Proutist Economics

Context

Excerpt from http://trustcurrency.blogspot.com/2009/12/proutist-economics.html:

"This chapter presents the basic economic principles required to move from a profit-based to a consumption-based economy. A consumption-based economy is premised on the belief that the opportunity to meet one’s basic needs should be guaranteed to all the members of a society.

...

The primary economic goal of PROUT is to maximally utilize and rationally distribute the resources of the world. Maximum utilization means that the resources of the world should be harnessed in an efficient and progressive manner, with the sole motivation of meeting the needs of all human beings within the carrying capacity of the planetary eco-systems. This requires that local people plan their own economies and control their own resources. This is the only way to prevent economic exploitation and ensure environmental sustainability." (http://trustcurrency.blogspot.com/2009/12/proutist-economics.html)

Discussion

Economic Decentralization and Socio-Economic Units

"For accomplishing its economic ideals, PROUT advocates an economic system based on decentralization. In a capitalistic system, the quest for profit directs the economic activity. In PROUT, the meeting of human needs is the underlying goal. Production based on this goal is best accomplished in a decentralized manner. Decentralization is the direct expression of economic democracy, insofar as local control of resources allows the best means to achieve maximum utilization and rational distribution of those resources. Conversely, centralization is the direct expression of capitalism because it allows maximum control of local resources by the capitalists.

Decentralization is also required for sustainability, because in this system the local people become responsible for the stewardship of resources. This is completely different from the current system, wherein profits are often made at the cost of social and environmental degradation. Under PROUT, resources are protected and enhanced because the standard of living of the local people is directly dependent upon it.

In order to accomplish decentralization, PROUT seeks to formulate "units of economic self-sufficiency," or socio-economic units. The formation of such a unit would be the decision of local people. Such a decision would be based upon such factors as common economic and social problems, common geographic potentialities and problems, common cultural legacy and language etc. Cultural and ethnic factors are quite relative, and they may or may not be helpful in establishing economic divisions. More to the point is that there should be a sentiment for cooperation among the local people to meet the common goal of economic self-reliance. Local people are those who have merged their economic interests in a particular region. Anyone may settle in any socio-economic unit. Current political bodies (countries, federations, states, etc.) may contain one or several socio-economic units.

For planning purposes, each socio-economic unit is further divided into "blocks," based upon economic, geographic and population considerations. The goal of a decentralized economy is to make each block (perhaps one to two hundred thousand people) self-reliant.

One of the major defects of capitalism is the drainage of capital from local areas and its concentration into few hands outside the control of local government. A company owned in New York may have a parasitic relationship with the economy of the Haitian countryside, thwarting the economic progress of the locals. Resources taken from under-developed areas are extracted at low cost and used to benefit capitalists elsewhere. Centralized economies also lead to high industrial and urban concentration. In a decentralized economy, there is no such problem of industrial concentration and excessive urban growth, or the problem of a growing migrant labor population. There is local control of resources and capital, and opportunity for every locality to develop its socio-economic potential. Each area strives for self-sufficiency and maximum development in all sectors of the economy with due regard for protecting the natural environment. Each is free to develop its own economic plan and methods of implementation.

Guiding Principles of Economic Decentralization

PROUT proposes five guiding principles for economic decentralization. These are:

1) There should be local control of resources. This is especially necessary for those resources that are involved in the production of the basic necessities. Raw materials must be utilized as close to their source as possible for maximum efficiency, sustainability and benefit to the local people.

2) Production is need-based, driven by consumption rather than profit. Commodities should be produced primarily for the local market to prevent the outflow of capital. The socio-economic unit should be of sufficient size to create stability in the local markets and economy in general.

3) Production and distribution should be organized mainly through cooperatives. Cooperatives are largely incapable of competing in a centralized, capitalist environment. With a decentralized economy, however, the cooperative system will provide the means to ensure that everyone at the local level has employment and decision making power in the economy. This is a critical component of economic democracy.

4) There should be local employment in local economic enterprises. This is contingent upon strong local education so that skilled people are available in all fields. Cooperatives can play a role in this process by providing on-going educational opportunities for their members as well as opportunities for implementing this knowledge. This also ensures that very talented people can be properly utilized and will not succumb to "brain drain," moving to more developed and affluent areas as is happening all over the world today. Many of the most skilled and talented move from rural areas to urban ones, and from the developing nations to the developed.

5) As far as possible, commodities pertaining to the basic necessities which are not locally produced, should be removed from the local markets. It is essential to the development of local production that this rule be applied. Initially, people may have to accept lower quality goods, higher prices, or less availability, but with proper development in accordance with the desires of a population, good results can be achieved by retaining capital within an economic unit. If there is enthusiasm and pride in locally produced goods, this process will proceed very well." (http://trustcurrency.blogspot.com/2009/12/proutist-economics.html)