At this point in the SMP Compendium, an astute Reader of the SMP Compendium will have already noticed elements of the “National-Socialization Principle” at play throughout the production processes and transactional sales of different Enterprises. Within the narrow contexts of the Work-Standard, the National-Socialization Principle is what enables an Accountant or an Economic Planner to determine whether someone is contributing Arbeit and Geld to the Life-Energy Reserve as part of an Enterprise and whether the Enterprise’s contributions are being supplemented by additional sources of Arbeit and Geld. These additional sources of Arbeit and Geld are designed to be mapped in the Work-World, which Economic Planners and Accountants rely on to ascertain the origins of different contributions and how they impact the finances of the Enterprise in question. The Social Rank of the Enterprise within the Tournaments becomes a handy mechanism to ascertain the Value of Arbeit being contributed and its Price in Geld.
The concept of National-Socialization is an exclusive phenomenon made possible because of the Work-Standard and made easily visible by the presences of National-Socialized Enterprises and National-Socialized Banks (NSBs). Aside from those two, the Economic Planner and their Accountants recognize the phenomenon in terms of two discernible factors whenever Arbeit is being converted into Geld. When Arbeit is converted into Geld, the Quality of Arbeit is transmuted into Quality of Geld. In that transmutation, there are two factors which must always be accounted for at all times: Economic Socialization (ES) and the two halves of the Solidarity Rate (SR).
Economic Socialization
We established earlier in the SMP Compendium that there are three ways in which an Enterprise contributes Arbeit and Geld to the Life-Energy Reserve. Two of those three ways to contribute Arbeit, the third generating Geld. Economic activities related to the production process and the successful conduct of a transactional sale in the Tournament counts toward the contributions of Arbeit by an Enterprise. Only the transferring of Actual Geld for the goods or service is where the Enterprise generates Geld from its own economic activities. However, it would be remiss to not account for the various other ways in which an Enterprise could contribute Arbeit from its own production processes and transactional sales.
Economic Socialization (ES) naturally occurs whenever an Enterprise is contributing Arbeit and Geld to the Life-Energy Reserve beyond its production processes and transactional sales. Every Enterprise contains various Vocations performing the roles of different Professions. Some are involved in the production process, others in the transactional sales at the Tournament. Besides its own economic activities, the Enterprise is also enabling other Enterprises and Professions to contribute Actual Arbeit through their own economic activities. While those other Enterprises and Professions contribute their own Arbeit and Geld to the Life-Energy Reserve, it is only when they interact with specific Enterprises that Economic Socialization occurs.
To illustrate an example, suppose there is a Social Enterprise in the VCS Economy that renders a transportation service. It contributes Arbeit and Geld from production processes related to the operation and maintenance of its own fleet of vehicular transports, only generating Actual Geld from providing that service to other Enterprises. When that Social Enterprise does render its transportation service to a large State Enterprise, ferrying and delivering its finished products to other Enterprises that need them, the Social Enterprise has yielded Economic Socialization. This is because the Social Enterprise is supporting the ability of that State Enterprise to create more Arbeit and Geld in its production process than it could not have done on its own.
There is only one source of Arbeit created from the aforementioned occurrence of Economic Socialization here. It is related to transportation of the finished product under the terms of an agreement negotiated between their Economic Planners, approved by the Administrators and Delegates, and enforced by the Inspectors from the State Commissariats of Wages and Prices. Both the State Enterprise and the Social Enterprise yield their own Economic Socialization as result of that agreement. For the State Enterprise, it was caused by the loading of the finished product to the transport vehicles that had been provided by the Social Enterprise. For the Social Enterprise, it was the distribution of the finished products to their intended destinations. As long as the Social Enterprise is continuing to render its transportation service to the State Enterprise, both the Social Enterprise and the State Enterprise can claim Economic Socialization from the agreement negotiated by their Economic Planners.
Typically, Economic Socialization occurs whenever the economic activities of one Enterprise support the economic activities of at least one other Enterprise. An Enterprise contributes additional Arbeit from being involved in the production process or transactional sales of another Enterprise. All of the Enterprises claim Economic Socialization and it is up to the State Commissariats to enforce the terms of those agreements. Economic Socialization between Enterprises is most likely to occur among Industrial Concerns, Consortiums, Subsidiaries, and Guilds of State and Social Enterprises. If the Council State has any active Real Trade Agreements (RTA), Foreign Enterprises become capable of yielding Economic Socialization as well.
National-Socialized Enterprises (NSEs) are capable of racking up large amounts of Arbeit and Geld from engaging in Economic Socialization between the Council State and the Totality. They can form the backbone of the VCS Economy and the SSE, supporting smaller Social Enterprises as well as the larger State Enterprises. Among individual Vocations, Economic Socialization occurs through the acquisitions of NSFIs from the Kontore or Work-Tenures from National-Socialized Banks (NSBs). In the case of NSFIs and Work-Tenures, Accountants always account for the Value of the NSFI if they have been created by the Economic Planner of an Enterprise and issued to potential Investors by the Kontore.
Solidarity Rate
The term ‘Liquidity’ in Liberal Capitalism refers to the rate at which anything can be bought or sold at a given frequency without any changes to its Price. It usually applies for most assets and securities and their subsequent conversion into Kapital. The Price is dependent on the speed at which something can be sold. Certain things can be sold off in a matter of minutes or hours whereas others may have to wait months or even years at their current Price. Lowering the Price may compel people to purchase it for less than what it may actually be worth. Alternatively, increasing the Price may dissuade those same people from purchasing due to perceiving it as being expensive. Any sudden Price increase coincides with higher Liquidity, causing lower returns on investment. If this is the Liberal Capitalist equivalent to the Socialist conception of “Solidarity,” it matters greatly as to how different Solidarity will operate under the Work-Standard.
To begin, recall the dynamics between Quality of Arbeit (QW) and Quality of Geld (QM) and how they interact with the Attrition/Inaction Rates. It is known that QW is affected by the contributions of Arbeit into the Life-Energy Reserve. And it is known that QM affects how much Geld will arise from conversions of Arbeit. The higher the QW, the lower the QM and the more Geld can be created with less amounts of Arbeit. Conversely, a superior QW enables the Attrition Rate to rise at a slower pace, whereas an inferior QW accelerates the Attrition Rate. This in turn influences the QM, which affects the generation of Geld.
Solidarity in this context refers to the sustainability achieved by the Quality of Arbeit maintaining a given pace before altering the Quality of Geld. It can be argued that the Quality of Geld is in many respects affected by the speed at which Arbeit is being contributed to the Life-Energy Reserve. While that may sound similar to the concept of “Liquidity,” Solidarity also depends on the ‘Scale’, ‘Duration’, ‘Scope’ and ‘Density’ of any effort. Those four variables were in fact at play within the Five-Year Plans of the former Soviet Union and the PRC as well as the Eastern Bloc countries. The problem faced by all of them has been whether it is possible for anyone to be consciously aware of those variables without something akin to the Work-Standard.
Consider the methodology of Soviet-Type Economic Planning (STEP) for instance. Economic planners will set specific target goals (“the Scale”) that need to be completed within the four years (“the Duration”) of a Five-Year Plan. Priorities may be placed on the production of specific goods and services (“the Scope”) and concentration of manpower and resources (“the Density”). The Scale and Duration denote the Plan itself, while the Scope and Density are the means to carry out that Plan. Most problems in economic planning often occur from imbalances between the Scale and Duration on the one hand and the Scope and Density on the other.
Setting the Scales too high and the Duration too short will result in unrealistic expectations yielding lackluster results at the very least. At the very worst, however, people will overwork themselves to death. A similar set of problems occur when the Scales are set too low and the Duration too long. People will starve themselves to death in the worst case scenario. Meanwhile, any projections set forth by the economic planners will fall short of expectations.
Letting the Scope be too narrow and the Density too large will also yield lackluster results. Certain goods and services are going to be overemphasized to the point where other goods and services become less available. Shortages, like the kind experienced towards the end of the Soviet Union between the 1970s and 1980s will occur as a consequence. Moreover, having the Scope be too broad and the Density too small stifle decisive action to the point where any decision becomes ineffective. This too was also another problem encountered by the Soviet Union, except it occurred from the market reforms of Perestroika as State-Owned Enterprises were being privatized and the Soviets lost State ownership of their Command Economy.
Fortunately for the Work-Standard, these imbalances are now able to be registered as emerging imbalances in the dynamics between Quality of Arbeit and Quality of Geld. The important metric at play is of course the Attrition/Inaction Rate. Information that normally would not be available to economic planners under STEP will now be available by means of the Work-Standard’s own version of economic planning, MTEP (Mission-Type Economic Planning).
Note that “Scales” and “Duration” affect the Quality of Arbeit rather than Quality of Geld. Any Work-Plan with higher Scales and shorter Durations will cause Attrition to rise. The growth in Attrition originates from Arbeit being contributed to the Life-Energy Reserve in greater increments because of higher Scales at faster rates due to shorter Durations. As for the reverse, lower Scales and longer Durations will instead yield Inaction. This is due to less Arbeit being contributed to the Life-Energy Reserve.
Also note that “Scope” and “Density” affect the Quality of Geld. Any Work-Plan with narrower Scopes and larger Densities forces QM to rise by lowering QW. Less Geld is being created from greater amounts of inferior Arbeit, the Arbeit originating from larger concentrations of manpower and resources on the production of fewer varieties of goods and services. The opposite is a Work-Plan with broader Scopes and smaller Densities. More Geld will instead be created from smaller amounts of inferior Arbeit, the Arbeit originating from smaller concentrations of manpower and resources in the production of more varieties of goods and services.
To summarize the importance of Scales and Duration, Scope and Density, Solidarity requires a sustainable balance that favors Quality of Arbeit against Quality of Geld. In essence, more Geld needs to be generated from fewer conversions of Arbeit. Even though it can be achieved through Technology vis-a-vis the Mechanization Rate, the Central Bank cannot be expected to do everything. The rest of the nation, including the Economic Planners themselves, must pursue realistic expectations that are sustainable. Any Scale of production needs to be in sync with their actual Duration, just as any Scope of production needs to be in sync with their actual Density.
Arriving at those conclusions forms the crux behind the concept of Solidarity within the State of Total Mobilization. Solidarity is more than just a word; it is part of a distinct way of life. Any enlarged Scale of economic activity is going to require longer Durations of Zeit and vice versa. Nothing good ever came from rushing things, absent emergency conditions such as in wartime, pandemics or natural disasters. Meanwhile, any broadened Scope of economic activity is going to involve smaller Densities of manpower and resources. Not everything needs to be produced in excess for there must be a sense of disciplined moderation.
As one can probably imagine, the challenge from trying to achieve such a grandiose balancing act seems like a herculean task for economic planners. It was the consensus among economists because of the flawed belief among economic planners who thought it can all be resolved with Technology. The same can be said for those who claim there will always be absolute access to flawless information from the free market.
For the Work-Standard, its conception of economic planning on behalf of its Vocational Civil Service (VCS) Economy offers a new dynamic to ease the burdens of the economic planners. There is immense potential for the Work-Standard to introduce National-Socialized Financial Instruments (NSFIs) capable of facilitating rapid allocations of Arbeit and Geld across different sectors of the VCS Economy. Not just promoting the emergence of an alternative to financial markets, it also provides the basis for altering the procedural banking practices. In a Planned/Command Economy with a Reciprocal-Reserve Banking System entirely backed and controlled by the Totality vis-à-vis their State, it becomes inevitable to envisage banks issuing loans that do not revolve around Kapital and Schuld but instead Arbeit and Geld. Finally, it is here where the concept of Liquidity is being supplanted by Solidarity.
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