In a currency system like the Work-Standard, it becomes inevitable to envisage Sociable Currencies pegged to it as relying on “Fixed Exchange Rates.” After the Death of Bretton Woods, Neoliberalism abandoned Fixed Exchanged Rates in favor of “Floating Exchange Rates.” This meant that Liberal Capitalist Currencies within International Trade were no longer backed by Gold but the Incentives of Supply and Demand. The Quantity of Kapital for one Currency now determines how valuable it is when compared against another Currency in terms of exchange rates.    Under Neoliberalism, the Fractional-Reserve Banking System and the Financial Markets decide the Value of a Currency according to its Quantity of Kapital or in terms of how many units that a Central Bank has allowed to release into circulation. Although that is the most common way method of determining exchange rates, the other two methods involve intervening in the Financial Markets to influence the Quantity of Kapital and officially declaring the Value of a Currency through monetary policymaking.

The Work-Standard relies on the Intents of Command and Obedience for determining exchange rates, its application of Fixed Exchange Rates dependent on the Quality of Arbeit that supports the Sociable Currency. Generally speaking, having a higher Quality of Arbeit reflected in the TPP (Total Productive Potential) value will cause the Sociable Currency’s Value to appreciate. Exporting goods and services to other countries will be more expensive for the VCS Economy but importing goods and services will be cheaper. It is likewise true in the reverse: with a lower Quality of Arbeit, exporting goods and services will be cheaper for the VCS Economy but more expensive when importing them.     

Of course, the Central Bank reserves the authority to decide how the Quality of Arbeit affects the exchange rates between the Sociable Currency and another Currency, Sociable or otherwise. The Central Bank could lower its Mechanization Rate, imploring the Totality to rely less on automated technologies. It could adjust the Inflow/Outflow Convertibility Rate by altering how much Geld can be gained are being converted from Arbeit or vice versa. And it could devalue or revalue the Sociable Currency as needed. It could even start issues Foreign Exchange Certificates to minimize the amount of Actual Geld going to Foreigners. 

Determining the exchange rate of a Sociable Currency is not as difficult as one might imagine at first. The necessary tools for the Central Bank to set the exchange rate have already been established. What needs to be done is for the State and the Totality to ensure that the Value of their Sociable Currency actually reflects their Socialist Nation’s Quality of Arbeit, requiring the Central Bank to respect the interests of the State and Totality as part of the Financial Regime.

Whichever option the Central Bank decides to choose, the Totality and the State must support the exchange rate. The proposed exchange rate must further the interests of the nation and be acceptable to any nations that have decided to trade with the Socialist Nation relying on the Work-Standard. This particular rule becomes especially important in a Socialist World Order presided by the World State Organization (WSO).

Categories: Compendium

Tags: Economics, Finance, Philosophy, Politics, Psychology, Socialist Finance, Third Place, Work-Standard