“Pragatishiila upayogatattvamidam' sarvajanahita' rtham' sarvajanasukha' rtham praca'ritam”
[This is the Progressive Utilization Theory, propounded for the happiness and all-round welfare of all.]
A developed economy should consist of four parts - people's economy, psycho-economy, commercial economy and general economy. This quadri-dimension of economy is a vast ex¬pansion on the contemporary and co-contemporary conceptions of economic activity.
Most economists today understand only a little of the principles of general economy and something of commercial economy; but both of these parts are still in an undeveloped stage. People's economy and psycho-economy are totally over-looked by modern economists, and as such could find no place in the present mode of economic thinking.
People's economy deals with the essential needs of the people in general - the production, distribution, marketing, shipping, storage, pricing, sales, freight charges, Proforma costing, and all related activities of such essential needs. Most importantly, it is directly concerned with the guaranteed provision of minimum requirements such as food, clothing, housing, medical treatment, education, transportation, energy and irrigation water. Continuous improvement and ready availability of these requirements is the key factor in people's economy.
Purchasing capacity: The minimum requirements can be assured through guaranteed purchasing capacity which should be enshrined in the constitution as a fundamental or cardinal human right. This will give the citizens of the country legal power if their minimum requirements are not met, hence the necessity of purchasing capacity will be reinforced by constitutional law. As people's economy will deal with minimum requirements and people's subsistence problems, it must take precedence over other parts of the economy.
Co-operative Industries: People's economy should also be concerned with the development of both private and cooperative industries. Private industries would be limited in size and scope to prevent monopoly production and exploitation, and would be required function as co-operatives once they grow too large. Cooperative industries are the best means of independently organize people so that they take collective responsibility for their livelihood.
Economic Decentralization: People's economy also includes employment for all; eradication of mass poverty; the development of rural economy the phase-wise socialization of land into the hands of those who work physically, or intellectually for proper production; practical training programs to impart skills which enable people to find employment in their immediate urban or rural locality work placement; and the transportation, transshipment, loading and unloading of any materials, even if they are not economically viable in the short-term. It is also concerned with generation of cheap power and the supply of water, which are essential if people are to control their local economics. Finally, it includes economic decentralization, cooperative dynamo and block-level planning.
Take the example of Bengal. The following program based on the provision of the minimum requirements may be adopted to improve the economic standard of Bengal.
Different crops, fruits and vegetables can be grown all over Bengal, which is 'capable of feeding its entire population of around seventy million people through its own resources if they are properly managed.
Education materials such as paper and ink are also available in Bengal. Paper can be manufactured from different grasses and plants which can be readily grown in several districts. Ink can be manufactured from synthetic processes or from indigo.
Neo-Humanistic Principles: These four parts of the economy should be integrated and adjusted according to Neo-Humanistic principles to ensure the maximum utilization and rational distribution of all resources, and to harmonize human progress with all creation.
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.
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 system 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.
To increase people's purchasing capacity, the easy availability of the minimum requirements, stable prices, progressive, periodic increases in wages and salaries, and increasing collective wealth must be ensured.
In a Proutistic economy, there will be no limit to purchasing capacity - that is, purchasing capacity will be ever increasing. The minimum requirements must be guaranteed and should always be increased according to time, space and person, and this can best be done by continuously increasing the purchasing capacity of the people in relation to the economic development of the concerned socio-economic unit. The greater the purchasing power of the people, the higher their standard of living.
Planning should also result in the increasing purchasing capacity of every person. ‘PROUT' does not support the existing practice of considering the per capita income as the index of people's economic standard. Per capita income is a deceptive and defective measure of collective wealth popularized by capitalistic economists to fool people and cover their exploitation. The genuine measure of people's economic advancement is increasing purchasing capacity.
According to PROUT, increases in per capita income are not a sufficiently reliable and scientific index to determine the standard and progress of a particular socio-economic unit. Rather, this approach is misleading and deceitful, because it refers to a simple mathematical calculation of total national income divided by total population. This does not give the correct picture of the standard of living of the people of a particular socio-economic unit as the wealth disparity in society is concealed. Per capita income shows the mean and not the variation of increase distribution. If inflation is also considered, the reliability of per capita income is further reduced.
Purchasing capacity, on the other hand, is the real index of how people's economic needs can be met by their income. All PROUT's plans and programs in the socio-economic sphere should be aimed at increasing the purchasing capacity of the people. PROUT stresses increasing purchasing capacity and not per capita income.
Per capita income is not a proper indication of the increase in the standard of living of the people because while people may have very high incomes they may not be able to purchase the necessities of life. If the per capita income is low and people have great purchasing capacity they are much better off. So, purchasing capacity and not per capita income is the true measure of economic prosperity. Everyone's requirements should be within their pecuniary periphery or purchasing capacity.
Such a simple approach of fixing per capita income suffers from the following defects :
In the subtle economic sense, the value of wealth is the real wealth. Wealth, if not properly defined, may mean only riches. But the value of wealth is to be measured in terms of its capacity to purchase commodities. That is, the purchasing capacity of wealth is its real value. This real value of wealth has not yet been properly understood in numerical terms by economists.
In a balanced economy, there should be proper adjustment among agriculture, industry and commerce. For example, a fixed percentage of people should be engaged in agriculture; another fixed percentage in industry and some percentage in commerce. Otherwise there will be no equipoise or equilibrium in the socio-economic sphere of life.
Unfortunately, no such adjustment exists in any country of the world today. Even in industrially advanced countries like Great Britain there is no proper adjustment. While England is developed, Scotland is backward. Even among the countries of England, some are developed and some are backward. Lancaster, for instance, is highly developed but Yorkshire is undeveloped. Sussex, Essex and Kent are not equally developed.
For a perfectly balanced economic environment, it is required that some thirty to forty percent of the people should depend directly on agriculture, and about twenty percent on agro-industries, twenty percent on agrico-industries, ten percent on general trade and commerce, and ten percent on intellectual or white collar jobs.
The agricultural system should be structured as an industry. That is, the prices of agricultural products should be determined by considering basic factors such as agricultural income, expenses and necessities. [For example]The farmers of Burdwan and Birbhum must not be forced to sell their rice at throw away prices; the growers of Hooghly district must not be compelled to sell their potatoes at very cheap rates; and the peasants of Nadia district must not be made to sell their jute at extremely low prices to pay off their debts. [Compiled from "PROUTIST ECONOMY" By Shrii P. R. Sarkar]
