Protection for Local Empowerment:
The movement for "Progressive Utilization Theory," or PROUT, was inspired by the work of Indian economic philosopher Prabhat Ranjan Sarkar in 1959-60. He sought an alternative to both socialism and capitalism that would meet the economic needs of developing nations while integrating economic pursuits with educational and spiritual concerns. The goal was to build healthy, decentralized social/economic communities which would resist exploitation by outside interests. The PROUT theory incorporates an attitude toward international trade that is similar to the classic protectionist position -- albeit in a different context. The main difference is that while traditional protectionist theory sees the nation as the fundamental unit of economic development, PROUT focuses on smaller, local socio-economic units. The following is an excerpt from the chapter "Proutist Economics", by the "Proutist Writers Group of New York Sector" at www.prout.org.
The treadle pump, such as this man uses in Nepal, costs around $20 US, and can increase a farmer's production by $100 US per year. With this technology, many families in Asia and Africa have increased their income. In Bangladesh, their production and sales are now sustainable without any external aid (but not in Nepal or many other countries in which they are used to great benefit). Because treadle pumps would help a local community become agriculturally self-sufficient, PROUT would not prohibit farmers (or, preferably, farming cooperatives) from importing them. It would want them to do so via barter, however ó and would discourage the export of surplus yields in exchange for any goods that could be produced locally.
Once a local economy is able to meet the basic needs of its people, finished goods which are not and cannot easily be produced should be allowed to enter an economic unit. Care should be taken, however, that they do not undermine the market for local goods. It is good if such kind of trade takes place through barter.
As an infrastructure develops for the exchange of manufactured goods, the free trade of surplus, finished goods between fully self-sufficient socio-economic units should be encouraged. This will help to facilitate prosperity and socio-economic parity amongst units. As this occurs, socio-economic units may begin to merge. This is a positive development if decentralized production and economic democracy are not jeopardized. One final and important point should be made in this matter. In order to avoid the emergence of a class of rich traders and middlemen, transactions between socio-economic units should be conducted only through producer and consumer cooperatives.
It should be clear how this approach differs from the capitalistic notion of freedom of trade. In quest of higher profit margins, capitalists seek cheap raw materials and cheap labor while targeting markets for finished goods which can give high returns. This is beneficial neither to the people living near the raw materials (who do not reap the benefits of ownership and may simply be employed in low wage mining, agricultural, or other jobs) nor to the populace of the more affluent market, for employment opportunities decrease as industry moves to cheap labor areas. And it is only marginally better for the areas which provide the labor for manufacturing because labor conditions, wages, and benefits will be as low as the capitalists can get away with. It may or may not stimulate much local economic growth or raise the standard of living. Furthermore, tremendous energy is wasted in shipping goods and raw materials between the sites of origin, sites of manufacturing, and the final markets.
In order for decentralization to exist successfully, there must be a cooperative economic structure. In such a structure the profit motive would be replaced by the desire to produce goods to meet the needs of the local people. The desire for profit is often at odds with this idea of production for consumption. Capitalists start industries only where favorable conditions for production and sales exist. They therefore often ignore the real needs of a population insofar as profits are often made at the expense of local people and the local eco-systems. Under the cooperative economic structure, self-supporting economic units will be the norm. Such units must be nurtured and strengthened. This requires a decentralized approach to industry as well as agriculture. Self-sufficiency does not mean only the local production of food - the industrial sector is highly important as well, and cannot be neglected. Hence PROUT advocates the existence of a full range of industries, mostly on a small scale, for every socio-economic unit.