Proutist Economic Development Decentralised Economic Planning

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Proutist Economic Development Decentralised
Economic Planning

• Dr. Michael Towsey

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Decentralised planning

• Decentralised economy requires decentralised
  planning.
• Planning starts from bottom up.
• The block is the smallest unit of Proutist
  economic planning.
• First step identify blocks, natural economic
  communities consisting of 100,000 to 250,000
  people.
• Block gt District gt NationGuarenas gt Miranda gt
  Venezuela
• There should be provision in constitutions, such
  as the Venezuelan constitution, for the
  importance of block level planning.
• Trickle up development vs trickle down.

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Trickle down development

• The theory goes
• Increase the income of the rich who know how to
  create wealth.
• The wealthy will invest their extra accumulated
  income as capital to generate more wealth.
• This creates jobs and more demand.
• Prosperity trickles down to the poorer people.

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Trickle down ?
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Traditional socialist planning

• Intention was to distribute wealth more
  equitably.
• BUT emphasis was on large scale projects and
  centralised planning.
• Centralised planning has never benefited people
  away from the centre or at the periphery.
• Eg Soviet development under Stalin was built on
  slave labour in prison camps.
• Communism is economic centralisation - in the
  hands of a few.
• Capitalism is also economic centralisation - in
  the hands of a few.

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Trickle up development

• Block level planning.
• Maximise production by decentralising production.
• Decentralise to point consistent with economic
  efficiency and collective welfare.
• Adjust block level plans to coordinate with
  district and national plans.
• Each block has its own developmental plan,
  adjusting with overall plan of the socio-economic
  unit at various levels.
• Planning should be of ascending order - starting
  at the block level to district to national - to
  include all the levels of a socio-economic unit. 

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Block-level planning boards

• Amount of natural and human resources varies from
  block to block.
• Separate economic plans have to be made for each
  and every block by a block-level planning board.
• Prepares a plan for development of the block and
  implements local developmental programmes.

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Organizing blocks

• Blocks must not be demarcated on basis of
  political considerations.
• Blocks should be scientifically and
  systematically demarcated as the basis for
  efficient decentralized economic planning. 
• Block divisions to be organized according to such
  factors as
• physical features of the area (including
  topography, river valleys, nature of the soil,
  type of flora and fauna, varying climatic
  conditions, etc)
• socio-economic requirements and problems of the
  people
• peoples physico-psychic aspirations.

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Intra- and inter- block planning

• Each block should be made economically sound so
  that the entire socio-economic unit will be
  self-sufficient.
• This enables a country or federation to become
  economically strong and developed in the real
  sense.
• Planning prepared for the all-round growth of a
  single block exclusively "intra-block
  planning".
• Cooperation among blocks is necessary.
• Planning among blocks "inter-block planning".

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Inter-block planning

• Inter-block planning is an economic venture into
  some selected fields to organize and harmonize
  socio-economic development in a few adjoining
  blocks through mutual coordination and
  cooperation.
• Deals with problems that traverse block
  boundaries and cannot be tackled or solved by one
  block alone.

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Inter-block examples

• Examples include
• flood control, river valley projects,
  afforestation projects, soil erosion,
  environmental impact of development
• establishment of key industries, water supply,
  power generation, communication systems
• establishment of an organized market system
• higher educational institutions
• etc.

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General advantages of block level planning

• Easier to identify and understand problems of a
  local area.
• Fewer conflicts of interest.
• Local leadership solves problems according to
  local priorities.
• Planning will be more practical and effective -
  to give quick, positive results.
• Easier and faster to respond to new situations.
• Base for a balanced economy can be established.
• Can easily identify leakage of capital.

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Local advantages of block level planning

• Local socio-cultural bodies play an active role
  in mobilizing human and material resources.
• Development of local industries provides
  immediate economic benefits.
• Growth of local industries creates greater
  opportunities for peoples all-round advancement,
  because all their basic needs are met.
• Local industries are the only way to provide
  local social security.
• Purchasing capacity of local people will be
  enhanced.
• Unemployment solved more easily.

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Short and long term planning

• Short term plan
• Focus Labour intensive industry.
• Long term plan
• Focus Establish capital intensive industry.
• Goals
• Guarantee minimum requirements of the local
  people
• Eliminate unemployment
• Increase purchasing capacity and
• Make socio-economic units self-sufficient.

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Factors of planning

• When planning (eg an industry), consider four
  factors
• Collective necessity i.e. is there a local
  demand?
• Full costing of inputs including externalities.
• Productivity efficiency and local availability
• build processing factories where raw materials
  are.
• Purchasing power
• distribute sufficient purchasing capacity
• real income vs nominal income
• no leakage of capital.

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Community development

• Identify community needs.
• Always start from strength ... ... ...
• A successful project requires good governance.
• Good governance requires continued training and
  education
• Need to understand concept of conflict of
  interests.
• Accountability to fight corruption.
• No outsiders on local boards
• Especially no money donors, central government
  officials project contractors.