Five Fundamental Principles of PROUT

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Five Fundamental Principles of PROUT
Abbreviation PROUT
Short description Socioeconomic theory for the happiness and welfare of all
Motto To end exploitation we demand economic democracy, not political democracy
Country Universal
Location in Sarkarverse
SVmap NonliteraryWorks.png

The five fundamental principles of PROUT are the practical essence of the socioeconomic theory given by Prabhat Ranjan Sarkar. Application of the Progressive Utilization Theory relies on an understanding of the underlying concepts of these principles, the interrelationship of the principles, and their respective areas of application.

The five fundamental principles

The five fundamental principles of PROUT are:[1]

  1. There should be no accumulation of wealth without the permission of society.
  2. There should be maximum utilization and rational distribution of the crude, subtle, and causal resources.
  3. There should be maximum utilization of the physical, mental, and spiritual potentialities of the individual and collective beings.
  4. There should be a well-balanced adjustment among the crude, subtle, and causal utilizations.
  5. Utilizations vary in accordance with time, space, and form; the utilizations should be progressive.


The fundamental principles have been likened to the construction of a social pyramid with five layers.[2] Theory flows from top downward. Practice flows from bottom upward. As the theory of PROUT is based on practice, the first fundamental principle of PROUT appears at the bottom of the pyramid and not the top.


Law maintains social integrity. Without it, society, to the extent that it survives, is reduced to tyranny.[3] Without law, not just our social existence but also our social identity is in jeopardy.[4] And fundamental to law is the notion of property rights. This applies regardless of whether a society is capitalist[5] or communist.[6]

In PROUT, the first fundamental principle is the primary guideline in respect to law and the practical foundation on which the other four principles are constructed. However, the manner in which the first fundamental principle is implemented – the nuances in respect to social justice – are determined by the theoretical impact of the higher four principles.


The second fundamental principle of PROUT reduces economics to its two rudimental elements: production and distribution. To optimize production, PROUT prescribes maximum utilization of all resources, animate and inanimate. To optimize distribution, PROUT prescribes a rational approach (in contrast to Adam Smith's invisible hand[7] and Karl Marx's according to contribution or according to need[8]). To implement such an economy, PROUT analyzes economics in respect to four dimensions: people's economy, psycho-economy, commercial economy, and general economy. Regarding these four dimensions of economics, Sarkar states:

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 stage. People’s economy and psycho-economy are totally overlooked by modern economists, and as such could find no place in the present mode of economic thinking.[9]

People's economy

People's economy covers all aspects related to the production and distribution of the minimum requirements (not just the minimum requirements of life but rather the minimum requirements according to era. According to PROUT, the first requirement of any economy is to guarantee these minimum requirements to all and to ensure that the standard of minimum requirements goes on increasing. In addition, people's economy comprises the following areas:[9]

  • Employment for all
  • Eradication of mass poverty
  • Development of rural economy
  • Phase-wise socialization of land into the hands of those who work physically or intellectually for production
  • Practical training programs to impart skills that help people find employment in their immediate urban or rural locality
  • Work placement
  • Transportation, trans-shipment, loading, and unloading of materials
  • Generation of cheap power and the supply of water
  • Economic decentralization
  • Encouragement of cooperative spirit (dynamism)
  • Block-level planning


PROUT notes a great distinction between material property and intellectual property. Unlike material property, intellectual property has a highly elastic quality. That is to say, possession of intellectual property does not inherently prevent anyone else from possessing the same property. In contrast, physical wealth has no such elasticity. Possession of material property automatically tends to restrict the access of everyone else to that property. If one person has a particular MP3 file on her/his computer, others could also have that same MP3 file on their computer; however, if one person has a loaf of bread in her/his kitchen, others could not have that same loaf of bread in their kitchen. Hence, PROUT seeks to divert human longings more toward psychic and spiritual wealth and less toward physical wealth. In the view of PROUT, this would help to ensure that no one's basic necessities are curtailed, and it would better satisfy everyone's thirst for freedom and progress.

Psycho-economy has two branches:

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".[10]
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.[9] 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.[11]

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. (Some recent examples of this problem are the savings and loan crisis in the 1980s and 1990s, the subprime mortgage crisis in the 2000s, and, most recently, the Libor scandal of 2012.) PROUT insists that the banking system be carefully regulated. The establishment of local banking cooperatives can also help to reduce risks.[12]

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.[10]

In principle, PROUT supports free trade as a means of enhancing distribution and reducing price manipulation.[13]

In principle, PROUT rejects speculative markets as exploitative.[13]

General economy

General economy consists of two parts:[9]

The overall position of PROUT in respect to general economy is consistent with the objectives of economic decentralization and regional self-sufficiency.

Industrial structure

PROUT extends the general concept of industry to include all aspects of the agricultural and service sectors as well, arguing that they too should be run in an efficient industrial fashion. Regarding the industrial structure, PROUT advocates a three-tiered approach:[14]

  • Key industries are those industries that are essential for the running of other industries (for example, mining of raw materials, supply of the electric power industry, the dairy industry, and the postal system). As these industries are critical for the entire economy, they should be run on a break-even basis.[15] According to PROUT, such industries must be closely regulated by the State for the welfare of the entire society. In other words, they must never be privatized, as this would jeopardize the entire economy. To offset some of the inefficiency of government control and to promote decentralization, PROUT would assign the managerial role for key industries to local government. Typically, key industries tend to be very large-scale. However, in some special cases, a key industry or a portion of it might be conveniently run as a medium-to-large-scale cooperative or even a small-scale enterprise. If so, PROUT would still insist that those operations be carefully regulated by local government.[16]
  • Medium- and large-scale industries that are not key industries should be run as cooperatives.[9] Regarding agriculture (the land and the harvest), as opposed to agrico-industry (industries that supply pre-harvesting and harvesting requirements) and agro-industry (post-harvesting industries dependent on agricultural production), PROUT asserts that cooperatives are the best way to rationalize the agricultural sector. Cooperatives give scope for efficient utilization of land and, at the same time, ensure economic security to all farmers. Taking into account the powerful sentiment of farmers for their land, PROUT would initiate farmers' cooperatives with a four-phase approach. The transitional period will give everyone the opportunity to adjust with the new system on seeing the individual and collective benefits that accrue.[17]
  • Small-scale enterprises may be run as a private business. Typically, privately run businesses would provide non-essential commodities or luxury items, that is, amenities. Small-scale enterprises would include cottage industries. Though such businesses may be privately run, PROUT would require that they maintain an adjustment with the cooperative sector to ensure a balanced economy.[15]

Economic planning

PROUT would organize nations and ultimately the entire world on the basis of self-sufficient economic zones, based purely on socioeconomic and geographical considerations rather than political considerations (as is currently common).[18] Within each socioeconomic zone, there would also be decentralized planning down to the block level, the block being the lowest level on which economic planning is feasible. In other words, economic planning would function on many levels – block, district, state, national, and global levels – but the block-level planning would be the primary level of planning. As block-level planning is essential for economic decentralization, it should be adopted in all blocks, and it should be constitutionally mandated.[19]

Under PROUT, economic planning would take into account four main concerns:

Most block-level planning would be intra-block (concerned with a single block). However, occasionally, inter-block planning will also be required. Inter-block planning would apply only in selected economic areas where the coordination and cooperation of two or more blocks (usually contiguous) should prove mutually beneficial.


In keeping with its organic view of society, PROUT notes that civilizations come and go, live and die. For example, the ancient Egyptian civilization that constructed pyramids is gone. Though the country is the same, the society is different.[20]

According to PROUT, there are six factors on which the development of any society depends:[21]

  • Spiritual ideology
  • Spiritual practice
  • Socioeconomic theory
  • Social outlook
  • Scriptures
  • Preceptor

In addition to this, PROUT considers the welfare of the individual and the welfare of society to be an inalienable concomitance. In other words, individual welfare depends on the welfare of society, and social welfare depends on the welfare of the individuals. Hence, the third fundamental principle of PROUT calls for the all-round development of both individual and collective potential (physical, mental, and spiritual).


In respect to administration, PROUT addresses two closely interrelated matters:

Decision making

With all decision making, multiple options are available. The fourth fundamental principle of PROUT calls for a well-balanced adjustment among the utilizations. Sarkar amplifies the concept of a well-balanced adjustment by affirming the need to maintain correspondence and concord among all the factors: crude, subtle, and causal as well as physical, mental, and spiritual. For example, society is obliged to furnish the minimum requirements of life to everyone. But if society were to carry out that obligation by building a house for every citizen and delivering food at each doorstep, then people would soon become lazy. So a more balanced approach would be for society to make provision so that everyone, in exchange for their labor according to capacity, will earn the money required to at least purchase their necessities. For similar reasons, to raise the minimum standard of living, the best approach would be to enhance everyone's purchasing power.[22] In later years, Sarkar formalized and extended this decision-making paradigm (sometimes referred to as the law of parallelism) by introducing the theory of pramá.


As a corollary to the law of parallelism, Sarkar asserted that two factors must be carefully weighed when taking decisions. Those two factors are subtlety and rarity. By applying those two factors to the question of what work society should take from an individual, PROUT arrives at the ideal candidates for the duty of top-level decision-making, government.

Every human being has physical, mental, and spiritual potential. That potential should be developed to the fullest extent in everyone. However, at any given time, all three capabilities may not yet be developed in some persons. For those with only a developed physical capacity, it is clear that society should utilize them primarily for their physical power. For those with both physical and mental capacity developed, society should utilize them more for their intellectual power and less for their physical power. The reason that Sarkar gives is that intellectual power is rarer and subtler than physical power. Sarkar argues that with such an approach, society derives more benefit from the service of those persons, and those persons in turn derive more satisfaction from their work. Insisting that a great scientist must also perform labor as a farmer is irrational, because that scientist could conceivably benefit society far more with just one hour's work in a laboratory than one thousand hours' work in the fields. If the concern is to ensure the scientist's physical health through exercise, that exercise may also be had in the form of any suitable and appealing sport or physical recreation.

Spiritual power is the rarest and subtlest ability. So, from those with all three capacities (physical, mental, and spiritual) developed, society should take greater spiritual service, less intellectual service, and still less physical service. According to Sarkar, such persons can render the greatest service to society. Those with only physical and mental power (warriors, intellectuals, and capitalists) render less service. Those with only physical power (unskilled laborers), though not unimportant, can only work under the direction of those endowed with spiritual or mental power. Hence, social control should not be vested in those that are only brawny nor even those that are also brave, brainy, or worldly wise. Rather social control should only be vested in those who possess all of those features plus the spiritual quality to work selflessly for the welfare of all – in a word, sadvipras.[22]


The fifth fundamental principle of PROUT observes that change is a constant in this universe. Three factors of relativity (time, space, and form) are constantly changing in relation to themselves and in relation to the other two factors.[23] So, according to PROUT, change is inevitable. What PROUT prescribes is not change but rather progress.


Authoritative version

In 1962, Prabhat Ranjan Sarkar formally outlined his socioeconomic theory, PROUT, in sixteen numbered Samskrta aphorisms (see Chapter 5 of Ananda Sutram[24]). The last five numbered aphorisms (5:12–16) are commonly referred to as the five fundamental principles of PROUT.

Earlier wording

In 1959, an initial glimpse of these five principles appeared in Sarkar's work, Idea and Ideology.[25] The preliminary wording found there is:

  1. No individual should be allowed to accumulate any physical wealth without the clear permission or approval of the collective body.
  2. There should be maximum utilization and rational distribution of all mundane, supramundane and spiritual potentialities of the universe.
  3. There should be maximum utilization of physical, metaphysical and spiritual potentialities of unit and collective bodies of human society.
  4. There should be a proper adjustment amongst these physical, metaphysical, mundane, supramundane and spiritual utilizations.
  5. The method of utilization should vary in accordance with changes in time, space and person, and the utilization should be of progressive nature.


Undoubtedly, Sarkar did say something on the subject of the five fundamental principles in 1959. But the language in which he spoke, the precise words that he said, and the quality of any translation that may have been done cannot be verified. What we have is only a few short paragraphs that were tacked on at the end of Idea and Ideology without any vetting and hence with doubtful authenticity. As the style and quality of language is greatly inferior to that found in the rest of the book, there is every reason to doubt the accuracy of what appears there. Furthermore, the concepts presented in the last paragraphs of the last chapter of Idea and Ideology do not correspond with the rest of that chapter, and the concluding sentences (introduced without amplification as fundamental factors on which the principles of PROUT depend) are riddled with internal problems and even inconsistencies. This is unlike most other published discourses or writings of Sarkar.

It is an undisputed fact that Ananda Sutram is the commanding authority on all of Sarkar's philosophy. This is stated clearly in Chapter 10: Svadhyaya of Ananda Marga Caryacarya Part 1.[26] And though it is well-known and accepted that the relevant Samskrta sutras in Ananda Sutram do not translate to the words that were tacked onto the end of Idea and Ideology, Ananda Sutram has never been published with an official English translation of those five aphorisms. As this is not rational, the only possible reason for that singular omission is a concession to the many authors who wrote articles and even books that employed the earlier English wording. Of course, this amounts to the imposition of dogma. But to this day, some older proutists argue feverishly and illogically in favor of that earlier wording.[27]


  1. ^ Bjonnes, Roar (2012). Principles for a Balanced Economy: An Introduction to the Progressive Utilization Theory. Copenhagen, Denmark: PROUT Research Institute. ISBN 978-0-9857585-0-9
  2. ^ Abhidevananda, Acarya Avt. (1978). PROUT Primer. Amazon Digital Services, Inc. ASIN B005G2CWSK.
  3. ^ Where law ends, tyranny begins. William Pitt, Earl of Chatham (1770). "In reply to Lord Mansfield, in relation to the case of John Wilkes". The Speeches of Lord Chatham.
  4. ^ We live in and by the law. It makes us what we are: citizens and employees and doctors and spouses and people who own things. Ronald Dworkin (1986). Preface to Law's Empire. Harvard university Press. ISBN 978-0674518360.
  5. ^ One of the most fundamental requirements of a capitalist economic system—and one of the most misunderstood concepts—is a strong system of property rights. For decades social critics in the United States and throughout the Western world have complained that "property" rights too often take precedence over "human" rights, with the result that people are treated unequally and have unequal opportunities. Inequality exists in any society. But the purported conflict between property rights and human rights is a mirage. Property rights are human rights. Armen Alchian (1993). "Property Rights" in The Concise Encyclopedia of Economics", Liberty Fund.
  6. ^ The establishment of property rights is important not only because it affects the distributions of wealth and income, and control, but also because it affects economic behavior. Often it makes a difference whether there is an owner. New hotels in China, regardless of whether they are government-owned or privately owned, are all beautiful when they open. However, five years later, the government-owned ones typically look more than ten years old. And the privately owned ones often still look new. Lawrence Lau (2006). Role of property rights
  7. ^ Adam Smith (1759), Section IV.1.10 of The Theory of Moral Sentimentsand Adam Smith (1776), Section IV.2.9 of An Inquiry into the Nature and Causes of the Wealth of Nations Library of Economics and Liberty.
  8. ^ Marx, Karl (1875). "Part I". Critique of the Gotha Program. Retrieved 2008-07-15.
  9. ^ a b c d e Sarkar, Prabhat Ranjan (1986). "The Parts of the Economy" published in A Few Problems Solved Part 7. Ananda Marga Publications.
  10. ^ a b Sarkar, Prabhat Ranjan (1986). "Keep Money Rolling – Excerpt B" published in PROUT in a Nutshell Volume 3 Part 12. Ananda Marga Publications.
  11. ^ The problem of a floating population and immigrant labor will not occur in the cooperative system, as cooperative members will have to be local people. Floating laborers should have no right to be cooperative members – migratory birds have no place in cooperatives – as they can disturb a whole economy. Howrah district, for example, produces sufficient crops in a season to feed the local people for seventeen months, but due to immigrant labor the produce is consumed in six and a half months. The elimination of the floating population will also protect the social life of the cooperative from the possibility of adverse social influences. Sarkar, Prabhat Ranjan (1982). "Farmers Cooperatives" published in PROUT in a Nutshell Volume 4 Part 20. Ananda Marga Publications.
  12. ^ Sarkar, Prabhat Ranjan (date unknown). "Questions and Answers on Economics – Excerpt C" published in Proutist Economics. Ananda Marga Publications. ISBN 81–7252–003–4.
  13. ^ a b Sarkar, Prabhat Ranjan (1984). "Socioeconomic Movements" published in A Few Problems Solved Part 9. Ananda Marga Publications.
  14. ^ Sarkar, Prabhat Ranjan (1984). "Socio-Economic Movements" published in A Few Problems Solved Part 9. Ananda Marga Publications.
  15. ^ a b Sarkar, Prabhat Ranjan (1982). "Decentralized Economy – 1" published in PROUT in a Nutshell Volume 4 Part 21. Ananda Marga Publications.
  16. ^ Sarkar, Prabhat Ranjan (1988). "Decentralized Economy – 2" published in PROUT in a Nutshell Volume 4 Part 16. Ananda Marga Publications.
  17. ^ Sarkar, Prabhat Ranjan (1982). "Farmers Cooperatives" published in PROUT in a Nutshell Volume 4 Part 20. Ananda Marga Publications.
  18. ^ Sarkar, Prabhat Ranjan (1961). "Talks on PROUT" published in PROUT in a Nutshell Volume 3 Part 15. Ananda Marga Publications.
  19. ^ Sarkar, Prabhat Ranjan (1981). "Inter-Block and Intra-Block Planning" published in A Few Problems Solved Part 8. Ananda Marga Publications.
  20. ^ From ancient times many groups of people came into existence. Some of them somehow managed to drag on, some became extinct and some continued to exist in a metamorphosed form. About one thousand five hundred years ago, Arabs were very developed in science. But they were defeated by the Islamic wave... The same is the case with Egypt. It was fully developed in the spheres of art, architecture and science. It is the Egyptians who made the pyramids which needed subtle geometrical knowledge. Moreover, they were also very advanced in the sphere of civilization. Despite this, they could not prevent their defeat. Today’s Egypt is the Egyptian form of Arab civilization. Sarkar, Prabhat Ranjan (1966). "The Future of Civilization" published in A Few Problems Solved Part 6. Ananda Marga Publications.
  21. ^ Sarkar, Prabhat Ranjan (1966). "The Future of Civilization" published in A Few Problems Solved Part 6. Ananda Marga Publications.
  22. ^ a b Anandamurti, Shrii Shrii (1962). Sutra 5:15 of Ananda Sutram. Ananda Marga Publications. ISBN 81–7252–027–1.
  23. ^ Anandamurti, Shrii Shrii (1955). "The Base and the Relative Truth (Ádhára and Ápekśika Satya)" published in Subháśita Saḿgraha Part 1. Ananda Marga Publications.
  24. ^ Anandamurti, Shrii Shrii (1962) Ananda Sutram Ananda Marga Publications. ISBN 81–7252–027–1
  25. ^ Sarkar, Prabhat Ranjan (1959). Idea and Ideology. Ananda Marga Publications. ISBN 81-7252-205-3
  26. ^ Anandamurti, Shrii Shrii Ananda Marga Caryacarya Part 1 Ananda Marga Pracaraka Samgha 
  27. ^ The Wording of the Five Fundamental Principles of Prout at