Progressive utilization theory: Difference between revisions

Revision as of 07:50, 31 March 2022

Revision as of 04:26, 11 May 2022

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==Theory==

=== Overview ===

Prout proposes a [[socioeconomics|socioeconomic]] system that ishe views as an advancement on [[capitalism]] and the largely outdated [[communism]].<ref name=Irving/> Under thehis system, [[Tangible property|resources]] would be [[common ownership|collective property]] from which usufructuary rights are carved out for use by individuals or groups of individuals. [[Distribution (economics)|distributionDistribution]] of goods in a market has to be rational and equitable, so that the allocation of a good maximizes the physical, mental, and spiritual development of all people.<ref name=Crovetto2008/><ref name=Onwuka /> There must always be a baseline distribution that intends to guarantee food, clothing, shelter, education, and medical care (whatwhich the theory regards as minimum living requirements for humans).<ref name=Crovetto2008/>

Prout advocates a three-tiered approach to [[industrial organization]]. Key industries and [[public utilities]] would operate on a [[no profit - no loss basis]] as these are resources held on trust for the public. Decentralized industry run by [[cooperatives]] would provide people's minimum necessities and other amenities of life. The majority of economic transactions would be through producers' and consumers' [[cooperative]]s.<ref name=Crovetto2011/> Incentives for people serving society would be funded via surpluses.<ref name=Crovetto2011/> A small business sector would also operate providing goods and services on a more individualiszd basis.

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=== The market ===

As far as Prout's values and goals differ from those of [[capitalism]] and [[communism]],<ref name=":3">{{Cite book|title=PROUT in Power|last=Inayatullah|first=Sohail|publisher=Proutist Bloc India|year=2017}}</ref><ref name=":8">{{Cite web|url=http://jan.ucc.nau.edu/jar/HOH/HOH-8.pdf|title=Panimatzalam's Voice of Transformation: An Indigenous Mayan Writing Project for Youth Activism|last=Oppenheim|first=Matt|website=North Arizona University|page=144}}</ref> so does its [[Economic system|economic structure]]. Following a close analysis of the two systems, Prout's propoundersupporters arguesargue that these philosophies are "anti-human“ in the sense that they encourage people to relentlessly pursue material attainment, like name, fame, etc.

Another criticism of [[Neoliberalism|neo-liberalism]] and capitalism in general is that the centralization of economic power in the hands of the rich leads to the exploitation of the masses and ultimately to the degeneration of society.<ref name=":4">{{Cite book|title=PROUT in a Nutshell part 12|last=Sarkar|first=Prabhat|publisher=Ananda Marga Publications|year=1986}}</ref>

Prout claims that both capitalism and communism have been built on shaky foundations, and identifies weaknesses to a point where a new market system is required.<ref name=":3" /> He heavily critiqued communism, indicating that one of the reasons the [[Soviet Union|USSRsUSSR]]'s experiment with communism did not work, causing the eventual implosion of their political structure, is that the sovieticSoviet central planning committees ([[Gosplan]]) had too much economic decision-making power and cohersioncoercive power in the federation (see [[Marxism–Leninism]]).<ref>{{Cite web|url=http://www.centrosraffa.org/public/bb6ba675-6bef-4182-bb89-339ae1f7e792.pdf|title=An analysis of the Soviet economic growth from the 1950s to the collapse of USSR|last1=Serrano|first1=Franklin|last2=Mazat|first2=Numa|website=Centros Raffa|page=3}}</ref><ref>{{Cite web|url=https://www2.warwick.ac.uk/fac/soc/economics/staff/mharrison/inactive/command.pdf|title=Are Command Economies Unstable? Why did the Soviet Economy Collapse?|last=Harrison|first=Mark|website=University of Warwick}}</ref>

Nonetheless, Sarkar observed that aspects of [[Economic planning|market planning]] thatmay help to create and sustain a healthy economy.<ref name=":5">{{Cite book|title=Growing a new economy|last1=Bjonnes|first1=Roar|last2=Sevaergrah|first2=Caroline|publisher=Inner World Books|year=2016|isbn=9781881717539}}</ref> In summary, Proutist thought considers that planning allows the market to protect its stakeholders from the meanderings of [[Neoliberalism|neo-liberal economics]] where profit-motive speaks highest.<ref name=":9">{{Cite web|url=http://www.prout.org.au/books/Self-Reliant%20Regional%20Development.pdf|title=Self-Reliant Regional proutist development|last1=Ghista|first1=Dhanjoo|last2=Towsey|first2=Michael|website=Prout.org|page=7}}</ref> However, he stresses that a planning committee at a national level should only outline the broader aspects of economic development, leaving the details to be resolved by planning bodies at a local level where problems are best understood and more easily dealt with.<ref name=":6">{{Cite web|url=http://www.proutinstitute.org/download/block-level-planning/|title=Block-level planning|last=Logan|first=Ronald}}</ref> (see [[diseconomies of scale]]). Consequently, this kind of top-down planning will leave communities, enterprises and ultimately workers with a significant level of freedom to decide their own economic future (see [[Decentralized planning (economics)|decentralized planning]]).<ref name=":6" />

Prout also claims that the [[nationalization]] of enterprises is inefficient due to the larger costs and amount of bureaucracy necessary to keep state-controlled industries running.<ref>{{Cite book|title=Human Society part 1|last=Sarkar|first=Prabhat|publisher=Ananda Marga Publications|year=1959}}</ref><ref>{{Cite news|url=https://www.economist.com/blogs/economist-explains/2015/12/economist-explains-1|title=Why nationalisation has fallen out of favour in Britain|work=The economist}}</ref> Yet, there are some industries that should be nationalized, operating on a "no-profit, no-loss" principle.<ref>{{Cite book|title=Prout in a Nutshell volume 4 part 21|last=Sarkar|first=Prabhat|publisher=Ananda Marga Publications|year=1986}}</ref>

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Concerning wealth distribution among the population, Sarkar argues for an "optimal inequality" where the wage gap between the richer strata of society is substantially subsided.<ref name=":5" /> [[Richard B. Freeman|Richard Freeman]], a Harvard economist, points out income inequality comes from the monopoly of power and other activities with "negative consequences" in terms of social development.<ref>{{Cite news|url=https://www.nytimes.com/2014/03/05/opinion/edsall-just-right-inequality.html|title=Just Right Inequality|last=Thomas|first=Edsall|date=2014|work=The New York Times}}</ref> Nonetheless Prout is not in favour of total income equality, claiming that in a society where material motivation to work is absent, the willingness to strive for financial success and to thrive in the creative development of industry and society will be lost in its citizens. Therefore, this theory argues for the implementation of a policy allowing the most meritous in society to receive added perks for the added benefits they bring to society. It is thus theorized that the communist's motto of [[from each according to his ability, to each according to his needs]] cannot work in the real world. Prout proposes instead a minimum and maximum wage, roughly attributed according to the value the work of each person brings to society. We see examples of attempts in this direction in companies like [[Mondragon Corporation|Mondragon]] or [[Whole Foods Market|Whole Foods]].

Regarding neo-liberalism, Sarkar throws a new light toon the concept of Adam Smith'sthe [[invisible hand]], wherewhich claims that individual producers acting in their self-interest benefit the community as a whole. Prout claims that, unchecked, societiesthe economic elite will disrupt the just circulation of material wealth within society. The market will then require regulatory measures so as to create a functional economic system.{{Citation needed|date=May 2018}}

=== Economic democracy ===

In relation to democracy, Prout argues that political democracy is not enough to free society from exploitation and what it considers extreme income inequality.<ref name=":5" /><ref name=":17">{{Cite web|url=http://www.online.southcentral.edu/students/instructors/MFMyROSEarticle.pdf|title=Living Wage and Optimal Inequality in a Sarkarian Framework|last=Friedman|first=Mark|date=2008|archive-url=https://web.archive.org/web/20160308014454/http://online.southcentral.edu/students/instructors/MFMyROSEarticle.pdf|archive-date=2016-03-08|url-status=dead}}</ref> As [[Roar Bjonnes]], a known Proutist, states, "Unless we have deeper structural change – what we refer to as economic-systems change – we will never be able to solve such global and systemic problems as the environmental and inequality crises. History has demonstrated that political democracy is not enough."<ref name=":5" />

Prout, therefore, advocates an [[economic democracy]] where the decision-making power for the economic future of a community is given to its inhabitants. Economic democracy is not a new term, but Sarkar reinvents it by setting four requirements for what he considers a successful oneeconomic democracy.<ref name=":5" /><ref name=":10">{{Cite book|title=Proutist Economics: Discourses on Economic Liberation|last=Sarkar|first=Prabhat Ranjan|publisher=Ananda Marga Publications|year=1992|isbn=9788172520038}}</ref> The first and foremost requirement is guaranteeing the minimum requirements of life to all members of society. Secondly, and following one of the five fundamental principles, Prout argues that there should be an increasing purchasing capacitypower for each individual, stating that local people will have to hold economic power over their socio-economic region.<ref name=":10" /> Still, on this regard, Sarkar theorizes that, unlike [[capitalism]], where the production and distribution of goods are mainly decided by market competition, in a Proutistic society it should be based on necessity.<ref name=":0" /><ref name=":8" /> The third requirement of economic democracy is the [[decentralization]] of power, giving the freedom to make economic decisions to its stakeholders.<ref name=":10" /> That can be accomplished by adopting a worker-owned cooperative system <ref>{{Cite book|title=Worker and Community: Response to Industrialization in a Nineteenth Century American City, Albany, New York, 1850-1884|last=Greenberg|first=Brian|year=1985|isbn=978-0-88706-046-5}}</ref> and by the use of local resources (raw materials and other natural resources) for the development of the region and not merely for export.<ref name=":10" /> In summary, Prout advocates a decentralized economy where self-sufficient economic zones are created and organized according to a set of predetermined conditions (see socio-economic units).<ref name=":5" />

Prout claims this requirement does not express xenophobic feelings, it solely claims to be the realization that there should not be a constant outflow of local capital, where natural resources are explored by foreign investment companies that extract assets and money out of the community.<ref name=":5" /><ref>{{Cite book|title=Small Is Beautiful|last=Schumacher|first=E.F.|publisher=HarperCollins|year=1973|isbn=978-0-06-091630-5|url-access=registration|url=https://archive.org/details/smallisbeautifu000schu}}</ref> From a [[Neohumanism|Neohumanist]] perspective, all people are free to choose where they wish to live, as long as they merge their economic interests with the ones of the local people.

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==Reception==

ProutProutism is a relatively unknown theory.<ref name=":17" />

[[Ravi Batra]] was one of the first economists that used the ideas of Prout in his bestseller ''[[The Great Depression of 1990]]''. In time, the theory attracted attention of people like [[Johan Galtung]], founder of the UN Institute for Peace studies who claimed that ''"Sarkar’s theory is far superior to [[Adam Smith|Adam Smith’s]] or that of [[Karl Marx|Marx]]."'' <ref name=":16" />