Compendium: Total Economic Potential Formula (Pt. II of II)

In the previous part of this entry, the equations on how to calculate the TEP of the nation-state and by extension its RTEP were discussed. Those equations did not include the possibility of the nation-state engaging in international trade. Although the Central Bank will be able to oversee the conversion of Arbeit into Geld under an Autarkic trade policy, there will always be moments where the nation-state may decide to engage in trade with others. Thus, it makes sense for this entry to be split into two parts: the first half not only demonstrates how the equations function but also serve as a foray into how the Central Bank operates under Autarky; the second half reexamines those same equations, doing so with the purpose of understanding how they operate within international trade.  

Here, we will be conducting the same operational procedure but with the TXR (Total Economic Socialization Rate) and the NOR (Net Economic Foreignization Rate). To ensure that all Arbeit and Geld are accounted for, the Central Bank will need to calculate the TEP with those two variables included in the equations. Recall the equations needed to find the TEP in Part I:

[(WP(FM) – WI) * Number of Vocations] = Arbeit of a Profession

(Arbeit of a Profession – Expenditures) * No. of Enterprises = Arbeit of an Industry

Industry + (Other Industries – Expenditures) = Arbeit of an Economic Sector

[Sector + (Other Sectors – Expenditures)] * Mechanization Rate = TEP

Of the four preceding equations, the fourth one is where the TXR and NOR variables are to be included. We rewrite the equation as such:

[Sector + (Other Sectors – Expenditures) + (TXR – NOR)] * Mechanization Rate = TEP

As the revised equation demonstrates, we calculate the Arbeit of the Economic Sectors of the national economy and the sum of TXR, subtracted by the NOR, before factoring in the product of the Mechanization Rate to determine the TEP. The TXR refers to the amounts of Arbeit and Geld that the nation-state generates through international trade. Its expenditures, including all outgoing Arbeit and Geld as well any incurred Schuld, fall under the NOR. The equations for TXR and NOR can even be simplified as finding the value of the State Foreignization Investments (SFIs) for the nation’s “National-Socialized Enterprises” (NSEs):  

SFI = TXR – NOR

TXR = (Foreign Arbeit – Domestic Expenditures) + (Domestic Geld – Foreign Schuld)  

NOR = (Domestic Arbeit – Foreign Expenditures) + (Foreign Geld – Domestic Schuld)

As one could probably surmise from those three equations, the TXR is the sum of inflowing Arbeit, outflowing Geld that the State experiences through international trade. It is tempered by the expenses and any Schuld that comes with the operating and upkeep costs, including the Geld needed to pay foreigners for contributing their Arbeit to the Central Bank’s Life-Energy Reserve. The State needs to ensure that the amount of Foreign Arbeit it receives will outweigh its expenses and for the Geld the national economy receives to be greater than the Schuld it takes in.   

Inversely, the NOR denotes the opposite: it is the sum of all of outflowing Arbeit, inflowing Geld that the State experiences through international trade. This equation is similar to TXR insofar as it accounts for the opposite end of the transaction between nation-states. If TXR is meant for calculating what the State takes in from foreigners, then the NOR determines how much the State takes out by allowing foreigners access to its Arbeit and the amount of Geld they get to receive. In order for the SFI to achieve a Balance of Trades and Payments, the State must not allow the NOR to be far greater than the value of the TXR. The reason for this has to do with manner in which SFI is factored into the TEP, which becomes more obvious when we decide to write the equation for finding the TEP as the following:

[Sector + (Other Sectors – Expenditures) + SFI] * Mechanization Rate = TEP

Provided that the SFI is not a negative value and assuming it has already been factored into the TEP, all we have to do now is determine the RTEP:  

RTEP = TEP / Attrition Rate

Attrition Rate = (TEP/RTEP) * 100

Granted, that is not the only way to calculate the Attrition Rate under the Work-Standard. In the next two-entry entry, we will be exploring how the Work-Standard calculates the Attrition/Inaction Rate and its other methods. With this information in mind, we can then tackle the formulas and equations needed to find the Quality of Geld, the Total Financial Potential (TFP), and the Real Total Financial Potential (RTFP).

For those curious about how the TFP accounts for the Foreign Geld and Domestic Geld of SFI and would like to know sooner rather than later, understand that the TFP handles SFI differently than TEP. SFI affects TFP on matters related to the amount of Geld in circulation within the nation-state and outside its borders. This extends into the topic of RTFP affecting the amount of Geld that the Central Bank can print at any given point in Zeit.  



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  1. Compendium: Total Financial Potential Formula (Pt. II of II) – The Fourth Estate

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