LaRouche To Peruvian Engineers

The following presentation, and dialogue, occurred on Oct. 2, 2023, when 2023 Democratic Presidential pre-candidate Lyndon LaRouche addressed the Peruvian Society of Economist Engineers by video-conference.

Presiding over the event were Dr. Luis Macavilca, the president of the chapter of Economist Engineers of the Society of Engineers of Peru; and Luis Vasquez and Sara Madueno of Executive Intelligence Review, who also moderated the question period, and summarized the questions that were submitted in writing.

Transcript of Mr. LaRouche's Opening Remarks:

Several things we should go through in series.

First of all, the crisis: We're in the final, breakdown phase of the existing world monetary and financial system. Not one part of it, but, essentially, all of it. That means the Americas, it means Europe, it means most of Eurasia, it means the world. Nothing can be done to save this system in its present form. It will go into a phase of disintegration during the present and next quarter, before the beginning of the year. It may limp along in some form after the first of the year, but the system is, essentially, finished, and can not be preserved in its present form, with its present institutions.

This is also, because of this crisis, it's also a very dangerous period in history in other respects.

We have now the threat of generally spreading warfare throughout the world, particularly since the Sept. 11 terrorist attacks in the United States, largely, an internal operation, but, obviously, may have involved elements from other parts of the world, as participants in the operation. We have not seen the end of it. No one has stopped the terrorists. No one has identified yet the terrorists, the actual ones, so, they're sitting there, ready to strike again.

And, this is not unusual in history, for times of great financial and economic crisis. For example, 1932-1933: We had a world crisis, which, at that point, centered on Germany, because Germany was a pivot, strategically, of the effects of the crisis. At that point, you had in Germany, an effort to stop Hitler from inside Germany. This effort was led by a Chancellor of Germany, Kurt von Schleicher. At that point, certain bankers in London, headed by the former Bank of England head, Montagu Norman, and by groups in New York City, including the Harriman interests, including the grandfather of the present President of the United States, Prescott Bush. These people with Norman, with people like Schacht in Germany, with the von Schroeder banking interests, with von Papen, conspired to overthrow the von Schleicher government, which was done on the 28th of January, 1933. On the 30th of January, at the instigation of U.S. bankers, Norman, and Schacht, Hitler was put into power in Germany, as a Chancellor. His power was not complete at that point.

A month later, the Reichstag, the Parliament of Germany, was burned down, in what would be called a terrorist incident. Immediately, the Nazi Party took measures to declare emergency laws, and then, through the Parliament, enacted new laws, extending the emergency. Less than a month later, Hjalmar Schacht became head of the Reichsbank, and became the controller of the arms drive of Germany leading toward World War II, which was already planned.

We're in such a time of crisis now: danger, coups d'etat, overthrows of governments, revolutions, violence, terrorism--of the characteristics of a period in which a financial system collapses. Because, it's a time of desperate men. You have men who have dominated the world with the present financial system. That system is now doomed. They're desperate. They're blind to reality, and they're determined to hold onto their power by any means possible at this time. They don't care about the future. They care about what they consider their way of life, their power, their commanding position in world affairs. So, therefore, there's a struggle between some of these financial interests who refuse to face reality, because they don't wish to, and the interests of sovereign nation-states and peoples. It's a dangerous period.

Reform the Monetary System

My concern is to do several things: First of all, to try to bring together forces which, as political forces, internationally, include governments and others, who will bring this danger to an end.

Secondly, we must have a reform of the international financial and monetary system immediately. This means bankruptcy reorganization. Now, most of you probably are familiar with the procedures for bankruptcy reorganization applying to corporations, to large firms. But, the bankruptcy of a government--and we're going to have many bankrupt governments around the world in the coming period, in South America and elsewhere. It's inevitable. It can't be prevented. The debts are beyond any possible means of paying the debts, therefore, a state of bankruptcy will exist. But this is bigger than a bankruptcy of government. This is the bankruptcy of a world system, a world financial system. The IMF system. And therefore, we must have a concert of power, of political power, which has the authority to put an entire international monetary and financial system into bankruptcy reorganization.

The principles are not much different than they are for the bankruptcy of an important firm, in a nation. There are certain firms you do not want to have collapse at any cost, because they're too important to the country. And therefore, somehow, you will arrange that these firms will continue to function because they perform an essential function for the nation. When you're dealing with the bankruptcy of a nation, the authority of this principle is even stronger. You can not bankrupt a nation. You can not foreclose on a nation. That would be mass-murder.

You must keep the essential institutions of the nation functioning. You must keep the levels of employment high. You must keep all the central institutions functioning. You must have a program for recovery. When you have a international crisis of this type, an international financial and monetary system, you have a similar situation. You can not liquidate countries; you can not decide which country is going to survive or not; all nations must survive. And they must survive together.

But, most of the debts will never be paid. And, really, they shouldn't be paid, because most of the debt was not earned honestly. With the system established in 1971, with the collapse of the old Bretton Woods system, the debts of many parts of the world--as in Ibero-America--for example, the nations of Central and South America have paid more on the debt they owed, as of 1971, far more than they owed. And they have far greater debts today, than those they owed at the beginning!

Much of this debt was absolutely fraudulent. In an attempt to maintain the system, vast amounts of credit have been poured into things that should not have been subsidized. And this now is dead. We have the international derivatives speculation: more debt! We have hundreds of trillions of dollars of above-board, and secret or hidden, debt around the world, which can never be paid at the present level of about $42 trillion equivalent of total world product. You can't pay the debt out of that amount of total product. And, the amount of total product produced is collapsing. In the United States, we have collapse, collapse, collapse. Every day, new firms are cutting back 10%, 20%, 30% unemployment. It goes on and on. In Europe, it's the same. Around much of the world, it's the same. So, the means to pay this debt does not exist.

So, we will have to put the entire financial system into bankruptcy reorganization, cancel whole categories of debt, freeze other kinds of debt, that is, suspend any kind of interest accrual and so forth, on this debt. But, nonetheless, keep banks open, because they're essential; keep governments functioning; keep pensions paid; keep the economy moving. That we can do.

We did something similar in the United States in 1933, under Franklin Roosevelt, and beyond. That's a precedent. We know how to use that precedent for today. We formed, at the end of World War II, a monetary system, the Bretton Woods system, which worked. In the parts of the world, for which it was working, it worked. Not perfectly, but, it succeeded. The world, under the IMF system that was part of it, grew. The incomes of people grew; the economy grew; conditions became better--despite all the things that were wrong--it worked. We can go back to that kind of thinking, starting from scratch with a new monetary system, and a new financial system. And we can live.

A Growth Program Needed

But we need something else. We need a growth program. The system made a lot of mistakes. The system is now bankrupt. In fact, in most bankruptcies, somebody in the management made a mistake. So, you reorganize the management, bring in competent management, and use, as a model, things that did work, as a way to start the economy of the firm or the country going.

What are these problems? Well, first of all, we must create large amounts of public credit, in most parts of the world, which will have the effect of increasing employment. That is, the state will use the sovereign authority of the sovereign nation-state to create sovereign state credit, which will then be used to create employment in essential areas of employment that can be organized. This will be, to a large degree, infrastructure. It will be, as much as possible, reviving industries that have been closed or partly closed, which should be reopened. Because we can not collapse the level of production of wealth in countries. We must do precisely the opposite: We must increase the production of wealth, in every possible way. We must manage it, of course, but, we must increase employment and production. Fiscal austerity methods are suicide. They're murder. Fiscal austerity, as a method, must be cancelled. No more bleeding economies to try to roll over debts. It won't work. You'll destroy civilization, if you try. And, we need special projects that will do this.

Now, we have one class of project which is immediately available to all governments. It's called basic economic infrastructure. There are always water systems, transportation systems, sanitation systems, health-care facilities, and so forth. These things are always needed. Governments have well-defined projects--every government does--of things that need to be done, that should be done, including the increase of production of power.

In Peru, for example, we have potential for development of water resources, which is crucial for the country and its future. These things can be done immediately, as we used to do it in the United States with the military-civil Corps of Engineers. To launch large-scale projects, conducted by engineering groups, sometimes as military employees, sometimes as civilians working with military groups, and so forth. We built large-scale infrastructure. By building the large-scale infrastructure, we put people to work, useful work. These people were paid. They bought goods for their families, communities, prospered as a result of the infrastructure works. Subcontractors, that obtained contracts to assist and participate in large-scale infrastructure, and the economies would grow.

But, we also need something more. We need two other things: First of all, we need the obvious. We have, in Eurasia today, a program which I've called a Eurasian Land-Bridge, and my associates and I called it this. It is now, in a sense, being adopted, or in the process of being adopted in Eurasia. That is, Russia, China, other countries, are coming together in cooperation on large-scale development projects, including transportation projects: modern types of rail transport, including in China; magnetic levitation rail systems are now being introduced. The idea is to create, from the Atlantic to the Pacific, a system of communication and development, which enables us to take the areas of Central Asia, which are wealthy, in terms of natural resources, but poor in development, and by introducing development across this area, and transportation, we can make this an area of growth. This would mean that countries such as Japan, or Western European countries, which normally were producing high-technology capital goods, will find in this arrangement, a market for increasing flows of production of goods, into countries like those of Central, South, and East Asia. China, for example, is a great market, if the proper kinds of assistance are given to it. A great internal development. This area contains the largest population in the world, part of the world's population. So, this is the great opportunity.

If, as is also being proposed, if, from Eurasia, not only do the Americas participate in the market in Eurasia; not only if Americans participate in the market which will also develop in Africa, for development, but, there will be the building of a bridge, a tunnel-bridge, from Siberia to Alaska. That bridge will come down to the Americas, through Central America, into South America, all the way to Tierra del Fuego, Cape Horn, to unify Eurasia, in that way, and in other ways, with the Americas.

We have, in South America, in particular, we have large areas which are undeveloped. Lack of infrastructure to develop them, with vast resources. Patagonia, for example: vast resources. Other parts of South America: vast resources. Undeveloped. We have to convert the opportunity of development of these areas, with their resources, to divert that into a great market for investment.

Science-Driver Programs

Now, we need to do something else. We need to have some science-driver programs for the world as a whole. We need to set some objectives, in terms of scientific objectives, new techologies, breakthroughs, new forms of energy, higher-density forms of energy. These kinds of things, we must have. We must use our universities, and develop our universities to produce the cadres for these projects, to produce the skilled people, to implement them. To do the scientific research, which will feed these kinds of scientific projects. In that way, we can create a new kind of national economy. Not really new, but a qualitative improvement.

If you look at the history of mankind, especially modern European civilization, the history of mankind is based on something, where man differs, absolutely, from all animal forms of life. Man is the only creature which can discover a universal physical principle, can replicate that discovery in the minds of other people, can cooperate to use those principles to increase man's power over nature. Through this means, man is able to increase the productive powers of labor, to improve the demographic characteristics of population, to increase the potential size of populations that can be supported, raise the standard of living, and conquer areas that could not have been conquered beforehand.

Why don't we just take that lesson, especially of modern society, and use that to reform our economies? That is, mobilize our universities and educational systems as science-driver institutions, where old discoveries are reenacted for the students, where research is done on new principles, where the research work on new principles is done together with engineering programs, to test new principles, to convert them into new technologies which can be used, to connect our economies--the productive sector of the economy--with these university centers; in order to create an economy in which we are increasing the percentile of the labor force which is employed in fundamental research and in engineering, in creating new technologies; to increase the percentile of the population employed in industries, which are of high-technology operatives, who are able to assimilate an outpouring of new advanced technologies, to make them real and to bring them into general practice.

So these, I think, are the things which we should do at this time. These are the things which can lead us out of the world mess. What we need, essentially, is the political will to understand that this has to be done, to bring nations together, and other forces, to say, we are going to put the system into financial reorganization, into bankruptcy reorganization. We're going to generate masses of public credit, by governments and by cooperation among governments, to expand employment, especially productive employment, on a world scale, in each country. We're going to take other measures to promote the expansion of employment in useful forms of production. We're going to maintain social stability and the general welfare. Now, we're going to reach out beyond that, to pioneer in great infrastructure projects, which will be transcontinental in their significance, to unite the continents, to unify the human race in cooperation.

We must mobilize our population around the theme of education, of scientific education, to elevate the meaning of the nation-state, to sovereign states which are concentrating on developing their populations through education, to become science-driver economies; to upgrade the quality of work for which people are employed; and to create a kind of world which we've been trying to build ever since about the 15th century in Europe, with the great Renaissance there.

I think that we have to say, we've come to a time, where humanity faces the greatest danger that the human race has ever faced, in all known history to date--right now. We're in a period where, if we don't do something to correct the problems, we could go into a New Dark Age of all civilization. We're vulnerable now. We don't have the resources we used to have, to live through a depression. The rate of deaths which will result from a continuation of this collapse, with no solution, would amount to a New Dark Age for humanity.

But, looking at the danger of great wars, a New Dark Age, and great convulsions, and chaos, perhaps this will alert us to the fact that we can not behave as children anymore. We have to become adults. We can not think about our convenience, our personal interest in a narrow way, or a silly way. We've got to think about what are we doing about a future humanity, our children, our grandchildren, who are threatened by this great crisis.

We're becoming older. In the course of time, we'll die. What are we going to leave to those who come after us? Are we going to leave a Dark Age, or are we going to be the giants, who created the opportunity for not only a revival and preservation of civilization, but who, in our time, did something of which we can be proud in the eyes of our deceased ancestors? Something in which we can be proud in the eyes of those who come after us.

We must use the great crisis, and the fear it strikes in many people, as an incentive to grow up, to grow out of small-mindedness, and to have the imagination to see solutions, and to devote our lives to the purpose of bringing those solutions into being, so that when we die, we will be able to say, we lived, and it was good. Thank you.

[Applause.]

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