(22)    18 Dec 93  14:50:42                                    Cost: 0
By: UUCP, In*Touch (1:2613/333@fidonet)
To: Glenda Stocks
Re: Pt 1/3: America's Revolutionary Economic Heritage
St: Pvt Rcvd
------------------------------------------------------------
From: ur-valhalla!ccs.covici.com!covici



America's Revolutionary Economic Heritage

by Robert Ingraham

In the recent period, Americans have witnessed with shock the
devastation resulting from the floods in the Mississippi River
Valley.  Estimates of the flood damage have now risen to as
much as $20 billion, and, if the pattern of government response
to other recent economic disasters holds true, there is little
likelihood of rapid economic recovery for that region. In 1989,
the Loma Prieta earthquake hit northern California and in 1992
Hurricane Andrew ripped through southern Florida. These regions
have yet to recover economically or to rebuild destroyed infrastructure.

We live in a country with decaying bridges, water systems, roads
and inner cities. Budget cuts are hitting schools, libraries,
and health care in virtually all of our states and counties.
Our manufacturing base is disappearing. Steel and machine tool
production are gone, and even the linchpins of what was falsely
portrayed as the so-called ``Reagan recovery''--aerospace and
high-tech industries--are in a tailspin. Our nation, which 24
years ago landed a man on the Moon, now seems incapable of maintaining
and modernizing even the most basic of national economic needs.

The question now posed to the populace is how can we as a nation
reverse this economic malaise and return to policies which will
bring economic rejuvenation and a promising future for our youth.
Populist antiestablishment rhetoric will not work. Simplistic
calls to ``balance the budget,'' ``deport the illegal immigrants''
and ``throw the bums out of Washington'' are just that, simplistic
slogans designed to mislead desperate people, people who are
in fact almost completely ignorant about the real economic history
of America and the economic policies which made America great
to begin with.

The only solution to our present crisis is to return America
to what 150 years ago was known as the ``American System'' of
economics. Many people have all kinds of opinions about what
type of economic policies were the original foundation for the
United States of America, but since very, very few citizens
have seriously researched this issue, and since most elementary
and secondary schools completely misrepresent American history,
most people's opinions on this subject are wrong.

From its inception, and particularly beginning in 1789, America
pursued a revolutionary economic path.  The repercussions from
America's economic revolution changed the course of history
and inspired patriots and nation-builders all over the world.
This article is an attempt to make readers cognizant of some
of the principal ideas underlying the American System. It is
also the story of a brief period of American history, the years
from 1825 to 1832 and the battle which took place at that time
between the patriotic proponents of the American System and
their enemies who sought to destroy it.

The hero of our story is Friedrich List, a man virtually unknown
today, but one of the most influential thinkers of the past
200 years. List's allies included such men as Mathew Carey,
Hezekiah Niles, and Charles Ingersoll, again men unknown today
but giants of American history. This article is the story of
their fight in the 1820s and 1830s to defend the American System
from its enemies, not today's Hollywood myths about America,
but the real American economic system designed by Alexander
Hamilton between 1789 and 1793.

Hamilton's Revolution

Most Americans rightly view the American Revolution as one of
the greatest political revolutions in history. What is not as
widely understood is that our founding fathers also created
a profound {economic} revolution, and that these were not two
separate revolutions, but rather two coherent aspects of one
revolution.

The Declaration of Independence states:

``We hold these truths to be self-evident, that all men are
created equal; that they are endowed by their Creator with certain
inalienable rights.... That to secure these rights, governments
are instituted among men, deriving their just powers from the
consent of the governed....''

The U.S. Constitution reads:  ``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 of the United States of America.''

These philosophical principles enunciated in our Declaration
of Independence and Constitution contained for our founding
fathers, just as they should hold for us today, very specific
implications as to how men should and must organize society
to ensure not only the future existence of the Republic, but
the continuing creative role of the individual citizen in that
republic. America, more than any other nation in modern history,
was founded on the recognized sacredness of the human individual.
The premise that all men ``are endowed by their Creator with
certain inalienable rights'' and that ``governments are instituted
among men, deriving their just powers from the consent of the
governed'' contains a clear epistemological message and a recognition
of the creative potential of each sovereign citizen to improve
and enrich society through his or her personal initiatives.

Grounded in this philosophical outlook, George Washington's
first four-year presidential term gave birth to the most dramatic
economic revolution in modern history. Between 1789 and 1793
Washington's Treasury Secretary Alexander Hamilton issued four
reports which created the economic foundation of the new republic.
These reports, {The First Report on Public Credit, The Second
Report on Public Credit, The Report on the National Bank} and
{The Report on the Subject of Manufactures} defined the idea
of a ``national economy,'' that is, that a republic of citizens
must have sovereign control over its own economic affairs, and
not be at the mercy of British or other international banking
forces who control what is erroneously called the ``free market.''

Hamilton argues that a republic of free citizens can guarantee
its future existence only if it fosters rapid development of
manufacturing, technology, new inventions, and rising skill
levels and educational levels of its population. The national
government, as an entity which derives its ``just powers from
the consent of the governed'' is obligated to originate policies
which will provide the framework whereby the necessary national
economic development can occur.

As Hamilton says in his {Report on Manufactures}:

``The fabrications of machines, in numerous instances, becoming
itself a distinct trade, and the Artist who follows it, has
all the advantages ...  for improvement in his particular art;
and in both ways the invention and application of machinery
are extended.  And from these causes united, the mere separation
of the occupation of the cultivator, from that of the Artificer,
has the effect of augmenting the productive powers of labour,
and with them, the total mass of the revenue of a Country.''

The National Bank

The cornerstone of Hamilton's program was the National Bank
through which the nation's credit could be directed into areas
of productive investment, manufacturing, and internal improvements
(canals, bridges, etc). To complement the policies of the bank,
Hamilton proposed a program of protective tariffs, tax policies
to promote investment in new industries and in-depth infrastructure
development. These policies became known as the ``American System
of Economics,'' to distinguish them from the British colonial
economic policies.

Under the British system, people were not citizens, but subjects;
they had no God-given ``inalienable'' rights.  British colonial
and ``free trade'' policies were based on subjugating and looting
weaker peoples. Theirs was a policy of control, control over
financial resources, control over raw materials and control
of the lives of their subjects. The American System, Hamilton's
system, sought to safeguard the creative spark in each individual
citizen, knowing that through the initiatives, inventions and,
entrepreneurship of such free citizens the nation could be ensured
a productive future.

In this sense the American System is the very specific inheritor
of the concepts of the fifteenth-century Platonic Florentine
Renaissance and a true representative of the Christian notion
of {imago viva Dei}, man in the living image of God.

Under the First and Second National Banks, the economic growth
of the nation was astounding. Most Americans will remember from
their history books the stories about the Erie Canal, the development
of the steam engine, and the invention of various farm machinery.
What is not understood by people today is why such economic
development was so rapid then and seems so impossible now. Foundries,
iron works, textile mills, and production of farm implements
flourished as America was industrialized. The Cumberland National
Road, canals, and infant railroads were built under a deliberate
American System policy of national economic development.

In popular American history books, the person who is most identified
with the term American System is Henry Clay, who campaigned
for President in 1824, 1828 and 1832 on a three-point American
System platform of 1) a national bank,

2)  internal improvements and 3) protective tariffs. These
were the publicly acknowledged issues of the day. In fact, from
the time of Alexander Hamilton all the way up through the Civil
War, the term American System had a very {specific} meaning
for Americans. It was not some fuzzy, debatable idea. People
knew exactly what the American System was, something that cannot
be said for the public today.

During the 1820s and 1830s, Henry Clay, Friedrich List, Mathew
Carey and others conducted a political and educational mobilization
to defend the American System from its enemies. The First National
Bank had been shut down in 1811 and only rechartered as the
Second National Bank in 1816 after the near catastrophe of the
War of 1812 proved the urgent need for it. The Second Bank was
saved in 1818 and again in 1822 only through the Supreme Court
rulings of John Marshall in {McCulloch vs. Maryland} and {Osborne
vs. The Bank of the United States}.

By the 1820s, America was undergoing a profound change in national
character. Many of the leading families of New England, including
the Cabots, Higginsons, and Sedgwicks had been recruited as
junior partners in the British East Indies opium trade, and
were, in philosophical outlook as well as political allegiance,
outright traitors. Slavery, once largely confined to the tobacco-growing
regions of the Southeast, began a period of massive expansion
as the cotton economy spread throughout the entire South.  These
slave owners and drug runners, together with certain banking
allies in New York and Boston, were openly arrayed against the
American System and determined to impose British free trade
policies in order to more ``freely'' conduct their perverse
economic activity.

These were the years in the period after the Battle of Waterloo
when the British Empire, victorious in arms and unchallenged
economically, truly emerged as a ``one-world'' empire. These
oligarchs viewed their control over humanity as a means for
economic looting and increased political power.  To fully achieve
these ends, they knew that America and Hamilton's American System
must be destroyed.

List in America

In June of 1825, the German republican and economist Friedrich
List arrived in the United States at the invitation of the Marquis
de Lafayette.  Lafayette was then in the middle of a two-year
tour of the United States as part of a campaign to politically
strengthen the proponents of the American System. List had been
imprisoned, stripped of his German citizenship, and deported
from Germany for his political activities in opposition to the
repressive policies of the post-1815 ``Holy Alliance.'' In 1823,
he had met Lafayette in Paris and become intimately acquainted
with the pro-American international networks with which Lafayette
was associated.

In America, List found a nation at a political crossroads. The
American System was under assault from an alliance of pro-British
opium merchants, slave owners, and bankers.  Their goal was
the abolition of the National Bank, the removal of tariffs and
a financial system based on usury and speculation. Make no mistake
about it, these goals were the product of a pro-British treasonous
conspiracy. The leaders of the conspiracy were members of ``free
trade clubs'' many of which were official branches of free trade
societies headquartered in London, and many of these individuals
later joined the infamous pro-Confederacy Cobden Clubs, which
were also based in London.

In his major economic work, {The National System of Political
Economy} (hereafter {National System}), List would write in
chapter nine that only one course existed whereby the American
Economic Revolution could be destroyed.  If America would allow
the deindustrialization of the Northeast through the adoption
of free trade and the simultaneous spread of (primarily slave-based)
agriculture throughout the South and West, then the country
could be ruined economically and subverted politically. This
formulation became, in fact, the organizing perspective of the
pro-British slave and opium faction through the 1830s and 1840s,
and their success in achieving it led directly to the crisis
of the 1850s and the U.S. Civil War.

In 1825, the immediate goal of the treason faction was to reduce
and eventually eliminate the national tariff. Support for the
tariff was led by the Pennsylvania Society for the Promotion
of Manufactures and the Mechanic Arts (hereafter Pennsylvania
Society), an organization originally founded by Alexander Hamilton
under the name Philadelphia Society for the Promotion of National
Industry.

The first protective tariff was proposed by Hamilton and enacted
into law in 1789. Although this was a modest tariff, it established,
as List points out, a precedent for the concept and the purpose
of a protective tariff.  List insists that the amount of the
tariff is irrelevant. The principle of protecting domestic producers
and ensuring orderly productive economic growth was paramount,
no matter how high the tariff had to be.

By the 1820s, Britain was dumping huge amounts of woolens, cloth
and manufactured goods on America, frequently below cost, in
order to bankrupt American producers and ensure a British monopoly.
To meet this threat the national tariff had been increased in
1820 and again in 1824, largely through the efforts of Henry
Clay, but these tariffs proved insufficient to prevent British
dumping. In 1827, the Pennsylvania Society called for a further
increase in the tariff. During these tariff battles, Mathew
Carey launched a national educational effort to familiarize
a new generation of Americans with the founding principles of
the American System. In 1824, his printing company republished
Hamilton's {Report on Manufactures}, a work out of print for
almost 30 years, and he brought out a second printing of the
same work in 1827. What today's history books quaintly refer
to as the 1820s ``tariff fight'' was in reality a battle over
the continued existence of the American System itself.

To spur the drive for a new tariff, the Pennsylvania Society
organized a national protariff convention which was held in
Harrisburg, Pa. on July 30, 1827, and Friedrich List was enlisted
to author a series of twelve letters to organize support for
the convention.  These letters were published simultaneously
in more than 50 newspapers, then collected and printed in pamphlet
form under the title ``Outlines of American Political Economy.''
Thousands of copies of the pamphlet were distributed throughout
the country as part of the organizing campaign. National sentiment
was rallied behind the tariff, and as a result in 1828 the new
tariff was signed into law by President John Quincy Adams.

List Versus the Free Traders

In writing the ``Outlines of American Political Economy,'' List
was not content with merely describing the practical benefits
of the proposed tariff. He used this work both to capture the
essential character of the American System itself and to demolish
the opposing enemy ideas of Adam Smith.  On the very first page
he begins:

``I confine my exertions, therefore, solely to the refutation
of the theory of Adam Smith and Co., the fundamental errors
of which have not yet been understood so clearly as they ought
to be.... I believe it to be a duty of the General Convention
at Harrisburg, not only to support the interests of the wool
growers and wool manufacturers, but to lay the axe to the root
of the tree, by declaring the system of Adam Smith and Co. to
be erroneous--by declaring war against it on the part of the
American System--by inviting literary men to uncover its errors,
and to write popular lectures on the American System--and, lastly,
by requesting the Governments of the different states, as well
as the general Government to support the study of the American
System in the different colleges, universities and literary
institutions under their auspices.''

Throughout the work, List reiterates two themes--first, that
the government as an embodiment of the nation's citizens has
a duty to create the conditions for continued useful economic
growth. In particular, he emphasizes policy which will increase
the ``productive powers'' of society by emphasizing those types
of manufacturing growth, infrastructure, and new inventions
which will result in an orderly expansion of the economy and
increased productive skills and living standards of the population.
He shows that the tariffs of 1820 and 1824, far from benefitting
a few rich industrialists, created economic opportunities and
prosperity for tens of thousands of farmers, wool manufacturers,
and individual business entrepreneurs, and he describes how
this prosperity was felt by working people, using the example
of Lowell, Ma. where over 100 factory workers reported personal
savings accounts of more than $1,000, a substantial amount in
those days.

List ridicules Adam Smith's free trade dictum {laissez faire
et laissez passer}, showing that none of this prosperity, in
fact not even the very existence of the nation would be possible
without government intervention. In Letter Six he says:

``Without interference of national power there is no security,
no faith in coined money ... no security for the health of seaports,
no security for the commerce at sea by the aid of a navy ...
no titles to land, no patents, no copyright, no canals and railroads.
Industry left entirely to itself would soon fall to ruin, and
a nation letting everything alone would commit suicide.''

The second theme which runs throughout List's ``Outline....''
is that the American System is the only method whereby the productive
potential of the individual citizen can be nurtured, developed,
and unleashed. The American System is not a policy of government
control; it is the only policy in which sustained individual
creativity can operate freely. List stresses that the unrestricted
so-called ``free market'' leads directly to monopoly and despotism,
with wealth and power concentrated in the hands of a few. The
``free market'' is in reality an enemy strategy, designed by
British oligarchs to subvert and control America. The American
System, Hamilton's system, is truly revolutionary because for
the first time in history a nation's economic policy is constitutionally
in coherence with the notion of the creative divine spark resident
in each individual human being.

In Letter Nine, List demonstrates how the British Empire has
used ``free trade'' to enslave colonies worldwide, and how in
their hatred of and determination to erase the American System
they are determined to force American acquiescence to such an
imperial world order. He issues an urgent warning concerning
the spread of the slave/cotton economy in the South as a flank
of the British schemes, and in the final letter he concludes
with an impassioned argument to industrialize the South as the
only means to stop this British plot.

List Versus the Boston Drug-Runners

The success of the Harrisburg convention generated panic among
the pro-British traitors. Free trade societies were mobilized
throughout the country to attack the work of the convention
and to refute List's ``Outline....'' Periodicals such as Condy
Raguet's {Free Trade Advocate} led the pack of pro-British hyenas.
Meetings were called in all of the states to spread agitation
and lies about the tariff. At one of these meetings in Charleston,
S.C., Thomas Cooper issued the first call for southern secession.
Cooper, the author of the pro-Adam Smith {Lectures on Political
Economy,} later personally trained many of South Carolina's
most rabid secessionists who led the nation into Civil War.
The Boston free trade meeting issued a written diatribe by Henry
Lee under the title {Report of a Committee of the Citizens of
Boston}. As 1827 ended, this report was reprinted and circulated
all over the country as the definitive broadside against the
proposed tariff.

The {Boston Report}'s author, Henry Lee, was a leading member
of this treasonous clique. His mother was a Cabot, his father
a pro-British merchant involved in the India opium trade. Lee,
a graduate of George Bush's alma mater, Phillips Andover Academy,
travelled to British India in 1811 to work under his father
for a number of years. Together with Theodore Sedgwick, he organized
the 1831 Free Trade Convention which brought together Boston
Brahmins and southern slave owners and provided a national platform
for Thomas Cooper's secessionist doctrines. At that convention,
Sedgwick denounced the American System as ``unjust and oppressive,''
and declared:  ``Fifty years ago the principle of free trade
was unknown. Adam Smith then rose as a sun to illuminate the
world.''

In 1832, Lee ran for vice-president on a secessionist ticket,
garnering South Carolina's 11 electoral votes. It was during
this campaign that Mathew Carey labeled the South Carolina secessionists
as ``the British Secret Service.'' Lee was also a lifelong friend
of both the notorious Richard Cobdon, the British intriguer
who devoted his life to destroying Friedrich List's influence,
and Albert Gallatin, the man who aided in the escape of Aaron
Burr, the murderer of Alexander Hamilton. Lee was also the author
of the 1832 free trade memorial supporting South Carolina's
nullification ordinance.

In early 1828, List was employed by Mathew Carey to write a
rebuttal to Lee's document. In his {Review of the Boston Report,}
List systematically refutes every argument raised by Lee. More
important, this essay, completely unknown today, is perhaps
the clearest document ever published exposing the British free
trade plot to destroy America. List begins:

``To distinguish (Lee's proposals) from the American System
we shall call it what it really appears to us to be, the English
or the Anti-American System.'' He continues: ``This is what
is urged upon us by the Boston Report, which we shall shew before
we have done with it, is written with a feeling wholly Anti-American,
and is advocating the cause of England as completely as if it
had been written in that country--indeed we have heard it intimated,
that some part of it was actually written in England. Improbable
as this may seem, we would ask our readers to examine for themselves
the hostile spirit it breathes to every thing that would make
us great, and we feel satisfied, they will agree with us in
opinion, that it would be difficult for a truly American heart,
ever to have given utterance to many of the insinuations against
us, which the report will hereafter be shown to contain. Mr.
Canning's and Mr.  Huskisson's [British prime ministers] principles
are the only principles we ought to adopt; or in other words,
we should be much better off to manufacture nothing at home,
go to England for every thing, and thus let Mr. Huskisson make
laws for us, which would bring us back to 1774, Colonies of
Great Britain!!''

List quotes extensively from Hamilton's {Report on Manufactures}
to the effect that the creation of a sovereign ``national''
economy is a prerequisite for economic development. He quotes
Hamilton on the urgency of securing the domestic market and
on the need for government support for infant manufacturing
and new inventions. He destroys the accusation that tariffs
are taxes by showing that tariffs result in new industry, whose
development will inevitably reduce the price of the commodities
in question.  He details the prosperity generated by the 1820
and 1824 tariffs, and, throughout the work, List continually
attacks the fallacies of supposed ``free markets,'' ``natural
prices,'' ``supply and demand,'' and other delusions. He exposes
how these ``cosmopolitical theories'' originated with the British
East India Company as a scheme to brainwash peoples into surrendering
their national sovereignties.

Dismantling the American System

The political offensive of Carey, List, Clay, and their allies
was successful, and in May of 1828 the new tariff was signed
into law. Dubbed the ``Tariff of Abominations'' by its opponents,
the new law established tariff levels of 44 percent. This tariff
level would stand as the highest in American history until Abraham
Lincoln set a tariff rate of almost 50 percent during the Civil
War (see chart).

In a very real sense, however, this 1828 fight was the last
major victory for the American System leadership. The antitariff
mobilization had crystallized the treasonous Boston-South Carolina
alliance which took increasing control over the emerging Democratic
Party. In November 1828, Andrew Jackson was elected President,
and between 1829 and 1841, Jackson and his successor Martin
Van Buren dismantled Hamilton's economic system. Under threat
of southern secession, the tariff was reduced in 1832 and again
in 1833. By 1855, America had adopted free trade with tariffs
below 5 percent.

In 1832, Jackson vetoed the rechartering of the National Bank,
shutting it down permanently in 1836 when its charter expired.
The President of the Bank, the great patriot Nicholas Biddle,
was driven from office, hounded and imprisoned prior to his
death in 1844. British agents rejoiced at his death with William
Cullen Bryant, national president of the Free Trade League penning
gloating editorials in {The New York Post,} demanding that Biddle
spend eternity in hell for his leadership of the bank.

In 1830, Jackson vetoed the Maysville Road Bill, reversing a
40 year policy of federal support for internal improvements
and establishing an antidevelopment policy he would continue
throughout his two terms.

The policies of Jackson and Van Buren, particularly after the
abolition of the National Bank, provoked an unprecedented financial
panic and depression. The ensuing political crisis resulted
in the election of the Whig presidential candidate William Henry
Harrison in 1840. Harrison campaigned on a platform of rechartering
the National Bank and restoring the American System.  Legislation
was drafted and introduced into Congress to restore the bank,
when only 30 days after his inauguration the healthy Harrison
suddenly died, a likely victim of assassination.  Congress passed
the legislation to restore the National Bank, but Harrison's
successor John Tyler vetoed the bill, despite the fact that
every member of the cabinet but Daniel Webster quit in protest.
Since Harrison's death, no U.S. President has ever attempted
to restore the National Bank.

Throughout the 1840s, northern manufacturing collapsed, accompanied
by the massive spread of the slave-cotton economy in the South,
particularly after the War with Mexico. By 1850, the American
System was dead, the nation in economic depression and facing
political dismemberment. Only the movement that resulted in
the candidacy of Abraham Lincoln saved the nation.

List's Legacy

Although he had become an American citizen and would remain
one until his death, List returned to Germany in 1831 and began
organizing networks in Europe with the aim of defeating British
imperial policy. He worked extensively in France with economists
Charles Dupin and Michel Chevalier. He developed collaborators
in Italy, Hungary, and Austria. In 1834, he was responsible
for the creation of the German Zollverein, the customs union
which paved the way for German political unity and national
economic development. In 1841, List published his economic masterpiece
{The National System of Political Economy}, and this book, together
with the writings of Mathew Carey and Henry Carey, spread the
ideas of the American Economic Revolution all over the globe
during the late nineteenth century.

In 1862 the ``American faction'' around Tsar Alexander II founded
the Russian National Bank, and in 1889 Sergei Witte translated
List's {National System} into Russian, using it to devise his
program for industrial development and railroad construction.
In Japan, Henry Carey's student Shigenobu Kuma, a leader of
the Meiji Restoration, founded a national bank in the 1870s,
leading to Japan's industrialization.  In 1924, Sun Yat-sen
founded the National Bank of China. List's writings were studied
by Kuomintang economists, and in {Chinese Economic Theory} Chiang
Kai-shek calls List the greatest of the western economists.

During the 1880s and 1890s, List's and Carey's writings were
translated and studied in India, Romania, Mexico, Argentina,
Brazil.  Patriots in those countries created national banks,
erected protective tariffs, and began to put the American System
into practice. These were not isolated developments in separate
counties. This was a continuation of the American Economic Revolution.
The American Revolution brought into existence a new type of
nation, based on national sovereignty, freedom, and economic
development. In the third letter of his ``Outlines of American
Political Economy,'' List states that once the American System
came into existence it immediately became the mortal enemy of
the British oligarchical system and that these two systems cannot
exit side by side.  Sooner or later, one of them will be universally
accepted throughout the world and the other will cease to exist.

The American System: True Free Enterprise

Some readers might question the relevance of this article with
comments like ``this is all very interesting history, but what
does it have to do with our problems today? These things all
happened 150 years ago, and times have changed.'' Such criticisms
display a complete lack of appreciation of the importance of
history and the implications of the American Revolution. Presently,
our only hope for national survival and world peace rests in
the revival of the American System. When the Declaration of
Independence stated ``all men are created equal and endowed
by their Creator with certain inalienable rights,'' it expressed
universal truth.  It was true then, it is true now, and it will
be true forever. These ideas defined a new type of nation which
recognizes as its founding principle the concept of individual
man made in the image of a creative rational deity.  In formulating
the American System, Hamilton, and his allies devised an economic
system in coherence with this image of man.

Such an approach has obvious implications for the present day.
Take the situation in the Mississippi River basin. Damage from
the recent floods is estimated at $20 billion, devastating a
region already plagued by a collapse of farm-related manufacturing
and the bankruptcy of family farms. The flood damage, however,
was preventable.  Thirty years ago, the Ralph Parsons Co.  proposed
to build a continent-wide water management and delivery system
known as NAWAPA (North American Water and Power Alliance), which,
if in place today would, have provided the flood control necessary
to harness the Mississippi. NAWAPA is the obvious modern example
of the type of water projects, canals, and internal improvements
built under the American System in the 1820s. Similarly, the
destruction of our Midwest farm economy could not have occurred
with a national bank in place with a mandate to provide credit
for manufacturing, agriculture, and other useful forms of production.

What the Federal Reserve and their Trilateral allies are doing
today is not free enterprise, it is oligarchism.  It is a monopolistic
financial looting operation which resembles nothing so closely
as the British opium and slave-running bankers of the nineteenth
century. In chapter twenty-one of his {National System}, List
describes such oligarchical thinking:

``Smith's school does not discern that the merchant may be accomplishing
his purpose (viz. gain of values by exchange) at the expense
of the agriculturalists and manufacturers, at the expense of
the nation's productive powers, and indeed of its independence.
It is all the same to him; and according to the character of
his business and occupation, he need not trouble himself much
respecting the manner in which the goods imported or exported
by him act on the morality, the prosperity, or the power of
the nation. He imports poisons as readily as medicines. He enervates
whole nations through opium and spirituous liquors. Whether
he by his importations and smuggling brings occupation and sustenance
to hundreds of thousands, or whether they are thereby reduced
to beggary, does not signify to him as a man of business, if
only his own balance sheet is increased thereby.''

Since the 1970s, America has been transformed from an industrial
and agricultural economy to a financial Sodom and Gomorrah.
In 1992, over $16 trillion were invested in futures and currency
markets, so-called financial derivatives. Recently George Soros,
one of the leading financial speculators, has waged monetary
warfare against the German and French currencies. This is the
actual freedom that Adam Smith represents--the freedom of international
speculators to attack sovereign nations and impoverish their
populations.

The U.S. Constitution, on the other hand, is clear in its moral
intent to foster productive growth and the creative role of
the individual. That is why it defines the rights to patents
for inventions and scientific discoveries and why it empowers
the federal government to regulate interstate and international
commerce.  Under real free enterprise, under the American System,
it is the duty of the government to guarantee the conditions
whereby free men can engage in useful commercial activity and
scientific discovery, both for their own benefit and as a means
of cumulatively advancing the productive powers of society.

In chapter seventeen of his {National System}, List describes
how this type of approach will create the first truly human
society in history, a society based on individual human creativity,
on genius. List describes an ancient barbarian society where
human worth is based on physical strength. He than describes
a medieval society where value is placed on artisanship and
skilled handiwork. It is only with the emergence of a society
based on continuing manufacturing, technological growth, and
scientific progress that the fostering of individual human creativity
becomes paramount to that society's continued existence. In
such a society, what is valued is not brute strength but the
human mind.

The Individual and the State

In concluding this article I wish to clarify some ideas about
precisely what the American System is and what it is not. It
is certainly the enemy of the oligarchical ``free market'' dominated
today by London and New York bankers, speculators and drug runners.
On the other hand it is {not} a ``planned economy.'' It is not
socialism, New-Dealism, social-democratic state-ism, or collectivism.
It is certainly not a policy of having the government tell individual
farmers, businessmen, and workers what they can and can't do.
This is necessary to say because today we have ranchers, small
businessmen, lumber producers, miners, fisherman, and others
who will tell you that they are being strangled by government
economic policy and regulations and that their most fervent
desire is to ``get the government off our backs and out of our
business.'' Although such antigovernment sentiment can become
misdirected, that does not make it any the less legitimate.
Producers need the freedom to produce. Farmers need the freedom
to grow food, and scientists need the freedom to invent. It
is the responsibility of the government to ensure that the preconditions
exist for such activity to occur, not to attempt to control
every step of the process.

Modern Western European thinkers are fond of speaking about
the ``problem of alienation in modern society.'' This disconnection
of the individual to any real political and economic power,
this existential dilemma, is in fact very real and is felt today
by millions of Americans who are being turned into servile consumers
and TV addicts. Collectivism and trendy versions of it such
as communitarianism provide fraudulent solutions by offering
the individual participation in decision making only if he is
willing to submerge his individual will in the group consensus.

This crisis of human identity has obviously worsened with the
onset of today's amoral postindustrial society, but in a very
real way this crisis can be traced back to the destruction of
the American System in the 1840s. In a world governed by the
British ``free-market,'' men are valued not for their creative
potential but the financial loot which can be extracted from
them. The solution to this crisis is a society in which children
are valued for their minds, given the education and tools to
be creative, and guaranteed the economic opportunity to apply
what they have learned. In such a society, each individual is
precious. That is the American System.

Bureaucracies do not compose music of genius, or make revolutionary
scientific inventions. Individuals do.  The purpose of the state
is to create the preconditions in which the citizenry may be
fruitfully creative.

This is not an unattainable goal.  It in fact was the founding
policy of this nation. The preconditions for achieving this
goal must include replacing the Federal Reserve with a National
Bank and taking back sovereign control over our economy. It
must include returning to an agroindustrial economy and a commitment
to scientific progress. It must very definitely include reversing
the satanic new-age brainwashing going on in our schools.  If
we as a people do these things, if we return to the American
System, our future potential is unlimited.

For Further Reading

{The National System of Political Economy} by Friedrich List,
Augustus Kelley Publishers, Fairfield, N.J.

{Review of the Boston Report} by F. List, Garland Publishing,
Inc., New York and London.

``Outlines of American Political Economy,'' by F. List, Samuel
Parker and Co., Philadelphia.

{The Papers of Alexander Hamilton,} Columbia University Press,
New York and London.

``In Defense of Alexander Hamilton,'' by Bruce Khouri, {The
New Federalist,} July 14, 21, 29, 1989.

{Treason in America} by Anton Chaitkin, New Benjamin Franklin
House, New York City.

{Andrew Jackson and The Bank War} by Robert Remini, W.W. Norton
and Co.  Inc., New York.

--
         John Covici
          covici@ccs.covici.com