Proutist Economic Development Economic Selfsufficiency Dr Michael Towsey

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

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 selfsufficient. • This presentation: How to achieve economic self-sufficiency? Dr. Michael Towsey Proutist Universal 2

Economy as a living system Semi-permeable trade border imports balance exports Requires: • Self-sufficiency in the essentials of life • Regulated trade • Maintain internal economic balance despite fluctuating global economy • Decentralisation Dr. Michael Towsey Proutist Universal 3

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. Dr. Michael Towsey Proutist Universal 4

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 socioeconomic units. Dr. Michael Towsey Proutist Universal 5

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 6

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? Dr. Michael Towsey Proutist Universal 7

1 st 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. Dr. Michael Towsey Proutist Universal 8

1 st 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. Dr. Michael Towsey Proutist Universal 9

2 nd feature of decentralised economy • Production should be based on consumption demand 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 1990 s. Dr. Michael Towsey Proutist Universal 10

3 rd 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. Dr. Michael Towsey Proutist Universal 11

4 th 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. Dr. Michael Towsey Proutist Universal 12

4 th 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). Dr. Michael Towsey Proutist Universal 13

5 th 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. Dr. Michael Towsey Proutist Universal 14

5 th 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. Dr. Michael Towsey Proutist Universal 15

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. Dr. Michael Towsey Proutist Universal 16