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.

  Requirements for Economic Democracy

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