2004 proutist universal 1 proutist economic development economic self-sufficiency dr. michael towsey
TRANSCRIPT
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?
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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
Dr. Michael Towsey Proutist Universal 4
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.
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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.
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Starting objective of decentralised economy
• Guarantee of minimum necessities for all persons:
– food (including water);
– clothing;
– housing;
– medical care;
– education.
• Through increased purchasing capacity.
Dr. Michael Towsey Proutist Universal 7
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?
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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.
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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.
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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.
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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.
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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.
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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).
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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.
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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.
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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.