PROUT is an acronym for PROgressive Utilization Theory, a socio-economic philosophy propouded by P.R. Sarkar that synthesizes the physical, mental and spiritual dimensions of human nature. The goal of PROUT is to provide guidance for the evolution of a truly progressive human society.
PROUT is an alternative to the outmoded capitalist and communist socio-economic paradigms. Neither of these approaches have adequately met the physical, mental and spiritual needs of humanity. PROUT seeks a harmonious balance between economic growth, social development, environmental sustainability, and between individual and collective interests. Combining the wisdom of spirituality with a universal outlook and the struggle for self-reliance, PROUTist thinkers and activists are creating a new civilizational discourse and planting the seeds for a new way of living.
A few basic tenets of PROUT are:
Spirituality and Progress
Human beings are on an evolutionary path toward realizing their higher consciousness. True progress is movement that leads to self-realization and spiritual qualities such as compassion and love for all beings. Material or intellectual gains do not necessarily constitute progress unless they contribute to deeper, spiritual well-being.
The progressive orientation of society is maintained by making continual adjustments in the use of physical resources and mental potentialities in accordance with spiritual and Neo-humanistic values. Human beings are encouraged to construct economic and social institutions to facilitate the attainment of our highest potentialities.
Political democracy and economic democracy are mutually inclusive. PROUT advocates economic democracy based on local economic planning, cooperatively managed businesses, local governmental control of natural resources and key industries, and socially agreed upon limits on the individual accumulation of wealth. By decentralizing the economy and making sure decision-making is in the hands of local people, we can ensure the adequate availability of food, shelter, clothing, health care and education for all.
A decentralised economy can better ensure that the ecological systems of the earth are not exploited beyond their capacity to renew themselves. Environmental stewardship is a requisite for people who are dependent upon these systems for their own survival and well-being.
Basic Necessities Guaranteed to All
The basic necessities of life must be a constitutional birth right of all members of society. People cannot attain their highest human potential if they lack food, shelter, clothing, health care and education. Meaningful employment with a living wage must be planned to ensure adequate purchasing capacity for all basic necessities. The standard of guaranteed minimum necessities should advance with increases in the economy's productive capacity.
For a benevolent society, it is essential that leaders are morally principled and dedicated to serving society as part of their personal progress. Authority should not be centered in the hands of individuals, but should be expressed through collective leadership. The viability of political democracy rests on an electorate possessing three factors:
2) socio-economic consciousness,
3) ethical integrity.
Individuals should have complete freedom to acquire and express their ideas, creative potential and inner aspirations. Such intellectual and spiritual freedom will strengthen the collectivity. Restrictions should only be placed on actions clearly detrimental to the welfare of others. Constraints need to be placed on the accumulation of physical wealth, as excessive accumulation by a few results in the deprivation of many.
In the spirit of universal fellowship, PROUT encourages the protection and cultivation of local culture, language, history and tradition. For social justice and a healthy social order, individual and cultural diversity must be accepted and encouraged.
Science and Technology
Scientific knowledge and technology are potential assets to humanity. Through their proper use, the physical hardships of life decreases and knowledge is gained about the secrets of life. Time is freed for cultural and spiritual pursuits. However, the development and utilization of scientific knowledge must come under the guidance of spiritual and Neo-humanist values and ethical leadership. Without this, technology is often abused by profiteers and the power-hungry, resulting in destruction and exploitation.
PROUT supports the creation of a world governance system having a global bill of rights, global constitution and common penal code in order to guarantee the fundamental rights of all individuals and nations, and to settle regional and international disputes. As the global economy becomes decentralised, it will be advantageous to also have a global political system.
Some Specialities of PROUT's Economic System
by P.R. Sarkar
PROUT’s economic system. These include guaranteed minimum requirements, increasing purchasing capacity, cooperatives, industrial development, decentralization and developmental planning. PROUT also has its specialities in trade and commerce.
Guaranteed Minimum Requirements
PROUT’s economic system guarantees the minimum requirements of life – that is, food, clothing, accommodation, medical treatment and education – to each and every person. Once the minimum requirements have been guaranteed, the surplus wealth is to be distributed among people with special qualities and skills such as physicians, engineers and scientists, because such people play an important role in the collective development of society. The quantum of the minimum requirements should be progressively increased so that the standard of living of the common people is always increasing.
The concept of equal distribution is a utopian idea. It is merely a clever slogan to deceive simple, unwary people. PROUT rejects this concept and advocates the maximum utilization and rational distribution of resources. This will provide incentives to increase production.
Increasing Purchasing Capacity
To effectively implement this, increasing the purchasing capacity of each individual is the controlling factor in a Proutistic economy. The purchasing capacity of common people in many undeveloped, developing and developed countries has been neglected, hence the economic systems of these countries are breaking down and creating a worldwide crisis.
The first thing that must be done to increase the purchasing capacity of the common people is to maximize the production of essential commodities, not the production of luxury goods. This will restore parity between production and consumption and ensure that the minimum requirements are supplied to all.
The Cooperative System
According to PROUT, the cooperative system is the best system for the production and distribution of commodities. Cooperatives, run by moralists, will safeguard people against different forms of economic exploitation. Agents or intermediaries will have no scope to interfere in the cooperative system.
One of the main reasons for the failure of the cooperative system in different countries of the world is the rampant immorality spread by capitalist exploiters to perpetuate their domination.
Cooperatives develop in a community which has an integrated economic environment, common economic needs and a ready market for its cooperatively produced goods. All these factors must be present for cooperatives to evolve. Properly managed cooperatives are free from the defects of individual ownership. Production can be increased as required in cooperatives due to their scientific nature.
For their success, cooperative enterprises depend on morality, strong administration and the wholehearted acceptance of the cooperative system by the people. Wherever these three factors are evident in whatever measure, cooperatives will achieve proportionate success. To encourage people to form cooperatives, successful cooperative models should be established and people should be educated about the benefits of the cooperative system.
The latest technology should be used in the cooperative system, both in production and distribution. Appropriate modernization will lead to increased production.
Cooperative managers should be elected from among those who have shares in the cooperative. Members of agricultural cooperatives will get dividends in two ways – according to the amount of land they donated to the cooperative, and according to the amount of their productive manual or intellectual labour. To pay this dividend, initially the total produce should be divided on a fifty-fifty basis – fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated. Local people should get first preference in participating in cooperative enterprises.
Developmental planning should be adopted to bring about equal development in all regions instead of just some particular regions. Local wealth and other resources and potentialities should be utilized in this developmental plan.
The controversial problem of the ownership of land can be solved by the phase-wise socialization of land through agricultural cooperatives. Cooperative land ownership should be implemented step by step in adjustment with the economic circumstances of the local area. During this process the ownership of land should not be in the hands of any particular individual or group.
PROUT divides the industrial structure into three parts – key industries managed by the immediate or local government, cooperatives and private enterprises. This system will eliminate confusion regarding whether or not a particular industry should be managed privately or by the governnment, and will avoid duplication between the government and private enterprise.
In many undeveloped and developing countries of the world there is excessive population pressure on agriculture. It is improper if more than forty-five percent of the population is employed in agriculture. In villages and small towns a large number of agro-industries and agrico-industries should be developed to create new opportunities for employment. In addition, agriculture should be given the same status as industry so that agricultural workers will understand the importance and value of their labour.
According to the wages policy of PROUT, wages need not be accepted only in the form of money. They may be accepted in the form of essential goods or even services. It is advisable to gradually increase this component of wages in adjustment with the monetary component of wages.
PROUT supports maximum modernization in industry and agriculture by introducing the most appropriate scientific technology, yet modernization and rationalization should not lead to increased unemployment. In PROUT’s collective economic system, full employment will be maintained by progressively reducing working hours as the introduction of appropriate scientific technology increases production. This is not possible in capitalism.
To materialize the above economic programme, PROUT advocates a new and unique approach to decentralization based on the formation of socio-economic units throughout the world. Socio-economic units should be formed on the basis of factors such as common economic problems; uniform economic potentialities; ethnic similarities; common geographical features; and people’s sentimental legacy, which arises out of common socio-cultural ties like language and cultural expression. Each socio-economic unit will be completely free to chalk out its own economic plan and the methods of its implementation.
Within each socio-economic unit there will also be decentralised planning, which is called “block-level planning” in PROUT. Block-level planning boards will be the lowest level planning bodies.
One political unit such as a federal or unitary state may contain a number of socio-economic units. For example, the state of Bihar in India can be divided into five socio-economic units – Angadesh, Magadh, Mithila, Bhojpuri and Nagpuri. Based on the above factors the whole of India may be divided into forty-four socio-economic units. These units must be guaranteed full freedom to achieve economic self-sufficiency through the implementation of their own economic planning and policies.
If the local people in these units organize large-scale programmes for their all-round socio-economic and cultural liberation, there will be a widespread socio-economic awakening in the whole of India. Regardless of whether they are rich or poor, old or young, educated or illiterate, if the local people are inspired by anti-exploitation and universal sentiments, they will be able to start powerful movements for socio-economic liberation. When people merge their individual socio-economic interests with the collective socio-economic interest, the outflow of economic wealth from a region will cease and exploitation will be completely rooted out. The right of full employment for all local people will be guaranteed, and the employment of local people will take precedence over non-local people.
Where there is no proper economic development, surplus labour develops. In fact all undeveloped economic regions suffer from surplus labour, and when the surplus labour migrates to other regions the region remains undeveloped forever. In areas of surplus labour provision should be made to immediately employ the local people.
While providing employment to local people, local sentiments should also be taken into consideration. Maximum agro-industries and agrico-industries should be established on the basis of the socio-economic potential of the region, and various other types of industries should be established according to the collective needs. This approach will create enormous opportunities for new employment. Through such an employment policy, increasing the standard of living of the local people will be possible.
In a decentralised socio-economic system the modernization of industry and agriculture can be easily introduced, and the goods that are produced will be readily available in the market. As each socio-economic unit develops its economic potential, per capita income disparities among different regions will decline and the economic position of undeveloped regions can be raised to that of developed regions. When every region becomes economically self-reliant, the whole country will rapidly achieve economic self-sufficiency. Economic prosperity will be enjoyed by each and every person.
PROUT’s decentralised economy follows a specific guiding principle. That is, effective economic planning should be based on four fundamental factors – the cost of production, productivity, purchasing capacity and collective necessity. Other related factors include natural resources, geographical features, climate, river systems, transportation, industrial potentialities, cultural heritage and social conditions.
Due to the lack of a well-defined principle of economic planning and the dominance of various narrow sentiments, India’s economy has been paralysed by inertia. Steel plants have been built where there is no supply of cheap power, and huge oil refineries like those in Mathura and Barauni have been constructed where there are no raw materials within 1,000 miles. Such a policy is not only a great waste and misuse of resources, it also illustrates the lack of foresight and ignorance of India’s planners.
This situation is reminiscent of the British period when raw jute from Bengal was sent to Dundee in Great Britain to develop the British jute industry. When the supply of raw jute from Bengal was stopped, all the jute factories in Dundee were closed down. If the finished jute products made in Dundee had not been sold in Bengal, the Dundee jute industry would not have survived.
This economic history is relevant to the dying jute industry in Bengal today. The present political climate is full of slogans like, “Let the closed jute factories be nationalized,” and, “Stop the lock-out.” Trade union leaders are amassing great wealth by exploiting this depressed industry while thousands of unemployed workers are being subjected to deprivation, starvation and untold suffering. Bengal does not even supply sufficient raw jute to run its own jute mills, so raw jute has to be imported from outside the region to supply the existing mills.
If people want to make the jute industry healthy some clear-cut, bold steps have to be taken. The number of jute mills should be reduced so that they correspond to the dwindling supply of raw jute. The additional mills should be closed down or converted to the production of other essential commodities. The mills engaged in jute production should produce mainly jute thread rather than other jute products, and jute thread should be distributed among farmers and weavers through a system of jute cooperatives. If such a policy is adopted the large demand for thread in Bengal will be met, and the surplus production can be exported. As the industry will be decentralised the wealth generated from thread production will be spread among the local people, ending large-scale exploitation by wealthy jute merchants and raising the standard of living of the local people.
So, on the basis of the above factors, each socio-economic unit should draw up its own developmental plan for socio-economic self-sufficiency and then implement it. Grandiose planning which is irrelevant or inappropriate for the local economic conditions should not be imposed from the outside. It will not be allowed.
centralised planning has totally failed in all countries of the world, including India. In PROUT’s system of decentralised planning, there should be one coordinated plan for the whole socio-economic unit on the basis of block-level planning. For example, for the entire western Ráŕh, including Bankura, Purulia, etc., there should be a sub-plan. Similarly, there should be another sub-plan for Jalpaiguri, Coochbehar, Siliguri and Goalpara. In addition, there should be proper block-level planning throughout the socio-economic unit. Thus, the seed of economic centralization will be destroyed.
Trade and Commerce
PROUT also has its own specialities in the fields of trade, commerce, taxation and banking. The distribution of essential commodities will have to be done entirely through consumer cooperatives, not through the government, businessmen or different levels of middlemen. This will not leave any scope for manipulation by profiteers. As far as possible barter should be the basis for trade among self-sufficient socio-economic units.
Essential commodities will have to be entirely tax free. There will be no income tax. Instead taxes should be levied at the starting point of production.
The banking system will have to be managed by cooperatives. The central or federal bank will be controlled by the immediate or local government.
The maxim of PROUT’s productive economy is, “Increase the purchasing capacity of the common people above all.” If this maxim is followed in practice, it will be easy to control the prices of commodities through the cooperative system and economic decentralization.
June 1979, Calcutta
by P.R. Sarkar
Nearly all the countries of the world today have come under some sort of democratic structure. Liberal democracy has been established in such countries as the USA, Great Britain, France and Canada, while in the Soviet Union, China, Vietnam and Eastern Europe socialist democracy is the dominant system. The plight of the people in liberal democratic (so-called democratic) countries is not as miserable as it is in communist countries, because in communist countries the political and economic system is imposed on society by party officials, causing untold human suffering and severe psycho-economic exploitation. Both liberal democracy and socialist democracy may be considered forms of political democracy because these systems are based on economic and political centralization.
In all countries where democracy is in vogue today, people have been deceived into believing that there is no better system than political democracy. Political democracy has no doubt granted voting rights, but it has snatched away the right of economic equality. Consequently, there is gross economic disparity between the rich and the poor, immense inequality in people’s purchasing capacity, unemployment, chronic food shortages, poverty and insecurity in society.
The type of democracy prevalent in India is also political democracy, and it has proved to be a unique system of exploitation. The Indian constitution was created by three groups of exploiters: the British imperialists, the Indian imperialists and the ruling parties representing the Indian capitalists. All the provisions of the Indian constitution were framed keeping an eye on furthering the interests of these opportunists. Just to hoodwink the masses, the people were granted the right of universal suffrage. Millions of Indians are poor, superstitious and illiterate, yet the exploiters, through such practices as making false promises, intimidation, gross abuse of administrative power and vote rigging, repeatedly win over the electorate. This is the farce of democracy. Once they form the government, they get ample opportunity to indulge in rampant corruption and political tyranny for five years. In the subsequent elections – whether on the provincial or state level – the same absurdity is repeated.
This type of political opportunism has been going on in India since independence. For the last thirty-five years, the political parties have maintained that in order to attain economic parity with the industrially developed countries of Europe, India must follow the democratic system. To support this argument, they cite the examples of America and Great Britain or China and the Soviet Union. The political leaders urge the electorate to vote in their favour at election time so that the country’s starving masses can reap the benefits of a developed economy. But once the elections are over, the exploitation of the common people continues unabated in the garb of political democracy, and other areas of social life are completely neglected. Today millions of Indian citizens are being deprived of the minimum requirements of life and are struggling to procure adequate food, clothing, housing, education and medical treatment, while a handful of people are rolling in enormous wealth and luxury.
One of the most obvious defects of democracy is that voting is based upon universal suffrage. That is, the right to cast a vote depends on age. Once people reach a certain age, it is assumed that they have the requisite capacity to weigh the pros and cons of the issues in an election and select the best candidate. But there are many people above the voting age who have little or no interest in elections and are not conversant with social or economic issues. In many cases, they vote for the party rather than the candidate, and are swayed by election propaganda or the false promises of politicians. Those who have not reached the voting age are often more capable of selecting the best candidate than those who are entitled to vote. So age should not be the yardstick for voting rights.
Whether or not a candidate gets elected usually depends upon party affiliation, political patronage and election expenditure. In some cases it also depends on antisocial practices. Throughout the world, money plays a dominant role in the electoral process, and in nearly all cases, only those who are rich and powerful can hope to secure elected office. In those countries where voting is not compulsory, often only a small percentage of the population participates in the electoral process.
The prerequisites for the success of democracy are morality, education and socio-economico-political consciousness. Leaders especially must be people of high moral character, otherwise the welfare of society will be jeopardized. But today in most democracies, people of dubious character and those with vested interests are elected to power. Even bandits and murderers stand for election and form the government.
In almost all the countries of the world, the masses lack political consciousness. Cunning, erudite politicians take advantage of this shortcoming to confuse people and attain power. They resort to immoral practices such as bribery, vote rigging, booth capturing and buying of votes, and stand unopposed for elections. Consequently, the standard of morality in society is declining, and honest, competent people are relegated to the background. Moral leaders have less chance to win elections because election results are rigged through financial inducements, intimidation and brute force. In the present democratic system, all sorts of immoral and corrupt practices are given the opportunity to pervert society. The very nature of the present system is that it favours the capitalists and exposes the administration to immoral and corrupt forces.
The farce of democracy has been likened to a puppet show where a handful of power hungry politicians pull the strings from behind the scene. In liberal democracies, capitalists manipulate the mass media such as the radio, television and newspapers, while in socialist democracies the bureaucrats lead the country to the brink of destruction. In both forms of democracy, there is little scope for honest, competent leaders to emerge in society, and virtually no possibility for the economic liberation of the people.
Political democracy has become a great hoax for the people of the world. It promises the advent of an era of peace, prosperity and equality, but in reality it creates criminals, encourages exploitation and throws common people into an abyss of sorrow and suffering.
The days of political democracy are numbered. PROUT demands economic democracy, not political democracy. To make democracy successful, economic power must be vested in the hands of the common people and the minimum requirements of life must be guaranteed to all. This is the only way to ensure the economic liberation of the people. PROUT’S slogan is: “To end exploitation we demand economic democracy, not political democracy.”
In economic democracy, economic and political power are bifurcated. That is, PROUT advocates political centralization and economic decentralization. Political power is vested with the moralists, but economic power is vested with the local people. The principal goal of the administration is to remove all the impediments and obstacles which prevent the economic needs of the people being met. The universal aim of economic democracy is to guarantee the minimum requirements of life to all members of society.
Nature has been kind enough to provide abundant natural resources to every region of this earth, but she has not given 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. 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 resources. To achieve 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 centralised production, which leads to regional economic disparity and imbalances in the distribution of the population. In the decentralised economy of PROUT on the other hand, 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 overcrowding in urban centres will not be allowed to 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 thirty to forty-five percent 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, decentralised development in all sectors of the economy. India is a classic example of this. About seventy-five percent of India’s population is dependent on agriculture for its livelihood.
In some democratic countries such as Canada and Australia a large percentage of the population is engaged in agriculture, and although these countries are regarded as agriculturally developed, they depend on industrially developed countries because they themselves are industrially undeveloped. For instance, Canada has traditionally been dependent on the USA, and Australia on Britain.
As far as India is concerned, as long as around seventy-five percent 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 capacity 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.
So, 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 will 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 counties of the world, economic power is concentrated in the hands of a few individuals and groups. In liberal democracies 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 each case a handful of people – the number can be easily counted on one’s fingertips – manipulates the economic welfare of the entire society. When economic power is vested in the hands of the people, 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 centralised economy or a decentralised economy. Which one will they select? Political democracy cannot fulfil the hopes and aspiration of people or provide the basis for constructing a strong and healthy human society. The only way to achieve this is to establish economic democracy.
Requirements for Economic Democracy
The first requirement for economic democracy is that the minimum requirements of a particular age – including food, clothing, housing, education and medical treatment – must be guaranteed to all. Not only is this an individual right, it is also a collective necessity, because the easy availability of the minimum requirements will increase the all-round welfare of society.
The second requirement for economic democracy is that increasing purchasing capacity must be guaranteed to each and every individual. In economic democracy local people will hold economic power. Consequently, local raw materials will be used to promote the economic prosperity of the local people. That is to say, the raw materials of one socio-economic unit should not be exported to another unit. Instead, industrial centres should be built up wherever raw materials are available. This will create industries based on locally available raw materials and ensure full employment for all local people.
The third requirement for economic democracy is that the power to make all economic decisions must be placed in the hands of the local people. Economic liberation is the birthright of every individual. To achieve it, economic power must be vested in the local people. In economic democracy the local people will have the power to make all economic decisions, to produce commodities on the basis of collective necessity, and to distribute all agricultural and industrial commodities.
The fourth requirement for economic democracy is that outsiders must be strictly prevented from interfering in the local economy. The outflow of local capital must be stopped by strictly preventing outsiders or a floating population from participating in any type of economic activity in the local area.
For the success of economic democracy, PROUT must be implemented and the economic welfare of all people must be enhanced step by step. This in turn will lead to greater opportunities for the spiritual emancipation of human beings.
Finally, it should be remembered that economic democracy is essential not only for the economic liberation of human beings, but for the universal well-being of all – including plants and animals. Economic democracy will devise ways and means to effect the smooth progress of society by recognizing the unique value of both humans and non-humans alike.
June 1986, Calcutta
by P.R. Sarkar
The most important economic issue before the leaders of all the countries in the world today is how to increase the standard of living of their citizens through the economic prosperity of the state. This is a burning question, especially in those countries which are economically backward. The matter is not very simple because in many countries people are still directly dependent on nature for their subsistence. Only in a few countries have people been able to utilize their knowledge and wisdom to solve their economic problems.
Most countries in the world – whether capitalist or communist – have adopted the policy of economic centralization. While the economies of the capitalist countries are centralised in the hands of a few capitalists or a few capitalist institutions, the economies of the communist countries are centralised in the hands of the party. After so many years of economic centralization, how successful have these countries been in improving the standard of living of the people? To assess this, the main issue is whether or not economic exploitation has been eradicated and the common people have been guaranteed ever increasing purchasing capacity. The fact is that in a centralised economy there is no possibility that economic exploitation can ever be eradicated or that the economic problems of the common people can ever be permanently solved.
As far as India is concerned, the common people have been led astray time and again by vested interests. Innumerable promises have been made by political leaders, but they have proved to be nothing more than cruel hoaxes. The policy of economic centralization stands exposed as merely a strategy to accumulate increasing capital in the hands of the capitalists. On the one hand the incredulous masses are kept in good humour by promising them something negligible, and on the other hand the capitalists go on amassing enormous wealth. If we examine why this is happening, we will find that the cause is clearly evident. All the economic policies in the country are formulated by a handful of people who are pillars of capitalism.
There is only one way to stop economic exploitation and alleviate the plight of the common people, and that is to implement a policy of decentralised economy in all the sectors of the economy. Successful planning can never be done by sitting in an air conditioned office thousands of miles away from the place where planning is to be undertaken. centralised economy can never solve the economic problems of remote villages. Economic planning must start from the lowest level, where the experience, expertise and knowledge of the local people can be harnessed for the benefit of all the members of a socio-economic unit. All types of economic problems can be solved only when economic structures are built on the basis of decentralised economy.
The basic question is how to remove the unhealthy influence of centralised economy. The real issue is, who will bell the cat? If the vested interests fail to be guided by righteous intellect, then people will have to take matters into their own hands. They will have to create circumstantial pressure from all sides, uniting around the slogan: “Abolish centralised economy to end exploitation; establish decentralised economy.”
decentralised economy is the only way that people can attain all-round welfare because it will not only guarantee economic prosperity, but also pave the way for individual and collective psycho-spiritual progress. Once people’s mundane problems have been solved, they will have greater opportunities to develop their potentialities in the psychic and spiritual spheres. With the establishment of decentralised economy, economic and psycho-economic exploitation will be eradicated, the gap between the rich and poor will be minimized and individual and collective welfare will be greatly enhanced. This in turn will create greater opportunities for the psychic and spiritual progress of all members of society.
Principles of decentralised Economy
The first principle of decentralised economy is that all the resources in a socio-economic unit should be controlled by the local people. In particular, the resources which are required to produce the minimum requirements must be in local hands, and all the industries based on these resources will have to be controlled entirely by the local people. Local raw materials must be fully utilized to produce all kinds of commodities necessary for the economic development of a socio-economic unit.
Local people are those who have merged their individual socio-economic interests with the socio-economic interests of the socio-economic unit they live in. Clearly, this concept of local people has nothing to do with physical complexion, race, caste, creed, language or birth place. The fundamental issue is whether or not each person or family has identified their individual socio-economic interests with the collective interests of the concerned socio-economic unit. Those who have not done so should be branded as outsiders.
No outsider should be allowed to interfere in local economic affairs or in the system of production and distribution, otherwise a floating population will develop, causing the outflow of economic wealth from the local area. If this occurs the area will become vulnerable to outside economic exploitation and decentralised economy will be undermined.
The surplus wealth, after meeting the minimum requirements of the people in the local area, should be distributed among the meritorious people according to the degree of their merit. For example, doctors, engineers, scientists and other capable people engaged in various activities require extra amenities so that they can perform greater service to society. While a common person may require a bicycle, a doctor may require a car. But there must also be provision in the economy for reducing the gap between the minimum requirements of all and the amenities of meritorious people. To increase the standard of living of common people, they may be provided with scooters instead of bicycles. Although there is some difference between a scooter and a car, the gap that existed between a car and a bicycle has been partially reduced. The economic gap between common people and meritorious people should be reduced as much as possible, and ceaseless efforts must be made in this regard, but this gap will never vanish altogether. If the gap increases, the common people will be deprived and exploitation will re-emerge in society in the guise of amenities. decentralised economy leaves no such loophole because on the one hand the standard of the minimum requirements must be increased, and on the other hand the provision of amenities will be assessed from the viewpoint of the collective welfare.
The second principle of decentralised economy is that production should be based on consumption, not profit. Most countries in the world have adopted economic systems which are profit oriented – that is, production is undertaken for profit. Producers give first preference to those items which bring maximum profit, so everywhere there is keen competition regarding the production of the most profitable goods. India is no exception. To increase the standard of living of the people, a new system of production will have to be introduced. Consumption, not profit, should be the underlying motive in the field of production.
In a decentralised economy the commodities produced by a socio-economic unit will be sold in the local market itself. As a result, there will be no uncertainty in the local economy or the economic life of the local population. In addition, money will be circulated within the local market so there will be no outflow of local capital. The possibility of an economic catastrophe in the local economy will be largely eliminated. In such a system, people’s income will have an upward trend and their purchasing capacity will continuously increase. No economic system in the world has been able to continuously increase the purchasing capacity of the people, because economic power is concentrated in the hands of a few.
The third principle of decentralised economy is that production and distribution should be organized through cooperatives. One of the principal reasons for the past failure of the cooperative movement is economic centralization. It is extremely difficult for cooperatives to succeed in an economic environment of exploitation, corruption and materialism, so people cannot accept the cooperative system wholeheartedly. Cooperatives are forced to compete with the monopoly capitalists for local markets, and the rights of the local people over their raw materials are not recognized. Such circumstances have undermined the success of the cooperative movement in many countries of the world.
On the other hand, decentralised economy is one of the principal reasons for the success of the cooperative system. The availability of local raw materials will guarantee constant supplies to cooperative enterprises, and cooperatively produced goods can be easily sold in the local market. Economic certainty will create increasing interest and involvement among the cooperative members, and as the local people will be confident of their economic security, they can wholeheartedly accept the cooperative system.
As far as possible, agriculture, industry and trade should be managed through cooperatives. In these sectors of the economy private ownership should be abolished in stages. Only where production cannot be undertaken by cooperatives because of the complex nature or small scale of operations should it be undertaken by private enterprises. The distribution of commodities should be done through consumers cooperatives. Adequate safeguards for cooperatives will also have to be arranged.
The cooperative system is a must, and it is only possible through decentralised economy. The cooperative system and decentralised economy are inseparable.
The fourth principle of decentralised economy is that the local people must be employed in local economic enterprises. Unless the local people are fully employed in the local economy, unemployment can never be solved. Local people should determine the quantum of minimum requirements and the basic policies connected with their own economic well-being. If this principle is followed the problem of outside interference in the local economy will not arise at all.
Cooperatives will provide employment for local people, and also ensure that the skills and expertise of the local people are fully utilized. Educated people should also be employed in cooperatives so that they do not leave the local area in search of employment or move from the countryside to the cities.
For the development of agriculture there is a great need for specialists and technicians, so cooperatives will have to train unskilled rural people so that they can acquire the necessary skills to develop the agricultural sector. In addition, all types of agro-industries and agrico-industries will have to be developed according to the needs and resources of the local area, and these industries should be managed as cooperatives.
The fifth principle of decentralised economy is that commodities which are not locally produced should be removed from the local markets. As decentralised economy aims to develop local industries and create employment for the local population, those commodities which are not produced within the local area should be banished from the local market as far as possible. It is essential that the local population utilize the commodities produced in their own area to ensure the prosperity of the local economy. Initially, local commodities may be inferior, more costly or less readily available than outside commodities, yet in spite of this, locally produced commodities should still be used by the local people. If local commodities do not meet the needs and aspirations of the people, immediate steps must be taken to increase the quality, reduce the price and increase the supply of local goods, otherwise illegal imports will be encouraged.
In a decentralised economy, the application of this principle is very important. If it is neglected, the local industries will gradually close down, local markets will go out of the hands of the local people and unemployment will increase. Once locally produced goods are accepted in principle, not only will local industries survive, but with their further development the local economy will thrive. The outflow of capital from the local area will be checked, and because it will remain in the local area, it will be utilized to increase production and enhance the prosperity of the local people. With the increasing demand for local commodities, large-scale, medium-scale and small-scale industries will all flourish.
The agricultural, industrial and trade policies of a socio-economic unit will have to be formulated according to the principles of decentralised economy. The maximum utilization and rational distribution of local resources and potentialities to ensure full employment should be given priority, keeping in view that there should be uniform economic development in all regions of a socio-economic unit.
The members of the cooperatives should decide the policies concerning such things as agricultural production, price fixation and the sale of agricultural commodities. Local people should not only control cooperative bodies, but supervise all activities related to the local economy. The local administration will have to assist the economic development of cooperatives. The price of agricultural commodities should be fixed on a rational basis by taking into account the price of commodities; the cost of labour, raw materials, transportation and storage; depreciation; sinking funds; etc. In addition, this price should include a rational profit of not more than fifteen percent of the cost of production. In a decentralised economy agriculture will have the same status as industry.
The industrial system must also be reorganized according to the principles of decentralised economy. If a certain part of a country is over-industrialized, it will impede the economic progress of other regions. Economic decentralization will not allow such a situation to arise. In a decentralised economy, key industries, medium-scale industries and small-scale industries will be managed by different groups of people. In a centralised economy – whether capitalist or communist – these industries are usually managed as either private companies or state enterprises. Most key industries should be managed by the local government but they should be guided by the principle of “no profit, no loss”. Most medium-scale industries should be managed as cooperatives, but they should not be guided by monopoly production and profit. The cooperative sector will be the main sector of the economy. Cooperatives are the best means to organize local people independently, guarantee their livelihood and enable them to control their economic welfare. Most small-scale and cottage industries will be in the hands of individual owners. Small-scale industries should be confined mainly to the production of non-essential commodities such as luxury items. Though privately owned, they must maintain adjustment with the cooperative sector to ensure a balanced economy.
A rural economy should not depend solely on cottage industries, otherwise the economic welfare of the rural population will be jeopardized. If cottage industries are properly organized, rural women will also get ample scope to earn a decent livelihood. Cooperatives and the local administration will have to take the responsibility of supplying cottage industries with raw materials so that they do not suffer from scarcity.
The local administration will also have to arrange for the supply of sufficient power to facilitate industrial production. Every region in a socio-economic unit must strive to be self-sufficient in power generation. The local administration will have to supply locally generated power such as solar energy, thermal energy, bio-gas, hydroelectricity, nuclear energy, pneumatic energy, electromagnetic energy and tidal power, or any other power which is easily available locally. The generation of power is a key industry which should be run on a no profit, no loss basis so that the cost of production is minimized and the purchasing capacity of the people is increased. For example, if batteries are produced through cottage industries, power should be supplied on a no profit, no loss basis, but the battery producers will be able to sell their batteries at a rational profit. Here the power that is used to manufacture the batteries is not an industrial commodity but a raw material. The power for such things as transportation, communication, schools, colleges and hospitals should also be supplied on a no profit, no loss basis to maintain social dynamism. The immediate government or the state government will have to take the responsibility to supply power as a key industry.
All kinds of industrial activities from key industries to cottage industries should be organized with the cooperation of the local population. Care should also be taken so that private enterprises are set up by the local people. Local people must be given preference in employment, and all local people should be locally employed. If this policy is followed, there will be no surplus or deficit labour among the local people, and if many people do come from outside areas, they will not find a place in the local economy. Where a floating population exists in a particular region, the outflow of capital remains unchecked and the economic development of the area is undermined.
Trade in a decentralised economy should be organized by distributing commodities through consumers cooperatives. There will be no income tax, but there should be a tax levied on the production of each commodity. Commodities should be exported from one region or socio-economic unit to other regions or units through cooperatives.
In the decentralised economy of PROUT, exporting local raw materials is not supported. Only finished goods should be exported under certain circumstances. After all the requirements of the local people in a socio-economic unit have been met, the surplus goods may be exported, but only to a socio-economic unit which has no immediate opportunity or potential to produce them, in order to meet the requirements of the people in that unit. And even then, the whole transaction of importation and exportation should be undertaken directly by cooperatives, and the exportation of commodities must not be motivated by profit. If there are insufficient raw materials in any socio-economic unit to meet the minimum requirements of the local people, the necessary raw materials may be imported from another socio-economic unit providing it can be carefully verified that the raw materials in the latter unit are surplus. Free trade should be encouraged once self-sufficiency is attained, as this will help facilitate increased prosperity and encourage economic parity among socio-economic units, and lead to the formation of larger socio-economic units.
Another important characteristic of decentralised economy is that money will always remain in circulation, hence the economy will move with accelerating speed. The value of money depends on the extent of its circulation. The more frequently money changes hands, the greater its economic value. The greater the value of money, the greater the prosperity in individual and collective life, and the greater the opportunities for all-round welfare.
There is a close relationship between the economic prosperity of people and their psychic and cultural development. Improvements in individual and collective life will lead to the all-round welfare of people. If local people do not develop a sense of self-confidence in their economic activities, then they become mentally weak, and this inherent weakness becomes an impediment to their economic well-being. Such a community will become an easy victim of economic, political and psycho-economic exploitation by vested interests. This unhealthy situation must be firmly resisted. Thus, the local language is to be used in all local dealings and transactions. That is, the local language should be used in the administration, the education system, the economy, and in cultural activities. All official and non-official bodies and offices of a particular socio-economic unit should use the local language as the medium of communication.
The overall well-being of society is the ultimate goal of decentralised economy. This is a comprehensive ideal and should be established in each and every socio-economic unit. It will bring about economic prosperity as well as ensure greater opportunities for the psycho-spiritual elevation of all members of society.
16 March 1982, Calcutta
by P.R. Sarkar
In the beginning, Master Units were started with a view to developing the fate of the backward and downtrodden classes of society who find no scope to keep pace with the developing world. When Ananda Marga started touching every discipline of life, it was then contemplated to establish the Master Units as the miniature forms of Ananda Marga. As there are different nerve centres in the body which control the function of the different limbs and organs, and which are finally controlled by the mind itself, likewise the Master Units will be treated as the nerve centres of the society. There has to be active representation and participation from all the departments, branches and sub-branches of Ananda Marga in the Master Units. Those who fail in representation will be lost in non-existence.
These miniature forms of Ananda Marga will expand and gradually terminate in the maxiature form and cover the whole universe. Master Units will expand all possible services, particularly in the fields of education, culture, economics and spiritual upliftment. These Master Units will work to improve the fate, first of all human beings, and then of all living beings, irrespective of caste, creed, colour, religion and national barriers. Humanity knows no artificial barriers. Humanity is the only criteria.
Through Master Units and PROUT, we will elevate the standard of the people in a few months or a few years. We should also serve the people immediately by all-round service. PROUT and all-round service may render temporary service – they move along the flow of life – but our spiritual philosophy is above the flow of life. Hence, with spiritual philosophy as the hub, we are to start as many Master Units as possible. All-round service, PROUT and Master Units are the ways of life.
What are the primary requisites of an ideal Master Unit? There are five, which correspond to the five minimum requirements in PROUT. First, to provide food throughout the year, sufficient local raw materials must be produced through agriculture and scientific farming. These raw materials will provide the basis for industrial units and agro-industries such as dairy farms, horticulture, sericulture, etc. For such industries, you cannot depend on raw material from anywhere else.
Secondly, there should be production of sufficient fibres and fabrics for clothing. For example, fibres from ladies’ fingers (okra), pineapple, sugar beet, banana, basil, cotton, sisal, etc. can be used for clothing.
Thirdly, primary and post-primary schools should be started on all Master Units. Higher education institutions should not be established just now.
Fourthly, general and special medical units should also be established. Special medical centres would accommodate invalid people for a certain periods because Master Units may or may not run big hospitals. Medical units should emphasise alternative medical treatments.
Fifthly, Master Units should undertake schemes to construct houses for extremely poor people. This special housing scheme for the poor must be immediately established.
There is the necessity of starting Master Units in each and every district and block of the world. Master Units will be the biggest structure of Ananda Marga. All Master Units will be the minia ture forms of Ánanda Nagar, and these Master Units will be the main centres for the Ánanda Márgiis. Master Units should be a minimum of five acres. The Saḿskrta name of Master Unit is “Cakranemii” which means “the nucleus of the cakra” (wheel). I want all Master Units to be economically self-sufficient in all respects, because spiritualists should not depend on the wealthy class for money.
There are several common points which should be implemented in all Master Units:
Schools, including primary, post-primary and higher secondary schools.
Hostels, including junior hostels, senior hostels and higher hostels.
Children’s homes, including junior homes, senior homes and students homes.
Besides these common points, there are some special features of Master Units which should also be implemented:
A wheat grinding machine or flour mill to produce flour.
A bakery to produce bread, etc.
A seed bank.
A Cheap Seed Distribution Centre (Sulav Biija Vitaran Kendra). The centre will collect good quality seeds and sell them at cheap rates. Seeds may be purchased from local farmers at the end of each harvest, purchased at cheap rates in the market or cultivated, but the centre should provide good quality seeds at cheap rates to the people.
A Free Plant Distribution Centre. This centre will grow plants from seeds and seedlings. The following system should be used to prepare plants for distribution. The seedlings should be grown until they are one and a half feet tall. The plants should then be uprooted and their roots soaked in water for half an hour. Next, the main root of each plant should be cut off one inch below the base of the plant, and the remaining roots should again be soaked in water for ten minutes. The plants should then be planted in a field or packed for distribution. Plants which are prepared in this way will produce large, sweet fruits. The fruits will be better than those produced from seedlings, but not as good as those produced from grafted plants.
Sericulture and silk weaving centre.
Bio-gas plants. This means that there must be a dairy farm. Water hyacinths are also good for producing bio-gas.
An Ideal Farm Training Centre.
On all our Master Units, only bio-fertilizers like compost, cow dung, neem paste, neem spray, etc. should be used. Chemical fertilizers must be avoided. Our Master Unit program is a combination of oriental sublimity and western dynamicity.
From: PROUT in a Nutshell Part 19
10 November 1989, Kolkata