PROUT Cooperatives

By Garda Ghista

“The sweetest unifying factors are love and sympathy for humanity. The wonts of the human heart are joy, pleasure and beatitude. In the physical realm the best expression of this human sweetness is the cooperative system. The cooperative system is the best representation of the sweet nectar of humanity.”

Prabhat Ranjan Sarkar

PROUT cooperatives have been developed by the philosopher and economist, Prabhat Ranjan Sarkar. According to Sarkar, cooperatives are essential in order for the community and then the society to move forward in a collective manner. Cooperatives “combine the wealth and resources of many individuals and harness them in a united way. To...achieve this…cooperatives should be structured so that individual interest does not dominate collective interest.” Sarkar states clearly that the commune system cannot work because it is made up of master and servant relationships, or supervisor and supervised. In this interpersonal setup, progress will not be forthcoming. In communes there is no personal ownership. It means the people will not work hard, as morale will be low. What is the incentive to work hard? In the capitalist system, a large part of the end profit is grabbed by middlemen. In a cooperative system, the owners/members will make all decisions regarding when and to whom to sell, and at what price. In PROUT cooperatives, members/ owners would be comprised of local people only. This would solve the present problem of immigrants taking over thousands of jobs which the locals need. In the PROUT cooperative system, there will be no unemployment. As production increases, the need for more facilities and jobs will also increase. People of all and varying skills will be utilized with the expansion of cooperatives. During times of economic recession or depression, all members’ labor and contribution will be accordingly reduced, so that no one suffers from the stigma of being without a job. This will also help the economy to pick up to a healthy level of activity. Here is a clear example of the humaneness of the cooperative system as compared to the capitalist economic system where thousands or millions of people are laid off with the snap of a finger.

PROUT cooperatives will comprise of (1) shareholders, who receive salaries for their work plus a return on their shares, and (2) non-shareholders or laborers, who will enjoy stable employment and living wages at the least. Laborers can be further categorized as (1) permanent laborers who will receive a percentage of the surplus revenue in addition to their wages, and (2) non-permanent laborers, who will receive wages only. Thus, the more permanent a coop member and the greater his/her contribution, the greater also will be the rewards. All human beings can benefit from the cooperative system. Elderly single women through owning shares can have a steady income provided to them. In the same manner disabled people can be taken care of. Impoverished women by their labor can also receive steady income plus a percentage of the surplus revenues.

PROUT cooperatives would elect a Board of Directors, and it would be required that those Directors as a minimum qualification be known as fearless moralists in their communities. In the developed stage of PROUT cooperatives, the three types of cooperatives – producer, worker and consumer – would all be interacting with and buying from each other and supplying each other with goods.

The quintessential evil of capitalism is that (1) it denies the poor people any economic participation, (2) it is based on self-interest, selfishness and profit alone, (3) money is everything, human beings count for nothing, (4) competition is everything, the collective good has no value, and (5) it is undemocratic. On the other hand, the cooperative system (1) helps the weak and impoverished persons to grow, to become strong and self-sufficient, (2) is based on the collective interest and collective good, and not on profit. Hence the rendering of social service becomes prominent in the community, (3) Human beings have more value than money and profit. (4) Cooperatives provide economic stability because there is no stockpiling of unconsumed goods, and no profit motive. And (5) It is democratic – one man, one vote.
Economy of the people, for the people and by the people!

Prabhat Sarkar in his development of PROUT economics has indicated that there should be a two-phase plan to introduce cooperative land management. First, all uneconomic land holdings should join the cooperative system so as to convert them to economic holdings.51 In the second phase, all persons should be encouraged to join the cooperative system. Third, there should be rational distribution and re-determination of ownership of the land. In the fourth phase, a congenial atmosphere will be created due to mental/psychic expansion and a deep study of morality, where people will learn to think for the collective welfare rather than for their own petty self-interests. This will be a gradual change in the community. The people themselves will be persuaded to develop this kind of altruistic mindset.

Sarkar further says that cooperatives, to be successful, require three factors: morality, strong supervision, and the wholehearted acceptance of the masses. Wherever these factors are present, the cooperatives have been reasonably successful. The poor people need to be educated regarding the benefits of cooperatives to their lives. They need to understand that it will bring them out of poverty and will provide them enough purchasing capacity to lead a dignified life.

Sarkar wants that modern technological equipment be used for farming, as this will free up many hours for the farmers and particularly for the women and children, giving them the glorious opportunity to develop themselves. He also wants no intermediaries in cooperatives. They are the leeches who suck the blood and sweat of the laborers and grab all profits in their greedy paws. It is also a critical point that cooperatives remain controlled by local people. Tea plantations, coal mines and all other natural resources such as minerals under the ground must not be given to outsiders to control. Local people must get first chance for employment. If jobs remain, then transient labor can be used.
Where the landowners have remained the owners, and they hire laborers for reaping the harvest, then 50% of the profits will go to the landowner and the other 50% will go to the laborers. This is in the first phase, mentioned above. In the second phase, the landowners will get 25% of the profit and the laborers will get 75%. In the third phase, there will be rational distribution of land and redetermination of ownership. All owners will be encouraged to join the cooperative system at this point. Sarkar then states:

“This time period from the first phase to the fourth phase of the implementation of the cooperative system can be called the transitional period for the implementation of PROUT.”

Prabhat Sarkar also explains that only a certain percentage of the population should be involved in agricultural work. He gives the figure of 40-45%. The remaining population should be engaged in setting up and running industrial cooperatives or service industries. This is very important, for it will allow people to remain in their towns and villages and not have to migrate to cities for work.
Another point made by Sarkar is that any products not produced in a particular area should be removed from that area. This will ensure the economic success of that area. For sure local products may initially be inferior to those produced outside; however, they should still be used by the local people, and in time they will improve.

He further explains the terms coordinated cooperation and subordinated cooperation. “Operation” means to get something done through any medium. If an operation is done collectively, then it is cooperation. Cooperation means something that is done with equal rights, equal human prestige and equal locus standi (i.e., legal rights). He says that if this cooperation is between human beings who have equal rights and mutual respect for each other and all participants are working for the collective welfare, then this working relationship is called ‘coordinated cooperation’. If people work together but if some of those people are keeping themselves under other people’s supervision or domination, then it is called subordinated. This subordinated cooperation has been the cause of society’s moral degeneration, including racism.53 For this very reason, Sarkar is advocating cooperatives as the way towards a new and truly democratic economic system, because in a properly structured cooperative, all people are working collectively in coordinated cooperation. Subordination is a thing of the past. Sarkar has stated:

“The entire human society is of a cosmopolitan nature – nothing can be treated as being indigenous to this group or that. The world is fast moving toward cosmopolitanism, and none will be able to maintain their national characters. The big towns have already become cosmopolitan. Just as the mixture of the English, the Spanish, the French and so on gave rise to the culture of America, similarly a cosmopolitan blending is taking place. Cultural blending is going on throughout the world. No group of people or nation will be able to maintain its specialty – the political entities are trying hard to maintain these specialties, but they will not be able to. During a time of flood, ponds, streams, lakes, oceans all become one; similarly, culture will become one.”

We need to set up the economic system from the bottom up, from the grassroots level. From PROUT cooperatives will evolve block-level planning. As a result of block-level planning, community rights will evolve. The individual communities at the block level will create a self-sufficient and balanced economy. (We can designate one block as being equal to approximately 100,000 persons in a given area.) As we move up from the block level to larger and larger units, coming to the national and then international level, we finally can achieve something called a world government based on economic democracy. This world government would replace the current corporate globalization with something called democratic globalization – it would be a real globalization (coming together now) involving all the people of the world, from the block-level on upwards. It would be a real democracy, where the people could then pass international labor laws to further benefit the people! This would bring an end to economic colonization, regional disparity and cultural imperialism. This would have no connection whatsoever with the United Nations. The United Nations is not a grassroots affair. UN ambassadors are appointed by ruling leaders of countries, which certainly does not involve democracy. They make decisions without consulting the people. For this very reason, the United Nations is entirely ineffectual in solving global problems. Rather, it is doused in financial corruption with millions of public dollars being squandered by thousands of administrative employees. However, from cooperatives, we can develop socio-economic units. They need to be established throughout the world “on the basis of common economic problems, similar economic potentialities, ethnic similarities, common sentimental legacy and similar geographic features.” Gradually these socio-economic units will come to represent political units. From there will evolve a democratic world government. Sarkar states:

“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 centralized economy or a decentralized economy. Which one will they select? Political democracy cannot fulfill the hopes and aspirations 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.

Put economic power in the hands of the people!