2004 proutist universal 1 proutist economic development three tier industrial system dr. michael...
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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.
Dr. Michael Towsey Proutist Universal 3
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
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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
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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.
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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 ...
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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.
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Cooperatives & management
• Cooperatives are managed by the workers.
• Security of employment.
• Anti-monopoly legislation - when a cooperative becomes too big, can split into two.
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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.
Dr. Michael Towsey Proutist Universal 10
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.
Dr. Michael Towsey Proutist Universal 11
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
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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.
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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.
Dr. Michael Towsey Proutist Universal 14
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.
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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.
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Industrial sectors -numbers employed
Cooperatives
Small businesses
Key industries
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Integration of three tier industries
Key industries (public utilities)
Cooperatives (all types of industry)
Small businesses
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Proutist production network - example
Demand for goods and services
Supply of natural
resources
Key industries Cooperatives Small businesses
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Health system
Major Hospital
Clinics
Private doctors
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Banking system
Central Bank
Credit Unions – cooperative banks
Private financial services