Proutist Economic Development Three Tier Industrial System

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Proutist Economic Development Three Tier
Industrial System

• Dr. Michael Towsey

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Modes of production

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

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Modes of production in PROUT
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The cooperative model

• "In capitalist and communist countries the mode
  of production is defective. In capitalist
  countries, labour does not work in the interest
  of management and management does not allow the
  rolling of money due to wealth concentration. In
  communist countries, labour does not feel one
  with the job and that is why there is sluggish
  production. The co-operative model of PROUT is
  free from both defects."
• - P.R. Sarkar

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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.

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Seven principles of coops
There are seven internationally recognised
principles of cooperatives ...

• Voluntary and open membership.
• Democratic - controlled by their members.
• All members contribute fairly to their co-ops,
  which they own in common. Co-ops pay a limited
  return on the money a person invests to become
  member.
• Autonomy and independence - cooperatives are
  autonomous, self-help organizations controlled by
  their members.
• Education, training and information.
• Cooperation among cooperatives.
• Concern for community.

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Cooperatives technology

• Cooperatives to use latest scientific
  developments.
• Cooperatives will allow workers to reap the
  benefits of technology.
• Automation will reduce working hours but not
  incomes.

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Cooperatives management

• Cooperatives are managed by the workers.
• Security of employment.
• Anti-monopoly legislation - when a cooperative
  becomes too big, can split into two.

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Cooperatives success depends on ...

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

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Cooperatives - examples

• Worlds best example of large scale cooperatives
• Mondragon, Spain.
• Best example of medium scale cooperatives
• Maleny, Australia, has over 20 cooperatives in
  the town including a cooperative bank, food coop,
  waste recycling coop, and several housing coops.

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Mondragón Corporación Cooperativa

• MCCs mission combines the basic objectives of a
  business organisation competing in international
  markets with the use of democratic methods in its
  organisation, job creation, promotion of its
  workers in human and professional terms and
  commitment to the development of its social
  environment.
• Jesús CataniaChairman of the General Council

www.mondragon.mcc.es
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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 with global best practice
• Eg PDVSA can be compared with Pemex, Petroecuador
  and Petrobras on criteria such as output
  efficiency, OP/L or OP/K.

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Private enterprises

• Capital is owned privately.
• Legal status small business, according to local
  legislation.
• Small scale.
• Prices determined by free market.
• Division between small and medium scale is a
  function of factors such as capital, number of
  workers and turnover. Definition will vary
  according to time, place and person (society).
• If a private business grows too big, split in two
  or turn into a cooperative.

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Industrial sectors -strategic importance
Small businesses
Cooperatives
Key industries

• Cooperatives are strategic because of
• peoples livelihood
• providing minimum necessities
• networking of industry.

• Key industries are strategic because of
• important resources
• backbone infrastructure
• regulatory implications.

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Industrial sectors -number of enterprises
Key industries
Small businesses
Cooperatives

• Cooperatives are the most predominant business /
  enterprise structural model.
• It is expected that small business will vary over
  time and the preferred model is cooperatives.
• Key industries are public sector employers.

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Industrial sectors -numbers employed
Key industries
Small businesses
Cooperatives
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Integration of three tier industries
Key industries (public utilities) Cooperatives
(all types of industry) Small businesses
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Proutist production network - example
Small businesses
Key industries
Cooperatives
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Health system
Major Hospital Clinics Private doctors
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Banking system
Central Bank Credit Unions cooperative
banks Private financial services