THE PARTS OF THE ECONOMY official source: A Few Problems Solved Part 7 cross-references: also published in Prout in a Nutshell Part 12 this version: is the printed A Few Problems Solved Part 7, 1st edition, version (spelling mistakes only may have been corrected). I.e., this is the most up-to-date version as of the present Electronic Edition. A developed economy should consist of four parts--people's economy, psycho-economy, commercial economy and general economy. This quadro-division of economy is a vast expansion on the con temporary and co-contemporary conceptions of economic activity. Most economists today understand only a little of the principles of general economy and something of commercial economy, but both of these parts are still in an undeveloped state. People's economy and psycho-economy are totally unknown to modern econo mists, and as such could find no place in the present mode of economic thinking. A brief outline of the parts of the economy is given below. People's Economy This part of the economy will deal with the essential needs of the people in general--their production, distribution, marketing, shopping, storage, pricing, sales, freight charges, proforma costing and all related activities. Most importantly, it is directly concerned with the guaranteed provision of minimum requirements like food, clothes, housing, medical care, education, transportation, energy supply and the supply of irrigational waters. Continuous improvement and ready availability of these essentials is a key factor in people's economy. Minimum requirements must be assured through guaranteed purchasing power which should be enshrined in the constitution as fundamental human rights or as cardinal human rights. This will give the citizens of the country power to sue a government if their minimum requirements are not met. Hence the necessity of people's economy will be reinforced by constitutional power. As people's economy will deal with minimum requirements and people's subsistence problems, it must take precedence over other parts of the economy. For example, if people have no food and are starving, it may be necessary to establish short term uneconomic industries to supply food. In normal conditions such industries would violate the logic and demands of general economic principles and the principles of demand and supply. People's economy should be also concerned with the development of small-scale industries, both private and cooperative. Private industries would be limited in size and scope to prevent monopoly production and exploitation, and would be required to function as cooperatives once they grow too large. Cooperative industries are the best means of organising people in an independent manner so that they take collective responsibility for their livelihood. People's economy may deal with employment for all, the eradication of mass poverty, rural economy, the phase-wise socialisation of land into the hands of those who work physically or intellectually for proper production, practical training programmes to impart specific skills to enable people to find employment in their immediate urban or rural locality, work placement, and transportation, transshipment and loading and unloading of any material, even if they are not economically viable. Another important aspect of people's economy may also be concerned with power, water and energy supply, as small-scale and cheap power and water production is essential if people are to have complete control over their economic lives. Finally, people's economy may further deal with economic decentralisation, "people's power", and co-operative dynamo, and block-level planning. Let us take the case of Bengal. As an example of how people's economy concerning the minimum necessities of life can be developed, the following programme should be adopted to improve the economic standard of Bengal. First, food: Bengal is fertile but is divided into two parts--areas that are short of rainfall and areas that have no shortage of rainfall but experience water shortages in the winter season. In both parts water conservation is required. The irrigation problem can be solved by any of four methods--shift irrigation systems (canals); lift irrigation systems (pumps); tank irrigation systems (reservoirs); and small scale river projects. The quality of water varies in different rivers. Some water is sweet and discriminating use of this water can improve agricultural production . Different crops, fruits and vegetables can be grown all over Bengal, which is capable of feeding its entire population of around 60 million people through its own resources if they are properly managed. Clothing: The type of clothing that people wear depends primarily on climatic conditions and the availability of raw materials. In Bengal four major raw materials are available for clothing--cotton, mulberry silk, non-mulberry silk and synthetic and other materials. Bengal cannot only become self-sufficient in cotton, silk and synthetic materials but can even produce a surplus for export to other regions. Mulberry silk is ideally suited to Bengal because it require a slightly dry climate, which is found in eastern Bengal. Non-mulberry silk can be grown throughout Bengal, while synthetic fibres from copra, rice plant, bamboo and coconut shells, banana and pineapple leaves are also widely available. Bengal can also produce wool, and even jute can be used for clothing. Housing: House-building materials are abundantly available throughout Bengal. The three essential requirements are sand, lime and cement. The soil of Bengal is suitable for manufacturing bricks, fire-bricks and tiles, while enormous limestone deposits have been discovered in one district. Thus Bengal cannot only be self-sufficient in the production of building materials, but can export to other regions as well. Industries which produce housing materials would be quite profitable. Medicine: Bengal is richly endowed with both herbal and mineral medicines. The major diseases of Bengal are fever and stomach diseases, and it is the practice of of nature to produce readily available herbs which cure local diseases. Specific districts of Bengal are suitable for herbal cultivation while other districts are rich in mineral medicines. Education: One's mother tongue is the natural medium of expression, hence Bengali should be the medium of instruction in Bengali schools. English, which is presently the global language, should be the second language and higher education (that is, tertiary) should be imparted in English. Sam'skrta' should also be taught to enrich the cultural heritage of Bengal. The materials of learning--paper, ink, etc.--are also available in Bengal. Paper can be manufactured from different grasses and plants which can be readily grown in several districts, and ink can be manufactured from a synthetic process or from Indigo. Energy and transportation: Until solar energy can be manufactured cheaply, other energy sources can be utilized, like hydroelectricity, coal, thermal power, tidal power, geo-thermal power, wind power and natural gas. All the raw materials necessary for transportation are also available, including rubber, steel, mica, mica chips, mercury, silver, copper, quartz and manganese; and hence Bengal could provide all kinds of transportation. Psycho Economy While people's economy is concerned primarily with the provision of the minimum requirements of life, psycho-economy is concerned with increasing the psychic pabula of the individual and collective mind through appropriate economic activity. While people's economy will be the main concern of poor and undeveloped economic units, psycho-economy will gain increasing importance once the problems of subsistence are gradually solved. Thus psycho-economy would be of major importance in a highly developed and mechanized economy where people may only work a few hours a week and have a lot of spare time. Psycho-economy will have two branches. The first one will endeavor to eradicate exploitative and unjust economic practices, behavior and structures. It will oppose all economic and psycho-economic exploitation , and make people aware of how capitalists in their singular or collective roles exploit society through their gigantic propaganda machinery, and create unhealthy, artificial demands which not only poison the mind but encourage dangerous habits detrimental to psychic purity and expansion. The first and foremost duty of psycho-economics is thus to wage a tireless struggle against the degenerating and dehumanizing economic trends in society. The second branch of psycho-economy is to develop and enhance the psychic pabula of the individual and collective minds. This branch is virtually unknown to economists today, but it will become an extremely important branch of economics in the future when mundane economic problems have been solved. Psycho-economics will add to the glaring glamour of economics. Psycho-economics will find creative solutions to economic problems to ensure the maximum utilization of the psychic and spiritual potentialities in creation. Psycho-economy includes the growth of balanced economy, the selection of production items, allocation decisions, the creation of proper work environments, the application of east-west theory, full employment policies, workers' participation and control over production and distribution, economic independence for women, incentive policies, psychological factors in progressive rationalization, psychological and sociological dimensions of economic development, the implementation of technology to increase production and reduce working hours, quality of life issues, business ethics and moral and ethical principles, and practices for effective cooperative management. In short, psycho-economy includes all aspects of economic life which directly effect the progressive development of the individual and collective mind. Psycho-economy will also assume increasing importance in the same way as the human body is a complete biological unit that has a separate life from its individual components, in much the same way as the human body is a complete biological unit although it is composed of many separate cells. Human Society is an integrated dynamic structure pulsating with its own rhythm and life, and it is much more than merely the sum total of the individuals in it. The collective psychology is the underlying motivation of social activity. Metaphysical and supramundane resources include theories and ideas like psycho-economics which influence the way people think and act. Social engineering will become an important feature of psycho-economics as future leaders learn more about the collective psychology and how to direct its proper development. Commercial Economy This part of the economy will develop scientific, efficient methods of production which will not incur loss, and where output will exceed input. The aim of commercial economy is maximum utilization and rational distribution of the resources of the universe. It includes the selection, production, and distribution of cash crops, inter-zonal and intra-zonal trade policies, export-import policies, rationalization of organized marketing systems, fixation of profit rates, cost accounting, licensing policies, technology transfer policies, technical quality control, management of balance of trade and payments, capital formation and loan policies, government intervention, monetary and fiscal policy, banking, capital supply, the barter system, the international monetary system, the organization of commerce, the planning of both agrico- and agro-industries, and non-agricultural industries. General Economy General economy will include all the existing economic theories in general, whether capitalist, socialist or Proutist, and will include the mainstream economic that is taught in colleges and universities today. While some development has occurred in general economy, there is scope for much greater development. PROUT's general economy is based on a three-tiered economic structure--large-scale key industries managed as public utilities; the cooperative economic sector, which is the largest sector in a Proutist economy; and small-scale concerns owned privately, as partnerships or as corporations. Key industries will function on "no-profit-no-loss" principle. General economy may also include economic infrastructure, coordination of economic planning at all levels, block-level planning, future planning, population policy, employment policy, full-employment policy, agro-industrial policies, socialization of the economy, development of cooperative organizations, the banking system, how to increase purchasing capacity, macro- and micro-economic problems, tax structure, urban and rural development, decentralization, classification of the three-tiered industrial structure, defence planning and expenditure, national or zonal budgeting, the application of appropriate technology and economic progress. In a Proutist society these four parts of the economy would be dynamically integrated and adjusted according to Neo-Humanistic principles to ensure the maximum utilization and rationalization of all resources, and to harmonize human progress with the progress of the rest of creation. July 1986, Calcutta