Economic Peace: From Corporatism to a Cooperative Commonwealth

Garda Ghista
Originally published in the September 2008 issue of India Economy Review.
Economic peace can be defined as that state wherein people are provided the minimum necessities of life – food, water, clothing, health care and education. In tandem with this provision, people must be guaranteed adequate purchasing power. This definition correlates with numerous treaties and conventions of international law.

In contrast, economic warfare can be defined as the “structural violation of human rights” that occurs when government-corporate policies wreak economic havoc on the common people, rendering them without their fundamental human needs. Images come to mind of starving, disease-ridden children in Darfur and Haiti. It is unnecessary poverty caused by faulty economic structures. With the Indian government adopting a neoliberal ideology, the implications for small farmers as well as tribals are devastating. Land wars have erupted across the nation in the face of corporate land grab of small farms and tribal lands. To date more than 150,000 farmers have committed suicide due primarily to high-priced imported seeds, fertilizers and pesticides.

The Magna Carta

In the Nigeria Delta region hundreds of militants regularly attack the Chevron oil facility located near Escravos, sometimes resulting in the shutting down of the facility which pumps more than 100,000 barrels of oil daily. Their spokeswoman, Cynthia Whyte, told reporters that “We have suffered enough.” But apparently their revolution is not over because the women of Escravos cannot cut wood for fuel, cannot draw clean water to drink, and the only decent job around is prostitution. We can look everywhere around the world, including India, and see the same phenomenon. Forests are being cut down for profit. Petroleum has substituted wood as the primary energy source. Last and worst, the common people are dislocated and expropriated. Their lands are taken from them by force. What happened to the Magna Carta?

In June 1215, British barons met with King John on a meadow called Runnymeade, situated on the banks of the Thames and unitedly agreed to adhere to the 63 chapters of the Magna Carta. While initially written to serve the barons, merchants and aristocracy, this changed as common people began to claim the document as their own.

Chapter 39 of the Magna Carta states: “No free man shall be arrested or imprisoned or disseised or outlawed or exiled or any way victimized, neither will we attack him or send anyone to attack him, except by the lawful judgment of his peers or by the law of the land.”

Chapter 47 states: “All forests that have been made forest in our time shall be immediately disafforested (de-privatized); and so be it done with river-banks that have been made preserves by us in our time.”

Due to growing oppression, the Levellers fought for the liberty of England and radicalized the interpretation of the Magna Carta, taking it away from the barons and aristocracy and giving it to the poor. It later developed still more radical interpretations wherein it was considered the legal basis for people’s right to pastures, forests and what lives in those forests.

During that period of the 13th century, wood was as critical to survival as oil is today. People could not live without wood. In those days also, forests were owned by someone but used by all people, by the commoners, hence the term “the commons.” In the years running up to 1216, one after the other of England’s 143 forests became enclosed and shut off from the people. After the meeting at Runnymeade, forests were once again disafforested and ceased to be enclosed.

SEZs – A Violation of Magna Carta

The Magna Carta remains one of the oldest and most fundamental documents of international law. But what happened to the Magna Carta in India? What happened in Singur and Nandigram? Industrial development is to be heralded, no doubt. But where is the moral/legal justification when it displaces tens or hundreds of thousands of simple farmers and villagers? Where is the Charter of the Forests that says the land belongs to the people who live on the land?

The Indian government in collusion with the Indonesian giant Salim Group identified the fertile land of Nandigram near the Ganges as the choice location for its new venture, being next to the major port of Haldia. SEZs (Socio-Economic Zones) are tax free zones where no laws apply – no labour laws, no environmental laws, no Panchayati Raj laws. The SEZ Act passed by the Indian government in 2005 allows the government to “appropriate” lands owned and occupied by farmers and hand that land over to multinational corporations such as Salim Group. Salim Group is owned by Sordono Salim, who built up the Bank of Central Asia as well as 500 noodle, flour, bread and other companies in Indonesia.

As Mamata Bannerjee of West Bengal declared recently, we want industrial development, but we don’t want those industries to take the land of the farmers. The impoverished, landless farmers of Nandigram formed the Bhoomi Uched Pratirodh Samiti (Land Sovereignty Movement) and refused to move from their land. In January 2007 police violence began. Thereafter escalating violence occurred until finally a veritable army of thousands of police and CPI(M) cadre drove the defenseless farmers off their lands, raping wives and murdering children in the process.

Nandigram is an ideal bioregion, complete with rich soil, ample water resources and vast biodiversity. Each village has ponds, thus guaranteeing water sovereignty. Each farm independently produces coconut, rice, papaya, drumstick, bananas and a large variety of vegetables including four varieties of potato, eight varieties of banana and date palm sugar. There are no middlemen in Nandigram. Producers sell to consumers who are also producers. They practice what Shrii Prabhat Ranjan Sarkar calls the PROUT economic model. Dr. Vandana Shiva, winner of the Right Livelihood (alternative Nobel) Award, points out that the output of the small farms in Nandigram is far higher than the synthetic fertilizer and pesticide-intensive industrial farms. Since farmers in Nandigram and Singur gave resistance to the government and corporations, the names of these two districts became famous across the nation. What about all the other SEZs and the hundreds of thousands of small farmers and indigenous peoples who are being displaced? Where do we read about their agonies and humiliations and ensuing economic impoverishment? As Mamata says, why not have industrial development without destroying the economic peace of thousands or millions of ordinary people?

PROUT – a Viable Alternative

The sole goal of corporations inside and outside India is personal profit. It is anathema to the economic peace of the people, because individual profit invariably harms the collective welfare. Capitalism involves a centralized economy, where economic power is vested in the hands of a small number of wealthy elite. Those elite control the corporations and work in nexus with governments to make sure that corporations have a free hand to operate with all obstacles in the way of profit removed. Communism is likewise a centralized economic model, this time with money and power vested with a handful of party bureaucrats.

In contrast, Vandana Shiva proposes economic decentralization and economic democracy, where each and every villager has a voice in the economic running of their village. Rather, she claims that this is the long-standing tradition of India. Her work is a living example of the practical implementation of a PROUT economy as propounded by Shrii Sarkar. PROUT is also a decentralized model with cooperatives as its bedrock. According to Shrii Sarkar, “economic planning must start from the lowest level, from the grassroots, where the knowledge, experience and talent of local people can be applied to solve local problems and build local economies.”

The Geneva-based International Cooperative Alliance, founded in 1895, created a Statement of Co-operative Identity, which includes the following principles: Membership of a cooperative society should be voluntary and without artificial restriction or an social, political, racial or religious discrimination, to all persons who can make use of its services and are willing to accept the responsibilities of membership. Cooperative societies are democratic organizations. Their affairs should be administered by persons elected or appointed in a manner agreed upon by the members and accountable to them. Members of primary societies should enjoy equal rights of voting (one member, one vote) and participation in decisions affecting their societies. In other than primary societies the administration should be conducted on a democratic basis in a suitable form. The economic results arising out of the operations of a society belong to the members of that society and should be distributed in such a manner as would avoid one member gaining at the expense of others. This may be done by decision of the members as follows: (a) by provision for development of the business of cooperative; (b) by provision of common services, or (c) by distribution among members in proportion to their transactions with the society. All cooperative societies should make provision for the education of their members, officers and employees and of the general public in the principles and techniques of cooperation, both economic and democratic. All cooperative organizations, in order to best serve the interest of their members and communities, should actively cooperate in every practical way with other cooperatives at local, national and international levels.

The cooperative business model is a win-win situation, because the workers are simultaneously owners. They produce, sell and consume locally. All surplus funds are distributed to the workers/owners and/or ploughed back into cooperative expansion. Peter Warbasse wrote in 1923 about his travels through Europe to see firsthand the cooperatives in action. He wrote: “I have for months at a time lived and traveled among co-operative societies where I have seen many thousands of co-operators – living in their co-operative houses, supplied by their own stores, working in their own industries, financed through their own banks, entertained in their own playgrounds; and I have realized that I was in actual contact with a demonstration of that very society for which utopian theorists hope as a remote possibility of the future and strive to attain by some other means.”

Shifting from the proprietor and corporate business models to a cooperative commonwealth will not occur in a day. It cannot work unless the common people are wholly convinced that the new structure will bring concrete benefits. It will involve constant and extensive education along with practical demonstration. PROUT founder Shrii Sarkar has this to say about the cooperative model: “The sweetest unifying factors are love and sympathy for humanity. The wonts of the human heart are joy, pleasure and beatitude. In the physical realm the best expression of this human sweetness is the cooperative system. The cooperative system is the best representation of the sweet nectar of humanity.”

Economic Decentralization the Key

While the bedrock of PROUT is shifting businesses from the corporate to the cooperative model, other strategies are required to attain and maintain economic decentralization and to assist in moving communities towards economic democracy. For example, Shrii Sarkar advocates that all resources in a socio-economic region be controlled by local people. This particularly applies to those resources essential in providing the minimum necessities of life. We should think in terms of production being based on consumption and not on profit. All goods produced in a community or bioregion would also be sold therein. This will keep local money continually rolling inside that community, resulting in both income as well as purchasing power continually increasing. In a centralized economy, this simply does not happen except for a minority of people. To further hasten decentralization, production and distribution of goods must be carried out directly by cooperatives without middlemen. Venezuelan President Hugo Chavez leads the way in this endeavour.

Walmart has arrived in India, and with people beginning to buy Walmart goods, earlier producers of those goods are rendered unemployed and do not even have the money to buy those same goods at Walmart. It is an example of the tremendous economic harm done to local people when outside corporations move into a community. The alternative is to convert existing private or corporate companies to the cooperative business model, which means that all workers are also owners, all have a vote in the running of the cooperative, all share the dividends or agree collectively to pour surplus funds back into cooperative expansion. Today people around the world are clamouring for “economic democracy.” Cooperatives are the living exemplification of that democracy.

A further strategy would be that only local people be employed in local business enterprises. This alone will solve the problem of unemployment. Further, no outside interference should be allowed in a local economy. Still another idea to consider would be that all essential goods not produced locally should as far as possible be removed from local stores. This would compel local communities to become self-sufficient. Also we can remember that the shorter the distance between producer and consumer, the greater control of the economy by the consumer. If less essential or non-essential items are imported into a region, it will not be so harmful. However, people must think now in terms of gradually moving towards local production of all essential food and non-food items. Once products essential for existence are produced locally, then people can bring in demi-essential and non-essential (luxury) items. It is expected that this would be a gradual process and can only be achieved with education; i.e., when people realize that it is in the best interest of their community to grow local, produce local and buy local.

Shrii Sarkar delineates further principles which he considers essential for achieving economic democracy. He states that the minimum necessities of life during a particular era must be guaranteed to everyone. Today those would be food, clothing, housing, health care and education. Increasing purchasing capacity must likewise be guaranteed to everyone. These guarantees must be written into the constitution of every nation, such that if any political leader fails to provide either or both, an individual can file a court case against the government, or by filing class action lawsuits the leader can be removed from office due to negligence and non-adherence to the law. All economic decisions must rest with the local people. They must never be made by outsiders, whether in another part of the country or outside the country. Outsiders, non-local people, people who have not merged their own socio-economic interests with those of the local community, cannot interfere in the managing of that local community. Adherence to this principle will stop the outflow of capital, one of the prime causes of local impoverization. When outside ownership of local land is prohibited, when local lands and natural resources are owned collectively by local people, poverty will become a relic in the history museum.

The Global Economy

International economist Dr. Nouriel Roubini has said that the U.S. faces a housing bust, a huge credit crisis, an oil shock and a deep recession, with more than one third of regional banks going under. The summer of 2008 saw the U.S. Federal Reserve taking the unprecedented step of cutting the lending rate by 50 basis points and buying up tens of billions of dollars in mortgage-backed securities. We saw Bear Stearns collapse, followed by the Fed making lines of credit available to selected investment banks and brokerage houses – again an unprecedented action. Everything Roubini predicted as far back as 2006 has come to pass, and he says the crisis is not over. He continues to predict the systemic bust of the entire U.S. banking system. What happens economically in the U.S. will reverberate around the world, including in India.

Under extant capitalism, eighty percent of the world population lives beneath the poverty line – defined as lacking one or more of the five necessities of life, i.e., food, clothing, shelter, health care and education. A new study by the World Bank released the week of August 20, 2008 shows that far more people around the world are impoverished than previously realized. A “toxic combination” of poverty and social injustice is killing people on a grand scale, with more than one billion people as poor as ever, and this despite claims by politicians that the global economy is improving. According to their report, in 2005 1.4 billion people in developing countries lived on less than $1.25 per day. Statistics for sub-Saharan African countries have not changed for the past 25 years. Ethiopia, Kenya, Somalia, Eritrea and Djibouti are severely affected. In contrast, poverty in East Asia has fallen from 80 percent of the people living below $1.25 per day in 1981 to about 18 percent living on that amount in 2005. But is the new number of 18 percent acceptable?

PROUT – Panacea of the Poor

Shrii Sarkar has stated that the sufferings of the people are the direct result of the sins of the leaders. In view of Roubini’s predictions and now visible symptoms of economic collapse in the U.S., in view of the World Bank’s statistics indicating that governments did not change poverty/wealth ratios or alleviate the economic suffering of the people, the question arises: do we have any choice regarding adoption of the PROUT economic model? If, for example, communities switch to the cooperative business model and begin producing their own essential commodities, then domestic or global monetary collapse will either not affect or will only minimally affect those communities. They can even develop their own currencies and utilize the barter system as much as possible – another key feature of PROUT. We need to create bioregional, self-sufficient communities that by definition will be protected from future economic as well as ecological and climatic calamities.

While cooperatives are the bedrock of the Prout model, Dr. Michael Towsey of Queensland University, and Co-director of the Prout Institute of Australia, further elaborates on the three-tier structure that would comprise a PROUT economy. According to him, “Sarkar promotes a system where the production and distribution of each individual is assigned either to the public, cooperative or private sector.” In other words, there would be some businesses too small or too complex to function as cooperatives and hence should be run as small private enterprises. Similarly, other businesses would be too large to be cooperatively managed (i.e., energy, communications) and would then be managed as regional public utilities. The table below graphically illustrates the three tier system of PROUT.

Table 1: Mode of Business Management as Determined by Size and Complexity

“Economic production is the result of a network of enterprises. A more
sophisticated diagram might show the arrow widths weighted according to the volume
of trade between enterprises. The arrows between public utilities and cooperatives
would be thick, while arrows to and from private enterprises would be thinner.
Source: “The Three Tier Economy of Prout” by Michael Towsey, Prout Institute of Australia

From Resistance Comes Peace

Millions of human beings today want relief from economic sorrow. Corporations occupying SEZs that displace the common people will not walk away voluntarily. Resistance is required. Today farmers are fighting for their land. Nandigram was the first armed struggle against SEZs in India. The traditional paradigm of farmer suicides and meek acquiescence appear to be coming to an end. A new era of resistance is beginning that will inspire all victims of SEZs and economic globalization. Their goal is economic peace.


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Vandana Shiva, “From Corporate Land Grab to Land Sovereignty (Bhu Swaraj),” Counter Currents, Feb 10, 2007.
Peter Linebaugh, “The Secret History of the Magna Carta,” Boston Review, Summer 2003.
Vandana Shiva, “Earth Democracy Thrives in Nandigram,” Zmag, 16 May 2007.
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Vandana Shiva, “Earth Democracy Thrives in Nandigram,” Zmag.
Cathy Garger, “Interview with Building a New World Conference Organizer, Garda Ghista.” May 3, 2008.
Garda Ghista, “From Globalization to Localization: Bringing Kentucky out of Poverty,” World Prout Assembly, January, 2007.
Garda Ghista, “Women at the Mercy of Globalization,” Prout Globe (Prout World) May 2002.
James Peter Warbasse, Co-operative Democracy: Attained Through Voluntary Association of the People as Consumers – A Discussion of the Co-operative Movement, Its Philosophy, Methods, Accomplishments and Possibilities, and its Relation to the State, to Science, Art and Commerce, and to Other Systems of Economic Organization, New York: The MacMillan Company, 1923, p. ix.
Prabhat Ranjan Sarkar, Proutist Economics: Discourses on Economic Liberation, Kolkata, AM Publications, 1992, p. 217.
Stephen Mihm, “Meet the Economist Who Thinks We’re Doomed,” World Prout Assembly, August 18, 2008 (originally published in the New York Times).
Haider Rizvi, “Global Poverty Figures Revised Upward,” World Prout Assembly, August 29, 2008. (Originally published at One
Michael Towsey, “The Three Tier Economy of PROUT,” Prout Institute of Australia, Feb. 22, 2008.


Garda Ghista is author of The Gujarat Genocide: A Case Study in Fundamentalist Cleansing, Wife Abuse: Breaking it Down and Breaking Out (March 2009) and President of the World Prout Assembly, a global non-profit organization dedicated to fighting injustice in every sphere of life and to transferring economic power from corporations to the common people. She can be contacted at

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