5 fundamental principles  11 social and socio-economic principles  Existence  Leadership  Economic democracy  Democracy  
"State vs. private"  Neo-humanism

Prout’s economic principles
including its 5 fundamental principles

By Gary Coyle
The basic principles of Prout’s economy are part of the 16 principles that encapsulate Shrii Prabhat Rainjan Sarkar’s "Progressive utilization theory". The four socio-economic principles eight to eleven, and are followed by what Sarkar calls the five fundamental principles of Prout. All these principles are concerned with economics.

The first of the four socio-economic principles state: “Diversity is the law of nature and sameness will never be.” That is, absolute equality is not possible in an ever-changing world. So although social equality is the key to an expansive and humanistic ideology, and although world federation with a common constitutional structure is a political necessity, diversity must also be recognized and utilized for the collective good.

Economically, diversity is a necessary consideration in the sound policy of both developed and less developed countries. The precarious existence of subsistence peasants must be stabilized, and the living standards raised through diversification – diverse production and production for both consumption and trade. Similarly, the precarious existence of totally trade-dependent economies in both developed and less developed countries must be established by diversification into self-sufficient production. Orthodox economic theory proposes the maximization of specialization and trade, so as to raise total output. However, regional sufficiency must augment trade for: a) strategic purposes, so that production of necessities is maintained in the case of disruption to communications or transport, or in case of war; b) fullest resource utilization, which is impossible in a totally specialized economy, where only the most ‘efficient’ resources of a particular area are exploited – mass employment is the best evidence of this; and c) economic democracy, where communities retain productive control of as much as possible for their basic necessities and so retain control of their lives and help prevent exploitation.

Another economic implication of this recognition of diversity is the question of incentives and income differentials. While no great gap between upper and lower incomes can be tolerated in any society based on equality, some gap must be provided for the maintenance of a certain level of material incentives and thus higher labor productivity. This issue, and the practical harnessing of diversity to serve collective interest, is taken up in the third and fourth principles of this set of four.

The second principle here, the ninth of the sixteen states: “In any particular age the minimum necessities of all shall be guaranteed.” That is, the provision of food, clothing, housing, education, medical care and other necessities to all, is a collective responsibility and must be the cornerstone of economic policy and social effort. While regional self-sufficiency is encouraged, a social guarantee must back such efforts.

Surplus goods and services cannot be provided for anyone while people in general do not have their necessities. Of course, the definition of necessities will vary at different places. For instance, heavy clothing is needed in cold countries and transport requirements will vary from place to place. But a minimum level must be determined and guaranteed to all.

The prime mechanism for this policy in any modern economy is the provision of purchasing power through wages. To ensure that wages carry sufficient purchasing power for necessities, as well as to ensure that income differentials are contained, there must be collective prices and income control.

The third principle of this set, the tenth of the sixteen, states: “The surplus goods and services, after distributing the minimum requirements, are to be given according to the social value of the individual’s production.” Note that it is social value rather than economic value. This principle provides a rational basis for material incentives. It is, of course, better for society if moral incentives and the desire for social service motivate people in their productive work. However the practical reality is that labor productivity is, to a large extent, proportional to material rewards. The need is for a framework that controls such incentives and contains them within such bounds as will best serve the collective interest. The incentives should also be provided in the form of goods and services that can be further applied to social purposes, rather in the form of wealth that is likely to be hoarded. The provision of necessities to all, established by the previous principle, creates an income ‘floor’; this principle creates an income ‘dynamic’; the 12th principle sets an income ceiling.

The fourth socio-economic principle, eleventh of the sixteen, states: “The increase in the standard of living of the people is the indication of the vitality of society.” So there must be a constant effort to reduce the gap between the income levels of those with earned surplus goods and services, and those with basic necessities. This means an approach, which, from time to time, increases the lowest wage while leaving the higher wages, untouched. This is a check on the expansion of living of society, and the defined level of basis necessities, rises. The benefits of science and technology can thus be distributed equitably and people in general can be freed from the more mundane responsibilities. Sarkar notes that mechanization under capitalism means more misery and unemployment to the common people because with the increase in the yield of a machine capitalists retrench laborers mercilessly. However under a collective economy the benefits of technology can be passed on to workers through progressive reduction in work hours.

While Sarkar supports the socialization of the means of production and the socialization of capitalist expropriation, he does not support nationalization or the communist practice of party dictatorship on behalf of society, and advocates socialism in the context of neo-humanism.

Sarkar opposes wholesale nationalization on two major grounds. First, the state is entirely dependent upon bureaucrats to administer its affairs. It is impossible for any bureaucracy to run diverse large and small scale industries spread over a whole country. Where a policy of nationalization exists, there persists a smug slackness not only in auditing and accounting, but also in the administrative affairs of the department. Secondly, it is impossible for state run industries to demonstrate as much technological and industrial dexterity and efficiency as either proprietary or cooperative industries. Nationalization is not a prerequisite for socialist transformation or reconstruction, and state ownership should be restricted to those sectors of the economy, which are too large or diverse for effective cooperative management.

Thus Sarkar’s socio-economic principles are rooted in human values and he seeks to blend the expression of human potentiality with economic efficiency and prosperity in the context of a progressive socialist society.

The first of the fundamental principles (the twelfth of the sixteen) of Prout states: “No individual should be allowed to accumulate any physical wealth without the clear permission or approval of the collective body.” This gives effect to the idea of collective property rights. While individual freedom in all spheres is valuable and to be preserved, economic ‘freedom’ is of a different nature because it involves the possible misutilization and misallocation of finite resources. Accumulation in one area or by one group necessarily means depletion of the resources available in another area or to another group. Therefore there can be no absolute economic ‘freedom’ as this only implies the freedom to exploit. The very propagation of such absolute economic license in the name of freedom is part of psycho-economic exploitation.

The collective body has to set parameters of individual accumulation for all and then approve the exceptions to these general rules as and when exceptions are necessary. In this way there is a basis for a healthy blending of collective and individual interests. 

The second fundamental principles (the thirteenth of the sixteen) states: “There should be maximum utilization and rational distribution of all mundane, supramundane and spiritual potentialities if the universe.” This principle begins the process of defining resources and capacities, to be utilized and distributed, as wider than the purely physical.

Through this process an equal footing, in principle, is established for comparing subtle and economic values. For instance, the aesthetic and entitative value of a forest is no less important than its economic value as woodchips. In fact, the fourth fundamental principle establishes the subtle value as more important.

Maximum utilization is not, of course, the same as indiscriminate use or exploitation. Utilization means proper use and implies the opposite of misutilization and non-utilization or resources stagnation. When people are starving the production of materials for war is clearly misutilization. In similar circumstances, the hoarding of produce for trade advantages is criminal non-utilization.

Maximum utilization of physical resources therefore provides the means of properly generating the basic social requirements and amenities. Economic growth, properly directed, is not a goal but a necessary condition for a society expanding through improvements in the quality and span of human life. Economic development implies proper balance and distribution in this growth process, and maximum utilization of subtle resources implies full consideration of their development and expression in the midst of this economic development.

Rational distribution similarly, refers to access to subtle resources as well as an equitable and constantly adjusted income policy. Minimum requirements must first be guaranteed to all and then the surplus can be distributed to merit, provided that the differential gap is progressively closed and the minimum level adjusted upwards. Some socialist countries succeeded in cutting the tails of income distribution – the extreme highs and lows – but failed to maintain constant adjustment and so disparity has grown again. Finally it should be noted that this principle extends to include the requirements of the animal and plant worlds; their requirements as independent life forms and not simply as functions of human existence. This principle thus includes the existential value of all living creatures.

The third fundamental principle (the fourteenth of the sixteen) states: “There should be maximum utilization of physical, metaphysical and spiritual potentialities of the unit and collective bodies of human society.” All human capacities, individual and social, should be fully developed and properly used, and this full expression is for the good of both society and the individual. Sarkar commented that one must not forget that collective good lies in individuals and individual good lies in collectivity, so it is with the sole intention of doing collectively good that one will have to devote oneself to individual good. This flows from the spiritual concept that real individual interest and fulfillment comes from identification with the collective or macrocosm.

The principle stresses the integrated development of all human capacities, including the often-neglected psychic, creative and spiritual. Individuals in the society should have the fullest scope for development of their various talents without fear of suppression or oppression; rather such expression should be socially encouraged. Such an approach should naturally apply to all, without regard to sex, race, caste or any other sort of categorization. The developed talents, skills and knowledge should not then be hoarded or used for any form of exploitation, but rather be made the collective property of the society that has nurtured them.

The fourth fundamental principle (the fifteenth of the sixteen) states: “There should be a proper adjustment amongst these physical, metaphysical, mundane, supramundane and spiritual utilizations.” The resources and capacities referred to in the second and third fundamental principles must be adjusted in a balance that will have to vary with conditions. An over emphasis of physical culture, for example economics and technology, will lead to mental degradation, exploitation and the suppression of subtler human capacities. Similarly, an over emphasis on spiritual culture will lead to material deficiency and, inevitably, exploitation. A proper balance is required in all spheres so that there is no neglect or suppression of essential human or universal resources.

In making this adjustment, special attention has to be paid to those capacities that are most rare. In the natural world, rare ecosystems must be given greater value than either their economic worth as common physical resources, or other more common ecosystems. In the human world, rare talents should not be waste by insisting, for instance, that a person of great intellectual capacity performs only physical labor. In general, intellectual talents are more rare than the physical, and creative and spiritual talents are rarer still. So, rare talents must be encouraged individually and collectively, as part of the pursuit of a physical, mental and spiritual development.

The fifth fundamental principle (the sixteenth of the sixteen) states: “The method of utilization should vary with the changes in time, place and person and the utilization should be of a progressive nature.” This stresses the flexibility necessary for Sarkar’s ideas to be a code of universal principles and not a dogma or reaction to an existing set of conditions. The proper use of all capacities and resources is always relative to the various environmental factors and there has to be a continuous effort to match policy and action to these circumstances. Changes in technology, the natural environment, culture and even human biology will destroy any narrow attempt to comprehend the form of human needs and the conditions for progress.

The fundamental principles of Prout provide the foundation for a progressive socialist economy and are intended to endure both flexibility and universality in economic management to guarantee ‘the good and happiness of all’.

From New Aspects of Prout
Proutist Universal Publications, Denmark 1987

Copyright The author 1999-2003