What President Trump Can Do With The American System 2.0 - Flipbook - Page 13
increase the ability of the labor force to produce
what’s needed to support society—increasing
what Hamilton called the productive power of
labor. Further, the so-called natural resources
that are the basis for the operations of an entire
economy are not 昀椀xed. What is and is not available for use as a natural resource is determined
by the level of science, technology, and culture
of a society.
In the late-1970s, Mr. LaRouche developed a
framework to assess if an economy is growing
(negentropic) or collapsing (entropic) in physical
terms.2 We start by dividing the entire population into two groups: 昀椀rst, productive labor
households, which include the population living in households whose primary wage-earner
is employed in the production of useful, tangible
output in agriculture, manufacturing, construction, mining, energy production, and freight
transport; second, the households supporting
the rest of the population (those households
whose primary wage-earner is not engaged in
production of the 昀椀rst type) or overhead households.3 We’re identifying the physical goods that
society requires to survive and isolating the section of the labor force responsible for their production.
2. Here we’re largely following: LaRouche, Lyndon H.
Jr., Why Credit Can Be Greatly Expanded Without Adding to
In昀氀ation, New York, National Democratic Policy Committee, 1980; and, from 1984, LaRouche, Lyndon H. Jr., So, You
Wish to Learn All About Economics?, New York, New Benjamin Franklin House, second edition, 1995.
3. Within overhead, we could also further distinguish
between categories of overhead that are necessary and indispensable vs those that are wasteful.
Promethean Action
The traditional economic metric of GDP includes the “value” of wasteful activities (including legalized drug sales, prostitution, and
gambling, to cite some extreme examples) which
can be meaningless, if not outright destructive,
to the ability of an economy to sustain itself in
physical terms. By the GDP approach, we’re
measuring the volume of total economic activity,
regardless of whether the activity contributes to
what’s needed to sustain society physically. By
Mr. LaRouche’s physical economic approach,
we’re focusing on the section of the labor force
directly involved in producing what’s needed to
keep society running in physical terms, allowing
us to isolate and examine what causes changes in their
ability to produce those goods.
Because these necessary physical goods are
both the input provided to the productive labor
force and the output of their productive activities, this creates the basis to measure an economy as if
it were a thermodynamic system. We separate the total physical output of the productive labor force
into di昀昀erent categories, based on how those
tangible goods are to be used. We’re 昀椀rst interested in the ability of the productive labor force
to produce the so-called energy of the system—
the physical goods required to keep society running
at its present technological level—vs the production
of additional free energy—the physical goods available to invest in new areas and new upgrades (the net
operating pro昀椀t for the economy as a whole).
This view of the economy, as if it were a closed
thermodynamic process, allows us to isolate and
understand what causes changes in the ability of the productive labor force to produce the
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