By Matthew Ehret-Kump
The process of lowering incomes, of degrading jobs, is a prime product of going from a science-based, energy-intensive economy, into a slave-labor economy. “
-Lyndon LaRouche, 1991
American presidential candidate Lyndon LaRouche prolifically stated that simple fact of economics when launching an international campaign to stop the North American Free Trade Agreement (NAFTA) from going into effect in 1991. The campaign, which then defined NAFTA as the “Auschwitz below the border”, had exposed that NAFTA was less of a free trade deal than a cloaked agenda designed to dismantle the last vestiges of national sovereignty that had been already been degraded by decades of de-regulation since the 1971 floating of the US dollar and the creation of the speculative “petro-dollar” in 1973[1].
Associating NAFTA with Auschwitz may have seemed extreme to some, but the reality is, that by exporting once productive, technologically advanced manufacturing jobs to impoverished nations, those “developed” non-producers could only become as reliant as a heroin addict upon maintaining impoverished (and thus “competitive”) conditions of cheap labour markets such as Mexico and Latin America. This fascist logic was the basis for the “production” of war materials produced in death camps in Germany under Nazi Finance Minister Hjalmar Schacht’s economic agenda during WW2. For those countries that had formerly enjoyed high technology driven modes of production, a money-obsessed, visionless world of consumerism and “raw materials” extraction became increasingly the basis of our existence.
Writing 13 years later in an article entitled “I stand Behind a Doomed Empire”, LaRouche mockingly described the immoral logic behind NAFTA in the following terms:
We’re getting our goods, not from our production. We’re getting it from cheap labor, in foreign countries. Therefore, we can shut down our factories. We can go into globalization. We can let NAFTA go into effect. We now suck the blood of the world. We bring slave labor into the United States, and we call it “illegal immigrants.” But, we bring it in, because we want the cheap labor. We force Mexico to supply cheap labor, even at the cost of the lives, of people who are paid so little that they can not survive, or raise a family on that income, not physically. We do the same thing throughout South America.”
For over 25 years, NAFTA stood relatively unchallenged, standing almost as if it were a universal law, whose very existence was built into the fabric of evolution of society.
The New Reality
Thankfully, as of March 4, 2018 that sacred cow has come to die the ugly death that it deserved. Following through on what many thought was merely “opportunist campaign rhetoric”, U.S. President Donald Trump announced that he would invoke a 25% tariff on foreign aluminum, and 10% tariff on steel breaking sacred dogmas at the foundation of Globalization. Trump announced this policy in the following terms:
We are on the losing side of almost all trade deals. Our friends and enemies have taken advantage of the U.S. for many years. Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!” In another message, he wrote: “We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminium will only come off if new & fair NAFTA agreement is signed.”
Blasphemy! Screamed the establishment technocrats and bankers. Everyone knows that under the NAFTA/WTO dictated world order, nation states are not supposed to play a roll in shaping the character of their economies as they did in the primitive ages past! The invisible hand of the markets is supposed to self regulate the world and create wealth and creative growth only on the condition that nations remain impotent to regulate the banks, deploy credit, or use national banks.
At the time of his announcement, President Trump, who knows that the invisible hand has been stealing from all nations’ vitality for decades, also announced that Canada and Mexico would be temporarily exempt from the tariff in order to give more time for a more just “re-working of NAFTA” to occur. When it became clear however that no such “just reworking” would be permitted to occur in a million years, Donald Trump took the historic decision to slap both North American neighbours (and the E.U) with the tariff causing bankers to scream like banshees and unleashing a vast array of counter measures from all parties. Canada quickly took the lead with a $16.6 billion counter tariff imports of American steel, aluminum, whisky, soap, orange juice and dozens of other products. Mexico followed suit with $4 billion of tariffs on US pork, apples, grapes and steel, and the E.U has gotten its revenge by taxing US jeans, whisky, cranberries and peanut butter.
Canada’s technocrat whisperer/ Foreign Minister Chrystia Freeland stated at a press conference:
The unilateral trade restrictions by the USA are in violation of NAFTA and WTO trade rules. Canada will therefor launch dispute settlement proceedings… Canada will work with the European Union to challenge these measures at the WTO…. This is the strongest trade action that Canada has taken in the post-war era”
Technocrats running Canada, the EU and Mexico are now crying to the WTO with the delusional assumption that this corrupt financial organization has any moral, or even legal leverage to do anything about the actions of a sovereign nation state acting in the welfare of its citizens.
What is important though often left out of this entire circus show, is that NAFTA, like the WTO and the Trans Atlantic financial system which they are components, were never legitimate in the first place, as they arose from an intention to dismantle the institutions of sovereign nation states while enslaving the mass of the targetted populations. Not only are they illegitimate, but are now dead and they aren’t coming back. Delusional arguments defending these failed mechanisms were best nipped in the buds now, before ever greater damage can be permitted to unfold. Time is of the essence.
But Won’t Tariffs Hurt Canadian Jobs?
While this argument is being repeated to death across the mainstream media with the Confence Board citing 91 000 jobs will be lost should NAFTA die, these claims are no less false. For those whining that this return to protectionism will hurt us, they should first ask themselves: Was Canada, or any nation for that matter, destined to be a simple raw materials exporter, producing steel and aluminum for international markets, or were we destined for something better? The fact is NAFTA has already hurt Canadian jobs, as over 540 000 manufacturing jobs have been lost in Canada since 2000 and 4.5 million manufacturing jobs in the USA since its implementation, having been replaced with low paying “service sector” jobs that are ultimately non-productive for the nation as a whole. While Mexico has gained factory jobs, they did so by become slave market producers. In all three countries, the real fruits of NAFTA can be seen by the explosions of child poverty, crime, opiod/drug epidemics, and suicide.
Rather than seeing a return to protectionism as “trying to recapture the past”, or as an “un-natural turning away from the natural laws of evolution embodied scientifically by “globalization”, we should instead see it as an opportunity to return to a forgotten state of mind that was once tied to a commitment to the future. Canada’s once full spectrum agro-industrial economy which we have long since abandoned over decades of globalization, was built, after all on the use of protectionism and long term credit for capital intensive infrastructure building. So why is it that we are being led to believe that the use of protectionism is somehow a destructive thing now?
Unortunately, since Canada’s economy has been conditioned by years of free trade looting and outsourcing of productive industry, it is true that the loss of sales which protective tariffs will invoke will be painful in the short term. However, this pain should be seen in the same light as the pain of a heroine addict being taken off drugs and put into rehabilitation, for it is the sort of pain that has a bright and hopeful future attached to it.
What will this rehabilitation look like?
The first step to this rehabilitation involves recognizing that the Four Laws of Lyndon LaRouche announced in 2014 are not only morally, but scientifically necessary policy measures uniquely designed to move society through the economic hell falling upon us and into a new era of peace and prosperity. Navigating through this crisis begins by re-invoking the law of nations as hegemonic over the arbitrary law of private capital and usury. In the first two laws, this means:
1) restoring Glass-Steagall Standards of banking internationally to clean the unpayable debts holding nations hostage, and
2) restoring national banking practices in order to emit long term credit for the rehabilitation of our REAL physical economic potential.
As these measures are implemented, nations will be better situated to invoke the 3rd and 4th laws., which are expressed by
3) the unleashing of policies of high technology infrastructure building via hamiltonian credit and…
4) committing ourselves to high energy flux density breakthroughs in space and nuclear power with a focus on fusion energy.
All of this can easily be done simply by taking a serious lesson from China and its New Silk Road strategy of true nation building now sweeping across the world.
The New Silk Road as the New Platform for an Age of Reason
In promoting the New Silk Road, the Schiller Institute had stated in 1997:
The realization of the ‘New Silk Road’ and the ‘Productive Triangle,’ a real reconstruction of Russia and Eastern Europe, the development of the entire Eurasian landmass with the most modern infrastructure, would be the central economic issue at such a monetary conference of world powers. The connection of the new financial and monetary system, with concrete development projects which demonstrably would set a new, worldwide economic miracle into motion, would guarantee the success of the new system, overcoming the current crisis, and ensuring the fundamental economic security of the world far into the future.”
This programmatic layout put forth by Lyndon and Helga Zepp-LaRouche beginning in 1993 led to hundreds of international conferences in Asia, Europe, Russia and the Americas throughout the 1990s. While the speculative attacks against the Asian economy led by such Anglophile golems as George Soros during the 1997-98 period handicapped the early unfolding of the New Silk Road strategy, it has since come back with a vengeance like a phoenix from the ashes when China’s President Xi Jinping announced it in Kazakhstan in October 2013. Since then, China has demonstrated its integrity and competency in nation building (and culture building) practices by sharing its means of production with all nations involved as well as having created new financial institutions such as the BRICS Bank, Asian Infrastructure Investment Bank, Silk Road Fund, and many more.
Return to Canada and the New Silk Road
Without NAFTA, the Canadian government has found itself in a Gordian knot which only a profound shift in axioms can heal. Not only has Canada’s relationship with the USA turned sour, but our European trading partner with whom the NAFTA-modeled CETA free trade deal had been initiated is a financially haywire basket case. Canada’s Russian economic relations have been pitiful for geopolitical reasons for several years, and even though there is no enthusiasm for the NAFTA-Modeled Canada-China Free Trade Agreement from China’s leadership, that important country now reshaping the global paradigm had remained one of the few nations willing to help us… until recently.
Since blocking China’s latest attempt to bring Canada into the New Silk Road with the May 23rd vetoing of China’s CCCC efforts to purchase Canada’s failing but incredibly important construction giant Aecon Inc, our government has missed a major opportunity to save itself and its citizens from the financial meltdown. In preparation for such a collapse of the western banking system, China has already begun a de-investment of Foreign Direct Investment capital from speculative zones such as Canadian real estate and Singapore casinos, into physically productive areas with a focus on infrastructure creation. The attempted buyout of AECON was done in preparation for such a nation-building policy in North America which China knows must occur at some point, as local construction companies would be vitally important to drive that development abroad rather than Chinese firms.
The questions remain: What is stopping us from accepting such help by China and re-directing our energy towards re-building our devastated manufacturing base, decayed infrastructure grids, and re-tooling our auto sector (which will likely be the next sector to get hit by American tariffs)? What is stopping us from building high speed rail from coast to coast connecting all major Canadian cities with the re-tooled machine tool powers embedded in our auto sector[2], and building new cities along the way, including the long overdue Mid-Canada Development corridor and Arctic development corridors with the Bering Strait Rail Tunnel and Alaska-Canada Rail connection as keystone projects bringing the New Silk Road into the Americas? The excess production that we will no longer be exporting to foreign markets can easily be used for the building up of our REAL economies once more. But we cannot do this alone.
The reality is that if LaRouche’s Four Laws were adopted, liberating nations perceived obligations to protect the $700 trillion derivatives bubble now exploding across the trans Atlantic, nothing is stopping us [see appendix].
China has made it known that the Belt and Road is not simply destined for Eurasia, but all countries are welcome to participate in building up the productive powers of mankind across all faces of the earth. They have openly expressed their intention to help re-build the physical economic potentials of the west and the current American American administration has expressed consistent openness to the idea. All that is lacking from the Canadian population is the will for a future.
Footnotes
[1] Why NAFTA Will Destroy Canada, the USA and Mexico, Executive Intelligence Review, vo. 18, no. 19, May 1991
[2] Unbeknownst to many, the automotive sector does not merely have value because it “makes cars”. As seen in WW2, the machine tool capacity of the auto sector can be re-tooled and redeployed easily for building ANYTHING from tanks, planes, to the mag lev trains we will need over the coming years. This was the basis for the LaRouchePAC campaign of 2002-2006 across North America: https://cecaust.com.au/pubs/pdfs/nce05-06.pdf
Appendix
To understand their interconnected relationship, we need to briefly explore the why the bubble known as the Trans Atlantic financial system is dead, before we can return to NAFTA and the solutions.
The Breakdown of the Financial System and NAFTA’s Death
During the same 1991 campaign to stop NAFTA, Lyndon LaRouche also announced that the trajectory of the world financial system was on the fast track to a global general meltdown were nation states NOT to regain control of their right to auto-determination of their banking system and credit policies. In November 1991, Larouche stated:
We are facing the wipeout, the breakdown, of the entire post war international financial system- the Anglo American financial system… To have a recovery of the U.S. economy… we must fund large-scale projects- water projects; power generation, and distribution projects; transportation projects, especially in rails and repairing breaking-down bridges and some urban infrastructure, which must be repaired if the economy is to function… this means scrapping the kind of central banking system we associate with the Bank of London or the Federal Reserve System. We must recognize that there is a power in this universe which is higher and greater than any jumped-up bunch of people who think, because they’re wealthy families with big foundations and trusts, that they are the gods of Olympus.”
The irrefutable logic underlying his forecast was illustrated in what was called the triple curve, unveiled in its first incarnation in 1996 [see graph]. Since 2008, LaRouche has emphasized that the only pathway to a solution to this inevitable meltdown involves a return to FDR’s Glass-Steagall bank separation act.
Today, the western financial system is teetering on the precipice of that financial meltdown, as $2 trillion dollars of fictious capital in the form of derivatives contracts meltdown. A newly elected Five Star/Lega Nord Italian government has made its intent to impose bank separation clearly defined, and even Donald Trump has been on record for expressing his support for Glass-Steagall bank separation.
With the return to protectionist measures in defense of the security of nations, the power of sovereignty is now carrying real legal force once again, allowing such major reforms as Glass-Steagall and the return to National Banking practices once again extremely feasible.
Without taking this breakdown into consideration, no discussion around NAFTA’s collapse could be effected competently.
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