Decentralised Economy – 3
The agricultural, industrial and trade policies of a socio-economic unit will have to be formulated according to the principles of decentralized economy. The maximum utilization and rational distribution of local resources and potentialities to ensure full employment should be given priority, keeping in view that there should be uniform economic development in all regions of a socio-economic unit.
The members of the cooperatives should decide the policies concerning such things as agricultural production, price fixation and the sale of agricultural commodities. Local people should not only control cooperative bodies, but supervise all activities related to the local economy. The local administration will have to assist the economic development of cooperatives. The price of agricultural commodities should be fixed on a rational basis by taking into account the price of commodities; the cost of labour, raw materials, transportation and storage; depreciation; sinking funds; etc. In addition, this price should include a rational profit of not more than fifteen percent of the cost of production. In a decentralized economy agriculture will have the same status as industry.
The industrial system must also be reorganized according to the principles of decentralized economy. If a certain part of a country is over-industrialized, it will impede the economic progress of other regions. Economic decentralization will not allow such a situation to arise. In a decentralized economy, key industries, medium-scale industries and small-scale industries will be managed by different groups of people. In a centralized economy – whether capitalist or communist – these industries are usually managed as either private companies or state enterprises. Most key industries should be managed by the local government but they should be guided by the principle of “no profit, no loss”. Most medium-scale industries should be managed as cooperatives, but they should not be guided by monopoly production and profit. The cooperative sector will be the main sector of the economy. Cooperatives are the best means to organize local people independently, guarantee their livelihood and enable them to control their economic welfare. Most small-scale and cottage industries will be in the hands of individual owners. Small-scale industries should be confined mainly to the production of non-essential commodities such as luxury items. Though privately owned, they must maintain adjustment with the cooperative sector to ensure a balanced economy.
A rural economy should not depend solely on cottage industries, otherwise the economic welfare of the rural population will be jeopardized. If cottage industries are properly organized, rural women will also get ample scope to earn a decent livelihood. Cooperatives and the local administration will have to take the responsibility of supplying cottage industries with raw materials so that they do not suffer from scarcity.
The local administration will also have to arrange for the supply of sufficient power to facilitate industrial production. Every region in a socio-economic unit must strive to be self-sufficient in power generation. The local administration will have to supply locally generated power such as solar energy, thermal energy, bio-gas, hydroelectricity, nuclear energy, pneumatic energy, electromagnetic energy and tidal power, or any other power which is easily available locally. The generation of power is a key industry which should be run on a no profit, no loss basis so that the cost of production is minimized and the purchasing capacity of the people is increased. For example, if batteries are produced through cottage industries, power should be supplied on a no profit, no loss basis, but the battery producers will be able to sell their batteries at a rational profit. Here the power that is used to manufacture the batteries is not an industrial commodity but a raw material. The power for such things as transportation, communication, schools, colleges and hospitals should also be supplied on a no profit, no loss basis to maintain social dynamism. The immediate government or the state government will have to take the responsibility to supply power as a key industry.
All kinds of industrial activities from key industries to cottage industries should be organized with the cooperation of the local population. Care should also be taken so that private enterprises are set up by the local people. Local people must be given preference in employment, and all local people should be locally employed. If this policy is followed, there will be no surplus or deficit labour among the local people, and if many people do come from outside areas, they will not find a place in the local economy. Where a floating population exists in a particular region, the outflow of capital remains unchecked and the economic development of the area is undermined.
Trade in a decentralized economy should be organized by distributing commodities through consumers cooperatives. There will be no income tax, but there should be a tax levied on the production of each commodity. Commodities should be exported from one region or socio-economic unit to other regions or units through cooperatives.
In the decentralized economy of PROUT, exporting local raw materials is not supported. Only finished goods should be exported under certain circumstances. After all the requirements of the local people in a socio-economic unit have been met, the surplus goods may be exported, but only to a socio-economic unit which has no immediate opportunity or potential to produce them, in order to meet the requirements of the people in that unit. And even then, the whole transaction of importation and exportation should be undertaken directly by cooperatives, and the exportation of commodities must not be motivated by profit. If there are insufficient raw materials in any socio-economic unit to meet the minimum requirements of the local people, the necessary raw materials may be imported from another socio-economic unit providing it can be carefully verified that the raw materials in the latter unit are surplus. Free trade should be encouraged once self-sufficiency is attained, as this will help facilitate increased prosperity and encourage economic parity among socio-economic units, and lead to the formation of larger socio-economic units.
Another important characteristic of decentralized economy is that money will always remain in circulation, hence the economy will move with accelerating speed. The value of money depends on the extent of its circulation. The more frequently money changes hands, the greater its economic value. The greater the value of money, the greater the prosperity in individual and collective life, and the greater the opportunities for all-round welfare.
There is a close relationship between the economic prosperity of people and their psychic and cultural development. Improvements in individual and collective life will lead to the all-round welfare of people. If local people do not develop a sense of self-confidence in their economic activities, then they become mentally weak, and this inherent weakness becomes an impediment to their economic well-being. Such a community will become an easy victim of economic, political and psycho-economic exploitation by vested interests. This unhealthy situation must be firmly resisted. Thus, the local language is to be used in all local dealings and transactions. That is, the local language should be used in the administration, the education system, the economy, and in cultural activities. All official and non-official bodies and offices of a particular socio-economic unit should use the local language as the medium of communication.
The overall well-being of society is the ultimate goal of decentralized economy. This is a comprehensive ideal and should be established in each and every socio-economic unit. It will bring about economic prosperity as well as ensure greater opportunities for the psycho-spiritual elevation of all members of society.