Economic Democracy

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Lifted from the proutgems yahoogroup at http://groups.yahoo.com/group/prout-gems/message/27ECONOMIC DEMOCRACYWhile by no means comprehensive the following offers some usefulinsights. The sentiment of economic democracy is brought out andcurrent and future researchers can explore these aspects in moredetail.Prout proposes a dynamic economy of the people, by the people and for the people. Rejecting profit-making as the goal of the economy, Proutbases its economic policy on consumption; that is, on meeting theactual needs of the people.Political democracy in which all citizens have the right to elect their government representatives has serious shortcomings in a capitalistsystem because big money influences elections. Economic democracy, onthe other hand, empowers people through cooperative management of almost all enterprises. It also decentralizes decision-making and givescitizens the right to choose how their local economy should be run.P. R. Sarkar identified four pre-requisites for economic democracy tobe successful and designed the economic structure of Prout to fulfilthem.The first is that the minimum requirements of life should be availableto everyone, in order to free everyone from the fear of poverty andwant.Secondly, the people should have a gradually increasing capacity topurchase goods and services. This is crucial because people need tofeel that the quality of their lives is improving. Measuring thepurchasing capacity of the people is the correct way to assess their standard of living and the true state of the economy. Their incomesshould grow. To achieve this, raw materials, agricultural produce andother assets of a particular region should be processed and refinedclose to the location of origin. In this way, improvements intechnology and manufacturing will benefit the local inhabitants of every region. Such a system will therefore bring about full employmentand increase the standard of living of everyone while creatingdecentralized flows of goods and capital.The third requirement is that local people should have the right tomake all economic decisions which directly affect their lives.Finally, all outsiders (those who do not have an affinity with thesocio-economic unit) should be prevented from interfering in thebusiness of local economies. This primarily means outside capitalists.There would be no outside control of land or resources, and profitsearned in the region must not be sent elsewhere or hoarded, rather theymust be re-invested locally in productive enterprises.Economy in Three Levels

Economic democracy based on Prout has a three-tiered economicstructure:Small-scale private enterprises: To encourage creativity and personalinitiative, individuals, families and small partnerships should beallowed to open privately owned businesses. They can producenon-essential or luxury goods and services. For example, homebusinesses, family-run restaurants, small retail shops, handicraftproducers, artistic groups and private inventors may prefer to managethemselves. All self-employed workers and micro enterprises will beencouraged to legally register without unnecessary bureaucracy or expense. Self-employment in all professions and trades is not ahindrance.If a private enterprise becomes too large, reaching the ceiling onsales volume or a maximum number of employees (for example, ten) itshould then halt any further expansion or if it wishes to expand toelse transform itself to more democratic, cooperative management.Cooperatives: It is a basic right in an economic democracy for workersto own and manage their enterprises through collective management.Industry, trade, agriculture and banking will be organized throughproducer and consumer cooperatives. These will produce the minimumnecessities and most other products and services, forming the largestpart of a Proutist economy. Smaller satellite cooperatives can servelarger cooperatives, for example, by producing the components needed inautomobiles that are then shipped off to the car manufacturing plantfor final assembly. Japan has set up such as system to some degree.Prout recognizes three requirements for successful cooperatives. Thefirst is honest, trustworthy leaders/managers. The second is strictadministration with transparent accounting to build confidence amongstthe cooperative members and the public. The third requirement is thesincere acceptance of the cooperative system by the public. Thisinvolves popular education to create an integrated network of communitycooperatives.Global capitalism, which wipes out local businesses around the world,also creates unwarranted pressure on cooperatives. However, adecentralized economic democracy can ensure that everyone in thecommunity has employment and a voice in decision-making processes.A cooperative market economy will have many benefits: it will keepconsumer prices low, control inflation, ensure low prices for rawmaterials, facilitate an equitable distribution of wealth, foster closer ties among people and build community spirit. This is becauseit removes the speculative mentality and arbitrate opportunities foundin inefficient capitalist systems.Large-Scale Key Industries: These will be managed as public utilitiesby autonomous bodies set up by the government on the principle of "no-profit-no-loss." They require large capital investment and arelarge in scale or very complex. Transportation, energy,telecommunications, defence, some aspects of mining and petroleum areexamples and are all essential parts of the economy. However, generallythe backbone or core resource will be considered a key industry, eg

electrical grid, water supply, telecommunications backbone network.Autonomous bodies should also manage specialized industries, such asresearch and development, hospitals and nursing homes, and overseemajor infrastructure projects, such as ports and airports.All types of natural resources, utilities and strategic enterprisescollectively belong to the local people. The local government shouldmanage them in an ecological and sustainable way, and provide worker incentives to maximize efficiency, quality, and worker satisfaction.Providing Goods and Services to the PeopleSarkar gave great importance to a field of economics that he termed thepeople's economy. This analyses the lives of individuals in relation tothe economy as a whole, including their living standard, purchasingcapacity, and economic problems. The most important aspect of thepeople's economy is ensuring the minimum requirements to everyone,which includes the production, distribution, storage, marketing andpricing of consumable goods.In this effort, the federal government will need to classify types of commodities into three basic categories: essential, semi-essential andnon-essential. Essential commodities are those needed to maintain anadequate standard of life: clean water, most foods, most clothing,medicines, housing materials, text books and other educationalmaterials, electricity and energy. Semi-essential commodities includesome types of food and clothing, books other than textbooks, mostelectronic goods, various household items, etc. Non-essentialcommodities include luxury goods.Only cooperatives would produce and sell essential commodities, and asmuch as possible, they should also manage semi-essential products.Small private enterprises can produce luxury goods and somesemi-essential items or services.As the economy of a region develops, the number of different types of commodities in all three categories will increase. When everyone isable to purchase the minimum necessities, gradually more semi-essentialcommodities such as household appliances and electronic items will bereclassified from semi-essential to be considered essentialcommodities. An item, which is initially considered as a luxury, maylater be classified to be a semi-essential or essential commodity.Services can also be classified in the same way. Essential servicesprovide the basic necessities, such as schools from kindergarten touniversity, hospitals, water and sanitation utilities, local publictransportation, the railway system, the national airlines, energyproducers, telecommunications, etc. The local, state and federalgovernment should be responsible for providing these services throughautonomous bodies set up for that purpose. However, ancillary servicesattached to these core or backbone services can certainly be run on aco-operative basis. Gradually the whole economy can move towardsco-operatisation. Key industries will be those held for the benefit of the public for the public trust and operated for the common good.Some essential services such as health care practices, medical centres

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