With the TPP Account uncovered, the next step is to find the LER Account, which is represented by the sum of RTEP (Real Total Economic Potential) and RTFP (Real Total Financial Potential). RTEP is TEP (Total Economic Potential) and RTEP is TFP (Total Financial Potential) factoring in Currency Depreciation/Appreciation as the Attrition/Inaction Rate. The TEP is the sum of all Arbeit being created by the SSE, the VCS Economy, the Reciprocal-Reserve Banking System (without including any Arbeit from NSFIs), the Council State (without including any Arbeit from State Investments), and International Trade. A similar operation also occurs for the TFP: the sum of all Geld being created by the SSE, VCS Economy, Reciprocal-Reserve Banking System (without including any Geld from NSFIs), the Council State (without including any Geld from State Investments), and International Trade.
The LER Account does not just record the creations of Arbeit. It also tracks how much is Arbeit is also being converted into Geld as part of the LER (Life-Energization Reciprocity) Process. For the sake of simplicity, this Entry will not be covering the LERE (Life-Energization Reciprocal Electrification) Process, which first requires mastery of the LER Process.
The most important question that needs to be asked before any efforts to discover the LER Account is this: What are the variables “Work-Productivity (WP),” “Force Multiplier (FM),” Work-Intensity (WI),” and the “Mechanization Rate (MR)?”
The Core Variables
To find the Arbeit of a Vocation, Profession, Enterprise, or Industry, it is important to ascertain the values of WP, FM, WI, and MR, as those four values are not always going to be constant. The “Who,” the “What,” the “How,” and the “Why” are important for the purposes of the accountant.
- “What is the Arbeit?” There are countless conceivable ways of creating Arbeit, but the ones that the Accounting Profession will be concerned about are those affixed to the Domains of the Work-World. Each Domain has production processes being carried out by related Industries, Enterprises, Professions, and Vocations. What is produced by one Domain is a prerequisite to the production processes of another Domain and so forth.
- “Who is contributing Arbeit?” All Professions, Enterprises, and Industries involved in the production process of each Domain must decide on the Value of their Arbeit. They negotiate with the State Commissariats of Wages and Prices, discussing why their Arbeit should be given its Value.
- “Why did the Arbeit attain its Value?” The State Commissariats expects everyone involved in the production processes of a Domain to know why the their Arbeit should be given this particular Value and how much did it cost to create that Arbeit to begin with.
- “How did the Arbeit receive its Price?” While individual Professions, Enterprises and Industries may have their own ideas about the worthiness of their Arbeit, the State Commissariats remain the final authority on all Prices at the regional level. The central government will base the National Prices based on the average Prices across every region of the Socialist Nation. Whatever Prices were set for the harvesting of natural resources, the production of Equipmentalities and finished goods, and the rendering of services will in turn impact the Prices for purchasing them. If the State Commissariats are compelled to make periodic adjustments to the Values of Arbeit, they will be recorded under the Convertibility Rate (CR) and then given new Prices.
The pricing goods and services are dependent on the Sustainability Factor, affecting whether the Quality of the production process can maintain the Frequency in which goods and services are being purchased within transactional sales. If the Frequency outpaces the Quality, the Price will rise because the production process is Unsustainable for the everyone involved in its Domain. The reverse will occur if the Quality happens to surpass the Frequency.
Note that the type of Arbeit being created and certain factors will impact the Force Multipliers (FM). The length of the production process, the experience and expertise of individual personnel will influence the FM value. This too must be decided by the State Commissariats.
The only variable that the State Commissariats does not control is the Mechanization Rate (MR), which is set by the Central Bank. MR determines how many production processes among the Domains of the Work-World should be automated and taken over by machines instead of the Totality. Note that increasing the MR will also reduce the number of ways in which the Totality is capable of creating Arbeit themselves. Further development of Automation Technology will increase how many facets of economic life may be subject to MR.
LER Accounting Procedures
I designed four reference charts to describe how to account for the creations of Arbeit and Geld under the LER Account. This is a step-by-step procedure that must be followed in the manner in which it was outlined below:
- Find the Arbeit of all Vocations for one Profession. Begin by finding the product Work-Productivity (WP) and Force Multipliers (FM), subtract it by Work-Intensity (WI), then multiply it by the sum of all Vocations in a Profession. Identify the values of all Professions before proceeding .
- Find the Arbeit of all Professions for one Enterprise. Take the sum Value of Arbeit for all Professions, then multiply it by the sum of the Enterprises within their related Industry. Repeat the same operation across all Enterprises.
- Find the Arbeit of all Enterprises for one Industry. Take the sum Value of Arbeit for all Enterprises, then multiply it by the sum of their Industries. Repeat the same operation for every Economic Sector.
- Find the Arbeit of all Industries for one Economic Sector. Take the sum Value of Arbeit for Industries and multiply it by the number of Economic Sectors. In the context of the VCS Economy, there should only be five.
The final value is the Value of Arbeit for the entire VCS Economy. To determine Quality of Arbeit (QW) across Professions, Enterprises, Industries, and Economic Sectors, take the sum value and multiply by the Central Bank’s official MR.
The Quality of Arbeit for the SSE, Reciprocal-Reserve Banking System, and Council State should follow very similar operational parameters. The only exception is of course the Arbeit received from International Trade, which relies on its own distinct parameters. Even so, the Final Quality of Arbeit (FQW) will be the sum of all Qualities of Arbeit from the SSE, VCS Economy, Reciprocal-Reserve Banking System, Council State, and International Trade.
- Once we know the Qualities of Arbeit across the Professions, Enterprises, Industries, and Economic Sectors of the VCS Economy, we can then determine the Quality of Geld (QM). Find their respective sums of Economic Socialization (ES), multiply the sum of each Vocation, Profession, Enterprise, Industry, and Economic Sector. Remember that ES is how much surplus Arbeit is being created from production processes facilitating other production processes like distribution and transportation services or maintenance and repair services.
- Next, multiply by the first Solidarity Rate (SR1), which will be the quotient of Scale and Duration of Production. The Scale and Duration of Production corresponds to how many items are known to have been produced across a fixed timeframe. This will yield the Quality of Geld across the Professions, Enterprises, Industries, and Sectors of the VCS Economy.
- The Final Quality of Geld (FQW) is the sum of the Qualities of Geld for the SSE, VCS Economy, Reciprocal-Reserve Banking System, Council State, and International Trade.
For the Values as well as the Qualities of Arbeit and Geld for International Trade, the Values and Prices for both will be negotiated between the Council State and the foreign government of another nation under the terms of a Real Trade Agreement (RTA). To ensure accuracy of results, I split the State Foreignization Investments (SFI1 and SFI2) of Arbeit and Geld into two groups.
- SFI1 is related to the economic activities and thus factored as part of the Final Quality of Arbeit (FQW).
- SFI2 is related to NSFIs and Foreign Investments and falls under the Final Quality of Geld (FQM).
- Both variables involve finding the differences of their respective Total Economic Socialization Rates (TXRs) and their corresponding Net Economic Foreignization Rates (NORs).
- Assuming we already know the values of FQW and FQM, we can now use two of the four methods to determine the Attrition Rate (AIR). These two methods are financial indicators that will allow us to determine the Attrition Rate across individual Professions, Enterprises, Industries, and Economic Sectors.
- For TEP, take the value of FQW and subtract the combined Expenditures incurred on all production processes. Work-Intensity (WI) was the costs of resource inputs required to create Arbeit. The Expenditures are the costs associated with the production processes themselves.
- For TFP, take the Quality of Geld, multiply it by the quotient of Density and Scope of Production, then add the Revenues. The Scope refers to how diverse was the production process in terms of the varieties of goods and services produced and the Density is how much did it cost to facilitate additions to the production process of the Domains within the Work-World.
- Once we have the TEP and TFP, we will then be able to find the RTEP and RTFP by factoring in the Attrition Rate. Note that the RTFP will be larger than the RTEP because the former also includes TEP in its equation to represent the conversion of Arbeit into Geld.
Given the above information provided, we should be able to know how much Arbeit and Geld are recorded in the LER Account. Any Arbeit and Geld created through routine economic activities will be tracked there. What we do not know is how much Arbeit and Geld were the outputs of NSFIs, State Investments, and the financial activities of the Reciprocal-Reserve Banking System. All of those are covered in the SI-EF Account, which will be the area of interest in Part III.
Categories: Work-Standard Accounting Practices
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