Why the Academicians Have Usually Failed in Economics

by Lyndon H. LaRouche, Jr.

December 19, 2008

There is rising consternation stirring within the international press, in leading circles of governments from the U.S.A., in western and central Europe, in Russia, in China, and from around the world generally. Reluctantly, it now dawns upon these circles, that virtually nothing which is essentially crucial has occurred in those patterns in the world's economy generally, which I had not forecast in my international webcast of July 25th, 2007.

Among the powers of evil which still appear to control some of the governing powers in the world, there is now a creeping sense that if it were possible they might destroy the prophet, but, then, be destroyed, themselves, by the prophecy.

What I had forecast, on July 25, 2007, was a general breakdown-crisis, which I had warned, was to unfold by about the close of that July. Three days after that webcast, the actual breakdown of the world's present monetary system began exactly as I had warned it would. Since then, the tocsin of a spreading, global tragedy of the nations of this planet, were heard here, then there, and then beyond, louder and louder, with a growing resonance, a resonance taking the planet as whole into its grip.

From that moment on, the ongoing, global, general, physical breakdown-crisis of the entire world's present monetary-financial system, has never ceased to worsen. It grows uglier and uglier, wider, deeper and deeper, and, for those who had deemed themselves the reigning powers of our planet, seemingly more hopeless, than what it had been a bare moment before.

There has been nothing like this, as I had repeatedly forewarned, since the U.S.A.'s 2000 Presidential primary campaign. There has been nothing comparable to this in the history of European civilization since the outbreak of medieval Europe's mid-Fourteenth-Century collapse of the House of Bardi into a Europe-wide "new dark age." It comes on as a planetary tragedy. As I had repeatedly forewarned since that time, what has been oncoming, is a general breakdown-crisis of the presently doomed financial-monetary system of every part of this planet as a whole.

One senses an approaching moment, like that silence heard by those either in the life-boats, or swimming in the chilling Atlantic ocean waters, in that moment when the S.S. Titanic had vanished under the waves.

So, since July 25, 2007, almost as soon as leading circles in any nation's government, in the Americas, Europe, Asia, and elsewhere, attempted to deny the possibility of a condition against which I had warned, exactly that kind of sign of an oncoming general, planetary breakdown-crisis had erupted. Essentially, not only have events around the world proceeded according to the pattern which I detailed in that webcast, but each such development had erupted seemingly moments after fresh, emphatic denials, by leading governments in the world, and others, denials that such a development as I had forecast had been possible.

So, now, in the oncoming, January 20 inauguration of a new U.S. Presidency, the crisis accelerates, building up like a rising, terrible storm. Yet, for a moment, there is an awful stillness, while this legendary Titanic is sinking into the deep, where it would lie under all the waters of the world.

Yet, ironically, at the same time, still today, even after the clear accumulation of proof of the accuracy of my July 25, 2007 warning, leading opinion often responds with a curious kind of effort at stubborn denial. In a moment when the virtual Titanic of today is already sinking. Yet, as absurd as it is for them to say, leading press and governmental circles attempt, again, to deny what is happening, by reassuring one another, that I am not a certified product of the economics department of virtually any university.

I can proudly confirm their view that I refuse to associate myself with anything as provably silly as that which passes for academic qualifications in economics among the usual academics of today. Meanwhile, they, each time, hearing their own voices on this subject, appear to be much more frightened, this time, by hearing the reverberations of their own attempted denials, than when they had uttered them a moment or so before.

Suddenly, in these moments, the threats to me from my would-be critics, appear as less ominous than tragically silly. This is a coming moment in my world, not a triumphant moment, but a moment like that experienced by a Noah floating on a vast, silent sea. So, the ominous, oncoming global tragedy, has now overtaken the world—for those who are willing to hear, and act accordingly.

I am no wizard. There is no uncanny miracle involved in my repeated, uniquely exceptional record of successes as a long-range forecaster. There is only science. As I had already emphasized back during the last four months of 1971, what had been taught as economics in most of the known universities, even then, was simply the result of the increasing rates of incompetence in what has been usually taught as economics at leading universities, since Harry S Truman was inaugurated as President.

Look back to the time and place at which the presently unfolding tragedy actually began.

My Experience
The tragedy began in that moment that the right-wing Wall Street choice for Vice-President, Harry S Truman, would seize the opportunity of President Franklin Roosevelt's death, to sabotage Roosevelt's Hamiltonian, post-war intentions. What Truman would introduce, instead of Secretary Hamilton's American System of political economy, is the intrinsic incompetence of sometime pro-Nazi economist John Maynard Keynes.[1] The widely practiced methods of statistical forecasting today, are the worst existing on this account up to the present date. Otherwise, generally, the incompetence of my academic rivals' failure as forecasters, lies presently in the way in which they define the subject itself. They have employed a method of forecasting which might be compared to the zeal of a passenger searching to upgrade his stateroom assignment on a sinking ship.[2]

This downward trend in quality of thinking about economies, a downwardness against which I have warned, as a forecaster, over the interval of two generations past, has been the principal source of the failure of the leading academic economists, and also leaders of corporate finance more or less world-wide, today. This has been a trend to be seen more clearly, more ominously, since the ousters of the last great post-World War II leaders of Europe's post-war resurrection, such as President Charles de Gaulle and Chancellor Konrad Adenauer.

This subject of widespread academic incompetence in the teaching of economics has been a recurring issue of my memorable, 1971 and later debates with spokesmen for leading academic economists. It came up yet once more, in a press conference which I held at Strasbourg this past Wednesday, (Dec. 17, 2008) In a press report on that subject, by Corriere della Sera during the same and the following day, notably, Corriere wrote: "LaRouche goes back to the XVIII century and to the [first] Secretary of the Treasury, Alexander Hamilton," as, in fact, did U.S. President Franklin D. Roosevelt. Corriere was correct on precisely this point.

Looking back toward the fateful inauguration of President Harry Truman, we must recognize that the U.S. government's fiscal year 1967-1968, is notable as the point in the history of the post-President Franklin Roosevelt U.S. economy, at which the U.S. economy reached a net down-turn in physical, as distinct from merely monetary output per capita and per square kilometer, a downturn which has not merely persisted, but accelerated, from that time to the present day. An earlier, but less severe decline had been characteristic of the post-Franklin Roosevelt U.S.A., a decline in rate of growth caused by the policies under Presidents Harry S Truman and Dwight Eisenhower, as reflected in what I had forecast, in Summer-Autumn 1956, as an oncoming deep recession to hit approximately February 1957.

Later, there had been a partial, even promising resurgence of the economy under President John F. Kennedy, a resurgence which ended with the assassination of that President, and the consequent, fraudulent decision to send the U.S.A. to a war in the region of Indo-China. However, although the long, useless, wasting warfare in Indo-China, did contribute significantly to the ruin of the U.S. economy, it was not the actual cause of that collapse of the U.S. economy which has continued up to the present point of a global, general, chain-reaction mode of physical breakdown-crisis which brings the world as a whole to the brink of a threatened, prolonged, planet-wide "new dark age" now.

During most of my adult lifetime's experience since what is called World War II, there has been a dwindling, now tiny fraction of professed economists who have been competent; but, in each such latter case, the competence was gained despite, not because of the teaching of that subject for which graduates in economics from leading universities of the post-Franklin Roosevelt decades had been awarded their professional titles.

This crisis is not a U.S. failure, but a global one, despite those exceptional, known, or little known figures who have been of relevance for understanding the unfolding character of our presently looming global tragedy. For example, the incompetence which the Soviet and other Marxists have shared with their academic and political rivals in Europe and the Americas, is a direct outcome of the influence on scientific thinking of the foolish followers of the Seventeenth Century's Rene Descartes, and the Eighteenth Century's radical reductionists David Hume, Abraham de Moivre, Jean le Rond D'Alembert, and Leonhard Euler, et al. This was the characteristic incompetence of such followers of the British East India Company's Haileybury school as the plagiarist of A.R.J. Turgot, Adam Smith, as of Smith's avowed follower Karl Marx, or as the standpoint of Immanuel Kant who dared not publish his famous Critiques until the great Moses Mendelssohn was, from Kant's standpoint, safely dead.[3]

The world did not fail us. The examples of competent heroes, variously prominent or little recognized, are evidence of the contrary, willful sources of our presently looming threat of a planetary tragedy.

Economics As Science
What might have been taught as a competent approach to the subject of economy, would be essentially a branch of physical science, specifically the viewpoint of physical science from the vantage-point of the discoveries of Gottfried Leibniz and Bernhard Riemann, or, a refined view of that work of Leibniz and Riemann provided by considering the discovery of the concepts of Biosphere and Noösphere by Academician V.I. Vernadsky.

To wit: There is nothing mysterious in this bit of irony. The only science of economy which has existed in any part of modern European civilization, is that which was introduced by Gottfried Leibniz, which was an explicitly anti-Cartesian science of the dynamics of physical economy (rather than monetarist varieties of economy). Thus, simply said, the incompetence prevailing among most of the nations' so-called "economics experts" today, is a product of that on which they, and misguided governments, have premised their stated academic claims to competence in this field.

Despite the numerous, important, and even great achievements within the work of physical science generally, these individual achievements have become, more and more, notable exceptions to the more general trend launched by the replacement of such leaders of France's Ecole Polytechnique as Gaspard Monge and Lazare Carnot, by the British-appointed charlatans Laplace and Cauchy. Despite the circles of Alexander von Humboldt, Carl F. Gauss, Lejeune Dirichlet, Bernhard Riemann, Max Planck, and Albert Einstein, the Twentieth Century's science emerged as dominated, as a current trend, by a succession of hoaxsters typified by, first, the mechanistic nonsense of Ernst Mach and, soon after that, the psychotic numerology of the evil Bertrand Russell and such among his typical dupes as Professor Norbert Wiener, John von Neumann, and the Russellite Cambridge school of systems analysis.[4]

The marker of this long trend in corruption of the teaching of Anglophile "science" has been that cult of the practitioner of black magic, Isaac Newton (who, probably, to his credit, actually discovered nothing), but who has been credited with the discovery of the mathematical expression for gravitation which was known, on published record, and in massive detail, by Johannes Kepler from whom Newton's boosters pilfered that mathematical formulation.

Competent instruction in economics will reappear in universities and kindred institutions, only if, or when what passes currently for competence in such institutions, today, has been suitably replaced.

I explain the nature of the widespread incompetence of the economic departments of universities and kindred institutions. My emphasis is upon economics; but, it can not be competently overlooked, especially after considering the wreckage of the world's economy now, that competent economics is a branch of physical science, not the childish witchcraft of mere monetary and related statistics.

Let us therefore resolve to learn this lesson before it comes too late to rescue the planet from the present lurch at the brink of a planetary new dark age.

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