2004 Proutist Universal 1 Proutist Economic Development Three Tier Industrial System Dr. Michael...

2004 Proutist Universal 1

Proutist Economic Development

Three Tier

Industrial System

Dr. Michael Towsey

Dr. Michael Towsey Proutist Universal 2

Modes of production

1. Who owns the means of production – the capital and land?

2. Determines who gets what income.

3. Capitalist system – private (in reality, a few).

4. Communist system – the State (in reality, not really public).

5. Mixed economy (private and State).

6. Cooperative system – members of the coop.

7. Prout prefers the cooperative system, but supports public and private ownership where appropriate.


Modes of production in PROUT

Mode of Production

Size Strategic Importance

Complexity Board of Directors

Examples

Public Large scale

High

(key industry)

High Elected, or appointed by immediate government

Water

Core power utilities

Oil, Minerals

Defence industry

Cooperative Large, medium scale

From high to medium, and even low

High, medium, low

Elected by workers or members

Agriculture

Auto manufacture

Private Small scale

Low Low, although can be specialised

Not applicable

Motor mechanics


The cooperative model

• "In capitalist and communist countries the mode of production is defective. In capitalist countries, labour does not work in the interest of management and management does not allow the rolling of money due to wealth concentration. In communist countries, labour does not feel one with the job and that is why there is sluggish production. The co-operative model of PROUT is free from both defects."

- P.R. Sarkar


Cooperatives

• "Cooperatives are the businesses of the future." - Felipe Perez-Marti

• Workers or members own the cooperative.

• More incentives for workers to be efficient.

• No conflict between owners and employees.

• Workers benefit from the effort they put in.

• Workers and members can derive income by:– wages/salary (including bonuses); & – dividends (allocation of rational profits); or– both.


Seven principles of coops

1. Voluntary and open membership.

2. Democratic - controlled by their members.

3. All members contribute fairly to their co-ops, which they own in common. Co-ops pay a limited return on the money a person invests to become member.

4. Autonomy and independence - cooperatives are autonomous, self-help organizations controlled by their members.

5. Education, training and information.

6. Cooperation among cooperatives.

7. Concern for community.

There are seven internationally recognised principles of cooperatives ...


Cooperatives & technology

• Cooperatives to use latest scientific developments.

• Cooperatives will allow workers to reap the benefits of technology.

• Automation will reduce working hours but not incomes.


Cooperatives & management

• Cooperatives are managed by the workers.

• Security of employment.

• Anti-monopoly legislation - when a cooperative becomes too big, can split into two.


Cooperatives – success depends on ...

• Ethical management.

• Strong supervision.

• Whole hearted acceptance by local community.

• Financial sustainability.

• In early stages, cooperatives require protection from multinationals or trans-national corporations.– eg import tariffs, tax concessions – but eventually should be phased out.


Cooperatives - examples

• World‘s best example of large scale cooperatives– Mondragon, Spain.

• Best example of medium scale cooperatives:– Maleny, Australia, has over 20 cooperatives in the town

including a cooperative bank, food coop, waste recycling coop, and several housing coops.


Mondragón Corporación Cooperativa

• MCC’s mission combines the basic objectives of a business organisation competing in international markets with the use of democratic methods in its organisation, job creation, promotion of its workers in human and professional terms and commitment to the development of its social environment. – Jesús Catania

Chairman of the General Council

www.mondragon.mcc.es

http://www.mondragon.mcc.es/


Key industries• Capital is owned by local community.

• Legal status - statutory authority, local government corporation.

• Board of directors:– elected or appointed by local community;– government appointments on merit.

• Large scale, complex.

• Operate in the public interest – to serve the people.

• Operate on no profit – no loss basis.

• Efficiency maintained through targets and comparison with global best practice:– Eg PDVSA can be compared with Pemex, Petroecuador and

Petrobras on criteria such as output efficiency, OP/L or OP/K.


Private enterprises

• Capital is owned privately.

• Legal status – small business, according to local legislation.

• Small scale.

• Prices determined by free market.

• Division between small and medium scale is a function of factors such as capital, number of workers and turnover. Definition will vary according to time, place and person (society).

• If a private business grows too big, split in two or turn into a cooperative.


Industrial sectors -strategic importance

Key industries

Cooperatives

Small businesses

• Key industries are strategic because of:

• important resources;• backbone infrastructure;• regulatory implications.

• Cooperatives are strategic because of:

• people’s livelihood;• providing minimum

necessities;• networking of industry.


Industrial sectors -number of enterprises

Small businesses

Cooperatives

Key industries

• Cooperatives are the most predominant business / enterprise structural model.

• It is expected that small business will vary over time and the preferred model is cooperatives.

• Key industries are public sector employers.


Industrial sectors -numbers employed

Cooperatives

Small businesses

Key industries


Integration of three tier industries

Key industries (public utilities)

Cooperatives (all types of industry)

Small businesses


Proutist production network - example

Demand for goods and services

Supply of natural

resources

Key industries Cooperatives Small businesses


Health system

Major Hospital

Clinics

Private doctors


Banking system

Central Bank

Credit Unions – cooperative banks

Private financial services

2004 Proutist Universal 1 Proutist Economic Development Three Tier Industrial System Dr. Michael...

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