THE AMERICAN SYSTEM
FOR AN AMERICAN RENAISSANCE
There is a little known but no less important part of American history, one that bears scant resemblance to our 21st century "globalized economy". Our Nation used to operate under a much different economic system. A system which, today, has been nearly relegated to the dustbin of history; associated with various cranks, "conspiracy theorists" and "paleoconservatives". A system scoffed at and ridiculed by a liberal hegemony with no interest in the well being of nations and people. Espousing such a system will earn you only opprobrium and censure from the mainstream neoliberal globalist establishment. You may be called every name in the book for your trouble; retrograde, nationalist, or worst of all isolationist (as though that's a bad thing). I entreat you to pay the naysayers no mind, they are either useful idiots to be pitied or dangerous enemies of the American Republic. This system is none other than the American System of Economics, but throughout our history its tenets and tendencies have gone under different names; the Federalism of Hamilton and Adams; the “Free Soil, Free Labor" system of Lincoln; elements of the “America First" policy of Charles Lindbergh, and the “Fordism” of Henry Ford; the "Economic Nationalism" of Ralph Waldo Emerson and Pat Buchannan.
You were probably told that the economy we have today is "the American way" buttressed with some meaningless platitudes like "freedom, and free markets", whatever that means. You were probably told that “free trade” is a good thing. Sad to say but you have likely been lied to your entire life, especially about economics. The system under which we currently live is an impostor, an interloper, masquerading as indigenous and historical when in fact it is quite foreign, and recent. The more conspiratorial mind might even be inclined to believe that this national amnesia and ignorance was engineered. Be that as it may, the American System, our true historical economy, never disappeared entirely. We've seen bits and pieces of it resurface, in brilliant flashes, in the policies and platforms of people like Pat Buchannan, Steve Bannon, Donald Trump, as well as some America First representatives in Congress. That said, I don't think anyone has updated and summarized the core tenets systematically for our present age and crisis. I hope to try to do so here, and to convince you that it is our only hope.
Whether you call it “free trade”, the Austrian School of Economics, Libertarianism, Liberalism, Neoliberalism, Globalism or the British Mercantile System, all are one and the same; policies not only evil and destructive to a nation, but fundamentally un-American. The so-called "free trade" system originally foisted upon the world by the likes of Adam Smith, Thomas Malthus and other lackeys of the British East India Company cartel, was always intended as a weapon with which to undermine less developed, less industrially competitive nations; was always intended to justify the dumping of cheap manufactures on subject nations to stifle their development and reduce them to national penury; was always intended to confine us to the role of mere providers of natural resources and cash crops to a global market, without sovereignty over our trade policy.
The Austrian School of "libertarian" economics represented by Friedman, Rothbard, von Mises, and Hayek, is merely a more recent and memetically virulent iteration of this same imperial policy of economic domination. We can look around at the devastation in our industrial heartland, our small towns and rural areas, and see the result of half a century of such policies; of running massive trade deficits with China, Mexico, Japan and Germany and shipping out the country's national wealth. Homelessness, unemployment, crumbling infrastructure, underemployment, despair, opiate addiction and ultimately the death of small towns and industrial cities across the country, are the wages of these evil and foreign policies.
The great German-American economist Friedrich List perceived the fundamental flaw in Adam Smith's logic 100 years ago. Smith utterly fails to reckon with the nation as an economic unit, only considering the individual on the one had, and the rest of the world on the other. Thus Smith and his ilk never understood (or never wanted to) that an individual acting entirely in their own economic self interest may in fact harm the economy of the nation. Smith and his imitators have basically theorized the nation out of economic existence.(1) Despite all his talk of the magnanimities of “the butcher, the brewer, or the baker”, Smith has not a word to say about the economic domination brought by the foreign trader, the smuggler and the rootless monopolist.
We see this same willful ignorance in the puerile justifications for dumping cheap imports, "comparative advantage" and so forth, which completely ignore questions of relative national economic development, trade balances and sovereignty. Free trade might be good for the merchant, and the wealthy consumer, and the foreign oppressor, but it is bad for everyone else. Especially American labor. List referred to Adam Smith's economics as "exchange-value economics"; a reference to it's essential character, of arbitrage, in contract to the industrially productive American way.(1)(2)
Today, this destructive ideology is so ubiquitous, so global in scope, that we seemingly know it under as many names as Inuits know snow. Liberal internationalism, free trade, neoliberalism, globalism, "socialism" (true in the sense that it is the Fabian socialism of Huxley's Brave New World), cartel corporatism, oligarchy, etc. Even most of what passes for “conservatism” today, unless it is explicitly America First or MAGA, is nothing more than anti-American free trade globalist economics.
The Nation has faced this enemy before. We fought the Revolutionary War to free ourselves from the yoke of British "free trade", in the form of cheap manufactured British goods dumped on American shores at gun point, leaving American industrialization hamstrung and unable to compete. Benjamin' Franklin’s assessment of British Mercantilism is illustrative.
“…it must be admitted, that the restriction laid by Great Britain upon our commerce, obliging us to sell our produce to her citizens only, and to take from them various articles, of which, as our manufactures were discouraged, we stood in need, at a price greater than that for which they could have been obtained from other nations, must inevitably produce dissatisfaction…”
So we observe that in former times, the destructive effects of free trade were more widely known among Americans, especially our political class. So it’s no surprise that Senator Henry Clay, the historical figure perhaps most closely associated the American System, defined that system as in direct opposition to the British System of free trade warfare. The American System of Economics was borne from crucible of British Imperial depredations. Henry C. Carey, economist for the Lincoln Administration and another leading intellectual of the American School, went so far as to say of the two opposing systems,
"One looks to pauperism, ignorance, depopulation, and barbarism; the other in increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards\universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world."(9)
This other system, this attack on a nation's sovereignty which goes by the name of "free trade", whether British or Austrian or straight from the Davos think tanks of the World Economic Forum, has but one goal, and that is nothing less than the elite cartel-dominated Fabian-style "socialism" of Huxley's Brave New World. The socialism of animals in a zoo; fed, clothed and housed, perhaps just barely, but otherwise completely degraded, atomized, demoralized, dehumanized, and utterly stripped of personal autonomy and national sovereignty.
No industrial nation in history has actually practiced free trade in all goods and services, at all times. Certainly not Great Britain. And certainly not the industrial powers of today's world, Germany, Japan, and China. For example, we accept large amounts of German imports, but Germany does not return the favor. In the ten years from 2011 to 2021, the U.S. had an average annual trade imbalance of more than $70 billion with Germany, and consequently about $70 billion leaves the America every year to accumulate in German banks.(3) And this pales in comparison to our trade imbalance with China, which is in the realm of $400 billion per year. That’s an annual $400 billion that can’t be used to construct roads, fund schools and sanitation infrastructure, or invest in American enterprise.
The institutional cheerleaders of free trade and the "international rules based order" do not make their money through capitalist competition, but rather through lopsided trade deals, monopolies, central banking scams or international trade arbitrage; collectively what economist Michael Hudson refers to as rentiership. Revenues paid to fundamentally unproductive activity.(4)(7) In truth such policies are nothing less than economic warfare. They call it “free trade”, but trading powers of the past were never shy about imposing trade embargoes when convenient. See the Navigation Acts acts of the Revolutionary Era. We see the same behavior today, when you can't stifle development with selective trade liberalization, impose sanctions. What else can we call it when globalist institutions freeze people’s bank accounts and ban them from payment platforms like Paypal and Stripe for engaging in wrongthink? Such behavior highlights the rank hypocrisy of the liberal economic order. When free trade is bad for the target, they advocate free trade. When it's good, these forces do not hesitate to impose sanctions or otherwise stifle commerce.
In fact, if you allow it, the forces of finance will seek to control a nation's economic development by every conceivable every avenue. Again, pre-Revolutionary America provides an example of the true operating principle behind all the high-minded liberal rhetoric, which is nothing less than maintaining power over subject nations by stifling economic development and eroding national sovereignty. In 1750, the British Parliament dispensed with all pretense of “free trade” and simply outlawed the construction of new iron forges in the American colonies, thus "clipping the wings by which we might soar to a dangerous greatness", as Alexander Hamilton noted some years later.(34)(6)
"Free trade" is just an Orwellian moniker for trade policy that promotes de-industrialization. It can take the form of cheap imports or trade restrictions. It can also invoked to justify more direct forms of sabotage in the forms of toxic, poor quality or contaminated products, addictive and dangerous drugs, sub-par safety and quality standards, promotion of degeneracy and obscenity, etc. The British Empire cracked the Chinese egg largely by smuggling in huge amounts of opium and encouraging the ravages of addiction among the population, in order to break down their collective will to resist. Is it a coincidence that today our streets are flooded with Chinese fentanyl?
We are still dealing with the same protean, smothering octopus of rentier interests that the Revolutionary generation valiantly fought. While in the past it may have presented in the form pf state powers, today the global financial elite is transnational, shadowy, hidden behind concentric rings of shell companies, trusts, boards, controlling shares, and supranational governance organizations; completely unaccountable and infinitely more practiced in the art of the psyop. Organizations such as The World Economic Forum, The World Trade Organization, the International Monetary Fund, the Open Society Foundation and the National Endowment for Democracy are their ideological and enforcement wings. These interests are not concerned with production or efficiency in physical terms, their business is rent and usury. They aren't really capitalists at all, but more akin to the Ancien Regime of old that kept Europe subjected in 1000 years of darkness. And they are engineering a global backslide into a dehumanizing techno-feudalism.
It is important to understand that financial or rentier interests are hostile to productive industrial development.(7) They would rather profit from unproductive activity, or rent, and therefore must be strictly regulated to serve the public interest, when allowed to exist at all. This is a deep truth of economics that is not taught in our universities. Finance, left to proliferate without guardrails, tends to create debt bubbles that grow exponentially, completely unconnected to real economic growth. This dynamic goes on to harm economic development as interest payments on exploding debt soak up more and more of the revenues which would otherwise be put towards capital expansion. Productive property and assets are foreclosed and monopolized into the hands of such interests, who are not concerned with putting them to productive use. Eventually, public and private debt grow to unsustainable levels, capital becomes scarce, investment halts, and the economy begins to de-industralize. Layer on the usual scams like cheap money to favored investment banks, outsourcing labor to cheap overseas markets, leveraged corporate takeovers, monopolization and cartels, and it's no wonder that in the 20 some odd years since the repeal of Glass-Steagall we have essentially lost our entire industrial economy.
Luckily, our republican history furnishes us with an alternative, passed down from the most august statesmen of American history. The very alternative which sparked and sustained the industrial revolution in America, and which produced the first and largest middle class the world had ever known. That alternative is the American System of Economics, and ever since it was dismantled by globalist elites, their agenda has been to hide this history from the American public. Not until the late 1960’s was our native protectionist system largely dismantled. We only need to read the preamble to our Constitution, basically the mission statement of our republic, to see that this country was never intended to be a liberal, economically libertarian, globalized free trade zone society,
"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 for the United States of America..."
It is clear that the Founding Fathers intended our Federal Government to fortify the cause of liberty through the promotion of the general welfare of the nation. The Founders carried an expansionist, positive view of liberty, much more sophisticated than the degenerate "negative liberty" libertarian hogwash we are fed today, peddled by such traitorous syndicates as PragerU and The Heritage Foundation. The Founders believed in the sovereign republic's responsibility to willfully mold our economy to serve the end of creating the greatest good for all Americans; this is what liberty meant to these men. This is why Lady Liberty holds the Torch of enlightenment.
The American System of Economics originates with the very founding of our country; it is just as deeply entwined with our history as the Constitution or the Declaration of Independence. Alexander Hamilton's tenure as Secretary of the Treasury under the Washington Administrations laid the groundwork for the American philosophy of economics. Hamilton realized that for the nation to be truly independent, it had to be not just militarily and territorially independent, but also economically independent, a sentiment clearly expressed in the opening lines of his brilliant Report on Manufactures,
"..to the subject of manufactures, and particularly to the means of promoting such as will tend to render the United States independent of foreign nations for military and other essential supplies.."
The necessity of a stable sovereign currency, as well as diverse industry and agriculture, was recognized by the founding generation as the only path to true independence. The great powers of the world are just as adept at waging economic war as they are at waging the regular kind, and Hamilton realized that a nation not independent economically would not long be independent politically. He expressed this sentiment masterfully in Federalist No. 10.,
“Commercial enterprise will have much greater scope, from the diversity in the productions of different States. When the staple of one fails from a bad harvest or unproductive crop, it can call to its aid the staple of another. The variety, not less than the value, of products for exportation contributes to the activity of foreign commerce. It can be conducted upon much better terms with a large number of materials of a given value than with a small number of materials of the same value; arising from the competitions of trade and from the fluctations of markets. Particular articles may be in great demand at certain periods, and unsalable at others; but if there be a variety of articles, it can scarcely happen that they should all be at one time in the latter predicament, and on this account the operations of the merchant would be less liable to any considerable obstruction or stagnation.”(40)
George Washington, though no perhaps great theorist himself, did have a certain genius for pragmatic judgments, and almost certainly reviewed and approved every one of Hamilton's proposals. He clearly concurred with Hamilton's strong nationalist developmentalist program.
It was in this context of trade war Hamilton produced three brilliant works, the foundational texts of American economic theory. The Report on Manufactures, the Report on Public Credit and the Report on a National Bank. The theoretical underpinnings would undergo refinement later on from such luminaries as Henry Clay, Friedrich List, Henry C. Carey, Daniel Webster and the Free Soil Lincoln Republicans. Familiar institutions, expeditions and infrastructure associated with its implementation include the U.S. Patent Office, the Coast and Geodesic Survey, the Lewis and Clarke Expedition, the Army Corps of Topographical Engineers, the Union Pacific Railroad, the Cumberland Road, the National Road, the Chesapeake, Ohio and Erie Canals, and the First and Second Banks of the United States. The New Deal is also in the same tradition, specifically with projects such as the Works Progress Administration, the Civilian Conservation Corps, and the Tennessee Valley Authority, as well as legislation such as the Glass-Steagall Act.
Many other countries have since gone on to plumb the wisdom of Hamilton, List and Carey, to great success. The Japanese for example industrialized on this model, under the tutelage of yet another American System economist, E. Perchine Smith, and they have since developed one of the most advanced manufacturing economies on the planet. Smith was invited in 1871 to Japan to serve as financial adviser, becoming the first of a number of economists and lawyers in the American developmental tradition to advise and aid Japanese development after the Meiji Restoration. Carnegie Fellow Michael Pettis characterizes China’s growth model as “merely a more muscular version of the Japanese or East Asian growth model, which is itself partly based on the American experience.". He goes on to say that the American intellectual tradition of economics influenced
"every variation of the investment-led development model adopted by a number of countries in the last century, including Germany in the 1930s, the Soviet Union in the early Cold War period, Brazil during the Brazilian miracle, South Korea after the Korean War, Japan before 1990, and China today, to name just the most important and obvious cases."(8)
And yet, due to decades of systematic inundation of traitorous and foreign historical revisionism, we in America have forgotten all about our own tradition, that built the greatest industrial power and the largest middle class the world had ever seen until that time.
1. TARIFFS
Tariffs are good, every self respecting nation should have some tariffs. Tariffs are the country’s filtration system, allowing only those goods and services which are beneficial to national welfare and development to enter circulation. You may want to, for example, slap tariffs on goods from Vietnam, so American labor does not have to compete with Vietnamese slave wages. American industry has declined precipitously over the last half century, and we are now in a weakened position with regards to productive capacity and economic diversity. We rely heavily on imports. At the end of WWII, manufacturing jobs made up approximately 50 percent of the American economy. Today that figure stands at less than 10 percent.(41) Manufacturing’s share of GDP has seen the same decline.(42)
Tariffs are so fundamental to the process of industrialization that no country has every industrialized or diversified their economy without them. This goes for all the great historical powers of Europe, and underscores the fundamentally disingenuous form such pro-free trade advocacy necessarily takes. "Free Trade for thee, but not for me" is the eternal maxim of economic warfare. Great Britain herself maintained extremely high tariffs on manufactured imports during it's own industrialization, and only converted to a more free trade policy in the 19th century, long after having reached global industrial preeminence.(43)
In America we have a long and proud tradition of engineering tariffs for maximum national economic prosperity. Alexander Hamilton was perhaps the first American statesmen to propose that national government had a responsibility to protect infant industries with tariffs, until they reach economies of scale and can compete on a global market. In his classic work, the Report on Manufactures, Hamilton says that the benefits to tariffs are self evident,
"Protecting duties, or duties on those foreign articles which are the rivals of the domestic ones, intended to be encouraged. Duties of this Nature evidently amount to a virtual bounty on the domestic fabrics since by enhancing the charges on foreign Articles, they enable the National Manufacturers to undersell all their foreign Competitors. The propriety of this species of encouragement need not be dwelt upon; as it is not only a clear result from the numerous topics which have been suggested, but is sanctioned by the laws of the United states in a variety of instances; it has the additional recommendation of being a resource of revenue. Indeed all the duties imposed on imported articles, though with an exclusive view to Revenue, have the effect in Contemplation, and except where they fall on raw materials wear a beneficent aspect towards the manufactures of the Country".(10)
Notable historical examples include the Tariff of 1816, the Tariff of 1828 and the Morrill Tariff. The culmination of these trade policies of the early 19th century was a 120 year long run of strong or increasing balance of trade in manufactured goods, and this is essentially what turned a underdeveloped frontier nation into an industrial superpower.(11)
A well-crafted and intelligently applied tariff framework should be a matter of national pride, since it is most certainly a matter of national defense. Such a framework must be erected again to protect our woefully degraded industry and allow capital to accumulate, free from the undercutting effect of cheap foreign imports from China, Japan, Mexico and Germany, among others. This is especially important now, with the future of the petrodollar in question and the imminent rise of a multi-polar geopolitical world order. The value of the dollar is likely to decline steadily in the coming decades, making imports more expensive for American consumers. It has been happening for years already.(12)
The perpetual refrain from financial and rentier interest groups seeking to undermine American national productivity is that tariffs will "raise prices". While it’s technically true that tariffs will raise prices on imports, it is nevertheless a lie by omission and completely ignores the ill effects of persistent trade deficits. The price of imports will rise, but this is only one side of the equation. What matters is not the price of a good, per se, but the purchasing power of the average worker. Tariffs have a much more immediate affect on workers wages, making it profitable again to employ American Labor for production. When American workers are earning higher wages, they are able to buy more goods and their standard of living increases. Meanwhile, economies of scale begin to return in domestic manufacturing, lowering the price of manufactured goods below what they could ever be through importing, since international shipping costs can now be cut out of the transaction.
Cheap goods do little good if the average working person can barely afford rent or is in deep debt. Many Americans today are so deeply in debt that they literally own less than nothing; how will low cost imports help them? The importance of purchasing power and irrelevance of price was most eloquently summarized by one of our greatest but sadly mostly forgotten presidents, William McKinley,
"Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man. [It is said] that protection is immoral ... Why, if protection builds up and elevates 63,000,000 [the U.S. population] of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefiting mankind everywhere. Well, they say, "Buy where you can buy the cheapest" ... Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: "Buy where you can pay the easiest." And that spot of earth is where labor wins its highest rewards."(13)
Tariffs have another beneficial effect, they bias overhead costs to trade in favor of the country that implements them. A tariff regime would encourage the export of high-value added manufactured goods, rather than the cash crops and natural resources we mostly export today. Over the last half century, the share of manufactured goods in total U.S. export has decreased markedly in favor of agricultural exports like soybeans and corn as well as petroleum products. It is fairly well understood that only underdeveloped nations with low productivity export mostly agricultural products and natural resources. This was noted 200 years ago by Henry Clay, for instance.(14)
However, the best analysis of the pitfalls of being a commodity exporting nation was penned by economist Henry Carey in his classic text on the American System, The Harmony of Interests. Here Carey explains that a nation which relies on exporting natural resources and commodities gets raked over the coals on shipping costs, since a given value of items such as oil, coal, gas, timber, agricultural products, metals, etc. tend to be relatively bulky and heavy. On the other hand, the nation that exports high-value added finished goods ships out less physical material, thus implicitly saving on shipping for every transaction. For example, which would cost less to ship to Australia, a Macbook? Or the equivalent value of timber or coal?
High value-added manufactured goods also have a tendency to confer on the seller some monopoly power, since the technical expertise needed to fabricate the item can be protected through various means like patents, trade policy and education. For this same reason agricultural products should be consumed closer to home, to feed the population with minimal overhead shipping costs while saving shipping space for high-value added goods. Under the protection of such a rationally crafted trade policy, the dollar value per unit of export cargo space is maximized.
What’s more, an excess of agricultural exports is dangerous, because you are in effect shipping out your most fertile top soil, without ever putting anything back in, and will thus degrade your national agricultural capacity over time. This effect has been noted among many economists and agronomists over the years, including Carey, and has occured regionally, such as the during the Dust Bowl disaster of 1930’s Oklahoma, where it caused much misery and privation.
The United States today has been relegated by our own corrupt elite to the status of a subservient colonial appendage. Our exports are mainly agricultural, like soybeans and corn, and petroleum products, which we should be using for development at home.
2. HIGH PRICES AND FEES FOR NATURAL RESOURCES EXTRACTION
In his classic speech on the floor of Congress in 1832, Senator Henry Clay observed that…
"Among the ties which bind us together, the public domain merits high consideration. And if we appropriate, for a limited time, the proceeds of that great resource, among the several States, for the important objects which have been enumerated, a new and powerful bond of affection and of interest will be added. The States will feel and recognize the operation of the general government, not merely in power and burdens, but in benefactions and blessings. And the general government in its turn will feel, from the expenditure of the money which it dispenses to the States, the benefits of moral and intellectual improvement of the people, of greater facility in social and commercial intercourse, and of the purification of the population of our country, themselves the best parental sources of national character, national unity and national greatness."
Our oil, gas, mines, timber, fisheries, rivers, fertile grazing lands and wilderness areas are our natural wealth, and we allow them to be exploited for far too cheap. When we lease oil and gas drilling rights, we should be doing it in such a way as to tax away all monopoly rents. Extractive operations should be regulated to return only a healthy and competitive profit and no more, while also ensuring that such operations use American labor and American-made parts and machinery.
It’s bad enough that the 2010 Deep Water Horizon explosion and subsequent oil leak did in excess of $17 billion dollars of damage to Gulf Coast fisheries and natural resources. Damage that will last centuries, perhaps. It was worse to learn that it was in part a foreign company, BP (also known as British Petroleum), that was responsible for this destruction. But the ultimate humiliation is scarcely ever questioned in public; namely that we allow BP and other international corporate cartels drain away our natural oil wealth for next to nothing. For paltry 12.5 - 18.5 percent royalty fees. So after BP pays it's fixed costs, it pockets 81.5 - 87.5 percent of the revenues as pure profits from oil deposits on American territory. And that's not even to mention the Marshallese flag of convenience and all of the financial trickery involved with that. These corporations don’t even pay the taxes they’re supposed to.
To properly frame the scale of the theft we’re talking about, consider that the yields on 10-year Treasury bonds has been less than 5 percent for more than ten years now. Therefore we could safely say that a rate of profit of 6 - 7 percent would handily attract capital investment over bonds or savings. For arguments sake let us be generous and consider the bond market of the late 1980s, when yields were at 8 percent.(45) A 10 percent or even 15 precent rate of profit would be sufficient for capital formation. A 30 percent rate of profit has historically been considered extraordinary. Indicative of cartel or monopoly, even. Now imagine an 80 or 90 percent rate of profit. This is the problem, we’re basically giving these resources away to foreign corporations for free. The corporations did not put the oil in the ground, or the lithium in the rock. Fortune did. And the lion’s share of fortune's bounty ought to go towards the common good, to be used intelligently and with forethought.
The corruption of D.C. is the stuff of legends at this point, no need to dwell on that here. We can all probably imagine that the fire sale of America’s natural resource rights to international corporate cartels coincides with quite a few well-greased palms in the halls of Congress. This graft machine is setting us up for destruction. An industrially underdeveloped nation, which after more that a half century of free trade globalism the United States most certainly is, must use it's natural resource wealth to cycle back into national economic re-development. We can ill afford to just give it away. Intelligent leaders around the world realize this, you better believe Putin and Xi use their natural resource revenues for national development projects. High Speed Rail. The Belt and Road Initiative. The Eurasian Land Bridge, etc. Putin has used the state-owned Gazprom corporation as an engine for the re-industrialization of the Russian economy, to far more success than Western elites stuck in the liberal shackles of degrowth would ever give him credit for.(44)
These revenues from oil, natural gas and mining leases should be channeled into state of the art manufacturing capital and ambitious public works projects. Instead, that value is siphoned into offshore accounts or monopoly profits for corporate oligarchs with no particular regard for the interests of the American republic, who perhaps are not even American themselves. Certainly the congress of corporate powers that rules global commerce is international in outlook, with no particular allegiance to our country. And when all the natural resource wealth is spent, our only recourse for development will be borrowing from international creditors. While simultaneously being squeezed by export markets. The proverbial rock and a hard place. The recent histories of Argentina, Greece, Sri Lanka, Thailand and many other debtor nations who have collapsed under the strain of massive IMF loans and periodic food crises stand as testimony to what happens in such situations. As Dr. Hudson notes,
"The aim of this post-industrial finance capitalism is the opposite of that of industrial capitalism as known to 19th-century economists: It seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, banking and infrastructure monopolies add to the cost of living and doing business."(7)
To ensure that wealth from natural resource extraction cycles back into the national economy to promote growth, we must make sure companies are not getting a free ride with regards to leasing fees, and aren't earning monopoly profits. This requires regulation of such extractive activity, and perhaps in certain cases nationalizing specific natural resource. Many conservatives balk at the the word “nationalize”, but they ought not to. What is the U.S. military, if not a nationalized defense force? And what is our God given natural wealth if not a national security issue?
Given that our objective is a world-class industrial economy based on high-value added manufactures, and since we aim to avoid exporting natural resources and agricultural products, it stands to reason that we should treat these resources as inputs rather than commodities; fuel, for development. The idea here is to provide these natural resource inputs to domestic industry as cheaply as possible (while also segregating some portion for conservation and posterity). This will likely in many cases require regulations to tax away economic rents. Revenues from the taxation of extractive industry, and from nationalized industry, can then be used to in turn subsidize key private industry expansion, as well as for infrastructure, education and innovation. Natural resources are a gift from God that, once spent, cannot be regained, and therefore must not be squandered. As that great philosopher of individualism and nationalism Ralph Waldo Emerson once said, "Economy does not consist in saving the coal, but in using the time while it burns."(15)
3. INFRASTRUCTURE
Infrastructure has since the very beginning of our republic been recognized as a means of tying the nation together, and binding the fates of its multitudinous populations commercially. Whether it was New York Governor DeWitt Clinton, advocate of the Erie Canal, which a joined a massive network of shipping lanes, east and west of the Appalachians, the National Road under the aegis of that visionary statesmen Henry Clay, or FDR's able management of the construction of the Hoover Dam and his administrative innovations to the National Parks System, or the public-private partnership venture sponsored by New York Governor Al Smith which undertook to construct the Empire State Building, America's greatest leaders have always used ambitious infrastructure projects as platforms for national unification. As occasions for massive public labor and fundraising mobilizations. And as projects by which to consciously guide the technological and scientific development of the nation, and thereby to increase national wealth. Ever since Hamilton successfully argued that the Spending Clause, Article I, Section 8 of the U.S. Constitution, not only allowed for but obliged the federal government to provide credit for projects to increase the general welfare, it has seemed the inexorable destiny of this Nation to bridge Atlantic and Pacific with vast and glittering improvements.(10)
If trains, highways, bridges, interstates, ports, airports, dams, canals, electrical grids, telephone lines and cellular towers bind us together and increase commerce and industry, they also increase the extent of internal markets for manufactures, agriculture, and capital investment, while decreasing the cost of natural resource extraction and shipping. Such robust internal trade allows a nation to consume it’s own products, without being at the whim of international commodity markets and fluctuations, and brittle global supply chains. Once again, Senator Clay provides a rousing defense of internal market development,
"He would cherish the foreign, and neglect the internal trade. I would foster both. What is navigation without ships, or ships without cargoes? By penetrating the bosoms of our mountains, and extracting from them their precious treasures; by cultivating the earth, and securing a home market for its rich and abundant products; by employing the water power with which we are blessed; by stimulating and protecting our native industry, in all its forms; we shall but nourish and promote the prosperity of commerce, foreign and domestic."(14)
Here's where the self-contained, rube-goldberg-esque genius of this system is revealed; the revenues from tariffs and natural resource extraction can be used to fund internal improvements, in effect killing two birds with one stone. The American System is designed to operate as a closed loop, first and foremost. The purpose of continuously improving infrastructure is to consistently lower shipping and logistics costs, costs to communications and all the infrastructural operations that allow the business of the nation to function. This also includes the cost of reproducing productive labor, so well funded public education, health care and sanitation also become necessary to reproducing a well educated, healthy and productive work force.
These costs, such as those to shipping, logistics, communications, policing and public safety, education, healthcare etc., are costs which are essentially overhead to the reproduction of society, insofar as they aren't efficiently provided by private business. Nevertheless these overhead functions are essential to the day to day operations of a productive economy. To that end, these are costs that should be continuously and consciously reduced by the state, to minimize the costs of productive activity. What we are pursuing here is a low-cost economy, where doing business is so frictionless and cheap that practically anyone can get in on the game. To increase competition and social mobility. This is the meaning behind the Lincoln Republican’s “Free Soil, Free Labor, Free Men” slogan. It meant nationally directed and continuous advance in infrastructure to steadily bring down the costs of commerce and to give to the individual worker or business owner an ever increasing portion of the fruits of their labor.
Greasing the logistical wheels of commerce and industry has traditionally been central to the American experiment. From the John Winthrop’s timeless sermon A Model of Christian Charity, where he exhorts his fellow Puritans to public works thusly, “For it is a true rule that particular Estates cannot subsist in the ruin of the public”, to Benjamin Franklin’s innovations as Postmaster General of the North American Colonies, doing things faster, better, and more efficiently was always a core part of the pragmatic American ethos.
Infrastructure also presents an opportunity to put millions of Americans to work, learning new skills, earning a family wage and improving the economy exponentially in the process. Homelessness and underemployment are serious issues today. We have approximately 23 million unemployed and underemployed Americans, and more than half a million homeless Americans.(16)(17) We should be giving these people opportunities for meaningful work, and incorporating them into the middle class, not defending their "right to exist" as a degraded lumpen-proletariat, and giving them free needles to destroy themselves with drugs. These are literally policies to destroy these people, but massive public infrastructure mobilizations present an opportunity to uplift those less fortunate souls. President Franklin Roosevelt employed this technique when he created the Works Progress Administration and Civilian Conservation Corps, federal programs which employed millions of Americans during the Great Depression and put them to work revitalizing the nation's infrastructure and caring for our public lands. It probably saved the country from some kind of violent Jacobin revolution.
However, internal improvements need not mean new construction or even federal spending, necessarily. Sometimes regulation of monopolies is what is required to increase the efficiency of infrastructure, for example Net Neutrality Laws, or laws stipulating that private canal or road monopolies be open at all times, not just peak hours. Again, we can be pragmatic with regards to the means. If regulation best serves the goal of lowering cost and increasing efficiency of shipping and communications, then regulation may the way to go. On the other hand, new construction using a public labor program like the Civilian Conservation Core might be the best approach. These things need to be approached soberly,not ideologically, and on a case by case basis.
This is a domain within which we can cultivate an ethos of American greatness. We can envision massive bridge and skyscraper construction projects using skilled American labor and American-made parts, revitalizing American business and the middle class in the process, and elevating the commercial and scientific potential of the nation to scarcely imaginable heights. In short, we can consciously strengthen and stitch the nation together with continuously improving commerce and contact, and the beneficial social relations such projects encourage. In the words of Henry Clay, "the American System unified the nation north to south, east to west, and city to farmer"
4. NATIONAL BANK
While we don’t have one today, the concept of the National Bank is absolutely central to American development economics. Credit allocation is the heartbeat of a nation, and how we choose to go about it is profoundly consequential. The National Bank is primarily the innovation of our inveterate champion of American industry, Alexander Hamilton. We had National Banks for more than 100 years of this republic, first with the Bank of North America under "Financier of the Revolution" Robert Morris, followed by the two Hamiltonian banks, the First Bank of the United States and the Second Bank of the United States, and finally with Lincoln’s signing of The National Currency Act of 1863. The policies and leadership of these successive institutions turned a backwards frontier nation with no industry to speak of into a world historical industrial power with the largest and most educated middle class in human history within a mere half century. A feat of development unmatched today, not even by China. A fourth National Bank would be the absolute cornerstone, the engine, of a true new American Renaissance.
The most important thing to understand about national banking, in it’s Hamiltonian conception, is that it is a development bank, not an investment bank; think of the mission of the World Bank, but without the usury or rampant corruption, and operating within the scope of the nation, of course. A national bank, unlike modern privately held central banks like the Federal Reserve, has a public mission to provide low-interest credit for increasing industrial productivity, science and innovation, commerce, supporting small business, education, infrastructure improvements, home ownership, perhaps health care, and various other social goals. The Federal Reserve, on the other had, is a central bank, based on the private Bank of England model. It has a far smaller scope of responsibility; the Fed's only job, on paper, anyway, is to control inflation by raising or lowering interest rates and creating new money. In a private central banking system, "raising interest rates" is a euphemism for throwing people out of work. Essentially, it is the Federal Reserve’s job to put the breaks on capital investment and throw people our of work when inflation is too high to decrease the cost of labor. It is monetary management for bankers and speculators, who again don’t care one whit about the productive centers of the economy. A blunt "monetarist" instrument, indeed, and incompatible with America First; but that's only the official story. The truth of the matter is even worse; The Federal Reserve is operated for the benefit of the private banking monopolies on Wall street. In fact, despite its putative anti-inflationary mission, it just as frequently encourages inflation, when inflation is good for Wall street that is. For example, tens of trillions of dollars of free money to Wall street has caused catastrophic levels of inflation in costs of housing, rent, higher education, pharmaceutical and medical costs, insurance fees, etc. But these things affect American workers and American consumers, not Wall street fat cats, so they don't matter. Inflation of costs to non-productive activity is fine, because this is how Wall street makes their money, but inflation of costs to the productive economy, i.e. wages, is bad, bc it increases the costs of the low-wage service economy that Wall street is engineering.
The details of operation in a national banking system can vary quite a bit; there are different ways to create the financial plumbing which will achieve the ends we have in mind. The point is to be pragmatic, whatever financial infrastructure will successfully stabilize the dollar and direct credit to productive, scientific, educational and other ventures of national interest. The institution constructed to do this need not necessarily be nationalized or owned by the state. Hamilton's banks certainly were not. They managed mostly private capital, the same way modern banks do, and accepted investment from private individuals, same as modern banks. But some portion of the capital must be controlled by the Federal Government (in the case of the First Bank of the United States it was one fifth), and Hamilton's banks were managed by a board of both large shareholders and publicly elected members. The national banks had an explicitly public mission. A mission that flowed with the loans given to smaller state and local banks, and in this way a national private commercial banking infrastructure was incentivized to lend productively and in the public interest, while also tying the fate of national wealth to profits from industrialization, and the national civic republican project of civilization.
Neither is the libertarian “gold bug” logic entirely sound. President Lincoln was perhaps the first American statesman to identify the issue with pinning a currency directly to gold; namely that it opens the currency up to manipulation by large trading houses with the capital and market power to sway the price of gold. This is where I differ with Dr. Ron Paul, who is otherwise entirely correct in his criticisms of the Fed. However, Dr. Paul entirely papers over the power of foreign financial monopolies to manipulate the price of gold, thus manipulating the price of your currency for their benefit. London banking houses are notorious for manipulating the prices of precious metals to swindle the public, they've been caught at it again only recently.(29) Gold-buggery is a red herring, the important principle here is sovereign currency; i.e. a currency who's price is decided by the republic, not by outside forces and manipulations. Having a truly sovereign currency, Lincoln understood, lies in the sovereign republic determining the value of the currency, not foreign interests. Sometimes it may be wise to pin the currency to gold, or to another currency, sometimes the better path may be to let the currency float. The key is in maintaining national sovereignty over it's value. The European Financial interests of Lincoln's time certainly recognized the threat that Lincoln's Greenback Dollar program represented to their oligarchic interests when the put out the following except from an article lambasting Lincoln in the London Times…
"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe."(33)
Turns out they were right to fear Lincoln's financial acumen and unwavering opposition to oligarchy. I have a sneaking suspicion that the late libertarian obsession with gold backed currency is an psyop backed by financial interests.
So we don't need to bother with specifics here, for details on possible mechanics of such a system, see Hamilton's First and Second Reports on Public Credit.(2)(19) What's relevant is that the current system systematically impoverishes Americans. When Nixon took the U.S. off of the Gold Standard in 1971, foreign central banks had only one option for investing their surplus dollars, and that was U.S. Treasuries. This, as Dr. Hudson has pointed out, allowed the U.S. to get something of a "free lunch" with overseas military spending for many decades. Dollars spent on military installations and operations overseas invariable found their way back into U.S. banks, in exchange for the now only asset available, treasury bills. Meanwhile, the Treasury is still spending new money into existence for the next round of perpetual military spending. The predictable result is the inflation of the money supply; oh they knew what they were doing, and almost immediately after we can observe a sharp decline in wage growth.
This already general decline in purchasing power and living standards was greatly exacerbated by the Obama-era bank bailouts; especially the tens of trillions of dollars created by the Fed's Quantitative Easing policy, which has now eroded paychecks and savings so much that nearly half of Americans have net negative wealth.(20) Matt Taibbi's Griftopia is a very well researched record of this especially criminal period, and Obama will certainly go down as one of history's great swindlers.(21)
Today, credit generation in America is controlled by the cabal of private for-profit investment institutions on Wall Street, facilitated in all kinds of financial chicanery (e.g Q.E.) by our corrupt Federal Reserve, who, at the expense of American workers and savers, subsidizes this cabal to bid up prices on homes, create stock, debt and real estate bubbles, wildly inflate the costs of education, insurance and health care, and to generally strip the country for parts and sell them off to the highest bidder through various criminal enterprises such as leveraged corporate buyouts. This system is destroying the country, already has really, and now it seems that the Wall Street, Davos oligarchs and their Western Central Bank lackeys will soon make good on their promise that "you will own nothing, and you will be happy"(22) Our current Federal Reserve and Wall Street financial system is based on the British Model of the Bank of England, later justified ideologically by the likes of the Austrian School of Libertarian Economics and monetarist criminals like Milton Friedman, who have convinced the American public that debt and interest payments, insurance costs and fees are a substitute for productive industry. The single largest component of U.S. GDP is the F.I.R.E. sector, finance, insurance, real estate and education, and is nearly twice the size as the next largest sector of U.S. GDP.(23) These are payments to unproductive enterprise, there is either no good or service on the other side, or a wildly inflated asset or public good. Debt bubbles represent a special problem. After reaching a critical mass they tend to inflate beyond all reason, due to the “miracle of compound interest”. This fundamental disconnect between the exponential rate at which usurious debt grows, and the linear growth observed in most physical economics is likely the reason nearly all major religions have deep taboos against the practice of usurious debt. It is deeply unnatural.
National banking on the Hamiltonian model is the only solution to our current crisis. We must break Wall Street's monopoly on credit creation, releasing credit and the entrepreneurial power it represents to the privately owned state and local banks, and ultimately to everyday Americans. Local commercial banks are best positioned to make the assessment of who is credit worthy; and meanwhile the objective of credit in the economy has now fundamentally changed. Wall Street provides credit with and eye to maximizing short term cost-efficiency and profit. This is why something like 90 percent of lending today is for financial chicanery like stock buybacks, debt instrumentation, corporate takeovers, cornering the market on assets like precious metals and real estate, etc. Dr. Hudson is an invaluable resource on these Wall Street scams and how they are draining the American economy and loading it up with unpayable debt which will eventually lead to another crash.(24) A national banking system would break this destructive cycle once and for all, and implement a financial system geared around a different criteria for credit worthiness. The new criteria would be whether the investment increases national productivity and efficiency, and with public oversight. It is also a convenient institution for collecting tariff and natural resource revenues for cycling back into the economy.
The Federal Reserve must be put into bankruptcy. Government should use legislation or an Executive Order to create a Third National Bank of the United States, write down the majority of bad unpayable debt on the Fed's balance sheet and turn over it’s good assets to the new national bank as start up capital. We must also reinstate the Glass-Steagall firewall between commercial and investment banking (i.e. gambling). Financial institutions have no right to gamble with people's savings and use them to gradually disenfranchise the population from their own property, enslaving them with unjust and usurious debt simply by virtue of their monopoly on credit creation. Jesus preached against usurious interest for a reason, it an incredibly destructive force which, when left unchecked, has eventually destroyed every society it touches.(25) Executive Intelligence Review has published many articles on the specifics of how to go about such a financial reorganization, and is a great resource for national banking policy in general.(26)
Ironically, the proximate cause for Hamilton's call for a national banking system was rampant inflation. An issue we have some cause to be familiar with today. Back then the inflation stemmed from a multiplicity of local banks operating without any central source of credit or currency, so various bank notes of unknown values and reputes were floating around, a veritable hothouse for currency devaluation. The Continental Army had also engaged in inflationary policy, printing notes to try and pay for much needed supplies with virtually no capital, no plan for paying of debt holders. The bonds held by soldiers and patriotic investors in the Revolutionary Cause we're rapidly debased and traded at fractions of their face value, threatening to cause chaos and impoverishment. Hamilton saw the need for a strong central financial planning institution to buy up bad debt and guarantee it's face value as a matter of national security and stability. Out of all the Founders he most clearly perceived that any country without a stable currency or the credit to raise loans in the event of an emergency is not long for this world.
5. SUBSIDIES
The federal government ought to provide subsidies for expansion of industrial and agricultural productivity and efficiency, and for scientific and technological innovation. “Supply side economics” has developed a rather poor reputation in the neoliberal era, with good reason, since spending bills tend to offer every opportunity to hide graft, pork and profiteering for such a corrupt government as ours. Even leaving aside all of that, in an economy as financialized as ours, where the bulk of our GDP is absorbed into stock buybacks, dividend payouts, interest on mortgages and loans, banking and insurance fees, and expenses associated with formerly public goods like utilities and transportation, subsidies to “industry” will be promptly hoovered up by the rapacious proboscis of Wall Street. Very little will go to small business or industrial capital expansion.
Today, much wealth is squandered this way. We are saddled with a corrupt, unelected and unaccountable federal deep state which has an agenda and distributes these funds. This is the administrative state Steve Bannon and others have referred to, and which has metastasized into a full fledged oligarchic bureaucratic class.(36) This corrupt political class works in direct concert with the financial oligarchs, and have done so openly since at least 1990, when Clinton repealed Glass-Steagall, effectively handing over America's savings to Wall street gamblers and saying go nuts.(13)
Corporate firms today generate most of their profits through non-productive financial manipulations like stock buybacks, leveraged takeovers, outsourcing, layoffs, investment in assets fixed and fake, etc. The Harvard Business Review has recently published a report detailing that 92 percent of corporate revenues are used for stock buybacks and dividend payouts, leaving a paltry 8 percent leftover for capital investment and R&D.(37) It would be pointless to subsidize corporate production as things stand now; only 9 cents on the dollar would actually go towards productive investment. The vast majority of the money would just disappear into a black hole of financial trickery, yielding no concrete results. As Dr. Hudson put it,
"Finance capitalism is not based on surplus value like industrial capitalism was. In fact, it destroys industry and in this cannibalizing of industrial capital, it basically dries out the economy and makes it unable to break even or even to function and in the United States today, for instance, if you look at the balance sheets of corporate revenue much of it is spent on stock buybacks. You buy back your own stock or dividend payouts. Only eight percent of corporate earnings are spent on new capital investment research and development: factories, machinery, and means of production to employ labor". (27)
These payments to unproductive activity, in other words public theft, are the reason corporate subsidies have not produced a single tangible positive result in the last 40 years.
Of course, it does not have to be this way, should not be this way. This is a perversion of how an economy should work. With some serious financial reforms and the re-implementation of Glass-Steagall, corporate subsidies could be a powerful tool for spurring American economic growth into a new industrial and scientific renaissance. The key to properly administering subsidies to industry is ensuring that they are invested directly into increasing production, capital expansion and efficiency increases, or scientific research and development. This means absolutely no subsidies for stock buybacks, no subsidies for monopolizing assets like real estate, no subsidies for leveraged buyouts of firms and corporate mergers, no subsidies for firms that ship jobs overseas, or for vulture capital that deconstructs productive firms and sells them for scrap. No bailouts for speculative institutions. No subsidies for degrowth.
What it does mean is subsidies for firms developing new technologies, for small businesses to expand hiring and capital investment, for institutions searching for cures for disease and faster more efficient ways of travel and shipping. For space travel, and harnessing geological power. For developing new drought resistant crop varieties. For restocking the seas with abundant fish and shellfish. For restoring Detroit and Cleveland and Flint to their former glory as industrial wonders of the world. For harnessing the mechanical power of the waves, and for enhancing human freedom and achievement without bound.
You'll never hear this discussed in the lame-stream media, but this constant “investment” by corporations, Wall street and the Federal Reserve into fundamentally unproductive activity is the primary driver of the inflation we are seeing today; particularly in the FIRE sector (finance, insurance, real estate and education). The issue is not “government spending”, per se. It is government spending that expands the money supply while doing nothing to increase the physical output of the economy. It's like increasing your daily calorie intake without also increasing how many calories you burn; you're going to inflate. The economy will inflate the same way. If subsidies are not spent productively, they will instead be spent on assets, which increases the cost of living and devalues the currency. If federal subsidies are intelligently managed to increase the physical output the economy is capable of producing, then inflation is quite literally impossible, because the increase in the money supply would on average always be accompanied by a commensurate increase in goods and services produced. In fact, in the long term you will actually see such subsidies drive prices down significantly, as economies of scale are reached and technological and logistical advances steadily reduce the cost of production and commerce. What we’re describing here is essentially the very process of innovation. Hamilton, with his characteristic flair, mounts the classic systematic defense of industrial "bounties" in his Report on Manufactures,
"1. It is a species of encouragement more positive and direct than any other, and for that very reason, has a more immediate tendency to stimulate and uphold new enterprises, increasing the chances of profit, and diminishing the risks of loss, in the first attempts.
2. It avoids the inconvenience of a temporary augmentation of price, which is incident to some other modes, or it produces it to a less degree; either by making no addition to the charges on the rival foreign article, as in the case of protecting duties, or by making a smaller addition. The first happens when the fund for the bounty is derived from a different object (which may or may not increase the price of some other article, according to the nature of that object) the second, when the fund is derived from the same or a similar object of foreign manufacture. One per cent duty on the foreign article converted into a bounty on the domestic, will have an equal effect with a duty of two per Cent, exclusive of such bounty; and the price of the foreign commodity is liable to be raised, in the one Case, in the proportion of 1 Cent; in the other, in that of two Cent. Indeed the bounty when drawn from another source is calculated to promote a reduction of price, because without laying any new charge on the foreign article, it serves to introduce a competition with it, and to increase the total quantity of the article in the Market.
3. Bounties have not like high protecting duties, a tendency to produce scarcity. An increase of price is not always the immediate, though, where the progress of a domestic Manufacture does not counteract a rise, it is commonly the ultimate effect of an additional duty. In the interval, between the laying of the duty and a proportional increase of price, it may discourage importation, by interfering with the profits to be expected from the sale of the article.
4. Bounties are sometimes not only the best, but the only proper expedient, for uniting the encouragement of a new object of agriculture, with that of a new object of manufacture. It is the Interest of the farmer to have the production of the raw material promoted, by counteracting the interference of the foreign material of the same kind. It is the interest of the manufacturer to have the material abundant and cheap. If prior to the domestic production of the Material, in sufficient quantity, to supply the manufacturer on good terms; a duty be laid upon the importation of it from abroad, with a view to promote the raising of it at home, the Interests both of the Farmer and Manufacturer will be disserved. By either destroying the requisite supply, or raising the price of the article, beyond what can be afforded to be given for it, by the Conductor of an infant manufacture, it is abandoned or fails; and there being no domestic manufactories to create a demand for the raw material, which is raised by the farmer, it is in vain, that the Competition of the like foreign article may have been destroyed."(10)
President John F. Kennedy's leadership during the era of the “space race” exemplifies the American ethos of state-directed technological advance, and shows just what is possible with planning, competent administration and the credit creating power of the federal government. In 1961, Kennedy stood before Congress and petitioned for $7 billion over five years for the American Space Program. This was not low-energy neoliberal pandering or padding at the margins. Kennedy did not make vague perambulations about increasing space funding by 25 percent, or increasing diversity in NASA. He boldly proclaimed that "this nation should commit itself to achieving the goal, before the decade is out, of landing a man on the Moon and returning him safely to the earth." He set a concrete national goal and laid out a plan to achieve it.
He did not take the standard establishment libertarian line, either; the false proposition that the rigged, cartel-dominated “market” will succeed in exploring space just as soon as it becomes profitable. By 1969, Kennedy had achieved what no President since has been able to; he set a bold national goal with wide-ranging practical applications, and pursued it successfully. In this case by landing human beings on the surface of the moon for the first time. Kennedy did what a true statesmen ought to; he conceived of a goal, in the national interest, and willfully crafted policies and managed bureaucracy to achieve that goal within a set time frame. This constant conservative deference to “the free market”, as though it were really free, is nothing but a cop-out.
Or consider the D.A.R.P.A. military program that eventually produced the Internet as another example of a successful federal funding program for practical scientific research. Benjamin Franklin is particularly interesting figure in this regard, because he so perfectly embodies this essentially American ethos of the can-do practical scientist. The Charles Lindbergh or Thomas Edison archetype. The tradition of Henry Ford, Alexander Graham Bell, Philo Farnsworth, Samuel Morse, Eli Whitney, the Wright Brothers and George Washington Carver. Franklin believed the inventive impulse should be buttressed and encouraged by federal policy-making, with practical application as the goal. Upon discovering the electrical essence of lightning, for example, he immediately turned his attention to searching for practical applications for this discovery. These efforts culminating in his invention of the lightning rod, which has since saved untold lives around the world. This is the essence of what American developmental economics historically represented; conscious scientific exploration for real-world applications, nurtured by government policy for the common good. This is the cultural root of so-called “American optimism”.
Always keen to cultivate the inventive spirit of the nation, Franklin bequeathed a small fortune to each of the cities of Boston and Philadelphia on his death, trusts that were eventually organized into the Franklin Institute of Boston. An institution dedicated to providing affordable technical education and research opportunities to the public. Franklin also founded the American Philosophical Society in 1743, today the oldest learned society in the country, with the mission of “Promoting useful Knowledge, desirous of advancing the Interest of the Society by associating to themselves Men of distinguished Eminence, and of conferring Marks of their Esteem upon Persons of literary Merit”.(38) It is this bold spirit of American inventiveness and genius for practical application coupled with grand national goals, so exemplified by the lives of Benjamin Franklin and John F. Kennedy, which we endeavor to foster with government subsidies and grants.
6. SOCIAL RELATIONS AND CLASS STRUGGLE
The American System of Economics as conceived of by such aforementioned luminaries as Hamilton, Clay, Carey, List and Lincoln, rejects both the foreign domination and de-industrialization of free trade liberal internationalism, as well as the destabilizing and subversive Marxist (specifically the warped tradition of Gramsci, the Fabians, the Frankfurt School, anarchism, identitarian politics, etc) tradition of "class conflict". The foot-soldiers of the latter tradition are generally deployed maliciously in order to disrupt populist nationalist movements. We recognize such subversions today in groups like Antifa, BLM, Time’s Up, Jane's Revenge etc, being composed mostly of an alliance between upper middle class cosmopolitans and lumpen types, manipulated by liberal elite institutional power. Antifa is the paramilitary wing of globohomo.
The American System steers not towards the crushing poverty and backwardness of the one, nor the fundamentally antagonistic and divisive politics of the other. Instead it opts for a more pragmatic approach of class collaboration, recognizing that a "harmony of interests" exists in society, and government can play a role in maximizing that harmony. Splitting the difference between Marxism and free trade liberalism, Carey on the one hand acknowledges the utility of hierarchy and specialization in production, essentially defending private property and the capitalist mode of production, while on the other also acknowledging that individual aspirations and talents must be vented and harnessed through maximizing social mobility. To crudely summarize Carey's thesis in Harmony of Interests, high social mobility, what we call "equality of opportunity" today, engineered through state-guided capitalist development, will more than make up for the inequality of property relations inherent to capitalism at any given point in time. True meritocracy; today's worker is tomorrow's capitalist. The American Dream.
The American System represents a populist individualist approach, it does not seek a revolution in the social organization of our society. It represents rather a return to our traditional republican values, where an expectation of high social mobility comes with an obligation to embody civic virtue as citizens with a stake in society. This is the republican tradition, going back to Milton, Montesquieu, the Florentine Republic, Polybius and Plato, the intellectual tradition the country was actually founded upon, not this absurd degenerate liberalism.
It is a system, of course, based upon private property and individual rights, but most importantly upon equality of opportunity, engineered through removing economic rents and excessive profits to unproductive elements of the economy, such as speculation, insurance, banking fees, transport and shipping costs, monopolies and cartels, ground rents etc. The central idea is to bring down the cost of doing business as much as possible, in order to encourage as much production, commerce and individual free labor initiative as possible. Lincoln quite literally wanted to "free" labor to express itself in diverse and increasingly efficient ways, and to increase labor’s share of the value it produced, so that workers could be the market for the products they produce. Hence the rallying cry of Lincoln's Republicans, "Free Soil, Free Labor, Free Men". Far from being considered as onerous government involvement, for most of our history a vigorous federal involvement in the economy was viewed as freeing society from it's inefficiencies so as to be as capitalistic as possible.
Our native American economic tradition is also a fundamentally humanist and Christian one, in that it recognizes the individual human being's creative potential and genius as our single greatest source of wealth. This optimistic or idealist view of the human individual's creative and productive capacity ineluctably leads to the conclusion that the population ought to be educated, well fed, well clothed and kept healthy as efficiently as possible, either by direct government intervention or with subsidies to private business. Investing in your people ultimately increases the productivity of the American workforce, thus contributing to profits, growth, science, technology and commerce. Education and cultivating the young mind is especially emphasized, a tradition that goes back to the Yankee Puritan founding of Massachusetts. A quote from 18th century Massachusetts minister Jeremiah Wise articulates the broad appreciation for the benefits of an educated citizenry in colonial New England,
"The Education of Youth is a great Benefit and Service to the Publick. This is that which civilizes them, takes down their Temper, tames the Fierceness of their Natures, forms their minds to virtue, learns 'em to carry it with a just Deference to Superiors: makes them tractable or manageable; and by learning and knowing what it is to be under Government, they will know the better how to govern others when it comes their Turn.... Yea good Education tends to promote Religion and Reformation as well as Peace and Order."(35)
The degrading evils of an non-productive globalized system based on arbitrage, especially for the middle and working classes of people, was remarked upon by Carey,
"A great error exists in the impression now very commonly entertained in regard to national division of labour, and which owes its origin to the English school of political economists, whose system is throughout based upon the idea of making England `the workshop of the world,' than which nothing could be less natural. By that school it is taught that some nations are fitted for manufacturers and others for the labours of agriculture, and that the latter are largely benefitted by being compelled to employ themselves in the one pursuit, making all their exchanges at a distance, thus contributing their share to the maintenance of the system of 'ships, colonies, and commerce.' The whole basis of their system is conversion and exchange, and not production, yet neither makes any addition to the amount of things to be exchanged. It is the great boast of their system that the exchangers are so numerous and the producers so few, and the proportion which the former bear to the latter, the more rapid is supposed to be the advance towards perfect prosperity. Converters and exchangers, however, must live, and they must live out of the labour of others: and if three, five, or ten persons are to live on the product of one, it must follow that all will obtain but a small allowance of the necessaries or comforts of life, as is seen to be the case".(9)
Such a system seeks to degrade labor to the lowest common denominator, pitting workers in America against those in China, Vietnam, Indonesia, Mexico and Japan. Concerned only with short-term cost efficiency, this system is unproductive, logistically bloated, based on trading with a dozen unproductive middlemen between the producer and the consumer, each taking their cut and inflating the price. It reduces the potential creative genius of the worker to a mere dehumanized widget, to be replaced at will for any cheaper widget anywhere across the trading empire.
The American System utterly rejects this bestial view of labor and of humanity. Rejects the premise that the best worker is the slave. Labor exists to be advanced, it's productivity and ingenuity unleashed, it's share in the national wealth commensurate with its contribution, the yoke of high-cost rentiership thrown off. Stable family life is to be supported and encouraged. This is the Free Soil, Free Labor economics of the Lincoln Republicans, in President Lincoln's own words, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration." Nothing exposes the irredeemable evil of Friedman, Hayek and the libertarian free trade crowd quite like juxtaposing their completely degrading view of human worth with the high esteem with which our own elder statesmen held American labor, as nothing less than the perpetual wellspring of national wealth.
Our country is in desperate need of a change. A half century of free trade, de-industrialization, financialization, and mass immigration have profoundly hobbled American industry, productivity, and creativity. 15 years of free money to Wall street and the private equity firms has caused an enormous increase in the cost of living, while the standard of living has fallen precipitously. Though the the corporate cartel mainstream media will never tell you any of this. They'd rather lie to you about it, tell you it's not true. But the health and economic data tells the story the media won't.
Like a 2019 study documenting that, for the first time in 75 years, Americans life expectancy is decreasing, mostly due to drugs, alcohol, and suicide, the "deaths of despair".(28) Or that purchasing power of the median American workers wage has not increased since 1964 while cost of living has soared. Americans are undeniably poorer than they were 60 years ago.(29) You can't really understand how much poorer unless you understand the amount of debt the average American has taken on to buy homes, pay for college, pay insurance, banking fees and medical expenses, credit card debt and vehicle loans. U.S. household debt was $152 billion in 1960. Today it stands at more than $14 trillion.(31) The majority of this debt is home mortgages. The median home price in 1953 was just over $18,000. Today it is almost $400,000.(32) In 2010, the bottom 40 percent of Americans held zero or negative wealth. The bottom 40 percent of Americans literally owe more than they own. They are debt slaves.(39). Rising home prices and rents are stealing people's savings.
The path forward lies in rediscovering our revolutionary republican roots, which were borne of a struggle that was similar to our present times in so many ways. It lies in rejecting the neoliberal, libertarian, globalist, free-trade homogenization project which threatens to lower our standard of living to third world levels. To chart our future, we must cast our gaze back to an optimistic and humanist era of nationalist economics, an economics which recognized individual human development and the individual human genius as the wellspring of wealth and stability of the Republic; as opposed to the dull, meaningless, and increasingly impoverished life offer by the global "consumer economy", where wealth is reckoned in trillions of dollars of consumer debt, and success is measured in mere monetary terms, divorced from all physical reality.
We shall rather measure wealth by the industriousness and genius of our citizens, by the safety, beauty and cleanliness of our neighborhoods and cities, by the commanding heights of science, technology and statecraft we may achieve. We shall measure by our happiness, sense of meaning, belonging and contributing to a unifying national project. It is time to hark back to that immortal maxim of our Declaration of Independence, which all true patriots honor, that every human being is entitled to "life, liberty and the pursuit of happiness", and to once and for all repudiate the reigning maxim of the day, the degrading and anti-human philosophy of Locke and the British East India Company, "life, liberty and the pursuit of property", before it turns us all into the property of the the Word Economic Forum gangsters. We must abolish the Federal Reserve, abolish Wall street, abolish the speculators and financial gamblers. Down with the free trade deals and the visa programs and mass immigration, down with the lunatic Military Industrial Complex, it is time for a new American Renaissance, animated and navigated by robust and unapologetic ally nationalist implementation of the American System of Economics. It is time for America First.
NOTES
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FURTHER READING
1. The Political Economy of the American Revolution. N.p., Executive Intelligence Review, 2015.
2. How The Nation Was Won: America's Untold Story 1630-1754 Volume I. N.p., Executive Intelligence Review, 2015.
4. Carey, Henry Charles. The Way to Outdo England Without Fighting Her. Letters to the Hon Schuyler Colfax... on the Paper, the Iron, the Farmer's, the Railroad, and the Currency Questions. United States, Baird, 1865.
5. Executive Intelligence Review. EIR News Service Incorporated.