see also coop-stakeholders
see also coop-examples
18 February 1988, Calcutta
As you know, human society is one and indivisible. A human being cannot live alone. If a person wants to drink water from a well, he or she needs a rope and a bucket, and to tie the rope one needs a hook. For all these things, the help of the others is indispensable.
In society human beings have to work jointly with others so that everybody can move forward collectively. Samánam ejati iti samájah. That is, society is the collective movement of a group of individuals who have made a unanimous decision to move towards a common goal. If human beings move closely together in all aspects of life, except for those few aspects which are very personal, the better it will be for the welfare of society. Only those things which cannot be done collectively should be done individually.
So, it is always better for people to work together as far as possible – the more that human beings work together, the better it is. If this principle is not followed the spirit of society will be broken, adversely affecting the very existence of human beings. People have to eat food individually – another person cannot eat your food for you – however a meal can be shared collectively. Where individuality dominates human life, the environment, the welfare of different groups and even the continued existence of humanity may be adversely affected.
“Operation” means “to get something done through any medium or media”. Suppose you are operating a tool machine. If this type of operation is done with collective effort then it is called “cooperation”. In the case of cooperation, something is done with equal rights, equal human prestige and equal locus standi.
In every field of collective life there should be cooperation among the members of society. Where this cooperation is between free human beings, each with equal rights and mutual respect for each other, and each working for the welfare of the other, it is called “coordinated cooperation”. Where people do something individually or collectively, but keep themselves under other people’s supervision, then it is called “subordinated cooperation”. In each and every stratum of life, we should do everything with coordinated cooperation and always avoid subordinated cooperation.
In the world today different socio-economic systems are in vogue, but none of these systems are based on coordinated cooperation. Rather, in these systems social relationships are mainly based on subordinated cooperation, resulting in the degeneration of society’s moral fabric. For example, in some countries there is a glaring lack of racial parity and no coordinated cooperation among the different ethnic groups whatsoever. This lack of proper equilibrium and equipoise in social life is causing the whole structure of society to crumble down.
In those countries that follow the commune system there is also lack of coordinated cooperation. In the commune system society is reduced to merely a production-distribution mechanism under a regimented system of control. Rather than increase production, the commune system forces production down. The consequences can be seen in nearly all communist countries: food shortages. Capitalist countries such as Australia, Canada and the USA are selling their food grains to the Soviet Union and China. Moreover, the workers in a commune do not feel oneness with the job, nor do they have the freedom to express all their potentialities. Such a suffocating and mechanical system fosters a materialistic outlook and produces atheistic leadership.
In the commune system there is no personal ownership. Without a sense of personal ownership people do not labour hard or care for any property. If farmers feel they have permanent usufructuary rights to the land they will get a better out-turn. Such a sentiment is suppressed in the commune system, resulting in sluggish production and psychic oppression. Intelligent people are forced to do work which is unsuitable for them and are paid the same wages as ordinary workers. There is no incentive system and individual initiative by meritorious people is not encouraged, so naturally people do not work hard. Such a system can never solve society’s economic problems, either in agriculture or in industry. Rather, it will only aggravate existing problems and create fresh social problems. The production and distribution systems of the commune system are fundamentally defective, exploitative and anti-human.
The commune system is based on subordinated cooperation – the relationships are those of supervisor and supervised or master and servant. Such relationships are detrimental for human progress and retard any possibility of progressive movement. They are ultravires to the wonts of the human mind.
PROUT supports the implementation of the cooperative system because its inner spirit is one of coordinated cooperation. Only the cooperative system can ensure the healthy, integrated progress of humanity, and establish complete and everlasting unity among the human race. People should work to enjoy sweeter fruits by establishing the cooperative system. PROUT raises the slogans: “We want cooperatives, not communes,” and, “We are not slaves of communes.”
Cooperation in Agriculture
If the spirit of cooperation is followed, those commodities which are essential for supplying the minimum requirements such as food, clothing, housing, education and medical treatment will have to be cooperatively produced. Food is the most important commodity, and because of the importance of food, agriculture is the most important sector of the economy. It is generally the case that the staple food of a country is also its main food crop. In Bengal, for example, the main food is rice and so paddy is the main crop. Similarly, the main crop in the Punjab is wheat, in Ireland potato, and in Scotland rye, oats and barley.
For the proper reorganization and maximum utilization of agricultural land, the cooperative system is most preferable. The fertility of the soil depends upon the natural terrain of the countryside, and the size of a harvest depends largely upon the water content of the soil. High land will not generally produce very much, even if it is fertile, but it is often possible to produce good crops on less fertile soil at lower levels because water usually accumulates there. Even on relatively flat land, agricultural plots should be arranged depending upon the level of the field in relation to the flow of water, or water should be channelized from upper levels to lower levels. Cooperatives will follow such an arrangement.
Land is extremely important in the psychology of farmers because they are very attached to their land. Farmers may give away hundreds of kilos of produce, but they would never voluntarily give away even a few square metres of their land. Suppose many small farmers own a total of 200 acres. If they form a cooperative and keep a record of their shares based on the size of their individual holdings, a sense of ownership is maintained. If all the land is on the same level then the boundaries between the small plots can be broken down, increasing the area of arable land. In such a system the psychology of the farmers will not be affected and they will not feel any insecurity. They will be able to increase the area of land under production by clearing away the boundaries which needlessly divide the land into many individual holdings and by scientifically cultivating infertile land.
Farmers who own only several square metres of land cannot keep bullocks and a plough. They have to give their land to someone who can cultivate it, as in the sharecropping system. If they do give their land to a sharecropper, they rarely get anything in return. This predicament arises because the size of the land is so small. If cultivation is done on a cooperative basis many small plots can be merged into one large plot. This will be of great collective benefit to the farmers.
In India in the time of Akbar a system was in vogue whereby boundaries were constructed around plots of land. Akbar introduced a new system in which the northern and western boundaries of each plot were owned by the owner of that plot. When cooperatives remove boundaries to form larger areas of agricultural land, the land occupied by the northern and western boundaries of each plot should revert to the owner of that plot.
Today for the cultivation of land farmers need things such as fertilizer, a tractor and irrigation water. Animal fertilizers are insufficient – farmers need chemical fertilizers. But wherever chemical fertilizers are used intensively, the land becomes infertile and useless after some time. Chemical fertilizers eventually destroy the vital energy of the land and it becomes lifeless, like cement. Intensive research should be conducted on how to use chemical fertilizers in agriculture without any ill effects on the land.
In the system of individual farming it is not possible to escape the ill effects of chemical fertilizers. However, in the cooperative system there is great scope for agricultural research and development to discover new ways to better utilize and prolong the vitality of land. The benefit of a cooperative is that it combines the wealth and resources of many individuals and harnesses them in a united way.
There was a time when farmers used to leave their land unused for a year after several years of continuous cultivation, but this is not possible today. So it is necessary to adopt a system whereby either chemical fertilizers will be used which will not decrease soil fertility, or high yields will be achieved without using chemical fertilizers at all. I am confident that this will be achieved in the very near future.
Agriculture should have the same status as industry. This policy is not followed in many undeveloped and developing countries today, and can best be implemented through the cooperative system. For example, the apple orchards of Himachal Pradesh should function as cooperatives rather than private farms, and so should the packaging industry for apple transportation and marketing. The processing and packaging of apples should be regarded as part of the farming industry. Those employed in agriculture should get bonuses in the same way as those employed in industry. Thus, farmers or agricultural cooperatives should organize the whole agricultural sector of the economy on the basis of industry.
PROUT advocates the reorganization of all agricultural land according to a phase-wise plan. In the first phase all uneconomic landholdings should be taken over by cooperative management for the benefit of both those who previously owned the land and agricultural labourers who work in the cooperative. In the second phase all landowners should be requested to join the cooperative system. In the third phase there should be rational distribution of land and redetermination of ownership. Finally, in the fourth phase there will be no conflict over the ownership of land. People will learn to think for the collective welfare rather than for petty self-interest. This psychic expansion will create a more congenial social environment. However, such a change in the collective psychology will not come overnight, but will occur gradually according to the sentiment of the people. When such a system has been introduced the present conflict among landowners and landless rural workers will no longer exist.
In the initial stage agricultural cooperatives will be formed with the mutual cooperation of groups of farmers. Suppose A, B, C and D are four farmers who have consolidated their land into a cooperative in the following proportions: A two acres, B five acres, C ten acres and D fifteen acres. The profits from the sale of their crops should be shared in proportion to the amount of land each gave to the cooperative, and the service each rendered for the production of these crops. Farmers will receive produce and profits according to the number of their shares in the cooperative and their labour. As the yield of land increases due to the continuous development of improved scientific techniques, farmers can expect increased productivity and greater prosperity.
A record should be kept of the productive capacity of all the land included in the cooperative. Shares should be allocated on the basis of this productivity. For example, if a farmer has thirty acres of land of which fifteen acres are highly productive and fifteen acres are of low productivity, then his or her shares should take into account the differences in productivity. If some landowners do not want to work in an agricultural cooperative their land should still be included in the cooperative. They should also be considered as cooperative members and should get shares based on the size and productivity of their land. Of course, landowners who do not work in the cooperative will not be entitled to wages.
In the cooperative system farmers need not sell their produce immediately after harvesting due to pressure of circumstances. In the individualistic or private enterprise system, most farmers have to sell their produce immediately in order to get sufficient money to survive. But in the cooperative system farmers will enjoy more financial security as the cooperative can advance money to individual farmers and sell the crops at the most favourable time for the best price. That is, the cooperative can determine how much to sell and when to sell in order to get the best profit. Cooperatives will also be able to fix the price of their own produce within certain price limits. Thus, cooperatives will get the profit which is taken by middlemen and profiteers in the individualistic or capitalistic system.
In the present system after the harvest poor farmers have to pay off the loans they took for such things as irrigation, seeds and labour to produce their crops. In addition, they often purchase clothing for their families for the following year. Due to their urgent need for money they are frequently forced to sell their harvest at virtually give away prices. This type of sale under the pressure of circumstances is called a “distress sale”. To protect the farmers from distress sales, the cooperative system is essential. In a cooperative, farmers will keep the necessary quantity of farm produce to meet their food needs for a year and will sell the excess produce to the cooperative at the rate fixed by the cooperative. When the market price is reasonable, the cooperative will sell the produce. The farmers will then receive their percentage of the profit which will be proportional to the amount of their land shareholding in the cooperative.
Taxes, levies, excise duties, etc., should be collectively paid by the cooperative, thus freeing individual farmers from financial pressure and economic exploitation. In many economically developed countries, there are no land taxes because the revenue collected from such taxes is only a very small part of the total revenue.
The workforce in the cooperative system will be composed of the shareholding farmers and non-shareholding labourers. Both groups will benefit: the shareholding farmers will get regular salaries for their work plus a return on their shares, while the labourers will enjoy stable employment and favourable wages.
There are two types of non-shareholding labourers working in agricultural cooperatives – those who are permanent labourers and those who are casual or contract labourers. The permanent labourers will get bonuses as incentives besides their wages, while casual labourers will only get wages for their labour. Those labourers who give the greatest service to the cooperative should get the greatest bonuses. Skilled workers should get paid more than unskilled workers. This will be an incentive for all to become skilled labourers and to work harder. Bonuses should be paid according to the amount of wages which should reflect both the skill and productivity of the labourer.
Members who purchase shares in the cooperative should have no power or right to transfer their shares without the permission of the cooperative, but their shares may be inherited. If some cooperative members have no descendants, then their shares should pass on to their legally authorized successors who will become members of the cooperative if they are not already members. The reason for this policy is that it prevents capitalists from purchasing large numbers of shares in a cooperative and speculating in the market place. This type of economic activity can easily lead to a depression.
In different countries there are different systems of inheritance, so the right of inheritance should be decided according to the system in vogue in a particular country. For example, in Bengal the Dáyabhága system is followed, in other places in India the Hindu Code is the established system, while in other countries other systems are practised. If this arrangement is followed, cooperative members will not need to go to court or get involved in litigation as the zamindars of the past used to do. As all members of the cooperative will be from the same vicinity or members of the same village, they will all know each other, and thus there will be little difficulty in deciding who should be the legally appointed recipient of the shares. The members of the cooperative themselves will be able to decide who can claim the right of inheritance to the shares owned by the deceased members.
Disadvantaged or minor landowners will also benefit in the cooperative system. A widow, a disabled farmer, or a minor boy or girl who owns some land will derive an income from the land based on the number of shares in the cooperative. In the system of private ownership their land would have remained unutilized, and they would have remained poor. Therefore, even if cooperative members are unable to do any work, they will still be entitled to an income from the total profit of the cooperative.
Farmers may also create producers cooperatives to produce items for various industries. Thus, some farmers cooperatives may function as both farmers and producers cooperatives. Raw materials which are of non-farming origin, such as limestone for the production of cement, should be processed by producers cooperatives. Cooperatives which are only agricultural should sell their produce directly to the producers cooperative which in turn can manufacture a variety of consumer goods. Farmers cooperatives which also function as producers cooperatives can increase their profitability in various ways. For example, such cooperatives could produce oil from rice husks. The money earned may be reallocated and reinvested in the farmers-cum-producers cooperative or used for research and development.
Farmers in agricultural cooperatives will be able to exert collective pressure on the local, state or federal governments for different benefits and facilities. For example, in India individual farmers who grow fruit normally use deep well irrigation. But this can adversely affect fruit production because if the water-table drops too far below the roots, the fruit trees will gradually wither and die. In such circumstances shallow tube wells are better, but these wells cannot supply sufficient water for irrigation. Farmers need ponds, barrages and lift and shift irrigation facilities, and for these things they may need government assistance.
It is the cardinal right of the people to be guaranteed the minimum requirements of food, clothing, housing, education and medical treatment. The proper supply of irrigation water is also a cardinal right, because without water, food, which is the most important of the minimum requirements, cannot be produced. Irrigation water is like the apex of a spinning top – without it the top cannot spin.
Producers and Consumers Cooperatives
Besides agricultural or farmers cooperatives, PROUT advocates the formation of other types of cooperatives, including producers and consumers cooperatives. Producers cooperatives include agro-industries, agrico-industries and non-agricultural industries. The total profit of such cooperativescooperative according to their individual capital investment in the cooperative and the service they render to the production and management of the cooperative. should be distributed among the workers and members of the
Similarly, consumers cooperatives should be formed by like-minded persons who will share the profits of the cooperative according to their individual labour and capital investment. Those who are engaged in the management of such cooperatives will also be entitled to draw salaries on the basis of the services they render to the cooperative. Consumers cooperatives will distribute consumer goods to members of society at reasonable rates.
Commodities can be divided into three categories – essential commodities such as rice, pulse, salt and clothing; demi-essential commodities such as oil and antiseptic soap; and non-essential commodities such as luxury goods. If hoarders create artificial shortages of non-essential commodities common people will not be affected, but if they accumulate essential commodities then common people will suffer tremendously. This situation can be avoided if consumers cooperatives purchase essential commodities directly from producers cooperatives or agricultural cooperatives.
Capitalists hoard essential commodities and create artificial scarcity to extract the maximum profit. As a result consumers pay inflated prices for essential commodities, and sometimes they even find that such goods are not available at all. Middlemen and profiteers create artificial shortages of essential commodities knowing that people will certainly purchase them, even by taking loans, but few people take loans to purchase luxury goods. If the distribution of essential commodities is done through consumers cooperatives, middlemen and profiteers will be eliminated.
Consumer cooperatives should be supplied with commodities from both agricultural and producers cooperatives. Commodities which do not go directly from agricultural cooperatives to consumer cooperatives should be produced by producers cooperatives. In addition, non-farming commodities should be compulsorily produced by producers cooperatives. For example, agricultural or producers cooperatives which produce cotton or silk thread should sell the thread to weavers cooperatives which can produce cloth on their power looms. Hand looms can also be used where intricate design work is required, but generally weavers cooperatives should install the latest power looms. The weavers cooperatives will in turn supply consumers cooperatives.
The number of items considered essential commodities should be continually and progressively revised and expanded with the changes in time, space and person. Such revisions should be made by the government and not by the board of directors of a particular cooperative. What is considered a demi-essential commodity today may be treated as an essential commodity tomorrow. Demi-essential commodities which may be affected by artificial shortages causing suffering to common people, should be produced by producers cooperatives. The production of luxury goods can be left in the hands of the private sector. Essential commodities or services of a non-farming nature coming within the scope of producers cooperatives, and which require huge capital investments, should be managed by the government. The railway system is an example.
So, for the establishment of a healthy society, agricultural cooperatives, essential commodity producers cooperatives and essential commodity consumer cooperatives are a must.
Cooperative members should form a board of directors for each cooperative. The board should decide the amount of profit to be divided among the members; that is, the dividend to be paid to each shareholder. However, the total profit should not be distributed in the form of dividends – some should be kept for reinvestment or purchasing items such as tractors, manure, etc.; some should also be used for increasing authorized capital; and some should be deposited in the reserve fund. The reserve fund should be used to increase the value of the dividend in the years when production is low. If this system is followed the authorized capital will not be affected.
The board of directors should be elected from among the cooperative members – their positions should not be honorary. Care should be taken to ensure that not a single immoral person is elected to the board. All directors must be moralists.
To stop black-marketeering strong steps need to be taken by the government. For example, to protect the clothing industry, the government should pass a law which prevents the sale of any clothing without the trademark of the producers cooperative where it is made. Thus, if black-marketeers try to sell any clothing without trademarks, they can be easily caught. This simple but effective remedy is known to many intelligent people, but still they do nothing. This is because they are the agents of capitalists who need money from these black-marketeers and hoarders to fight their election campaigns. This kind of corruption in the electoral system is part of democracy, so we can say that democracy is not the best form of government. Hoarding, profiteering and black-marketeering cannot be stopped in the democratic system because those who try to stop it will be thrown out of power. In the high point of the Kśatriya Era smuggling and hoarding were controlled, but as soon as the influence of the vipras or vaeshyas emerged, the control over these corrupt practices slackened.
Many small satellite cooperatives should be formed to supply various items to large producers cooperatives. Take a car factory, for example. The many different parts for a motor car can be locally manufactured in small cooperatives. The members of these small satellite cooperatives may even carry on their work from their homes, involving all their family members. The main function of large producers cooperatives will be to assemble the different car parts. This will have two benefits: the large cooperative will not require many labourers hence labour unrest will be minimized, and labour costs will be reduced and thus the cost of the commodities will be kept low.
The problem of a floating population and immigrant labour will not occur in the cooperative system, as cooperative members will have to be local people. Floating labourers should have no right to be cooperative members – migratory birds have no place in cooperatives – as they can disturb a whole economy. Howrah district, for example, produces sufficient crops in a season to feed the local people for seventeen months, but due to immigrant labour the produce is consumed in six and a half months. The elimination of the floating population will also protect the social life of the cooperative from the possibility of adverse social influences.
In the cooperative system unemployment will be solved. As production increases the need for more facilities and resources will also increase. Educated people can be employed as skilled workers. There will also be a need for tractor drivers, labourers and cultivators, and cooperative members will naturally do this work. Village people will not need to move to the cities for employment. In the cooperative system there should be no compulsory age for superannuation. People should be free to work as long as they like, providing their health permits.
Those socio-economic units which do not have a sufficient supply of raw materials will have to manufacture synthetic or artificial raw materials. Suppose a unit or region does not have an adequate supply of fodder to feed its cattle or sheep. Will it import fodder from another unit or region? No, it should manufacture artificial fodder instead. Similarly, it takes a substantial volume of cotton to produce one dhoti [the traditional lower garment worn by men in northeastern India]. To transport large amounts of cotton also requires much energy, and so if it is not readily available, synthetic fabric can be produced instead.
As science advances, cooperatives will develop and manufacture a great variety of commodities from synthetic raw materials. In the capitalist system, raw materials are imported from other countries or regions in order to manufacture finished products. Cooperatives will not follow this system. They will develop their own raw materials through research so that they are not dependent on foreign raw materials.
Through the cooperative system human society will progress with accelerating speed, ushering in a new revolution in science. No part of the universe will be left unutilized – every nook and corner will be properly used. Where fodder is available, grazing land, dairy farms and milk production can be developed. Where fodder is not available, synthetic milk will be produced. In this way progress and development will be maintained in every field of life.
The day is very near when science will be guided by spiritually oriented intellectuals. When this day comes, science will move forward with leaps and bounds, causing the intellectual capacity of human beings to increase immensely. Cooperatives will greatly assist this psychic and spiritual advancement.
To enhance the unity in society we should encourage all common factors and discourage all fissiparous factors. For example, in India there are many common factors which help create unity, and there are many fissiparous factors which create disunity. The most fundamental point of unity in India is that the Indian mentality is God-centred; that is, it is intrinsically based on theism. It accepts divine providence as a cardinal human factor. Even Indian communists are theists in their hearts, but on a political platform they speak as atheists. Although the spiritual standard of the people is high, the moral standard is lower than in western countries. Thus, the moral standard needs to be increased. Moralists should be created. For this a universal ideology should be propagated in every nook and corner of the country.
Another point of unity in India is the Sanskrit language. The Indian people may or may not know Sanskrit, but they all certainly have a deep love and respect for it. If Sanskrit had become the national language of India instead of Hindi, all the present problems relating to the national language would have been avoided.
Take another example, the calendar system. In North India and some parts of South India the lunar calendar, called Saḿvat, which depends upon the movement of the moon, is followed. In this system the seventh aśárh is in the morning, the eighth aśárh is at noon and the ninth aśárh is at night. A lot of problems arise with such a calendar. In Bengal, Assam, Manipur, the Punjab, Jammu, Kashmir, Orissa and some parts of South India the solar calendar, called Shakábda, which depends upon the movement of the sun, is used. According to this system, in Bengal the first Vaeshákha is on the fourteenth of April and in the Punjab the first Vaeshákha is on the thirteenth of April. Should we encourage this difference in the calendar system? No, so either the Shakábda system or the international calendar system should be followed. So, to integrate the entire human race, unifying factors should be encouraged and fissiparous factors should be discouraged.
The sweetest unifying factors are love and sympathy for humanity. The wonts of the human heart are joy, pleasure and beatitude. In the physical realm the best expression of this human sweetness is the cooperative system. The cooperative system is the best representation of the sweet nectar of humanity.” – Sarkar, Prabhat, 18 February 1988, Calcutta, Prout in a Nutshell Part 14, Cooperatives
“The Cooperative System
For decentralization, agricultural land should be managed through the cooperative system. However, it is not wise to suddenly hand over all land to cooperative management because cooperatives evolve out of the collective labour and wisdom of a community. The community must develop an integrated economic environment, common economic needs and a ready market for its cooperatively produced goods. Unless these three factors work together, an enterprise cannot be called a cooperative.
After creating a congenial environment, land will have to be handed over to cooperative management. Then, with the help of appropriate scientific technology, it will be possible to increase agricultural production.
There should be a two phase plan to introduce cooperative land management. In the first phase, all uneconomic holdings should be required to join the cooperative system so that they will become economic holdings. In this phase, cooperatives will only consist of those people who merged their land together to make uneconomic holdings economic. Private ownership will be recognized. For instance, one person may own one acre, another two acres and a third person three acres within the cooperative. Each cooperative member will be entitled to a dividend based on the total production in proportion to the land they donated to the cooperative. Each individual will retain the deed of ownership of their land, but agricultural activities will be conducted cooperatively. Consequently, land which remained utilized as boundary lines will no longer be left uncultivated. In certain places in Bihar and Bengal the total area of arable land is less than the amount of land wasted on boundary lines. If this system is implemented, all will benefit.
In the first phase of the plan, those owning land which is productive as an economic holding need not be persuaded to join a cooperative. But if an economic holding comprises land which is dispersed in small plots, the scattered plots should be consolidated into one holding. Alternatively, wherever small, scattered, uneconomic plots are located, they will have to be joined together under cooperative management.
In the second phase all should be encouraged to join the cooperative system.
In the third phase there should be rational distribution of land and redetermination of ownership. In this new system two factors will determine the rational distribution of land – the minimum holding of land necessary to maintain a family, and the farmer’s capacity to utilize the land.
In the fourth phase there will be no conflict over the ownership of land. A congenial environment will exist due to psychic expansion because people will learn to think for the collective welfare rather than for their petty self-interest. Such a change will certainly not come overnight. Unless there is suitable psychic preparation through internal urge and external pressure, adjusting with the time factor, people will never accept this system, and it cannot be forcibly imposed on them.
The leaders of the Soviet Union were ignorant of the collective psychology of the people, so they tried to impose collective farming by force. This produced severe famines and massive civil unrest. While trying to cope with these problems, the administration resorted to brute force instead of adopting psychological measures, and as a result they annihilated many people. Sadvipras will never go against the spirit of a country and cause its ruin.
Many people raise questions regarding cooperatives because in most countries the cooperative system has failed. On the basis of the examples to date, it is not appropriate to criticize the cooperative system. This is because most countries could not evolve the indispensable conditions necessary for the success of the cooperative system. Cooperatives depend upon three main factors for their success – morality, strong supervision and the wholehearted acceptance of the masses. Wherever these three factors have been evident in whatever measure, cooperatives have achieved proportionate success.
Take the case of Israel. Because the country is surrounded by enemies on all sides, the people are extremely aware of the need to be self-reliant. People want wholeheartedly to consolidate the national economy. Thus, they have converted arid deserts into productive agricultural land through the cooperative system.
As this kind of mentality was never created in India, India is a classic example of the failure of the cooperative system. Indian cooperatives were not created for economic development but for the fulfilment of political interests. Under such circumstances it was impossible for the cooperative system to succeed.
Good examples must be established to encourage people to adopt the cooperative system. There should be pilot cooperative projects, machine stations, adequate irrigation systems, and improved seeds and insecticides. At the same time people must be educated about the beneficial aspects of cooperatives. Instead of educating people how to increase the productivity of their land, the leaders of India show films on birth control in the market place. I call such people the greatest enemies of humanity.
PROUT advocates maximum modernization in agriculture and industry. In the cooperative agricultural system, modern equipment must be utilized because such modernization will facilitate increased production. For example, tractors can dig the land very deeply, bring low level soil to the surface and force the the top soil below. The fertility of the top soil is diminished as a result of continuous cultivation, so when the lower soil is brought to the surface through the use of tractors, the productivity of the soil increases. In addition, the depleted top soil has the opportunity to become revitalized for future utilization. This is one benefit of tractors. A second is that farmers do not need to maintain cows for ploughing the fields. Where cows are kept for farming, they are unutilized for six months in a year. During that idle period, many costs occur to maintain them properly. The present age is not the age for utilizing large animals. In Europe horses and elephants are no longer used. To adjust with the times, tractors should be utilized today. One tractor equals the service of at least eight pairs of bullocks. Those who have half an acre or three acres of land need to maintain a pair of bullocks. This is wasteful duplication.
If modern equipment is used in agriculture, agriculture will not remain labour intensive and people can be utilized in other activities to enhance the development of the country. For this, new arrangements will have to be created. If fewer people work in agricultural cooperatives, there will be substantial savings. Simultaneously, women and children will be freed from related work so they will get scope to develop themselves. In addition, increased mechanization will link the villages to the cities and towns, and as a result the standard of living in the villagers will be increased.”…
According to PROUT, in the first phase of agrarian revolution private ownership of land within the cooperative system will be recognized. People should have the right to employ labour for cultivation, but in such cases fifty percent of the total produce should be distributed as wages to the agricultural labourers who work in the cooperative. That is, the owners of the land will get fifty percent of the total produce and those who create the produce through their labour will get the other fifty percent. This ratio must never decrease – rather it should increase in favour of the agricultural labourers who work in the cooperative.
The managerial staff body of the cooperative should only be constituted from among those who have shares in the cooperative. They will be elected. Their positions should not be honorary because that creates scope for corruption. Managers will have to be paid salaries according to the extent of their intellectual expertise. In addition, the members of the cooperative may also employ their manual labour if they so desire, and for this they should be paid separate wages. Thus, cooperative members can earn dividends in two ways – as a return on the land given to the cooperative and on the basis of their productive labour. For this, the total produce of the cooperative should be divided into equal parts – that is, fifty percent on wages for labour, and fifty percent for the shareholders of the land. ” – Sarkar, Prabhat, Prout in a Nutshell Part 7, ElEdit 7, Agrarian Revolution
“6) Question: What should be the system of share distribution in cooperatives?
Answer: PROUT advocates the phase-wise socialization of agricultural land which should be managed by farmers cooperatives. In the initial phase of transition to cooperative management, land shares should be in the hands of those who are landholders. That is, initially the shares in agricultural or farmers cooperatives should be distributed on the basis of the land vested in the cooperative. When the cooperative system is fully implemented in the agriculture sector, there will not be any distinction between landholders and non-landholders, as all members of the cooperative will be collectively responsible for the management of the land. However, this stage can only be achieved after the proper psychological preparation of the people.
In the cooperative system there should not be any scope for interest earning shares; that is, there should not be profit earning shares in cooperatives. Rather, shares should be according to the production of the land. If there are profit earning shares in farmers or agricultural cooperatives, then these shares will be sold in the share market, capitalists will buy the shares, the rate of share prices will fluctuate according to share market prices, and cooperatives will become commercial enterprises.
Similarly, in industrial cooperatives there should be dividend earning shares and not profit earning shares as in bank interest, otherwise these cooperativescooperative system will be destroyed and cooperatives will go into the hands of the capitalists. will also become commercial enterprises. If there are profit earning shares, the spirit of the
So, there must not be any preferential shares in any farmers, producers or consumers cooperatives, only dividend shares. Shareholders with preferential shares earn a fixed amount of interest from their shares regardless of whether the enterprise makes a loss or profit.
Preferential shares are like the sonja system in agriculture. In the sonja system, sharecroppers get a fixed amount from landowners when they initially agree to cultivate their land. This is given regardless of the amount produced by the sharecropper, even if there is crop failure. Dividend shares earn a dividend which is defined as a return on the basis of the net profit earned by the enterprise.
Shareholders must be people of high morality. In cooperatives, voting rights should be on an individual basis and not on the basis of the number of shares a person holds. In capitalist countries shares can be purchased. Democracy in capitalist countries is a farce because votes can be purchased and poor people cannot fight elections.
Neither the commune system nor capitalism can solve human problems. Only the cooperative system can solve all sorts of social, cultural and national problems.
7) Question: What are service cooperatives?
Answer: This type of cooperative will not be in the arena of producers or consumers cooperatives. Service cooperatives are a subtle type of cooperativecooperatives. coming within the arena of cultural
Let us take the example of doctors. Doctors should start service cooperatives. These cooperatives may also be called “physicians’ service cooperatives”. Suppose a doctor is not able to open his or her own practice, he or she may form a service cooperative with five or ten other doctors. Such a cooperative is an intellectual service cooperative. Doctors who have little capital and cannot afford to establish their own practices can also work in this type of cooperative. Such a system will solve the unemployment problem of doctors. In addition, doctors can start research through these cooperatives, although a doctor’s job is ninety-nine percent practical and hardly one percent theoretical.
Besides service cooperatives, there are several other types of cooperatives which include farmers cooperatives, producers cooperatives, consumers cooperatives, banking cooperatives, housing cooperatives and family annuity cooperatives.
The day is fast approaching when intellectuality will rule the earth. The commune system has failed – we do not want communistic mania or philosophical phobia. Intellectually developed human beings will rule the earth, and for this the cooperative system is indispensable.” – Sarkar, Prabhat, ElEdit 7, Proutist Economics, Questions and Answers on Economics – Section C
February 1982, Calcutta
Providing food, clothing, housing, education and medical treatment is most important for social security. These five minimum requirements are indispensable to raise the living standard of the people. To guarantee these, the principle of production based on consumption has to be adopted. Special emphasis should be placed on agricultural production because the provision of food is of vital importance, and for this the cooperative system should be rapidly expanded.
According to PROUT, too many people should not be engaged in agriculture. Rather, a major part of the population should depend on industry. Not more than thirty to forty-five percent of the population should be employed in the agricultural sector.
Land is usually divided into economic holdings and uneconomic holdings, according to productivity. Economic holdings are those where the market price of the produce will exceed the cost of production including capital, labour and machinery. Lands which produce economically viable agricultural wealth – that is, where output exceeds input – are called “economic holdings”.
Uneconomic holdings are those where the market price of the produce is less than the cost of production after including the costs of all the inputs. As uneconomic holdings are not profitable, the landowners usually refrain from producing any crops. In the rural economy of a country such as India, if a village is accepted as a production unit, then there may be many plots of land in a village which are not used for producing crops because they are uneconomical.
While implementing PROUT, the question of agrarian revolution will automatically arise. As I have already said, agricultural land should be brought under cooperative management, but the cooperative system should be introduced in two stages. In the first phase of the socialization of land, PROUT will not raise the demand for land ceilings, but the sale of agricultural land will be prohibited and uneconomic landholdings will be brought under cooperative management. The responsibility for cultivating this land will not lie with the landowners but with the cooperatives under the aegis of the immediate government, and with its assistance.
The landowners of the uneconomic landholdings in each village will become the members of the cooperatives in this phase. Thus, cooperatives will only consist of those who merged their land together to make uneconomic landholdings economic. The landowners will give their land, and in this phase they will remain the owners of the land. In cases where the landowners employ labour for cultivation, fifty percent of the net profit will go to the landowners and fifty percent to the labourers who work in the cooperatives.
In this phase, the rivers and streams in a village should be harnessed for the collective welfare. For instance, by constructing embankments and small dams on the rivers, large-scale irrigation, electricity generation, and industries based on local needs should be established.
The first steps must also be taken to alleviate the population pressure on land. An increasing percent of the rural population will have to be employed in industry by establishing agrico-industries and agro-industries. There should be provision for the preservation of crops by building stores and cold-stores under the control of local administrative boards. The cooperatives should be supplied with tractors, manure, seeds, water pumps and other farming equipment through producers cooperatives. Consumers cooperatives will supply the commodities necessary for daily consumption to the rural population.
In the very first phase of establishing cooperatives, agricultural labourers, landless labourers, day labourers and sharecroppers will come within the scope of cooperatives. From this phase, the education system in rural areas should be thoroughly reformed. To arouse the cooperative spirit among the people, there should be extensive training and education, but moral education must take precedence over everything else so that people do not give greater importance to individual interests at the expense of the collective interest.
In the second phase of implementing agricultural cooperatives, the economic holdings of the landowners should be brought under cooperative management. Only after all the uneconomic holdings in a village are brought within the scope of cooperatives should the economic holdings be brought under cooperative management. In this phase it will be easy to apply science and technology extensively in agriculture, increasing the amount of production.
In this second phase, all should be encouraged to join the cooperative system. The net profit will be increased in favour of the labourers working in the cooperatives so that twenty-five percent of the net profit will go to the landowners and seventy-five percent to the labourers. Here labourers means those who employ either their physical or psychic labour in the cooperative. The landowners will benefit in two ways. First, as landowners, they will get twenty-five percent of the net profit of the produce from the land, and secondly, if they are part of the cooperative labour force, they will be entitled to a portion of the seventy-five percent of the profit distributed among the cooperative members.
In this phase, there must be emphasis on the rapid and large- scale establishment of agrico-industries and agro-industries so that the rural population will be dependent more on industry than on agriculture. With the development of such industries, there should be simultaneous emphasis on educational and cultural reforms to further develop the cooperative mentality of the rural population.
From this second phase, production for consumption will increase the standard of living of the rural population, and the basic criteria of social security – that is, the minimum requirements of life – must be arranged for the people.
In the third phase, there should be rational distribution of land and redetermination of ownership. The rational distribution of land will depend on two factors – the minimum holding of land necessary to maintain a family, and the capacity of the farmer to utilize the land. In this phase, the landowners will not be able to employ individual labourers, landless labourers or sharecroppers for the cultivation of land, so it will be more beneficial for them to participate fully in the cooperative system.
In this phase, it will be easy to establish big cooperatives with the extensive application of science, but these cooperatives will not be anything like the huge collective farms of the Soviet Union or China. If cooperatives are allowed to become extremely large, it will be difficult to utilize natural resources efficiently and this will lead to complications in the sphere of production. One of the main defects of the collective farms in socialist countries is their unmanageable size.
In PROUT, the farmers cooperatives themselves will determine the size of the cooperatives. But while building up the cooperative system, two factors should be kept in mind – first, the high quantity and quality of production should be ensured through the application of science and technology while keeping production costs at a minimum; and secondly, the cooperative members must be encouraged to attain maximum psychic and spiritual development at their highest level in exchange for their minimum physical labour.
In the third phase of implementing the cooperative system, one hundred percent of the net profit will be distributed among the cooperative members. The former landowners will identify fully with the cooperatives in this phase.
Through these three phases it will be possible to reduce the excessive population pressure on land and to engage thirty to forty-five percent of the population in agriculture. In the second phase, the problem of unemployment will be tackled through the large-scale establishment of industry, and by the third phase there will be no unemployment problems for the agricultural labourers. By the end of the third phase, the rural sector will be freed from the vexing problems of agricultural and industrial production, unemployment and social security.
In the fourth phase of implementing the cooperative system, there will be no conflict over the ownership of land. The agrarian problems of every village will be solved. All the social security arrangements concerned with food, clothing, housing, education and medical treatment will be easily provided to the people. In this phase it will be possible to make the maximum utilization of the collective physical, psychic and spiritual wealth of every village.
For the total implementation of the cooperative system, there must be proper psychic preparation through internal urge and external pressure, adjusting with the time factor, because people will never accept a system which is forcibly imposed on them. Such a change in the collective psychology will not occur overnight, but will depend on the sentiment of the people.
The time period from the first phase to the fourth phase of the implementation of the cooperative system can be called the transitional period for the implementation of PROUT .” – Sarkar, Prabhat, February 1982, Calcutta, ElEdit 7, Prout in a Nutshell Part 20, Farmers Cooperatives
“Questions and Answers – 4
date not known
1) Question: What should be the system of share distribution in cooperatives?
Answer: PROUT advocates the phase wise socialisation of agricultural land which should be managed by farmers co- operatives. In the initial phase of transition to cooperative management, land shares should be in the hands of those who are land holders. That is, initially the shares in agricultural or farmers cooperatives should be distributed on the basis of the land vested in the cooperative. When the cooperative system is fully implemented in the agriculture sector, there will not be any distinction between landholders and non-landholders, as all members of the cooperative will be collectively responsible for the management of the land. However, this stage can only be achieved after the proper psychological preparation of the people.
In the cooperative system there should not be any scope for interest earning shares; that is, there should not be profit earning shares in cooperatives. Rather shares should be according to the production of the land. If there are profit earning shares in farmers or agricultural cooperatives, then these shares will be sold in the share market, capitalists will buy the shares, the rate of share prices will fluctuate according to share market prices, and cooperatives will become commercial enterprises.
Similarly, in industrial cooperatives there should be dividend earning shares and not profit earning shares as in bank interest, otherwise these cooperativescooperative system will be destroyed and cooperatives will go into the hands of the capitalists. will also become commercial enterprises. If there are profit earning shares, the spirit of the
So, there must not be any preferential shares in any farmers, producers or consumers cooperatives, only dividend shares. Share holders with preferential shares earn a fixed amount of interest from their shares regardless of whether the organization makes a loss or profit. Preferential shares are like the sonja system in agriculture. In the sonja system, share croppers get a fixed amount from land owners when they initially agree to cultivate their land. This is given regardless of the amount produced by the share cropper, even if there is crop failure. Dividend shares earn a dividend which is defined as a return on the basis of the net profit earned by the organization.
Share holders must be people of high grade morality. In co- operatives, voting rights should be on an individual basis and not on the basis of the number of shares a person holds. In capitalist countries shares can be purchased. Democracy in capitalist countries is a farce because votes can be purchased and poor people cannot fight elections.
Neither the commune system nor capitalism can solve human problems. Only the cooperative system can solve all sorts of social, cultural and national problems.
2) Question: What are service cooperatives?
Answer: This type of cooperative will not be in the arena of producers or consumers cooperatives. They are a very subtle type of cooperative coming within the arena of cultural co- operatives.
Let us take the example of doctors. Doctors should start service cooperatives. These cooperatives may also be called physicians service cooperatives. Suppose a doctor is not able to open his or her own practice, he or she may form a service cooperative with five or ten other doctors. Such a cooperative is an intellectual service cooperative. Doctors who have less capital and cannot afford to establish their own practice can also work in this type of cooperative. Such a system will solve the unemployment problem of doctors. In addition, doctors can start research through these cooperatives, although a doctors job is 99% practical and hardly 1% theoretical.
Besides service cooperatives, there are several other types of cooperatives which include farmers cooperatives, producer co- operatives, consumer cooperatives, banking cooperatives, housing cooperatives and family annuity cooperatives.
The day is fast approaching when intellectuality will rule earth. The commune system has failed – we do not want communistic mania or philosophical phobia. Intellectually developed human beings will rule the earth, and for this the cooperative system is indispensable. ” – Sarkar, Prabhat, ElEdit 7, Prout in a Nutshell Part 18, Questions and Answers – 4
“The third principle of decentralized economy is that production and distribution should be organized through cooperatives. One of the principal reasons for the past failure of the cooperative movement is economic centralization. It is extremely difficult for cooperatives to succeed in an economic environment of exploitation, corruption and materialism, so people cannot accept the cooperative system wholeheartedly. Cooperatives are forced to compete with the monopoly capitalists for local markets, and the rights of the local people over their raw materials are not recognized. Such circumstances have undermined the success of the cooperative movement in many countries of the world.
On the other hand, decentralized economy is one of the principal reasons for the success of the cooperative system. The availability of local raw materials will guarantee constant supplies to cooperative enterprises, and cooperatively produced goods can be easily sold in the local market. Economic certainty will create increasing interest and involvement among the cooperative members, and as the local people will be confident of their economic security, they can wholeheartedly accept the cooperative system.
As far as possible, agriculture, industry and trade should be managed through cooperatives. In these sectors of the economy private ownership should be abolished in stages. Only where production cannot be undertaken by cooperatives because of the complex nature or small scale of operations should it be undertaken by private enterprises. The distribution of commodities should be done through consumers cooperatives. Adequate safeguards for cooperatives will also have to be arranged.
The cooperative system is a must, and it is only possible through decentralized economy. The cooperative system and decentralized economy are inseparable.
The fourth principle of decentralized economy is that the local people must be employed in local economic enterprises. Unless the local people are fully employed in the local economy, unemployment can never be solved. Local people should determine the quantum of minimum requirements and the basic policies connected with their own economic well-being. If this principle is followed the problem of outside interference in the local economy will not arise at all.
Cooperatives will provide employment for local people, and also ensure that the skills and expertise of the local people are fully utilized. Educated people should also be employed in cooperatives so that they do not leave the local area in search of employment or move from the countryside to the cities.
For the development of agriculture there is a great need for specialists and technicians, so cooperatives will have to train unskilled rural people so that they can acquire the necessary skills to develop the agricultural sector. In addition, all types of agro-industries and agrico-industries will have to be developed according to the needs and resources of the local area, and these industries should be managed as cooperatives. ” – Sarkar, Prabhat, 16 March 1982, Calcutta, ElEdit 7, Prout in a Nutshell Part 21, Decentralized Economy – 1, Principles of Decentralized Economy
The agricultural, industrial and trade policies of a socio-economic unit will have to be formulated according to the principles of decentralized economy. The maximum utilization and rational distribution of local resources and potentialities to ensure full employment should be given priority, keeping in view that there should be uniform economic development in all regions of a socio-economic unit.
The members of the cooperatives should decide the policies concerning such things as agricultural production, price fixation and the sale of agricultural commodities. Local people should not only control cooperative bodies, but supervise all activities related to the local economy. The local administration will have to assist the economic development of cooperatives. The price of agricultural commodities should be fixed on a rational basis by taking into account the price of commodities; the cost of labour, raw materials, transportation and storage; depreciation; sinking funds; etc. In addition, this price should include a rational profit of not more than fifteen percent of the cost of production. In a decentralized economy agriculture will have the same status as industry.
The industrial system must also be reorganized according to the principles of decentralized economy. If a certain part of a country is over-industrialized, it will impede the economic progress of other regions. Economic decentralization will not allow such a situation to arise. In a decentralized economy, key industries, medium-scale industries and small-scale industries will be managed by different groups of people. In a centralized economy – whether capitalist or communist – these industries are usually managed as either private companies or state enterprises. Most key industries should be managed by the local government but they should be guided by the principle of “no profit, no loss”. Most medium-scale industries should be managed as cooperatives, but they should not be guided by monopoly production and profit. The cooperative sector will be the main sector of the economy. Cooperatives are the best means to organize local people independently, guarantee their livelihood and enable them to control their economic welfare. Most small-scale and cottage industries will be in the hands of individual owners. Small-scale industries should be confined mainly to the production of non-essential commodities such as luxury items. Though privately owned, they must maintain adjustment with the cooperative sector to ensure a balanced economy.
A rural economy should not depend solely on cottage industries, otherwise the economic welfare of the rural population will be jeopardized. If cottage industries are properly organized, rural women will also get ample scope to earn a decent livelihood. Cooperatives and the local administration will have to take the responsibility of supplying cottage industries with raw materials so that they do not suffer from scarcity.
The local administration will also have to arrange for the supply of sufficient power to facilitate industrial production. Every region in a socio-economic unit must strive to be self-sufficient in power generation. The local administration will have to supply locally generated power such as solar energy, thermal energy, bio-gas, hydroelectricity, nuclear energy, pneumatic energy, electromagnetic energy and tidal power, or any other power which is easily available locally. The generation of power is a key industry which should be run on a no profit, no loss basis so that the cost of production is minimized and the purchasing capacity of the people is increased. For example, if batteries are produced through cottage industries, power should be supplied on a no profit, no loss basis, but the battery producers will be able to sell their batteries at a rational profit. Here the power that is used to manufacture the batteries is not an industrial commodity but a raw material. The power for such things as transportation, communication, schools, colleges and hospitals should also be supplied on a no profit, no loss basis to maintain social dynamism. The immediate government or the state government will have to take the responsibility to supply power as a key industry.
All kinds of industrial activities from key industries to cottage industries should be organized with the cooperation of the local population. Care should also be taken so that private enterprises are set up by the local people. Local people must be given preference in employment, and all local people should be locally employed. If this policy is followed, there will be no surplus or deficit labour among the local people, and if many people do come from outside areas, they will not find a place in the local economy. Where a floating population exists in a particular region, the outflow of capital remains unchecked and the economic development of the area is undermined.
Trade in a decentralized economy should be organized by distributing commodities through consumers cooperatives. There will be no income tax, but there should be a tax levied on the production of each commodity. Commodities should be exported from one region or socio-economic unit to other regions or units through cooperatives.” – Sarkar, Prabhat, 16 March 1982, Calcutta, ElEdit 7, Prout in a Nutshell Part 21, Decentralized Economy – 1, Economic Transformation
“The Cooperative System
According to PROUT, the cooperative system is the best system for the production and distribution of commodities. Cooperatives, run by moralists, will safeguard people against different forms of economic exploitation. Agents or intermediaries will have no scope to interfere in the cooperative system.
One of the main reasons for the failure of the cooperative system in different countries of the world is the rampant immorality spread by capitalist exploiters to perpetuate their domination.
Cooperatives develop in a community which has an integrated economic environment, common economic needs and a ready market for its cooperativelycooperatives to evolve. Properly managed cooperatives are free from the defects of individual ownership. Production can be increased as required in cooperatives due to their scientific nature. produced goods. All these factors must be present for
For their success, cooperative enterprises depend on morality, strong administration and the wholehearted acceptance of the cooperative system by the people. Wherever these three factors are evident in whatever measure, cooperatives will achieve proportionate success. To encourage people to form cooperatives, successful cooperative models should be established and people should be educated about the benefits of the cooperative system.
The latest technology should be used in the cooperative system, both in production and distribution. Appropriate modernization will lead to increased production.
Cooperative managers should be elected from among those who have shares in the cooperative. Members of agricultural cooperatives will get dividends in two ways – according to the amount of land they donated to the cooperative, and according to the amount of their productive manual or intellectual labour. To pay this dividend, initially the total produce should be divided on a fifty-fifty basis – fifty percent should be disbursed as wages and fifty percent should be paid to the shareholders in proportion to the land they donated. Local people should get first preference in participating in cooperative enterprises.
Developmental planning should be adopted to bring about equal development in all regions instead of just some particular regions. Local wealth and other resources and potentialities should be utilized in this developmental plan.
The controversial problem of the ownership of land can be solved by the phase-wise socialization of land through agricultural cooperatives. Cooperative land ownership should be implemented step by step in adjustment with the economic circumstances of the local area. During this process the ownership of land should not be in the hands of any particular individual or group.” – Sarkar, Prabhat, June 1979, Calcutta, ElEdit 7, Prout in a Nutshell Part 13, Some Specialities of Prout’s Economic System, The Cooperative System
“The preservation and utilization of land should be the responsibility of the local government, which in turn should carry out its duty through producers’ cooperatives composed of actual farmers. The disadvantages of private ownership will not manifest if the land is collectively owned in a cooperative system. The use of proper scientific methods will make it possible to increase crop production without much effort.
It is undesirable for business people to have the right to distribute food grains. Only consumers’ cooperatives should have this right. As long as the production and distribution of crops is controlled by vaeshyas rather than by cooperatives, it is absolutely impossible to stop hoarding, speculation, black marketing and adulteration in food markets. The slightest weakness in such matters will have extremely dangerous consequences. Such weakness is not at all desirable in those who love humanity and practise politics. It is completely immoral for food grains to lie in the warehouses of black marketeers and speculators to be eaten by rats while people die little by little of starvation.
Besides food and clothing, fuel may also be considered an essential commodity. Distributing fuel through business people has the same drawbacks as distributing food. Local consumers’ cooperatives should have the sole right to distribute essential, though not all, varieties of clothing, and the essential fuels produced in their countries (wood is used in some places, and coal or oil in others) in any given age. Producers’ cooperatives should have the sole right to produce essential clothing and, as far as practicable, essential fuels. Where this is not possible (such as where the conditions and climate are unsuitable for spinning thread) the right to produce the associated raw or half-finished materials for a particular industry and to supply them to producers’ cooperatives, should belong to the state government or local autonomous bodies and not to business people. At most, business people should have the right to produce and distribute non-essential foods and fuels, because then there is virtually no chance of their exploiting the common people by exerting undue pressure on them.
The production and distribution of other commodities: Business people should not be given the right to produce reading and writing materials or any commodities not classified as luxury items (such as razor blades, washing soap, etc.) Only producers’ cooperatives or the state government should have this right. These goods should, of course, be distributed through consumers’ cooperatives. Business people may be permitted to produce and distribute commodities considered to be luxury items.” – Sarkar, Prabhat, 1959, ElEdit 7, Prout in a Nutshell Part 2, Various Occupations, The production and distribution of food and clothing
“In Japan, which is one of the most industrially developed countries, there are only a few labour disputes because work is done according to the bonus system and piece work payments, and industry is mostly managed along lines similar to the cooperative system.
Regarding cooperatives, we must not forget that cooperatives only function properly under a strong government. They cannot function under a weak democratic structure. Before starting cooperatives a psychological environment has to be created. In the Proutistic structure rationalization means less labour, more leisure and more comfort. In order to safeguard the interests of these cooperatives in the field of industry, it has to be emphasised that key industries should be run by the government so that there will not be any occasion for a tool down and the consequent closure of subsidiary industries in the cooperative sector. However, slogans calling for the cooperative movement are untimely in the present system as the psychological background is lacking. If cooperatives are established at the present time, they will simply cause losses to the national wealth. It may be questioned whether it is desirable for a government to engage in commercial concerns, and if so, how can the labour problems in such concerns be solved permanently? In principle governments should not run commercial concerns, but in those cases where it is not possible to run a concern on a cooperative basis, the government should take the lead. However, such concerns should be mostly assembly factories. The manufacture of component parts for these assembly factories should be done through industrial cooperatives. In extreme cases, where industrial cooperatives are unable to manufacture certain components, they should be manufactured by the government. In such concerns there will be no net profit because it is often the question of profit which creates labour problems. The cost of production may be suitably reduced to make it a no-profit, no-loss concern. It is, however, necessary to keep both financial and commercial accounts to ensure that the concern does not run at a loss. If any loss occurs in such a factory it should be converted into an industrial cooperative. ” – Sarkar, Prabhat, July 1961, Ranchi, ElEdit 7, Prout in a Nutshell Part 15, Talks on Prout, LABOUR DISPUTES
“Cooperative Production – Section B
Sharecroppers do not own land, but cultivate other people’s land for a share of the produce. Land usually is given to sharecroppers because it is too small for the landowner to make sufficient income from it. A sharecropper may arrange several hundred acres of land from different landowners. This system was first introduced seven hundred years ago. Sharecroppers are called bargadar or bhagcáśi in Bengali.
The cooperative system is far better than the sharecropping system. It can readily overcome the defects of the sharecropping system by properly utilizing agricultural land, increasing agricultural production and using modern technology. Cooperative members should elect a board of directors which will be able to supervise every aspect of production, thus increasing the out-turn. The maxim of agricultural cooperatives should be: “More production, more dividends and more bonuses.” Labourers will earn wages and bonuses. Wages will be earned according to the amount of labour done by the labourer, while bonuses should be paid on the basis of the net per annum profit of the cooperative according to the amount of a labourer’s net wage.
The sharecropping system may be replaced by different systems – at one pole is the commune system and at the other pole is the cooperative system. In the commune system there are no incentives at all. This system is worse than the sharecropping system. Lack of incentives is the reason why the state run communes have failed in China and the Soviet Union. Even today these countries have to import food grains from capitalist countries like Canada, the USA and Australia. But in the cooperative system there are incentives and a feeling of oneness with the job. Through their own initiative, cooperatives can take large loans from a bank or the government to purchase modern equipment and construct dams, barrages and shift or lift irrigation facilities to increase production. This never happens in the commune system. Thus, the cooperative system is the best system while the commune system is the worst. The commune system is detrimental to anything and everything that is human.” – Sarkar, Prabhat, 16 May 1988, Calcutta, ElEdit 7, Prout in a Nutshell Part 14, Cooperative Production – Section B
“One of the most important basic features of socialism is cooperative bodies. Cooperative bodies cannot survive unless the state administration is run by honest citizens. Similarly, a socialistic state cannot survive unless the cooperative organizations are run by honest citizens. Hence if the public does not have a very high moral, spiritual and educational standard (an average standard or above average standard will not suffice), we cannot expect to find worthy people as representatives, as ministers, or as directors of cooperative bodies. Dishonest directors of cooperative institutions will steal money; dishonest ministers will indirectly support such activities; and weak-minded ministers will deliberately avoid looking into those activities out of fear of losing their ministerships, or in hopes of securing votes in the future. If such abuses continue, it will never be possible to build up cooperative institutions, corruption will never be flushed out of the courts and secretariats, and socialism will never be established.” – Sarkar, Prabhat, 1967, ElEdit 7, Prout in a Nutshell Part 6, Shúdra Revolution and Sadvipra Society, Democratic Change