By Neil Martin

07/01/2009(LPAC)— In the wake of the Obama Administrations "Environmental", and Health Care policy directions, it has become crystal clear that the current direction of the Obama Administration is one of a witting British agent, out to destroy the US economy, and world civilization besides, leading to the deaths of up to and beyond 4 billions persons; therefore, as Lyndon LaRouche stressed in his June 27th webcast, those responsible for putting Obama under adult supervision must learn the lessons of the American System immediately. Here we take up the issue of the American System's tool for directed development of a nation state economy: protectionism.

Today's world leaders cry out against the use of protectionsim. With this kind of stupidity the British Empire today does not have to send over free trade pushers as they used to do in the 19th century. Nor did they need free trade societies in the United States, like Cobden clubs two centuries ago. They also do not need newspapers like the Boston Herald that attacked protectionism, “Nothing could be more pointedly against the spirit of Christ than the system of protection.” Today, the oligarchy can just sit back and relax, and enjoy the show of countless government officials who say that protectionism has no merit. The consequence? As statesman and economic scientist Lyndon LaRouche has said “Governments that do not adopt protectionist policies are cutting the throats of their own people.”

1. What is Protectionism?

Protectionist policies reflect that a nation knows that their people and people of foreign nations have the inalienable rights of life liberty and the pursuit of happiness. Free trade, a system that loots from the labor force of a nation looks at its own interests, and those interests do not include humanity. Free trade theories and theorists are repugnant. Once one says that certain people will be exploited to make some people’s lifestyles better, the trajectory has been set. One no longer acts in the interest of man, whose a being in the image of his creator. To the free trader it is an exaggeration that man is in the image of his creator, because in their mind man is just a beast. In The Unity of Law, Henry Carey, a chief advocate of the American System wrote, “Lastly, man is distinguished from all other animals by his capacity for progress. The hare, the wolf, the, ox, and the camel are the same as those that existed in the days of Homer.”

American system advocate Carey, in his book The Way To Outdo England Without Fighting Her, explicitly conveyed that in order for the Declaration of Independence to be a living document protectionism must be the law of the land and not free trade.

The consequence of going against Hamiltonian protectionism, was enunciated by British Economist, Joshua Gee, who came before Adam Smith: “It would be sad policy for governments to spare their people be at the charge of protecting them abroad, and yet allow them to set up manufactures of their mother kingdoms, whereby they would supply themselves, and in respect to trade and Commerce, throw themselves into a state of independency.” As for Adam Smith, he was not so honest. He did not reveal why the British did not want the United States to have manufacturing. Smith wrote “To endeavor by the Extraordinary patronage of Government, to accelerate the growth of manufactures, is in fact, to endeavor, by force and art, to transfer the natural current of industry, from a more, to a less beneficial channel.”

To this, we look to Carey follower, Robert Ellis Thompson, in his Elements of Political Economy, where he asks the following questions:
“Is it 'natural' that any nation should keep its farms on one continent and its workshops on another? Is it natural that cotton, on its way from the grower to the wearer, should go half way round the globe and back again? Is it 'natural' that a large part of the race should be employed in carrying bulky articles- raw materials and coarse goods - from some countries to others in the same climate and of the same general capacity? Is it natural that a country with millions of tons of iron on the surface of her soil, and square miles of good coal not far below it, and most of her labor running to waste for lack of employment, should send for railroad iron thousands upon thousands of miles? Is it not a most unnatural and artificial system? Or is there no test of what is natural in this connection, except present cheapness in money price.” Thompson further stated that on the other hand, “Protection is natural resistance to an unnatural state of things.”

There is nothing natural about the globalization of Adam Smith; on the other hand, resistance to globalization via protectionism is government executing what it should do to promote the general welfare, and those governments that fail to do so fail their people. For a nation is not a group of merchants; merchants look for profit first, and second, third, fourth, fifth,sixth and so on. Nor is it a body of consumers.

An American system advocate, Calvin Colton, exposed in his book Public Economy For the United States how the British would never give up their advantage in manufacturing because this would endanger the British Empire from being the soul workshop of the world, which their advanced machinery, could capture several markets. The only thing other nations could do to save their various manufacturing establishments was revealed by British Economist Mcculloch, “...and that nothing but the aid derived from restrictive regulations and prohibitions, will be effectual to prevent the total destruction of their establishments.” Colton then says, “The passage in italics tells the story, and discloses the doom assigned to us, and to all nations, which adopt the Free Trade commended to them by the pensioned economists of Great Britain.”

Free Trade Vs. Protectionism

A protectionist view of government and that of a free trader ultimately clash together. Henry Hoyt a former union general of the civil war and one term governor of Pennsylvania from 1879- 1883, in his 1866 Protectionism Versus Free Trade devises syllogisms pertaining to Mr. Mill and Adam Smith's view on government.

“Major premise .-Industry can be increased only by the increase of capital
Minor premise.- laws and government can not increase capital
Conclusion.- therefore, laws and government can not increase industry.”

In response to this piece of sophistry. I have to ask, have these demagogues ever heard of government credit at all? Alexander Hamilton’s report on public credit says, “It cannot but merit particular attention, that among ourselves the most enlightened friends of good Government are those, whose expectations are the highest.” Smith and his ilk had no expectations for government; they knew that government hindered their reforms which were based upon the theory of laissez faire.

Let us examine these syllogisms again: “Industry can only be increased by capital.” These fools act as if government has no power or vested interest in protecting industries. Next:“laws and government can not increase industry.” These henchmen for the British Empire may be right if all governments were weak as Europe is today, where central banks have more sovereignty than governments, but, the United States goes by a credit system not a monetary system.

If laws and government can not increase capital or industry, why do British free trade patsies become Congressman and Supreme Court justices? And why do “free traders” have anti-constitutional policy institutes and think tanks in order to lobby government? It seems like Adam Smith has lost some creditability concerning these matters.

Today's FDR haters know what powers the U.S government possesses. They know that this government is capable of going protectionist. They oppose this vehemently.

A Protectionist view of government is rooted in the general welfare clause in the Preamble of the U.S. Constitution. The application of this clause can only come about through protectionism and not through the “let it alone” system. The type of economy that can promote the general welfare clashes with laissez faire.

U.S Presidents who were pro laissez faire have never been attacked by British and Anti FDR think tanks such as the American Enterprise institute, the Hasting institute, and the Heritage foundation. But Presidents who were protectionists or moving in that direction, were assassinated like Abraham Lincoln, James Garfield, William McKinley, and John F Kennedy. FDR was almost assassinated. While other protectionists, such as George Washington and John Quincy Adams were left unharmed.

This, is a must for people to understand. This, shows what lengths the British Empire will go through to keep the American System of political economy on the shelves; they knew free trade would have become extinct by now if the American System had spread.

Keep in mind however, that unlike the United States, England used protectionist measures at home but never abroad. Free trade was encouraged for other countries, but they would not drink their own poison; but the United States not only used protectionism, they also encouraged other countries to do so. Whenever protectionism took hold of a nation’s economy, the American System of Political Economy was vindicated.

In fact several countries in Europe were going with protectionist measures. So much so that the British had a report put out by the Royal Commission. Time after time, the commission blamed protectionist measures for ruining the interests of the British Empire. Here are a few statements that’s covered in Robert Porter’s pamphlet “Free Trade Folly” that the commission made.

“Foreign tariffs have seriously injured the traders of this district.”
“Foreign tariffs have materially affected our iron and steel trades”
“The imposition of very high tariffs goods of British origin by the countries on the continent of Europe also, the duties imposed upon these goods in the United States.”
“If hostile tariffs were ameliorated, and more especially foreign bounties abolished, the increase in our industry would be great.”

As is clear, at that time the British Empire had no qualms in attributing its decline as “the work shop of the world' to the protectionist measures of the American System.

One of many ways in which the American System of Political Economy, is vindicated.

Protectionism and Commerce(domestic trade)

According to free trade fanatics, “In reality there is only international economy”, i.e. globalization, and domestic commerce is only imaginary. In contrast, Henry Carey looked upon the improvement of commerce as an indicator that a country was self governing as and was making the Declaration of Independence a living document.

Internal improvements, like building rails, roads, canals making, rivers navigational show that man is not some redundant part or tool to be exploited by those who treat man as an expendable beast. Commerce brings the farmer closer to the manufacturer and conveys that there is after all a “harmony of interest”, as Henry Carey described.^{1Henry Carey's Harmony of Interest} Nations seeking to develop manufacturing, agriculture and commerce will seek to improve their waterways of a nation, build canals and iron roads, otherwise known as the rail roads. All branches of an economy flourish with protectionism, aided by technology. Agriculture, manufacturers, and commerce are one. They are like vital organs in a human body, if one goes there’s no chance for survival.

Commerce, the development of the domestic economy, should not fall prey to a globalized form of international trade; agriculture should not be at a great distance from manufactures. They are not to be separated, as shamelessly insisted by free trade.
Today the United States is not devoted to the Henry Carey's Harmony of interest; in fact, it has not been that way for over 40 years. Instead, this country has been hood winked to follow policies that will create a dark age for up and coming generations.

Rather, nations that recognize there is a harmony of interest among agriculture, manufacturing, and commerce will always and must concentrate their efforts on improving domestic commerce. Growth in agriculture, manufactures, and commerce are facilitated by means of protectionism; these are the signs that Congress is performing its task. For example, one of Congress’ several powers is to regulate commerce with foreign nations; Congress essentially dictates the terms on which trade is carried out between nations. This does not mean that Congress should let everything come in duty free.

The deregulation of commerce with foreign nations will only do one thing: make domestic commerce, agriculture, and manufactures being only accountable to the law of the jungle, free trade.

Rather, protectionism makes sure that the home market does not compete against cheap labor. A country that allows for cheap labor to compete in the home market is a country that does not understand the true meaning of sovereignty. If a nation wants to be sovereign, it must go with protectionism. Protectionism's ultimate goal is not merely to place protectionist tariffs on imports, rather it's goal is to establish a nation state and preserve that nation state.

Protectionism and International Trade

The sole purpose for a fair, international trade is for the mutual benefit of nations; Henry Carey called this “a trade of equivalents.” A trade of equivalents does not undermine the sovereignty of the two countries; a trade of equivalents never creates one sided trade.

However; this is not the case anymore. Free trade creates conditions where manufacturing takes place, not in countries that have a higher standard of living, but in countries that have a lower standard of living, like in China today. This type of set up is called an investors' haven, because now investors are not responsible for the livelihood of their work force which are taken as mere animals to them; therefore, investment havens are no better than the Chinese granting extra territorial rights to companies in colonial times.

In those times, when China was a sub colony, a colony of few European powers, Shangai, a possession of France, had a special park where neither dogs or Chinese could enter. But today the new colonial power—that is, investors in free trade zones—welcome Chinese with open arms in these places in China because now the Chinese are seen as mere tools, as exemplified by their cheap wages. To the investors they are expendable.

Before this, raw materials, and one sided trading were the reason why Colonial powers made countries or territories into colonies. These Chinese workers, and many more throughout the globe, have no voice under free trade. These investors are a disgusting lot, and they should not be allowed to subject poor countries with jobs that don’t contribute to the future of their nation.

For instance in China, companies should not be allowed to invest in China if they refuse to promote the people’s livelihood as understood by China‘s Founder Father and protégé of the American System of Economics Sun Yat Sen. In Sun Yat Sen’s lecture, Three Principles of the People, he said “Many things will have to be done to industrialize China: The first is the construction of railways, canals, and other transportation facilities on a large scale. The second is to open our mineral resources. Our mineral resources are very rich; and it is a pity that they are not opened. Thirdly, Chinese manufacturing industries must be developed. Although China has unlimited labor power, she cannot compete with foreign powers because she has no machinery.” This should be the basis of any type of investment in China and in any other country.

But rather than these wise words of Sun Yat Sen being followed, today free trade is adopted; a policy with no interest in building up the infrastructure of nations. Free trade acts to destroy the commerce of a nation; free trade everywhere craves for cheap raw materials and cheap labor. They are there for profit, and the means to profit does not concern them; cheap labor to them is a means to profit. This does not create national wealth, but private wealth, and private wealth differs from National wealth.

This form of international trade was sought by the British for her advantage, and mainly to destroy the industries of other nations. A quote from a British Parliament report in the 1850's states that:

“The laboring classes generally, in the manufacturing districts of this country and especially in the iron and coal districts, are very little aware of the extent to which they are often indebted for their being employed at all to the immense losses which their employers voluntarily incur in bad times, in order to destroy foreign competition ,and to gain and keep possession of foreign markets...The large capitalists of this country are the great instruments of warfare against the competing capital of foreign countries, and are the most essential instruments now remaining by which our manufacturing supremacy can be maintained; the other elements: cheap labor, abundance of raw material, means of communication, and skilled labor rapidly in the process of being equalized.”^{2William Elder, American system economist said in his Questions of the Day, Economic and Social, concerning trade: “Legitimate trade is reciprocity, not dependence and domination.” An example of which is when Turkey allowed for the British Empire to dump manufactured goods into their unprotected home market. This literally destroyed Turkey.}

Here we have the intent of the British, to first, destroy the industries of other nations so she can be the work shop of the world.^{3Carey told the U.S speaker of the house Hon. Schuyler Colfax, that only protectionist measures will stop the British Parliamentary policy of dumping British goods on countries to destroy their industries.} Secondly, to bring down high skill labor at the same level of cheap labor.

Today, globalization does this; in globalization, all that exists is this form of international trade. Globalization is disgusting. It thrives when nations act like a selfish and self-diluted merchant, leading to a nation’s ruin. The merchant seeks to buy in the cheapest markets. These markets are cheap because the value of man is not high, and cheap labor till this day has never developed a country.

2. Adam Smith Refuted On All Counts

Today the debate of free trade versus protectionism is discussed in purely monetary terms; however, it is important to see this fight in the language of the historical debate between Adam Smith and the American System. Some call Adam Smith the originator of the division of labor.

This and other foundational axioms lying at the basis of Adam Smith's religious followers are demolished in what follows.

Those who shriek about protectionism do not see how building up a division of labor or “diversity of employment”^{4As named by Henry Carey} correlates with protective tariffs. The more division of labor there is, the more creative is an economy. The division of labor is defined by how scientifically and technologically advanced an economy is. In this type of economy the government practices protectionism and it is not fond of the “markets.”

One would never find, Mr. Let It Alone, Adam Smith, the so called originator of division of labor, or his second source disciples^{5People that learned free trade from a text book instead of reading the likes of Smith, Ricardo, Malthus Mills and Cobden}, making a correlation between a division of labor and protectionism. Smith and his like will argue that the legislative body should not interfere in having foreign goods underselling domestic goods.

However, the diversity of employment does correlates with protective tariffs, a discovery free traders will never be found making. A proper division of labor can determine the trade policy of a nation; there will be little wants, because those necessities are made at home.

The more scientifically advanced a Protectionist nation is, the more diversity of employment a nation has.

Were this type of economy to fall in the hands of free traders, a funeral procession would have to take place to say “good bye” to the nation, for historically, any nation that adopts free trade, its imports dwarf its exports coinciding with the lack of a division of labor^{6This is conscious decision made with help from agents of other countries.}, eventually sharing the same fate as Portugal under the Muthen treaty.^{7This treaty was used by the British to gradually dump manufactures, on Portugual. This similarly occurred with Ireland under the United Kingdom, when they signed the Act of Union in 1812, destroying their manufacturing capability.}

It should be known already that The Wealth of Nations was not meant for the United States to flourish, but to be subjugated by the powers of Europe especially the British Empire. Adam Smith wanted the U.S to be subjugated by the the British Empire, and yet had the audacity to speak about the “division of labor being limited to the extent of the market”, as if the market determines the barriers of an economy.

Once a country goes with Adam Smith’s advice, that “a great Empire has been established for sole purpose of raising up a nation of consumers, who should be obliged to buy from the shops for our different producers all the goods with which they could supply them,” the division of labor collapses, and manufacturing gives way to foreign products that are cheap because they are allowed to compete with a country's manufactures. Agriculture no longer has a constant market because the manufacturing sector is destroyed by competition. Commerce also collapses because manufacturing gives way to foreign goods, and the farmers lose their best clientele.

This is seen in the case where those who worked in manufacturing, mining, etc, went out West to have farms that produced food stuff like wheat. When protectionism was not the policy in certain periods of the19th century, such as 1818,1834-1835,1847, industries dried up, and scores of men went out West. But what were they doing out West? Were they independent at all? Did they have any agro industrial centers out West ? Sorry, there were no agro-industrial centers, just scores of farmers who were dependent on the markets in England. All they had to offer England were food stuffs and raw materials, and those out west paid dearly to transport their food stuffs and raw materials. But sometimes their food stuffs and raw materials were not needed by England. International foreign Trade was the policy instead of protectionism. This devastated the Western parts of the United States, but the wisdom of Adam Smith conveyed that all industries will reemerge once the magic of the markets determines so. That however, never worked in any country, the idea that manufactures can flourish without protectionism is a blatant lie. This not only ruined the division of labor, it struck a blow to the population density of several towns. Free trade not only brings down men to the same level of cheap labor, but it also lowers the population density of that town by putting people out of work, and forcing them to go out west.

The infrastructure that was originally made to transport domestic goods to other States in the Union by means of rivers, and canals which were once used to export goods, are now the means to bring in goods. Roads and railroads shared the same fate too. What happens if a country can no longer be the nation of consumers? The powerful country does not care, because the mission is complete. The division of labor of that country has been destroyed because of free trade. This mode of destroying a nation, without even using the military, is far more likely to succeed than a military invasion.

Returning to the point, if Adam Smith had discovered the division of labor, why would he insist on foreign nations to buy cheap goods instead of making them? Why would Smith say this: “Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country.”

Apart from this lie, in reality, not buying these manufacturing goods from Europe, and protecting a country's industries, represents the nation wisely creating a division of labor by means of protectionism. The division of labor should determine whether or not a country will lay duties on imported articles.

Some fool like Adam Smith might say that the manufacturing class is the sole beneficiary of protectionism. However, this axiom merely asserts that commerce, agriculture and manufacturers have different agendas, instead of one common aim.

In reality, manufacturers, agriculture, and commerce are like train tracks. Were one to remove a track. One would derail the train. These three things: agriculture, commerce, and manufacturers, are improved by internal improvements such as: roads, railroads, canals, water navigation, water management, electricity, and high forms power generation. All countries should have a division of labor that is based upon high skilled labor.

Ever deluded, Smith called the industries that the U.S wanted to have, barren and unproductive. Meaning, that U.S should be persuaded from not manufacturing those goods. But wait, why the double standard Smith? The same manufactures and artificers that the U.S wanted, were flourishing in England!

The British Empire has grabbed up foreign markets by dumping their goods through one sided treaties with countries or by having their non governmental economist^{8Either Adam Smith, or Malthus, were the last openly paid economists by the government in England. Cobden was not paid by the British, but the Manchester school.} such as Richard Cobden to preach free trade to countries, and persuade them that they should buy goods at a more cheaper price, because the British Empire could provide those necessities for that country. This policy destroyed the high skill division of labor in any country with which it traded.

Adam Smith wanted the United States to not take advantage of her own market. Smith called this “creating a monopoly.” Now remember what Smith says, “A great Empire has been established for sole purpose of raising up a nation of consumers, who should be obliged to buy from the shops for our different producers all the goods with which they could supply them.” Is this policy going to develop a proper division of labor? Of course not. Had the U.S pursued Smith's policies, the United States would have retained its colonial status, based on exporting raw materials and food stuffs to various countries in Europe, especially England. This is one of the lowest types of a division of labor. For what does it accomplish? Does it lead to prosperity for a nation or does it ruin that nation?

Robert Porter, who held a special post in the McKinley government, and his biographer, further reveals in his Free Trade Folly what would happen to the farmer under the policy of free trade. The free trader insists to the farmer that they need not worry about the protective system being pushed aside, for this will not harm the farmers interest. The farmer would now have access to cheap goods, and as for the artisans, miners, the laborers of a furnace, they can become farmers of wheat, but there was already a large amount of wheat in the market. This would increase competition and the farmer of the United States would find himself competing with cheap labor from abroad. When immigration decreased, the farmer’s ever increasing demand of food decreased also, because protectionism had been dropped. The reason why this has happened was not because labor was scarce, but that free-trade was the policy. This shows that free trade does not create a division of labor; it creates cheap labor, cheap goods, and cheap men.

Protectionism, can increase the division of labor

Necessary Means

The only way a division of labor can happen is by using protectionist measures to allow for the agro industrial economy to have the home market, and grow technologically.

The highest degree of a division of labor is not in a purely agricultural and raw material exporting economy. It is in the forbidden, agro-industrial economy that is protected by protectionism. Which one of these economies creates a proper division of labor? The American System model would accomplish something for the present and distant future. The British system would accomplish what it has always accomplished: treating man like beast.

There was a proper division of labor in the United States whenever the division of labor had a solid foundation to grow, based on protective tariffs and other protective measures; for instance, bounties, which encourage the various industries that are vital to the economy.

After the post industrial era, the service sector economy came and grew. But the service sector economy will not accomplish anything; it is not a benefactor for the future. Making jobs to just make jobs, like in the service sector, will not serve the same purposes as jobs that contribute to diversity of employment. The investments made in preparing people for service sector jobs, are incommensurable to the training needed to work at a steel mill, building parts for magnetic levitation trains, building parts for making rivers to be come more navigational, building nuclear power plants, creating a science driven economy, and revamping the space program. Economies should grow in their mode of transport, power generation, water management and in their productive powers of labor. This type of economy will lead to a greater division of labor.

A service sector economy can’t do that. Sure, it may have a division of labor, but it’s low skill. The division of labor that a Starbucks has, can't compare to the division of labor required to revitalize the space program, building thousands of nuclear power plants, building magnetic levitation trains that connect five continents together.

I leave you with the following: the move to pseudo science will destroy the division of labor.

A green economy does not develop new technologies, that increase the productive powers of labor, per capita, and per square kilometer, like the space program did. It degrades man as not being a lord of creation.

The environmentalist economy can't do it as I described above, because they do not want to subdue the Earth and replenish it. They don't know how to use the Earth—what Henry Carey called, “the great machine.” Environmentalists would have the power of the great machine lie latent. They are just like the servant who buried his talent instead of using it. The Al Gore groupies, have substituted science with a consensus. The greenie theorists ignore that man must be fruitful, multiply, subdue the earth and replenish it.” Do they realize the serious environmentalists like Prince Phillip and Al Gore hate human beings, and advocate reducing the worlds population to 1 billion people?

In contrast to this pseudo science, we must look to Daniel Raymond’s Elements of Political Economy, where he says “The power of invention distinguishes man from the brute creation, and it is the exercise of this power which has raised him from savage to a civilized state; and to say that this power ought to be abridged, or restrained, in any respect whatever ,is not only an outrage on man himself, but it is also an impeachment of the wisdom of his Creator, in bestowing upon him these faculties.” Indeed, all sources of fuel have not been discovered; nor the ones we can create. Yet the greenies insist that the resources of the Earth are limited. An environmentalist greenie like an ox, cow, goat, monkey will be doing the same thing in the future as their fellow greenies and animals did in the past.

These insane environmentalists, most certainly are not going to advocate polices that will have a proper division of labor. They are committed to killing off billions of people. In fact the economy of theirs should be seen as dangerous as free trade, where both exclude human creativity from their economic policy. Both of their policies place mankind closer to an animal instead of nearer to the angel. In any case, the greenies and free traders, like religious fanatics, stick to there theories and never prove them. The environmentalist says there is a consensus on global warming, while the free trader says, I brush aside history and only deal with theory.

Today's statesman and economists, must learn these lessons, heed these words, and get some guts—-fast.

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