In the SMP Compendium, Schuld is a German word that has two etymological meanings, a legal one and a financial one. The financial meaning is commonly used to refer to “Debt,” which is the amount that an indebted borrower owes to a credited lender. The composition of the Currency in question depends on whether the borrower owes the lender Geld (if the transaction was done under Socialism) or Kapital (if the transaction was conducted under Liberal Capitalism). The other etymological meaning buttresses, rather than detracts, the financial significance of this author’s decision to refer to Debt as ‘Schuld’. The term itself is meant to convey a sense of guilt that may or may not necessarily be legally justifiable. The ‘guilt’ arises from the limitations of a financial system that revolves around endless borrowing and lending that ultimately buries scores of people, firms, institutions, and governments in Schuld.
The ever-growing deluge of Schuld among Western and non-Western nation-states around the world is the consequence of the death of Bretton Woods. In essence, the collapse of the Gold Standard gave rise to the proliferation of Fiat Currencies backed by the “full faith and credit” of the Financial Regime. These Fiat Currencies are designed to generate Schuld because there is nothing that is ultimately backing their Value except the promise of the Financial Regime to enforce its Value and pay any and all dues as Legal Tender. Everything is centered on an incessant cycle of Schuld generated by the creation of Kapital through the lending and borrowing of loans by banks and Central Banks and Securities by governments and Financial Markets.
The proliferation of Fiat Currencies has led to the widespread overabundance of Kapital backed solely by the Schuld that they leave behind as the only thing backing its Value. The cycle of Schuld that Fiat Currencies create is capable of overburdening anyone beyond their ability to pay. Individuals and nation-states are not immune to this trend, as the world continues to accrue increasing sums of Schuld with each passing second of every single day. It is mind-boggling for anyone to realize that Fiat Currencies leave behind a trail of Schuld, because there will always be a lender expecting their borrower to pay back what has been owed.
A Currency pegged to the Work-Standard will operate under a different set of parameters. Rather than have its Value be backed by Schuld, it is instead pegged to the Arbeit, the “Work,” generated by the economic activities of the nation-state. This is not to suggest that Schuld ceases to exist entirely. Any Schuld that arises will more often stem from trying to live beyond what is allowed by the means of production. If any expenditures exceed beyond the amount of Geld, of “Money” created under the Work-Standard, then Schuld will begin accumulating. It is unlikely that the need to borrow and lend Geld will be diminished due to the distinct properties surrounding how the Work-Standard operates. The key driver is no longer Kapital; it is Arbeit.