How to Find Real Total Economic Potential
By this Entry, we should already have the values of an Enterprise’s Final Quality of Arbeit (FQW) and its Final Quality of Geld (FQM). We should also have the Attrition/Inaction Rate (AIR) of that same Enterprise. However, we are not quite finished yet. We still need to know the Total Economic Potential (TEP) and the Total Financial Potential (TFP), which is needed to uncover the Real Total Economic Potential (RTEP) and Real Total Financial Potential (RTFP) with the AIR. As one might have noticed in the past two Entries, nowhere did I factor the “Revenues” and “Expenditures” of that Enterprise into the conversion of Arbeit into Geld. This is because the LER Process is not supposed to account for any Actual Geld that an Enterprise receives from any of its transactional sales.
The “Expenditures” of an Enterprise are all of the costs associated with running the Enterprise outside of the production process. The costs of producing goods, rendering services, and conducting transactional sales have been accounted for in the Work-Intensity (WI) variable. The Enterprise had to have spent Actual Geld in facilitating Economic Socialization (ES), maintaining the production process, and allowing water and electricity into the Enterprise. Even the Enterprise’s buildings and workspaces have to be cleaned and even renovated.
Every conceivable cost on the Enterprise that is not directly tied to the conversion of Arbeit-into-Geld is to be accounted for in the Expenditures variable. By finding the difference between Enterprise’s FQW and all of its other Expenditures, its Economic Planner and Accountants will be able to uncover the Total Economic Potential. Given the TEP value and the Attrition/Inaction Rate, the Enterprise’s RTEP can now be uncovered. To find the value of RTEP, take the quotient of TEP and the AIR.
How to Find Real Total Financial Potential
The operational procedure of finding the RTFP value is more involved than that of finding the RTEP value. This is due to the fact that the Final Quality of Geld must be multiplied by the second half of the Solidarity Rate (SR2) and the sum of the Enterprise’s “Revenues.” The Enterprise had to have received Actual Geld from its transactional sales at the Tournament. This is the Actual Geld that did not come from the production process, which went straight to the Life-Energy Reserve of the Central Bank. Therefore, these Revenues will be staying with the Enterprise and will not be subject to taxation by the Council State.
The SR2 value is the quotient of the “Density” and “Scope” of the production process. The Scope refers to the diversification of goods and services associated with the production process. Depending on the Enterprise in question, the production process may be capable of facilitating a larger variety of goods and services. Density is the cost of having to sustain that diversification of the production process. Since this is related to the production process, the Density and Scope become the analogues of Work-Intensity and Work-Productivity as these economic activities are always secondary to the primary ones of the Enterprise.
Granted, most Enterprises in the VCS Economy are not going to be diversifying to the extent that they will be engaging in more than one Industry or Economic Sector. At best, they will only be producing goods, rendering services, conducting transactional sales, and supporting other Enterprises with their own production processes. This particular half of the Solidarity Rate can be skipped by the Economic Planner and the Accountants.
Should that be the case, all that remains is finding the TFP value through the sum of FQM and Revenues. All that remains now is finding RTFP, which involves finding the sum of TEP and TFP and dividing it by the known AIR. We now have the values for RTEP and RTFP. The sum of RTEP and RTFP is the total value of the LER Account.
On a sidenote, if we were finding the RTEP and RTFP values of the entire Socialist Nation, we would uncover the RTEPs and RTFPs of the SSE, the VCS Economy, the Reciprocal-Reserve Banking System, and International Trade. The operational procedures that apply to one Enterprise is also designed to be reapplied to entire Socialist Nation.
Categories: Compendium
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