The Third Place: Dealing with the Wealthy (Pt. II of II)

The spending habits of the wealthy deserve further analysis than what has been discussed previously in The Work-Standard (2nd Ed.). When I originally discussed about the topic, I did so in relation to the Social Ranking System. I mentioned how the concept of “Class” in Production for Profit and Production for Utility was consistently affixed to Kapital and Schuld. The first and second Modes of Production would insist that a person who has $1,000,000 USD should be considered as being part of a higher Class than somebody who has only $100,000 USD. The idea is that the hierarchical structure should reflect the person’s Quantity of Kapital and Quantity of Schuld at any given period in Zeit (Time).

Having a higher Quantity of Kapital and a lower Quantity of Schuld are supposed to confer status in the first and second Modes of Production. By having more Kapital than the next person, one is able to change their spending habits to reflect their ability to afford a higher standard of living. To afford a higher standard of living represents the fact that someone has the Quantity of Kapital and the Quantity of Schuld required to sustain the newfound expenditures. That essentially boils down to acts of Consumerism, of buying things that one neither needed nor wanted, but whose ‘Incentives’ (or for our purposes, Intents) are meant to convey the fact that one has a higher Quantity of Kapital. The ability to sustain those expenses may include ownership of privatized commercial firms, LCFIs (Liberal Capitalist Financial Instruments), having a high enough “Credit Score” with the Fractional-Reserve Banking System, or earning more than enough Kapital to afford the expenses.

Based on these considerations, it should not be too surprising to expect Production for Profit or Production for Utility to define its notion of hierarchy along the lines of Quantity of Kapital and Quantity of Schuld. It is also unsurprising to learn that the “Progressive Income Taxation System” happens to be derived from that conceptual understanding of hierarchy and the interplay between upper and lower “Classes.” If there is something which needs to be understood about the “Progressive Income Taxation System” and has not yet been described in the preceding half of this Entry, it is this: people across different echelons of a nation’s hierarchical structure are supposed to help each other. That was the whole ‘Incentive’ behind promoting Income Taxation in peacetime contexts as they are understood by most Social-Democrats and Social Liberals (Read: Progressives). However, the definition of what constitutes as ‘help’, as I had pointed out in the first half of this Entry, involved ensuring that the upper and lower Classes will have equal Quantities of Kapital and Schuld.

The Wealthy’s Spending Habits in other Modes of Production

Since the wealthy’s spending habits in the first and second Modes of Production are meant to reflect their Class vis-à-vis Quantities of Kapital and Schuld, it then becomes imperative to ascertain what the wealthy are spending their Kapital on. Generally, in a Market/Mixed Economy, the wealthy would try to spend Kapital on things that can retain their Value and can fetch a higher Price. This explains why a majority of them tend to invest their Kapital in LCFIs like Stocks and Bonds. While Stocks and Bonds are not the only ways in which they invest their Kapital, they do have some understandable ‘Incentives’ behind making those specific choices.

The idea of a Stock, as an LCFI, is to buy shares in the ownership of a privatized commercial firm at the financial market. Shares in ownership of a firm will in turn translate into shares of its Profits. Even though the wealthy have no direct control on the innerworkings of their chosen firm, they can indirectly influence the direction of its economic activities as “shareholder” and “stakeholder.” Whenever they buy the shares vis-à-vis the Stock, the wealthy are allocating a fixed Quantity of Kapital into the privatized commercial firm. The firm would then spend the Kapital in order to create more Kapital through the sales of goods and services. Here, the Schuld becomes apparent because the firm, upon creating Profits, has to eventually split the Quantity of Kapital between its employees and its shareholders. If the firm for whatever reason cannot keep its Profits high enough, then we can expect its Quantity of Schuld to start accumulating.

The other LCFI, Bonds, follow a similar metaphysical framework as the Stocks. By buying Bonds from a privatized commercial firm or the Parliament (in the case of government bonds), wealthy are lending their Kapital to whoever is borrowing it. The Bonds act as the vehicle to facilitate the transfer of Kapital between hands, with each Bond acting as an interplay between Kapital and Schuld. By holding onto them, the wealthy are expecting to earn Kapital from the Interest accumulated over the years leading up to the LCFI’s Maturity Date. Once the Maturity Date comes, they can have the Bonds converted into Kapital on the expectation that the privatized commercial firm or the Parliament has the Quantity of Kapital required to pay them back. Bonds issued by Parliaments are stable than those issued by privatized commercial firm because former exerts control over its Central Bank’s creation of Kapital and Schuld as part of the Financial Regime. The latter, by contrast, cannot always be counted on to have enough Kapital.       

Those two LCFIs are not the only options available to the wealthy. Another option includes Commodities such as Gold and Silver as well as other precious metals and minerals. Having Gold and Silver will give the wealthy additional Kapital in the event of an economic or financial crisis because the Gold and Silver will continue to be Priced in either US Dollars or their domestic currency. The next major option for the wealthy involves making large purchases of Private Properties as Real Estate, especially those which can be Leased or Rented out by others in exchange for Kapital. The wealthy could spend their Kapital on rare antiques, fine artworks, or Intellectual Properties. The more ambitious ones might consider Cryptocurrencies, but that tends to be done as part of a broader investment strategy.

What do all of these activities have in common, apart from being associated with the first and even second Modes of Production? Each example above involves the wealthy allocating Kapital toward endeavors which they believe will safeguard their Kapital and perhaps even earn them more Kapital over the long-term. Compared to other Classes, most wealthy people will try to preserve as much of their Kapital as possible. Breaking even is preferable to losing Kapital, but Kapital Accumulation is far better than breaking even. This mentality can also be found in the middle and lower Classes as well, but what separates them from the wealthy is that the wealthy have additional ‘Incentives’ on what to do with their Kapital.  

The Wealthy’s Spending Habits in Production for Dasein

Nothing here should be too unusual to anyone who has made the effort to acclimate themselves with the Work-Standard. I say this because the concept of the Social Ranks in Production for Dasein function differently from the Classes found in the other two Modes of Production. A hierarchical structure centered around the Quality of Arbeit and the Quality of Geld will come with its own set of dynamics, altering the spending habits of the wealthy. Instead of a hierarchical structure where those occupying the higher echelons have more Kapital, the Social Ranking System envisages the higher echelons as those whose Quality of Arbeit and the merit of their achievements had distinguished them from the rest of the Totality.

Thus, the position of the wealthy will not always be occupying the same Social Rank within the Socialist Nation as they would in Liberal Capitalist regimes. Although it is possible for the wealthy to attain any one of the highest Social Ranks, simply having more Actual Geld than others will never serve as a true reflection of their Social Rank. The amount of Geld that goes into somebody’s Paygrade is distinct from their Social Rank. A person can become wealthy under the Work-Standard, but they will always be outranked by those who, despite having less Actual Geld, still have a higher Social Rank than the wealthiest members of the Totality. These characteristics are related to the manner in which I had devised the Social Ranking System back in The Work-Standard (2nd Ed.) and later reiterated in Section One of The Third Place (1st Ed.).

Even though the wealthy may not necessarily be occupying the same Social Rank, that is not to suggest that their spending habits will be same as they had been in Production for Profit or Production for Utility. Instead, their spending habits will be geared toward the specifications of Production for Dasein as I had outlined towards the end of the first half of this Entry. I previously stated that there were six different options for the wealthy to spend their Actual Geld, and they are:

  1. The first option is to have the wealthy invest their Actual Geld in NSFIs at the Kontor (Financial Office), giving the Totality and the State the ability to create more Actual Arbeit.
  2. The second option involves the wealthy spending their Actual Geld on goods and services from Small Businesses and Cooperatives, which will also support the Totality and State.  
  3. The third option entails the wealthy allocating their Actual Geld toward specific Personal Properties that, when attached to a Domain within the Work-World, can be turned into a Productive Property as part of a new Enterprise.
  4. The fourth option is for the State to provide the wealthy with opportunities to invest their Actual Geld into research and development projects at the Kontor.   
  5. The fifth option is for the State to help the wealthy spend their Actual Geld on causes that benefit the national interests of the Totality.
  6. And the sixth option, which will be focus of this Section, is for the wealthy to invest their Actual Geld into the affairs of the SSE by working with its Student Government.

What would be the Explicit and Implicit Intents behind these six options? Why would the wealthy want to invest their Actual Geld in any of those options?

The first option involves the Kontor allowing the wealthy to spend Actual Geld by investing in Fiefs and Work-Plans and creating Actual Arbeit from the production process. When the wealthy invests Actual Geld in Fiefs or Work-Plans, they are essentially providing Actual Geld to whoever is selling those NSFIs. With Fiefs, the wealthy will become directly involved in the affairs of the affected Enterprise and entitled to its Drawings in exchange for their Actual Arbeit. For Work-Plans, they will be creating Actual Arbeit for an Enterprise, and the resulting Actual Geld can then be received by cashing in the NSFI at the Kontor. The Explicit Intent of spending Actual Geld on Fiefs and Work-Plans is “Geld-into-Arbeit.”

The Implicit Intents of investing in Fiefs and Work-Plans occurs when the wealthy decides to sell Fiefs and Work-Plans at the Kontor. By selling Fiefs, the wealthy are providing ways for others to become directly involved in their Enterprises or become entitled to its Drawings in exchange for Actual Arbeit. Alternatively, selling Work-Plans will allow the wealthy to receive additional sources of Actual Arbeit and expand the production capabilities of the affected Enterprise. The Implicit Intent of receiving Actual Geld from Fiefs and Work-Plans is “Arbeit-into-Geld.”

Whichever the case may be, the wealthy are expecting their wealth to grow from interacting with the LER Process itself. By spending their Actual Geld on those NSFIs, they are providing ways for the Totality to create other sources of Actual Arbeit, which can then be converted into Actual Geld at the Life-Energy Reserve. The wealthy will receive the Actual Geld from either the Drawings of an Enterprise through a Fief or cashing in a Work-Plan after its Maturity Date.

The second option has the wealthy spending Actual Geld on the goods and services of Small Businesses and Cooperatives. Since I had established that one of the roles of Small Businesses is to fulfill the niche role of providing custom-built and one-of-a-kind items, they will provide an opportunity for the wealthy to invest their wealth into items that will retain its Value and can fetch higher Prices well into the distant future. The same Explicit and Implicit Intents are also apparent here as they were in the first option.

The same can be said for the third option, which entails the wealthy spending Actual Geld on purchases of Personal Properties from the Council State. Here, the Council State is expecting the wealthy to convert the Personal Properties into Productive Properties, so that it will start creating Actual Arbeit and Actual Geld by extension. All it takes is for somebody with the right combination of creativity, ingenuity, ambitiousness and industriousness to turn any Personal Property into a Productive Property that will in turn become a creator of newfound wealth.

We can expect the similar Explicit and Implicit Intents to exist in the fourth, fifth, and sixth options. What distinguishes those Intents from the ones shared by the first, second, and third options is that they are intended to serve as suitable alternatives to the sort of Philanthropy that puts the wealthy in the category of the Informal Economy. After all, when the wealthy engages in Non-Profits and Philanthropy in the other two Modes of Production, they are either trying to evade taxes and pass on their wealth to the next generation or to provide services which the Council State could otherwise be coordinating with the certain elements of the Totality. In either case, it can be argued that the wealthy are trying to conduct themselves inside the Informal Economy.

For the purposes of Production for Dasein, it is vital that the Council State strive to consolidate the efforts of everyone interested in helping the less fortunate or financing research and development, guiding them toward a single unified endeavor. The Council State does not necessarily have to replace charitable groups outright insofar as the Council State should be guiding them toward their intended goals. This rule applies more so to the wealthy, especially those seeking to spend Actual Geld on important causes which appeal to them. But should one of those causes happen to involve the SSE, the Student Government must have its own say on the role of the wealthy in the Total Educational Effort of the Student Body. Just like the Council State itself, the Student Government needs to be able to get along with the wealthy and try to help them find more efficient ways of spending their wealth.       



Categories: Third Place

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