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Dialogue of Cultures


Meet Lyndon LaRouche
Dialogues Since September 11, 2001
Cadre School Questions and Answers, Part I

How We Earn Our Income

I want to do something which, probably, some of you don't expect, but it's quite relevant. Let's start with the fact that, to sustain the U.S. organization, and its obligations at a level which corresponds to our current responsibilities and programs, costs about $300,000 a week. If we don't raise $300,000 a week, we are in deep trouble, and things will begin flake around the edges, or things which are essential will simply not be done.

Now, what I'm going to do, is, essentially, to make a political point; to show the relations of politics, as we practice it, and things related to politics, to the way in which the money is generated, not the way it's collected, and so forth, but, what prompts people to either buy subscriptions, or other publications, or to make contributions to the organization, which enable us to meet—whenever we're on the ball, not them—the $300,000 required to sustain our operations.

Now, this parallels a general problem in society, and also, a general problem of ignorance of the ABCs of economics in administration, by practically everybody who teaches accounting, or thinks they know things because they studied accounting. Accounting has nothing to do with economics, as such; accounting is simply an administrative device, which is used to keep track of some of the monetary side-effects of the economic process. But accounting has nothing to do with economics, otherwise, except as an auxiliary, administrative tool, of keeping track of the monetary implications of actualy physical and related activities, which are, by their nature, economics.

Now, the problem we have, in terms of accounting, is people who believe that accounting budgets will solve the economic problems, or economic-policy problems, are wrong. Obviously, budgets are created—they have to be created—in order to administer the monetary side of the process, as an administrative matter. But, they are not a causal factor in the way in which income is actually earned, or properly generated. The problem has been—and the worst example of this, of course, is shareholder value, advocated by the Associate Justice [Antonin] Scalia of the U.S. Supreme Court, and other decadent characters of that sort. But, the statement was, in French, years ago, that "the dead grip, or seize, the living, or suffocate the living." And that's what's said of money and accounting: That the idea that a past monetary or equivalent interest should control the present, for the benefit of the past, was this concept of the dead seize and torture, and so forth, and devour the living. And, that's what happens when you apply accounting, as such, and apply it as if you thought it were economics. In which your budgetary figures, your profit-and-loss statement, your capital-accounts statement, become a way in which the dead devour you, the living. Accounting of that sort is really the most common cause of bankruptcy. That is, where bankruptcy is caused by the entity itself, rather than by an external influence.

Now therefore, look at our operations in light of this, and look at them from the standpoint of locating what it's important for us to do, politically, in order to be able to fund what is essential to continue, or increase doing, politically, for the sake of the world.

Real Econonics

Now, in economics, the essential relationship, [by] which economics is defined, has nothing to do with accounting. It has to do with—accounting may enter in as an accounting of what the monetary implications are—but, the actual accounting side has nothing to with the way in which income is caused, real income is caused. The relationship between man and nature, as distinct [from that] between animals and nature, is entirely located in the ability of the human mind to generate what we call an experimentally verified discovery of a unversal physical principle. It is by applying these principles to our behavior on nature, that mankind is able to increase man's power over nature, to such effects as increasing the general relative population density, the potential relative population density, reflecting this in improvements in the demographic standard of living, increased population, greater ratio of input to output, in terms of physical product per capita of the labor force, and physical output, net per capita, in terms of per square kilometer of the surface area used.

So, this essential point of discovery, discovery in the sense of scientific principles, that is, the experimentally validated, experimentally verified discoveries of universal physical principles, and their application in a cooperative way as technology, is the essense of all economics, all real economics. It's the essence of man's relationship to nature.

Now, you look at the case of a particular firm; let's take an industrial firm, or a farm. You have a relationship, in the industrial firm, among many people, performing many functions, which determines the relationship of that firm to society as a whole, its economic relationship. You have the activity of the so-called point of production. Now, some people say, "wealth is generated at the point of production." That's rubbish! Wealth is generated in only one way: by the application of the discovery of experimentally verified, universal physical principles. And by the transmission of those discoveries, and their assimilation by people who do all kinds of work. So therefore, it is the change in the behavior—partly through education, and so forth, in various forms—which enables a person at the so-called point of production to engage in the kind of behavior which results in an improvement in man's mastery of nature.

However, the question is: How is this organized? Well, in all cases, you have two kinds of operations, which are economically significant in increasing the wealth of society: One, is the private entrepreneurship—that is somewhat distinct from the large, publicly owned corporation, stock corporation. The entrepreneurship: by that we mean an entity where several individuals, or one individual, has developed the ideas, or the idea of practice upon which that particular entity functions. All other persons in that entity are extensions of that central organizing feature of the entity. This is one of the problems that came up in the mismanagement of the Soviet economy. We see in the Soviet economy, that on the military-industrial side, science-driven military-industrial side, the Soviet productivity, was, in terms of its military relevance, highly efficient. As efficient, essentially, as anything produced on the NATO side. However, when you went over to the so-called civilian economy—which, again, was in the form of a public corporation—you found the performance of both the personnel and the management was terrible.

And so, therefore, you had this contrast: In the case of the military side of the thing, you had direction—very strong direction, top-down direction; that gave the initiative, in terms of work with scientists, on which the achievements in that area were made, economic achievements. Whereas, in the rest of the Soviet economy, the lack of an entrepreneurial drive in the production of goods, generally, resulted in poor performance. In some aspects, you had the general infrastructure, basic infrastructure—it functioned fairly well, though it could be improved, shall we say—but, this is the kind of business.

So, therefore, the question of organization of the economic process is crucial. It's especially crucial for us, as we're talking about: What do we do with this $300,000; why are we so effective; why should people get the money to us to do this operation, in that amount or more, in a week?

Entrepreneurship, and Our Organization

In our case, the essential characteristic is my own personal role. Let's take a few facts: First of all, the existence of this organization, which came into being about 1966, as an organized venture, was the result, primarily, of discoveries I had made between 1948 to 1952, 1953, in my method of discovery. The application of this led to a result, in which I recognized that the developments, the trend of the so-called Arthur Burns policy of the Eisenhower Administration—if that policy were continued, with certain other attributes of that policy, into the 1960s, that by the second half of the 1960s, we must expect a series of monetary crises, threatening the stability of the then-existing Bretton Woods system, and leading toward a crash of the system, with the possibility that, beyond that, you would have a general breakdown of the entire world economy, unless that were reversed.

So, on the basis of that forecast, about the middle of the 1960s, I began to organize classes to teach to the audience of that period—which was largely people you know about, the so-called "Baby Boomers" in universities, chiefly, but also elsewhere—to organize, to educate a group of people who would take what I had done, both, first of all, my forecast of what the problems were, what we had to deal with in society in the decades ahead. And also, to learn the method, as much as possible, by which I had come to the determination of these forecasts and their implications.

Now, that's how our organization, viewed as if it were an entrepreneurship, was created. So therefore, the creation of economic wealth in our activity, or the equivalent of economic wealth in our activity, is generated as an entrepreneurship, in which my personal role is still decisive in our ability to generate the income needed to sustain these activities which involve this $300,000 a week central cost of operations. So, our income is not made at the point of production. It's not made at sales departments in various regions, nor nationally. It's made by an organized effort, centered upon this role, of my entrepreneurial role, or entrepreneurial-like role, in making certain original discoveries which have never been duplicated by anyone else, and in making a series of forecasts, which, at this point, are the most vidicated, long-range forecasts on record, in the past century, to date.

So, that's what we're based on.

Now, the way we—our relationsip to the population and to institutions, is in that form: that we are able to provide the population an insight into what's going on, and also, an influence on the shaping of policy, which they get from no other source. So, our actual product is not $300,000 a week; it's much more.

The SDI, For Example

For example, let's take the case of the SDI. Now, the SDI, which was so-named by the Reagan Administration, was actually entirely my creation, as a concept. Other people contributed to my work, in the secondary and tertiary feature of this, but the concept of SDI was entirely my concept. Let's just indicate the way it came about: We had been concerned that, before the time of the Carter Administration, in 1974-75, that the Carter Administration was bringing the world, or what the Carter Administration treatened to be—Brzezinksy, James Schlesinger, so forth and so on—that these people assembled around the incoming Carter Administration, or the Carter candidacy, were the greatest single threat to civilization we knew at that time. And everything we said about Carter at that time, including the threat of a nuclear confrontation under his administration, was true, was proved true.

So, the other aspect of this, was obvious to me: that the policies which Henry Kissinger had conducted on behalf of the Nixon Administration, during the preceeding period, while he was National Security Adviser and Secretary of State, was leading the world, not toward a stability, nuclear-weapons stability, but toward a point of crisis at which the inherent fallacy of the so-called detente, mutually-assured-destruction formula, could lead to an actual nuclear blowout, or to a confrontation of the type which could trigger a general nuclear blowout.

So, in 1977, after Carter had been elected, about the summer of 1977, I became concerned, more than before, about this question. And, by a series of accidents, we came into touch with some of the work that was being done under the Nixon Administration, in certain military circles, on the question of the missile defense, based on new physical principles. I picked [up] on this, but, I did more than that, than simply adopt the idea that weapons systems, based on new physical principles, ought to be developed. My view was that we should propose such a policy to the Soviet government, with the view that we, the two powers, and other powers, should jointly agree to develop such weapons systems with two things in mind: First of all, in the medium to long term, that we would develop a capability to overwhelm a ballistic-missile barrage; that is, weapons which could actually defeat a ballistic-missile barrage, before the missiles actually struck, before the warheads actually struck.

But more immediately, that our cooperation in developing such systems representing new physical principles, would be a science-driver program which would increase the economic productivity of all of the economies involved, and would give the nations participating in this effort the means to transform the conditions of life in Africa, parts of Asia, and so forth. And that was the proposal.

Now, this proposal was reflected, first of all, in a policy paper, which was published, by my Presidential campaign, against Carter's reelection, in August of 1979. In December 1981, through a discussion with some people in the Reagan Administration, there was a proposal that I engage in a backchannel discussion with the Soviet government to explore what might be done about some of these areas which the Carter Adminstration had goofed up, in trying to find some kind of understanding with the Soviet government, which would lessen the danger of unfortunate accidents, shall we say. My answer was: Well, I could that; I didn't see what use I could be, except as it might be approved for me to introduce my own independent proposal—which I just described to you summarily—as a talking point in the discussion. And to see if the Soviet government would consider this as a serious possiblity, not adopt it as a policy, but consider it as a serious possibility. In which case, I could then, report to the relevant people in the Reagan Administration, that the Soviet government had shown an interest, and presumed, hoped that the Reagan Administration would pick up on what I had proposed; and then, that the two governments might then come together, and agree to share such a program. My view was that this should not be limited to the United States and the Soviet Union, but that European countries should be involved, and others as well.

So, this began in December of 1981. In February of 1982, we convened a conference in Washington, D.C. It was a two-day conference, where hundreds of people attended; military people from many countries—the Soviet Union, Eastern Europe, and others, as well as U.S. military people, and other intelligence people. And, in this two-day presentation, I, among others, laid out various topics, relevant topics, but laid out specifically this business. And in the context of those same events, I had my first meeting with a Soviet official, who functioned, for that year, 1982-1983, February '82-83, as my official backchannel, or unofficial backchannel, between the Reagan Administration and the Soviet government. Now, as a result of this operation, President Reagan took my proposals to heart. Probably about date January 1983—that was the best estimate of insiders I knew in the administration, with whom I was discussing this matter, which was held, still—part of it was highly secret—but, the rest, it was fairly open.

Then, as you know, on March 23, 1983, the President delivered a five-minute message, over the objections and resistance of James Baker III and the Bush crowd in the administration, generally, in which he proposed to the Soviet government, exactly what I had been proposing. Now that, for the moment, changed the world. And the world has never been the same since, including, ultimately, I was sent to prison for a certain period of time, because I had succeeded in making this proposal—as a matter of stopping it. That's all a matter of record; I'm not going to go into the details again here. But, to illustrate the point: This is only typical of things we've done.

From Berlin, to the Eurasian Land-Bridge

Just to take some other typical things: 1988. I proposed, in a speech delivered on Columbus Day, in Berlin, that we were then on the edge of a collapse of the Comecon system, and that we could expect that to occur in the near future, leading probably to the reunification of Germany in the near future, and agreements on reestablishing Berlin as the early future capital of Germany, once again. I forecast specifically, that the crisis would begin in the Poland—as it did—and indicated the policies which the U.S. government should follow. Now, the policies which I proposed then, which are—some of you may have seen this videotape of the presentation I made on that date—but, in November of 1989, the leading banker of Germany, Alfred Herrhausen, shortly before his assassination, had drafted a speech to be delivered to official circles in New York City. He didn't deliver the speech because he was assassinated in the meantime. But the speech contained an outline for a German policy toward the prospect of reunification, the prospect of cooperation with Eastern Europe and the Soviet Union, which was precisely in the direction I had indicated earlier.

So, then from that, came a larger operation, the so-called European Triangle proposal, which we launched at the end of 1989, the beginning of 1990, and the subseqent 1992-93 expansion of the European Triangle proposal, into what became known as the Eurasian Land-Bridge proposal.

Now, these are policies, or examples of policies, whose utterance by us, in these kinds of circumstances, with these kinds of effects, have changed the world. That, in these terms, our impact, and my personal impact, on world policy, is probably at the highest density of anybody outside the top positions of government in the world today. So, we are a very effective organization, in terms of everything we're doing, including on this question of the crises erupting around Sept. 11, and the economic crisis. Not only are we vindicated as having been right, but our policies are the most important, in terms of per-capita impact, of anything else going on in the world today.

So, therefore, there is the source by which we earn the income which we require to be able to continue to do, and improve on, our job. And, that's the way this thing works.

So, our efforts are not successful, because of a sales effort at some local point, or so forth and so on. They're successful because we have a series of publications, and other forms of communications and activities, including my personal travel to meet with important circles in various parts of the world, through which our policy initiatives, which have very high impact globally, are being delivered. That's how we earn our income. Not for our personal use, because we don't get enough [laughs] to make it really our income; but enough to sustain us in doing what we're doing. And people will pay to sustain our efforts, for that reason, and that reason, essentially alone. So, it's our organized efforts, based on ideas, based on the entrepreneurial principle of intellectual leadership, based upon scientific discovery and its application, which is the secret of any successful entrepreneurial enterprise, economic enterprise. And it's also the secret of the actual and potential success of our operations, as funded operations.

Yet, sometimes often, as a point of fact, many people associated with me lose sight of these realities which I just summarized in that form, and think about, "Well, we should cut our budget this way. We should re-manage our budget this way," all in sort of accounting terms, failing to see that what we're doing, is: We're trying to save the world from plunging into a New Dark Age. That our work has the impact, globally, of catalyzing changes in the way people in many important places around the world think; to catalyze things into actions which might actually save this planet from a plunge into a New Dark Age. That's what we do. That is our importance. And that is how we earn the income that is contributed to us to sustain our publications and these other activities which are essential to that function. We have to look at ourselves in these terms, not in some other kind of terms.

Now, that's what I wanted to say. I think that is sufficiently provocative of a number of points, that the rest of you should now get in on the act!

Cadre School Questions and Answers, Part I


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