Shrii Prabhat Rainjan Sarkar on Purchasing Capacity

Sources are referred at the end.

"The greater the purchasing power of the people, the higher their standard of living."

"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 systems 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." [Quotes continue below illustration]

"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 capitalist economists to fool people and cover their exploitation. The genuine measure of people's economic advancement is increasing purchasing capacity."

"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."

"No economic system in the world has been able to continuously increase the purchasing capacity of the people, because economic power is concentrated in the hands of a few."

"According to PROUT, the minimum requirements of life should be assured through the availability of essential goods and purchasing power."

"It may be questioned whether it is wise for any government to guarantee the minimum requirements. If the state is to supply cereals, pulses, salt, gram, ghee, butter, etc. to all people then naturally the state has to institute some process of control which people may not like. Hence PROUT’s view is that people should be guaranteed the provision of sufficient purchasing power to meet these requirements. In that case the state need not adopt control measures. The other disadvantage of guaranteeing the supply of minimum requirements is that if consumable goods are supplied to everyone, people will become lethargic. They should therefore be supplied with purchasing power in exchange for their work according to their physical, psychic or spiritual capacity."

"I have not said anywhere that society should give plenty of money to everyone; I have only said that the purchasing power of each and every person should be increased."

"The maxim of PROUT's productive economy is, 'Increase the purchasing capacity of the common people above all.' If this maxim is followed in practice, it will be easy to control the prices of commodities through the cooperative system and economic decentralization."

"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."

"If the market price of a commodity is five rupees and if the salaries of the government employees are doubled with the intention of providing them greater amenities, will the purchasing capacity of the government employees also be doubled? If they go to market with more money in their pockets they will find that everything costs more. Such an approach is like adding fuel to fire. If the market price of commodities goes sky-high the country will be thrown into the clutches of high inflation. So, increasing the expenses of a government department at the cost of developmental programmes amounts to committing economic suicide. If production is increased through investment in developmental programmes instead, the purchasing capacity of the people can be increased without increasing their salaries. When purchasing capacity is increased, both government and non-government employees will benefit. In pure economic terms developmental programmes are those programmes which directly increase national wealth and indirectly support this increase. Programmes which only increase national wealth indirectly, not directly, cannot be regarded as developmental programmes until the minimum requirements of the people are guaranteed."

"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."

"To save society from depression, the approach of PROUT is to increase purchasing power by increasing production, reduce disparities in the value of wealth, and increase the circulation of money."

"The formation of a World Government will require a world constitution … each country must guarantee purchasing power to all its citizens."

"In the economic structure of the society, the purchasing power of the people plays the most important role in their all-round physical welfare."

"Question: What do we want, increase in per capita income or increase in purchasing capacity?
Answer: 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 income 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 programmes 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."

Sources

Economic Dynamics
Social Security and the Authority of the State
The Importance of Society
Requirements of an Ideal Constitution
Developmental Programs
One Human Society
Block-Level Planning
Quadri-Dimensional Economy
Some Specialities of Prout's Economic System
"Questions and Answers on Economics", Proutist Economics

Copyright Ananda Marga Publications 2012

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