the
rehabilitation of Lake Eyre and feeder rivers. John Cob Crew Bradfield,
the designer of the Sydney Harbour Bridge and Sydney's rail links, had
proposed an extensive program of natlon building in a speech in 1942. He
had long been a hero amongst populist development networks.
Adjunctive to these national and popular advocates of economic
development in the 1950s and 1960s were Thomas Playford in South
Australia and Henry Bolte in Victoria. Both were fierce advocates of
government support for infrastructure, especially water, electricity,
private enterprise. From their efforts there was an attachment to
population increases, a harmony of interests between agrlculture and
rural industry, and cultivation of the home market.
In the works of these leaders, the major principles of National System
economics were: the use of government banks to fund infrastructure and
private enterprise; tariffs; science and
{p. 17} technology, increasing population; develop the home market;
increase productive powers; harmony of interests; progress and optimism.
They all supported free-enterprise, condemned socialism and opposed the
drift of free trade.
{Comment (Peter M.): they condemned Communism; but National System
Economics itself is a kind of Socialism}
After H.V. 'Doc' Evatt's heavy handed attempt to nationalise the banks,
and the end of the 'workingmen' tradition in the Labor Party, and it
being subsumed by Fabian and overt Marxlst ideas, Labor languished in
opposition for 23 years. The government of Gough Whitlam revived some of
the postwar reconstruction deas, but failed because of its inability to
finance such projects. Whitlam advocated a regional form of government
through the Australian Assistance Plan, which involved building 30 new
cities, and Rex Connor advocated a new power and resource capaclty for
Australia.
In the 1980s and 1990s, free trade principles have come to dominate the
economic agenda, forcefully promoted by free trade think-tanks such as
the Sydney Institute, the Tasman Institute, the Institute of Public Affairs.
By the 1990s the Syme-Deakin, and Syme-Curtin tradition was not even a
memory.
(7) Genre and Background of the National System Economics article
Peter Myers, January 1, 2012
The above article by Don Veitch and John Seale is an example of the
"Larouche" genre.
However, the authors had long since fallen out with Lyndon Larouche,
becoming bitter enemies, even though they preserved the same general
mindset.
Arno Mong Daastoel, of Norway, who sent the material on List and Sun Yat
Sen, and Professor Michael Hudson, of the US, also have connections with
Larouche.
There's also a connection with Trotsky: about 50 years ago, Larouche
himself was a Trotskyist.
And Michael Hudson is a Godson of Trotsky. Michael's parents, fervent
devotees of Trotsky, took Michael as a baby to meet Trotsky in Mexico,
for the "Christening".
Michael says that it means little to him; he does not feel beholden to
Trotsky over it.
Arno used to be a Larouche disciple. Michael tried to talk him out of
it, so Arno is only "lukewarm" now. But he, too, writes in the
"Larouche" genre.
Michael knew Larouche decades ago; their ideas being similar, Larouche
asked to use some of Michael's writing. Michael says that Larouche
plagiarized it; and for that, he had Larouche imprisoned. At least,
that's the gist of the story, so far as I understand it. I think that
misappropriation of money was involved too. Larouche's disciples call
for him to be "exonerated".
We feel Trotsky's influence today through the nonsectarian New Left
(anti-Stalin Left - Feminism, Gay, other "minorities"); yet the
Trotskyist parties - those mindful of doctrine and devoted to the master
- are hopelessly divided into warring sects. So with the Larouche
movement: one comes across numerous articles on the internet belonging
to the "Larouche" genre, yet many of the authors had fallen out with
Larouche over some matter or other, not least over Larouche's raving and
excessive control over his followers.
In my view, the above National System Economics article by Don Veitch
and John Seale is a very good summary, and should be widely
disseminated. Yet I have some differences with it too:
1. Alexander Hamilton, although within the National System school and
therefore partly a "good guy", promoted a privately-owned central bank.
See The Money Masters: How International Bankers Gained Control of
America, by Patrick S. J. Carmack: http://mailstar.net/money-masters.html.
We DO need a National Bank - a publicly owned one. But most Central
Banks are subordinate to the Bank of International Settlements, which
imposes policies from Basel (Basle) in Switzerland. If one does have a
Central Bank, it should be publicly owned, and subject to parliament and
government. We have some say over the latter, but none over
"independent" Central Banks. If the economy is left in the hands of
"Markets", Democracy is illusory. "Markets" just means "the Big End of
Town"; or, worse still, "Foreign Investors".
2. Nation-building and Development are good, but within limits. There
are environmental constraints to resource use, consumption and
population growth. But National System Economics can operate within
such limits. Take the low road; live simply, and in peace. Divide up the
work so that all have a job, instead of some having excessive hours and
others having none. Only a strong government can do that.
3. Whilst we rightly fear World Government as draconian, there are
limits to Nationalsm too - eg when it becomes Imperialism. Co-operation
between countries is desirable; thus trade and population movement,
provided that these are on a proportionate scale so that the economy and
the existing polulation are safeguarded.
items 8 to 13 are from newsletter from b2043, date Jan 2, 2012
(8) Japanese imperial system was based on the PRUSSIAN system - Elaine
Supkis
Subject: Re: Asia Model economies - derived from List or from
Confucianism? National System Economics
From: Elaine Supkis <emeinel@fairpoint.net> Date: Sun, 1 Jan 2012
08:00:12 -0500
Confucius was anti-labor, anti-science and this is what the Chinese
revolutionaries wanted to get rid of.
This is dead wrong.
The Japanese imperial system was very much based on the PRUSSIAN system
especially Prussian schools. The uniforms, the standing at attention for
the lecturer, I used to go to high school in Germany and trust me, this
still was going on in the sixties there!
The 'free university' for any students who master the keyhole tests at
age 12 and then age 19 is also Prussian. The melding of the schools with
apprenticeships of the industries is also German.
Comment (Peter M.):
Well, the Maoists had their chance. They denounced Confucius, but what a
mess they made of China. THAT is why Confucius was rehabilitated.
Yes, the Prussian connection to imperial Japan was well-known. Gavan
McCormack once said to me, "It's a Prussian state."
But List developed his ideas in the US. They were used there, and in
Australia, during the Nineteenth Century and this century too, until the
Globalists took over.
There is nothing particularly Prussian about National System Economics.
The Japan Model of the 1970s & 80s was repressive, as you imply. It did,
however, feature relative equality and a "lifetime employment" system,
which is missed now. McCormack has revised his assessment of that
period, giving it more credit.
And look how it has transformed China, since the Great Leap Forward and
the Cultural Revolution left it devastated. In just 30 years it has gone
from the scrapheap to chief creditor of the US.
Why aren't don't we find articles in the media about how this has been
achieved? It doesn't fit the current Laissez Faire paradigm - that's
why. They're assuming that it will collapse in another Asia Crisis, and
that they'll then be able to buy it up cheap. But this won't happen. The
Asia Crisis happened to non-Confucian countries. Rather, the
Anglo-American system is the one that will collapse. And as they go
down, they may try to take everyone else too. Better take to the hills,
like me. Poverty now, but more chance of survival later.
(9) Michael Hudson tells two interviewers "I'm Leon Trotsky's godson"
Interview with Michael Hudson
Louis Proyect
Sat, 12 Jul 2003 14:14:13 -0700
Counterpunch, July 11, 2003
An Interview with Economist Michael Hudson
The Coming Financial Reality
By STANDARD SCHAEFER
[...] On July 1st, as the state legislatures began their new fiscal
year, I spoke with Leon Trotsky's godson, heterodox economist and
historian Michael Hudson, one of the few with both real experience
inside the financial services sector. ==
The Road to Surviving Progress
December 1, 2011 By Mark Leiren-Young
[...] Michael Hudson.
When we met Michael Hudson, this brilliant economist, economic
historian, he's the one who introduces us to the whole subject of debt
pollution and the ecological impact of Wall Street. We imagine, because
he began his career as a young man working for the Chase Manhattan Bank
and for David Rockefeller that there must have been a "road to Damascus"
transformative moment in his life before he became a radical economist.
So on the way to the interview — he lives in Forest Hills in New York,
and we were going to interview him in Manhattan — on the cab coming into
the city he tells us ...
[...] And I said, "Well, Michael, would you be prepared in the interview
to talk about how you got from working for David Rockefeller to, today,
your critique of financial capitalism? You know, your transformative
moment?"
And he said to me, "What are you talking about?"
I said, "You know, your road to Damascus moment."
He said, "There was no road to Damascus moment. I'm Leon Trotsky's godson."
(10) Michael Hudson says he testified before grand juries to convict
Lyndon LaRouche
Re: [A-List] William Engdahl?
from [Hudsonmi]
To: a-list@xxxxxxxxxxxxxxxxxxx
Subject: Re: [A-List] William Engdahl?
From: Hudsonmi@xxxxxxx
Date: Tue, 8 Mar 2005 11:54:48 EST
Cc: engdahl@xxxxxxxxxxx, amd@xxxxxxxxxxx
Delivery-date: Tue, 08 Mar 2005 10:28:38 -0700
List-archive: <http://lists.econ.utah.edu/pipermail/a-list>
Dear A-list,
I met Bill Engdahl around 1980 at LaRouche's EIR offices in New
York, when I was trying to find out what they were all about.
(Truth-in-advertising: I later went around the United States testifying
before grand juries to convict LaRouche and his leading financial
fraudsters. He paid Mordedai Levy money to hurt me and Ramsey Clark,
which was one reason he was sent up -- to the prison where my father was
sent as one of the Minneapolis 17 in 1941. LaRouche had a hero-worship
of my father and an obsession with my own background and writings, which
is why I looked into just who he was.)
At that time Engdahl was a "regular" member, and remained so for
nearly two decades.
A few years ago he called me and told me he had left. (Many of
LaRouche's followers have come to me when they left.) He expressed his
growing disgust with LaRouche for the latter's refusal to countenance
any ideas not his own or that did not serve his clients. Bill seems
seriously to have broken, as have many others who have gone on to
successful Wall St. careers, such as David Goldman, Nic "Criton" Zoakis
and other loonies whom I suspect have really not changed their colors.
But Bill Engdahl does indeed seem to have dropped his connections.
I recommended his book to Pluto (my own publisher), and I think his
interpretation deserves to be considered. I don't see the
ideology-for-sale dirty tricks or misrepresentation that LaRouche
typically plays.
I do believe in handling all Larouchies and former members at arms
length, however. Twenty years is a long time to have spent in the
company of psychos.
(I'm sending a copy of this to Mr. Engdahl as we've developed a
civil correspondence.)
Michael Hudson
(11) Michael Hudson says he asked ADL to help expose LaRouche; ADL were
Schachtmanite Trots
Re: [A-List] William Engdahl?
from [Hudsonmi]
To: a-list@xxxxxxxxxxxxxxxxxxx
Subject: Re: [A-List] William Engdahl?
From: Hudsonmi@xxxxxxx
Date: Sun, 13 Mar 2005 11:22:15 EST
Delivery-date: Sun, 13 Mar 2005 14:30:22 -0700
List-archive: <http://lists.econ.utah.edu/pipermail/a-list>
Dear A-List,
Regarding the "anti-Semitic" slander, I have an interesting story.
Both Dennis King and I tried to get ADL support for our exposure of
LaRouche. the ADL refused to do anyithing against LaRouche, because
they explained that they agreed with his politics!
These were old Schachtmanites who had become ultra-rightists. (I've
blocked out the head of their research department's name.) In Dennis's
talks with them, they made it clear that they put support of right-wing
politics above any concern with anti-Semitism.
So of all the arguments against LaRouche, I don't think
anti-Semitism should be one of them. Rather, LaRouche cultivated Jewish
followers who were breaking away from their parents (usually CP members,
I think) and replaced them. Only the Jewish members ever made any Jewish
jokes in my presence.
If anything, LaRouche had an obsession with the Queen of England. I
imagine that when he was along writing at 4 AM he would pace around his
desk stamping, muttering, "I am Queen Elizabeth. I am Queen Elizabeth,"
until he got up enough energy to keep on writing some more of his stream
of consciousness.
Michael Hudson
(12) Asia Times was edited by ex-Larouche member Uwe Parpart - Larouche
website says so
A close look at "Confessions of a Coward":
David Goldman is not telling the full truth about his years in the
LaRouche movement
[...] Goldman and Parpart (also known as Uwe Henke "von" Parpart) would
remain closely associated with each other after leaving the LaRouche
movement. Parpart edited Asia Times, where Goldman became the celebrated
pseudonymous columnist "Spengler." ==
Destroying the house that Gandhi built
March 15, 2002
By Uwe Parpart, Asia Times Online Editor
(13) EX-LAROUCHE writers
Nicholas F. Benton
Robert Dreyfuss
F. William Engdahl ·
David P. Goldman (David P. Goldman, a.k.a. Spengler)
Victor Gunnarsson
Laurent Murawiec
Webster Tarpley ·
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