The following is related to the Work-Standard’s conception of Currency Depreciation/Appreciation under Socialist Monetary Policy (SMP). This entry assumes that the reader has in fact understood the conventional Liberal Capitalist version of Currency/Appreciation relative to Inflation/Deflation. Everything here will hereby be one of countless entries related to the specifications of the Work-Standard. For those who have not read the preceding entry, “Currency Depreciation/Appreciation (Pt. I of II),” or would like a simple review to understand the differences, I will illustrate them below.
Recall that the Post-Bretton Woods conception of Currency Depreciation/Appreciation relies on the Inflation/Deflation of Kapital. The Inflation/Deflation Rate is influenced by the Supply and Demand of Kapital in existence relative to the amount of goods and services being circulated. The manner in which this Rate rises or falls is mitigated by the Interest Rate. In the preceding entry, every method conducted by the Central Banks of Liberal Capitalist Financial Regimes can be summarized as “Lending/Borrowing,” “Interest/Negative Interest,” “Produce/Consume,” and “Buy/Sell.” The ones conducted by Parliamentarian Democracies are “Increase/Decrease Taxation” and “Spend/Save.” All of them rely on the aforementioned dialectics of “Scarcity/Availability” of Kapital. None of these dialectics, including Taxation, are applicable to the Work-Standard. This is due to the Work-Standard relying on a very different set of dialectics that stem from its own distinct understandings of economics and finance.
The concept of Currency under SMP is not Kapital, but Geld (Gift). Geld is SMP’s manner of referring to any unit of Currency that was created while being pegged to the Work-Standard. Two other recurring terms employed in the Work-Standard are Zeit (Time) and Arbeit (Work). Any Currency backed by Arbeit is therefore pegged to the Work-Standard.
Geld, Arbeit, and Zeit will always be the three important variables whenever any analysis of the Work-Standard in the Compendium. It is for these considerations that Currency Depreciation/Appreciation under the Work-Standard operates according to its parameters.
A Currency’s Value based on the Price of its Geld rises and falls according to the amount of Arbeit being exerted by the entire Command or Planned Economy at any given point in Zeit. The keyword to understanding Attrition/Inaction is “Synchronicity.” Depreciation occurs from an increasing Attrition Rate, whereas Appreciation occurs from an increasing Inaction Rate. What causes Attrition and Inaction, the Work-Standard’s equivalents to Inflation and Deflation respectively, is Arbeit.
All forms of economic activity generate Arbeit that can then be converted into Geld. That Geld can then be converted back into Arbeit to maintain and expand the level of Synchronicity. However, as more Arbeit is generated, the Attrition Rate will rise. As Attrition rises, the Price of the Currency increases to reflect the Depreciation of its Value. The same can be said for the inverse: declining amounts of Arbeit generated will cause Inaction to rise. As Inaction rises, the Price of the Currency decreases to reflect the Appreciation of its Value.
Influencing the Attrition/Inaction Rate under the Work-Standard is the “Mechanization Rate.” The Mechanization Rate is the rate at which Arbeit is being created and converted into Geld by automated machinery. Rather than an Interest Rate intended to influence the Value of Kapital, the Mechanization Rate influences the Value of Arbeit through the Synchronicity between the workers and their technologies. In essence, the Mechanization Rate helps the Work-Standard achieve the metaphysical embodiment of Ernst Jünger’s archetype of the Arbeiter from “Total Mobilization” and Der Arbeiter.
The Mechanization Rate should always be used sparingly and justly. Increasing the Mechanization Rate means further automation of the economy by the State. While Usury ends under the Work-Standard, it can potentially return in the form of destroying the livelihoods of people whose Arbeit is generated from their professions. Not everything needs to be automated.
But this is only in regards to monetary policy. The realm of fiscal policy is different. While a discussion into understanding why the Work-Standard rejects the notion of Taxation remains forthcoming, an important topic must be addressed with regard to pricing.
The pricing of everyday goods and services will be decided by the State in accordance to the directions and guidance of the people. The people should help the State determine the Prices just as they must also help the State determine the wages in Geld that are needed to purchase those same goods and services. Special financial institutions, also another future topic requiring its own future entry, must be established by the State to oversee the official changes to any Price.
The State must enforce the Prices according to the overall conditions of the Planned or Command Economy at a given point in Zeit. The State will always be the final authority and thus wields all Intents of Command and Obedience regarding the Work-Standard.
Furthermore, there cannot be any “Price Controls.” A Price Control basically freezes the Price of any good or service into a specified amount or else range. The problem with Price Controls is that they are never meant to change at all according to current economic conditions. Once they are enacted, the Price remains static until repealed. Instead of relying on them, there should instead be legislation forbidding any price gouging. Under no circumstances outside of the absolute life-or-death conditions of Total War are there to be preventable shortages or implementations of rationing by the central government.