Level System Economics Explained

There are various economic systems in the world, that define much of our daily lives. Think for a moment how much time we spend each day that is defined by our economic system: From why we go to work.. what lies on the shelves at the grocery store.. and finally the tedious task of paying taxes are all defined by our economic system. Different economic systems can shape nations, and can be deeply imbedded into ideology, the best example of this perhaps being the free market system versus the command economy system. This story is for the curious of a third alternative economic system: the level driven market system.

This acticle goes from high level overview to detailed level overview. Starting with the definition of the level system, then how the systems compares to other economic theories, followed by how the system could look like in practise. Included in the appendix down below you can find one example for each concept discussed.

Prior to reading this paper, general knowledge about the free market economic theory and command economic theory is adviced for a better understanding of the comparison with the level system with other, more well known economic theories.

Definition of a Level System

A level system is a meritocratic economic system in which the goal is to reward and incentivize people based on their current contribution to society. Where the role of the government is to determine the level of contribution of each individual and determine the amount of non-taxable goods for each level of contribution. People are free to buy a set amount of goods tax-free determined by the government, the amount is often determined per category of goods. Commercial buildings and lands are owned by ventures (called groups), a group can create their own rules of ownership as long as they are within the laws of the government.

The ideology behind a level system is that people shouldn’t have wealth based on what they have acquired, but based on what they deserve based on current contribution.

From a social perspective a society that uses a Level System is a society in which people are valued based on their current merit, called their level, rather than inherited wealth or earlier accomplishments. Skilled workers in this society have a high status in society while retired and jobless have a lower status. In such a society the government determines the level of an individual, based on skill exercised, ability to exercise skill through degrees held, positions and titles in society.

A Level System compared to other economic systems

Persuasion vs Coercion

In a free market system, hard work and innovation are stimulated with the reward of wealth. With increasing wealth comes the promise of having a comfortable life doing things one want to do. Such a system functions because people want things other people have, these being material objects but also immaterial objects such as people their time and ability.

When to people want something from each other (as a common example one person wants money and the other wants to their services) they make a deal with each other. When both parties want this deal and are happy about it we call it persuasion. This is different from coercion were only one party is happy with the deal, and the deal exits because of pressure from that party on the other party (via for example threatening the other party).

The free market theory is by design based on persuasion as a means of production while a command driven economy have a party (often the government) that is allowed to also use forms of coercion as a means of production.

A free market system promotes persuasion by giving people choices of deals, which also allows for smart ways of investments by including time in the equation (As an example one party wants money at this point in time and will return money plus interest in a later point in time). In theory it becomes possible for one party to live their lives without having to work at all.

A level system differs from a free market system by having a government controlling, by means of tax, the amount of material wealth a party can have based on their current job (or called current exercised ability per definition).

A Level System in practice

In a Level System it is the government their job to determine the levels of its citizens and to enforce tax based on the amount of wealth they acquired vs. the amount of wealth they deserve based on their level.

How levels in a Level System are determined

A way to determine citizens their level is by making use of a criteria table (see appendix down below for: Example of set level criteria) containing a set of rules which are predetermined by the government.

They should contain criteria for current contribution and current ability, and optionally criteria of citizenship (see appendix down below for: Example of set level criteria).

A citizen can move up or down the levels by gaining or losing levels from these criteria. Which changes their taxes. The government should assess these levels every set period (for example every year)

Taxes

In Level Systems taxes should be used as an incentive to increase current contribution and ability as well as an incentive to bring excessive luxury owned by individuals back into the market. Collected taxes can be used for governmental projects (such as public infrastructure) and as a means to counterbalance missed taxes from tax-free goods).

Categories of goods

A way to enforce taxes is to split goods up into different categories and assign an amount of deserved goods per level (see appendix down below for: Example of goods per category per level).

Tokens

To administer which goods are being consumed and owned, tokens can be distributed for these different categories per set period. Which can be used as currency for a good of a particular type (as an example, a person can buy 50 ‘food category’ tokens with their level for $10 each, uses it throughout the month to buy $380 worth of food keeping 12 tokens. The tokens then can be turned back in for $120 at the end of the month. A token can then be used to buy that good tax free against the market price, buying goods without these tokens is possible, but the price will go up because of tax.

Tokens can be distributed at a dedicated central place by the government at a set timeframe. By design tokens have to be used in the set period, or turned back in. A watermark can be added to tokens to decrease the chance of forgery, and the watermark can be changed from time to time to decrease the chance of tokens being saved up.

Goods that are not consumed, such as land rights, can be administered by the government without the use of tokens. Such items can be taxed based on who owns what, rather than who buy’s what.

Outro

Hope you liked this article, please comment below what you thought of it and if you want to see more of it. This article covered the definition and practical aspects of the level system as an economic system. There are however many more aspects of a level system this article hasn’t touched. Such as how retirement and studies work within a Level System. How implementing such a system would impact the daily lives of citizens on a cultural level. I hope, that I will have the chance to write about these topics in a later point in time, and include them in a next version of this article.

Appendix I – Example of goods per level per category

 Appendix II – Example of set level criteria