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On economic decentralisation and cooperatisation ...


As you know, human society is one and indivisible. A human being cannot
live alone. If a person wants to drink water from a well, he or she
needs a rope and a bucket, and to tie the rope one needs a hook. For
all these things, the help of the others is indispensable. In society
human beings have to work jointly with others so that everybody can
move forward collectively.

That is, society is the collective movement of a group of individuals

who have made a unanimous decision to move towards a common goal. If
human beings move closely together in all aspects of life, except for
those few aspects, which are very personal, the better it will be for
the welfare of society. Only those things that cannot be done
collectively should be done individually. So, it is always better for
people to work together as far as possible -- the more that human
beings work together, the better it is. If this principle is not
followed the spirit of society will be broken, adversely affecting the
very existence of human beings. People have to eat food individually --
another person cannot eat your food for you -- however a meal can be
shared collectively. Where individuality dominates human life, the
environment, the welfare of different groups and even the continued
existence of humanity may be adversely affected.


Cooperatives not communism and not capitalism

In communism the slogan is, "From each according to his capacity, to

each according to his necessity," but in the cooperative system the
slogan is, "Each will get according to his or her capacity." Due to
this slogan, a person will try to do more labour. People will put all
their talent and energy into a task and production will increase.

In communism the leaders themselves try to avoid labor. They prefer to

sit in an office rather than work hard, thus there is sluggish
production. In the cooperative system, for example, people are issued
shares in farming cooperatives based on the amount of land that they
farm under cooperative management. Similar concepts apply to producers
and consumers cooperatives and all manner of industrial enterprise. In
the communist system, this type of participation is absent, so people
do not feel oneness with their work. They are led to believe that their
needs will be supplied by the state, so they have no incentive or
interest in the system.


On decentralization

At the beginning of civilization, the desire to create arts and crafts

arose in the human mind. At that time artisans used to work at home,
and arts and crafts were produced in cottage industries. Men, women,
boys and girls --
all participated in the creation of arts and crafts. Later people
realized that some arts and crafts could not be produced in every
village; so a few combined villages produced certain artifacts. If
artisans had not combined together, they would have suffered losses in
the market place, and their numbers would have been significantly
reduced. So gradually human beings started to go and work in places
where production was done collectively, or the first factories. At that
time the few industries that existed were decentralized. In this
connection one thing should be remembered -- the more that arts and
crafts are decentralized, the greater the benefits for human society.

Decentralization does NOT diminish or dissipate economic potential.

Rather, decentralization removes regional disparity because wealth is
distributed almost equally everywhere. We do not find situations where
people in some places cry out in agony due to scarcity and starvation,
while people in other places become immoral due to excessive affluence
and over abundance. Such problems only arise from economic
centralisation (whether capitalist in the hands of few corporations or
communist in the hands of party bureaucrats of the state). In fact,
industrial centralization is detrimental to a well-knit social order.

In a decentralized economy people do not have to leave their homes to

work in an industry or work is close at hand in the collective
enterprise, and consequently they are saved from the expenditure of
maintaining two establishments or travelling long distances. Moreover,
decentralization increases the possibility of saving labour, because
people can earn their livelihood while simultaneously taking care of
their household responsibilities. This arrangement is not possible
under capitalism. Capitalism will never support decentralization,
because capitalist production exists to maximize profits.
Centralization means industry for profit, while decentralization means
industry for consumption - for the benefit of the consumer.

PROUT's approach, which will be supported by all rational people, is

production for consumption. PROUT's maxim is, "Production for
consumption, not production for profiteering."

Capitalists want to produce commodities at the lowest costs and sell

them at the highest prices. To produce commodities cheaply, there must
be efficient transportation, cheap raw materials, cheap labor, cheap
energy, adequate water supply, etc. No matter what form capitalism
takes -- individual capitalism, group capitalism or state capitalism --
capitalists will always prefer centralized production. All these forms
of capitalism are essentially the same. Thousands of industries have
mushroomed around major cities due to this capitalistic mentality.
Remote places such on the other hand have been neglected. They have
gone to sleep, crying in cimmerian darkness. Perhaps only a few people
have even heard of these places. How could they? The people living
there are extremely poor. They are incapable of purchasing a woollen
wrapper for winter, what to speak of expensive woollen clothing. Take
an example. In India regional disparity is increasing. Calcutta's per
capita income is twenty percent higher than the rest of Bengal, while
the Punjab's per capita income is higher than Haryana's and Orissa's.
The people of Delhi enjoy much greater liberty and comfort than the
villagers of Purulia district. Regional disparity is detrimental to the
cause of a healthy social order. A progressive utilisation theory is
the only panacea. There is no other solution.
Communism is state capitalism, which is why it is not free from the
defects of capitalism. State capitalists, like individual and group
capitalists, control industries. State capitalism means state
controlled industries. In other words, in state capitalism industries
are centralized. Communist countries support state capitalism, which
means centralized production. While communism appears to differ from
capitalism on the question of popular liberation, capitalism and
communism are the same internally. Fruits of the same variety may have
different colour skins, but their seeds are the same. Capitalism and
communism are fruits of the same variety.

To ensure the social and economic liberation of human beings, the

maximum amount of socio-economic decentralization is essential. While
it may be difficult to establish village-level economic infrastructure
at present, there is no insurmountable obstacle preventing us from
establishing block-level or quasi-regional economic infrastructure. As
far as possible, the establishment, operation and distribution of all
industries should be done at block level. Only when this cannot be done
should industries be organized at a higher level. Obviously, industries
such as iron and steel factories cannot function in every village,
block and district, so they should function in a larger area. There are
some special types of key industries, which can conveniently function
as either small-scale industries or medium-scale cooperative
industries. If some key industries are structured in this way, they
must be under state regulation. Care should be taken to ensure that
they are properly organized and widespread.

Capitalists should never control key industries, such as electricity

grids, telecommunications backbone networks, dams, roads, essential oil
and gas supplies, etc; otherwise the interests of the people will be
partially if not fully ignored. Moreover, if they are left in the hands
of capitalists, many different kinds of problems will arise. Normally
only very large-scale key industries should be under state control, and
these industries should be centralized instead of decentralized. The
local government can often be the agent managing such enterprises.

But industries that cannot be readily decentralized today may be

decentralized in the future due to changing circumstances. At that time
the decentralization of key industries must be implemented. That
process will be one of cooperatisation not privatisation.

There are also many other adverse effects of industrial centralization.

For example, in large cities it is difficult for people to remain
healthy because of the scarcity of fresh fruits, vegetables and milk.
Junk food sales become prolific. Immorality and corruption are rampant.
Thieves, criminals, drug addicts, alcoholics and antisocial elements
easily conceal themselves and prey on innocent people. Malnutrition,
air pollution, water pollution as well as other problems also exist in
many cities in the West tend to be hidden from view - rather the image
is one of glorifying the city. All large industrial centers presently
suffer from these defects.


Decentralized economy
The most important economic issue before the leaders of all the
countries in the world today is how to increase the standard of living
of their citizens through the economic prosperity of the state. This is
a burning question, especially in those countries that are economically
backward. The matter is not very simple because in many countries
people are still directly dependent on nature for their subsistence.
Only in a few countries have people been able to utilize their
knowledge and wisdom to solve their economic problems. Most countries
in the world -- whether capitalist or communist -- have adopted the
policy of economic centralization.

While the economies of the capitalist countries are centralized in the

hands of a few capitalists or a few capitalist institutions, the
economies of the communist countries are or were centralized in the
hands of the party. After so many years of economic centralization, how
successful have these countries been in improving the standard of
living of the people? To assess this, the main issue is whether or not
economic exploitation has been eradicated and the common people have
been guaranteed ever increasing purchasing capacity. The fact is that
in a centralized economy there is no possibility that economic
exploitation can ever be eradicated or that the economic problems of
the common people can ever be permanently solved.

In many countires the common people have been led astray time and again
by vested interests. Innumerable promises have been made by political
leaders, but they have proved to be nothing more than cruel hoaxes. The
policy of economic centralization stands exposed as merely a strategy
to accumulate increasing capital in the hands of the capitalists. On
the one hand the incredulous masses are kept in good humor by promising
them something negligible, and on the other hand the capitalists go on
amassing enormous wealth.

If we examine why this is happening, we will find that the cause is

clearly evident. All the economic policies in the country are
formulated by a handful of people who are pillars of capitalism. There
is only one way to stop economic exploitation and alleviate the plight
of the common people, and that is to implement a policy of
decentralized economy in all the sectors of the economy. Successful
planning can never be done by sitting in an air-conditioned office
thousands of miles away from the place where planning is to be
undertaken. Centralized economy can never solve the economic problems
of remote villages. Economic planning must start from the lowest level,
where the experience, expertise and knowledge of the local people can
be harnessed for the benefit of all the members of a socio-economic
unit. All types of economic problems can be solved only when economic
structures are built on the basis of decentralized economy.

The basic question is how to remove the unhealthy influence of

centralized economy. The real issue is, who will bell the cat? If the
vested interests fail to be guided by righteous intellect, then people
will have to take matters into their own hands. They will have to
create circumstantial pressure from all sides, uniting around the
slogan: "Abolish centralized economy to end exploitation; establish
decentralized economy." Decentralized economy is the only way that
people can attain all-round welfare because it will not only guarantee
economic prosperity, but also pave the way for individual and
collective psycho-spiritual progress. Once people's mundane problems
have been solved, they will have greater opportunities to develop their
potentialities in the psychic and spiritual spheres.

With the establishment of decentralized economy, economic and

psycho-economic exploitation will be eradicated, the gap between the
rich and poor will be minimized and individual and collective welfare
will be greatly enhanced. This in turn will create greater
opportunities for the psychic and spiritual progress of all members of


Control by local people

The first principle of decentralized economy is that the local people

should control all the resources in a socio-economic unit. In
particular, the resources that are required to produce the minimum
requirements must be in local hands, and all the industries based on
these resources will have to be controlled entirely by the local
people. Local raw materials must be fully utilized to produce all kinds
of commodities necessary for the economic development of a
socio-economic unit.

Local people are those who have merged their individual socio-economic
interests with the socio-economic interests of the socio-economic unit
they live in. People may travel and live anywhere around the world.
Wherever their base is, it is natural to establish community links
there and help develop that community. Movement from one community to
another simply means a reestablishment of individual socio-economic
intersts. Clearly, this concept of local people has nothing to do with
physical complexion, race, caste, creed, language or birthplace. The
fundamental issue is whether or not each person or family has
identified their individual socio-economic interests with the
collective interests of the concerned socio-economic unit. Those who
have not done so should be branded as outsiders. No outsider should be
allowed to interfere in local economic affairs or in the system of
production and distribution, otherwise a floating population will
develop, causing the outflow of economic wealth from the local area.
Whose interests do they serve? What balance do they represent between
individual and collective rights. How can it be ensured that collective
rights will prevail against parasites willing to control but not
participate in the local community? If this occurs the area will become
vulnerable to outside economic exploitation and decentralized economy
will be undermined.

The surplus wealth, after meeting the minimum requirements of the

people in the local area, should be distributed among the meritorious
people according to the degree of their merit. For example, doctors,
engineers, scientists and other capable people engaged in various
activities require extra amenities so that they can perform greater
service to society. While a common person may require a bicycle, a
doctor may require a car. But there must also be provision in the
economy for reducing the gap between the minimum requirements of all
and the amenities of meritorious people. To increase the standard of
living of common people, they may be provided with scooters instead of
bicycles. Although there is some difference between a scooter and a
car, the gap that existed between a car and a bicycle has been
partially reduced. The economic gap between common people and
meritorious people should be reduced as much as possible, and ceaseless
efforts must be made in this regard, but this gap will never vanish
altogether. If the gap increases, the common people will be deprived
and exploitation will re-emerge in society in the guise of amenities
not rationally distributed. Decentralized economy leaves no such
loophole because on the one hand the standard of the minimum
requirements must be increased, and on the other hand the provision of
amenities will be assessed from the viewpoint of the collective


All above articles or extracts are by P.R. Sarkar.

Shrii Prabhat Rainjan Sarkar (1921-90), philosopher, social reformer

and spiritual teacher. Born in India. Sarkar inspired people to develop
themselves to their fullest, and to assume greater responsibility for
the welfare of humanity and the entire creation. Sarkar propounded
PROUT in 1959.

"Sarkar, in his own way, is more than the equal of the great historian
Arnold Toynbee. Sarkar not only illuminated the growth and inevitable
decline that comes from the 'acquisitive-Capitalist' stage in societal
evolution that has now deeply infected the West, but offers wise
counsel on what to do instead."

Oliver W. Markley, Professor of Human Sciences, University of Houston

at Clear Lake

"Sarkar was one of the greatest modern philosophers of India."

Former President of India, Giani Zail Singh

"Sarkar, who did more than thirty years of studies and practical
concrete work with the poor population of India, is very important for
all who yearn for a liberation which starts from economics and opens to
a totality of personal and social human existence . . ."

Leonardo Boff, Brazilian founder of Liberation Theology

"Sarkar's theory is far superior to Adam Smith's or that of Karl Marx."

Johan Galtung, Founder UN Institute of Peace Studies