The PROUT Companion: Industrial policy

Q. What will be the Proutistic industrial policy?

PROUT propounds a system of decentralization of economic power. The centralization of economic power, whether it is in the hands of individuals or the state, such as under capitalism and communism respectively, leads to economic-political exploitation. Private capitalists venture to suck the vital juice from the social tree.

For decades the global trend has been towards the concentration of economic power into fewer and fewer hands. One estimate is that the current level of world inequality is equivalent to a situation where 66% of people have zero income, and 34% divide the entire income of the world among themselves equally!1 One high level study points out that while most of the world’s attention is currently focused on the GDP growth rates of China and India, the world’s wealth is heavily concentrated in North America, Europe and a handful of developed Pacific rim countries. With 2% of adults owning more than 50% of the world’s wealth.2

A study by the World Institute for Development Economics Research at the United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. The bottom half of the world adult population owned 1% of global wealth. Another study found that the richest 2% own more than half of global household assets. The distribution has been changing rapidly in the direction of greater concentration of wealth. It means that in the world’s democracies there has long been a strong tendency toward a concentration of economic power in fewer hands irrespective of their social concerns.

PROUT advocates a decentralization of economic power through a well-defined system of:

  • Key industries
  • Large-scale industries
  • Small enterprises

The motivation behind economic enterprises will not be profit-earning but utilization. All economic activity is to be harnessed with utilization as their objective, not profit motivation. Profit is needed but not as a motive leading to the exploitation of consumers and undue capital formation.

a) Key industries are those industries whose products are used as raw materials for other industries or which act as the nervous system of the economic structure, i.e. steel, yarn, energy, means of communication, defence, etc.

These are to be managed by the immediate state government and will work on a no-profit, no-loss basis. The state will never behave as a commercial institution with profit motives.

b) Large-scale industries are those which need considerable capital, employ a significant number of workers, run by complex technical know-how, and are not small enough to be left to individual skill and endeavour. They will be controlled by cooperatives.

Such industries will have to follow broad rules of policy, i.e. percentage of profit, bonus policy, quantities of shares and dividend to be paid to each shareholder as stipulated by the Policy Planning Body. Normally the proportion of profit shared by labour and shareholders will be 40% and 60% respectively.

A successful cooperative systems necessitates:

  • Strong ethical governance
  • Ethical administration of the industry
  • Proper psycho-social environment

The lack of these essential factors has been the reason for the failure of the cooperative system in many countries. Under PROUT there will be no lack of any of these.

c) Small enterprises are those which depend on individual skills and are so small that they cannot be administered profitably in cooperation or are those which do not require a total capital beyond a certain limit to be stipulated by the Policy Planning Body, such as small convenience shops, stalls, grocery shops, restaurants, tailor shops, barber shops, service workshops and a wide range of similar small establishments and cottage industries like hand weaving, handicrafts, engineering goods manufacturing, etc. Steps will be taken to modernize and rationalize such ventures in order to ensure the maximum production of each unit.

Q. What is the structural setup of this industrial system?

Key industries will act as the nucleus around which large-scale industries will be encouraged to be established as satellites. Small enterprises will naturally crop up around large-scale industries beside towns and villages out of necessity or according to specific local conditions.

No overlapping will be allowed among the industries, i.e. commodities classified for key industries will not be produced by large-scale industries nor vice versa. There is no scope for private ownership or management in the sphere of key or large-scale industries; the former will act as a check on the large-scale industries by virtue of being the supplier of raw materials on a no-profit, no-loss basis.

Q. What will the structure and responsibility of the Policy Planning Body be?

The Policy Planning Body will consist of such persons of moral integrity who are experts in the technical know-how of the industrial and economic setup. The central Policy Planning Body may form its lower bodies for particular economic-administrative units. They will decide on and enact  the following points:

  1. The sphere of different industries (key, large-scale and small scale enterprises).
  2. Percentage of gross profit for large-scale and small enterprises, which may vary according to industry, time and place.
  3. The quantity of purchasing capacity necessary for minimum essentials.
  4. Quantity of rewards to be paid as special amenities to persons of merit and also for raising the standard of minimum necessities.
  5. Arrange for the establishment of key industries necessary for an area and encourage the establishment of large-scale industries.
  6. Endeavour to create such a psycho-social atmosphere in which the motivation behind economic growth will be utilization and not profit.
  7. Find ways and means by which a proutistic economic setup may be established properly and evolve progressively and materialize them.

Q. What is the system of incentives according to PROUT?

PROUT provides incentives in all the following three spheres: spiritual, psychic and economic.

  1. Spiritual: The entire Cosmic phenomenon including this social setup is the manifestation of my Supreme Father. In us lies a divine purpose to express and utilize the physical, metaphysical and spiritual potentialities in order to serve the Divine cause in the best progressive manner. This acts as the spiritual incentive.
  2. Psychic: Since the Supreme Father of the entire humanity is a singular Entity, in serving the society and evolving with it in a sublime social order we are serving our own family, our common patrimony is one and for all. This will be the inspiring psycho-social incentive.
  3. Physical: Progressively increasing the standard of minimum essentials for all, and also that of the special amenities for the few merited, will be the economic incentive.

All the three incentives will be applicable to all but the more the individual evolves psycho-spiritually, the subtler will be his or her incentive. A spiritually evolved person will be more inspired by a spiritual incentive than by psychic or economic, and the psychically evolved person more by psychic sentiment and less by economic, and so on.

Q. Will the rationalization of industry be affected under a PROUT economy?

PROUT as progressive social thinking would never advocate the retracing of the path of technological progress and its application in an economic-industrial endeavour. Instead it advocates more and more technological advancement and greater rationalization in all sections of the economy so that human and physical resources are utilized to their maximum.

Q. Will it not lead to unemployment?

Rationalization based on profit-motivation leads to unemployment and exploitation. But rationalization based on the principle of utilization has a different role to play. Progressive utilization of human potentiality means this human potentiality’s expression in subtler spheres such as in metaphysical and spiritual spheres. The accomplishment of this rationalization will cause the reduction of working hours (but no reduction in employment potential) so that the surplus time saved by workers is utilized in subtler pursuits (intellectual and spiritual).


1 The Economist, 26. Apr., 2001.
2 As reported by a study published by the Helsinki-based World Institute for Development Economics Research (part of the United Nations University). Source:, 5. Dec, 2006.

Copyright Proutist Universal 2011

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