ECONOMIC

DEMOCRACY
Four requirements of
economic democracy
 Democracy
Political Democracy
Economy
Today: Economic
Political
Centralization
Centralization Future: Economic
Decentralization
Political Centralization
• Malevolent dictatorships:
– Political tyranny.
– Rampant corruption.
– Abuse of administrative power.
– Insecurity in society.
– Rigging of votes.
– Intimidation.
– False promises.
Economic Centralization
• Economic disparity.
• Inequality in purchasing capacity.
• Unemployment.
• Food shortages.
• Poverty.
 Political Economic
Centralization Centralization

Granted Snatched away

voting ?????? the right of
rights economic / social
equality

Demonocracy
 Economic Democracy

Economic Political
Power Power
Moralists
Local People
Non-party
basis
 Requirements of
Economic Democracy
Minimum requirements must be
1 guaranteed to all.

Increasing purchasing capacity must be

2 guaranteed to all.

3 Economic decisions by the local people.

Outsiders must not interfere in the local

4 economy.
 1
Minimum requirements
must be guaranteed to all

Minimum Guarantee
requirements

Absolutely necessary A concept of

for existence social responsibility
 Minimum requirements
• Relative to a particular age.
• Today: includes food, clothing, housing,
education and medical treatment.
• By continuous improvement it is to include:
transportation, energy supply, supply of
irrigational waters, communication facilities.
• Minimum requirements are an individual right
and also a collective necessity.
• Importance: The easy availability of the
minimum requirements will increase the all-
round welfare of society.
 What is a guarantee?

Supplying requirements
to every individual?
+

Ensuring a per capita income? +

Providing purchasing
capacity (ever increasing)?
 Supplying requirements?

If society arranges food and builds

a house for everyone, individual
initiative becomes retarded.
People will gradually become
lethargic.
 Per capita income?
Per capita income is a misleading,
deceptive and defective measure
popularized by capitalist economists to
fool people and cover their exploitation.

It is not an index of people’s economic

standard.
 Per capita income?
Per capita income:
• refers to a simple mathematical calculation of
total national income divided by total population;
• does not give the correct picture of the standard
of living of the people of a particular socio-
economic unit, as the wealth disparity in society
is concealed;
• shows the mean and not the variation of income
distribution;
• if inflation is also considered, its reliability as a
measure is further reduced.
Providing purchasing capacity

Society has to make arrangements

so that people, in exchange for their
labour according to their capacity,
can earn the money they require to
purchase the minimum requirements.
 Social responsibilities
We are not only to recognize these
minimum requirements, but also to
guarantee the availability of the
minimum requirements, which
includes our social responsibility of
supplying individuals with purchasing
power.
 Guarantee:
means a social responsibility

To recognize To guarantee
the their availability:
minimum
requirements: Production Distribution
• Food
• Clothes Producers’ Co-Op Consumers’ Co-Op
• Housing
• Education
• Medical treatment
•…
 2
Increasing purchasing capacity
must be guaranteed to all
Increase
purchasing Guarantee:
capacity a responsibility of
society, by:
Utilization Distribution
Maximum utilization Rational distribution
of mundane of mundane
potentialities potentialities
(production will be
ever increasing) Step 1 Step 2 Step 3
 How to increase
purchasing capacity? ?
 There must be easy availability of
commodities (minimum requirements)
according to collective needs.
 Stable prices – the price level should
remain stable and continuous inflation
should not occur.
 There should be progressive and periodic
increases in wages and salaries.
 Increasing collective wealth must be
ensured.
 What is
maximum utilization ?
• Production is ever increasing with creation of new
industries, new products and new production
techniques incorporating the latest scientific
discoveries.
• No drainage of capital or misutilization of capital.
• If a significant part of the production of a socio-
economic unit is misutilized or capital is sent
outside, the unit cannot increase its prosperity.
 What is
maximum utilization ?
• Local potentialities to be harnessed - consider:
– geographical resources of the area, including:
• capacity of rivers, lakes and canals;
• location of hills and mountains;
• location and amount of mineral, forest and aquatic resources;
– agrarian potential:
• agricultural resources and related industrial resources;
• possibilities for agrico-industries (pre-harvesting industries) &
agro-industries (post-harvesting industries);
• distribution of land for collective needs;
– communications;
– demography, including:
• labour skills;
• health and psychology of the people.
 Examples of
maximum utilization (agriculture)
• Three systems of cropping to ensure maximum
utilization of land:
– mixed cropping;
– supplementary cropping;
– crop rotation.

• Well integrated system of crop blending for full

use of space and thus maximum utilization of
land:
– space below the surface;
– space on the surface;
– space above the surface.
 Examples of
maximum utilization (agriculture)
• System of planting on boundary areas of land for
plants and trees, such as:
– around farms, fields and orchards;
– beside roads:
– edges of schools, homes, etc;
– spaces around buildings.

• Any convenient space used:

– to grow fill-up and fill-gap plants;
– e.g. for filler plants between fruit trees and palm
trees.

• Fertilizers, but must be for maintaining vitality of the

land.
 Rational Distribution - step 1
Equal rights for all to the
minimum requirements of life
minimum future levels
purchasing capacity

requirements – with equal rights

increase to the relevant level
over time
level of minimum requirements

equal rights
merit does not affect
0 equal rights to
merit minimum requirements

Every individual must have equal rights in respect of

those things that are necessary for existence
(food, clothing, housing, education and medical care).
 Rational Distribution - step 2
Distribution of surplus wealth
purchasing capacity

b u t ion
d istri
minimum requirements e
itabl
increase over time equ
surplus wealth
level of minimum requirements

equal rights

0
merit

The surplus wealth, after meeting the minimum

necessities of the age, should be distributed
among meritorious (talented, specially qualified
and skilled) people according to their merit.
 Rational Distribution - step 3a
Increase the minimum requirements of all
minimum requirements
purchasing capacity

increase over time

new level of
minimum requirements
equ

(was surplus wealth)

al r

previous level of
minimum requirements
ig h
ts

0
merit
The distribution of surplus wealth should not go
against the common interest, and as the
purchasing capacity of the people increases, their
minimum requirements should also increase.
 Rational Distribution - step 3b
The level of minimum requirements
should be increased in every era
minimum requirements 3rd era i b u t ion
l e d istr
purchasing capacity

increase over time i t ab

e q u surplus wealth
level of minimum requirements
equal rights
– minimum requirements of 2nd era
by increasing purchasing capacity

equal rights
– minimum requirements of 1st era

0
merit
The quantum of the minimum requirements should be
progressively increased so that the standard of living
of the common people is always increasing.
 Rational Distribution – appendix:
maximum amenities
• If the common people and the meritorious people are treated as
the same, the capable people will not be encouraged to develop
their higher potentiality.
• Therefore, meritorious people have special and maximum
amenities to enable them to render greater service to society.
But the provision of these maximum amenities should not go
against the common interest.
• Accordingly, maximum amenities should also be available for
the common people by way of an increase over and above their
minimum necessities, as per environmental conditions of the
time.
• While there is a gap between the maximum amenities of the
common people and the maximum amenities of the meritorious
people, there should be constant efforts to reduce this gap.
• What constitutes minimum requirements and maximum
amenities should be ever expanding.
 Rational Distribution start increasing
maximum amenities
for meritorious
increase increase
maximum maximum people also
amenities for amenities for
maximum amenities (i.e. provide
common common … at same time … special amenities,
people – people – but reducing the
stage 1 stage 2 gap with common
purchasing capacity

(guaranteed) (guaranteed) people)

target level of minimum requirements

minimum requirements i b ution

t r
increase over time
ab le dis
equit surplus wealth
current level of minimum requirements

equal rights
(guaranteed minimum requirements for all)

0
merit
Minimum requirements are guaranteed and are to be
increased over time. In the process of increasing
minimum requirements, maximum amenities should
also be guaranteed to the common people.
 Summary of
Rational Distribution
2. Everyone must be guaranteed the minimum requirements of life.
3. Special amenities should be provided so that the diversity in skill and intelligence
is fully utilized, and talent is encouraged to contribute its best towards human
development.
Maximum amenities should be provided to especially qualified or gifted persons to
enable them to render greater service to society according to the social value of
their production.
5. The provision of these maximum amenities should not go against the common
interest.
If the maximum amenities for talented people becomes too high, then the
minimum requirements of the common people should be immediately increased.
To bridge the gap between the more affluent people and the common people, it is
necessary to increase the minimum requirements of all.
As the income of people increases, this enables the minimum requirements to
also be increased.
9. Also, it necessary to increase and guarantee the maximum amenities available to
the common people over and above their minimum necessities.
There will still be a gap between the maximum amenities of the common people
and the maximum amenities of the especially qualified meritorious people, but
there should be constant efforts to reduce this gap.
What constitutes both the minimum requirements and the maximum amenities
should be ever increasing – fixed and refixed – to elevate the standard of living.
 PROUT’s approach …
• Prout’s approach is to:
– guarantee the minimum requirements for
all;
– guarantee special amenities for people
with special capabilities;
– guarantee maximum amenities for all
(both at the level of meritorious people
and level of common people, reducing
the gap between them);
 3
Economic decisions by
the local people

local people make economic

decisions
Local people are those who Plans and programs for the
have merged their individual socio-economic unit.
socio-economic interests with E.g. to produce commodities
the socio-economic interests on the basis of collective
of the socio-economic unit necessity; and to distribute
they live in. agricultural and industrial
commodities.
 Socio-economic units
• People form socio-economic units to ensure the welfare of all.

• A universal outlook is arising in the minds of human beings.

• Gradually humanity is advancing towards an age of rationality
and common interest.

• In accordance with this trend, PROUT advocates the formation

of self-sufficient socio-economic units throughout the world.

• Socio-economic units work to enhance the all-round welfare of

the people in their respective areas and to unite humanity.
• The interests of all local people are guaranteed so that they can
gain proper recognition.
• As each socio-economic unit becomes strong and prosperous it
will merge with other socio-economic units.
 Socio-economic units
Basis of formation includes:
• Common economic problems.
• Uniform economic potentialities and resources.
• Ethnic similarities.
• The sentimental legacy of the people which
arises out of common socio-cultural ties like
language, literature, historical traditions, common
usages, cultural expressions etc.
• Common geographical features.
 Common economic problems
• Ascertaining whether or not a similar set of economic
problems exists in an area is the first thing which
should be clearly analysed when forming a socio-
economic unit.
• "Same economic problems" refers to the common
economic problems confronting people in a particular
unit.
• These may include the lack of markets for locally
produced goods, surplus or deficit labour problems,
communication or transportation difficulties and lack
of irrigation water.
• The economic problems of the socio-economic unit,
and their solutions, should be well understood.
Uniform economic potentialities
and resources
• Despite natural variations from place to place, overall
the people throughout a unit should enjoy similar
opportunities for economic prosperity.
• There should be uniform economic development in all
regions of a socio-economic unit.
• Disparity between the haves and the have-nots and
the rich and the poor will have to be progressively
reduced so that the collective wealth will increase and
society will become bountiful.
 Ethnic similarities
• In the past many races and sub-races have been
suppressed and exploited by powerful or dominant
races. Racism has been propagated by those with
evil designs in order to divide society and establish
their own pre-eminence.
• Society must guard against such narrow and
dangerous sentiments. This can be done only if every
ethnic group has adequate scope for its expression
and development.
• The multi-coloured garland of humanity will be
enriched to the extent diverse human groups blend
together from a position of strength and
independence out of a genuine love for each other,
and are not forced together through fear or
compulsion.
 Sentimental legacy
• Sentimental legacy includes factors such as:
– language,
– historical traditions,
– literature,
– common usages,
– cultural expressions.
• Sentimental legacy is the common chord in the collective
psychology of a particular group of people which gives
them their unique identity and sense of affinity.
• If a person’s sentiment towards some thing is adjusted
with the collective sentiment then that sentiment can be
utilized for establishing unity in human society.
• Those sentiments which are conducive to human unity
should be encouraged, and the sentiments which divide
and disunite human society should be rejected.
Common geographical features
• Similar geographical features should be considered in
the formation of a socio-economic unit. Such as:
– topography,
– river systems,
– rainfall,
– irrigation water.

• Based on the maxim, "Know the area, prepare the

plan and serve the people."
 Socio-economic units
& civilizations
Socio-economic units can also be
described as different civilizations
which have the potentiality to become
economically self-sufficient.
 India

Civilizations Socio-economic units

Garwali Garwali Samaj
Kumauni Kumauni Samaj
Bagheli Bagheli Samaj
Bundeli Bundeli Samaj
Avodhi Avodhi Samaj
Bhojpuri Bhojpuri Samaj
Magahi Magahi Samaj
Maethili Maethi Samaj
Angika Angika Samaj
Bangali Bangalistan
 Bottom up planning

Direction

+ TOP TOP

BOTTOM BOTTOM
 Economic decisions

Economic Plan and Programs

Decentralized Planning

Block Level Planning

Organization Plan
of boundaries
 Organization of boundaries
Factors:
• Topography.
• Physical features of the area
(including river valleys).
• Nature of the soil.
• Variations of climatic conditions.
• Types of flora and fauna.
• Socio-economic requirements
&
problems of the people.
• Physico-psychic aspirations of the people,
but it is a mistake to demarcate boundaries on the
basis of linguistic and political considerations.
 Plan

Intra Block Inter Block

Planning Planning

Block level bodies

will be
constitutionally
recognized.
 Benefits of block level planning
• All the major and minor problems will be solved as the
area is small enough for the planners to understand.
• Local leadership can come forward to solve all the
problems according to their own priorities.
• Planning will be more practical and effective.
• Quick and positive results.
• Local socio-cultural bodies can play an active role in
mobilizing human and material resources.
• Unemployment problems will be easily solved.
• Purchasing capacity of people will be enhanced.
• Base for a balanced economy will be established.
 Balanced economy
Dependence of people
Proper adjustment among
agriculture, industry and commerce,
e.g. within percentages:
• Agriculture: 30 to 40%
• Agro-industries: about 20%
• Agrico-industries: about 20%
• Non-agriculture: 20 to 30%
• General trade and commerce: 10%
• Intellectual and white collar: 10%
 Balanced growth
• Balanced growth will ensure congenial
conditions for all the people of the society.

• Balanced growth will provide full security

to each and every person of the society
since all their basic needs will be met.

• This will help maintain equipoise in the

 Equipoise in physical level
Need to consider:
• Physical demand of the present and
physical demand of the foreseeable future.
• Physical supply of the present and physical
supply of the foreseeable era.
• Maximum utilization of land.
• Socio-economic development should occur
according to the Five Fundamental
Principles of PROUT.
 Five Fundamental Principles
of PROUT
• Ceiling on accumulation of physical wealth.
• Maximum utilization and rational distribution of all
potentialities of the universe (mundane,
supramundane and spiritual).
• Maximum utilization of all individual and collective
potentialities of society (physical, metaphysical and
spiritual).
• Proper adjustment among all these utilizations.
• Method of utilization to vary with changes in time,
place and person and be of progressive nature.
 4
Outsiders must not interfere
in the local economy
Outsiders (non-local) Local economy
• Have not identified their own • Capitalists in either singular or
socio-economic interests with
collective forms are the most
the interests of the local area.
• Own assets in a socio- pernicious economic exploiters
economic unit but transfer today.
their wealth outside the socio- • All over the world they are
economic unit. exploiting local economies.
• Earn their livelihood in a
particular socio-economic unit
but spend their earnings in
another socio-economic unit.
 Economic independence
• In nearly all countries of the world economically
privileged or advanced groups are mercilessly
exploiting other economically backward groups
and sucking their vitality, gagging their voice and
closing all the doors of their future progress.

• To overcome this tyranny and exploitation,

movements will have to be launched for those
suppressed people so that they can attain
economic independence.
Movement to root out exploitation
• 100% employment for local people.
• Maximum industrial development in the local
area.
• Avoid importing outside products.
• Local language as the medium of instruction.
• Local language as the primary means of
communication.
• Local socio-economic demands to be met and
implemented.
 Economic democracy
• Is the fight for the oppressed and suppressed
people of the globe.

• Applied side of Prout is based on:

• Humanistic patriotism and not geo-political
patriotism.
• Neo-humanism (welfare of human beings,
animals and plants, animate and
inanimate world).
• Universal outlook and spirit, but regional
approach.
 Factors for merger
• Socio-economic units may merge together
because of:
– Diminishing economic disparity amongst units.
– Development of science and communications.
– Administrative efficiency.
– Socio-cultural mixing.

• The size of socio-economic units is ever

expending, so smaller units will merge together to
form bigger ones.
 Socio-economic parity

Where conditions for merger occur

two or more units will have attained
a high degree of socio-economic
parity, so it will be easy and natural
for them to co-operate together in a
coordinated way.
 Final Note:
Permanent protection from
exploitation
• PROUT - to guarantee minimum requirements and
maximum amenities.
• Neo-humanistic outlook - which removes disparities.
• An integrated ideology and empirical spiritual base:
– for spiritual philosophy and practices
– to prevent fissiparous tendencies and group or
clan sentiments which create shackles of narrow-
mindedness
– spirituality does not recognize any unnatural
distinctions between human beings, as it stands
for evolution and elevation and not for superstition
or pessimism.