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This presentation appears in the December 6, 2002 issue of Executive Intelligence Review.

Italy's Classical Heritage, and Its Role
In Solving Today's Systemic Crisis

Lyndon LaRouche spoke to the Casa d'Europa in Milan, a national Italian business, professional, and political organization concerned with issues of economic integration in Europe, on Nov. 23. He opened the morning panel of its conference. Subheads have been added.

Thank you, ladies and gentlemen.

What I should say on the topic which is before you today, pertains to the fact that the world faces, immediately, certain thorough, extensive changes in institutional relations, among regions of the world, and among nations. I shall sketch the points in several successive points; at the conclusion, you will see what my argument is.

To begin with, I want you to look at the situation—between the economic crisis, which is now descending upon the world, and the recent escape we had, from what was thought to be the certainty of an involvement with a general war in the Middle East.

Stopping War Against Iraq

I know that many people in Europe, who do not really understand the institutions of the United States, were persuaded that the United States was absolutely going to a war against Iraq. Now, the war was never inevitable, although it is still possible. Admittedly, the Democratic and Republican Party leaderships both failed to do anything significant to prevent the war. But you have to know that our Constitution of the United States is unique among the constitutions of nations. It is understandable to you, because it's based on principles which were developed in Europe. Our system is a Presidential system, in which the legislature has no significant executive powers; which means, that around the President of the United States, there are permanent institutions, both officially formal and also unofficially formal.

So when I had the problem of trying to persuade my countrymen not to go to a war against Iraq, I concentrated on those institutions, and did not waste my time on the leadership of the political parties. Most visible to you in Europe was the role of the U.S. military. The U.S. military, being a very intelligent body of people, wanted no U.S. war in Iraq. And in our institutions, the retired military play an active function, as well as the serving military.

It is usually the case that the serving military shuts its mouth up publicly, and lets the retired military do the talking. And you probably are acquainted with the role of General Brent Scowcroft, in opposing this war, and also that of General Zinni, the Marine Corps general.

Military opposition was crucial, but it was only typical. Large sections of the intelligence community, large sections of other parts of the institutions of governments, all agreed. So those of us who were involved in this, agreed on three points. And my function was to articulate some of these conceptions, which they adopted.

First, we must take the question of war out of the hands of the U.S. government, and put it in the United Nations Security Council.

Secondly, we must induce Saddam Hussein to accept that idea.

Thirdly, we must get the United States to accept a favorable decision on the part of the United Nations.

We couldn't do much about it before the election, on Nov. 5. But through negotiations, behind channels, with France and other governments, Russia and so forth, the pre-arrangements were made. And, as you observed, as soon as the Nov. 5 mid-term election was concluded, the pre-arrangements went into effect.

'Ladies and Gentlemen, We Are Bankrupt'

But, that only illustrates a point. We are now, the world is now in the worst systemic crisis in centuries. This is a general breakdown crisis, not a conjunctural crisis. This represents, therefore, a failure of existing institutions, not a normal conjunctural problem within them. This crisis is hitting such that we can expect a collapse of banking systems of entire nations, to occur in the immediate weeks or months ahead. The principal leading banks of the United States are—I can tell you—all presently bankrupt. The leading banking institutions of Europe are bankrupt. The Japan banking system is bankrupt.

This is a process of bankruptcy that has been building up over a period of time, since about 1964, but especially, 1971. About 1964, after the assassination of Kennedy, certain changes occurred in Britain and the United States, and spilled over to the rest of Europe, and the rest of the world. As most of you recall, during the postwar period, after 1945, that Europe and other parts of the world underwent a great reconstruction, and recovery, which went from the beginning of the postwar period, to the middle of the 1960s. And beginning with the first Harold Wilson government in Britain, and with the United States entry into the war in Indochina, and the introduction in the United States and elsewhere of a so-called drugs-rock-sex youth counterculture, that the United States underwent a cultural change; Britain underwent a cultural change, and Europe was compelled to follow.

As a result of that, especially the 1971 decision, the Rambouillet decisions of 1975, and especially the post-1982 period, the world underwent one of the worst periods of degeneration, and decadence, that we've experienced in modern European civilization.

The world prior to 1964-71, believed in reconstruction, economic reconstruction. The developing countries desired the right, not only for political freedom, but also for construction, agro-industrial development, like that of Europe and the Americas. About the middle of the 1960s, we made a shift, like the shift in Italy which occurred following the Second Punic War. Before then, we believed in production. We went to what was called a consumer society. And like ancient Rome, over the period following the Second Punic War, the United States and Europe became increasingly a consumer society, rather than a producer society—especially after the decision of 1971, the floating-exchange-rate system. Globalization, and so forth, was nothing but a new form of imperialism, in which we looted the poorest part of the world, and their cheap labor and raw materials, so we at home, in Europe and America, could live as consumers, on credit-card debt.

This is a great destruction of wealth, and of the ability to produce wealth, which has afflicted the world as a whole since that time. We have destroyed basic economic infrastructure, railway systems, systems of power generation and distribution. We've destroyed agriculture. We have destroyed our principal industrial productive capacities. But we have greatly multiplied the amount of financial obligations outstanding, while we have been shrinking our actual physical productive capacities.

We have now reached the point that the outstanding, short-term debt of the world, is about 10 times the amount of the total GDP of all nations combined.

Ladies and gentlemen, we are bankrupt. The nations are bankrupt. The banking systems are bankrupt. And we are bankrupt because of our own policies. Most bankruptcies occur because the management is incompetent. Or the government is incompetent. Or the central banking system is incompetent.

Reorganize Europe's Debt, and Export!

So, therefore, this is what I mean by systemic crisis. We have a cultural crisis. We have destroyed the culture upon which the successful development of European civilization depended. We've engaged in a vast destruction of essential capital, of infrastructure, industry, and agriculture, upon which our prosperity had depended. Therefore, we have to change the system.

This compels us to make, very soon, thoroughgoing changes among institutions. But, using the best lessons of experience in the past.

For example, Europe is, under present circumstances, hopelessly bankrupt. For example: You have in northern Italy, an entrepreneurship, among private entrepreneurs, small ones. Many of these, especially from this northern region, are very aggressive in their export activities. Their performance is excellent. They have very little capital, as you know; it's self-controlled. They're innovative, adaptive. They're liked in [other] countries, because they go in as partners, not just as salesmen.

Germany has an export potential. Germany has a very large export, to India, and its greatest growth in export is to China.

Now, we could reorganize Europe's finances, even if we had to do it in bankruptcy. Very effective long-term opportunities exist in the world. For Europe, especially in East, Southeast, and South Asia. We could actually organize, with Russia, a reorganization of Russia's debt, to make it a mediating relationship, to the East, South, and Southeast Asia. This means a reorganization of the international monetary system.

But this also means that Europe must develop, organize itself, to become a great exporting giant, for the needs of the markets in East, Southeast, and South Asia. Which means that certain institutional changes within Europe, as existing in an expanded common market, must occur.

For example, long-term export requires 1% to 2% percent long-term credit, 25 years. It requires a fixed-exchange-rate system. It requires a protectionist system. You cannot make a 25- or 15-year long-term investment in Asia, unless you have protection for the area for which you're extending the credit.

So, these things are possible. We have, if we create new institutions, or reformed institutions, we can solve each and all of the problems of the planet and the regions of the planet. This would mean putting all existing central banking systems into bankruptcy reorganization.

The Utopian Draft-Dodgers Want a War

Now let me conclude, and make one very relevant point, which pertains to the example of the recent danger of the war with Iraq.

What was the cause of the war? Who wished the war? If you look at the group of people behind the war, during the period of the Vietnam War in the United States, they were all draft-dodgers. The people who oppose the war were generally flag-officers, or retired flag-officers, who, as lieutenants, captains, and majors, had served in the Vietnam War. So the soldiers were the peacemakers, and the draft-dodgers were the war-makers!

Vice-President Cheney of the United States, for example. The President of United States—the present President—who served in a national guard unit, and avoided service overseas. The hard core of the advisers of the President, for war, were Trotskyists beforehand.

What does this mean? You find the same thing is true in Europe. The traditional people do not want this war! They want no utopian schemes. They want practical institutional solutions, to practical problems.

The problem we have in the United States: My enemies in the United States—and I'm proud to have them—are the followers of Bertrand Russell and Herbert George Wells, who invented the idea of a utopia, a world utopia: world government, through a combination of peace movements, and nuclear terror. Many shallow-minded people were taken in by Bertrand Russell and his followers. They tried to piece together, utopian schemes, based on, "I like this; I like this; I like this. We'll put this together and we'll have a perfect society."

So, these people with wild-eyed schemes, wanted to make a one-world utopia. So did the Roman Empire. The difference between these people and the Roman legionnaires: The Roman legionnaires established an empire, when they were at the height of their power. These fools want to establish an empire at the lowest level of their economic and mental powers.

Italy's Role in Development

So, the kinds of things that you've been discussing in these institutions are relevant. I think we have to give a global context to them, put them in terms of the total world situation we face now; and base ourselves on durable, proven principles of law, such as natural law, which Italy has a very strong dose of, as a heritage, especially since the 15th-Century Renaissance.

One of the first nation-states, modern nation-states, was created in France, under Louis XI, and in England, under Henry VII. The rebirth of European civilization, after the Dark Age of the 14th Century, occurred in the shadow of the cupola on the Cathedral of Florence—the cupola which had been constructed by Brunelleschi. The reason that the parliamentary system of Italy has taken the leadership in moving toward the reform of the international monetary institutions [see EIR, Oct. 4] is, in my opinion—from my contact, and my discussion with these people—because of the heritage of natural law, which is a heritage of Classical Greece, a heritage of the Apostles John and Paul; but also, a heritage of the rebirth of Classicism in Italy in the 15th-Century Renaissance.

And, actually, Italy might just have national enjoyment over the fact that it has that role to play again.

I thank you very much.