The 5 Fundamental Principles

Rational Distribution and Maximum Utilization

Economics is a value-free, objective science. So they say.  Lets look at a few dogmas:
- Every country can achieve economic efficiency and success through free market trade. 
- Countries should produce cheaply a few special goods for export. 
- Countries should use foreign exchange to import whatever they need.
- It is a right to maximize one's wealth. 
- Any tax or law that diminishes property rights would jeopardize the growth of society.
- Economics should not consider the question of fairness, or whether or not everyone receives a just salary. 

Can we move ahead of limited outlook?

The Question of Fairness: 
For example, the chief executive officers (CEOs) of multinational corporations are now paid salaries with stock options that Fortune magazine describes as “outrageous!” In the year 2000, the director of Citibank was paid $151 million. Disney paid their CEO US$575 million. Apple Computers paid CEO Steve Jobs $872 million, more than 30,000 times what the average Apple employee is paid each year!

In Venezuela, Lorenzo Mendoza and family, owner of Polar beverages, has a net worth of US$4.3 billion, and Gustavo Cisneros and family, media baron, has US$4 billion. (Forbes magazine, www.forbes.com)

The wealth of the world’s 200 richest people more than doubled during the last four years (2000-2004), to more than $1 trillion. 

Question: are you two times richer today than you were four years ago?

But neoliberal economists say these figures, the difference between what the richest and poorest receive for their work, don’t matter if the economy is healthy and growing. 

Dr. Amartya Sen from Calcutta was awarded the 1998 Nobel Prize in Economics. A former professor at Harvard University, he is presently Master of Trinity College, Cambridge, U.K. The Royal Swedish Academy of Sciences cited that he had “restored an ethical dimension to the discussion of vital economics problems.” He is a major pioneer in what today is known as welfare economics. 

P.R. Sarkar, the founder of Prout, was a contemporary of Sen. He also focused on questions of inequality, the measurement of poverty, and on how societies make choices that are both fair and efficient. 

Prout resolves this dilemma both logically and morally. Prout asserts that the only justification for granting higher income to a person is to motivate him or her to exert greater effort to benefit society. 

Prout advocates: “The surplus wealth should be distributed among meritorious people according to the degree of their merit.”

This surplus is known in Proutist economics by the Sanskrit word 'atiriktam'. It is used as an incentive to motivate people to render greater service to society. Atiriktam can, for instance, be given either as increased salary or as other benefits.  Its purpose is to encourage people to develop their skills and increase their capacity to assist society. Atiriktam can take the form of special task-related privileges. For example, a talented researcher may be given access to expensive laboratory facilities, while an effective and selfless social worker may be offered more staff to work under her.

In an article published shortly before his death in 1990, entitled “Minimum Necessities and Maximum Amenities,” Sarkar expanded on the relationship between minimum salary and atiriktam (incentives). He stressed that while providing the minimum necessities, people should not be left with a bare-bones existence. Higher salaries should be provided to the meritorious, yet continuous and collective effort will be needed to raise the economic standard of the common people to an appropriate level for that time and place. The majority of people should feel that they are living with dignity. 

The Five Fundamental Principles of Prout: 
The following five statements direct how resources should be distributed under Prout. Together they comprise what is known as the Five Fundamental Principles of Prout. A unique aspect of the Prout model is that it recognizes the physical, psychic and spiritual qualities of human beings as well as of natural resources. 

First Fundamental Principle:
“No individual should be allowed to accumulate any physical wealth without the clear permission or approval of the collective body.”

This point recognizes that the physical resources of this planet are limited; hence the hoarding or misuse of any resource would diminish opportunities for others. Hoarding wealth or using it for speculation rather than productive investment directly reduces the opportunities of others in society. Hence ceilings must be placed on salaries and inherited wealth, as well as property and land ownership.

Salaries should be capped at a reasonable maximum level. The maximum salary should be calculated by including all the components of a salary package, such as share options, incentives, performance bonuses, personal expense accounts, etc. The gap between the minimum wage and the maximum salary will have to be gradually decreased; however, it should never be reduced to zero. 

There is growing acceptance of the idea that the gap between the minimum and maximum wages in an enterprise should be controlled. Renowned economist John Kenneth Galbraith wrote, “The most forthright and effective way of enhancing equality within the firm would be to specify the maximum range between average and maximum compensation.” Some Japanese and European companies already have such policies.

Sarkar used the term “the collective body” to refer to society. He indicated that the government would have to assume responsibility for setting limits to the accumulation of wealth. It would do this by forming economic boards. He insisted that the members of the boards should be “those who are honest, who really want to promote human welfare… [by] rendering social service collectively ...” In addition to setting economic policies and standards, Prout economic boards will also hear applications from citizens for exceptions to the ceilings. For example, a paraplegic person may be awarded a sophisticated and expensive computerized wheelchair. 

This principle only applies to physical wealth, because intellectual knowledge and spiritual wisdom are unlimited. 

Second Fundamental Principle: 
“There should be maximum utilization and rational distribution of all mundane, supramundane, and spiritual potentialities of the universe.”

Maximum utilization means to make the best use of the planet’s resources, with maximum economic and mechanical efficiency while protecting the natural environment. It is the conviction of Prout that everyone can experience a high quality of life if we use our resources wisely. As the American scientist and visionary R. Buckminster Fuller said, “We have enough technological know-how at our disposal to give everyone a decent life, and release humanity to do what it is supposed to be doing – that is, using our minds, accomplishing extraordinary things, not just coping with survival.”

This principle is based on the concept of Cosmic Inheritance. This asserts that human beings have the right to utilize and share, but not hoard or abuse, the resources that we have been endowed with by the Creator. 

Excessive wealth concentration causes deterioration and poor utilization of the earth’s resources. For example, when an elite few own vast land holdings, they often leave them sitting idle, or they produce cash crops for export. Poor rural farmers are thus forced onto marginal land, clearing and cultivating it with dire ecological consequences.

Supramundane potentialities include properties which cannot be perceived by the sense organs, but which would include subtle knowledge and powers, those based on intuition, and may include even telepathy etc. Spiritual potentialities refer to the attractive force in the universe, which helps us to come closer to the Supreme Consciousness. 

Third Fundamental Principle: 
“There should be maximum utilization of the physical, metaphysical and spiritual potentialities of the unit and collective bodies of human society.”

This principle concerns the utilization of all human resources, emphasizing the value of both individual and collective well-being. Healthy individuals create a healthy society, just as a healthy society fosters the development of healthy individuals. According to Prout, there is no inevitable conflict between individual and collective interests. Rather, their true interests are shared.

The results of excessive individualism can be seen in the breakdown of the family and the selfish “me-first” attitude which is sadly all too prevalent throughout the Western world. A materialistic consumer society pressures people to increase their own pleasures and comforts, indifferent to the needs of others. 

This principle, however, does not support abandoning all individuality for the intended good of collective society. Society needs to respect human diversity, and to allow people the freedom to think for themselves, to express their creativity, and to form diverse relationships. An important goal of Prout is to encourage individuals to realize their full potential and achieve their dreams and goals. Communism amply demonstrated the danger of excessive collectivism.  Most communist governments have been dreadfully inefficient, and made life joyless, dull and mechanical.

Waste of metaphysical or intellectual resources occurs when people lack education, or are denied opportunities to develop their different talents and contribute their ideas because of racial or sexual discrimination or economic exploitation. How wonderful it will be when all the creativity of human beings is encouraged and channelled towards improving our world, instead of being wasted or misdirected in advertising to convince us to purchase what we don’t need. 

The spiritual potentialities which allow humans to develop peace, harmony, wisdom, wholeness, and lasting happiness within, remain for the most part undiscovered in materialistic societies. Yet throughout history, a few mystics of all cultures have dedicated their lives to practicing spiritual techniques to realize this inner treasure and share it with others. 

Fourth Fundamental Principle:
“There should be a proper adjustment amongst these physical, metaphysical, mundane, supramundane and spiritual utilizations.”

The traditional economic principle of comparative advantage states that each country and person should do what it, he or she is best at. Sadly, this principle has sometimes been used to argue that Central America is best at producing bananas for North Americans, and that the US is best at producing everything else! The Food First Institute has demonstrated that every country in the world today has the agricultural potential to feed its entire population. Prout asserts that regional self-sufficiency is the most effective means to increase the living standard of all people. Hence Prout insists that the farmland of every region should first produce food for its people, and only after that is achieved should the surplus produce be exported.

The central issue here is one of holistic development of both the human being and society. Where there are competing demands for any resource, the more rare and valuable quality of the resource should be utilized. For example, in China during the Cultural Revolution and also after the Khmer Rouge took over Cambodia, all doctors, nurses and other university graduates were unjustly forced to the countryside to do farm work on communes. Whereas the proper approach should be that anyone engaged in any honest work possesses dignity and deserves society’s respect, so those who possess developed intellectual skills should not be employed only for manual labour.
 
Individuals who have developed spiritually, who embody deep wisdom and compassion, are still more rare. They should be allowed to spend the majority of their time sharing their teachings and practices with others.

The same principle pertains to physical resources. A wilderness area with especially inspiring scenic beauty should be preserved as a natural park instead of being mined for iron ore. Similarly, the burning of fossil fuels is destroying our climate and our environment. To re-establish pramá -- dynamic equilibrium or equipoise -- every effort should be made to develop and utilize alternative energy sources such as sunlight, wind, tides and gravity. 

Fifth Fundamental Principle: 
“The methods of utilization should vary in accordance with the changes in time, space, and person, and the utilization should be of a progressive nature.”

This principle acknowledges that change is constant. The Prout model is not set in stone – rather it is a comprehensive set of dynamic principles that should be applied considering the many special conditions of the location and culture where they are put into practice. 

Technological development has the capacity to both create and destroy. Today institutions and individuals with great wealth control the direction of scientific research, and use that power for their own interests.

The challenge for a Proutist society is to choose wisely, directing research and development for the long-term welfare of humanity and the planet. We can welcome new technology when it frees human minds and hands for higher pursuits. Every effort should be made to thoroughly assess technology’s impact and minimize its negative repercussions. 

The Progressive Utilisation Theory (PROUT) is propounded for the happiness and all-round welfare of all.