Compendium: How Arbeit is Converted into Geld

Multiple entries have been written to arrive at this particular one. It was established that every profession should be a “Vocation” in order to allow for the “Life-Energization Reciprocity” (LER) process. By committing their physical, mental and spiritual energy into their Vocation as “Life-Energy” to create Arbeit. That Arbeit is then registered on the financial ledgers as being accounted for in the Life-Energy Reserve of the Central Bank. Therefore, the next logical step in the Work-Standard is for the conversion of Arbeit into Geld. It is precisely during this aspect of the Work-Standard that a large number of variables are at play.

Before the process of converting Arbeit into Geld can begin, the Central Bank will note the overall “Quality of Arbeit” (QW) of the Vocational Civil Service (VCS) Economy. The QW is the total Value of the Arbeit from all Vocations. It is affected by the overall Work-Intensity (WI) and Work-Productivity (WP) as well as all known Force Multipliers (FMs) at any given Zeit. Shorter intervals of Zeit with “High WI, High WP” or “Low WI, High WP” will decrease the Quality of Arbeit by a rising Attrition Rate. Longer intervals of Zeit with “High WI, Low WP” or “Low WI, Low WP” are more likely to increase Quality of Arbeit through the Inaction Rate.

The Central Bank gauges the nation-state’s Quality of Arbeit through the “Total Economic Potential” (TEP), the Work-Standard’s alternative to the Gross Domestic Product. TEP is the final sum of all economic and financial activities by the nation-state before its Attrition/Inaction Rate was factored. For finding the TEP after Attrition/Inaction, the Central Bank uses the “Real Total Economic Potential” (RTEP). RTEP affects how much Geld is allowed to be created by the Central Bank and is influenced by the Quality of Arbeit. It is tenable to argue that RTEP represents the Quality of Arbeit applicable to all Vocations within the VCS Economy.

Given the Quality of Arbeit and the Real Total Economic Potential in relation to the Attrition/Inaction Rate, the Central Bank can now determine the “Quality of Geld” (QM). The QM refers to the Price for any conversions of Arbeit into Geld under the Work-Standard. It affects how much Geld can be printed by the Central Bank based on a specified amount of Arbeit. A nation-state having a “High QW” can be correlated to them having a “Low QM.” This means that they are able to command a superior Quality of Arbeit that enables them to create more Geld with fewer amounts of Arbeit. Conversely, a “Low QW” can be correlated to them having a “High QM.” Under those conditions, the nation-state has an inferior Quality of Arbeit that forces them to spend more Arbeit for less amounts of Geld.

It is because of the need to factor how QW and RTEP affect the QM that the Central Bank must find the “Total Financial Potential” (TFP). A TFP is the sum of all Geld that has already been converted from Arbeit before including the Attrition/Inaction Rate. If the Central Bank needs to know the TFP with the Attrition/Inaction Rate, they will use the “Real Total Financial Potential” (RTFP).  RTFP is the final sum of all Geld in circulation and is limited by the RTEP. Remember that the Attrition/Inaction Rate is not affected by the RTFP but by the RTEP because of the nature of the Work-Standard. If the Central Bank needs to print more Geld, the RTEP will need to be gradually increased to facilitate it.

What happens if the Central Bank decides to print more Geld to increase the RTFP without any expected increases in RTEP? That Geld is counted as Schuld and is thus added to the Sovereign Schuld of the nation-state as “unpaid debts.” This is done to discourage excessive creations of Geld and deter the existence of Schuld-backed Kapital under the Work-Standard. As a Constitutional Obligation with a corresponding Constitutional Intent, any Sovereign Schuld must be paid back without any Interest whatsoever under the Work-Standard.

For the sake of review, six variables are accounted for in the conversion of Arbeit into Geld. It is understandable for someone to ask where these variables fit within the bigger picture of the Work-Standard in relation to the Financial Regime. The following table demonstrates where the variables fit within the context of the Financial Regime:

Head of State
Head of Government
State CouncilCentral Bank
EconomyFinance
Real Total Economic PotentialReal Total Financial Potential
Total Economic PotentialTotal Financial Potential
Quality of ArbeitQuality of Geld

As one can probably deduce from the table, the QW, TEP and RTEP correspond to the Economic and the QM, TFP, and RTFP are related to the Financial. What happens in the Economy must affect Finances and what affects Finances must affect the Economy. That is where the Work-Standard prevails in contrast to the Liberal Capitalist conceptions of Kapital. With Kapital, it is possible to argue that the Financial Markets are an economy onto themselves, independent of what the actual Economy is doing at any given Zeit.

Furthermore, the Central Bank can adjust the Quality of Arbeit through a Mechanization Rate (MR). The Mechanization Rate is the Work-Standard’s alternative to the Interest Rate by focusing more on how much Arbeit is being created by actual Vocations and how much has been allowed to be created by automated technologies. The MR is capable of increasing the RTEP and improve the QW without causing serious increases in Attrition by conserving the Life-Energy of Vocations. It may seem counterintuitive, but the MR has its purposes and should never be seen as an excuse to replace Vocations with machines.

An important question that must be considered is who really decides the Quality of Arbeit for the Central Bank? Which financial institutions under the Work-Standard is in the best position to help the Central Bank formalize the decision on behalf of the State?

In certain entries within the SMP Compendium, it was argued that special financial institutions known as the “Kontore” (Financial Offices) and the “State Commissariats for Wages and Prices” are the ones in the positions to decide. Since the Work-Standard functions best under Council Democracy as opposed to Parliamentary Democracy, it is realistic for Councilor governance to collaborate with both institutions in determining the Prices and the Value of goods, services, Arbeit and Geld. The Central Bank will execute the Command by setting the Quality of Arbeit in relation to the Quality of Geld. The State will uphold Obedience by enforcing the decision as “Socialist Monetary Policy” (SMP), an Intent that must be realized as conditions change enough to warrant sufficient alterations to the SMP.  

From the outset, it would seem that the basics behind how the Work-Standard is intended to function in theory and practice have been laid out in enough detail. The previous entries in the SMP Compendium have made this entry in particular possible. In retrospect, Vocations create Arbeit from exertions of Life-Energy, Arbeit is contributed to the Life-Energy Reserve and is then converted into Geld based on the Quality of Arbeit and Quality of Geld respectively.

It is important to note that the Work-Standard has its own methodology of accounting and special equations for determining all economic and financial metrics for the VCS economic model. For instance, the Work-Standard does not rely on the “Double-Entry Bookkeeping System” that has allowed for the rise of the ‘Capitalism’ in Liberal Capitalism between the Renaissance and the Enlightenment. And just as the Work-Standard eschewed the GDP for the RTEP, various other economic metrics that had once been employed under Liberal Capitalism were also replaced with more appropriate alternatives. All of these and more will be covered in subsequent entries.



Categories: Compendium, Philosophy, Politics, Technology

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  1. Draft on Math Conversions of Arbeit into Geld – The Fourth Estate
  2. Compendium: Devaluation and Revaluation (Pt. II of II) – The Fourth Estate

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