Progressive Utilization Theory - Other Key Concepts - Economics - Commercial Economy

Commercial Economy

The value of money increases with its mobility... The maxim, "Keep money rolling", is as true as the proverb, "Keep the wagons moving".
Prabhat Ranjan Sarkar

Commercial economy is the application of scientific and efficient methods of production and distribution that do not incur loss but rather ensure that output exceeds input. Under capitalism, this dimension of economics has been developed somewhat, but the primary goal in respect to production is profit rather than consumption (as in PROUT). So, for example, under capitalism, outsourcing of labor to a cheaper locality and the diversion of raw materials from an underdeveloped country are both acceptable, if not desirable, commercial economy. Under PROUT, neither would be acceptable.

Under PROUT, efficiency in respect to production and distribution is enhanced by judicious allocation of amenities. Another way in which efficiency would be enhanced is by restricting hiring in respect to floating populations.

In a revised economic structure – that is, PROUT – there must not be any import or export duties on consumable commodities. If this is done, then this earth will be converted into a golden earth.
Prabhat Ranjan Sarkar

The banking system is a crucial element of commercial economy. Without banks, the mobility of money would be hindered. However, banks and similar institutions have a tendency to be greedy. Hence, they may make unsafe or unwise loans. When that occurs, depositors are at risk of losing their savings. PROUT insists that the banking system be carefully regulated. The establishment of local banking cooperatives can also help to reduce risks.

With respect to monetary policy, a PROUT-based economy would prohibit the issuance of currency that does not have a proportionate amount of reserved bullion (typically, gold). This would eliminate the possibility of crippling inflation and facilitate a genuine and recognizable increase in purchasing power.

In principle, PROUT supports free trade as a means of enhancing distribution and reducing price manipulation.

In principle, PROUT rejects speculative markets as exploitative.

Read more about this topic:  Progressive Utilization Theory, Other Key Concepts, Economics

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