PROUT and Employment: Balanced Economy, Self-reliance and Cooperatives

A PROUT Globe presentation
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 pre- and post harvest industries should be developed on the basis of the socio-economic potential of the region. 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.

Sarkar determined that if the percentage of people engaged in non-agricultural industry is kept between twenty and thirty percent of the population, then it creates a state of balance, a balanced socio-economic system. If the percentage goes beyond thirty percent it becomes an industrially developed area. The more the percentage rises beyond thirty percent, the more the area goes from industrially developed to industrially over-developed.

In order to procure agricultural produce the industrially over-developed countries try to convert agriculturally predominant regions into their satellites. They feel the need to keep these industrially undeveloped countries under their control in order to serve as a market for their finished goods. If they do not obtain markets for their industrially produced consumer goods, they will have to suffer from economic recessions and growing unemployment.

Socio-economic self-reliance

In 1958, Sarkar suggested that the promotion of industry in one part of the world cannot eradicate either poverty or unemployment in any other part. Instead it is desirable to form self-sufficient units one by one, to produce the essential commodities of life, at least in the fields of agriculture and industry. Otherwise people may have to face tremendous hardship and misery during war and other abnormal circumstances. With the development of transport facilities, we can increase the scope of these units.

In the interest of developing local industries and create employment for the local population, PROUT’s decentralized economy dictates that commodities that are not produced within the local area should be banished from the local market as far as possible.

PROUT supports the principle of reducing transport of raw materials to nil. Raw materials should be refined in the area of their source. In addition to supporting the environment, this principle will support local employment and a drop in the prices of semi- and fully refined products.

Local control

According to PROUT, wherever there is surplus labor, top priority must be given to creating employment for all local labor. This policy will raise the standard of living of the local people and the whole area.

If this policy is not implemented and surplus labor is allowed to move to other regions, then all plantations, mines and other natural resources will be controlled by outside labor. Local people will lose control over their natural resources. This is a major part of the reason for the very unstable situation we have today.

While creating employment for the local people, consideration must be given to local sentiments, writes Sarkar. For instance, many areas of India are regions of surplus intellectual labor. People in this category are ready to work as clerks for a very low wage but they are not prepared to work as porters and earn more money.

PROUT holds that the problem of surplus intellectual labor is unique and should be solved in a proper way. In these areas industries which require less manual labor should be established. Thus, different development schemes will have to be adopted in different socio-economic units depending upon time, place and person.

If people are guided by the needs and potentialities of their socio-economic unit, the law of productivity is benign. Maximum production in the economy will provide a congenial environment for more investment, more industrialization, more employment, increasing purchasing capacity and increasing collective wealth in an ever progressive manner, Sarkar concludes.

The development of local industries will provide immediate economic benefits. The unemployment problem will be rapidly solved, and in a short time it will be possible to create a congenial environment for permanent full employment.

In fact, the only way to solve unemployment and bring about full employment throughout the world is by developing block-level industries. The growth of local industries will provide social security to the local people and create greater opportunities for their all-round advancement, because all their basic needs will be met.

The population of every socio-economic unit should be organized on a scientific basis, Sarkar held. The problem of a floating population should be tackled on the block level itself. Where there is a floating population, it should be either permanently settled or returned to its original region.

Eradication of mass poverty

PROUT’s People’s economy includes employment for all; the 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, trans-shipment, loading and unloading of any materials, even if they are not economically viable in the short-term.

People’s economy is also concerned with the generation of cheap power and the supply of water, which are essential if people are to control their local economies. Finally, it includes economic decentralization, cooperative dynamo and block-level planning.

Cooperatives – skilled and unskilled labor

The workforce in PROUT’s cooperative system will be composed of the shareholding farmers and non-shareholding laborers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the laborers will enjoy stable employment and favorable wages.

PROUT’s cooperative system will solve the problem of unemployment, writes Sarkar. As production increases the need for more facilities and resources will also increase. Educated people can be employed as skilled workers. There will also be a need for tractor drivers, laborers and cultivators, and cooperative members will naturally do this work.

Village people will not need to move to the cities for employment. In the cooperative system there should be no compulsory age for superannuation. People should be free to work as long as they like, providing their health permits.

Through the three phases of establishing the cooperative system it will be possible to reduce the excessive population pressure on land and to engage thirty to forty-five percent of the population in agriculture. In the second phase, the problem of unemployment will be tackled through the large-scale establishment of industry, and by the third phase there will be no unemployment problems for the agricultural laborers. By the end of the third phase, the rural sector will be freed from the vexing problems of agricultural and industrial production, unemployment and social security.

Abolition of income tax

PROUT advocates the abolition of income tax. If income tax is abolished in India and excise duty on excisable commodities is increased by only ten percent, there will be no loss of government revenue, Sarkar suggested in 1979.

When there is no income tax, nobody will try to accumulate black money. All money will be white money. 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 exchange.


PROUT is an all-comprising socio-economic model that aims at economic liberation to pave the way for further all-round growth. By liberating all from the curse of unemployment individuals and society will be free to explore truer meanings of existence and co-existence.


Proutist Economics, Ananda Marga Publications

PROUT and Employment: 100% Employment
PROUT and Employment: Pragmatic Approaches to Eradicating Unemployment

Copyright PROUT Globe 2012

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