Before any attempts can be made at finding the Quality of Geld, the Quality of Arbeit needs to be uncovered first. It should be made obvious by now that any economic productivity contributed from Arbeit will also generate Geld through the production of goods and services. The Geld needed for the creation of Arbeit is to be provided to the VCS Economy by the State. The VCS Economy will spend the Geld for manufacturing everything that the Socialist nation-state will need. The Arbeit from the actual production process alone falls under the Quality of Arbeit, the Total Economic Potential (TEP) and by extension the Real Total Economic Potential (RTEP).
Quality of Arbeit Equations
[WP (FM) – WI] * Number of all Vocations = Arbeit of an entire Profession (AP1)
(AP1 + … + APx) * MR = Quality of Arbeit for a Profession (QP1)
WP = Work-Productivity
FM = Force Multiplier
WI = Work-Intensity
MR = Mechanization Rate
(AP1 + … + APx) * Enterprises = Arbeit of all Professions within an Enterprise (AE1)
(AE1 + … + AEx) * Mechanization Rate = Quality of Arbeit for an Enterprise (QE1)
(AE1 + … + AEx) * Industries = Arbeit of all Enterprises within an Industry (AI1)
(AI1 + … + AIx ) * Mechanization Rate = Quality of Arbeit for an Industry (QI1)
(AI1 + … + AIx) * Sectors = Arbeit of all Industries in the Sectors of National Economy (AN)
(QP + QE + QI) + AN * Mechanization Rate = Quality of Arbeit for the National Economy (QW1)
QW1 + QW2 + QW3 + QW4 + QW5 = Final Quality of Arbeit (FQW)
QW1 = Quality of Arbeit of the National Economy
QW2 = Quality of Arbeit for SSE
QW3 = Quality of Arbeit for the Financial System
QW4 = Quality of Arbeit for the State
QW5 = Quality of Arbeit for International Trade
The SMP Compendium repeatedly gave recurring statements about how it ‘converts’ Arbeit into Geld, Geld into Arbeit. What exactly does this entail from a financial perspective? Is it even possible for anyone’s Arbeit to be somehow ‘transmuted’ into Geld?
The language throughout the Compendium is adamantly unambiguous about “conversions of Arbeit into Geld.” Under the Work-Standard, the State allocates fixed sums of Geld to economic sectors, allowing Geld to circulate throughout the entire VCS Economy. Geld finances the creation of large amounts of Arbeit from the cultivating and harvesting of natural resources, the refining of raw materials into Equipmentalities, and the turning of Equipmentalities into goods and services. Clearly, the valuation of the Quality of Arbeit is originating from the overall production processes and its sustainability based on the Attrition/Inaction Rate.
Arbeit is being ‘converted’ into Geld whenever and wherever those same economic activities are contributing to other economic activities with Geld itself. This was the Geld facilitating all transactions over the transferring and transporting of Equipmentalities and goods between professions, enterprises, industries and economic sectors. The Geld facilitating the distribution of components and unfinished products intended for the manufacturing and assembly of goods. The Geld facilitating the distribution of finished goods to the services that need them. The Geld facilitating the selling of goods and services as “Revenue.” And the Geld facilitating the purchasing of goods and services and the paying of “Expenses” in order to create more Arbeit, thereby repeating the whole production process.
These ‘transactions’ are related to the “Economic Socialization” (ES) and “Solidarity Rate” (SR). If the Mechanization Rate (MR) affects the Arbeit, then the ES and SR are related to the Geld that results from the former. Any expansion of Quality of Arbeit (and by extension, TEP and RTEP), even by a small amount with 0% Attrition, is affected by the Quality of Geld. The Quality of Geld is expected to become larger than the Quality of Arbeit because of those conversions.
ES exists within all contexts where the creation of Arbeit of a particular profession yields the Geld needed for the creation of Arbeit by another profession. Certain professions are more able to contribute more Arbeit and thus generate even more Geld because of their importance in allowing the rest of the VCS Economy to function.
SR affects the sustainability at which the Quality of Arbeit can maintain a given rate before any major alterations in the Quality of Geld can occur. Certain professions tend to maintain a steady Quality of Arbeit and can still yield a higher Quality of Geld due to low Attrition Rates. For SR, however, the Quality of Geld equations cover the first half of the production process, namely the “Scale” and “Duration” of the production process. This refers to how large are the efforts of the affected professions and enterprises and how long they are going to sustain those same efforts.
The importance of both within Quality of Geld are demonstrated by the following equations:
Quality of Geld Equations
QP + (ES1 + … + ESx) * No. of Vocations = Geld of Vocations within a Profession (MP)
MP1 * SR1 = Quality of Geld for Professions across Professions (MQP)
QP = Quality of Arbeit within a Profession
ES1 = Economic Socialization
SR1 = Scale / Duration of Production
QE + (ES1 + … + ESx) * No. of Enterprises = Geld of Professions within an Enterprise (ME)
ME * SR1 = Quality of Geld for Enterprises across Industries (MQE)
QI + (ES1 + … + ESx) * No. of Industries = Geld of Industries within a Sector (MI)
MI * SR1 = Quality of Geld for Industries across Economic Sectors (MQS)
QW + (ES1 + … + ESx) * No. of Sectors = Geld of Sectors in the Economy (MS)
(MQP + MQE + MQS) + MS * SR1 = Quality of Geld across the National Economy (QM1)
QM1 + QM2 + QM3 + QM4 + QM5 = Final Quality of Geld (FQM)
QM1 = Quality of Geld of the National Economy
QM2 = Quality of Geld for SSE
QM3 = Quality of Geld for the Financial System
QM4 = Quality of Geld for the State
QM5 = Quality of Geld for International Trade
The general idea about Quality of Arbeit yielding the Quality of Geld is discernible from the equations to find the Quality of Geld itself. The Quality of Arbeit combines with the Economic Socialization among all of the economic actors involved to find the actual amount of Geld circulating within a given part of the VCS Economy. This sum of Geld and the Solidarity Rate governing Scale and Duration of the production process will yield the Quality of Geld.
The variables “MQP,” “MQE,” and “MQS” determine the Quality of Geld, demonstrating how their Geld interacts with their respective industries and sectors as well as the rest of the VCS Economy. The Quality of Geld for the VCS Economy, “QM1,” when combined with QM2, QM3, QM4 and QM5, yields the actual Quality of Geld for the whole nation. To avoid confusion, the Quality of Geld for the nation is denoted as “FQM,” just as the Quality of Arbeit for the nation is designated as “FQW.”
Together with FQW and FQM, it is now possible to calculate the Attrition/Inaction Rate without even knowing the TEP and RTEP, TFP and RTFP, or even all four of those variables. Calculating the Attrition/Inaction Rate vis-à-vis FQW and FQM is a lot easier than calculating it with TEP, RTEP, TFP and RTFP because there is a lot less room for error.
But if the “Scale” and “Duration” are the first half of the production process regarding SR, what is the other half of SR and where does it apply within the Work-Standard? The other half of SR, the “Scope” and “Intensity” of the production process, affects the calculations for Total Financial Potential (TFP) and Real Total Financial Potential (RTFP). TFP affects the amounts of Geld that are in circulation by the State and how the Geld in turn affects Arbeit under TEP and RTEP. Where the TEP and RTEP has “Expenses,” the TFP and RTFP has “Revenues.”
The equations for the Attrition/Inaction Rate as well as those governing TFP and RTFP will be covered over the course of the next three Compendium entries.