10-three Tier Industry(handout)[1]

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Modes of production Proutist Economic Development

Three Tier Industrial System Dr. Michael Towsey

 2004 Proutist Universal

1

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

Modes of production in PROUT Mode of Production

Size

Strategic Importance

Complexity

High

High

Board of Directors

Large scale

(key industry)

Elected, or appointed by immediate government

Examples

Water Core power utilities Oil, Minerals Defence industry

Cooperative Large, From high to medium medium, and scale even low

High, medium, low

Elected by workers or members

Private

Low, although can be specialised

Not applicable

Small scale

Dr. Michael Towsey

Low

Proutist Universal

2

The cooperative model •

Public

Proutist Universal

Agriculture Auto manufacture

"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

Motor mechanics

3

Dr. Michael Towsey

Proutist Universal

4

1

Cooperatives

Seven principles of coops There are seven internationally recognised principles of cooperatives ...



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

1. Voluntary and open membership.



Workers or members own the cooperative.

2. Democratic - controlled by their members.



More incentives for workers to be efficient.



No conflict between owners and employees.

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.



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.

Dr. Michael Towsey

Proutist Universal

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. 5

Dr. Michael Towsey

Cooperatives to use latest scientific developments.



Cooperatives will allow workers to reap the benefits of technology.



Automation will reduce working hours but not incomes.

Dr. Michael Towsey

Proutist Universal

6

Cooperatives & management

Cooperatives & technology



Proutist Universal

7



Cooperatives are managed by the workers.



Security of employment.



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

Dr. Michael Towsey

Proutist Universal

8

2

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

Cooperatives - examples

9

Mondragón Corporación Cooperativa •

www.mondragon.mcc.es Proutist Universal

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

10

Key industries

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

Dr. Michael Towsey



11



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.

Dr. Michael Towsey

Proutist Universal

12

3

Industrial sectors strategic importance

Private enterprises

Small businesses



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

Cooperatives

Key industries

Proutist Universal

13

• Key industries are strategic because of: • important resources; • backbone infrastructure; • regulatory implications.

Dr. Michael Towsey

Industrial sectors number of enterprises

• Cooperatives are strategic because of: • people’s livelihood; • providing minimum necessities; • networking of industry.

Proutist Universal

14

Industrial sectors numbers employed

Key industries

Small businesses

Key industries

Cooperatives

Small businesses

• 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. Dr. Michael Towsey

Proutist Universal

Cooperatives

15

Dr. Michael Towsey

Proutist Universal

16

4

Integration of three tier industries

Key industries (public utilities)

Proutist production network example

Demand for goods and services

Supply of natural resources

Cooperatives (all types of industry) Small businesses Dr. Michael Towsey

Proutist Universal

17

Key industries Dr. Michael Towsey

Health system

Cooperatives Proutist Universal

Small businesses

18

Banking system

Central Bank Major Hospital

Credit Unions – cooperative banks

Clinics

Private financial services

Private doctors Dr. Michael Towsey

Proutist Universal

19

Dr. Michael Towsey

Proutist Universal

20

5

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