Analytical Economics & Prout’s Symbiotic Economics PDF Print E-mail
PROUT
Written by Bhaveshananda Avadhuta   

New Horizons (Feature heading)

The recent economic downfall has made us sit down and reflect over the various types of economic systems. This analytical study can help us find out a way to a people-oriented economic system guided by general welfare.

Till now, humanity has conceived two economic systems for its well being. The first one is analytical economics and the second one is symbiotic economics.
What is analytical economics? In analytical economics, the concept starts from the state and ends with the individual. If the state is prosperous and if the Gross Domestic Product (GDP) or the foreign exchange reserves are increasing, this will be treated as a measure of the welfare of the citizens. Analytical economics is always calculated in terms of the increase of GDP or the foreign exchanges reserves and the lowering of inflation is also regarded as the indicator of the health of the nation and consequently that of the people of the country.
The pundits of analytical economics, however, are unable to see the fallacy or dichotomy in their arguments. In a state, there are always some individuals whose incomes are at times as high as 100 times the average salary or in some cases 10,000 times more than the income of the lowest income group. Then, how can the mean growth of GDP relate to the income of the low income group? There is no effort or methodology to bridge the gap between the highest income brackets and the lowest one. The arguments based on the growth of GDP or the increased foreign exchange reserves or the lowering of the inflation is faulty and cannot be accepted.
Analytical economics can be broadly divided into three ideological methods that have been evolved and experimented so far. The first one is capitalism, and the second is communism and the third is a motley mix of the two termed as Fabian socialism or mixed economy.

Capitalism

Capitalism can be defined as a socio- economic and political system where the means of production – industries, banks, natural resources, distribution system and business etc are all owned by private individuals or corporations, where the political system operates in the interest of such owners and where the distribution of national income is totally determined by them. It is a free enterprise system, which can allow the businessman or the owner of means of production absolute and unrestrained freedom to maximise their profit.
The doctrine of policy of freedom from governmental control especially for private commercial interests is known as Laissez Faire. It was first propounded by Adam Smith and later refined by his disciples David Ricardo and J.B.Say and it is known as the Classical Theory of Economics. With this the economic theory went a political creed that considers the state as the necessary evil, evil because of its encroachments on individual liberty to acquire more and accumulate more and more wealth.
But, they also consider the state as a bulwark against anarchy resorted to by the exploited labour class to protest against the rapacity and greed of the Capitalists or the Corporations. Hence, they like to preserve the concept of the state too to protect them. This is due to the fact that they are scared of the rising labour unrest due to the rapacious exploitation done by them. In such a case, they want the state to act in their interest by protecting them from the onslaughts of the labour who may become hostile or aggressive. In this system, the labour force is to act in the total interests of the capitalists.
Capitalism is not congenial to the integrated growth of human progress. Capitalism is anti-human and dehumanises the working class.
In the words of Shri P.R.Sarkar, the seer-philosopher of the PROUT ideology , “the fundamental defect in capitalism is the contradictions due to the self-centered profit-motivated psychology and the accumulation of wealth for the benefit of a selfish few rather than for the welfare of the large sections of the society. A day is therefore sure to come when capitalism will burst like a firecracker”.

Communism

The second is Collectivism or Communism given by Karl Marx. Here the State reigns supreme and the human beings in the State are mere economic beings only needing bread and butter.
The term “Communism” is derived from the word, “Commune” which comprises the prefix “Co” means “together” and “mune” means “to do something together”. “Commune” means “to do something together”. “Commune” plus “ism” equals “Communism”. The term “Communism” is only applicable where the commune system exists. Those who follow the commune system are communists. In the commune system, there is no relationship among people doing something together as everything is imposed from the top. Hence, the word “Commune” as used by Karl Marx is improper and misleading.
While Marx said many things our discussion here is only concerned with those things in his philosophy which went against human psychology. That is, we are only concerned with the part of his philosophy, which attempted to build castles on quicksand.
Communism is based on crude materialistic philosophy. Its goal is to enjoy whatever you get by depriving others. There is no scope for preparing the mind in an intellectual flow towards the pinnacled entity. When the mind reaches to the abode of its object whether the object is crude or subtle, the mind is powered down. The natural tendency of the mind is to go downwards, but when the mind ideates on the subtlest entity it is slowly converted into spirit. A spiritual aspirant has to take his or her mind upwards.
Communism is unable to provide the proper environment for the creation of a strong, solid psychic and intellectual structure. That is why moral stamina – moral sanctity – is lost in communist countries. Such a phenomenon took place in India just before the Buddhist Age because of the influence of Carvaka philosophy. Carvaka philosophy was a protest against the Vedic “bogusism”, although it was materialistic in nature. During that period there was not even a pinch of morality – society had lost all its moral stamina. Today the same thing is happening and will continue to happen in communist countries. In communist countries there is no sanctity in moral life – society is devoid of moral principles.
In the name of this defective theory, one of the leaders of the Soviet Union killed more than 500,000 people and sent many more to labour camps in Siberia. Among all the anti-human and homicidal theories that have been created in this world, communism is the most barbarous. The day has come for it to be thrown on the scrap heap forever.
Countries which have both laborious and intellectually-developed citizens have never accepted communism. For example, Karl Marx was born in Germany but his theory was not accepted there. Similarly, England gave shelter to Marx but it did not accept his theory. The co-operative movement first started in England and the spirit of co-operation is reflected in many aspects of British society; consequently Marxism has not been able to get a foothold in Britain. Japan is surrounded by communist countries like the Soviet Union, North Korea and China but it did not accept communism. The citizens of these countries, as well as some other countries, are both laborious and intellectually developed, hence they have rejected Marxism.
Previously in India, some meritorious students accepted Marxism as the best theory out of the bad lot, but they did not embrace it as their ideology of life. Now the cream of the university students is not attracted towards Marxism because Marxism is the symbol of intellectual hollowness.

Mixed Economy

The third pattern of economic system is called Mixed economy or Democratic Socialism. It is based on Fabian socialism. In this concept, there should be both private sector and the public sector and they will compete with each other and ultimately a day will come when the capitalistic structure will be squeezed out and will totally evaporate and only the public sector will prevail. But, in reality it is totally different. The fallacy of this system is that the employees in the public sector do not have a feeling of oneness with the job in the public sector.
The public sector can never compete with the private sector and consequently the private sector will never get squeezed out as envisaged by the founding fathers of this school of philosophy. Today, many countries of the world who have treaded on the path of mixed economy are backtracking to the capitalistic path. The leaders who were shouting from the rooftops about the merits of this system had to eat back their own words. More shameful is the role of economic pundits who were eulogizing the efficacy of the system as the panacea of all social evils as they have to suddenly turn around and start praising the glory of the economic liberalisation through disinvestment. So much so that today for the first time a minister for disinvestment has been appointed. The appointment of disinvestment minister was the first of its kind anywhere in the world.
Due to their inherent static nature, the downfall of both capitalism and communism is inevitable. Both capitalism and communism are on the verge of extinction from this world. The external and internal spheres of the capitalism have ordinary acceleration but there is a contradiction in capitalism due to the self-centred profit-motivated psychology and the accumulation of wealth for the benefit of a few rather than for the welfare of all. Hence, capitalism is not congenial for the integrated growth of human progress. A day is therefore sure to come when capitalism will burst like a fire cracker.
The capitalistic system is based on speculation and lack of mobility of monetary resources. In its worst day when the speculation reaches its culminating point much far from the reality, the bubble burst will take place. So, the question as to when this will happen will depend on many factors.
Marxism too is s transitory phenomenon. In the external sphere of Marxism there is only ordinary acceleration and in the internal sphere there is staticity. The result is negative dynamicity. That is why Marxism also will never be a success. Marxism is just like a comet on a parabolic path –it is not a hyperbolic order. Marxism can only bring society to an Omni static state that is a state of nihilism or cynicism- a sort of negation. According to Shri P.R.Sarkar, communism can never bring prosperity to the people at large due to the fact that the communist philosophy treats the people as mere economic beings as there is never any feeling of oneness with the job in the people’s minds.

A few definitions:

Inflation:  A continuous raise of prices that is sustained by the tendency of wage increase and cost increase to react to each other.
A general increase in prices and fall in the purchasing power of money is inflation of the country or economy.
Gross Domestic Product (GDP): The total value of goods produced and services provided in a country in one year.
GDP growth is calculated with 1999-2000 as the base.
Gross National Product (GNP):  GDP plus the total net income that has come in one year is the GNP for that year.
Principle of inflation: This is based on the fact that the demand of capital goods is derived or based on the demand of consumer goods, which the former help to produce. The acceleration Principle explains the process by which an increase in the demand of consumption goods leads to an increase in investment in capital goods.
The capital goods like machinery and other allied raw materials cause employment and general welfare. That is why the acceleration of economy should be high. In Proutist Economy, acceleration will be high because the consumer goods will progressively be upgraded as more and more amenities are provided with changes in Time.
PROUT is symbiotic economics, which is distinctly different from the analytical economics like communism, capitalism and mixed economy that are prevailing in the society today. The dictionary meaning of symbiotic is two or more dissimilar organisms living together in harmony. In symbiotic economics, an individual’s wellbeing is connected with the fellow beings as well as flora and fauna. Here, the concept starts with the individual and ends with the collective body. Symbiotic economics is synthetic in nature that unites all beings in harmony unlike the existing economic orders of the day. Not a single individual is left out from the care of the society. The welfare of human beings is also linked with that of the nature and the animate and inanimate objects all around. The stress here is not about the growth of the GDP and the foreign exchange reserves, rather the stress is on the purchasing power of each and every individual and also the guaranteed provision of the minimum guarantees of life and their continuous upgradation and also provision of special amenities.
The symbiotic economics was thought about by a few individuals during the Rigvedic times but nobody could ever give a working model in the past. It is the Seer-philosopher Shri P.R.Sarkar alone who could conceive a working model to the symbiotic economics and a new social order. He is the first philosopher who had the deep concern for the humanity suffering from the social malaise of ignorance, poverty and inequality. In his view, human beings live in groups like elephants and so the well being of each one is linked with the wellbeing of the fellow human beings around him.
In His concept of a Neo-Magnacarta, Shri Sarkar envisages that a new charter of rights for all human beings and flora and fauna is needed. Shri Sarkar insists that the trees should not be felled to satisfy the greed of the humans. He ordains that a tree can only be cut with the permission of the social board after carefully going through the need of such an action.  He wrote: “The third psychological loophole is that there is no law against the indiscriminate destruction of flora and fauna due to the absence of Neo-Humanistic sentiment. In the Cosmic Family of the Parama Purus´a, humans, animals, plants, and inanimate objects exist together and maintain a harmonious balance. However, human beings, because of their superior intellect, are indiscriminately destroying plants and animals for their own narrow, selfish ends. In the constitution, there is no provision for the safeguard of the plants and animals. In a constitution, there should be safeguards for the lives of plants and animals. The absence of such provisions in the constitution creates psychological loopholes, which should be corrected without delay.”
To prevent cruelty against animals and plants, Shri Sarkar has started a movement called PCAP and to propagate awareness against such cruelty, he felt the need of low-cost literature to educate the people.
In one of His lectures, “How cruel Human beings are”, He wrote: “Vultures are carnivorous birds, yet it is found that they are not cruel or heartless. Usually, like eagles, they do not attack living humans or animals. Their habit is to eat the flesh of dead bodies. There was an incident in my childhood that I can still vividly recall. On the west of our locality, there was a large field which bordered on a tributary of the Ganges. As the soil was not fit for cultivation nothing could be grown there. On the upper side of that fallow land was a mound upon which stood a large tamarind tree. A vulture lived in a nest on the tree. Beside the mound was the site for the disposal of carcasses. Cows used to graze in the field as did a few horses and sheep. Once an old cow came there and fell flat on the ground due to utter exhaustion. The veterinary doctor came and said, “The cow has no chance of survival. She is likely to die in a few hours.” The owner of the cow was a very kind-hearted man. He tried to save the cow in various ways but in vain. I noticed that as long as the cow was alive, she gently wagged her tail, even when her eyes were half closed. There was no other symptom of life, at least that is what it seemed to me. I also noticed that while her tail was wagging, the vulture stayed patiently in the tree. It came to eat the cow’s flesh only an hour after her natural death. Human beings are more cruel than vultures. Their hearts do not melt even at the sight of tears of innocent birds and animals. Just to gratify their sense of greed, they mercilessly slit the throats of animals with sharp knives and swords and thus deprive them of the right to live, even while preaching the hollow dictates of religion.” 
In His speech on “Renaissance in all walks of life”, He mentioned that some carnivorous-minded people say that if we do not eat goats, the whole world will be full of goats. Sarkar counters that in the world no one eats vultures, is the whole world is full of vultures?
Similarly if human beings with their intellect are not greedy for animals, the balance will not tilt in favour of animals vis a vis humans and plants.
He visualised a society in which all human beings share the pleasure and pain of their fellow beings including the flora and fauna. He says that inanimate beings also have life but they are unable to express their feelings. He envisages a society where the human beings will share the resources of the universe equitably without any discrimination of gender, race, colour and creed and live in harmony free from all tensions and complexes. He divided the symbiotic economics into four divisions, which include even the psycho-economics that deals with the mental potentialities of the human being.  
PROUT is a symbiotic economics, which is distinctly different from the analytical economics like communism, capitalism and mixed economy that are prevailing in the society today. The etymological meaning of symbiotic is two or more dissimilar organisms living together in harmony. In symbiotic economics, an individual’s wellbeing is connected with the fellow beings as well as flora and fauna. Here the concept starts with the individual and ends with the collective body. Symbiotic economics is synthetic in nature that unites all beings in harmony unlike the existing economic orders of the day. Not a single individual is left out from the care of the society. The welfare of human beings is also linked with that of the nature and the animate and inanimate objects all around. The stress here is not about the growth of the GDP and the foreign exchange reserves, rather the stress is on the purchasing power of each and every individual and also the guaranteed provision of the minimum guarantees of life and their continuous upgradation and also provision of special amenities. 

It is the Seer-philosopher Shri P.R.Sarkar alone who could conceive a working model to the symbiotic economics and a new social order based on it. He is the first philosopher who had the deep concern for the humanity suffering from the social malaise of ignorance, poverty and inequality. He is equally concerned with the welfare of flora and fauna and the need to maintain ecological balance for the holistic living of all. In His view, human beings live in groups like elephants and so the well being of each one is linked with the wellbeing of the fellow human beings around him. He visualised of a society in which all human beings share the pleasure and pain of their fellow beings including the flora and fauna. He says that inanimate beings also have life but they are unable to express their feelings. He envisages of a society where the human beings will share the resources of the universe equitably without any discrimination of gender, race, colour and creed and live in harmony free from all tensions and complexes.

He divided the symbiotic economics into four divisions, which include even the psycho-economics that deals with the mental potentialities of the human being. This is the first time ever the psychic potentiality is taken into consideration as a part of economics. This is because Shri P.R.Sarkar envisages a human being as a cosmic being and not a mere economic being as classified by other philosophers.  The four aspects of the economics are:

People’s Economy

People’s economy deals with the essential needs of the people in general –production, distribution, marketing, shipping, storage , pricing, sales, freight charges, pro forma costing and all related activities of such essential needs. Most importantly, it is directly concerned with the guaranteed provision of minimum requirements such as food, clothing, housing, medical treatment, education and other needs like transportation, energy and irrigation water. Continuous improvement in these requirements and their ready availability is the key factor in people’s economy.

The minimum requirements can be assured through guaranteed purchasing power, which should be enshrined in the constitution as a fundamental or cardinal right. This will give the citizens of the country legal power if their minimum requirements are not met, hence, the necessity of purchasing power will be reinforced by constitutional law. As people’s economy will deal with minimum requirements and people’s subsistence problems, it must take precedence over other parts of the economy.

People’s economy should also be concerned with the development of both private and co-operative industries. Private industries would be limited in size and scope to prevent monopoly production and exploitation, and would be required to function as co-operatives once they grow too large. Co-operative industries are the best means of independently organising people so that they take collective responsibility for their livelihood.

People’s economy also includes employment for all; the eradication of mass poverty; the phase-wise socialisation of land into the hands of those who work physically or intellectually for proper production, practical training, programme to impart skills, which enable people to find employment in their immediate urban or rural locality; work placement; and the transportation, transshipment, loading and unloading of any materials, even if they are not economically viable in the short term. It is also concerned with the generation of cheap power and the supply of water, which is essential if people are to control their local economies. Finally, it includes economic decentralisation co-operative dynamo and block-level planning.

Psycho-economy

While people’s economy is concerned primarily with the provision of the minimum requirements of life, psycho- economy is concerned with increasing the psychic pabulum of the individual and collective mind through appropriate economic activity. People’s economy will be the main concern of undeveloped and developing countries, but psycho- economy will gain increasing importance in the future once the problems of subsistence are gradually solved.

Psycho-economy will be of a major importance in a highly developed and mechanised economy where people may only work a few hours a week and have much spare time. Psycho- economy has two branches. The first branch endeavours to eradicate exploitative and unjust economic practices, behaviours and structures. It will counter all economic and psycho-economic exploitation and make people aware of how capitalists, in their singular or collective roles, exploit society and create unhealthy, artificial demands, which not only poison the mind but encourage dangerous habits detrimental to psychic sanctity and expansion. The first and foremost duty of psycho-economics is to wage a tireless fight against all degenerating and dehumanising economic trends in society.

The second branch of psycho economy develops and enhances the psychic pabulum of the individual and collective minds. This branch is virtually unknown today. But, it will become an extremely important branch of economics in the future. It will ensure equilibrium and equipoise in all levels of economy. It will find new and creative solutions to economic problems to nurture the maximum utilisation of psychic and spiritual potentialities. Psycho-economics will add to the glaring glamour of economics.

Commercial economy

This part of the economy is concerned with the development of scientific, efficient methods of production and distribution, which will not incur loss and where output will exceed input. The aim of commercial economy is to ensure the maximum utilisation and rational; distribution of resources for the benefit of all.

General economy

Although some development covers both commercial and general economy, there is scope for much greater development.
PROUT advocates a three-tiered industrial structure which includes key industries managed by the immediate government, co-operatives and private-owned enterprises. Key industries will function on a “no profit, no loss” principle. General economy includes the organisation of the industrial structure and the co-ordination of economic planning at all levels to ensure collective welfare.

These four parts of the economy should be integrated and adjusted according to Neo-Humanistic principles to ensure the maximum utilisation and rational distribution of all resources, and to harmonise human progress with all creation.

A few solutions for the present day world’s economic crisis

In the context of any discussion on the present economic recession termed as meltdown in USA, the prime mover of Capitalism, the following observations of Shri P.R.Sarkar are highly relevant.
Capitalistic economic system is based on speculation and lack of mobility of monetary resources. When the speculation reaches its culminating point due to excessive greed of the capitalists it is natural depression or recessions occurs in the commercial sub-section of the industrial economy. The commercial subsection is nothing but the stock market in modern terminology where wily operators speculate and manipulate the value of the shares as they like. The present crisis is one of this nature.

The following corrective steps to be need to be taken.

1.    The common man should be given enough purchasing power as a right and it should be maintained in parity with the cost of the basic consumer goods that are needed for survival. PROUT researchers find that nearly 87% of the purchasing power of a common man goes in fulfilling the basic needs like food, shelter and education of his children. A very bare minimum of roughly 13 percent of the money he earns is used in the purchase of any other goods, which we may call luxury goods. The more the purchasing power of money is not generated or utilised, the more the economic system is damaged.

2. Money can bring about disparities in wealth if it loses its ability to be the unit of economic equilibrium and stability. Today the world over the biggest problem is disparity of wealth between the haves and have nots.  In countries like India the problem is more acute. For example, in India less than only sixty persons amount for more than 30 percent of GDP whereas more than 60 crores of people account far less than 25 percent of GDP.
PROUT advocates that unless this problem is not solved on a priority basis the economy cannot be set right. According to PROUT, the economic disparity should never be more than 5:1 between the highest paid person and the lowest paid. Constant efforts must be made to bring them close and closer.

3. According to PROUT, the shares of any individual should not be allowed or cannot be sold to any broker or to any other person. Such selling or buying of shares brings in speculation in the markets. If any person wishes to sell or transfer he can only do it to the Industry.  As a temporary measure it is advocated that to minimise the element of speculation and adverse impact of volatility, there should be a minimum lock in period of 3 years for every share.

4.    A developing country like India should depend primarily on domestic demand. Running after export market may prove disastrous.
5.    Mass consumption goods which are basic in nature be produced by mass so that there is simultaneous increase both in the availability of mass consumption goods and mass purchasing power. Mass production cannot be sustained without mass prosperity.
6.         In globalised set up as of now, developing countries like India are severely affected as they have no social security or purchasing power.  Poor people without any social security or enough purchasing power in countries like India suffer far more than common people in the affluent countries enjoying social security.

7.     If these two fundamental factors of economics are even partially forgotten, a world-wide depression will result.
Economic slow down occurs when supply is greater than demand. 

8.    The biggest component of India’s imports are of crude oil, which is running in billions of dollars. India, in its quest to ape the west is making more and more cars. Instead, it should concentrate on its public transport as in a crisis like this the exports are bound to suffer.
9.     From the macro point of view, prosperity cannot be built in a sustainable way on the basis of indebtedness. Furthermore, individual fortune cannot be built in a sustainable manner on the basis of speculative pursuit in the stock market.

In Capitalism, there is concentration of wealth and income. Capitalists with their lion’s share of productive mean build up huge productive capacity. The demand for producer’s goods is derived from demand for final goods in the household sector. Advanced capitalist countries like the U.S try to artificially create purchasing power in the household sector without corresponding income. Ordinary people are encouraged to make purchase on the basis of credit cards. This means the common people borrow to spend even for their current consumption. They marginally save.

When the chain breaks, the borrowers are unable to pay their due installments in repayment of their credit purchases. But, debts start growing and the financial companies are in extreme difficulties. There is immediate significant fall in the demand for durables particularly in the housing and automobile sectors. In this confounding situation, stock prices tumble down adding fuel to fire. Common people make huge losses in their savings, face unemployment and are denied of further borrowing facilities. The downward trend aggravates.

Credit should be offered only for durable goods and total installment dues should not exceed 25 percent of income.

When there is recession a country like India suffers from one more disadvantage vis –a-vis a country like the USA. During the Great Depression of 1930s, the USA successfully undertook huge public works programme to boost up the demand. The same option is still open to them. Further, the government in an affluent country like the United States has the capacity to bail out institutions facing insolvency. But, these options are not effectively open to a country like India whereas in the USA, the economy will benefit by every dollar of public expenditure. In India, since the leakage component of public expenditure is very high due to corruption, the same magnitude of expenditure will generate much less benefit in India compared to the United States.
Further, the ability of the Indian Government is far less than that of the USA in respect of bailing out private companies in distress. For building up prosperity on a sustainable basis, fulfillment of certain conditions is imperative.

The crisis occurs because inherently the capitalist system is incapable of taking a symbiotic view of the economy where prosperity of everybody depends on the prosperity of everybody else. The humanity has no other way except to accept PROUT as a panacea to all its sociological, economic and political problems and the sooner it is done the better it is for one and all.