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This article appears in the October 9, 2009 issue of Executive Intelligence Review.

This Tower of Babble

by Lyndon H. LaRouche, Jr.

Septembert 28, 2009

[PDF version of this article]

Unless a purgative system of bankruptcy is put into effect very soon, the entire world system of nation-states will soon disintegrate, one after the other, chain-reaction style. It could come as soon as some time in October. If it is permitted to occur, it will come as a result of the hyperinflationary collapse, like that of Weimar Germany in 1923, but not in one isolated nation, this time; the entire planet will collapse, and leading nations will simply disintegrate. This could be stopped now, if my proposal for a reorganization-in-bankruptcy converts certain leading nations from the present international monetary system, into a credit-system of the type prescribed by the U.S. Federal Constitution. Otherwise, the doom is already inevitable.

There are two principal facts which must be considered, if the reasons for such a present threat to the entire world-system is to be understood. The first consideration is specified by my "Triple Curve." That "Triple Curve" identifies the scientific reason why such a collapse will be fully ripe in the U.S.A. itself as early as sometime during October. To discover why such a U.S. collapse would set off an immediate chain-reaction collapse through the entire world, it is necessary to consider the effects of forty years of the single, combination of two combined factors. The first of these co-factors, is the spread of "free trade." The second, is the crucially aggravating co-factor of a policy of what has been called "globalization." These two co-factors have, in effect, destroyed those barriers inherent to the modern sovereign nation-state economy which have acted as "fire-breaks" against the spread of a chain-reaction effect of a crash in the combination of one or several economies, which bring down all of the economies of the world. You may justly call this threat to world-wide civilization "a Monsanto effect," so designated for reason of the effect of the monopolistic practices which Monsanto has been permitted, contrary to all reasonable law, to conduct in the field of grain.

The effect of the process of "globalization" has featured the following typical expressions.

Globalization Today

What is called "globalization" today, began during the late 1940s and 1950s, with the so-called "runaway shop." For example: industries which had been developed in the region of a relatively superior quality of culture, were transferred from those areas into cheap-labor zones. This trend, which began in the United States with the shift of employment to cheap-labor markets characterized by poorer standards of intellectual life, results in a lowering of the standard of living throughout the national economy. In this way profit was derived not from advances in culture and productivity generally, but by cheapening labor, and transferring production to regions of lower productivity.

The process of economic degeneration of the world economy as a whole, has proceeded into what has become known as "globalization" today. The policy of "globalization" is the tendency that nations cease to produce the products which they consume in their own nation, but transfer the production of what they used to produce and consume in their own nation, to other nations, thus undermining, and virtually destroying the existence of even food security in one's own nation. The control of production and consumption, now lies in international financier cartels, which determine who lives and dies, at margins of price, and of wages of production, which the financier cartels control.

The asymptotic effect on which this process converges is a copy of the Biblical Tower of Babel, in which what had been intellectually effective language-cultures degenerated into relative conditions of cultural stupidity among a mass of slaves.

The collateral effect of this under present world conditions already established, is that any financial crash in any keystone nation of the global process spreads like a wildfire in a drought-stricken forest throughout the world economy as a whole.

The case of China is exemplary. China was used as a dumping-ground for the production of goods which had been produced in the economies of other nations, the United States most notably. China also depended on advanced technologies such as those of Germany, but which Germany was no longer permitted to produce for Germany's own consumption. When the foreign markets for goods produced by China collapsed, China was suddenly faced with two leading effects: it had lost markets on which its economy had been conditioned to depend, and it was thereby faced with the makings of a social crisis in its own nation.

There is another, two-fold feature of the predicament created for China by the fate of both the U.S. economy and the incompetence of the U.S. government under President George Bush. The U.S. had a debt of about $2 trillions to China, which it had no expressed intention of paying, even by the obvious measure of providing China long-term credit to finance investment in a greater margin of economic independence through capital improvements inside China itself.

Under a sane system of relations among sovereign nation-states, each nation is encouraged to protect its internal economy by protectionist measures, especially the building up of self-sufficiency to approximately 80% of total essential consumption, and by tariff agreements with other nations which, to a very large degree, protect each nation against intolerably severe shocks radiated from problems generated by other nations. Essential economic self-sufficiency and efficient national sovereignty are the essence of a sane world order.

Globalization and related measures have virtually destroyed that protection which sovereign states enjoyed as defenses against grave disorders erupting in other parts of the planet.

So, a collapse of the U.S. dollar would mean an immediate chain-reaction collapse throughout every part of the planet as a whole.

For such a contingency as that we are already facing in October, the only remedy is the shutting-down of the principal cause of the explosive, hyperinflationary monetary disorder, by putting the economy through a proceeding in bankruptcy based on the notion of a Glass-Steagall standard of bankruptcy of the national banking system. Financial derivatives and related categories of fictitious values would simply be debrided under bankruptcy rules, while the banking system operating according to Glass-Steagall rules would continue to operate, even under bankruptcy protection, if the bank were in any meaningful sense "salvageable." This is what I had proposed with my 2007 Homeowners and Bank Protection Act. Had that legislation not been blocked by Representative Barney Frank et al., we would be coming "out of the woods of crisis" today.

Today, more is required. Without a creation of a new credit-system, to replace all monetary systems, by means of a pilot agreement to this effect among the U.S.A., Russia, China, and India, no nation will be left standing, including those four, as the smoke settles on a world whose population is being rapidly reduced from about 6.7 billions human beings, to about two, or less: about the level which Britain's Prince Philip has stated as his intention.

Time is running out. Assuming that the U.S.A. would get through this month of October, is already a big stretch.

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