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(22) 18 Dec 93 14:50:42 Cost: 0 By: UUCP, In*Touch (1:2613/333@fidonet) To: Glenda Stocks Re: Pt 1/3: America's Revolutionary Economic Heritage St: Pvt Rcvd ------------------------------------------------------------ From: ur-valhalla!ccs.covici.com!covici America's Revolutionary Economic Heritage by Robert Ingraham In the recent period, Americans have witnessed with shock the devastation resulting from the floods in the Mississippi River Valley. Estimates of the flood damage have now risen to as much as $20 billion, and, if the pattern of government response to other recent economic disasters holds true, there is little likelihood of rapid economic recovery for that region. In 1989, the Loma Prieta earthquake hit northern California and in 1992 Hurricane Andrew ripped through southern Florida. These regions have yet to recover economically or to rebuild destroyed infrastructure. We live in a country with decaying bridges, water systems, roads and inner cities. Budget cuts are hitting schools, libraries, and health care in virtually all of our states and counties. Our manufacturing base is disappearing. Steel and machine tool production are gone, and even the linchpins of what was falsely portrayed as the so-called ``Reagan recovery''--aerospace and high-tech industries--are in a tailspin. Our nation, which 24 years ago landed a man on the Moon, now seems incapable of maintaining and modernizing even the most basic of national economic needs. The question now posed to the populace is how can we as a nation reverse this economic malaise and return to policies which will bring economic rejuvenation and a promising future for our youth. Populist antiestablishment rhetoric will not work. Simplistic calls to ``balance the budget,'' ``deport the illegal immigrants'' and ``throw the bums out of Washington'' are just that, simplistic slogans designed to mislead desperate people, people who are in fact almost completely ignorant about the real economic history of America and the economic policies which made America great to begin with. The only solution to our present crisis is to return America to what 150 years ago was known as the ``American System'' of economics. Many people have all kinds of opinions about what type of economic policies were the original foundation for the United States of America, but since very, very few citizens have seriously researched this issue, and since most elementary and secondary schools completely misrepresent American history, most people's opinions on this subject are wrong. From its inception, and particularly beginning in 1789, America pursued a revolutionary economic path. The repercussions from America's economic revolution changed the course of history and inspired patriots and nation-builders all over the world. This article is an attempt to make readers cognizant of some of the principal ideas underlying the American System. It is also the story of a brief period of American history, the years from 1825 to 1832 and the battle which took place at that time between the patriotic proponents of the American System and their enemies who sought to destroy it. The hero of our story is Friedrich List, a man virtually unknown today, but one of the most influential thinkers of the past 200 years. List's allies included such men as Mathew Carey, Hezekiah Niles, and Charles Ingersoll, again men unknown today but giants of American history. This article is the story of their fight in the 1820s and 1830s to defend the American System from its enemies, not today's Hollywood myths about America, but the real American economic system designed by Alexander Hamilton between 1789 and 1793. Hamilton's Revolution Most Americans rightly view the American Revolution as one of the greatest political revolutions in history. What is not as widely understood is that our founding fathers also created a profound {economic} revolution, and that these were not two separate revolutions, but rather two coherent aspects of one revolution. The Declaration of Independence states: ``We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with certain inalienable rights.... That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed....'' The U.S. Constitution reads: ``We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution of the United States of America.'' These philosophical principles enunciated in our Declaration of Independence and Constitution contained for our founding fathers, just as they should hold for us today, very specific implications as to how men should and must organize society to ensure not only the future existence of the Republic, but the continuing creative role of the individual citizen in that republic. America, more than any other nation in modern history, was founded on the recognized sacredness of the human individual. The premise that all men ``are endowed by their Creator with certain inalienable rights'' and that ``governments are instituted among men, deriving their just powers from the consent of the governed'' contains a clear epistemological message and a recognition of the creative potential of each sovereign citizen to improve and enrich society through his or her personal initiatives. Grounded in this philosophical outlook, George Washington's first four-year presidential term gave birth to the most dramatic economic revolution in modern history. Between 1789 and 1793 Washington's Treasury Secretary Alexander Hamilton issued four reports which created the economic foundation of the new republic. These reports, {The First Report on Public Credit, The Second Report on Public Credit, The Report on the National Bank} and {The Report on the Subject of Manufactures} defined the idea of a ``national economy,'' that is, that a republic of citizens must have sovereign control over its own economic affairs, and not be at the mercy of British or other international banking forces who control what is erroneously called the ``free market.'' Hamilton argues that a republic of free citizens can guarantee its future existence only if it fosters rapid development of manufacturing, technology, new inventions, and rising skill levels and educational levels of its population. The national government, as an entity which derives its ``just powers from the consent of the governed'' is obligated to originate policies which will provide the framework whereby the necessary national economic development can occur. As Hamilton says in his {Report on Manufactures}: ``The fabrications of machines, in numerous instances, becoming itself a distinct trade, and the Artist who follows it, has all the advantages ... for improvement in his particular art; and in both ways the invention and application of machinery are extended. And from these causes united, the mere separation of the occupation of the cultivator, from that of the Artificer, has the effect of augmenting the productive powers of labour, and with them, the total mass of the revenue of a Country.'' The National Bank The cornerstone of Hamilton's program was the National Bank through which the nation's credit could be directed into areas of productive investment, manufacturing, and internal improvements (canals, bridges, etc). To complement the policies of the bank, Hamilton proposed a program of protective tariffs, tax policies to promote investment in new industries and in-depth infrastructure development. These policies became known as the ``American System of Economics,'' to distinguish them from the British colonial economic policies. Under the British system, people were not citizens, but subjects; they had no God-given ``inalienable'' rights. British colonial and ``free trade'' policies were based on subjugating and looting weaker peoples. Theirs was a policy of control, control over financial resources, control over raw materials and control of the lives of their subjects. The American System, Hamilton's system, sought to safeguard the creative spark in each individual citizen, knowing that through the initiatives, inventions and, entrepreneurship of such free citizens the nation could be ensured a productive future. In this sense the American System is the very specific inheritor of the concepts of the fifteenth-century Platonic Florentine Renaissance and a true representative of the Christian notion of {imago viva Dei}, man in the living image of God. Under the First and Second National Banks, the economic growth of the nation was astounding. Most Americans will remember from their history books the stories about the Erie Canal, the development of the steam engine, and the invention of various farm machinery. What is not understood by people today is why such economic development was so rapid then and seems so impossible now. Foundries, iron works, textile mills, and production of farm implements flourished as America was industrialized. The Cumberland National Road, canals, and infant railroads were built under a deliberate American System policy of national economic development. In popular American history books, the person who is most identified with the term American System is Henry Clay, who campaigned for President in 1824, 1828 and 1832 on a three-point American System platform of 1) a national bank, 2) internal improvements and 3) protective tariffs. These were the publicly acknowledged issues of the day. In fact, from the time of Alexander Hamilton all the way up through the Civil War, the term American System had a very {specific} meaning for Americans. It was not some fuzzy, debatable idea. People knew exactly what the American System was, something that cannot be said for the public today. During the 1820s and 1830s, Henry Clay, Friedrich List, Mathew Carey and others conducted a political and educational mobilization to defend the American System from its enemies. The First National Bank had been shut down in 1811 and only rechartered as the Second National Bank in 1816 after the near catastrophe of the War of 1812 proved the urgent need for it. The Second Bank was saved in 1818 and again in 1822 only through the Supreme Court rulings of John Marshall in {McCulloch vs. Maryland} and {Osborne vs. The Bank of the United States}. By the 1820s, America was undergoing a profound change in national character. Many of the leading families of New England, including the Cabots, Higginsons, and Sedgwicks had been recruited as junior partners in the British East Indies opium trade, and were, in philosophical outlook as well as political allegiance, outright traitors. Slavery, once largely confined to the tobacco-growing regions of the Southeast, began a period of massive expansion as the cotton economy spread throughout the entire South. These slave owners and drug runners, together with certain banking allies in New York and Boston, were openly arrayed against the American System and determined to impose British free trade policies in order to more ``freely'' conduct their perverse economic activity. These were the years in the period after the Battle of Waterloo when the British Empire, victorious in arms and unchallenged economically, truly emerged as a ``one-world'' empire. These oligarchs viewed their control over humanity as a means for economic looting and increased political power. To fully achieve these ends, they knew that America and Hamilton's American System must be destroyed. List in America In June of 1825, the German republican and economist Friedrich List arrived in the United States at the invitation of the Marquis de Lafayette. Lafayette was then in the middle of a two-year tour of the United States as part of a campaign to politically strengthen the proponents of the American System. List had been imprisoned, stripped of his German citizenship, and deported from Germany for his political activities in opposition to the repressive policies of the post-1815 ``Holy Alliance.'' In 1823, he had met Lafayette in Paris and become intimately acquainted with the pro-American international networks with which Lafayette was associated. In America, List found a nation at a political crossroads. The American System was under assault from an alliance of pro-British opium merchants, slave owners, and bankers. Their goal was the abolition of the National Bank, the removal of tariffs and a financial system based on usury and speculation. Make no mistake about it, these goals were the product of a pro-British treasonous conspiracy. The leaders of the conspiracy were members of ``free trade clubs'' many of which were official branches of free trade societies headquartered in London, and many of these individuals later joined the infamous pro-Confederacy Cobden Clubs, which were also based in London. In his major economic work, {The National System of Political Economy} (hereafter {National System}), List would write in chapter nine that only one course existed whereby the American Economic Revolution could be destroyed. If America would allow the deindustrialization of the Northeast through the adoption of free trade and the simultaneous spread of (primarily slave-based) agriculture throughout the South and West, then the country could be ruined economically and subverted politically. This formulation became, in fact, the organizing perspective of the pro-British slave and opium faction through the 1830s and 1840s, and their success in achieving it led directly to the crisis of the 1850s and the U.S. Civil War. In 1825, the immediate goal of the treason faction was to reduce and eventually eliminate the national tariff. Support for the tariff was led by the Pennsylvania Society for the Promotion of Manufactures and the Mechanic Arts (hereafter Pennsylvania Society), an organization originally founded by Alexander Hamilton under the name Philadelphia Society for the Promotion of National Industry. The first protective tariff was proposed by Hamilton and enacted into law in 1789. Although this was a modest tariff, it established, as List points out, a precedent for the concept and the purpose of a protective tariff. List insists that the amount of the tariff is irrelevant. The principle of protecting domestic producers and ensuring orderly productive economic growth was paramount, no matter how high the tariff had to be. By the 1820s, Britain was dumping huge amounts of woolens, cloth and manufactured goods on America, frequently below cost, in order to bankrupt American producers and ensure a British monopoly. To meet this threat the national tariff had been increased in 1820 and again in 1824, largely through the efforts of Henry Clay, but these tariffs proved insufficient to prevent British dumping. In 1827, the Pennsylvania Society called for a further increase in the tariff. During these tariff battles, Mathew Carey launched a national educational effort to familiarize a new generation of Americans with the founding principles of the American System. In 1824, his printing company republished Hamilton's {Report on Manufactures}, a work out of print for almost 30 years, and he brought out a second printing of the same work in 1827. What today's history books quaintly refer to as the 1820s ``tariff fight'' was in reality a battle over the continued existence of the American System itself. To spur the drive for a new tariff, the Pennsylvania Society organized a national protariff convention which was held in Harrisburg, Pa. on July 30, 1827, and Friedrich List was enlisted to author a series of twelve letters to organize support for the convention. These letters were published simultaneously in more than 50 newspapers, then collected and printed in pamphlet form under the title ``Outlines of American Political Economy.'' Thousands of copies of the pamphlet were distributed throughout the country as part of the organizing campaign. National sentiment was rallied behind the tariff, and as a result in 1828 the new tariff was signed into law by President John Quincy Adams. List Versus the Free Traders In writing the ``Outlines of American Political Economy,'' List was not content with merely describing the practical benefits of the proposed tariff. He used this work both to capture the essential character of the American System itself and to demolish the opposing enemy ideas of Adam Smith. On the very first page he begins: ``I confine my exertions, therefore, solely to the refutation of the theory of Adam Smith and Co., the fundamental errors of which have not yet been understood so clearly as they ought to be.... I believe it to be a duty of the General Convention at Harrisburg, not only to support the interests of the wool growers and wool manufacturers, but to lay the axe to the root of the tree, by declaring the system of Adam Smith and Co. to be erroneous--by declaring war against it on the part of the American System--by inviting literary men to uncover its errors, and to write popular lectures on the American System--and, lastly, by requesting the Governments of the different states, as well as the general Government to support the study of the American System in the different colleges, universities and literary institutions under their auspices.'' Throughout the work, List reiterates two themes--first, that the government as an embodiment of the nation's citizens has a duty to create the conditions for continued useful economic growth. In particular, he emphasizes policy which will increase the ``productive powers'' of society by emphasizing those types of manufacturing growth, infrastructure, and new inventions which will result in an orderly expansion of the economy and increased productive skills and living standards of the population. He shows that the tariffs of 1820 and 1824, far from benefitting a few rich industrialists, created economic opportunities and prosperity for tens of thousands of farmers, wool manufacturers, and individual business entrepreneurs, and he describes how this prosperity was felt by working people, using the example of Lowell, Ma. where over 100 factory workers reported personal savings accounts of more than $1,000, a substantial amount in those days. List ridicules Adam Smith's free trade dictum {laissez faire et laissez passer}, showing that none of this prosperity, in fact not even the very existence of the nation would be possible without government intervention. In Letter Six he says: ``Without interference of national power there is no security, no faith in coined money ... no security for the health of seaports, no security for the commerce at sea by the aid of a navy ... no titles to land, no patents, no copyright, no canals and railroads. Industry left entirely to itself would soon fall to ruin, and a nation letting everything alone would commit suicide.'' The second theme which runs throughout List's ``Outline....'' is that the American System is the only method whereby the productive potential of the individual citizen can be nurtured, developed, and unleashed. The American System is not a policy of government control; it is the only policy in which sustained individual creativity can operate freely. List stresses that the unrestricted so-called ``free market'' leads directly to monopoly and despotism, with wealth and power concentrated in the hands of a few. The ``free market'' is in reality an enemy strategy, designed by British oligarchs to subvert and control America. The American System, Hamilton's system, is truly revolutionary because for the first time in history a nation's economic policy is constitutionally in coherence with the notion of the creative divine spark resident in each individual human being. In Letter Nine, List demonstrates how the British Empire has used ``free trade'' to enslave colonies worldwide, and how in their hatred of and determination to erase the American System they are determined to force American acquiescence to such an imperial world order. He issues an urgent warning concerning the spread of the slave/cotton economy in the South as a flank of the British schemes, and in the final letter he concludes with an impassioned argument to industrialize the South as the only means to stop this British plot. List Versus the Boston Drug-Runners The success of the Harrisburg convention generated panic among the pro-British traitors. Free trade societies were mobilized throughout the country to attack the work of the convention and to refute List's ``Outline....'' Periodicals such as Condy Raguet's {Free Trade Advocate} led the pack of pro-British hyenas. Meetings were called in all of the states to spread agitation and lies about the tariff. At one of these meetings in Charleston, S.C., Thomas Cooper issued the first call for southern secession. Cooper, the author of the pro-Adam Smith {Lectures on Political Economy,} later personally trained many of South Carolina's most rabid secessionists who led the nation into Civil War. The Boston free trade meeting issued a written diatribe by Henry Lee under the title {Report of a Committee of the Citizens of Boston}. As 1827 ended, this report was reprinted and circulated all over the country as the definitive broadside against the proposed tariff. The {Boston Report}'s author, Henry Lee, was a leading member of this treasonous clique. His mother was a Cabot, his father a pro-British merchant involved in the India opium trade. Lee, a graduate of George Bush's alma mater, Phillips Andover Academy, travelled to British India in 1811 to work under his father for a number of years. Together with Theodore Sedgwick, he organized the 1831 Free Trade Convention which brought together Boston Brahmins and southern slave owners and provided a national platform for Thomas Cooper's secessionist doctrines. At that convention, Sedgwick denounced the American System as ``unjust and oppressive,'' and declared: ``Fifty years ago the principle of free trade was unknown. Adam Smith then rose as a sun to illuminate the world.'' In 1832, Lee ran for vice-president on a secessionist ticket, garnering South Carolina's 11 electoral votes. It was during this campaign that Mathew Carey labeled the South Carolina secessionists as ``the British Secret Service.'' Lee was also a lifelong friend of both the notorious Richard Cobdon, the British intriguer who devoted his life to destroying Friedrich List's influence, and Albert Gallatin, the man who aided in the escape of Aaron Burr, the murderer of Alexander Hamilton. Lee was also the author of the 1832 free trade memorial supporting South Carolina's nullification ordinance. In early 1828, List was employed by Mathew Carey to write a rebuttal to Lee's document. In his {Review of the Boston Report,} List systematically refutes every argument raised by Lee. More important, this essay, completely unknown today, is perhaps the clearest document ever published exposing the British free trade plot to destroy America. List begins: ``To distinguish (Lee's proposals) from the American System we shall call it what it really appears to us to be, the English or the Anti-American System.'' He continues: ``This is what is urged upon us by the Boston Report, which we shall shew before we have done with it, is written with a feeling wholly Anti-American, and is advocating the cause of England as completely as if it had been written in that country--indeed we have heard it intimated, that some part of it was actually written in England. Improbable as this may seem, we would ask our readers to examine for themselves the hostile spirit it breathes to every thing that would make us great, and we feel satisfied, they will agree with us in opinion, that it would be difficult for a truly American heart, ever to have given utterance to many of the insinuations against us, which the report will hereafter be shown to contain. Mr. Canning's and Mr. Huskisson's [British prime ministers] principles are the only principles we ought to adopt; or in other words, we should be much better off to manufacture nothing at home, go to England for every thing, and thus let Mr. Huskisson make laws for us, which would bring us back to 1774, Colonies of Great Britain!!'' List quotes extensively from Hamilton's {Report on Manufactures} to the effect that the creation of a sovereign ``national'' economy is a prerequisite for economic development. He quotes Hamilton on the urgency of securing the domestic market and on the need for government support for infant manufacturing and new inventions. He destroys the accusation that tariffs are taxes by showing that tariffs result in new industry, whose development will inevitably reduce the price of the commodities in question. He details the prosperity generated by the 1820 and 1824 tariffs, and, throughout the work, List continually attacks the fallacies of supposed ``free markets,'' ``natural prices,'' ``supply and demand,'' and other delusions. He exposes how these ``cosmopolitical theories'' originated with the British East India Company as a scheme to brainwash peoples into surrendering their national sovereignties. Dismantling the American System The political offensive of Carey, List, Clay, and their allies was successful, and in May of 1828 the new tariff was signed into law. Dubbed the ``Tariff of Abominations'' by its opponents, the new law established tariff levels of 44 percent. This tariff level would stand as the highest in American history until Abraham Lincoln set a tariff rate of almost 50 percent during the Civil War (see chart). In a very real sense, however, this 1828 fight was the last major victory for the American System leadership. The antitariff mobilization had crystallized the treasonous Boston-South Carolina alliance which took increasing control over the emerging Democratic Party. In November 1828, Andrew Jackson was elected President, and between 1829 and 1841, Jackson and his successor Martin Van Buren dismantled Hamilton's economic system. Under threat of southern secession, the tariff was reduced in 1832 and again in 1833. By 1855, America had adopted free trade with tariffs below 5 percent. In 1832, Jackson vetoed the rechartering of the National Bank, shutting it down permanently in 1836 when its charter expired. The President of the Bank, the great patriot Nicholas Biddle, was driven from office, hounded and imprisoned prior to his death in 1844. British agents rejoiced at his death with William Cullen Bryant, national president of the Free Trade League penning gloating editorials in {The New York Post,} demanding that Biddle spend eternity in hell for his leadership of the bank. In 1830, Jackson vetoed the Maysville Road Bill, reversing a 40 year policy of federal support for internal improvements and establishing an antidevelopment policy he would continue throughout his two terms. The policies of Jackson and Van Buren, particularly after the abolition of the National Bank, provoked an unprecedented financial panic and depression. The ensuing political crisis resulted in the election of the Whig presidential candidate William Henry Harrison in 1840. Harrison campaigned on a platform of rechartering the National Bank and restoring the American System. Legislation was drafted and introduced into Congress to restore the bank, when only 30 days after his inauguration the healthy Harrison suddenly died, a likely victim of assassination. Congress passed the legislation to restore the National Bank, but Harrison's successor John Tyler vetoed the bill, despite the fact that every member of the cabinet but Daniel Webster quit in protest. Since Harrison's death, no U.S. President has ever attempted to restore the National Bank. Throughout the 1840s, northern manufacturing collapsed, accompanied by the massive spread of the slave-cotton economy in the South, particularly after the War with Mexico. By 1850, the American System was dead, the nation in economic depression and facing political dismemberment. Only the movement that resulted in the candidacy of Abraham Lincoln saved the nation. List's Legacy Although he had become an American citizen and would remain one until his death, List returned to Germany in 1831 and began organizing networks in Europe with the aim of defeating British imperial policy. He worked extensively in France with economists Charles Dupin and Michel Chevalier. He developed collaborators in Italy, Hungary, and Austria. In 1834, he was responsible for the creation of the German Zollverein, the customs union which paved the way for German political unity and national economic development. In 1841, List published his economic masterpiece {The National System of Political Economy}, and this book, together with the writings of Mathew Carey and Henry Carey, spread the ideas of the American Economic Revolution all over the globe during the late nineteenth century. In 1862 the ``American faction'' around Tsar Alexander II founded the Russian National Bank, and in 1889 Sergei Witte translated List's {National System} into Russian, using it to devise his program for industrial development and railroad construction. In Japan, Henry Carey's student Shigenobu Kuma, a leader of the Meiji Restoration, founded a national bank in the 1870s, leading to Japan's industrialization. In 1924, Sun Yat-sen founded the National Bank of China. List's writings were studied by Kuomintang economists, and in {Chinese Economic Theory} Chiang Kai-shek calls List the greatest of the western economists. During the 1880s and 1890s, List's and Carey's writings were translated and studied in India, Romania, Mexico, Argentina, Brazil. Patriots in those countries created national banks, erected protective tariffs, and began to put the American System into practice. These were not isolated developments in separate counties. This was a continuation of the American Economic Revolution. The American Revolution brought into existence a new type of nation, based on national sovereignty, freedom, and economic development. In the third letter of his ``Outlines of American Political Economy,'' List states that once the American System came into existence it immediately became the mortal enemy of the British oligarchical system and that these two systems cannot exit side by side. Sooner or later, one of them will be universally accepted throughout the world and the other will cease to exist. The American System: True Free Enterprise Some readers might question the relevance of this article with comments like ``this is all very interesting history, but what does it have to do with our problems today? These things all happened 150 years ago, and times have changed.'' Such criticisms display a complete lack of appreciation of the importance of history and the implications of the American Revolution. Presently, our only hope for national survival and world peace rests in the revival of the American System. When the Declaration of Independence stated ``all men are created equal and endowed by their Creator with certain inalienable rights,'' it expressed universal truth. It was true then, it is true now, and it will be true forever. These ideas defined a new type of nation which recognizes as its founding principle the concept of individual man made in the image of a creative rational deity. In formulating the American System, Hamilton, and his allies devised an economic system in coherence with this image of man. Such an approach has obvious implications for the present day. Take the situation in the Mississippi River basin. Damage from the recent floods is estimated at $20 billion, devastating a region already plagued by a collapse of farm-related manufacturing and the bankruptcy of family farms. The flood damage, however, was preventable. Thirty years ago, the Ralph Parsons Co. proposed to build a continent-wide water management and delivery system known as NAWAPA (North American Water and Power Alliance), which, if in place today would, have provided the flood control necessary to harness the Mississippi. NAWAPA is the obvious modern example of the type of water projects, canals, and internal improvements built under the American System in the 1820s. Similarly, the destruction of our Midwest farm economy could not have occurred with a national bank in place with a mandate to provide credit for manufacturing, agriculture, and other useful forms of production. What the Federal Reserve and their Trilateral allies are doing today is not free enterprise, it is oligarchism. It is a monopolistic financial looting operation which resembles nothing so closely as the British opium and slave-running bankers of the nineteenth century. In chapter twenty-one of his {National System}, List describes such oligarchical thinking: ``Smith's school does not discern that the merchant may be accomplishing his purpose (viz. gain of values by exchange) at the expense of the agriculturalists and manufacturers, at the expense of the nation's productive powers, and indeed of its independence. It is all the same to him; and according to the character of his business and occupation, he need not trouble himself much respecting the manner in which the goods imported or exported by him act on the morality, the prosperity, or the power of the nation. He imports poisons as readily as medicines. He enervates whole nations through opium and spirituous liquors. Whether he by his importations and smuggling brings occupation and sustenance to hundreds of thousands, or whether they are thereby reduced to beggary, does not signify to him as a man of business, if only his own balance sheet is increased thereby.'' Since the 1970s, America has been transformed from an industrial and agricultural economy to a financial Sodom and Gomorrah. In 1992, over $16 trillion were invested in futures and currency markets, so-called financial derivatives. Recently George Soros, one of the leading financial speculators, has waged monetary warfare against the German and French currencies. This is the actual freedom that Adam Smith represents--the freedom of international speculators to attack sovereign nations and impoverish their populations. The U.S. Constitution, on the other hand, is clear in its moral intent to foster productive growth and the creative role of the individual. That is why it defines the rights to patents for inventions and scientific discoveries and why it empowers the federal government to regulate interstate and international commerce. Under real free enterprise, under the American System, it is the duty of the government to guarantee the conditions whereby free men can engage in useful commercial activity and scientific discovery, both for their own benefit and as a means of cumulatively advancing the productive powers of society. In chapter seventeen of his {National System}, List describes how this type of approach will create the first truly human society in history, a society based on individual human creativity, on genius. List describes an ancient barbarian society where human worth is based on physical strength. He than describes a medieval society where value is placed on artisanship and skilled handiwork. It is only with the emergence of a society based on continuing manufacturing, technological growth, and scientific progress that the fostering of individual human creativity becomes paramount to that society's continued existence. In such a society, what is valued is not brute strength but the human mind. The Individual and the State In concluding this article I wish to clarify some ideas about precisely what the American System is and what it is not. It is certainly the enemy of the oligarchical ``free market'' dominated today by London and New York bankers, speculators and drug runners. On the other hand it is {not} a ``planned economy.'' It is not socialism, New-Dealism, social-democratic state-ism, or collectivism. It is certainly not a policy of having the government tell individual farmers, businessmen, and workers what they can and can't do. This is necessary to say because today we have ranchers, small businessmen, lumber producers, miners, fisherman, and others who will tell you that they are being strangled by government economic policy and regulations and that their most fervent desire is to ``get the government off our backs and out of our business.'' Although such antigovernment sentiment can become misdirected, that does not make it any the less legitimate. Producers need the freedom to produce. Farmers need the freedom to grow food, and scientists need the freedom to invent. It is the responsibility of the government to ensure that the preconditions exist for such activity to occur, not to attempt to control every step of the process. Modern Western European thinkers are fond of speaking about the ``problem of alienation in modern society.'' This disconnection of the individual to any real political and economic power, this existential dilemma, is in fact very real and is felt today by millions of Americans who are being turned into servile consumers and TV addicts. Collectivism and trendy versions of it such as communitarianism provide fraudulent solutions by offering the individual participation in decision making only if he is willing to submerge his individual will in the group consensus. This crisis of human identity has obviously worsened with the onset of today's amoral postindustrial society, but in a very real way this crisis can be traced back to the destruction of the American System in the 1840s. In a world governed by the British ``free-market,'' men are valued not for their creative potential but the financial loot which can be extracted from them. The solution to this crisis is a society in which children are valued for their minds, given the education and tools to be creative, and guaranteed the economic opportunity to apply what they have learned. In such a society, each individual is precious. That is the American System. Bureaucracies do not compose music of genius, or make revolutionary scientific inventions. Individuals do. The purpose of the state is to create the preconditions in which the citizenry may be fruitfully creative. This is not an unattainable goal. It in fact was the founding policy of this nation. The preconditions for achieving this goal must include replacing the Federal Reserve with a National Bank and taking back sovereign control over our economy. It must include returning to an agroindustrial economy and a commitment to scientific progress. It must very definitely include reversing the satanic new-age brainwashing going on in our schools. If we as a people do these things, if we return to the American System, our future potential is unlimited. For Further Reading {The National System of Political Economy} by Friedrich List, Augustus Kelley Publishers, Fairfield, N.J. {Review of the Boston Report} by F. List, Garland Publishing, Inc., New York and London. ``Outlines of American Political Economy,'' by F. List, Samuel Parker and Co., Philadelphia. {The Papers of Alexander Hamilton,} Columbia University Press, New York and London. ``In Defense of Alexander Hamilton,'' by Bruce Khouri, {The New Federalist,} July 14, 21, 29, 1989. {Treason in America} by Anton Chaitkin, New Benjamin Franklin House, New York City. {Andrew Jackson and The Bank War} by Robert Remini, W.W. Norton and Co. Inc., New York. -- John Covici covici@ccs.covici.com


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