PROUT (an acronym for Progressive Utilization) is a socio-economic theory developed by Indian philosopher and social activist Prabhat Rainjan Sarkar in 1959, providing an alternative to both communism and capitalism. PROUT rejects exploitation in all its forms and advocates economic democracy, based on the following guiding principles:
Minimum Essentials: The basic minimum essentials, such as, food, clothing, shelter, education and health, must be guaranteed to all members in the society as a fundamental constitutional right. This means that it is the responsibility of a government and its economic system to provide job opportunities for all those who are capable of work. These jobs must afford a purchasing capacity that secures the basic essentials to live in a given society. PROUT supports welfare payments only for people with special needs or for those unable to work due to sickness or old age.
Purchasing Capacity: One of the most essential functions of the economic system is to continuously increase the purchasing capacity of every person in the economy. Economic growth without increasing the purchasing capacity of a large section of the society is of no significance in PROUT’s economic system.
Inequality: People should be provided with opportunities to earn according to their talent and skills. It is necessary to give higher incentives for more contribution to society. However, highly unequal societies are detrimental for the social well-being of its people. Therefore, inequality should be managed by maintaining a cap on wealth accumulation in proportion to the minimum earning capacity. This is a dynamic ceiling that moves upward with the rise in minimum earnings and the fruits of economic progress are more widely distributed in PROUT's economic system.
Economic Democracy: PROUT’s conception of economic democracy strives for bestowing economic power to the people rather than capital owners or the state. It envisages worker owned and managed co-operatives as the largest sector of the economy. Nonetheless, PROUT accepts the role of private ownership of businesses, especially when they are small or simultaneously small and complex, and not involved in the essentialities of life of which should operate as cooperatives. The role of state in managing key natural
resources is seen as desirable for the benefit of the wider economy. However, local governments and local civic boards must be vested with as much power as possible for economic management of local resources and achieving both economic security and
full employment.
Utilization and Distribution: The world’s resources should be utilized maximally for the benefit of the people and these resources should be justly distributed. It is important to
note that maximum utilization does not mean indiscriminate exploitation of human and natural resources. Utilization refers to proper use of sustainable and progressively scientific methods to serve the needs of society.
Types of Resources: PROUT recognizes all three types of resources, namely, physical, psychic and spiritual, and demands a balanced and well-adjusted utilization of all these resources for collective welfare. For example, excessive focus on material development alone to the neglect of intellectual and spiritual needs of the people is considered detrimental for all-round welfare of the individual as well as the collective.
Progressive Utilization: The method of utilization is progressive. It is dynamic and adjusts with changes in time, such as, the development of new scientific knowledge as well as changing social norms.
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