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From the Vol.1,No.10 issue of Electronic Intelligence Weekly

THIS WEEK YOU NEED TO KNOW

President Bush Mis-Briefed, Again — Lyndon LaRouche Comments

Saturday, May 11, 2002

Those Americans who are asking questions such as "What happened to my pension?" "How did I blow out my credit cards?," or, "Who closed down the only full-service public hospital in town?" have good reason to take a hard look at the notorious Milton Friedman, who is reported as about to turn 90 this July.

The May 9 New York Times online edition quotes Federal Reserve chairman Alan Greenspan describing Friedman as "the most formidable economist" of the 20th century. Friedman has, indeed, racked up a formidable record: as perhaps the most awesomely incompetent of widely known economists of the recently closed 20th century.

Leading British (Cambridge University) economist Mrs. Joan Robinson once ridiculed him, quite appropriately, as a forecaster of the "post hoc, ergo propter hoc" school: or, in free translation from her Latin, an economist who, in fact, claimed credit for predicting the past. Lyndon LaRouche, like some other well-known economists, such as Arthur Laffer, has described Friedman as one whose proposals may be interpreted as fascist. A similar characterization came from certifiable right-winger William F. Buckley, Jr., who described Friedman as a man whose dogmas are inappropriate for a democratic form of government. To be exact, Friedman stated: "The object of such controls [on wages, prices, and credit] is the restriction of spending on the part of individuals.... Such a policy if rigorously enforced should restrain a rise in the price level. This policy appeared to have been successful in Nazi Germany," leaving the reader to guess whether Buckley was condemning or supporting Friedman's policies.

In 1980, LaRouche published a book, The Ugly Truth About Milton Friedman, a documentation of the scientific evidence which showed that letting Milton Friedman's influence into the Reagan White House, would lead to a continuation of same kind of national economic disaster which Friedman's ideology had caused under both Henry A. Kissinger's Nixon Administration, and also that Administration of Zbigniew Brzezinski's Carter which had ensured the November 1980 proliferation of Democrats for Reagan. It worked out exactly as LaRouche had forewarned.

Apparently, the new President has not yet learned that lesson. The New York Times quotes Bush: "He [Friedman] has used a brilliant mind to advance a moral vision—the vision of a society where men and women are free, free to choose, but where government is not as free to override their decisions.... That vision has changed America, and it is changing the world." The Times adds a quote from Bush's Defense Secretary Donald Rumsfeld, saying that Friedman had "changed the course of history."

Economist LaRouche, who has a published record as the most successful long-range forecaster of the recent 35 years, has given EIW the following few, timely remarks explaining why Friedman might be admired, by some erring souls, as a man whose influence had become significant in "changing the course of history."

LaRouche comments on the Times' May 9 report: "Friedman's growing influence among right-wing ideologues, since the late 1950s, did in fact contribute to the mid-1960s shift in the U.S. economy, from the successful growth of the U.S.A. as a producer economy, over the course of the 1933-1965 interval, into the presently disastrous process of slide into the persistently increasing impoverishment of the lower 80% of family-income brackets, under the decadent consumer society of the 1966-2002 interval.

"It seems never to have occurred to either Friedman or his legion of dupes, that the British East India Company interests which owned Adam Smith, had created the doctrine of 'free trade' solely for the edification of Britain's intended victims abroad. Every time some British government, such as the foolish Harold Wilson, Margaret Thatcher, and Blair governments, has been so silly as to apply Smith's slogan to the United Kingdom itself, that Kingdom has slid into a monumental economic catastrophe. Those catastrophes do represent, as the famous 'Chairman Greenspin' claims, 'a formidable record,' but only of a certain sort."

The Three Follies of Friedman

LaRouche warns whoever is advising the President, to avoid committing the same blunder. "There are three features of the Adam Smith and related dogma of Friedman's dupes which must be recognized, if our republic is to avoid the now-looming catastrophe which that dogma threatens to ensure at this juncture.

"First, we must recognize that the 'free trade' dogma of Lord Shelburne's creature, Adam Smith, as in The Wealth of Nations, was concocted as a swindle intended, at the time it was published, to support the American Tory cause, against the economic and related policies of both those circles, led by that authentic genius Benjamin Franklin, who crafted both the 1776 Declaration of Independence and Federal Constitution. Smith's tract was also part of the effort to neutralize the growing, 1763-1776, strategically crucial support for the American cause, not only on the continent of Europe, but within the United Kingdom itself. In short, then as now, Adam Smith's dogma was essentially a political manifesto to be used by the enemies of our republic.

"Second, contrary to Karl Marx and other dupes of Bentham's British East India Company's Haileybury school of faked economic history, the dogma of Smith et al. has no positive relationship to the successful development of modern political-economy.

"The kernel of modern political-economy was formed, both conceptually and in actual national practice, beginning the Italy-pivoted 15th-century Renaissance. This occurred as a byproduct of the same revolutionary developments which brought the France of Louis XI and the England of Henry VII and Sir Thomas More's ascendancy into being, as the first actual models of a successful design for a modern sovereign nation-state economy. In the later rebirth of Europe from a 1511-1648 little dark age characterized by recurring religious wars, the leadership in reviving the cause of national economy was initially centered around Cardinal Mazarin and his protégé Jean-Baptiste Colbert. Out of Colbert's sponsorship of the science-driver economic program of Christiaan Huyghens, Leibniz et al., a science of political-economy, known as 'physical economy,' was founded and developed by Leibniz during the interval 1671-1716.

"The doctrines of the Physiocrats, of Mandeville, and Smith, came into circulation out of plainly stated hatred against all of the leading authors of that concept of national-economy which our Federal Constitution established, as the framework for what Treasury Secretary Alexander Hamilton and others named 'the American System of political-economy.'

"Since 1789, every period of sustained improvement in the physical and related prosperity and growth of the U.S. economy, has been, like the Franklin Roosevelt-initiated recovery of 1933-1945, the result of resumption of American System economic policies; while every economic and related disaster, such those under Andrew Jackson and Aaron Burr's putative heir Martin van Buren, has been the consequence of a substantial degree of uprooting American policies in favor of the dogmas of Smith et al.

"Third, from the standpoint of religion, John Locke, Bernard Mandeville, Adam Smith, et al. belong to a theological tradition known in traditional English slang as 'the buggers,' otherwise known as radically gnostic pseudo-Christian cults, such as the Cathars. This current had gained renewed support in modern English and French tradition, through the widespread influence of the doctrine of empiricism. This was the doctrine injected into England and other cultures by the internationally powerful Venetian leader Paolo Sarpi and his household lackey Galileo Galilei, the latter the teacher of Thomas Hobbes. This doctrine was the result of Sarpi's revival of the so-called 'Occam's Razor' of the medieval gnostic William of Ockham, to slice off essential attributes from modern Aristoleanism. The effect of that economy-measure, is to move crucial issues of science and theology from the domain of sanity, into the license for practicing sundry wild-eyed varieties of superstition, akin to those of Aaron Burr's wild-eyed grandfather, thunderous Jonathan Edwards. Typical of this lunatic religious mysticism, are, John Locke's doctrine of what is called today 'shareholder value'; the doctrine of Bernard Mandeville, that public good is the fruit of private sin; and, the explicit resurrection of gnostic 'buggery' in the teachings of the Physiocrats and Adam Smith.

"These three categorical features of current 'free trade' dogma, taken into account as facets of the same clinically significant aberration, point to the reasons why today's 'free traders' must be understood as having a corrosive impact on civilized society, an impact comparable to that of the roving predatory hordes of the cult known as the 'Flagellants,' during Europe's 14th-century New Dark Age."

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Milton Friedman Fêted at the White House

At a White House event May 9, President George W. Bush honored Milton Friedman, author of the monetarist bible Free To Choose, who turns 90 years old in July, as "a hero of freedom." Secretary of Defense Donald Rumsfeld said Friedman had "changed the course of history." And Federal Reserve chairman Alan Greenspan called him "the most formidable economist" of the 20th century.

The back cover of Lyndon LaRouche's book The Ugly Truth About Milton Friedman, published by Benjamin Franklin House in 1980, asks the question: "Is Milton Friedman a fascist?" In answer, Arthur Laffer is quoted: "You want to prove that [Friedman] is a fascist? It's easy. Quote him." Even the odious William F. Buckley, Jr. is forced to admit that "it is possible that Friedman's policies suffer from the overriding disqualification that they simply cannot get a sufficient exercise in democratic situations." And Friedman himself, the senile guru of monetarism and the free-market madness that has dominated U.S. economic policy for 35 years, states, "The object of such controls [on wages, prices, and credit] is the restriction of spending on the part of individuals.... Such a policy if rigorously enforced should restrain a rise in the price level. This policy appeared to have been successful in Nazi Germany."

Nonetheless, President Bush, whose reading list probably did not include LaRouche's book, dutifully repeated what he had been told: "He has used a brilliant mind to advance a moral vision—the vision of a society where men and women are free, free to choose, but where government is not as free to override their decisions." When he added "That vision has changed America, and it is changing the world," he came closer to the ugly truth than he realizes: Unless Friedmanite economic lunacy is abandoned in the immediate future, the only thing the U.S. will be "free to choose" is our poison.