1.  2004 Proutist Universal 1 Proutist Economic Development Three Tier Industrial System Dr. Michael Towsey

2. Proutist Universal2 Modes of production 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.

3. Dr. Michael TowseyProutist Universal3 Modes of production in PROUT Mode of Production SizeStrategic Importance ComplexityBoard of Directors Examples PublicLarge scale High (key industry) HighElected, or appointed by immediate government Water Core power utilities Oil, Minerals Defence industry CooperativeLarge, medium scale From high to medium, and even low High, medium, low Elected by workers or members Agriculture Auto manufacture PrivateSmall scale LowLow, although can be specialised Not applicable Motor mechanics

4. Dr. Michael TowseyProutist Universal4 The cooperative model "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

5. Dr. Michael TowseyProutist Universal5 Cooperatives "Cooperatives are the businesses of the future." - Felipe Perez-Marti Workers or members own the cooperative. More incentives for workers to be efficient. No conflict between owners and employees. 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.

6. Dr. Michael TowseyProutist Universal6 Seven principles of coops 1.Voluntary and open membership. 2.Democratic - controlled by their members. 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. 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. There are seven internationally recognised principles of cooperatives...

7. Dr. Michael TowseyProutist Universal7 Cooperatives & technology Cooperatives to use latest scientific developments. Cooperatives will allow workers to reap the benefits of technology. Automation will reduce working hours but not incomes.

8. Dr. Michael TowseyProutist Universal8 Cooperatives & management Cooperatives are managed by the workers. Security of employment. Anti-monopoly legislation - when a cooperative becomes too big, can split into two.

9. Dr. Michael TowseyProutist Universal9 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.

10. Dr. Michael TowseyProutist Universal10 Cooperatives - examples 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.

11. Dr. Michael TowseyProutist Universal11 Mondragón Corporación Cooperativa 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 www.mondragon.mcc.es

12. Dr. Michael TowseyProutist Universal12 Key industries 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.

13. Dr. Michael TowseyProutist Universal13 Private enterprises 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.

14. Dr. Michael TowseyProutist Universal14 Industrial sectors - strategic importance Key industries Cooperatives Small businesses Key industries are strategic because of: important resources; backbone infrastructure; regulatory implications. Cooperatives are strategic because of: people’s livelihood; providing minimum necessities; networking of industry.

15. Dr. Michael TowseyProutist Universal15 Industrial sectors - number of enterprises Small businesses Cooperatives Key industries 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.

16. Dr. Michael TowseyProutist Universal16 Industrial sectors - numbers employed Cooperatives Small businesses Key industries

17. Dr. Michael TowseyProutist Universal17 Integration of three tier industries Key industries (public utilities) Cooperatives (all types of industry) Small businesses

18. Dr. Michael TowseyProutist Universal18 Proutist production network - example Demand for goods and services Supply of natural resources Key industriesCooperatives Small businesses

19. Dr. Michael TowseyProutist Universal19 Health system Major Hospital Clinics Private doctors

20. Dr. Michael TowseyProutist Universal20 Banking system Central Bank Credit Unions – cooperative banks Private financial services