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Lyndon LaRouche views economics as the study of man's intervention into nature, and therefore as the "mother of the sciences," since in LaRouche's opinion science is man's study of nature by making interventions into it, rather than man making observations about nature from a "remote location."
Consequently, LaRouche often combines discussion of economics with a discussion of science, philosophy and culture. LaRouche has written extensively on subjects as diverse as historiography, plasma physics, polyphony, and philology; this article is a concise summary of his key ideas.
LaRouche on Economics
LaRouche began as a Marxist, but by the mid-1970s he had abandoned Marxism in favor of the school of thought known as the American System, which he regarded as a superior approach. LaRouche describes himself as a "physical economist," meaning that he studies how man improves the means by which societies produce the necessities for survival, particularly through advances in technology. This term, "physical economy," is used in opposition to the school of monetarism.
LaRouche has said that a fundamental question of economics is the problem of diminishing resources, which is the central point of the Malthusian argument: that population growth causes the depletion of resources needed for human survival. LaRouche insists that the Malthusian argument is false, because man, unlike other creatures, can invent new technologies that rely on new resources. Therefore, in LaRouche's opinion, an appropriate policy would be to develop the technology to harness nuclear fusion, for which the fuel would be hydrogen isotopes that are abundant in sea water, and to do it long before reserves of fossil fuels are exhausted.
It follows from this argument that the only lasting "natural resource" is the creative power of the human mind, which makes it possible to harness elements of nature that were once considered useless, such as oil, and then find new resources before the old ones have been depleted. LaRouche developed a metric to measure the success of an economic policy, which he calls "potential relative population density." This means that if a policy is successful, the number of human beings that can be sustained within a given geographic unit (for example, per hectare) should be increasing at an accelerating rate.
LaRouche uses the term "political economy" to describe the decision-making process. He favors extensive government intervention, both in terms of regulating sectors of the economy that are essential to the well-being of the nation, and in terms of providing credits for investment in infrastructure projects and science projects such as NASA that are too large and long-term for any private firm to pursue. LaRouche points to policies such as Abraham Lincoln's transcontinental railroad and Franklin Delano Roosevelt's Tennessee Valley Authority as examples of successful economic policy. LaRouche also supports the selective use of government's power both to tax and to issue credits (see national bank) as a means of encouraging productive investment, while discouraging speculation.
LaRouche believes that if governments do not play a strong role in directing national economies, the gap will be filled by various sorts of monopolies and cartels. It is for this reason that LaRouche opposes Free Trade and globalism while supporting protectionism.
LaRouche on Epistemology
LaRouche's views on politics come out of his ideas about epistemology, the study of the genesis of knowledge and ideas.
In 1978, LaRouche authored an article entitled The Secrets Known Only to the Inner Elites, in which he described the history of European civilization as a battle between two conflicting images of man, one proposed by Plato and the other proposed by Aristotle (this analysis is similar to the one published a century earlier by the German poet/philosopher Heinrich Heine.) LaRouche favors the Platonists and opposes the Aristoteleans. As LaRouche describes it, Plato and his followers saw the universe as an ongoing process of creation, in which man plays a central role through his powers of cognition. Aristotle and his followers, on the other hand, saw the universe as static and fixed, with humans being just another species of animal.
LaRouche sees all of human history as the ongoing conflict between these outlooks. He extends this analysis to controversies in science, the arts, and politics (see below).
Among those thinkers that LaRouche considers followers of Plato, are Philo of Alexandria, Saint Augustine, Nicholas of Cusa, Johannes Kepler, Pierre Abélard, Rabelais, Gottfried Leibniz, Johann Sebastian Bach, Moses Mendelssohn, William Shakespeare, Miguel Cervantes, Benjamin Franklin, and Friedrich Schiller. In the opposing Aristotelean camp he puts Thomas Hobbes, John Locke, Voltaire, Rene Descartes, Charles Darwin, Sir Isaac Newton, Richard Wagner, and Bertrand Russell, along with the positivists, existentialists, and the Frankfurt School (these are partial lists).
Republicans vs. Oligarchs
According to LaRouche, the political expression of Platonism is the republican current, while the rival Aristotelean camp is oligarchical. The republicans seek a form of society which cherishes the creative mental powers of the individual, and seeks to cultivate those powers as the key to economic and cultural progress. The oligarchs seek to suppress the mental powers of the individual, because they prefer a fixed, feudal form of society and consider change to be disruptive and dangerous. Friedrich Schiller made a similar analysis, comparing the ancient city-states of Athens and Sparta in his essay, The Legislation of Solon and Lycurgus. LaRouche also warns that the oligarchical tendency opposes the idea of a universal human identity based on creativity, and tries to pit human beings against one another by categorizing them into various ethnicities -- this leads to particularism, racism and eugenics.
In LaRouche's opinion, the conflict between these two camps is the essence of politics, and all of the contemporary notions about "left vs. right" and "liberal vs. conservative" are a red herring.
The Renaissance and the Nation-State
LaRouche emphasizes the importance of the Renaissance as a point in the history of Europe when there was a major resurgence of Platonic thinking. European culture gradually embraced the idea of progress, a radical shift from feudalism, which was characterized by the Aristotelean view of the universe as fixed and unchanging. For the tiny minority that ruled over the population under feudalism, fixed and unchanging was considered to be a desirable state of affairs.
LaRouche regards France under the reign of Louis XI, the "Spider King," as the first modern nation-state. Louis XI broke with the feudal practice of a power-sharing relationship between the king and the aristocracy, choosing instead an alliance with the commoners against the aristocracy. He encouraged the development of literacy among the commoners, which caused a general improvement in the economic and military strength of France. This was the beginning of the idea of the general welfare or commonwealth.
Venice
In LaRouche's theory, the opposition to the Renaissance was centered in Venice, which, though not a center of economic production, became politically powerful by dominating maritime trade and finance. The Venetians became skilled at manipulating one kingdom against the other (what later became known as geopolitics,) and played a parasitical role in Europe's economy through inserting themselves as middlemen in trade relations, and practicing usury. When Venice was nearly put out of business by the League of Cambrai, the financial houses of Venice began gradually to relocate to England and the Low Countries, re-emerging in the form of such entities as the British East India Company and the Dutch East India Company. Venetian scholars also organized an Aristotelean reaction to the Renaissance, which became known as the Enlightenment.
The American Revolution
LaRouche believes that the American Revolution and the adoption of the U.S. Constitution mark a watershed in history, as the most successful attempt to put the republican theory of politics into practice. LaRouche also places great importance on the Monroe Doctrine, believing that it is the mission of the United States to oppose colonialism and empires whereever they may raise their heads. He refers often to the anecdotes recounted in Elliot Roosevelt's book, As I Saw It, where he describes how his father,Franklin Delano Roosevelt, informed Winston Churchill, in various meetings, that when the war was over, the U.S. would act to prevent the re-colonization of the Third World nations by the British Empire and other similar enterprises. LaRouche sees the development of the Third World, and an end to the austerity regime of the International Monetary Fund, as the uncompleted mission of the U.S.
Fascism
According to LaRouche, the first fascist state was France under Napoleon Bonaparte. European oligarchical forces, fearing that the ideas of the American Revolution would take root on European soil, intervened into the French Revolution to prevent it from becoming a republican, American-style revolution, and steered it instead toward becoming a bloodbath followed by a dictatorship. LaRouche calls this the beginning of modern synarchism, a revival of feudal-Venetian methods.
Most contemporary definitions of fascism emphasize components such as racism, chauvinism, and authoritarianism. LaRouche, however, points to a specific economic policy as the foundation of fascism: it is a situation where the financial system has become insolvent, and rather than put it through a bankruptcy reorganization, the ruling powers attempt to prop it up by cannibalizng the workforce through radical austerity and forced-labor policies. LaRouche identifies these policies particularly with German finance minister Hjalmar Schacht, who LaRouche considers to be instrumental in bringing Adolf Hitler to power. With the collapse of the Bretton Woods system in 1972, LaRouche warned that key financial institutions of the world were committed to a revival of Schacht's policies, first in the form of intensified exploitation of the Third World, and increasingly with respect to the economic policies of the more wealthy nations toward their own populations.
The "New Bretton Woods"
LaRouche proposes a new international conference, modeled on the Bretton Woods Conference, for the purpose of reorganizing a bankrupt monetary system, and eliminating most of the presently unpayable debt. For example, he advocates the retroactive cancellation of all financial derivatives contracts. He proposes that new credits be created for very large infrastructure projects all over the world; LaRouche has published specific proposals for such projects in Eurasia, Africa, the Middle East, North and South America, and Australia. LaRouche considers it to be the unfinished mission of the United States of America to end any form of colonialism, which he associates in particular with the austerity policies of the International Monetary Fund in the post-1972 period.