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2004 Proutist Universal

Proutist Economic Development

Three Tier Industrial System

Dr. Michael Towsey

Dr. Michael TowseyProutist Universal2

Modes of production

1.Who owns the means of production –the capital and land?2.Determines who gets what income.3.Capitalist system –private (in reality, a few).4.Communist system –the State (in reality, not really public).5.Mixed economy (private and State).6.Cooperative system –members of the coop.7.Prout prefers the cooperative system, but supports public andprivate ownership where appropriate.

Dr. Michael TowseyProutist Universal3

Modes of production in PROUT

NotapplicableElected byworkers or membersElected, or appointed byimmediategovernment

Board of Directors

Motor mechanicsLow,althoughcan bespecialisedLowSmallscalePrivateAgricultureAuto manufactureHigh,medium,lowFrom high tomedium, andeven lowLarge,mediumscaleCooperativeWater Core power utilitiesOil, MineralsDefence industryHighHigh(keyindustry)LargescalePublic

ExamplesComplexityStrategicImportanceSizeMode of Production

Dr. Michael TowseyProutist Universal4

The cooperative model

•"In capitalist and communist countries the mode of production isdefective. In capitalist countries, labour does not work in theinterest of management and management does not allow therolling of money due to wealth concentration. In communistcountries, labour does not feel one with the job and that is whythere is sluggish production. The co-operative model of PROUTis free from both defects."-P.R. Sarkar

Dr. Michael TowseyProutist Universal5

Cooperatives

•"Cooperatives are the businesses of the future."-Felipe Perez-Marti•Workers or members own the cooperative.•More incentives for workers to be efficient.•No conflict between owners and employees.•Workers benefit from the effort they put in.•Workers and members can derive income by: –wages/salary (including bonuses); & –dividends (allocation of rational profits); or –both.

Dr. Michael TowseyProutist Universal6

Seven principles of coops

1.Voluntary and open membership.2.Democratic -controlled by their members.3.All members contribute fairly to their co-ops, which they own incommon. Co-ops pay a limited return on the money a personinveststo become member.4.Autonomy and independence-cooperatives are autonomous,self-help organizations controlled by their members.5.Education, training and information.6.Cooperation among cooperatives.7.Concern for community.

There are seven internationally recognisedprinciples of cooperatives ...

Dr. Michael TowseyProutist Universal7

Cooperatives & technology

•Cooperatives to use latestscientific developments.•Cooperatives will allow workers toreap the benefits of technology.•Automation will reduce workinghours but not incomes.

Dr. Michael TowseyProutist Universal8

Cooperatives & management

•Cooperatives aremanaged by the workers.•Security of employment.•Anti-monopoly legislation-when a cooperativebecomes too big, cansplit into two.

Dr. Michael TowseyProutist Universal9

Cooperatives –successdepends on ...

•Ethical management.•Strong supervision.•Whole hearted acceptance by local community.•Financial sustainability.•In early stages, cooperatives require protection frommultinationals or trans-national corporations. –eg import tariffs, tax concessions –but eventually should be phased out.

Dr. Michael TowseyProutist Universal10

Cooperatives -examples

•World‘s best example of large scale cooperatives –Mondragon, Spain.•Best example of medium scale cooperatives: –Maleny, Australia, has over 20 cooperatives in the townincluding a cooperative bank, food coop, waste recyclingcoop, and several housing coops.

Dr. Michael TowseyProutist Universal11

Mondragón CorporaciónCooperativa

•MCC’s mission combines the basic objectives of abusiness organisation competing in international marketswith the use of democratic methods in its organisation, jobcreation, promotion of its workers in human andprofessional terms and commitment to the development of its social environment. –Jesús CataniaChairman of the General Council

www.mondragon.mcc.es

Dr. Michael TowseyProutist Universal12

Key industries

•Capital is owned by local community.•Legal status -statutory authority, local government corporation.•Board of directors: –elected or appointed by local community; –government appointments on merit.•Large scale, complex.•Operate in the public interest –to serve the people.•Operate on no profit –no loss basis.•Efficiency maintained through targets and comparison withglobal best practice: –Eg PDVSA can be compared with Pemex, Petroecuador andPetrobras on criteria such as output efficiency, OP/L or OP/K.