Compendium: Paygrade Scaling, Accounting and Distribution (Pt. III of III)

Mission-Type Economic Planning in Action

In the VCS Economy, there is the Head of State and the State Delegates.

Every Sector in the VCS Economy has its Central Planners and State Bankers.

Every Industry in the VCS Economy has its State Superintendents and State Commissars.

Every Enterprise in the VCS Economy has its Economic Planners, Accountants, and Inspectors.

And every Profession in the VCS Economy has Administrators, Functionaries, and Civil Servants.

Mission-Type Economic Planning (MTEP), the specific model of economic planning touted by the Work-Standard, integrates the economic and financial lives of the Totality with their political and social lives. The Central Planners and the Economic Planners cannot arbitrarily insist that any production should be increased or decreased without acting on a Constitutional Intent. They have to work together with the State Bankers, State Superintendents, State Commissars, Inspectors, Accounts, Administrators, Functionaries and Civil Servants.

Under normal economic conditions, the Economic Planners will be holding regular meetings with their retinue of Accountants and the Economic Administrators and Civil Servants from their respective Enterprises to discuss about whether the Prices should remain unchanged or altered. Inspectors are sent to make periodic visits and being in contact with the Economic Planners on orders from their Superintendents, whose government offices are adjacent to those of the State Commissars inside every State Commissariat of Wages and Prices. Like the Kontore, every region in the country has a single State Commissariat with multiple local branches.  

The State Superintendents and the State Commissariats are in close communications with the Central Planners from the Ministry of Economics and the State Bankers from the Ministry of Finance. The Central Planners report to the Minister of Economics and the State Bankers report to the Minister of Finance, the two Ministers in constant communications with the State Council and the Head of State’s Cabinet as members of the Council of Ministers.

Imagine that the Administrators of various Enterprises within an Industry have decided the Price of something should be altered. Acting on behalf of their subordinates, they inform the decision to the Economic Planners and Accountants, who in turn relay that same decision to the State Inspectors in charge of their Industry. The State Inspectors will notify the Central Planners, who are at their government offices inside the Ministry of Economics, that they and their Economic Planners will be contacting the State Commissars. The State Inspector and their Economic Planners will debate with the State Commissars over a proposed Price change. An in-person meeting at a State Commissar’s office or just a single-page invoice will suffice, allowing the State Commissar to authorize the new Price. It is up to the State Commissar to decide whether the Price should or should not be changed.

Once the decision is made, the Central Planners are to be notified. The Central Planners will contact the State Bankers, informing them that the Central Bank is going to experience changes in the contributions of Arbeit and generations Geld from the aforementioned Industry. The Central Planners and the State Bankers will document the changes in their reports to the State Council and the Head of State. The Minister of Economics and the Minister of Finance are the ones who will be presenting the reports to the Head of State and the State Council.

In earlier entries within the SMP Compendium, it was stated that the State Commissariats’ decisions will eventually require the authorization and approval of the State Council and the Head of State in their capacity as the Financial Regime. Just as there are Checks and Balances against arbitrary, rash decisions made by Economic Planners, there is also a similar set of Checks and Balances against any unwarranted interference from the Council State, preserving the Head of State and the State Council’s role as the final authority to decide what happens to the State Budget.  

The real question has always remained a valid one throughout the Compendium: When does the Head of State and State Council become involved in the changing of Prices by a State Commissar?  

The Head of State and the State Council share a Constitutional Intent informing them on when to override a State Commissar’s decision as one of their Legal Duties. Everything depends on whether the State Commissar is changing any Price on a regional basis or a national basis. All State Commissariats operate on a regional basis like the Kontore, the State Commissar with a Legal Duty to distinguish between their “Official Regional Price” (ORP) and the Council State’s “Average National Price” (ANP). The Council State will always be affected by the State Commissar’s actions if they are deciding to alter the ANP.

Prices for certain goods and services are not always going to be the same throughout the country. For instance, the Price of zero-carbon synthetic fuels are often higher at the gas stations in the major cities, whereas the Price is more likely to be lower for the gas stations in the countryside. Those are examples of the Official Regional Price. Meanwhile, the Prices for other goods and services are affected by the Average National Price. The Price for a single load of bread is more likely to be the same in the whole country.

How do the State Commissariats determine the ORPs and the ANP?

Suppose there are two State Commissariats trying to determine the Official Regional Prices of synthetic fuel for their respective regions. A State Commissariat with the national capital as its jurisdiction as listed its ORP as “5.49 GDM per Liter,” the other is way out in the countryside with its ORP at “3.16 GDM per Liter.” The Council State has a 2% Fuel Tax. If the Socialist nation was small enough to only have two State Commissariats, we can determine the Average National Price based by finding the Average of both Prices. The State Commissars will find the actual Prices before applying the Fuel Tax and then determine the Mean of both Prices to obtain the Average.

5.49 GDM / 2% Fuel Tax = 2.74 GDM per Liter (before Fuel Tax)

3.16 GDM / 2% Fuel Tax = 1.58 GDM per Liter (before Fuel Tax)

(5.49 GDM + 3.16 GDM) / 2 State Commissariats = 4.33 GDM

This table, based on Command-Obedience Account Bookkeeping, indicates that it costs the State about 0.85 ₰ to produce 1 Liter of Synthetic Fuel. Given the two State Commissariats, the Mean value of the ANP based on the two ORPs is “8.65 GDM,” the Average listed as the Current Price of “4.33 GDM.” Every 1 Liter of Synthetic Fuel generates an Average of 3.48 GDM. Barring the 2% Fuel Tax, the Council State was not directly involved in the decision-making process of those two State Commissariats.   

Here’s another example where the Council State is going to be involved in the decision-making process. There is a State Commissariat somewhere in our own Socialist nation, proposing the Average National Price for a single loaf of bread to be increased from its Current Price at “0.43 ₰ GDM” to a new Proposed Price of “0.53 ₰ GDM.” A decision was made because the Current Minimum for the production of loaves of bread by bakeries has risen to “0.50 ₰ GDM,” causing the State Expense to rise by 0.07 ₰. Therefore, raising the Price to 0.53 ₰ will help balance the State Budget and achieve a State Revenue of 0.03 ₰.

Unlike the previous example, the ANP is not relying on an Average derived from the Mean of ORPs. The Price of 1 loaf of bread is the same because the Council State has made it a priority to ensure that the Totality, in every region in the country, will be able to purchase bread at an affordable Price. For unlike Liberal Capitalist regimes, the average Price of purchasing food in our Socialist nation is cheap. But why is that? Why is the Price for a single loaf of bread so cheap, when the Price for the same loaf of bread in the US is “$2.49 USD?”

Below is a table determining the decision-making processes of the Council State (for ANP) and the State Commissariats (for ORPs):

If the Quality of the bread is greater than the Frequency for the bread, the Price will decrease. This means that the Quality has improved far enough to surpass its Frequency. The Attrition Rate falls, but the Inaction Rate will rise in response.

If the Quality is less than the Frequency, the Prices are increasing. This means that the Quality of goods and services are being sacrificed by a surpassing Frequency for those goods and services. The Inaction Rate falls, but the Attrition Rate will rise in response.

But if the Quality is equal to the Frequency, the Prices will hold steady and remain unchanged. Neither the Quality of goods and services nor the Frequency for those goods and services are surpassing the other. The Attrition/Inaction Rate is left unchanged.

The methodology works the same in the event of a Transvaluation of all Arbeit. The State Commissariats act on the decisions of the Council State resetting the Prices vis-à-vis the ANP as opposed to the ORPs. The State Commissariats inform the Council State of those actions. Conversely, the Council State acts on the decisions of the State Commissariats resetting the Prices vis-à-vis the ORPs as opposed to the ANP. And the Council State informs the State Commissariats of those actions.

How do the State Commissariats Set or Reset the Paygrade Scale?

One of the benefits of not having Income Taxation within the Socialist nation is the ability of the State Commissariats to better coordinate how much Geld goes into each Paygrade. Paygrades are issued weekly on a per-household basis according to Years of Service and Number of Dependents. Not everyone is going to receive the exact same Paygrade. Some will receive a higher Paygrade than others by being committed to a Vocation for most of their adult life. Others may have a Paygrade that includes two children, an old grandfather, and a physically disabled brother-in-law. There are plenty of ways this can play out, but the State Commissariats will conduct themselves according to the Income Brackets.

The amount of Geld that goes into the household’s Paygrade each week is affected by the Rank of its recipient. Everyone receives their first Rank during their teenage years as part of the Socialist Student Economy (SSE). This is the Council State’s way of providing a rite of passage for all teenagers preparing to begin their first moments of young adulthood. Whatever Rank they had when they graduated from secondary school will be carried over when they continue their education at the university, voluntarily pursue their Vocation, and receive a draft card for work-conscription or military conscription if they have not yet decided on a Vocation.

For ease of reference, the Income Brackets provided in the SMP Compendium are as follows:

Income Bracket I: {1,000-2,000 GDM}

Income Bracket II: {2,000-4,000 GDM}

Income Bracket III: {4,000-6,000 GDM}

Income Bracket IV: {6,000-8,000 GDM}

Income Bracket V: {8,000-10,000 GDM}

Income Bracket VI: {10,000-12,000 GDM}

The Official Rate for Years of Service is “50 GDM per 1 Year for a Vocation.” The longer one stays with a Vocation, the more Geld they will receive from the State. The highest that the State will give to anyone vis-à-vis the State Commissariats is “1,500 GDM” by being committed to a Vocation for thirty (30) years.

The Official Rate for Number of Dependents is “350 GDM per 1 Dependent.” The highest that the State will give to anyone vis-à-vis the State Commissariats is “3,500 GDM” for caring up to ten (10) Dependents for a multigenerational household.

When the State Commissariats, should current economic conditions were to change, decide that the Paygrades are to be adjusted, they can alter the amount of Geld allocated to Paygrades from the State Budget. The State Commissars must notify the Council State of the changes, allowing the Council State to inform the Totality of the changes ahead of time, ensuring that the Totality will be able to make the necessary lifestyle adjustments.

Below is the table for the official Income Rates set by the State Commissariats of Wages and Prices. Here, the placements of the Command side and Obedience side are reversed. The Command side is normally on the right, the Obedience side on the left. More importantly notice the manner in which the table was organized.

The term “Wage,” as it appears in the official legal name of the State Commissariats, is in reference to the “Wage Scale” under Command-Obedience Account Bookkeeping. The Paygrade Scale on the Command side is affected by the proposed alterations on the Obedience side.  

The Command side has a “Proposed Bracket” intended to reset the Income Brackets of the Paygrade Scale on the Command Side. The Years of Service and the Number of Dependents fall under the “Proposed Payments.” Any changes are reflected in the “Income Difference.”

State Commissars have a Legal Duty to refrain from altering the Paygrade Scale on their own. The State Commissariats must work together with the Council State in order to make any changes to the Paygrade Scale from the Wage Scale. Once the State Commissariats have decided, the State Council will debate over their handiwork, the State Delegates casting their vote. If the Head of Government votes in favor of the changes, the proposal goes to the Head of State for them to either sign or veto. As with the State Budget, the People’s Geld follows the same logic: either the Head of State signs the new Paygrade Scale into law or the Head of State vetoes, offers their own counterproposal that requires a two-thirds majority vote from the State Council. And if the counterproposal for the State Budget (or in this case, the People’s Geld) were to not receive a two-thirds majority vote from the State Council, the Head of State must sign the original proposal.    

Categories: Compendium

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