Seventh Principle of Economic Democracy

7) The seventh principle of economic democracy is that commodities which are not locally produced should be removed from the local markets. As decentralized economy aims to develop local industries and create employment for the local population, those commodities which are not produced within the local area should be banished from the local market as far as possible. It is essential that the local population utilize the commodities produced in their own area to ensure the prosperity of the local economy. Initially, local commodities may be inferior, more costly or less readily available than outside commodities, yet in spite of this, locally produced commodities should still be used by the local people. If local commodities do not meet the needs and aspirations of the people, immediate steps must be taken to increase the quality, reduce the price and increase the supply of local goods; otherwise illegal imports will be encouraged.

In an economic democracy, the application of this principle is very important. If it is neglected, the local industries will gradually close down, local markets will go out of the hands of the local people and unemployment will increase. Once locally produced goods are accepted in principle, not only will local industries survive, but with their further development the local economy will thrive. The outflow of capital from the local area will be checked, and because it will remain in the local area, it will be utilized to increase production and enhance the prosperity of the local people. With the increasing demand for local commodities, large-scale, medium-scale and small-scale industries will all flourish.

Commentary: It is a historical fact that no nation from Holland to Germany to the UK and the USA has developed their national economy except by banning imports of outside products or placing sufficiently high tariffs on them. The history of each nation shows that this policy was also part of the development of the national self-respect and the development of the national literature and culture. Only when such nations with have developed their economy and made it very strong have they propagandized exploitative free trade in which they dump their products in another nation’s markets, thereby causing local manufacturers to go out of business and be taken over by foreign corporations. Currently we are in the final, dying phase of capitalism. First to take over economies in poor countries, free trade was encourage and corporations became globalised, leading to increasing misery in both their own countries as well as the countries they exploit. The policies are imposed by economic hitmen as John Perkins has documented. This process of globalization met with increasing resistance.

The capitalists came up with two strategies. Firstly the manufacturing of terror acts to justify an endless Global War on Terror which allows governments to attack and invade countries that do not submit to their economic terrorism. To non-hostile nations, sponsored terrorism is a protection racket. In order to be protected, nations will have to accept American military bases and then will be pressured to privatise its industries and sell them to American corporations.

The second strategy for creating a Global Economic Dictatorship is the manufacturing of the present Global Economic Depression. This was done by persuading nations to deregulate their economies which allowed foreign banks and corporations to indulge in formerly illegal commerce that made them millions in the short term and that sent entire nations into bankruptcy. Bankruptcy allows nations like Greece to be completely looted by foreign corporations.

In such a scenario, many people advocate a return to the quasi-socialist West European economies of the 1960s and 1970s. In reality however this is not going to solve severe unemployment and economic collapse. This is because Britain for example has historically been built upon the exploitation of such regions as Wales and Yorkshire by London. So, chronic unemployment, industrial underdevelopment and other issues in these colonies of England will not be solved by a return to semi-socialist nationalism of the 1970s.

The fundamental fact is that this exploitation of one region by another will continue until each region attains basic economic independence and develops its economy without outside interference just like the powerful national economies did in the past. And this is by banning outside products from entering the local economy. Unless this is done large countries like China, India, Congo, Russia will see one region exploiting other regions. So long as this form of internal colonialism persists no nation can emerge from the current Global Economic Depression.

To simply summarise, what the historian Braudel has shown, the capitalist economy was constructed firstly, by creating centralized regional economies (dukedoms), then by creating national economies and then finally by creating national mafia (empires) that loot the entire planet. The way to defeat capitalism is not by nationalising the economy under the state capitalism of party bureaucrats. The way to defeat capitalism is by rebuilding economic liberty at the grassroots or subdistrict (block, upabhukti) level and establishing full economic sovereignty (svaraja) of every socio-cultural bioregion (samaja).

The building blocks of this liberation struggle from the economic tyranny of capitalism is through the struggle to keep outside products out of each economic bioregion (samaja) as much as is possible. Many who have lived in countries like India during the 1960s and 1970s have little fondness for the policy of that era of keeping out foreign good. This was because the crony socialism of that era caused economic stagnation and high levels of unemployment. However, the crony capitalism (as Prime Minister Singh described the system) of present has led to more than 60% of the population being below the poverty line, among the highest levels of malnutrition in the world the lowest amount (per percentage of GDP) spent on education, medical care.

The only way out of being caught between the devil of capitalism and the shark infested sea of totalitarian communism, lies in regional economic democracy based on a mix of bans or tariffs on outside products. Political freedom, in the form of political rights in a democracy, is the result of centuries of struggle, sacrifice and martyrdom. Today even political freedoms are being seized by economic autocrats in order to create a Global Police State where the majority of the world lives in what Nick Turse reported, the US Army projects will be a Planet of the Slums controlled by drones and mind-control technology. Unless the economic power of these economic autocrats is ended there is no hope for humanity and even the planet itself.

A million grassroots rebellions and revolutions are required in the economies of countless communities in order for humanity to simply survive. This is why PROUT’s approach is that outside finished products which can be locally produced should not be imported. This point implies that the local people should support their local industries by purchasing their own finished products. They should buy the finished goods of the local industries even if initially they may be of lesser quality than the finished goods manufactured outside the socioeconomic unit, as this will ensure the continued economic viability and growth of the industries in the unit. With continued local support, the local industries will develop to a stage when they will be able to produce goods of better quality. But, if due to economic, political or psycho-economic exploitation, people purchase finished goods made outside their socio-economic unit rather than those made locally, then as a result; local developing industries may be forced to close down creating unemployment and other social and economic problems. Thus, people’s sentiments should be aroused so that they buy locally produced products rather than outside finished products wherever possible. To achieve this, popular movements should be started so that the economic awareness of local people is increased.

When the British were ruling India, India imported salt even though the potential for manufacturing local salt existed in India. The Indian leaders then organized a civil disobedience movement and proceeded to make their own salt, boycotting British made salt. This movement caught the imagination of the people and won their support, thus the Indian people became conscious of British exploitation. This movement brought down the price of salt, an indispensable part of most Indian dishes, and provided employment by building up the local salt industry. It also saved the country from the drainage of wealth which previously went into the coffers of the British salt manufacturers. In addition, it heightened the consciousness of the Indian people and helped polarize the population into the pro and anti-British camps.

In a healthy economy raw materials should come from the local area. Industries which are based on imported raw materials are always weak industries, sick industries. A sick economy depends upon raw materials from outside – it depends upon inputs. For example, the Barauni Oil Refinery in Bihar is a sick industry because it depends upon crude oil from Assam. If there is any disturbance in Assam or if India is Balkanized, then the refinery will have to close down. The establishment of this refinery was a foolish act. It does not represent a healthy economic structure. It is a sick industry, a foolish industry, a stupid industry!

In the case of colonial exploitation, the exploiters first capture a market and then gain control of all the raw materials available in that area through monopoly rights. They produce finished goods out of the raw materials in their own factories within their own region, and then sell the finished goods to the people in the occupied market. Thus, they get double the opportunities to misappropriate wealth – the exploiters deceive the local population while procuring their raw materials at cheap rates, and then they sell their finished products in the same markets at exorbitant prices. By capturing the local market, the colonial exploiters succeed in totally destroying the local industrial system.

For example, almost all items of daily use in Bengal are manufactured outside Bengal in other Indian states, but sold in the West Bengal market. At the same time, Bengal’s own industries have either been paralysed or destroyed so that the goods produced in Bengal can never compete with those of the Indian capitalists produced outside Bengal. This is the reason that West Bengal does not get the chance to establish new industrial enterprises. The Punjab and Haryana have been turned into monopoly centres for the leather industry, but strangely, in both these states, hides are scarcely available. Industrialists from these states procure animal skins from the forests of Terai and Dooars in North Bengal and the deltaic region of the Sundarbans in the south of the state, and sell their finished leather products in Bengal. West Bengal has no hide industry to supply finished products to its own market. Only a small percentage of the leather shoes produced in Batanagar is supplied to the West Bengal market, and the largest percentage is exported to foreign markets. The same situation prevails in the sports goods industry. Needless to say, the owners of most of the essential industries in West Bengal are outsiders. To them West Bengal is merely a colony to acquire raw materials as well as a vast market for the sale of finished goods which are manufactured in their own regions. All these outsiders are guided by one psychology: “As we have come to a foreign land, let us try to loot as much as we can.”

Under such circumstances the industrially-developed countries, to ensure a permanent supply of raw materials and the continuing availability of markets for their finished products, resort to imperialism, economic and political fascism, and so on. They try to create an arena of satellite markets to ensure the supply of raw materials and markets for their finished goods. When the developing, or undeveloped, countries detect the intentions of the developed countries, conflict arises between the developed and undeveloped countries, and this poses a great threat to world peace. In essence, the history of India can be summarized into the story of how one giant corporation (East India Company) colonised India and India struggled for independence until the British could no longer control India or exploit it easily and were forced to leave. Thereafter, the story of India is of the black Britishers who had helped the British loot the country now took over the economy but still India kept itself largely independent of foreign corporations although through servitude to the IMF, it became so indebted that it once again has allowed the vultures of foreign coporations to once again feast on the Indian economy. This is the tragedy of not just India but so many postcolonial nations.

In the current global environment motivated by the socio-sentiment of fascism (be it ethnic or religious), one social group tries to forcibly dominate another group, with the intention that “We will utilize the exploited group or their land” – here the group is more important than the land – “as a source of raw materials. The finished products will be manufactured within our area, and then we will utilize the exploited country as the market for our goods.”

This situation is reminiscent of the British period when raw jute from Bengal was sent to Dundee in Great Britain to develop the British jute industry. When the supply of raw jute from Bengal was stopped, all the jute factories in Dundee were closed down. If the finished jute products made in Dundee had not been sold in Bengal, the Dundee jute industry would not have survived.

What can the financially-handicapped groups do in this situation? They are forced to enslave themselves to the powerful countries or groups because of their fear complex born of their impotence or poverty. And what is the outcome of such slavery?

In the next phase, the exploited painfully find themselves reduced to the position of suppliers of raw materials and purchasers of finished products. They are economically ruined. Such things happen as a result of both psycho-economic exploitation and politico-economic exploitation. Intelligent people should analyse this carefully.

Suppose I find that a particular social group is suffering from starvation, and I provide food for them. This is humanitarian, no doubt, but at the back of my mind I am thinking, “Let me utilize these people as the suppliers of our raw materials and the purchasers of our finished products, because these people are now obligated to us.” This sort of mentality will one day destroy peace in society. So the humanistic approach is not perfect – it is adulterated.

Suppose we discover that a particular group is educationally backward. We feel pity for them because they are also our fellow human beings; so we think, “Let us introduce them to the printed word, at least!” and actually we do something towards that end. But through this so-called “literacy drive”, we inject ideas in their minds that paralyse them mentally, and then we ultimately govern these mentally-paralysed people as colonized people. In this way the peace of the world will be destroyed. This is all “intra-human conflict”. The intention is to develop them socially in the way we like and thus destroy their originality. This mentality is at work.

What is the reason for this type of mentality? “I pity them” – this vanity, this superiority complex, will eventually create satellite social groups. This adulterated [humanism] is not genuine [humanism], nor is it true humanistic spirit; it is ordinary human sentiment or pseudo-humanistic strategy in another form.

The remedy for this regional and international exploitation based on geo-sentiment is two-fold: study of history and present-day realities of regional and international exploitation and the dissemination of this knowledge to the people. This is why Shrii Sarkar states

“Thus the importance of study is tremendous. Those who are educated must conduct seminars among themselves and also among the less-educated – they must make the latter understand. Knowledge must be disseminated throughout all sections of society. You must create opportunities for all people to judge everything in the light of truth. Liberate the intellect of each and every person. Human intellect is now bogged down in a marshy quagmire – let people enjoy the sweet taste of intellectual freedom.” (Awakened Conscience)

This is why PROUT states the expansion of knowledge (jiṋána vistára) lies not in the expansion of one’s knowledge by study but rather in the wisdom that arises when one dedicates oneself to making people conscious of their rights in every sphere of life such as the social, economic, political, cultural, psychic and spiritual. And of these rights the most fundamental are economic or the right to life.

This brings us to the second way to fight this geo-sentiment that causes regional and international imperialism and exploitation. This is the development of rationalistic mentality. By reasoning and deliberating together with people in a block (district subdivision), in a cooperative or in a samaja (eco-cultural region), gradually they not only become aware of their rights but also concerned and full of feelings of solidarity for struggling people everywhere. In this mission they will find true wisdom

And the spiritual practice of ultimate wisdom or enlightenment (vijiṋána sádhaná) lies not in sitting in a cave in the Himalayas but in working, fighting and sacrificing oneself in the struggle to help exploited people become fully established in exercising these rights. The evolution of the collective mind through meditation and collective love gives communities the daring to live their caring by fighting for the rights of everyone. It is this spirit that will not only induce them to remove outside goods from their region out of love for their region, they will make sure their region and nation does not exploit anyone and they will work in other regions and nations to liberate people from economic slavery arising from the dumping of commodities from foreign countries and corporations.

This is how people will learn to love their homeland – not by robbing and bombing other people’s homelands – but by stopping the economic conquest of their homeland by goods dumped by outside exploiters and by liberating other homelands as part of a mission to let every person enjoy the tranquility of economic liberty and end once and for all, the reign of malnutrition, illiteracy, disease, imperialism and exploitation arising from the economic tyranny of capitalist corporations and banks. So the banning of outside products is not a retreat into selfish isolation but rather a leap into the global struggle of exploited communities everywhere for economic freedom.

->> Eight principle

->> Introduction

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