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PROUT Institute of Australia

This presentation on planning for a decentralised economy is in no waycomprehensive. It does not cover planning methodologies, for example.Its purpose is to fill out some additional concepts in planning for adecentralised economy.

Proutist economic development is from bottom up. Likewise Proutistplanning starts from the lowest level and builds upward. The lowestlevel of economic planning is the "block". Thus the first step is toidentify natural local communities of some 100,000 to 250,000 persons asa block. From block go to district and then to nation. Prout would havea provision in the constitution of a country or federation to formalisethe process of block level planning.

The neo-liberal agenda plans for economic development using the trickledown approach. In this way, President Bush in 2003 was able to seek taxcuts for the very rich and appeal to the theory of "trickle down"growth.

But the statistics do not support the notion that tax cuts necessarilyincrease investment, the supposed first step in the trickle down theory.The graph of Investment/GDP Radio and Share of the Corporation IncomeTax shows a steady decline in corporate taxation as a percent of totaltaxation from 1955 to 1985, yet there does not appear to be acorresponding increase in investment (as a percentage of GDP) except forthe years from 1976 to 1980.

Prout does not support centralised planning whether capitalist orsocialist. Centralised planning provides too many opportunities forunscrupulous persons to profit financially and politically. Centralisedplanning has never benefited people away from the centre or at the

periphery. Eg Soviet development under Stalin was built on slave labourin prison camps. According to Prout, communism is economiccentralisation - as there is control of wealth in the hands of a few.Capitalism is also economic centralisation - it also has control ofwealth in the hands of a few.

Prout supports decentralised planning to achieve "trickle up" movementof wealth. That is, first guarantee to all the basic minimum necessitiesthrough adequate purchasing capacity.

Incentives should be there for those skilled and meritorious so thatthey have resources, facilities, amenities, etc to better offer theirservices to society and be rewarded accordingly with the amenities

required for this. Incentives are a vital feature of Prout economics.However, increased amenities, over time, should also be there for thecommon people, not just the meritorious. The degree only varies as pereconomic development. The idea is that the gap will always be lessened,not increased. However, everyone having identical amenities or incomesis not a sensible or feasible approach in the relative world.

The planning goal of any economic enterprise should be to maximiseproduction and to decentralise production to the extent that iscompatible with economic efficiency and collective welfare. Block level

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plans should however be coordinated with each other, with the districtplans and with the national plan. The idea to build up the wealth in ablock, not to allow for net outflows of wealth at random or as per thewhim of those who hold centralised economic power (be it capitalist orcommunist).

In decentralised planning, each block has its own developmental plan,adjusting with overall plan of the socio-economic unit at variouslevels. Planning should be of ascending order - starting at the blocklevel to district to national - to include all the levels of asocio-economic unit.

As the amount of natural and human resources varies from block to block,separate economic plans have to be made for each and every block by ablock-level planning board. Such a board should prepare a plan fordevelopment of the block and implement or see to the implementation oflocal developmental programmes.

Blocks must not be demarcated on the basis of political considerations.Blocks should be scientifically and systematically demarcated as the

basis for efficient decentralized economic planning. This means blockdivisions are to be organized according to such factors as:- Physical features of the area (including topography, river valleys,nature of the soil, type of flora and fauna, varying climaticconditions, etc).- Socio-economic requirements and problems of the people.- Peoples physico-psychic aspirations.

Each block should be economically sound so that the entiresocio-economic unit will be self-sufficient. This enables a country orfederation to become economically strong and developed in the realsense.

Planning prepared for the all-round growth of a single block exclusivelyis called "intra-block planning". It should be noted that cooperationamong blocks is necessary. Accordingly, planning among blocks is called"inter-block planning".

Inter-block planning is an economic venture into some selected fields toorganize and harmonize socio-economic development in a few adjoiningblocks through mutual coordination and cooperation. It deals withproblems that traverse block boundaries and cannot be tackled or solvedby one block alone. Examples include:Examples include:- Flood control, river valley projects, afforestation projects, soilerosion, environmental impact of development.

- Establishment of key industries, water supply, power generation,communication systems.- Establishment of an organized market system.- Higher educational institutions.

The advantages of block level planning are many. Generally theyinclude:- It is easier to identify and understand problems of a local area.- There are fewer conflicts of interest.- The local leadership solves problems according to local priorities.

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- Planning is more practical and effective - to give quick, positiveresults.- It is easier and faster to respond to new situations.- The base for a balanced economy can be established.- It can easily identify leakage of capital.

In block level planning, everything local is enhanced within the worldcommunity. In this regard, local socio-cultural bodies play an activerole in mobilizing human and material resources. It is the developmentof local industries that provides immediate economic benefits. Thegrowth of local industries creates greater opportunities for peoplesall-round advancement, because all their basic needs are met. Localindustries are the only way to provide local social security.The purchasing capacity of local people will be enhanced through thisblock level, local planning, approach. Consequently, unemployment issolved more easily.

Prout distinguishes short and long term planning. The two types ofplanning differ not only in time scale but in their objectives. Thegoals are:

- Guarantee minimum requirements of the local people.- Eliminate unemployment.- Increase purchasing capacity.- Make socio-economic units self-sufficient.

P R Sarkar offers these points as a guide to planning and placement of anew industry:- Collective necessity i.e. is there a local demand?- Full costing of inputs including externalities.- Productivity efficiency and local availability (eg build processingfactories where the raw materials are).- Purchasing power (increase and distribute sufficient purchasingcapacity).

As a negative example, Sarkar notes that in India, tobacco is grown inthe north, is processed in the south and is then taken north again topopulation areas. Again leakages of capital are to be avoided. It isalso important to distinguish between real income vs nominal income.

Important points on practical experience in community developmentprojects are:- Always start from community strength.- Alway offer continuous education in good governance.- Never allow outsiders on local boards.