Modes of production Proutist Economic Development
Three Tier Industrial System Dr. Michael Towsey
2004 Proutist Universal
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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
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Dr. Michael Towsey
Proutist Universal
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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
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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
•
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•
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
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• 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
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Dr. Michael Towsey
Proutist Universal
16
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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
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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
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Dr. Michael Towsey
Proutist Universal
20
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