For a More Progressively Evolving Society

Friday, February 25, 2011

Prout - An Overview

Prout - An Overview

Prout (an acronym for Progressive Utilisation Theory) is a social and economic system first proposed by the eminent Indian philosopher, Srii Prabhat Ranjan Sarkar (1921-1990). It is arguably the only socio-economic theory to emerge out of the third world that has direct applicability to the developed world.
1.  Prout attempts to draw on the environmental, social and spiritual wisdom that humans have accumulated over thousands of years of struggle, discovery and experimentation. It opposes social dogmas based on ancient texts.   

2.  A Proutist economy is based on the cooperative system. It is community based, decentralised and promotes an economic voice for women. Prout satisfies human needs by promoting the utilisation and rational distribution of all resources, physical, mental and spiritual.

3.  Prout also has a program for globalisation based on the concept of political centralisation and economic decentralisation

4.  Prout has a theory of class and a historical analysis based on the concept of collective psychology.

Building Communities
The primary goal of Prout is to build healthy communities which, like living systems, need to be nurtured and cultivated. An economic system cannot be divorced from the people, the community and the bioregion in which it is embedded. Therefore Prout opposes the neo-liberal agenda of deregulation, privatisation and free trade. These policies bleed wealth from local communities and the already impoverished ‘third world’ into a comparatively few centres of global economic dominance.
Prout advocates a constitutional guarantee that all persons have the right to obtain their minimum requirements of life, in particular food, education, health care, clothing and housing. After that, surplus wealth can be distributed as determined by the community values of the day. Prout also promotes a system of cooperative community budgets to determine the shares of annual aggregate income going to households, government and business. 

New Definitions Of Economic Progress
Per capita GDP is a defective measure of economic progress. It counts every new nuclear missile, tourist casino and cigarette sale as positive growth – as contributing to prosperity. It ignores tremendous disparities in wealth between rich and poor.
Prout recognises that human beings are not just Homo economicus. We have intellectual, emotional, cultural, social and spiritual needs in addition to the economically obvious physical needs. To satisfy these needs requires the management of many kinds of 'subtle' capital in addition to physical and financial capital. Satisfying these diverse needs underlies our productive activity and our community life. A healthy community with a healthy economy requires …
  • An expanded definition of economic resources: Future economic theory and practice will have to come to terms with a much broader definition of economic resources to satisfy the spectrum of human needs.
  • Multi-bottom line accounting: Prout supports the introduction of triple- and multi-bottom-line accounting to ensure efficient management of the full spectrum of resources.
  • New economic indicators: To measure social and economic progress, Prout embraces alternative economic indicators such as those developed by the Calvert-Henderson group and others.
  • Resource taxation: Prout supports shifting the tax base by gradually replacing personal income tax with a rational system of taxes on finite natural resources.
Economic Democracy

Economic democracy in Prout is achieved through 1. economic decentralisation; 2. a cooperative based economy; and 3. a significant voice for women in economic planning and decision making. Local communities can solve local economic problems more easily because they are closer to the source of the problem and by definition the problems are on a smaller scale. Economic decentralisation also decentralises population and so contributes to sustainable population centres.
Sarkar argues for five principles of economic decentralisation:
  1. Local people should have control of local resources.
  2. Production should be guided by local consumption needs and not profit motive.
  3. Production and distribution should be organised through the cooperative system.
  4. Local people should have employment priority in local industry.
  5. A community should not import what can be produced locally

Three Tiers Of Enterprise

Prout divides the industrial system into three sectors:
  1. Most businesses, especially those producing the essential requirements of life, are best operated as cooperatives. For example, the agricultural and housing sectors fall into this category.
  2. Businesses too small for cooperative management and producing non-essential goods are private enterprises.
  3. Very large-scale industries and key/strategic industries are public utilities. Key industries operate on a no-profit, no-loss basis.
Prout advocates a monetary system managed by a central bank run as a public utility with numerous cooperative banks providing ordinary people with their banking needs.
Prout supports the development of a balanced economy, in which the agricultural sector, agro- and agrico-industries, manufacturing and the service sectors all develop in balanced proportion. The agricultural and manufacturing sectors of so-called developed countries are being decimated by free trade. This is a worrying trend.
A cooperative economy will encourage a large not-for-profit sector which contributes to the accumulation of social capital. It would also recognise the productive role played by mothers and carers not employed within the formal economy. 

In the long term, Prout envisages the establishment of a system of tiered communities from the local to the global level. The lowest level would be the block, a bioregion having about 100,000 inhabitants. At the global level, a world government is essential to solve pressing problems such as global warming and human rights abuses. However a world government cannot be imposed from the top. When local communities around the world have economic security, they will naturally see the advantages of a world administration. Prout promotes the concept of political centralisation and economic decentralisation. This approach can make globalisation work for all . 

How Will It Happen?
The contemporary world is threatened by three main sources of instability. First, economic instability arises from gross concentration of wealth which generates speculative bubbles, most obvious today in the equities, futures and foreign exchange markets. All speculative bubbles inevitably burst. The flip side of wealth concentration is institutionalised poverty encouraged by policies of the World Bank, IMF and the World Trade Organisation. So the second source of instability is social instability, which in the worst case is expressed as violence and war. A third source of instability comes from environmental degradation and climate change. Given these sources of instability, each of them potentially catastrophic, it is hard to imagine how ‘business as usual’ can continue much longer.
According to Prout, societies transform themselves through dialectical struggle. The existing order (the thesis) in decay is gradually or rapidly replaced by progressive ideas (the antithesis). The antithesis to capitalism is already emerging. Civil society including community, women’s, workers, indigenous, artists and green organisations all over the world are setting the agenda where large business corporations and governments have failed. 

Personal Change

An important lesson learned by political and social activists in recent decades, and arising in particular from women’s experience of social struggle, is that social change requires personal change. Outer change must be accompanied by inner change. Keeping this in mind, Prout encourages three kinds of personal transformation:
  • Universal outlook: the struggle to accept all women and men, regardless of social status, economic class, cultural or ethnic background, as equal members of one universal family. Prout is the application of family spirit in the social and economic arena.
  • Ethical lifestyle:   Personal ethics underpin all political and economic practice. A limited vision of ethics is contributing to the disintegration of contemporary society. To build a healthy society, Prout promotes the acceptance of cardinal human values.
  • Spirituality: This is the constant endeavour to maintain one’s connection with Spirit, the well-spring of hope and the source of all that is sweet and subtle in human life. Many people consider the regular practice of meditation or contemplation to be helpful in this regard.
This article, edited, from PROUT Institute of Australia website,

Tuesday, February 22, 2011

Capitalism, Marxism and NeoHumanist Economics

Capitalism, Marxism and NeoHumanist Economics

by Jayanta Kumar

The link between neo-humanism and economics is that NeoHumanism provides the ethical framework and value system such that all economic activity relates to human welfare. Existing schools of economics (Marxism, capitalism, Keynesianism) are based on materialist values and vested interest. We need to move from materialist economics to NeoHumanist economics, wherein the welfare of the common people is paramount! 

The essential link between NeoHumanism and economics is that NeoHumanism provides an ethical framework and value system within which all economic activity can be directly related to human welfare.  The major schools of economic thought, whether capitalist or Marxist, are based upon materialist values and vested interests, which prevent them actuating the fullest possibilities of human welfare.

NeoHumanism advances a new value system based on the principle of social equality, rather than self-interest, and gives a new perspective on the integration of theories of social and spiritual liberation.  Under the influence of NeoHumanism, economics become a means of liberation from material problems rather than a tool of exploitation and enslavement.

The science of economics is over 200 years old and it first developed as a theoretical justification for capitalism.  Its major branches have either explicitly supported or opposed capitalist values, exemplified by classical and neo-classical schools of economic thought and Marxism respectively.  Smith, the father of modern economics, published “Wealth of Nations” in 1776 and argued that human conduct is actuated by six motives – self-love, sympathy, the desire to be free, sense of propriety, a habit of labor, and the propensity to barter and exchange one thing for another.  Each person is the best judge of their own interests and should be left free to pursue their interests in their own way.  If people are left to themselves they will not only attain their objectives, but they will also further the common good.  This result is assured because providence has made society into a system in which the natural order prevails.  The different natures of human conduct are so carefully balanced that the benefit of one does not conflict with the good of all.  Thus Smith considered that in pursuing their own interests each individual was “led by an invisible hand to promote an end which was not part of their intention.” In this way the individual promoted the interests of society more effectively than if they had consciously set out to do so.  In essence Smith believed that that public good arises out of acquisitiveness, individualism and self-interest.  The work of Smith and later classical economists like Ricardo and Malthus provided the first theoretical foundation for capitalism, and the philosophical justification for policies like opposition to all forms of state intervention in business and commerce, support for colonialism and later imperialism and strong advocation for laissez-faire economics.

Marx was an economist in the classical tradition but he was also a revolutionary.  While Smith and Ricardo were concerned with understanding the nature of capitalist production and modifying it so that it ran more efficiently, Marx saw capitalism as an unjust, exploitative social order that must be overthrown.  Marx rejected the acquisitive, individualistic and exploitative aspects of classical economic theory and formulated a new theory of collectivism, which included working class interests.  Marxism is a comprehensive system of thought that includes theories on philosophy, history, economics and politics and Marx’s own claim was that it was necessary, through the study of political economy, to discover the laws of social development and thus acquire a theoretical weapon to make political action more potent.  Unlike Smith, Marx did not rely on perceptions of human nature as the basis of his theories but instead set out to analyze objective social forces.

Both classical economic theory and Marxism are materialist theories – while the former is based upon self-interest, profit and exploitation, the later is based on collectivism, poverty and suppression.  Both branches, in an effort to remain relevant to contemporary social conditions, are projected as empirical, value-free and universal.  But both suffer from major defects and distortions as they struggle to reconcile obsolete theories with modern social practice.

Shrii Prabhat Rainjan Sarkar gave a unique analysis of the defects of capitalism and communism based upon individual and collective psychic pabula.  His analysis reflects the view that the essential characteristic of human life is progressive forward movement – expansion and development in all spheres of life – towards the supreme goal of infinite consciousness.  Mind evolved out of matter and its natural tendency is to flow back towards matter.  Where this flow is unchecked or encouraged, psychic degeneration occurs.  Conversely, where the mind is chanalized towards consciousness, sublime spiritual expressions emanate.

In both capitalism and communism the basic tendency of subtler human propensities is towards the acquisition and enjoyment of matter.  In capitalism psychic pabula is unchecked – the mind has free reign to run after all kinds of pleasure.  The very nature of capitalist society seduces, entices and cajoles the mind to appropriate and consume matter packaged in innumerable attractive forms.  This leads to the deprivation of general people, making them victims of exploitation by vested interest.  As a consequence they are deficient in the minimum essentialities of life, with little prospect of securing the purchasing capacity necessary to guarantee these essentialities.  Vested interests feed on this injustice and social disorder results as society is polarized into the rich exploiters and the poor exploited.  The disgruntled workers, those potentially capable of advancing an antithesis against capitalist exploitation, must develop tremendous psychic fortitude and undergo intense psycho-spiritual training to triumph over the dogged trend of materialism entrenched in the collective mind.

In communism, in the name of equal distribution, psychic pabula is suppressed.  People are forced into professions they may not have an aptitude for and no interest in.  This condition is enforces by oppressive state machinery, government agencies and secret police.  Psychic pabula must never be suppressed because suppression leads to large-scale depression and its accompanying social diseases.  It results in social doldrums and stagnancy and this takes two forms.  Where social doldrums is caused through a leaking effect discontent ferments slowly.  Where it is caused by a percolating effect encompassing every aspect of social life then society breaks down rapidly causing chaos and pandemonium.

The fundamental futility of Marxism is that when the mind is projected toward matter it is reflected and this reflection is more limited and crude than the original projection.  Thus the process of mental interaction with matter crudifies the mind.  But when mind is directed towards consciousness, consciousness absorbs the projection leading to intuitive development, expanding psychic pabula.

In both capitalism and communism psychic pabula degenerates causing the devolution of the human mind and social chaos.  Both systems are defective argues Sarkar, as are the economic policies which support them.  In his philosophy of NeoHumanism, Sarkar formulated a process for channeling psychic pabula towards consciousness instead of letting it degenerate towards matter.

According to NeoHumanist analysis, different groups adopt geo-socialism, geo-politics, geo-economics or geo-religion, all based on geo-sentiment, which not only confine people to the limitations of a particular country, but also alienate one particular community from another.  And what is more harmful, different groups become violent towards each other, which is extremely dangerous for the progress of human civilization.

Sarkar further argues that human movement is inspired by two ideas – the principle of selfish pleasure and the principle of social equality.  All modern political systems and economic theories embody the principle of selfish pleasure.  Capitalism is clearly exploitative through its dictum of self-interest, profit and laissez-faire economics.

Communism, while making a token gesture towards equal distribution, attempts to elevate the interests of the proletariat above the rest of society but only succeeds in establishing the hegemony of a new class of vested interests who rule through suppressing the rest of society.  Both ideologies are based on the self-interest of individuals or small groups and are therefore incapable of advancing the welfare of the entire society.

Both systems also rely on extensive psychic exploitation to perpetuate their rule.  Sometimes psychic exploitation occurs only in the mental sphere and sometimes partially in the mental sphere and partially in other spheres such as the economic, political, cultural or religious spheres.  In the economic sphere one social group, guided by a particular type of social sentiment, exploits another group.  First the exploiters inject the idea into the minds of the exploited and that the latter are degraded, while the former are elevated and so entitled to greater rights, even to the extent of exploiting the weaker community.  The exploiters become first class citizens and the exploited become second-class citizens.

Throughout history whenever one group exploited another in the economic sphere, they first created psychic exploitation by infusing inferiority complexes into the minds of the exploited people.  In each case of economic exploitation, psychic exploitation was the foundation, coupled with continuous cunning attempts to create inferiority complexes.

Economic exploitation is perpetuated in two ways – one is psycho-economic exploitation and the other is politico-economic exploitation.  When psycho-economic exploitation is combined with politico-economic exploitation it becomes doubly dangerous.  Through economic exploitation one community or class tries to forcibly dominate another class for economic gain.  The intention of the exploiters is to use the exploited community and their resources as sources for raw materials.  For example, increasingly manufacturing industries are being located in South Korea, Taiwan and the Philippines because of the cheap labor and right wing sympathies.  In other cases multinationals invest in countries like Australia, Brazil or Argentina to exploit the raw materials and send the profits out of the local country to overseas parent companies with little or no benefit to the local economy.  The net result of economic exploitation or economic imperialism is that the exploited people find themselves reduced to being the suppliers of raw material or cheap labor and markets for finished products to satisfy rich and powerful interests.  Because the exploited community is financially handicapped or lacks the political will it develops a fear complex born of impotency and poverty and is forced to enslave itself to more powerful countries.

The main difference between politico-economic exploitation and psycho-economic exploitation is that the former is perpetuated by physical force, exemplified by Third World dictatorships, while the latter is done through devious strategies and pseudo-culture, exemplified by multinational exploitation of Australia and Europe.

In order to save humanity from economic exploitation arising from socio-sentiments, people’s consciousness must be raised; otherwise they will never be able to successfully resist psycho-economic or politico-economic exploitation.  In India the masses were inspired to fight for independence without raising their consciousness.  As a consequence India ultimately attained political freedom but has not yet attained politico-economic independence, and even today is still the victim of psycho-economic and politico-economic exploitation.

Besides geo-economics and economic exploitation arising from socio-sentiments, exploitation is also perpetuated in the name of humanism.  Sometimes an economically backward community is helped out of a sense of humanism, but the real motivation of the benefactor is to exploit the disadvantaged community in the name of humanism.  Here humanism degenerates into pseudo-humanism and economic exploitation continues unchecked.

Depending upon the degree of economic affluence, some countries are called developed, some developing and some undeveloped.  However no so-called developed countries can stand on their own legs.  They simply compel the developing and undeveloped countries to buy their produce by creating circumstantial pressure.  But none of these countries have been developed by developing their own resources.  In those countries which are developing their own resources, the resources are not equally distributed, so some country’s resources will become exhausted before others.  And when this occurs some nations will have to use force – either physical or intellectual – against other nations to obtain their resources.

In an effort to meet the growing needs for agricultural development and land, large-scale deforestation and widespread destruction of the ecology has occurred.  Many animal and plant species have become extinct and once plentiful rainforests have been decimated.  The delicate balance between plant, animal and human life has been severely mutilated, disrupting the harmony of the planet and the species that live on it.  Wherever economic exploitation occurs the interests of animals and plants are also neglected and exploited for economic goals.

All these problems arise because of a defective ideology and a defective social structure.  But underlying this Sarkar concludes that the human mind is the source of the problem of defective economic theories and misguided ideologies.  He suggests that to generate the individual and collective dynamism to overcome exploitation and launch a successful antithesis against dominant vested interests, a rationalistic mentality – or awakened consciousness – must be developed through study, analysis and discrimination.  Those who have developed such a mentality will be able to establish a new ideology, which fully reflects the ideals of NeoHumanism.

The principle, which reflects this rational mentality, is the principle of social equality – the provision of the minimum requirements to all members of society through the rational distribution of all resources.  This principle is diametrically opposite to the principle of selfish pleasure – the motivation for capitalist and communist economic theories.  The inner spirit of the principle of social equality is the endeavor to collectively move towards the implementation of NeoHumanism by eradicating all inequalities and injustices.  It is the ideal of forever promoting the welfare of all members of society through unity and cooperation.  This in turn leads to greater human progress and a more just society.

Excerpted from New Aspects of Prout, Proutist Universal Publications, Denmark 1987. Copyright The author 1999

Watch this brief video about the "Economics of PROUT" 

Economic Dynamics

Economic Dynamics

Due to their inherent staticity, both capitalism and communism are on the verge of extinction from this world. The contradictions in capitalism are due to the self-centered, profit- motivated psychology and the accumulation of wealth for the benefit of a few rather than for the welfare of all. Hence capitalism is not congenial to the integrated growth of human progress. Shrii Sarkar says the day is "therefore sure to come when capitalism will burst like a fire-cracker!"
by Srii Prabhat Ranjan Sarkar

Each and every movement in this universe is systaltic. Nothing ever moves in a straight line. Due to this systaltic motion, internal clash and cohesion take place. The ups and downs of socio-economic life in different phases of the social order are sure to take place due to this systaltic principle. When the period of pause is long, society goes through a phase of extended staticity, and it may lose all its dynamic movement or even cease to exist. If there is lack of dynamic force in the phase of pause, then the stage of dynamicity may not come in the subsequent phase.

The downfall of both capitalism and communism is inevitable due to their inherent staticity. Both capitalism and communism are on the verge of extinction from this world. The external and internal spheres of capitalism have ordinary acceleration, but there is a contradiction between its internal and external spheres. The contradictions in capitalism are due to the self-centred profit motivated psychology and the accumulation of wealth for the benefit of a few rather than for the welfare of all. Hence, capitalism is not congenial to the integrated growth of human progress. A day is therefore sure to come when capitalism will burst like a fire-cracker.

Marxism, too, is a transitory phenomenon. In the external sphere of Marxism there is only ordinary acceleration, and in the internal sphere there is staticity. The result is negative dynamicity. That is why Marxism will never be a success either. Marxism is just like a comet on a parabolic path -- it is not of hyperbolic order. Marxism can only bring society to an omni-static state; that is, the state of nihilism or cynicism -- a sort of negation.

Economic Depressions -- The Result of Staticity

In the economic sphere depressions are inevitable in both capitalist and communist countries due to this very inherent, intensive and innate staticity. Economic depressions are actually the net result of suppression, repression and oppression -- that is, exploitation. When exploitation reaches the culminating point, the mobility and the speed of the society become virtually nil. In such a stage, that is, in this culminating point, a natural explosion takes place. In the case of the material world the explosion is of a material nature, and in the psychic sphere the explosion is of a psychic order, and so on. Depressions may happen in any of the four eras -- the worker, warrior, priest or capitalist eras.

Depressions may also take place in the cultural life of society due to suppression, repression and oppression. As a result, every aspect of cultural life becomes perverted and degenerates. This is why we get perverted literature, music, dance, art, architecture, etc.

In both social and economic life this depression becomes unbearable for one and all. Such a depression took place between 1929 and 1931. During this depression in Bengal, five kilos of eggplant/brinjal were sold for one paisa, and forty kilos were sold for eight paisa in the Burdwan market, but there was no one to purchase these items. There were also big curtailments in salaries, and people had to accept salary cuts of ten percent or more.

Today also the stage has almost come for such a severe reaction. The explosion will come in two, three or five years. It will surely come within ten years. The difference between the previous depression and the future depression will be that in the previous one there was little inflation, but the future depression will be associated with inflation. Hence, it will be more detrimental to the integrated development of human society.
This depression will occur in the industrial subsection of the commercial economy. It will have widespread and devastating consequences for humanity.

An endeavour should be made to shorten the span of this economic depression. Before the final culminating point comes, it is possible to avert the disaster and accelerate the speed of social movement. We can do so by creating a socio-economic and cultural impact on the entire social structure through PROUT. As the world is passing through a most critical phase, we should be more active and create an impact. If the positive impact we create coincides with the explosion, the effect will be excellent.

It must be borne in mind that both inflation and depression result from the ailment of staticity. If the production in a country is abundant and the gold bullion reserves are in proportion to the country's economic position, there is no possibility of inflation. However, if the circulation of the capital decreases as a result of staticity and the quantum of production also goes down, then inflation is bound to take place.

If a country has a constant deficit in foreign trade, in that case also there is the possibility of inflation. In addition, if foreign trade is not conducted according to the barter system and the country has to import foodstuffs and export raw materials, inflation will certainly occur.

On the other hand, if there is sufficient production and adequate supply, but suddenly the quantum of demand falls, then the value of money suddenly increases for the buyer. This is called "negative inflation" or "deflation".

The Causes of Depressions

There are two main causes for economic depressions -- first, the concentration of wealth, and secondly, blockages in the rolling of money. If capital is concentrated in the hands of a few individuals or the state, most people will be exploited by a handful of exploiters. As a result of this process of severe exploitation, a serious explosion takes place. This explosion is known as a depression in the economic world. The concentration of wealth, and particularly the concentration of the value of wealth, is the fundamental cause of a depression.

Secondly, a depression may occur when money that is in the possession of individual or state capitalists stops rolling. Money remains inert or unutilized because those capitalists think that if the money is allowed to roll freely then their profits will decrease, even though it will bring relief to the common people. The very psychology of capitalists is to make profit from the rolling of money. When they discover that the investment of money does not bring profit up to their expectations, then they stop rolling money. This keeps money immobile or inert; consequently, there is no investment, no production, no income and hence no purchasing power. The situation becomes so dangerous that there are few buyers to buy commodities.

If there is surplus labour and deficit production, the effect of depression is more acute. Bihar, Andhra Pradesh, especially the Telengana region, and Orissa are surplus labour areas, so during a depression these areas could face indiscriminate closure of business houses and lay-offs. When wages fall, the people in surplus labour areas who used to go to deficit labour areas for employment will be subjected to more hardships. This will aggravate the unemployment problem in surplus labour areas.

In such situations, restricting the transfer of food among different socio-economic units could lead to an acute scarcity of food in the deficit production areas, and therefore a cordon system should not be introduced. Countries and regions with surplus production and deficit labour usually suffer less hardships during depression.

The Effect of Economic Depressions

An economic depression in capitalist countries will not spare communist or so-called socialist countries, India and the Middle East. India exports many raw materials to industrially developed countries and their satellites. India also purchases raw materials such as raw cotton from other countries, although it used to export such materials in the past. Therefore, to the extent to which India is dependent on other countries for its exports or imports, it will be affected. India also has immense loans, and these loans will put a strain on the Indian economy during the depression. The fire sparks of depression will not spare India. If the financial or monetary trade -- or say the trade that affects bullion -- is lessened, and barter trade is increased, then the effect of a depression on India will not be much. Therefore, India should try to increase its range of barter trade. Bangladesh exports manufactured goods, raw jute and hide, and imports foodstuffs and almost all other articles. If Bangladesh wants to avoid a depression, it will have no alternative but to increase its barter trade.

In time the Arab countries -- those selling oil -- will be the most affected. Even the communist countries will not be spared from the onslaught of a depression. These countries have not been able to solve their food problems. Although they have huge buffer stocks, they depend on Canada, the U.S.A. and Australia for wheat. If these dollar-based countries suffer from a depression, the communist countries will certainly be affected by a depression, although not much.

Depression is not a natural phenomenon. Pause is a natural phenomenon. In a Proutistic structure pause may occur but depression will not occur. To save society from depression, the approach of PROUT is to increase purchasing power by increasing production, reduce disparities in the value of wealth, and increase the circulation of money; that is, by keeping money rolling. Empty slogans will not do. Attention will have to be given to increasing the level of production.

In capitalist and communist countries, the mode of production is defective. In capitalist countries, labour does not work in the interest of the management and management does not allow the rolling of money due to the concentration of wealth. In communist countries, labour does not feel one with the job and that is why there is sluggish production.

The cooperative model of PROUT is free from both sets of defects. PROUT is well-adjusted with human ideals and sentiments. Other socio-economic systems are ultravires to human existence and all-round elevation.

Bullion Inflation

In capitalist economies, production is for the profit of the capitalist and the profit goes to individuals, groups and the state exchequer. In socialist economies or so-called communism, the profit goes to the state exchequer and a microscopic fraction of the profit goes to the actual producers. In both cases capitalism exists, and whenever fresh financial investment is required, inflation takes place.

In a Proutistic economy, production will be solely for consumption. As there will not be any profit motive, there cannot be any fresh inflation, and the existing inflation will gradually die out. In Proutistic production or consumption, in the first phase the money value remains constant and full-fledged purchasing capacity will be guaranteed to the people.

In the second phase, when production increases in the revised economic order, money will get back its natural market value. Finally, after consumption, money will get back its actual value. Inflation will be checked and purchasing capacity and the minimum requirements of life will be guaranteed to the people.

The second phase will continue for ten to fifteen years. After the expiry of this period, that is, in the third phase, minimum requirements of life will increase and people will acquire more purchasing power. This power will increase at an accelerating rate.

The printing and issuing of monetary notes having no bullion value must stop immediately, and new notes having bullion value should be issued in new colours and shapes. No monetary notes should be issued by the government from then on without a clear assurance that it is prepared to pay the requisite amount of money in gold coins. This can only be implemented by a Proutistic government.

Production Inflation

The problem of production inflation cannot be ignored either. Production inflation may occur in two ways. First, owing to the application of scientific methods, the production of certain commodities may increase in excess of the demand or need in particular socio-economic regions. Then it becomes a problem how such excess production or overproduction can be marketed or consumed. Secondly, it may also happen that all of a sudden under certain circumstances the production of commodities increases, then it becomes difficult to find a market for such production.

Now a question arises whether or not such production will increase purchasing power as well as elevate the standard of it. In general circumstances such production is not a big problem, not a chronic problem, but if no measure is taken to find a market for such overproduction, then it may take the form of an acute problem. This problem can be tackled by taking three measures.

First, there should be a free trade system so that overproduction can be consumed by other countries or other economic units. In India, excepting the Punjab and Haryana, there is underproduction of milk.

In other states, common people cannot get a sufficient amount of milk. But there are many countries, such as certain European countries, where there is overproduction of milk. In England, Germany and Sweden the authorities even give orders or encourage the public to kill cows.

If in these circumstances free trade is allowed among different countries, the countries having overproduction or underproduction can make respective adjustments among themselves so that the overproduction of commodities may be consumed by under-producing countries. In that case the concerned countries will be benefited. Here free trade means that there should not be any imposition of export or import duties, and thus the prices of these commodities will benefit the consumers when they reach the market for actual consumption.

Secondly, there should be proper arrangement everywhere for the preservation of products which are in excess production. In Malda in Bengal there may be overproduction of mangoes which are perishable commodities. As there is no system of preservation, the ordinary mango growers will have to sell their mangoes at throw away prices. But if they could sell the same products four months later they would get remunerative prices.

Moreover, if processing factories are established, they can then produce dried mango, mango candy, mango juice, sauce, jam, etc., which can be preserved for a longer time. There are many countries in Europe or other parts of the world where there is no mango production. If a system of preservation were available, then mangoes could easily be sold in those European countries, and the mango growers could earn a good amount of money.

In many places in India abundant vegetables are produced in the winter season; for example, in Nadia district, at Ranaghat, Nagi, Bago, etc. In European countries at the same time there cannot be any vegetable production due to the excessive cold. If vegetable processing factories could be installed in those places, then perishable vegetable products could be easily preserved by such processes as canning, and exported to other countries. From Calcutta it takes a maximum of twenty days for a ship to reach Europe, so preservation arrangements could be made for that period. Similar arrangements could be made for betel leaf. If this were done, then the poor growers at Tomluk, Mecheda, Bagnan, etc., would be able to live a well-to-do life.

Thirdly, new diversified styles of consumption should be invented. That is, consumption should be of a progressive nature and the style of consumption should be diversified. For example, there is only limited utilization of linseed at the moment in India. If the oil extracted from the linseed is deodorized, then it can be widely used as an edible oil. Also linen thread can be manufactured from linseed plants, which generally go to waste. Okra is abundantly produced in India, but it is only used as a vegetable. Oil can be extracted from okra seeds, and this can be processed and marketed as edible oil. Also, fine thread can be manufactured from the okra plant, and good quality clothes can be prepared from that thread.

In Bangladesh and West Bengal there is overproduction of jute, which is an acute problem today. This problem can be easily tackled by diversifying the methods of jute consumption. For example, we can get fine thread from raw jute to produce good quality clothes.

In the existing world structure geo-sentiment is an obstacle to the implementation of free trade. Neither the capitalist countries nor the communist countries like the free trade system because it is detrimental to their respective self-interests. But there are some free trade zones in the world which are very bright examples of the success of this sort of system. Singapore is one such example. There was a good proposal to declare Calcutta a free trade zone, but it was not implemented for many reasons, including the failure of the concerned leaders.

Bengal could have been greatly benefited by such a system. In a revised economic structure -- that is, PROUT -- there must not be any import or export duties on consumable commodities. If this is done, then this earth will be converted into a golden earth.

The commune system suffers from the acute problem of chronic shortages of food products, so the communist countries always import food products from capitalist countries, in spite of all sorts of hue and cry raised by them regarding their "isms". Therefore, they oppose the free trade system.

In case there is overproduction of non-perishable goods or raw materials, these raw materials must not be allowed to be exported to other countries. Instead, raw materials must be immediately converted into manufactured goods at the place where they are available. For example, Orissa, the western portion of Ra'r'h, certain portions of Madhya Pradesh, and certain portions of southern Bihar and Telengana are rich in different kinds of raw materials. These economically undeveloped places can easily be converted into advanced areas like the Rhine region of Germany. Poverty stricken people will live an affluent life if factories in these areas convert raw materials into manufactured goods.

The export of raw materials is a sign of an unhealthy economy in a country. If overproduction is caused due to the scientific application of improved methods in industry and agriculture, such as good manuring, then consumption may be adjusted through different methods as suggested above. This will also increase the purchasing power of the people.

In such a stage the bountifulness of nature will ultimately prove to be a boon for the common people. Hence, in a Proutistic structure production inflation would not be regarded as a problem.

The Panacea

PROUT is the panacea for the integrated progress of human society. It aims to bring about equilibrium and equipoise in all aspects of socio-economic life through totally restructuring economics. Without PROUT, socio-economic emancipation will remain a utopian dream. Only PROUT can save the world from depression.

Furthermore, only PROUT is free from the inherent and exherent staticity. In capitalism there is exherent and inherent staticity. In communism there is extensive and intensive innate staticity. People suffer from the ailments of staticity. These ailments will destroy all forms of "isms" in the very near future. Wise people should utilize this moment. We are near the last stage of the Capitalist Era. If an impact is created, it will help the suffering humanity. It is the most opportune moment for creating an all-round revolution. This is a new sub-theory under Proutistic theory and may be called the science of dynamics in PROUT._____________________________
Source: Shrii Prabhat Ranjan Sarkar, Proutist Economics, Kolkata: Ananda Marga Publications, 1999.

Saturday, February 19, 2011

Economic Democracy

The viral growth of the Occupy Movement, and the public support of it, is testament to the tremendous dissatisfaction with the inequities and abuses of contemporary global capitalism.  Meta-corporations and large financial institutions have corrupted democracy in the United States and many other countries.  In response, there is a wide spectrum of progressive forces struggling to rescue our political democracy; however, reform of extant political structures is not enough.  

Economic Democracy is not a reactionary paradigm, it is embedded in a long-term effort to project economic democracy as the common demand of a mass movement to replace corporate plutocracy, providing a progressively adaptive and optimizing socio-economic and political paradigm.  Economic democracy provides the new economic vision and practice required by populist elements who now understand that an alternative economic paradigm is required, one congruous with and operative of universal principles, respecting the sovereignty of each person and community.  

Economic Democracy 

By Prabhat Rainjan Sarkar, Founder of PROUT

Nature has been kind enough to provide abundant natural resources to every region of this earth, but she has not given the guidelines on how to distribute these resources among the members of society.  This duty has been left to the discretion and intelligence of human beings.

Those who are guided by dishonesty, selfishness and mean-mindedness misappropriate these resources and utilize them for their individual or group interests rather than for the welfare of the whole society. 

The mundane resources are limited, but human longings are limitless, hence for all the members of society to live in peace and prosperity, human beings have to adopt a system which ensures the maximum utilization and rational distribution of all resource.  For this, human beings will have to establish themselves in morality and then create a congenial environment for morality to flourish. 

Economic decentralization means production for consumption, not production for profit.  Economic decentralization is not possible under capitalism because capitalist production always tries to maximize profit. 

Capitalists invariably produce at the lowest costs and sell at the highest profits.  They prefer centralized production, which leads to regional economic disparity and imbalances in the distribution of the population.  On the other hand, in the decentralized economy of PROUT, production is for consumption, and the minimum requirements of life will be guaranteed to all.  All regions will get ample scope to develop their economic potentiality, so the problems of a floating population or over-crowding in urban centers will not arise

Unless a country attains optimum development in industry and other sectors of the economy, it is impossible for it to be highly developed.  If more than 30% to 45% of a country's population is engaged in agriculture, there will be excessive pressure on the land.  Such a country cannot become highly developed, nor can there be balanced, decentralized development in all sectors of the economy.  India is a classic example of this.  About 75% of India's population is dependent on agriculture for its livelihood. 
Trickle-down Economics Explained!

In some democratic countries like Canada, Australia, etc., a large percentage of the population is engaged in agriculture, and although these countries are regarded as agriculturally developed, they depend on other industrially developed countries because they themselves are industrially undeveloped.  For instance, Canada has traditionally been dependent on the U.S.A. and Australia on Britain. 

As far as India is concerned, as long as around 75% of the population is engaged in agriculture, the unbearable economic plight of the people will continue.  Any country confronted with such circumstances will find it very difficult to meet its domestic and international responsibilities.  The purchasing power of the people will keep decreasing while economic disparity will go on increasing.  The social, economic and political environment of the whole country will degenerate.  India is a clear example of all these evils. 

Thus, economic decentralization does not mean that the majority of the population will be dependent on agriculture for their livelihood or that the other sectors of the economy remain undeveloped.  Rather, each sector of the economy must strive for maximum development, and all sectors must strive for maximum decentralization. 

In all the democratic countries of the world, economic power is concentrated in the hands of a few individuals and groups.  In liberal democracies* (laisser faire), economic power is controlled by a handful of capitalists, while in socialist countries, economic power is concentrated in a small group of party leaders.  In both cases, a handful of people -- the number can be easily counted on the fingertips-- manipulates the economic welfare of the entire society.  When economic power is vested in the hands of the people, then the supremacy of this group of leaders will be terminated, and political parties will be destroyed forever

People will have to opt for either political democracy or economic democracy.  That is, they will have to choose a socio-economic system based on either a centralized economy or a decentralized economy.  Which one will they select? 

1.PROUT guarantees the minimum requirements of life which include at least food, shelter, clothing, education and medical care. The minimum necessities of life are guaranteed by providing full employment and assuring that the basic necessities are easily affordable and available with good quality. Any surplus wealth is then distributed among the meritorious and those with special needs.

2.Increased Purchasing capacity is achieved by assuring that the essential requirements of life are available and affordable for all. To achieve this there must be a continual increase in production through research and development and the appropriate use of progressive scientific ideas.

3.Decentralised planning assures that decisions for the local economy are made locally and not by bureaucrats or politicians who don’t have strong ties to the area. A balanced economy will be part of this planning so that agriculture, industry and white-collar work are appropriately developed.

4.PROUT advocates a three-tier economic system. This is made up of privately-owned small businesses, co-operatively-owned medium to large businesses, and government-run large key industries that run on a no-profit, no-loss basis.

5.Cooperatives are central to PROUT’s economic system and are the basis of economic democracy.

6.PROUT aims to create decentralised economic areas that are as far as possible self- sufficient. All businesses will be locally-owned, so there is no room for multi-nationals or outside exploitation of an area.

7. These six points create economic democracy, which gives local people control over their economic lives and assures their basic necessities. Society is then encouraged to pursue more non-material, creative, intellectual and spiritual forms of enjoyment which will ultimately lead society to real progress and happiness in every realm of life.

* liberal democracy (laisser faire) defined:
   1. An economic doctrine that opposes governmental
regulation of or interference in commerce beyond the minimum
necessary for a free-enterprise system to operate according
to its own economic laws.    2. Noninterference in the
affairs of others.

Political Democracy can and will be fortuitous
when Economic Democracy is established.  

Explore this and other articles covering alternative economics, ethical leadership, economic democracy, and a society without the weal and woe of social and economic vicissitudes HERE  
How does PROUT compare or contrast with capitalism or communism?  Explore the answers HERE
What are essential ingredients assuring progressive sustainability bereft of the vicissitudes of economic or political predation, privation or disparity?  Learn more HERE 

Thursday, February 10, 2011

Introducing PROUT

PROUT (the Progressive Utilization Theory) is a new paradigm of development based on economic decentralism, social equity, bioregional integration, cultural empowerment, a planetary polity, bio-equality, and spiritual-humanism. As such, it compliments the critique of globalization with a deeply thought out and coherent alternative. Recognition of the value of this alternative developmental model has been slow to take root in the progressive community -- until now! 

PROUT models the way nature works. Those with knowledge of ecological science, complexity theory, systems theory, or the philosophical implications of quantum physics will feel a familiarity with its values, principles, and operational structure.

The Progressive Utilization Theory (PROUT) has been developed to meet humanity's need for a post-materialist, spirit-based social philosophy. It is  a social philosophy for a new era; an ideology grounded in expanded humanism, born of love, and sublime confidence.  PROUT cannot be characterized as either conservative or liberal; neither can it be called libertarian, socialist, or anarchist. It arises from its own values base, transcends the bipolarity of the left-right political spectrum, and possesses the strengths of many social philosophies.

A liberated society can only arise out of the liberated consciousness of individuals, and the liberated consciousness of individuals depends both on individual effort to develop inner awareness and upon a social environment that supports this effort.  In this spirit we present to you the Progressive Utilization Theory, PROUT.

Watch this brief video about the "Economics of PROUT"