The Problem with PROUT

PROUT stands for Progressive Utilization Theory which is from Indian guru PR Sarkar, founder of Ananda Marga.

Its principles are:

1. No individual can accumulate any physical wealth without the clear approval of the collective body.
2. There should be maximum utilization and rational distribution of all mundane, supramundane and spiritual potentialities of the universe.
3. There should be maximum utilization of physical, metaphysical and spiritual potentialities of unit and collective bodies of human society.
4. There should be a proper adjustment amongst these physical, metaphysical, mundane, supramundane and spiritual utilizations.
5. The method of utilization should vary in accordance with changes in time, space and person, and the utilization should be of progressive nature.

Its most striking feature is the guarantee of minimum requirements as a realization of those principles, without explaining how it would be done.

Sarkar seems to just lazily give these principles as short “Nutshell” books that are devoid of statistical data that can expose causes and effects.

This is in contrast to Adam Smith who went through pricing data of wheat from the 12th-18th centuries in order to justify his proposed principles.

Venezuela is Proof that PROUT is Wrong

PROUT influenced Hugo Chavez and consequently, Venezuela. However, we do not know whether its policies were implemented by Venezuela as to contribute directly the its rapid economic decline.

If PROUT had any influence in Venezuela’s inflation problem, it could be from the misunderstanding of how to guarantee minimum requirements:

It may be questioned whether it is wise for any government to guarantee the minimum requirements. If the state is to supply cereals, pulses..to all people then naturally the state has to institute some process of control which people may not like. Hence PROUT’s view is that people should be guaranteed the provision of sufficient purchasing power to meet these requirements. In that case the state need not adopt control measures. The other disadvantage of guaranteeing the supply of minimum requirements is that if consumable goods are supplied to everyone, people will become lethargic.. I have not said anywhere that society should give plenty of money to everyone; I have only said that the purchasing power.. should be increased.

P

PR Sarkar

Chavez’ socialist rule had made Venezuelans lethargic.

They now want the government to guarantee even cheap refrigerators which are not part of the minimum requirements, and now Maduro must satisfy lethargic people by driving the economy down with more controls.

Instead of controls, Chavez & Maduro should have invited more investment:

If production is increased through investment in developmental programmes instead, the purchasing capacity of the people can be increased.. In pure economic terms developmental programmes are those programmes which directly increase national wealth

P

PR Sarkar

Chavez kicked out capitalist investors hoping that the state could invest through oil revenues. But that failed when skilled oil workers were replaced with unskilled loyalists.

Unfortunately, PR Sarkar never elaborated on the technical aspects of how to increase purchasing power and so it has remained abstract.

He correctly points out that investment is needed, something that capitalists are very much experts on.

If PR Sarkar elaborated on its technical aspects, then PROUT would have instead advocated ’national wealth investment’ even before minimum requirements (which explains why minimum requirements are an appendix and should come last).

Currently, China has such public investments in welfare through its state run infrastructure and services with work via state capitalism.

• Sarkar calls these state run organizations as “key industries”

The China Model Succeeded

So the natural system of economy was already discovered by Chinese socialism, which also pushes for cooperatives and single-party control where the Communist Party is the sadvipra party.

China’s success makes PROUT much less relevant as an economic solution when we compare the poverty in Venezuela and the wealth in China, both of which are socialist.

Both Modern China and PROUT started in the 1950s.

• Marxist China was established in 1949
• PROUT was established in 1959

The big difference is that China did not use the dogmatic cult format whereas PROUT kept its cult dogma. This prevented reform in PROUT.

The Communist Party reformed Mao, with Deng declaring Mao’s Cultural Revolution as a catastrophe in 1981. This allowed a near total overhaul that stayed within the genearl socialist agenda.

The cult format of PROUT prevents it from admitting that PROUT from 1959 to modern times (2014) has been a catastrophe, with Venezuela as a shining example, that needs a near total overhaul.

How Supereconomics Fixes PROUT

Supereconomics uses the Four Laws of Value derived from Adam Smith:

1. The 1st Law establishes a moneyless system and purchasing power and minimum requirements

The moneyless system ensures that value is always circulating instead of being hoarded.

2. The 2nd Law establishes moneyless investements

This replaces the 3rd and 5th principle of PROUT.

3. The 3rd Law establishes the Usufruct Economy

This replaces the 1st and 4th principles of PROUT.

4. The 3rd Law establishes multilateral clearing (from economist EF Schumacher) whether using the money or moneyless systems

This replaces the 2nd principle of PROUT.