The Limits of Business

A Prout Globe survey

As is well known, Prout places limits on the individual accumulation of physical wealth. It leaves it to the collective to decide on those limits. The private sector is distinctly regulated under Prout. We should note that such private sector limitations do not refer to psychic and spiritual types of wealth but to physical, material wealth only.

To clarify what private sector regulations and limitations may be, the propounder of Prout, Shrii Prabhat Rainjan Sarkar, has commented on the role of businesspeople in society. He quotes two main reasons for the need to regulate the extent and scope of capitalist activities:

  1. The need for maximum utilization and rational distribution of all types of resources, and
  2. The need to safeguard the all-round physical, psychic, and spiritual development of businesspeople as well, so that they do not turn into greedy thieves.

“The situation has become so bad that in most parts of the world starting a business is tantamount to becoming a refined criminal. I use the term “refined” because no matter what type of business a person may start, their success depends upon their skilful use of persuasive language. Can a business be run honestly? Why not! Of course, it can. But an honestly run business cannot make one rich overnight. In ancient times, when the varńáshrama [caste] system was in vogue, managing a business honestly was the social dharma of vaeshyas. But today it is extremely difficult, if not impossible, for people to run their businesses honestly.”

Shrii Sarkar mentions that the word vaeshyas — industrial merchants — means “those who produce through various occupations”.

“But today the meaning has completely changed. Today vaeshyas means those who profit by trading and broking without being directly involved in production. Where profit is the only objective, there is every possibility that all types of selfish and antisocial activities will flourish. In one sense the vaeshyas of developed countries are better than those of other countries because although they engage in activities which are detrimental to the welfare of the public, they generally prefer not to undertake activities which are harmful to public health, due to either their own consciences or people’s awareness of their rights.”

Prout supports no absolutism in business. Neither the public, the cooperative, nor the private sector is fit for running all types of businesses alone successfully. Each of these sectors is fit to run some sorts of businesses. Together they make for all-round industrial and commercial development both for individuals and the collective.

“The widespread nationalization of industry cannot be supported for several reasons. The two main reasons are as follows. First, if a state is completely dependent on its bureaucrats (it should be kept in mind that no matter what people say, bureaucrats will always play an important role in the structure of a government, because without them the administration cannot function), it will not be possible to properly run all the large- and small-scale businesses and industries spread over the entire country. Officials are required not only to keep accounts, but also to supervise workers. Secondly, it is not possible for state-controlled industries to be as proficient either industrially or commercially as private enterprises which can make any product more cheaply and with greater efficiency than a state-controlled industry. Without the backing and preferential treatment of the state, state-controlled industries cannot compete with non-government enterprises.

“The proposal to run all industrial and commercial enterprises as cooperatives is also unrealistic. This is because a cooperative enterprise is built with the collective labour and intelligence of a group of people who share a common economic structure, have the same requirements, and have markets available nearby for the goods they produce (or purchase). Although an enterprise may be called a business venture and be run using the limited resources of its members, it cannot be called a cooperative unless these three factors are all present. It will not have the fundamental characteristics of a cooperative.

“To run a business as a private enterprise under state control is worse than running a business that is completely nationalized, because it will not only suffer from the defects inherent in nationalization, it will also lead to the creation of a group of rich but disgruntled entrepreneurs in society who in all likelihood will express anti-national sentiments and stoop to any means to re-establish their power. Indirect state control over industrial enterprises and attempts to prevent them from increasing their profits are doomed to failure, because it will not be difficult for businesspeople to deceive the government by falsifying their accounts with the collaboration of dishonest officials. In such a system, businesses will not retain the same prices as when they were non-government private enterprises; they will increase their prices due to increased expenditure.

“In most countries the distribution of food is controlled by businesspeople, and in many countries they control not only the distribution but also the production of food. That is, business people who are farmers in name only own large areas of land legally in their own names or illegally in the names of others, while the farm labourers, peasants or sharecroppers who are the actual farmers, grow golden crops through their own labour and give most of each crop to their non-labouring masters. Almost everyone in the world today has in principle acknowledged that only genuine farmers should own arable land, and that no third party should come between them and the revenue department of the government. So, it must be accepted that in the production of food, the question of ownership by non-producing businesspeople does not arise at all.

“But those who are themselves farmers, that is, those who, in principle, can be called vaeshyas, is it proper for them to have individual ownership of land? No, certainly not. The amount of arable land one farmer is capable of farming is not very large, so if he or she owns a large amount of land, it will not be possible for him or her to efficiently arrange seeds, improved manure, irrigation, etc. Personal problems also sometimes arise resulting in seeds not being sown or harvests not being reaped on time. Hence, the land may remain uncultivated. Uncultivated land is a liability for humans.

“Land is also unnecessarily wasted by demarcating the boundaries of privately-owned land. (Actually, it is a complete waste of land to demarcate the boundaries of land where land is of the same level.) It is also difficult to introduce improved methods of cultivation on small plots of privately-owned land. Because of this problem many countries, despite being educationally and intellectually developed, have not been able to introduce tractors, the latest technology, and scientific systems in the field of agriculture. If anyone thinks that land should be owned by individual cultivators because they are deeply attached to their land, we may also argue that those who own land but do not work in the fields have and will continue to have a deep attachment to their land. In this matter we should give more importance to collective welfare than to the sentiments of the individual.

“In my opinion all the land in the entire universe is the common property of every human being. An individual, a group of individuals or a state should only have the right to preserve and properly utilize a piece of land. No one should need to worry about the ownership of land.
The preservation and utilization of land should be the responsibility of the local government, which in turn should carry out its duty through producers’ cooperatives composed of actual farmers. The disadvantages of private ownership will not manifest if the land is collectively owned in a cooperative system. The use of proper scientific methods will make it possible to increase crop production without much effort.

“It is undesirable for businesspeople to have the right to distribute food grains. Only consumers’ cooperatives should have this right. If the production and distribution of crops is controlled by vaeshyas rather than by cooperatives, it is absolutely impossible to stop hoarding, speculation, black marketing and adulteration in food markets. The slightest weakness in such matters will have extremely dangerous consequences. Such weakness is not at all desirable in those who love humanity and practice politics. It is completely immoral for food grains to lie in the warehouses of black marketeers and speculators to be eaten by rats while people die little by little of starvation.

“Besides food and clothing, fuel may also be considered an essential commodity. Distributing fuel through businesspeople has the same drawbacks as distributing food. Local consumers’ cooperatives should have the sole right to distribute essential, though not all, varieties of clothing, and the essential fuels produced in their countries (wood is used in some places, and coal or oil in others) in any given age. Producers’ cooperatives should have the sole right to produce essential clothing and, as far as practicable, essential fuels. Where this is not possible (such as where the conditions and climate are unsuitable for spinning thread) the right to produce the associated raw or half-finished materials for a particular industry and to supply them to producers’ cooperatives, should belong to the state government or local autonomous bodies and not to businesspeople. At most, businesspeople should have the right to produce and distribute non-essential foods and fuels, because then there is virtually no chance of their exploiting the common people by exerting undue pressure on them.

“The production and distribution of other commodities: Businesspeople should not be given the right to produce reading and writing materials or any commodities not classified as luxury items (such as razor blades, washing soap, etc.) Only producers’ cooperatives or the state government should have this right. These goods should, of course, be distributed through consumers’ cooperatives. Businesspeople may be permitted to produce and distribute commodities considered to be luxury items.

“Businesspeople should not have the right to produce materials for constructing houses (such as cement and metal products) that cannot be easily manufactured everywhere. Such materials should be manufactured directly by the state government or by large cooperatives which are supported by the state government. Distribution should be directly arranged by the state government or by state-controlled autonomous bodies. Businesspeople should not be allowed to meddle in such matters at all because they will try to create artificial scarcity, to increase the demand for commodities which are in limited supply.

“On the subject of housing materials, I have observed that dishonest businesspeople, in collusion with dishonest government officials, compel the owners of incomplete houses to buy cement, corrugated tiles, etc., from black marketeers by creating circumstantial pressure. Those who are socially aware and have had bitter experiences in such matters should carefully eliminate the cause of this problem.

“As with construction materials, the manufacture of drugs is not safe in the hands of businesspeople.

“Out of their greed, some people adulterate milk and then demonstrate its thickness with a lactometer, ignoring the detrimental repercussions their actions have on unsuspecting consumers, especially children and sick people. It is not desirable to entrust the production or distribution of any necessary item to criminals who betray society by adulterating medicines, pushing sick people little by little into the jaws of death.
The right to manufacture medicines should be entrusted to autonomous bodies which can distribute the medicines themselves or through consumers’ cooperatives. If necessary, certain types of medicines may be manufactured by the state or central government, but it is preferable for them to be distributed by autonomous bodies or cooperatives.

“The production and distribution of non-essential housing materials and non-essential food items (such as sweets, betel, etc.) may remain in the hands of businesspeople.

“Businesspeople should not have the right to manage banks, because past experience has shown that managers who are dishonest businesspeople have seldom protected the hard-earned savings of ordinary depositors. Many have profited by illegally or recklessly investing the bank’s money; their activities have also ruined many middle-class families. The number of middle-class people who have lost the money they were saving for their old age is not small.

“The less private enterprise is provided with business opportunities and the more production and distribution is carried out through cooperatives and autonomous bodies, the better. The less the government is involved with the public in the areas of production and distribution the better its relationship with them will be, and the less power the central government has in these areas the better.

“Trading: In the area of trade, state governments must have the right to take action against those involved in black marketeering, speculation, adulteration, illegal misappropriation and the creation of artificial scarcity, but broad-based autonomous bodies (such as district boards or municipal corporations) should also have sufficient power to act. This is because if ordinary people want to take action against a local offender they may have to register their complaint with an individual police officer, then with the police station, then with the sub-divisional administration and finally with the district administration, the entire process taking about six or nine months, and when they reach the state capital, they learn that such matters come under the jurisdiction of the central government and not the state government. This type of situation is certainly not desirable. The state government must have the right to pass and enforce anti-corruption laws.

“To eliminate dishonesty in business, free trade should be established throughout the world as far as possible and the speculative markets of all countries should be immediately closed.”

All quotes from "Various Occupations - Businesspeople" in Human Society Part 1 (1959) by Shrii Prabhat Rainjan Sarkar.

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