Alexander Hamilton has given Socialism its political philosophy on the conduct of international trade. “Protectionism” and “Import Substitution Industrialization” (ISI) are the means of achieving Autarky. Autarky, it should be prefaced, is not an ideal but a strategic goal in the state of Total Mobilization. Total Mobilization in peacetime alone is resource-intensive and this is even more so the case in wartime. This applies for Production for Profit, Production for Utility and, yes, Production for Dasein in the case of the VCS Economy and its Work-Standard. These considerations are what inform the State of a Constitutional Intent that grants itself a Constitutional Obligation of wielding the power to decide what shall pass through customs and what will avoid crossing international borders during times of both war and peace.
Granted, it is perfectly understandable for everyone to be skeptical of achieving Autarky. Not every resource the VCS Economy needs is going to be situated within the nation itself or they are not sustainable insofar those exist in small deposits scattered across the country. This is an issue of geography as opposed to politics or even economics because nobody from any nation really asked to have their borders drawn in the manner that they are. It is a problem that everyone from Western Civilization, Liberal Capitalists and Socialists alike, have been trying to find proper workarounds. There are two ways of achieving this, waging war and signing trade agreements, and Hamilton has advocated for both in the spirit of Prussian Realpolitik.
When America was originally a Union of thirteen former British colonies, Hamilton stressed the American economy’s need to be self-sufficient by advocating for a national bank. He sought to find ways to implement economic planning in the US economy for the farmers and manufacturers to create what America needs, ways for Americans to register technical patents with the Federal government, and ways for a centralized Federal government to create a Command Economy. When he was not writing The Federalist Papers or debating with Jefferson and the Democratic-Republicans, he was laying the groundwork of American Conservatism and American Socialism. There were also other occasions where Hamilton advocated for a Trade War against the British Empire, forging cordial diplomatic relations with Latin America, the annexations of Spanish Florida and French Louisiana and counterintelligence operations against industrial espionage. He insisted on a US armed forces to serve alongside the US economy. And he made sure to maintain his diplomatic relations with the Prussians who helped America gain its independence.
We find examples of Hamilton’s arguments resonate with us in the realm of weapons and vehicles. If the domestic armaments industry can design and manufacture weapons for the armed forces with superior Quality of Arbeit at a sustainable Solidarity Rate, there is no need to be importing large numbers of FNs from Belgium, H&Ks from West Germany, Kalashnikovs from Russia or Norincos from the PRC. Conversely, if the domestic automotive industry can design and manufacture automobiles with superior Quality of Arbeit at a sustainable Solidarity Rate, there is no point to importing large numbers of Toyotas from Japan, Volkswagens from West Germany, Renaults from France, or Fiats from Italy. This is not to suggest that the military is forbidden from preferring the weapons of other armies or that motorists are forbidden from preferring the automobiles of other economies. At some point, the Socialist nation-state will eventually allow for its citizens to import foreign vehicles and its military to import foreign weapons, but the parameters of how the citizenry and the military conduct themselves is dependent on the State.
It is likely for the first Socialist nation-state to peg its Currency to the Work-Standard to be experiencing similar conditions as Federalist America in the 1790s. That nation, wherever it may be on the political map of Earth, lives in a world beset upon by nations drowning in its Schuld by a deluge of Kapital. There are foreign commercial firms queuing in line like those Muscovites outside the McDonald’s in Pushkin Square, offering to sell goods and services that the Totality neither needs nor wants. There are Liberal Capitalist regimes interested in making Faustian pacts with the Totality called “Free Trade Agreements” (FTAs). The International Monetary Fund (IMF) and the World Bank will also be offering what the Austrian School of Economics call “cheap credit” in exchange for the dissolution of the Financial Regime to unpeg the Currency from the Work-Standard. For now, we ignore all of them.
The moment that their Currency is pegged to the Work-Standard, the Socialist nation-state will need to maintain ample reserves of “blood money” (Read: Kapital of Liberal Capitalist Commodity, Representative and Fiat Currencies) and “dirty money” (Read: Kapital of Socialist Currencies unpegged to the Work-Standard) in two accounts separate from two additional accounts reserved for “clean money” (Read: Geld of Currencies pegged to the Work-Standard and the Totality’s Geld as Total Productive Potential, TPP) at the Central Bank. Everything changes if the world order becomes more favorable to the Work-Standard as other nations begin pursuing Socialism and pegging their own Currencies to the Work-Standard.
We begin by visiting the Central Bank of the Socialist nation-state at our national capital. Everyone who enters goes through “post-9/11 TSA airport security” and gets strip-searched, just as everyone else who leaves is also strip-searched under the tightest scrutiny by the State. Racing through an Olympics obstacle course that the State had set up below the ground floor elevators, we arrive at the reinforced bank vaults of the Life-Energy Reserve. Inside those vaults are several different accounts, two of which we already discussed in other entries in the SMP Compendium:
First row of vaults houses the “Accounts of Life-Energy Reserve and Total Productivity Potential” (LER-TPP Accounts). The Totality’s Arbeit and Geld are being stockpiled here by the State. The LER Account contains the Arbeit entering the Life-Energy Reserve under RTEP (Real Total Economic Potential) and leaving as Geld in circulation under RTFP (Real Total Financial Potential) before ending up at the TPP Account. The TPP Account includes administrative funds in the State Budget and numerous accounts owned by the Totality as the “People’s Geld.” As more nations adopt Socialism and peg their Currencies to the Work-Standard, any State investments and foreign currencies will be stored here as “State Investment and Economic Foreignization Accounts” (SI-EF Accounts).
Second row houses “Kapital Account of Blood Money” (KBM Account). Those include Currencies like the US Dollar (if not pegged to the Work-Standard), UK Pound Sterling, EU/NATO Euro, West German Mark, Swiss Franc, Japanese Yen and so forth. The name is symbolic of the fact that those Currencies are relying on the Incentives of Supply and Demand and their rates of Currency Depreciation/Appreciation rely on Inflation/Deflation and Interest Rates.
Our last row houses “Kapital Account of Dirty Money” (KDM Account). The Currencies stored here may include the Venezuelan Bolivar, Cuban Peso, Chinese Renminbi, Vietnamese Đồng, Soviet Ruble, East German Mark, and so forth. Those Currencies may be from a Socialist country, but all of them are still relying on the same conception of Currency as the ones stocked in the KBM Account. Only when their central banks decide to peg their Currencies to the Work-Standard can we finally be able to store them in the TPP Account, which will be our reserves intended for facilitating foreign trade and, eventually, currency conversions at the Office IV of our nation’s Kontore.
Returning to the surface, we drive to the local branch of the regional Kontor covering the national capital as part of its administrative. There may be a line outside with metropolitan police present at the front entrance, the drive-through packed like a fast food restaurant at lunchtime. Or there could be no line to speak of outside and the police are in another part of the capital. In any case, there’s a teller leaning against a counter behind plexiglass, a CCTV camera staring at us. She keeps a loaded snub-nose revolver inside a drawer and she is authorized by the State to defend the foreign currency until the police arrive. Similar countermeasures are also present to deter armed robberies by the banks under the Reciprocal-Reserve Banking System.
Will we ask her to “convert our ‘clean money’ into ‘dirty money’ or ‘blood money?’” Will it be “convert our ‘blood money’ into ‘dirty money’ or ‘clean money?’” Or will it be “convert ‘dirty money’ into ‘blood money’ or ‘clean money?’” Remember, there is a world of difference between our Geld pegged to the Work-Standard, Socialist Currencies unpegged to the Work-Standard, and the Kapital of Liberal Capitalist Currencies. Chances, we may decide to find Arbeit abroad in a Liberal Capitalist regime and start sending Kapital back to this same Office IV and wired to our savings accounts at an NSB (National-Socialized Bank) somewhere?
For clean conversions, we either receive the receive a Foreign Exchange Certificate (FEC) of another Socialist Currency or else the actual Kapital of Liberal Capitalist regimes. Unlike their Liberal Capitalist or unpegged Socialist version, FECs under the Work-Standard are an NSFI that allows anyone to convert it into Geld or another Currency within a limited period of Zeit. Listed on every NSFI is the recipient’s name, rank, vocation, a preferred point of contact (i.e. mailing address, telephone number, email address, bank account etc.), and a red stamp from Office IV.
For messy conversions, we either receive an FEC to another Currency or else our own FECs (if we are not citizens) or else the actual Geld of our own Financial Regime (if we are citizens). FECs for Liberal Capitalist Currencies are in a different color for easier differentiation with the ones for unpegged Socialist Currencies. Like Authentic Dasein and Inauthentic Dasein from Being and Time, Office IV either ‘cleanses’ Kapital by turning it into Geld or ‘putrefies’ Geld by turning it into Kapital respectively. The State issues FECs through the Office IV of every Kontor for those interested in working abroad. Technically, a Real Trade Agreement with Liberal Capitalist Currencies will allow us to send Kapital and Arbeit across international borders. The Liberal Capitalists are somehow convinced that there is such a thing as a Free Lunch under Socialism and so there ought to be a Free Trade under Socialism as well. Unfortunately, the Work-Standard reveals the opposite for Liberal Capitalists too idealistic to realize this: “There is no such thing as Free Trade under the Work-Standard because there is no such thing as a Free Lunch under Socialism!”
For dirty conversions, we either receive an FEC to our Geld or else the actual Kapital of Liberal Capitalist regimes. Note that the Socialist Currencies will also be issued FECs in a color different from the FECs intended for Liberal Capitalist Currencies. The FECs that the State issues to Socialist foreigners are designed to contribute Arbeit for the VCS Economy and generate Geld for their Totality under the terms of a Real Trade Agreement. If somebody decides to work abroad, they will be contributing Arbeit to a foreign Socialist Planned/Command Economy’s Life-Energy Reserve in exchange for Geld being wired to Office IV of a Kontor. Once other Socialist regimes catch on to the Real Trade Agreement and are convinced of the Work-Standard’s efficacy, we can finally expect other Socialist States to start pegging their Currencies to the Work-Standard.
When conducting Real Trade Agreements with Liberal Capitalist regimes, there are plenty of ways to maintain our Authentic Dasein while working abroad. There are cargo ships running full-speed in the oceans, airlines carrying passengers above the midday clouds, trains hauling other passengers and motorists on the highways of international borders. Our “Barriers to Trade” in Liberal Capitalist regimes include a combination of Liberal Capitalist and Socialist variants.
For Liberal Capitalists, there are “Tariffs” and “Import Duties” (Excise Taxes), “Export/Import Quotas” (Limitations on Exports/Imports), “Subsidies” (Kapital for Liberal Capitalist firms), “Intellectual Private Property-as-Wealth” (Problematic for the State if the VCS Economy creates imitations with superior Quality of Arbeit), “Trade Restrictions” (Bans that may create black markets for Liberal Capitalists if goods and services from the VCS Economy command a Quality of Arbeit superior to theirs), and “Economic Sanctions” (second dangerous of all, but depends on having negative diplomatic relations with Liberal Capitalists), “Trade Wars” and “Currency Wars” (most dangerous of all if the Liberal Capitalists become really annoyed by the Work-Standard). Note that everything discussed here relies on Kapital and Schuld as well as the Liberal Capitalist conception of Property.
For Socialists, the Work-Standard has plenty of and some of them were already explored in various SMP Compendium entries. “Special Charges” and “Mechanization Rates” (to grow the entire VCS Economy) and Service Fees (for bank loans and all NSFIs, including conversions from Kapital to Geld), “People’s Surcharges” (for local communities with foreign Enterprises), “Anti-Migrant Laws” and “Anti-Immigration Laws” (Nationalists, Conservatives and Traditionalists demanding foreigners to behave themselves while the Anarchs and the Arbeiter agitate for foreigners to be issued their own Paygrades in Geld). “Voluntary Import/Export Limitations” (the State decides which goods or services shall pass through customs), “Export Licenses” and “Import Licenses” (requires the joint approvals of State Council and Head of State and applicable all technical patents), “Administrative Barriers” (the State Commissariats block Liberal Capitalist goods and services by forcing their creators to conform to the State’s regulations, driving up their Prices). “Anti-Dumping Laws” (Offices I, III, VI and VIII of all Kontore turn the tables on Supply and Demand by insisting that all goods and services to conform with the Quality of Arbeit of the Socialist nation), “Trade Embargos” (the State cracks down on Economic Foreignization of the VCS Economy), “Trade Wars” and “Currency Wars” (Hamilton’s Authentic Dasein). Note that everything here relies on Arbeit and Geld as well as the Socialist conception of Property.
When conducting a Real Trade Agreement, the Socialist nation-state will need to establish Real Economic Zones (REZs) and Real Trade Areas (RTAs) in the cities and metropolitan areas of Liberal Capitalist regimes.
An REZ refers to special locations where the Work-Standard is currently active in a Liberal Capitalist regime. Our Enterprises can be found here, wiring contributions of Arbeit and generations of Kapital across international borders. The Arbeit enters the Life-Energy Reserve and the Kapital cleansed to be counted as Geld by Office IV of Kontore. Expect the foreigners to be paid in the Currencies of their Liberal Capitalist regimes. There is always “International Workers’ Day,” where the citizens of an affected Liberal Capitalist regime will get their only chance in an entire year to convert their Arbeit into Geld under Liberal Capitalism. Any demand for economic freedom through Socialism often arises as a demand for Arbeit under the Work-Standard. There will never be enough Arbeit in existence under a Liberal Capitalist Market/Mixed Economy.
An RTA refers to a consortium of REZs within a Socialist or Liberal Capitalist regime. They refer to specific locations within another nation that our Enterprises are allowed to operate. If the REZs began at the points of entry into another nation, then the RTA is the VCS Economy’s chance to move further inland into the countryside and eventually the capital itself. It would help our Enterprises to ease strained relations with the labor unions and national populists of Liberal Capitalist regimes if accommodations can be made for their Nationalists and Socialists to join forces, win the next parliamentary election, let their parties to take power democratically, and build their own Socialism so they can achieve true Balances of Trades and Payments with our State.
If the concept of REZs and RTAs sound familiar, that is because the Liberal Capitalists had employed their own of such tactics between the 1970s and 1980s. Those “hard currency specialty shops” in the former Soviet Union and Eastern Bloc countries were only there for the Kapital and the Schuld of sustaining their trade deficits with the Western Bloc and a Jeffersonian United States. There is a reason why all countries around the world became subjected to Liberal Capitalist Market/Mixed Economies and Parliamentary Democracies around 1989-1991. The first Socialist nation to peg its Currency to the Work-Standard was at first bombarded by those ploys early on in this Compendium, its State eventually returning the favor through Real Trade Agreements.