Economic democracy

In all countries where democracy is in vogue today, people have been deceived into believing that there is no better system than political democracy. Political democracy has no doubt granted voting rights, but it has snatched away the right of economic equality. Consequently, there is gross economic disparity between the rich and the poor, immense inequality in people’s purchasing capacity, unemployment, chronic food shortages, poverty and insecurity in society.

Whether or not a candidate gets elected usually depends upon party affiliation, political patronage and election expenditure. In some cases it also depends on antisocial practices. Throughout the world, money plays a dominant role in the electoral process, and in nearly all cases, only those who are rich and powerful can hope to secure elected office. In those countries where voting is not compulsory, often only a small percentage of the population participates in the electoral process.

In almost all the countries of the world, the masses lack political consciousness. Cunning, erudite politicians take advantage of this shortcoming to confuse people and attain power. They resort to immoral practices such as bribery, vote rigging, booth capturing and buying of votes, and stand unopposed for elections. Consequently, the standard of morality in society is declining, and honest, competent people are relegated to the background. Moral leaders have less chance to win elections because election results are rigged through financial inducements, intimidation and brute force. In the present democratic system, all sorts of immoral and corrupt practices are given the opportunity to pervert society. The very nature of the present system is that it favours the capitalists and exposes the administration to immoral and corrupt forces.

The farce of democracy has been likened to a puppet show where a handful of power hungry politicians pull the strings from behind the scene. In liberal democracies, capitalists manipulate the mass media such as the radio, television and newspapers, while in socialist democracies the bureaucrats lead the country to the brink of destruction. In both forms of democracy, there is little scope for honest, competent leaders to emerge in society, and virtually no possibility for the economic liberation of the people.

Political democracy has become a great hoax for the people of the world. It promises the advent of an era of peace, prosperity and equality, but in reality it creates criminals, encourages exploitation and throws common people into an abyss of sorrow and suffering. The days of political democracy are numbered. PROUT demands economic democracy, not political democracy. To make democracy successful, economic power must be vested in the hands of the common people and the minimum requirements of life must be guaranteed to all. This is the only way to ensure the economic liberation of the people. PROUT’S slogan is: “To end exploitation we demand economic democracy, not political democracy.”

In economic democracy, economic and political power are bifurcated. That is, PROUT advocates political centralization and economic decentralization. Political power is vested with the moralists, but economic power is vested with the local people. The principal goal of the administration is to remove all the impediments and obstacles which prevent the economic needs of the people being met. The universal aim of economic democracy is to guarantee the minimum requirements of life to all members of society.

The first requirement for economic democracy is that the minimum requirements of a particular age – including food, clothing, housing, education and medical treatment – must be guaranteed to all. Not only is this an individual right, it is also a collective necessity, because the easy availability of the minimum requirements will increase the all-round welfare of society. The second requirement for economic democracy is that increasing purchasing capacity must be guaranteed to each and every individual. In economic democracy local people will hold economic power. Consequently, local raw materials will be used to promote the economic prosperity of the local people. That is to say, the raw materials of one socio-economic unit should not be exported to another unit. Instead, industrial centres should be built up wherever raw materials are available. This will create industries based on locally available raw materials and ensure full employment for all local people.

The third requirement for economic democracy is that the power to make all economic decisions must be placed in the hands of the local people. Economic liberation is the birthright of every individual. To achieve it, economic power must be vested in the local people. In economic democracy the local people will have the power to make all economic decisions, to produce commodities on the basis of collective necessity, and to distribute all agricultural and industrial commodities. The fourth requirement for economic democracy is that outsiders must be strictly prevented from interfering in the local economy. The outflow of local capital must be stopped by strictly preventing outsiders or a floating population from participating in any type of economic activity in the local area.

Economic decentralization means production for consumption, not production for profit. Economic decentralization is not possible under capitalism, because capitalist production always tries to maximize profit. Capitalists invariably produce at the lowest costs and sell at the highest profits. They prefer centralized production, which leads to regional economic disparity and imbalances in the distribution of the population. In the decentralized economy of PROUT on the other hand, production is for consumption, and the minimum requirements of life will be guaranteed to all. All regions will get ample scope to develop their economic potentiality, so the problems of a floating population or overcrowding in urban centres will not be allowed to arise.

As far as possible, agriculture, industry and trade should be managed through cooperatives. In these sectors of the economy private ownership should be abolished in stages. Only where production cannot be undertaken by cooperatives because of the complex nature or small scale of operations should it be undertaken by private enterprises. The distribution of commodities should be done through consumers cooperatives. Adequate safeguards for cooperatives will also have to be arranged. The cooperative system is a must, and it is only possible through decentralized economy. The cooperative system and decentralized economy are inseparable.

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.

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. Clearly, this concept of local people has nothing to do with physical complexion, race, caste, creed, language or birth place. 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. If this occurs the area will become vulnerable to outside economic exploitation and decentralized economy will be undermined.