Fifth Principle of Economic Democracy

5) The fifth requirement for economic democracy is that production and distribution should be organized through cooperatives. One of the principal reasons for the past failure of the cooperative movement is economic centralization. It is extremely difficult for cooperatives to succeed in an economic environment of exploitation, corruption and materialism, so people cannot accept the cooperative system wholeheartedly. Cooperatives are forced to compete with the monopoly capitalists for local markets, and the rights of the local people over their raw materials are not recognized. Such circumstances have undermined the success of the cooperative movement in many countries of the world.

On the other hand, decentralized economy is one of the principal reasons for the success of the cooperative system. The availability of local raw materials will guarantee constant supplies to cooperative enterprises, and cooperatively produced goods can be easily sold in the local market. Economic certainty will create increasing interest and involvement among the cooperative members, and as the local people will be confident of their economic security, they can wholeheartedly accept the cooperative system.

The cooperative system is a must, and it is only possible through decentralized economy. The cooperative system and economic democracy are inseparable.

As far as possible, agriculture, industry and trade should be managed through cooperatives. In these sectors of the economy private ownership should be abolished in stages. Only where production cannot be undertaken by cooperatives because of the complex nature or small scale of operations should it be undertaken by private enterprises. The distribution of commodities should be done through consumer cooperatives. Adequate safeguards for cooperatives will also have to be arranged.

Commentary: We have seen that economic democracy involves community control over the local economy so as to guarantee the minimum requirements and the maximum possible goods to everyone. We have furthermore seen that the entire process of economic production is geared towards helping people fulfill their needs and desires for consumer goods. We have already seen that both socialism or state capitalism and corporate capitalism result in economic autocracy and exploitation. To mix either of these two systems with cooperatives such as in a mixed economy (as seen formerly in Scandinavia or Yugoslavia) is to give the temporary illusion of economic freedom without the practical reality of economic democracy.

So long as the rights of the national government or the corporations to control the local resources and the local economy is not severely restricted, local resources will inevitably be taken outside the local area and used in industries in these areas. Furthermore if the economy of a local area is dependent on either the government or corporations, then it will be innately unstable and guaranteeing the minimum necessities of life to all citizens will become very difficult, if not impossible.

There are some who simply advocate distributing land to individuals. This is a false solution for two reasons. First, if surplus land were distributed among landless people, no one would get more than an acre of land at the most. This acre of land would not be an ideal economic holding because it could not be cultivated with the latest scientific methods. A sizeable portion of the land would be wasted in demarcating boundary lines, so it would be impossible to increase productivity. Increased productivity is the most important agricultural requirement in India today. Besides this, if land were distributed in this way, land would be further subdivided with the increase in the population, further aggravating the problem.

Secondly, this approach would have the effect of increasing the number of petit bourgeoisie. By petit bourgeoisie I mean those who derive unearned income by giving their land to others for cultivation because they are in economic difficulty. If landless peasants acquired a plot of one acre, they would certainly get some psychic satisfaction, but when they failed to earn anything after cultivating the land, they would definitely become disheartened. It would require all their time, energy and money to cultivate one acre of land productively because the land would be too small to utilize modern agricultural techniques. The amount of produce they would get in return would not be enough to maintain their families. They would have to lease a portion of the land and try to earn their income through other methods. By this process, the number of landowners would increase and they would all become part of the petit bourgeoisie. Politicians who claim that they hate landowners and raise slogans for their destruction deviate from their professed platform, because such an ideology only results in the creation of more landowners.

The Commune system of communist nations is an even worse solution. In the commune system individual ownership is denied. In some countries the right of individual ownership may be accepted in principle but not in practice. In such places there is no scope for workers to get either the inspiration or the incentive to fully utilize their skills in either agriculture or industry. There is no opportunity for them to enhance their working capacity. They are like oxen moving around an oil grinding mill with their eyes blindfolded. The oxen may move one hundred miles a day but they make no forward progress. Similarly, the workers in the commune system are confined within the four walls of intellectual staticity. They have no opportunity to develop subtle thoughts, so their lives can never be elevated to higher strata. People living in the commune system are like animals trapped within the vortex of staticity till the last breath of their lives. They have no psychological or human relation with their work. This is the nature of the commune system. The whole system runs counter to human psychology, and consequently production never increases.

Those countries which have adopted the commune system directly or indirectly have utterly failed in agricultural production. This is a most unfortunate fact. Capitalist countries, where agricultural production takes place on the basis of individual ownership, supply food grains to communist countries. Communist countries are compelled to purchase their minimum requirements from countries under private enterprise. The poor masses live a miserable existence of hunger and deprivation, and their lives are nothing but a bad dream. Though the capitalist system is bad, even then the commune system surrenders to it. What a pitiful situation this is. Until communist countries reject the commune system they will not be able to solve their food problems, and they will continue to move from country to country with their begging bowls outstretched. History tells us that all communist countries have rejected this system in practice and embraced capitalism. This has only brought great wealth to a new elite and stripped the common people of all welfare programmes of the state, plunging them into poverty and severe exploitation.

The commune system is based on subordinated cooperation – the relationships are those of supervisor and supervised or master and servant. Such relationships are detrimental for human progress and retard any possibility of progressive movement. They are ultra vires to the wonts or characteristics of the human mind to yearn for, work for and fight for freedom. PROUT raises the slogans: “We want cooperatives, not communes,” and, “We are not slaves of communes.”

Benefits of Cooperatives

“Operation” means “to get something done through any medium or media”. Suppose you are operating a tool machine. If this type of operation is done with collective effort then it is called “cooperation”. In the case of cooperation, something is done with equal rights, equal human prestige and equal locus standi.

In every field of collective life there should be cooperation among the members of society. Where this cooperation is between free human beings, each with equal rights and mutual respect for each other, and each working for the welfare of the other, it is called “coordinated cooperation”. Where people do something individually or collectively, but keep themselves under other people’s supervision, then it is called “subordinated cooperation”. In each and every stratum of life, we should do everything with coordinated cooperation and always avoid subordinated cooperation.

In the world today different socio-economic systems are in vogue, but none of these systems are based on coordinated cooperation. Rather, in these systems social relationships are mainly based on subordinated cooperation, resulting in the degeneration of society’s moral fabric. For example, in some countries there is a glaring lack of racial parity and no coordinated cooperation among the different ethnic or caste groups whatsoever. This lack of proper equilibrium and equipoise in social life is causing the whole structure of society to crumble down.

PROUT supports the implementation of the cooperative system because its inner spirit is one of coordinated cooperation. Only the cooperative system can ensure the healthy, integrated progress of humanity, and establish complete and everlasting unity among the human race. People should work to enjoy sweeter fruits by establishing the cooperative system.

Industry, agriculture, trade and commerce – almost everything – needs to be managed, as far as possible, through cooperative organizations. For this, special facilities will have to be provided to cooperative organizations whenever necessary. Adequate safeguards will have to be arranged, and slowly private ownership, or the system of individual management, will have to be eradicated from specific areas of agriculture, industry, trade and commerce.

If the spirit of cooperation is truly followed, those commodities which are essential for supplying the minimum requirements such as food, clothing, housing, education and medical treatment will have to be cooperatively produced. Cooperatives develop in a community which has an integrated economic environment, common economic needs and a ready market for its cooperatively produced goods. All these factors must be present for cooperatives to evolve. Properly managed cooperatives are free from the defects of individual ownership. Production can be increased as required in cooperatives due to their scientific nature.

It must be emphasized the PROUT’s cooperative commonwealth is radically different from other cooperative movements. Firstly PROUT’s cooperative movement is localized and focused solely on making the local region economically independent of products from outside regions. Secondly PROUT’s cooperative movement is not aiming to work within the capitalist system but rather to create the basis for liberation from capitalist control over the local economy. Thirdly PROUT’s cooperative movement does not simply aim to abandon society and return to a primarily agricultural or tribal hunter-gatherer lifestyle. Rather PROUT’s cooperative movements seek to provide for a renaissance of diverse forms of intellectual knowledge, artistic and literary expression as well as diverse forms of localized mysticism and spirituality. To aid this all sorts of technological developments are utilised. Fourthly PROUT cooperatives work to develop the security, intellect, talents and even spirituality of animals while working to protect and develop the spread of plant species. In addition PROUT seeks to infuse the plants, rivers, hills and other landforms with spiritual vibrations. This is a part and parcel of life in PROUT cooperatives.

Only those enterprises which are difficult to manage on a cooperative basis because they are either too small or simultaneously small and complex can be left to individual management. Similarly, the responsibility for those enterprises which cannot be conveniently managed on a cooperative basis because they are either too large, or simultaneously large and complex, can be undertaken by the immediate state government (in the case of a federation), or by the local body (in the absence of a federation).

It is desirable that the management of industrial, agricultural, trade and commercial enterprises not be in the hands of the central government or the world government (after the establishment of the world government). If it is, the common people will not get the direct or even the indirect opportunity to participate in the management of these enterprises. In such cases capitalists, opportunists or self-seeking politicians can easily take control of them and misappropriate public wealth.

As we have seen, land is also unnecessarily wasted by demarcating the boundaries of privately-owned land. 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. Land of the same level should be consolidated into one area for cooperative farming, but if the land is wavy, the area of the consolidated land should be smaller. In wavy land and land which contains small river valleys, small-scale inexpensive irrigation projects which cost only one to two hundred thousand rupees should be started. Such amounts can easily be arranged through cooperative effort. In addition, mixed farming and crop rotation can also be done through cooperatives.

In the cooperative system, members can pressurize the government because of their collective strength and gain financial help and various facilities to increase production. They can pressurize the government to provide better irrigation facilities and high yielding seeds and even make infertile land productive. Land with little fertility can be transformed into fertile farm land with proper care. This will increase total agricultural production and also help a country become self-sufficient in food production and cash crops, freeing it from food shortages. In addition, plots of land on the same level and of the same fertility can be turned into larger single plots by removing all dividing boundaries. However, if the land is undulating and varies in fertility, the division of land may be maintained, otherwise land cannot be properly irrigated.

In the cooperative system farmers need not sell their produce immediately after harvesting due to pressure of circumstances. In the individualistic or private enterprise system, most farmers have to sell their produce immediately in order to get sufficient money to survive. But in the cooperative system farmers will enjoy more financial security, as the cooperative can advance money to individual farmers and sell the crops at the most favourable time for the best price. That is, the cooperative can determine how much to sell and when to sell in order to get the best profit. Cooperatives will also be able to fix the price of their own produce within certain price limits. Thus, cooperatives will get the profit which is taken by middlemen and profiteers in the individualistic or capitalistic system.

In the present system after the harvest, poor farmers have to pay off the loans they took for such things as irrigation, seeds and labour to produce their crops. In addition, they often purchase clothing for their families for the following year. Due to their urgent need for money they are frequently forced to sell their harvest at virtually give away prices. This type of sale under the pressure of circumstances is called a “distress sale”. To protect the farmers from distress sales, the cooperative system is essential. In a cooperative, farmers will keep the necessary quantity of farm produce to meet their food needs for a year and will sell the excess produce to the cooperative at the rate fixed by the cooperative. When the market price is reasonable, the cooperative will sell the produce. The farmers will then receive their percentage of the profit which will be proportional to the amount of their land shareholding in the cooperative.

Taxes, levies, excise duties, etc., should be collectively paid by the cooperative, thus freeing individual farmers from financial pressure and economic exploitation. In many economically developed countries, there are no land taxes because the revenue collected from such taxes is only a very small part of the total revenue.

For decentralization, agricultural land should be managed through the cooperative system. However, it is not wise to suddenly hand over all land to cooperative management because cooperatives evolve out of the collective labour and wisdom of a community. The community must develop an integrated economic environment, common economic needs and a ready market for its cooperatively produced goods. Unless these three factors work together, an enterprise cannot be called a cooperative.

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.

One of the main reasons for the failure of the cooperative system in different countries of the world is the rampant immorality spread by capitalist exploiters to perpetuate their domination. For their success, cooperative enterprises depend on morality, strong administration and the wholehearted acceptance of the cooperative system by the people. Wherever these three factors are evident in whatever measure, cooperatives will achieve proportionate success.

Both the materialism of communism and capitalism fosters corruption and immorality. Unless the cooperatives come under the management of honest citizens, they cannot stand, and socialism will not succeed. So unless the moral, religious and educational standard of a large portion of the population is very high, we cannot expect to have truly able men and women as representatives, ministers, or directors of cooperatives. The dishonest managers or directors of the cooperative institutions will steal money, and the dishonest ministers will indirectly support the theft. If such malpractices continue, no cooperative institutions can be moulded, nor will true socialism ever see the light of day.

Cooperative Management

In the cooperative system there should not be any scope for interest earning shares; that is, there should not be profit earning shares in cooperatives. Rather shares should be according to the production of the land. If there are profit earning shares in farmers or agricultural cooperatives, then these shares will be sold in the share market, capitalists will buy the shares, the rate of share prices will fluctuate according to share market prices, and cooperatives will become commercial enterprises.

So, there must not be any preferential shares in any farmer, producer or consumer cooperatives, only dividend shares. Share holders with preferential shares earn a fixed amount of interest from their shares regardless of whether the organization makes a loss or profit. Preferential shares are like the sonja system in agriculture. In the sonja system, sharecroppers get a fixed amount from land owners when they initially agree to cultivate their land. This is given regardless of the amount produced by the share cropper, even if there is crop failure. Dividend shares earn a dividend which is defined as a return on the basis of the net profit earned by the organization.

Share holders must be people of high grade morality. In cooperatives, voting rights should be on an individual basis and not on the basis of the number of shares a person holds. In capitalist countries shares can be purchased. Democracy in capitalist countries is a farce because votes can be purchased and poor people cannot fight elections.

The workforce in the cooperative system will be composed of the shareholding farmers and non-shareholding labourers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the labourers will enjoy stable employment and favourable wages.

There are two types of non-shareholding labourers working in agricultural cooperatives – those who are permanent labourers and those who are casual or contract labourers. The permanent labourers will get bonuses as incentives besides their wages, while casual labourers will only get wages for their labour. Those labourers who give the greatest service to the cooperative should get the greatest bonuses. Skilled workers should get paid more than unskilled workers. This will be an incentive for all to become skilled labourers and to work harder. Bonuses should be paid according to the amount of wages which should reflect both the skill and productivity of the labourer.

Members who purchase shares in the cooperative should have no power or right to transfer their shares without the permission of the cooperative, but their shares may be inherited. If some cooperative members have no descendants, then their shares should pass on to their legally authorized successors who will become members of the cooperative if they are not already members. The reason for this policy is that it prevents capitalists from purchasing large numbers of shares in a cooperative and speculating in the market place. This type of economic activity can easily lead to a depression.

Cooperative managers should be elected from among those who have shares in the cooperative. Members of agricultural cooperatives will get dividends in two ways – according to the amount of land they donated to the cooperative, and according to the amount of their productive manual or intellectual labour. To pay this dividend, initially the total produce should be divided on a fifty-fifty basis – fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated.

Cooperative members should form a board of directors for each cooperative. The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. However, the total profit should not be distributed in the form of dividends – some should be kept for reinvestment or purchasing items such as tractors, manure, etc.; some should also be used for increasing authorized capital; and some should be deposited in the reserve fund. The reserve fund should be used to increase the value of the dividend in the years when production is low. If this system is followed the authorized capital will not be affected.

The board of directors should be elected from among the cooperative members – their positions should not be honorary. Care should be taken to ensure that not a single immoral person is elected to the board. All directors must be moralists.

To stop black-marketeering strong steps need to be taken by the government. For example, to protect the clothing industry, the government should pass a law which prevents the sale of any clothing without the trademark of the Producer cooperative where it is made. Thus, if black-marketeers try to sell any clothing without trademarks, they can be easily caught. This simple but effective remedy is known to many intelligent people, but still they do nothing. This is because they are the agents of capitalists who need money from these black-marketeers and hoarders to fight their election campaigns. This kind of corruption in the electoral system is part of democracy, so we can say that democracy is not the best form of government. Hoarding, profiteering and black-marketeering cannot be stopped in the democratic system because those who try to stop it will be thrown out of power. In the high point of the Kśatriya [Military] Era smuggling and hoarding were controlled, but as soon as the influence of the vipras [priests/intellectuals] or vaeshyas [capitalists] emerged, the control over these corrupt practices slackened.

Those socio-economic units which do not have a sufficient supply of raw materials will have to manufacture synthetic or artificial raw materials. Suppose a unit or region does not have an adequate supply of fodder to feed its cattle or sheep. Will it import fodder from another unit or region? No, it should manufacture artificial fodder instead. Similarly, it takes a substantial volume of cotton to produce one dhoti [the traditional lower garment worn by men in northeastern India]. To transport large amounts of cotton also requires much energy, and so if it is not readily available, synthetic fabric can be produced instead.

As science advances, cooperatives will develop and manufacture a great variety of commodities from synthetic raw materials. In the capitalist system, raw materials are imported from other countries or regions in order to manufacture finished products. Cooperatives will not follow this system. They will develop their own raw materials through research, so that they are not dependent on foreign raw materials.

Land Reorganization

According to PROUT, to facilitate increased production economic holdings must first be reorganized. An economic holding means a holding where output exceeds input or where the market price of the produce will exceed the cost of production including capital, labour and machinery. Lands which produce economically viable agricultural wealth – that is, where output exceeds input – are called “economic holdings”.

Uneconomic holdings are those where the market price of the produce is less than the cost of production after including the costs of all the inputs. As uneconomic holdings are not profitable, the landowners usually refrain from producing any crops. In the rural economy of a country such as India, if a village is accepted as a production unit, then there may be many plots of land in a village which are not used for producing crops because they are uneconomical.

It is not possible to predetermine the size of this economic unit. While considering input, output, productivity, etc., to determine the optimum size of an economic unit, factors like the fertility of the soil, climatic conditions, etc., will have to be considered.

Today many people believe that increased production is possible even if landholdings are small. Increased production depends upon the expertise of farm managers and their correct, timely decisions. If managers are competent, then even very large farms can increase production. Of course, it is not necessary that all farms should become large. The main thing is that the holdings should be economically viable.

To increase productivity and prevent the growth of large exploitative cultivators, the minimum and maximum size of an economic landholding should be determined. The minimum size of a landholding should be equal to the size of an economic holding in a particular region. Thus, the minimum size of an economic holding will vary from place to place. The maximum size of a landholding will depend upon the fertility of the soil, overall production and the expertise of the management. Economic holdings will generally comprise land of the same topography having adequate irrigation and other agricultural facilities. The size of economic holdings must be progressively increased keeping all these factors in mind.

The size of economic holdings may vary from country to country. At the same time the size may also vary within a country. In the Indo-Gangetic plains, a five acre holding is abundantly productive, whereas in Ladakh or the Chotanagpur Hills, even fifteen or sixteen acres of land may not yield enough produce for subsistence. The size of economic holdings in these two places is bound to vary.

 Phases of Economic Cooperativisation

Agricultural land should be brought under cooperative management, but the cooperative system should be introduced in two stages. In the first phase of the socialization of land, PROUT will not raise the demand for land ceilings, but the sale of agricultural land will be prohibited and uneconomic landholdings will be brought under cooperative management. The responsibility for cultivating this land will not lie with the landowners but with the cooperatives under the aegis of the immediate government, and with its assistance.

The landowners of the uneconomic landholdings in each village will become the members of the cooperatives in this phase. Thus, cooperatives will only consist of those who merged their land together to make uneconomic landholdings economic. The landowners will give their land, and in this phase they will remain the owners of the land. In cases where the landowners employ labour for cultivation, fifty percent of the net profit will go to the landowners and fifty percent to the labourers who work in the cooperatives.

In the initial stage agricultural cooperatives will be formed with the mutual cooperation of groups of farmers. Suppose A, B, C and D are four farmers who have consolidated their land into a cooperative in the following proportions: A two acres, B five acres, C ten acres and D fifteen acres. The profits from the sale of their crops should be shared in proportion to the amount of land each gave to the cooperative, and the service each rendered for the production of these crops. Farmers will receive produce and profits according to the number of their shares in the cooperative and their labour. As the yield of land increases due to the continuous development of improved scientific techniques, farmers can expect increased productivity and greater prosperity.

A record should be kept of the productive capacity of all the land included in the cooperative. Shares should be allocated on the basis of this productivity. For example, if a farmer has thirty acres of land of which fifteen acres are highly productive and fifteen acres are of low productivity, then his or her shares should take into account the differences in productivity. If some landowners do not want to work in an agricultural cooperative their land should still be included in the cooperative. They should also be considered as cooperative members and should get shares based on the size and productivity of their land. Of course, landowners who do not work in the cooperative will not be entitled to wages.

In this phase, the rivers and streams in a village should be harnessed for the collective welfare. For instance, by constructing embankments and small dams on the rivers, large-scale irrigation, electricity generation, and industries based on local needs should be established.

Private ownership will be recognized. For instance, one person may own one acre, another two acres and a third person three acres within the cooperative. Each cooperative member will be entitled to a dividend based on the total production in proportion to the land they donated to the cooperative. Each individual will retain the deed of ownership of their land, but agricultural activities will be conducted cooperatively. Consequently, land which remained utilized as boundary lines will no longer be left uncultivated. In certain places in Bihar and Bengal the total area of arable land is less than the amount of land wasted on boundary lines. If this system is implemented, all will benefit.

In the first phase of the plan, those owning land which is productive as an economic holding need not be persuaded to join a cooperative. But if an economic holding comprises land which is dispersed in small plots, the scattered plots should be consolidated into one holding. Alternatively, wherever small, scattered, uneconomic plots are located, they will have to be joined together under cooperative management.

The first steps must also be taken to alleviate the population pressure on land. An increasing percent of the rural population will have to be employed in industry by establishing agrico-industries and agro-industries. There should be provision for the preservation of crops by building stores and cold-stores under the control of local administrative boards. The cooperatives should be supplied with tractors, manure, seeds, water pumps and other farming equipment through Producer cooperatives. Consumer’ cooperatives will supply the commodities necessary for daily consumption to the rural population.

In the very first phase of establishing cooperatives, agricultural labourers, landless labourers, day labourers and sharecroppers will come within the scope of cooperatives. From this phase, the education system in rural areas should be thoroughly reformed. To arouse the cooperative spirit among the people, there should be extensive training and education, but moral education must take precedence over everything else so that people do not give greater importance to individual interests at the expense of the collective interest.

In the second phase of implementing agricultural cooperatives, the economic holdings of the landowners should be brought under cooperative management. Only after all the uneconomic holdings in a village are brought within the scope of cooperatives should the economic holdings be brought under cooperative management. In this phase it will be easy to apply science and technology extensively in agriculture, increasing the amount of production.

In this second phase, all should be encouraged to join the cooperative system. The net profit will be increased in favour of the labourers working in the cooperatives so that twenty-five percent of the net profit will go to the landowners and seventy-five percent to the labourers. Here labourers means those who employ either their physical or psychic labour in the cooperative. The landowners will benefit in two ways. First, as landowners, they will get twenty-five percent of the net profit of the produce from the land, and secondly, if they are part of the cooperative labour force, they will be entitled to a portion of the seventy-five percent of the profit distributed among the cooperative members.

In this phase, there must be emphasis on the rapid and large- scale establishment of agrico-industries and agro-industries so that the rural population will be dependent more on industry than on agriculture. With the development of such industries, there should be simultaneous emphasis on educational and cultural reforms to further develop the cooperative mentality of the rural population.

From this second phase, production for consumption will increase the standard of living of the rural population, and the basic criteria of social security – that is, the minimum requirements of life – must be arranged for the people.

In the third phase, there should be rational distribution of land and redetermination of ownership. The rational distribution of land will depend on two factors – the minimum holding of land necessary to maintain a family, and the capacity of the farmer to utilize the land. In this phase, the landowners will not be able to employ individual labourers, landless labourers or sharecroppers for the cultivation of land, so it will be more beneficial for them to participate fully in the cooperative system.

In this phase, it will be easy to establish big cooperatives with the extensive application of science, but these cooperatives will not be anything like the huge collective farms of the Soviet Union or China. If cooperatives are allowed to become extremely large, it will be difficult to utilize natural resources efficiently and this will lead to complications in the sphere of production. One of the main defects of the collective farms in socialist countries is their unmanageable size.

In PROUT, the farmer cooperatives themselves will determine the size of the cooperatives. But while building up the cooperative system, two factors should be kept in mind – first, the high quantity and quality of production should be ensured through the application of science and technology while keeping production costs at a minimum; and secondly, the cooperative members must be encouraged to attain maximum psychic and spiritual development at their highest level in exchange for their minimum physical labour.

In the third phase of implementing the cooperative system, one hundred percent of the net profit will be distributed among the cooperative members. The former landowners will identify fully with the cooperatives in this phase.

Through these three phases it will be possible to reduce the excessive population pressure on land and to engage thirty to forty-five percent of the population in agriculture. In the second phase, the problem of unemployment will be tackled through the large-scale establishment of industry, and by the third phase there will be no unemployment problems for the agricultural labourers. By the end of the third phase, the rural sector will be freed from the vexing problems of agricultural and industrial production, unemployment and social security.

In the fourth phase of implementing the cooperative system, there will be no conflict over the ownership of land. The agrarian problems of every village will be solved. All the social security arrangements concerned with food, clothing, housing, education and medical treatment will be easily provided to the people. In this phase it will be possible to make the maximum utilization of the collective physical, psychic and spiritual wealth of every village.

For the total implementation of the cooperative system, there must be proper psychic preparation through internal urge and external pressure, adjusting with the time factor, because people will never accept a system which is forcibly imposed on them. Such a change in the collective psychology will not occur overnight, but will depend on the sentiment of the people.

The leaders of the Soviet Union were ignorant of the collective psychology of the people, so they tried to impose collective farming by force. This produced severe famines and massive civil unrest. While trying to cope with these problems, the administration resorted to brute force instead of adopting psychological measures, and as a result they annihilated many people. Sadvipras (spiritual revolutionaries) will never go against the spirit of a country and cause its ruin.

The time period from the first phase to the fourth phase of the implementation of the cooperative system can be called the transitional period for the implementation of PROUT.

Farmers Cooperatives

Cultivation should be done on the cooperative basis. Only cooperatives can support the expanding economic requirements of agriculture, like creating ponds, purchasing machinery, uniting local people to pressurise the government for irrigation facilities, etc. Through the cooperative system four crops of rice in a year can easily be grown from any plot of land.

Farmers may also create Producer cooperatives to produce items for various industries. Thus, some farmers’ cooperatives may function as both farmer and producer cooperatives. Raw materials which are of non-farming origin, such as limestone for the production of cement, should be processed by Producer cooperatives. Cooperatives which are only agricultural should sell their produce directly to the Producer cooperative which in turn can manufacture a variety of consumer goods. Farmers’ cooperatives which also function as producer cooperatives can increase their profitability in various ways. For example, such cooperatives could produce oil from rice husks. The money earned may be reallocated and reinvested in the farmer-cum-producer cooperative or used for research and development.

Farmers in agricultural cooperatives will be able to exert collective pressure on the local, state or federal governments for different benefits and facilities. For example, in India individual farmers who grow fruit normally use deep well irrigation. But this can adversely affect fruit production because if the water-table drops too far below the roots, the fruit trees will gradually wither and die. In such circumstances shallow tube wells are better, but these wells cannot supply sufficient water for irrigation. Farmers need ponds, barrages and lift and shift irrigation facilities, and for these things they may need government assistance.

It is the cardinal right of the people to be guaranteed the minimum requirements of food, clothing, housing, education and medical treatment. The proper supply of irrigation water is also a cardinal right, because without water, food, which is the most important of the minimum requirements, cannot be produced. Irrigation water is like the apex of a spinning top – without it the top cannot spin.

In the cooperative agricultural system, modern equipment must be utilized because such modernization will facilitate increased production. For example, tractors can dig the land very deeply, bring low level soil to the surface and force the top soil below. The fertility of the top soil is diminished as a result of continuous cultivation, so when the lower soil is brought to the surface through the use of tractors, the productivity of the soil increases. In addition, the depleted top soil has the opportunity to become revitalized for future utilization. This is one benefit of tractors. A second is that farmers do not need to maintain cows for ploughing the fields. Where cows are kept for farming, they are unutilized for six months in a year. During that idle period, many costs occur to maintain them properly. The present age is not the age for utilizing large animals. In Europe horses and elephants are no longer used. To adjust with the times, tractors should be utilized today. One tractor equals the service of at least eight pairs of bullocks. Those who have half an acre or three acres of land need to maintain a pair of bullocks. This is wasteful duplication.

If modern equipment is used in agriculture, agriculture will not remain labour intensive and people can be utilized in other activities to enhance the development of the country. For this, new arrangements will have to be created. If fewer people work in agricultural cooperatives, there will be substantial savings. Simultaneously, women and children will be freed from related work so they will get scope to develop themselves. In addition, increased mechanization will link the villages to the cities and towns, and as a result the standard of living in the villagers will be increased.

The best system of taxation was in vogue in the ancient Hindu Age. In those days only twenty-five percent of the entire produce was given to the king as taxes. The farmers could also give cows, horses or sheep as taxes. In such a system farmers did not face any inconvenience. Today, however, farmers face much inconvenience because they have to pay their taxes in cash. Farmers cannot always arrange cash by selling agricultural produce, because a proper market does not always exist.

According to PROUT, a certain percentage of the farmers’ produce should be collected as direct taxes. It is also convenient for the government to realize taxes in the form of goods, because it needs to store produce as insurance against future contingencies. Taxes in such a form can easily be distributed from government stores when the people are in need. Moreover, this system will easily meet the requirements of people in the towns and cities. Such a system can rapidly transform the Indian economy.

Until now the structural locus standi of agriculture has not been properly developed. In fact, all aspects of the structural side of agriculture have been neglected.

According to PROUT, agriculture should be given the status of industry. In industry raw material costs, labour costs, interest on loans, depreciation, maintenance costs, profit, the rate of out-turn, etc., are fixed and included in costing. In agriculture this has not been done, so produce is usually uneconomically priced. Farmers are forced to sell their produce at low prices due to the pressure of circumstances. This is known as a “distress sale”. If agriculture is treated as an industry, all the conditions of industry should apply to agriculture. When this occurs farmers will not be neglected, and there will not be any differentiation in the style of development and costing of agriculture and industry.

For example, Orissa produces a single crop of paddy per year. No proper irrigation exists so there is always a dearth of water, consequently peasants remain poor. But this poverty must be removed. If we recognize agriculture as an industry in Orissa, costing and pricing will be different. Costing will include the cost of seeds, labour, raw materials, pension funds, storage or inventory, depreciation, sinking funds, etc. Farmers should also include up to fifteen percent profit on their produce as part of their costs. Thus, the value of agricultural produce as an industrial output will be properly calculated.

In a Proutistic economy buyers will have to purchase agricultural produce at this newly calculated price. This is the proper approach to integrated development. In such a system, farmers will not be exploited or put to needless hardship.

Industrial Producer Cooperatives

The central government should not control large-scale industries because this may hamper the interests of local people. Where there is a federal system of government, these industries should be controlled by the immediate government, and where there is unitary government, they should be managed by local bodies.

Industrial decentralization is only possible in a collective economic structure. No profit motive will remain in such a structure. Capitalists start industries only where the following factors are available: (1) capital; (2) labour; (3) favourable [economic] climate; and (4) a ready market for sales. They always try to lessen the cost of production; hence they will never support the principle of decentralization. In the collective economic structure the profit motive has no place – here industry is for consumption. In the collective economic structure, self-supporting economic units are to be strengthened.

If a particular country or district is highly industrialized, that will not help in uplifting or changing the economic standard of other parts of the world or country. Hence industry should be decentralized, but key industries should be centralized. For example, the spinning industry should be centralized, and around it there should be a weaving industry run on [the basis of] decentralization principles. Even in areas where the climate is extreme, industries such as spinning can be established through artificial vaporization. This will help to create a self-supporting economic unit, which is badly needed. The area of self-supporting economic units will increase with the increase of transportation facilities. One day this world will become one economic unit. A day may come when the whole of the planetary world will become one economic unit.

Large-scale and small-scale industries should remain side by side. Key industries should be managed by the immediate government, because it is not possible to run them efficiently on a cooperative basis due to their complexities and hugeness. Most key industries should be managed by the local government but they should be guided by the principle of “no profit, no loss”. Small-scale industries should run on a cooperative basis, and the small industries which cannot be managed by cooperatives should be left to private enterprise. Thus: (1) small businesses should be left to individuals Most small-scale and cottage industries will be in the hands of individual owners. Small-scale industries should be confined mainly to the production of non-essential commodities such as luxury items. Though privately owned, they must maintain adjustment with the cooperative sector to ensure a balanced economy. ; (2) Big industries should be owned by the immediate government; and (3) the industries in between the big and small industries should be run on a cooperative basis. Extensive research is required to develop this new economic structure that in PROUT is called General Economics.

The local administration will also have to arrange for the supply of sufficient power to facilitate industrial production. Every region in a socio-economic unit must strive to be self-sufficient in power generation. The local administration will have to supply locally generated power such as solar energy, thermal energy, bio-gas, hydroelectricity, nuclear energy, pneumatic energy, electromagnetic energy and tidal power, or any other power which is easily available locally. The generation of power is a key industry which should be run on a no profit, no loss basis so that the cost of production is minimized and the purchasing capacity of the people is increased. For example, if batteries are produced through cottage industries, power should be supplied on a no profit, no loss basis, but the battery producers will be able to sell their batteries at a rational profit. Here the power that is used to manufacture the batteries is not an industrial commodity but a raw material. The power for such things as transportation, communication, schools, colleges and hospitals should also be supplied on a no profit, no loss basis to maintain social dynamism. The immediate government or the state government will have to take the responsibility to supply power as a key industry. All kinds of industrial activities from key industries to cottage industries should be organized with the cooperation of the local population.

As far as possible, the establishment, operation and distribution of all industries should be done at block or sub-District level. Only when this cannot be done should industries be organized at a higher level. Obviously, industries such as iron and steel factories cannot function in every village, block and district, so they should function in a larger area.

There are some special types of key industries which can conveniently function as either small-scale industries or medium-scale cooperative industries. If some key industries are structured in this way, they must be under state control. Care should be taken to ensure that they are properly organized and widespread. Such key industries should never be controlled by capitalists; otherwise the interests of the people will be partially if not fully ignored. Moreover, if they are left in the hands of capitalists, many different kinds of problems will arise. Normally only very large-scale key industries should be under state control, and these industries should be centralized instead of decentralized. But industries which cannot be readily decentralized today may be decentralized in the future due to changing circumstances. At that time the decentralization of key industries must be implemented.

In order to keep labour relations congenial in a key industry, a bonus system of work and piece work payments should be adopted. The harder and better the people work, the more profit they will get. The bonus system of work and the system of piece work payments are two different things. Payment for the time saved in doing a particular piece of work is called the bonus system of work. That is, a particular amount earned by labourers from the profit of the organization on the basis of their labour is called a bonus. Piece work payments are something else. If a piece of work is completed before the fixed time, and in the remaining portion of time extra work is done, then labourers will get extra payment for that extra work. This system is called piece work payment. To take a concrete example, if the time allowed for manufacturing a scissors blade is two hours and the work is actually performed in one and a half hours, the payment for saving half an hour’s time is called piece work payment. A dividend is defined as a return on the basis of the net profit earned by the organization. In Japan, which is one of the most industrially developed countries, there are only a few labour disputes because work is done according to the bonus system and piece work payments, and industry is mostly managed along lines similar to the cooperative system.

There are also many other adverse effects of industrial centralization. For example, in large cities it is difficult for people to remain healthy because of the scarcity of fresh fruits, vegetables and milk. Immorality and corruption are rampant. Thieves, criminals, drug addicts, alcoholics and antisocial elements easily conceal themselves and prey on innocent people. Malnutrition, air pollution, water pollution as well as other problems also exist. All large industrial centres presently suffer from these defects.

In many undeveloped and developing countries of the world there is excessive population pressure on agriculture. It is improper if more than forty-five percent of the population is employed in agriculture. In villages and small towns a large number of agro-industries and agrico-industries should be developed to create new opportunities for employment. In addition, agriculture should be given the same status as industry so that agricultural workers will understand the importance and value of their labour.

Agrico-industries represent a set of pre-harvesting industries such tractors, fertilizers and farming equipment. Agrico-industries directly or indirectly promote the rapid qualitative and quantitative growth of agricultural products. Agro-industries comprise those post-harvesting industries which depend on agricultural production.

Farmers may also create Producer cooperatives to produce items for various industries. Thus, some farmer cooperatives may function as both farmers’ and Producer cooperatives. Raw materials which are of non-farming origin, such as limestone for the production of cement, should be processed by Producer cooperatives. Cooperatives which are only agricultural should sell their produce directly to the Producer cooperative which in turn can manufacture a variety of consumer goods. Farmer cooperatives which also function as Producer cooperatives can increase their profitability in various ways. For example, such cooperatives could produce oil from rice husks. The money earned may be reallocated and reinvested in the farmer-cum-producer cooperative or used for research and development.

We cannot neglect even a single living being in this creation, nor can we ignore the smallest part of the universe. So, as far as possible, the industrial system should be organized according to the principle of decentralization.

Industrial development in one part of the world cannot satisfactorily eradicate poverty or unemployment in another part. Therefore, in the industrial system, it is necessary to build up numerous self-sufficient units, at least for those industrial and agricultural commodities which are considered to be essential for maintaining life. Otherwise people will have to suffer tremendous hardships during war and other abnormal circumstances. With the development of transportation and communication, the size of these units can be expanded.

Many small satellite cooperatives should be formed to supply various items to large Producer cooperatives. Take a car factory, for example. The many different parts for a motor car can be locally manufactured in small cooperatives. The members of these small satellite cooperatives may even carry on their work from their homes, involving all their family members. The main function of large Producer cooperatives will be to assemble the different car parts. This will have two benefits: the large cooperative will not require many labourers hence labour unrest will be minimized, and labour costs will be reduced and thus the cost of the commodities will be kept low.

According to the wages policy of PROUT, wages need not be accepted only in the form of money. They may be accepted in the form of essential goods or even services. It is advisable to gradually increase this component of wages in adjustment with the monetary component of wages.

The total profit of such cooperatives should be distributed among the workers and members of the cooperative according to their individual capital investment in the cooperative and the service they render to the production and management of the cooperative.

It is important that one cooperative does not dominate an industry such as how the Amul dairy cooperative of Gujarat dominates the entire sale of dairy products in India or that one cooperative network should dominate such as the Mondragon Cooperative network in Spain.

In industrial cooperatives there should be dividend-earning shares and not profit earning shares as in bank interest; otherwise these cooperatives will also become commercial enterprises. If there are profit-earning shares, the spirit of the cooperative system will be destroyed and cooperatives will go into the hands of the capitalists.

Various types of cottage industries should be established on master units or ecovillages subject to the availability of raw materials. Some types of cottage industries include the following:

  1. The first stage of processing farm products of animal and insect origin, such as milk, wool, silk thread, lacquer, honey and wax.
  2. Producing all types of farm products derived from plants, such as papad (crispy, flat snack) from pulse, beaten rice from rice, cereal flakes from different types of cereals, jams from fruits, etc.
  3. Industrial products and herbal medicines of plant origin, such as essences, Ayurvedic medicines and naturopathic remedies.
  4. Medicines of non-plant origin, such as allopathic and biochemical medicines, as well as medical equipment such as pressure gauges.
  5. Different fibres produced from plants, such as jute, cotton, linen, hemp, banana, pineapple, sisal, okra and basil.
  6. Fibre products of non-plant origin, such as nylon, rayon, plastic and artificial silk.
  7. Articles of mineral but non-metallic origin, such as calcium carbonate, calcium sulphate, calcium phosphate, conch shells, rubber and oyster shells.
  8. Non-metallic products, such as soap, shampoo, liquid soap, toothpaste, toothbrushes, detergent and nectar.
  9. Metallic products from gold, aluminum, bronze, brass, zinc, etc., as well as tin articles, thermometers, crockery and utensils.
  10. Iron materials and articles, such as steel, stainless steel, grinding machines, cement and fertilizers.

These are just a few examples of some of the items which can be produced. There are in fact many items which can be produced under each category. In poor areas, two or three simple industries can be started first, such as manufacturing briefcases, medicines or making flour with grinding machines. If cottage industries are properly established, poor local people will enjoy immediate economic benefits. If cottage industries are properly organized, rural women will also get ample scope to earn a decent livelihood. Cooperatives and the local administration will have to take the responsibility of supplying cottage industries with raw materials so that they do not suffer from scarcity.

Consumer Cooperatives

The distribution of essential commodities will have to be done entirely through consumer cooperatives, not through the government, businessmen or different levels of middlemen. This will not leave any scope for manipulation by profiteers. As far as possible barter should be the basis for trade among self-sufficient socio-economic units. Essential commodities will have to be entirely tax free

Consumer cooperatives should be formed by like-minded persons who will share the profits of the cooperative according to their individual labour and capital investment. Those who are engaged in the management of such cooperatives will also be entitled to draw salaries on the basis of the services they render to the cooperative. Consumer cooperatives will distribute consumer goods to members of society at reasonable rates.

Commodities can be divided into three categories – essential commodities such as rice, pulse, salt and clothing; demi-essential commodities such as oil and antiseptic soap; and non-essential commodities such as luxury goods. If hoarders create artificial shortages of non-essential commodities common people will not be affected, but if they accumulate essential commodities then common people will suffer tremendously. This situation can be avoided if consumer cooperatives purchase essential commodities directly from producer cooperatives or agricultural cooperatives.

Capitalists hoard essential commodities and create artificial scarcity to extract the maximum profit. As a result consumers pay inflated prices for essential commodities, and sometimes they even find that such goods are not available at all. Middlemen and profiteers create artificial shortages of essential commodities knowing that people will certainly purchase them, even by taking loans, but few people take loans to purchase luxury goods. If the distribution of essential commodities is done through consumer cooperatives, middlemen and profiteers will be eliminated.

It is undesirable for business people to have the right to distribute food grains. Only consumer cooperatives should have this right. As long as the production and distribution of crops is controlled by capitalists 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 practise 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 business people has the same drawbacks as distributing food. Local consumer 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. Producer 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 producer cooperatives, should belong to the state government or local autonomous bodies and not to business people. At most, business people 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: Business people 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 producer cooperatives or the state government should have this right. These goods should, of course, be distributed through consumer cooperatives. Business people may be permitted to produce and distribute commodities considered to be luxury items.

Business people 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. Business people 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 business people, 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 business people.

Out of their greed some people add flour or other things to 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 that can distribute the medicines themselves or through consumer 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.

Consumer cooperatives should be supplied with commodities from both agricultural and producer cooperatives. Commodities which do not go directly from agricultural cooperatives to consumer cooperatives should be produced by producer cooperatives. In addition, non-farming commodities should be compulsorily produced by producer cooperatives. For example, agricultural or producers cooperatives which produce cotton or silk thread should sell the thread to weaver cooperatives which can produce cloth on their power looms. Hand looms can also be used where intricate design work is required, but generally weavers’ cooperatives should install the latest power looms. The weaver cooperatives will in turn supply consumer cooperatives.

The number of items considered essential commodities should be continually and progressively revised and expanded with the changes in time, space and person. This is natural as the minimum requirements for each member of the local economy will continuously increase in a healthy economy. Such revisions should be made by the state, regional or samaja government and not by the board of directors of a particular cooperative. What is considered a demi-essential commodity today may be treated as an essential commodity tomorrow. Demi-essential commodities which may be affected by artificial shortages causing suffering to common people should be produced by producer cooperatives. The production of luxury goods can be left in the hands of the private sector. Essential commodities or services of a non-farming nature coming within the scope of Producer cooperatives, and which require huge capital investments, should be managed by the government. The railway system is an example.

So, for the establishment of a healthy society, agricultural cooperatives, essential commodity producer cooperatives and essential commodity consumer cooperatives are a must.

Service and Other Types of Cooperatives

This type of cooperative will not be in the arena of producer or consumer cooperatives. Service cooperatives are a subtle type of cooperative coming within the arena of cultural cooperatives.

Let us take the example of doctors. Doctors should start service cooperatives. These cooperatives may also be called “physicians’ service cooperatives”. Suppose a doctor is not able to open his or her own practice, he or she may form a service cooperative with five or ten other doctors. Such a cooperative is an intellectual service cooperative. Doctors who have little capital and cannot afford to establish their own practices can also work in this type of cooperative. Such a system will solve the unemployment problem of doctors. In addition, doctors can start research through these cooperatives, although a doctor’s job is ninety-nine percent practical and hardly one percent theoretical.

Besides service cooperatives, there are several other types of cooperatives which include banking cooperatives, housing cooperatives and family annuity (insurance) cooperatives. The banking system will have to be managed by cooperatives. The central or federal bank will be controlled by the immediate or local government.

One pertinent question is whether both a ceiling on landed property and a ceiling on bank balances have to be imposed. It goes without saying that both methods have to be adopted, but the latter should precede the former. This will bring immediate cash to the government to help establish new industries on the one hand, and it will check the growth of capitalism on the other. By enforcing land ceilings no direct benefit can be expected to accrue to the nation because the available arable land will not be increased, nor will production be increased, since it is not the function of the government to cultivate land.

Through their own initiative, cooperatives can take large loans from a bank or the government to purchase modern equipment and construct dams, barrages and shift or lift irrigation facilities to increase production.

Business people should not have the right to manage banks, because past experience has shown that managers who are dishonest business people 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.

Cultural Cooperatives

When we consider those litterateurs who are the most numerous and the most vocal among the artists today, we find that their literary practice has generally not been able to solve the problem of their subsistence. In most cases the sugar of their profit is being gobbled up by the ants of publishers. We hear everywhere that there is a slump in the book market, and the royalty rates for new writers are not even discussed in society. If those who are the pioneers of society, who portray the past in the present and the present for future posterity, who offer suggestions of the picture of the future to the people of the present – if they are forced to starve or half-starve, this will certainly not be to the credit of human society. It is unthinkable that these creative geniuses should curse their own fate. In my opinion the litterateurs themselves will have to find the solution to this problem. They should take up the publication of their books themselves, on a cooperative bases. It is not possible for the insolvent litterateurs to operate this business individually, nor is it desirable; for then they might become dominated by a capitalistic, materialistic mentality. Nor is it desirable to constantly blame the governments without reason; indeed, if the book publishing business falls in the hands of the government, litterateurs may suffer more harm than good. The publishing business must be kept completely in the hands of private organizations, or else literature will cease to be literature and will be transformed into the bulletins of various parties, as has been, and is, the case in many countries of the world.

Some people maintain that the ownership and management of cinemas, theatres and all types of concert halls should be in the hands of artists’ cooperatives. Although this sounds like a good idea, it does not merit our full support because born artists keep their minds engrossed in benevolent thoughts in order to inspire ordinary people, and thus tend to forget about the hard realities of life. They generally lack the practical intelligence needed to run a cooperative. In my opinion the right to own and manage cinemas, theatres and all types of concert halls should be in the hands of local autonomous bodies which are supported by the state government. However, artists should be completely free to select films and live performances and all other activities related to art.

The salaries of artists should depend upon their abilities and the needs of their families. A large percentage of the net profit from artistic events should be distributed among the artists as bonuses. Provision should also be made so that they receive pensions when they retire.

If dramatic art is to develop properly – indeed, if it is to be kept alive at all – then every country must adopt a strong policy. The first step of this policy must be to build up fully or partially government aided theatres in every major village and city, which must be exempt from amusement taxes. Of course the people should expect that the government will adopt a liberal policy and award full freedom to the non-official connoisseurs of art in the selection of the subject matter of the dramas. If the condition is imposed that none of the political groups be allowed to use dramas as the media of their party propaganda, this will be a welcome measure. When the number of theatres is increased and dramatic performances are popularized, there will be a greater demand for dramas. This will certainly encourage the talented authors to write dramas. It is because dramas do not sell well that powerful authors do not want to write dramas. If dramas receive proper remuneration, then there will certainly be a change in the authors’ outlook. Furthermore, if the number of theatres is increased, the playwrights will no longer have to depend upon the generosity of a few big theatre magnates; for if the dramas prove their worth in the theatres, then the playwrights will not have to worry about how to sell their dramas.

One more step, in my opinion, that may be taken in order to encourage the dramatists, is to give them financial help in the form of a daily honorarium for the number of days their dramas run on the stage, regardless of whether they are professional or non-professional. This will give the dramatists the opportunity to earn some money whenever their dramas are staged and thereby keep them free from the cares of subsistence. Then they will be able to apply their minds to writing more and more new dramas for human society.

Gone are the days of poems and poetry as a commercial proposition. Books of poetry sell even less than dramas, and it is hard to say how far the slogan “Read more poetry” will help. But I think we should expect good results if the custom of presenting books of poems at various social ceremonies and festivals is introduced. The poets may even get sufficient encouragement if different books of poetry are selected as textbooks for higher classes, that is, each book by a single poet. If the compositions of the different poets are compiled in one single book, none of the poets will reap any financial benefit.

Truly speaking, most people have constantly ignored the merits and demerits, the specialty and charm of the art of painting, and that is why it is incumbent on the state or the cultural institutions to keep alive this art and its artists. Furthermore, they must awaken in the people an artistic outlook; that is, it is the duty of these very institutions to make people appreciative of art. Art galleries should be maintained in the major clubs and libraries; the original paintings can be lent to the members in exactly the same way as books are loaned form the libraries. In this way the artists, especially the new ones, will get great encouragement. The clubs and libraries may even print the pictures that become particularly popular.

Balanced Economy

In creating networks of cooperatives to end economic slavery to corporations and bureaucrats, economic balance between different sectors of the economy must be maintained. There are three main reasons why cities and states in the past lost economic balance and declined after achieving the height of prosperity. First, if the city or state developed following the course of a river system and the river suddenly changed direction or dried up, its economy was adversely affected. Secondly, if industries moved away from rural villages, the balance of the economy was also destroyed. The third reason was a defective educational system. If there are defects in the rural educational system and the social system, economic balance is lost.

In order to build a sound economy thirty to forty percent of the people in an area – neither more nor less – should depend directly on agriculture. If the percentage is smaller, agriculture is neglected. Conversely, if the percentage is greater, there will be a heavy strain on agriculture. This is exactly what happened in Ráŕh – and not only in Ráŕh, but throughout Bengal, India, China and Southeast Asia. To solve this problem today a new socio-economic analysis is required.

Just as agriculture will have to be based on a scientific system, industry will also have to be organized in perfect adjustment with agriculture. It is not proper under any circumstances if the percentage of the population depending directly on agriculture exceeds forty percent. Because rural industries have been destroyed, a major part of the population once engaged in that sector has now moved towards agriculture. For a perfectly balanced economic environment, it is required that some thirty to forty percent of the people should depend directly on agriculture, and about twenty percent on agro-industries, twenty percent on agrico-industries, ten percent on general trade and commerce, and ten percent on intellectual or white collar jobs.

In India village industries have been ruined, and those who depended on these industries have turned towards agriculture. While the percentage of traders has not increased much, the opportunities for further growth have decreased. In addition, the number of white collar job seekers has increased, resulting in soaring unemployment. The sons of rural peasants who have had a little education are no longer willing to labour in the fields. They want to become so-called gentlemen thriving on the labour of others. They consider agricultural work inferior. As a consequence, on the one hand there is a dearth of educated youths in agriculture, and on the other hand an increasing number of people from the ruined rural industries have moved towards agriculture. In rural areas the percentage of the population depending on agriculture has gone up to seventy or eighty percent. What an unbearable situation!

Non-agricultural industries (such as steel plants, the brass industry, the metal industry, oil refineries, the salt industry and non-herbal pharmaceuticals) mean those industries which are not directly agrico-industries (such as the production of picks, axes, spades and tractors) and industries which are not directly agro-industries (such as flour mills, jute mills, oil mills, cloth mills, paper mills and herbal medicine factories). The percentage of people engaged in non-agricultural industries should be formed by reducing the percentage of people depending directly on agriculture, agrico-industries and agro-industries. The percentage of people engaged in non-agricultural industries will have to be kept within twenty to thirty percent of the total population.

If the percentage of the population engaged in non-agricultural industries in a country is less than twenty percent, the country is said to be industrially undeveloped. The per capita income of the people cannot be very high. The standard of living also cannot be very high because people’s purchasing capacity remains very limited. Because of the low capacity for purchasing consumer goods, the import index always remains lower than the export index, or in other words the area has to remain a satellite of a developed country. Consequently, the balance of power in the world is jeopardized and war is always possible.

If the percentage of people engaged in non-agricultural industries is kept within twenty to thirty percent of the population, this is the state of balanced economy – a really balanced socio-economic structure. If the percentage goes beyond thirty percent, the area becomes industrially developed. Then, the more this percentage increases above thirty percent, the more over-industrialized the area becomes. In order to procure agricultural produce, over-industrialized countries try to grab productive agricultural regions or countries and make them their satellites. These over-industrialized countries also find it necessary to keep industrially undeveloped countries within their control in order to use them as a market for their finished goods. If they do not get a market to sell the consumer goods produced in their countries, they will suffer from economic depression and growing unemployment.

In this regard there is no difference between the communist and non-communist countries. They are equally aggressive in their approach. They desperately look for the kámadhenu. (Dhenu means “cow” and káma means “desire”. Kámadhenu is a mythological cow which gives as much milk as its master demands.) They want to keep it tied to the door, feeding it the minimum amount of fodder. They want the maximum output with the minimum investment. This is why there is so much war psychosis and sabre-rattling in the world today.

Efforts must be made so that each and every country of the world can enjoy socio-economic balance in both agriculture and industry; otherwise the socio-economic equilibrium of the world is bound to be destroyed.

The harmful internal consequences of over-industrialization not only affect the personal, social and national health of the people, they also precipitate gradual individual and collective psychic degeneration. A type of psychic epidemic may arise which can poison almost all expressions of life and destroy them. This may not happen today, but it will surely happen in the very near future.

Where the industrial system – the agro-industries, agrico- industries and non-agricultural industries – depends on outside labourers, it will lead to an extremely precarious situation. The speed of psychic degeneration will rapidly increase, and people will face permanent scarcity of food. There will be little possibility of expanding the markets for their consumer goods. Rather, the existing markets will gradually contract.

As examples we may cite Howrah, Hooghly, 24 Parganas and Burdwan in West Bengal. Most of the manual labourers in these districts are outsiders; hence the local people will never experience a good standard of living. However industrially developed or over-industrialized these districts might become, they will be seriously affected by the harmful internal consequences of over-industrialization, and will never enjoy any of the benefits of industrialization. This miserable picture can be seen every morning and evening in Howrah District.

On the other hand, there are many areas in India where ninety percent of the population is dependent on agriculture. There is no industry whatsoever in these areas. They are areas of surplus labour. In a balanced socio-economic structure there will be no such thing as surplus labour or deficit labour. Such a condition will never be allowed to arise.


Through the cooperative system human society will progress with accelerating speed, ushering in a new revolution in science. No part of the universe will be left unutilized – every nook and corner will be properly used. Where fodder is available, grazing land, dairy farms and milk production can be developed. Where fodder is not available, synthetic milk will be produced. In this way progress and development will be maintained in every field of life.

The day is very near when science will be guided by spiritually oriented intellectuals. When this day comes, science will move forward with leaps and bounds, causing the intellectual capacity of human beings to increase immensely. Cooperatives will greatly assist this psychic and spiritual advancement. To enhance the unity in society we should encourage all common factors and discourage all fissiparous factors.

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.

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