Every Currency, including the Work-Standard, must be able to exhibit four consistent characteristics. Without those key defining characteristics, they are unworthy of being practical in the everyday affairs of any nation-state. These characteristics are:
- Medium of Exchange: A Currency is capable of facilitating transactions in the transfer of goods and services from one set of hands to another. It should overcome the need for bartering for goods and services that somebody else lacks or does not have on hand, just as it must enable a Financial Régime to fuel all economic activities within the nation-state.
- Unit of Account: A Currency has to be able to measure the Value of any given set of goods and services according to their Price. This enables anyone to compare their Value in relation to the Price whenever the latter depreciates or appreciates across time. It also has to be able to determine the overall health of the economy and the Financial Régime sustaining it.
- Standard of Deferred Payment: A Currency should be considered as being an acceptable form of payment in resolving all Debts. Any unit associated with this Currency is considered “Legal Tender” and thus can be used by anyone for paying off their Debts. This implies that the Currency has an inherent Value that exists independent of its own stated Price.
- Store of Value: A Currency has to be able to preserve its Value, independent of its Price at any given point in time. This means that in order to the Value to remain constant, its Price has to also be constant as well. It does not even to have to be Kapital insofar as the Currency in question is capable of maintaining its Value despite deteriorating political, social, and economic conditions.
All four functions are correlated to any Currency’s Fungibility, Durability, Divisibility, Portability, Cognizability, and even Scarcity.
- Fungibility refers to a Currency being capable of maintaining its Value, even if the Currency takes on different shapes, appearances, and forms. Gold and Silver have traditionally been the most Fungible since they can be melted down and molded into coins, ingots, bars, jewelry and other valuables.
- Durability is the ability of the Currency to be reused in more than one transaction. Anyone who has been paid in its units following a transaction must be guaranteed the right to reuse it again on a later date. This implies that the Currency itself is indiscriminate about its users, from individual persons and the most populous of nation-states to transactions across international borders.
- Divisibility determines whether the Currency can be divided into smaller denominated units. Mathematically speaking, it needs to be able to conduct itself in whole numbers and in decimals. A large denominated banknote, for instance, could be broken down into various coins that are of the same Value.
- Portability is whether the Currency can be safely transported by someone without too many difficulties related to its size, weight, length, width, or transferability. Anyone is capable of carrying large units of the Currency and has no difficulties in transferring them to somebody else within their transactions.
- Cognizability refers to whether the Currency can be easily recognized by anyone, no matter who they are, as being a Store of Value, a Standard of Deferred Payment, a Unit of Account, and a Medium of Exchange. The Currency can maintain its Value, considered Legal Tender for paying off debts, can measure the Value of goods and services based on their Prices, and can facilitate transactions by anyone who uses it.
- Scarcity describes whether the Currency is able limit its overall circulation based on a specific attribute. There is only so much gold and silver in exist just as printing too much a debt-backed fiat currency will cause Kapital. True to its intended purpose as being a genuine Currency, the Work-Standard fulfills all four functions and all six associated attributed. In either case, this means that the Currency is capable of maintaining its Value and also regulating the distribution of goods and services within any transactions.
A Currency pegged Work-Standard is capable of facilitating a Medium of Exchange within transactions, measuring the Value of goods and services according to their Prices as a Unit of Account, worthy of being an acceptable form of Legal Tender, and can sustain itself as a Store of Value for any and all future uses. All four functions are fulfilled by the Work-Standard in simultaneously exhibiting all of the six attributes.
Currencies pegged to the Work-Standard are Fungible insofar as they were intended to be used by the Totalities of entire nation-states as being both between and among their own peoples. This is achieved by allowing for the possibility that the Price of one Currency can be different from the Price of another and thus reflect different Values as a result. The State will always be the issuer of the Currency so long as it remains on the Work-Standard.
Such Currencies are Durable, Divisible and Portable because the Arbeit that ultimately backs the Value of Geld originates from the economic activities of the people. They and their actions in Life determine the Value and set its Price, with their State enforcing that Price. Arbeit is generated by everyone as part of the nation-state, which means that their Currency is as durable as the ability of their State to enforce its Value. Arbeit is capable of being divided into specific professions and economic sectors due to the Work-Standard’s need for a specialized model of political-economic governance. Arbeit can also be brought across international borders whenever the State decides that it can be expanded abroad within trade agreements with another State.
This in turn enables the inevitability of Currencies pegged to the Work-Standard as being Cognizant and thus Scarce. Some nation-states will implement better SMPs (Socialist Monetary Policies) better than others and their economies have the potential to generate more or less Geld according to the amount of Arbeit that they are capable of contributing at any given point in Zeit.
Note that Zeit does not determine the Value of any Currencies pegged to the Work-Standard. Rather, it gauges the overall productivity and intensity of all economic activities generating Arbeit within a specific period. There is only so much Zeit within a workweek and even less so within a workday. Also, not all economic activities generate the same amounts of Arbeit and Geld. Certain professions, due to their inherent nature, may contribute more Arbeit but less Geld or less Arbeit but more Geld. This is normal and acceptable under the Work-Standard, so long as its Attrition/Inaction Rate, its peculiar metric for measuring the rate of Currency Depreciation/Appreciation, is able to stay within sustainable levels.
All of these considerations are demonstrative of why the Work-Standard is an original endeavor. It can therefore be capable of being distinguished from seemingly similar alternative currencies such as Josiah Warren’s Time-Based Currencies, Robert Owen’s Labour Vouchers and Labour Notes, Silvio Gesell’s Freigeld, and even some of the recent derivatives of Cryptocurrencies. The justifications behind why the Work-Standard has rejected them outright instead of borrowing anything from them will be elaborated in future entries to the Compendium.