2004 Proutist Universal 1 Proutist Economic Development Economic Self-sufficiency Dr. Michael Towsey.

2004 Proutist Universal 1

Proutist Economic Development

Economic Self-sufficiency

Dr. Michael Towsey

Dr. Michael Towsey Proutist Universal 2

Summary so far

• Poverty: caused by the bleeding of wealth from a community.

• Answer: economy must be strongly linked to community and environment.

• People‘s Economy – Prout‘s answer to poverty.

• Samaj strategy - identify socio-economic units - the smallest communities that have potential to be economically self-sufficient.

• This presentation:

How to achieve economic self-sufficiency?


Economy as a living system

Requires:

• Self-sufficiency in the essentials of life

• Regulated trade

• Maintain internal economic balance despite fluctuating global economy

• Decentralisation

exportsimports balance

Semi-permeable trade border


Fundamental principle

• Prout separates political power from economic power.

• Separation of powers:

– legislature;

– executive;

– judiciary.

• And audit also to be independent.

• Political centralisation & economic decentralisation.


Political and economic powers

• Political power is vested with ethical leaders ...

• But ... economic power is vested with local people.

• Political representatives concerned with overall social welfare ...

... for the good and happiness of all.

• But ... local people plan their strategy in the socio-economic units.


Starting objective of decentralised economy

• Guarantee of minimum necessities for all persons:

– food (including water);

– clothing;

– housing;

– medical care;

– education.

• Through increased purchasing capacity.


Minimum necessities of life

• It is a fundamental human right.

• But also a collective necessity, because easy availability of minimum requirements (through adequate purchasing capacity) will increase the all-round welfare of society.

• Decentralised economy is required for self-sufficiency.

• What are the features / characteristics of a decentralised economy?


1st feature of decentralised economy

• All resources in a socio-economic unit (Venezuela) should be controled by local people (Venezuelans).

• Local people should control economic decisions.

• Economic planning is bottum up, not top down.

• The goal: economic self-reliance.

• Method: to develop the local economy using local resources, establish local savings, use local labour, develop local entrepreneurs and local markets.


1st requirement and question of foreign

investment?• Foreign investment:

– not opposed to Direct Foreign Investment.

• In the interim, multi-national corporations can invest and get a reasonable rate of return ... BUT:

– project must be in the interests of local community;

– there must be technology transfer (Japan and China);

– investors cannot withdraw capital, at will;

– investors cannot control local resources outright;

– investors must work within development plan of the local economy.

– IMF article 6: every country has right to impose capital controls.


2nd feature of decentralised economy

• Production should be based on consumption demand and not profit motive.

• Negative Example 1: Planting of cash crops for export (foreign currency) rather than food crops for local consumption.

• Negative Example 2: Big banks in Australia closed rural branch offices. The branch offices were not making a loss but can make more profits elsewhere.

• Negative Example 3: Profit motive has created a junk food industry which is bad for health (diabetes and obesity), at the public cost.

• Positive Example: Cuba in the 1990s.


3rd feature of decentralised economy

• Production and distribution organised primarily through cooperatives.

• Cooperatives and decentralised economy go hand in hand.

• Cooperatives need protection from multi-national corporations.

• In Prout‘s industrial system cooperatives are established as the norm (other than in areas of public key industries or private small businesses).

• Industry is to be optimally developed and with maximum modernisation.


4th feature of decentralised economy

• Local people have first preference to be employed in local economic enterprises.

• Who is a foreigner? Who is a local person (eg Venezuelan)?

• A Venezuelan (local) is a person who has merged their socio-economic interests with the socio-economic interests of Venezuela.

– Determined by factors such as where their money goes, length of residence, contribution to community.

– Has nothing to do with ethnicity, religion or place of birth.


4th requirement and question of foreign workers?

• Where a floating population exists in a particular region, the outflow of capital remains unchecked and the economic development of the area is undermined.

• Floating population: foreigners cannot work in a country such as Venezuela just to send money outside.

• Cooperatives in Prout will have local members as shareholders and workers (receiving dividends and wages / salary).


5th feature of decentralised economy

• No import of commodities that can be made within Venezuela.

• Venezuela should NOT depend on imported raw materials for its development – use local raw materials wherever possible.

• Encourage import substitution (ie strategy to replace imports with domestically produced substitutes).

• National security requires security of food and medicines (eg insulin) and reserves are required to be built up.


5th requirement and question of exports?

• Export surplus and specialty goods.

• Exports must be made from raw materials of the country (process and value add to raw materials internally).

• Export of raw materials is a sign of a weak economy – always value-add before export.

• Barter trade wherever possible – can set up sophisticated clearing houses to achieve this internationally (much international trade is actually barter already).

• Establish trade blocs between equally developed countries.


Final comments

• Economic decentralisation does not reduce economic potential.

• Rather, it removes poverty because wealth increases everywhere – so there is no waste of economic potential.

• Every economic sector strives for maximum development AND economic decentralisation.

• Example: within Venezuela, local regions would strive to be self-sufficient in:

basic food, drinking water, irrigation water, required clothing, building products for housing, essential medical care, educational needs, communications, power and other utilities.

2004 Proutist Universal 1 Proutist Economic Development Economic Self-sufficiency Dr. Michael Towsey.

Documents

local economy

local consumption

local entrepreneurs

local labour

local markets

local savings

local people venezuelans

economic decisions