FAQ: Socio-economics

What is the prime motivation of proutistic economy?
In order to guarantee the minimum requirements of all and to keep economic life free from stagnancy, the economy should be consumption-motivated and not profit-motivated. Physical wealth is in limited supply. There is enough for everyone’s needs but not for even a single persons’ greed. Since physical wealth is limited, it cannot satisfy the unlimited inner thirst of any living being. The economy, along with the political system, education, science, etc., should therefore see to it that human beings can move on in life together, and reach their ultimate goal of Supreme Emancipation and unity of all.

What are cardinal rights?
It is the cardinal, or fundamental, right of the people to be guaranteed the minimum requirements of food, clothing, housing, education and medical treatment. The proper supply of irrigation water is also a cardinal right, because without water, food, which is the most important of the minimum requirements, cannot be produced. Irrigation water is like the apex of a spinning top – without it the top cannot spin.

What are the specialties of PROUT’s economic system?
The specialties of PROUT’s economic system are:

  • Guaranteed minimum requirements
  • Increasing purchasing capacity
  • Cooperatives
  • Industrial development
  • Decentralization
  • Developmental planning

What are PROUT’s guaranteed minimum requirements?
The guaranteed minimum requirements are food, clothing, shelter, medical treatment and education for every human being. Once the minimum requirements have been guaranteed, the surplus wealth is to be distributed among those people having special qualities and skills such as physicians, engineers and scientists, because these people play an important role in the collective development of society. The level of minimum requirements should be progressively increased so that the standard of living of the common people is always increasing.

How does PROUT guarantee people’s minimum requirements of life?
It would be impossible to guarantee people’s requirements of life without further ado. It was the intention in communism to do so, but the dogma of equality soon proved catastrophic. Instead of just giving people what they need, PROUT will allow them to earn income in a system of fixed minimum income and maximum amenities. A guaranteed purchasing capacity should be enshrined in the constitution as a fundamental or cardinal human right.

How will PROUT give all people the required purchasing capacity?
The guaranteed purchasing capacity should be enshrined in the constitution as a 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. In a proutistic setup people will earn their purchasing capacity through work. There will be no unemployment in such a progressive-minded socio-economic setup as the local people will control the economy. When local people control the economy there is no chance of outsiders exploiting the local people. That local non-profiteering economy will develop self-reliance and it will be easy to keep everyone employed in such a consumption-motivated economy. As people’s economy will deal with minimum requirements and people’s subsistence problems, it must take precedence over other parts of the economy.

What does PROUT mean by “people’s economy”?
People’s economy is part of PROUT’s four-fold economic model, the other parts being general economy, commercial economy, and psycho-economy. People’s economy deals with the essential needs of the people in general – the production, distribution, marketing, shipping, storage, pricing, sales, freight charges, pro forma 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. This part of the economy comprises other essential areas as well, such as the development of both private and cooperative industries, employment for all, and all other areas and issues related to the economic development and welfare of the people.

What is the wage policy of PROUT?
Wages need not be accepted only in the form of money. They may be in the form of essential goods or services. It is good to gradually increase this component of wages while adjusting with the monetary component.

What is the role of amenities in a proutistic economic setup?
The role of amenities in a proutistic economic setup is:

  • To sustain the especially meritorious people in their continuous effort to offer above average service to society.
  • To inspire all to increase their effort for utilizing their individual and collective wealth properly.
  • To fulfil the progressive requirements of all.

Without stimulating economic growth continuously, by recognizing the natural diversity and competitive drive of human beings, economic vitality will decrease. In a proutistic setup the standard of living will go on increasing and this will be the proof or indication of the vitality of the society.

How does purchasing capacity of the people increase in a Proutist economy?
Today the purchasing capacity of millions of people globally is neglected or non-existent, which has caused a worldwide crisis. To increase the purchasing capacity of the people, it is essential to maximize the production of essential commodities – not luxury goods. Maximizing production of essential commodities will ensure that the minimum requirements are supplied to all.

What are the three types of commodities?
The three types of commodities are:

  1. Essential commodities, such as rice, lentils, salt and clothing.
  2. Demi-essential commodities such as articles for personal care and many household items.
  3. Non-essential commodities such as luxury goods.

These category contents will vary from country to country depending on the standard of living. Items in each category will go on being revised over time. What today is a demi-essential item may tomorrow be considered an essential commodity.

Who should produce which commodities?
Essential commodities which require huge capital investment should be managed by the local government. The railway system would be an example. Essential agricultural Items should be produced by worker cooperatives. Demi-essential items should be produced by producers cooperatives. Luxury goods can be left in the hands of the private sector. Hence for a healthy economy, agricultural cooperatives, essential commodity producers cooperatives, and essential commodity consumer cooperatives are essential.

How will essential commodities be distributed in a PROUT economy?
Goods will be distributed entirely through consumer cooperatives, not through the government, businessmen or middlemen. Hence there will be no scope for manipulation by profiteers.

In a PROUT system, will there be taxes on essential goods?
Essential goods will be entirely tax free. There will be no income tax either. Instead taxes should be levied at the starting point of production.

How to make up for the abolition of income tax?
If income tax is abolished and excise duty on excisable commodities is increased by only 10%, there will be no loss of government revenue. Moreover, when there is no income tax, nobody will try to accumulate black money. All money will be white money and as a result there will be economic solidarity, an increase in trade and commerce, more investment, more employment and an improvement in the position of foreign revenue. The abolition of income tax will prove a boon.

What do capitalists do with essential commodities?
They hoard them and create artificial scarcity so as to extract maximum profit for themselves.

What happens in all undeveloped socio-economic areas?
Surplus labor arises. When this surplus labor moves to the cities looking for work, then that undeveloped socio-economic area is likely to remain undeveloped forever. According to PROUT, wherever there is surplus labor, steps must be taken to provide employment in that very town/village. If local labor leaves, it will result in natural resources being controlled by outside labor, which will destroy the local economy because local people will lose control over their natural resources. For this reason, employment must be given first to local people, so that they do not leave their area.

What will be the hallmark of PROUT’s economy?
“Increase the purchasing capacity of the common people above all.” If this maxim is followed in practice, it will be easy to control the price of goods through the cooperative system and through economic decentralization.

What other key factor must be followed in a Proutist economy?
Paper money (monetary notes) must be backed up by gold. No paper money should be issued by a government unless that government can back up the paper money with gold coins.

What are the hallmarks of both capitalism and communism?
Both systems want the maximum output with the minimum investment. For this very reason it is critical to maintain economic balance in each country – balance in both agriculture and industry. Otherwise, socio-economic equilibrium will be destroyed. When there is over-industrialization (as we see everywhere today), it affects the personal, social and national health of the people. It precipitates gradual individual and collective degeneration. Further, if the industrial system depends on outside laborers, this will lead to rapid mental deterioration in the society. Also, people will face permanent scarcity of food.

Why have cities and states lost economic balance after having achieved prosperity?
First, if a city developed along a river system and the river changed course, the economy would be adversely affected. Second, if industries moved away from rural villages, the balance of the economy would be destroyed. Third, when there is a defective educational system and social system, the economic balance is lost.

What will be the result of establishment of a decentralized economy?
Economic exploitation will be eradicated; the gap between rich and poor will be minimized, and individual and collective welfare will be greatly enhanced. This will lead to greater opportunities for the intellectual and spiritual progress of all people in the society.

What is another benefit of keeping only local goods in a locality?
The outflow of capital from that area will be checked, and will be utilized to increase production and enhance the prosperity of the local people. With increasing demand for local goods, large-scale, medium-scale and small-scale industries will all flourish.

How will banks be managed under PROUT?
The banking system will be managed by cooperatives. The central or federal bank will be controlled by the immediate or local government.

What is PROUT’s theory of exploitation?
Karl Marx held that the creation of surplus value is the source of economic exploitation; when capitalists convert surplus value into money value they amass profit. However, no country, communist or otherwise, could do away with the creation of surplus value as it is an indispensable part of national prosperity. Marx’s weakness here is that he tried to interpret exploitation only in an economic perspective.

PROUT’s analysis of exploitation says:

  • Economic exploitation involves the unrestricted plunder of the physical and psychic labour of communities together with the natural resources in their local areas.
  • By undermining local culture and corrupting the mental and spiritual spheres by introducing foreign culture with an economic motivation, exploitation includes psychic and spiritual exploitation as well. Marxism could not perceive of such pervasive exploitation as its world view is materialist.

If surplus value is essential to economic growth, how to guard against its misuse?
It is not possible, as Marx proposed, to exterminate exploitation by doing away with surplus value. It is correct that capitalists cheat the public in all possible ways and continue to accumulate profits by tucking surplus value in their off-the-limits coffers, but a productive economy without the creation of surplus value is a sorry utopia. In practical life, economies do not work without surplus value. The entire weapon’s industry of the Soviet block was based on the production of surplus value. PROUT’s policy to root out exploitation is two-fold: applying external pressure and stimulating internal urge. The internal urge of confirmed exploiters is very weak, therefore external pressure will have to be applied on them. The first fundamental principle of PROUT establishes that accumulation of physical wealth must be regulated. This is only possible by turning the economy upside down and creating a bottom-up economic structure where the grass roots are in control over their economic destiny. PROUT calls it economic democracy. On the other hand, the remaining four principles stimulates both positive external and positive internal urge. PROUT is embedded in spiritual inspiration. It is the only scientific socio-economic theory that looks towards the entire potential and requirement of human beings. The integrated application of PROUT and neohumanism will end exploitation.

What happens 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 employment of local people will take precedence over non-local people.

What is PROUT’s view on the so-called population crisis?
It is a crime to disallow or dissuade anyone from bringing children into this world. Such crimes are only perpetrated in an exploitative setup. PROUT’s view on the so-called population crisis is that it isn’t a crisis of population at all but a crisis of leadership, a systemic crisis. The system that makes many poor and a few rich does not want that people should multiply as the number of poor and therefore revolutionary will grow in dangerous ways. However, by introducing policies based on maximum utilization and rational distribution of all natural resources a proutistic society will be able to feed all and educate any number of people so that humanity will continue to grow in a natural way.

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