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The Republic of Theodia has a rather unique economy that cannot be readily described as capitalist or socialist. It is notable for its lack of debt, usage of statistics, and dual-currency model. The economy depends heavily upon an online infrastructure that is not yet in place, but this article will cover the country's economy as if it were.
This article was current as of 2016's March.
The Republic of Theodia has banned all lending at interest (henceforth referred to as 'usury'), due to its falsification of value and currency, which Theodia's government believes lead to dramatic booms and busts. In particular, usury is seen as economically enslaving the citizens of the country. Thus, it is fitting that the government itself is not allowed to hold public debt, and must always have a balanced budget (where outlays do not exceed receipts); except in times of national emergency.
A hoarding tax (known as a 'demurage charge') exists on the currency itself, inspired by the 'Miracle of Wörgl' in Great Depression Austria, as well as the work of Silvio Gesell. Thus, the currency itself essentially rots away the longer you have it, thus increasing the short-term value of long-term investments, and dramatically increasing the velocity of money (in the Wörgl experiment, by 14x).
Theodia considers artificial scarcity to be a great evil, so non-scarce resources are required by law to be 'gifted'. Thus, Theodia's economy can to some extent be seen as a hybrid between a regulated market economy and a gift economy. Typically, gifted resources (such as software) will be presented with a recommended price and an encouragement to pay whatever the item is worth to the consumer. This simultaneously eliminates the problem of piracy. This has been shown successful even with scarce resources, such as when Panera Bread launched Panera Cares, a gift-economy version of Panera. Also, Theodians receive tax discounts for donating and volunteering. This combined with the demurage charge make gift economy very viable. In addition to this, Theodia is currently looking into alternative compensation systems as a replacement for copyright, patents, and other forms of intellectual property.
The day-to-day calendar is the same as the fiscal calendar, and the fiscal calendar is designed to work comfortably in the society's mathematical base (twelve).
In order to give Theodian citizens a reasonable amount of breaks per year, the government guarantees them 8 days of vacation (including sick days) per fiscal year (equivalent to 144ten days), after having been employed for at least one continuous fiscal year. Until this benchmark is reached, Theodians are guaranteed 4 days of vacation. These values were inspired by those that naturally arose in the USA, but are optimized for dozenal and the Theodian fiscal calendar; and reach in 1 to 2 fiscal years of employment the number of vacation days that Americans average after about 10 years.
There is no minimum wage (just as there are no other price floors) due to the difficulties it causes people in finding employment. There is also no general sales tax, due to its minor incentive against buying and small distortion of price; but sales taxes are allowed on individual items when it is perceived as beneficial to discourage their consumption (ie, a sin-tax), or where it is necessary for to offset negative externalities of the item's purchase/use (ie, a Pigouvian tax).
The government is allowed to have an income tax. The reasoning for this is that income taxes, so long as they are marginless, are nearly non-incentivizing, and prevent the government from being tempted to set important incentivizing taxes to suboptimal values just to make end's meet. Even so, the government is not expected to have a high income tax, due to the heavy optimizations that come with a repositocratic system. Should the country ever adopt a non-proportional tax-rate, this income-tax will not have margins, but instead will be done per a smooth curve, so that people are not trapped in their income-brackets; but, as the country is currently committed to the fairness of proportional taxation, this is a non-issue.
Since the Theodian economy will occur entirely online, taxes can be levied at intervals and to degrees of complexity never before done. The demurage charge, for example, can be levied at regular intervals and take into account the average percentage of personal wealth spent per hour by people demographically similar to you, their influence fading away on a bell-curve; the amount you spent; the average amount of money you've spent over the past so many days; your income (again, done not marginally, but on a smooth gradient); and more, thus applying statistics and computation to the art of taxation in paradigm-changing ways.
It is planned to have two different currencies, with each designed to focus on one of the two main contrastive functions of money: store of value, and medium of exchange. The exact details of them have not yet been worked out, but it is known that the medium of exchange currency will be backed by the store of value currency. Also, it is likely that the store of value currency will be tightly floated over a basket of commodities. Conversion between the currencies will be instantaneous and largely invisible, since the entire economy will be online.
Around the time of the original constitution, the currency of the Kingdom of Theodia was called the 'KTM' (Kingdom of Theodia Marks). Their value was pegged to the USD, with ten KTM equaling one USD. A demurrage tax was due to the government at the end of each fiscal quarter, and was equal to the inflation rate of the USD, so as to stabilize the currency. The tax was enforced by causing the currency to expire at the end of each quarter. Citizens had to buy a stamp to renew their currency (the cost for the stamp was the demurrage tax). However, the KTM was never widely circulated, and only six were known to have been printed; likewise, the no demurrage tax was ever collected.
It was intended for the KTM to come in paper bills of 1, 5, 10, 20, 50, 100, 200, and 1000. On the front were spots for the demurage stamp, the national coat of arms, the KTM symbol (ꝧ), and the number of units in the currency; on the back were a Theodian flag and the KTM symbol.
Coins were also considered, and would have been called "crowns" and come in coins worth 1/100, 5/100, 10/100, 25/100, and 50/100 of one KTM. Although they never came into existence, it was planned for them to consist of a central hole with a runic inscription in the Theodian-language circumscribing it.
The early-middle Kingdom picked up on the idea of "hours" currency. The idea was to create equal pay for equal time working, but scaled for the difficulty of the job. Unskilled labor was to be paid between 10 and 20 KTM per decim (an early Theodian unit of time roughly equal to an hour), skilled labor between 20 and 30 KTM per decim, and educated labor between 30 and 40 per decim. Although no salary pay was allowed, it was also legal for people to be paid a flat rate instead of being paid per decim.
There is very little economic activity in Theodia at the moment. Most of what once defined the economy has since stagnated or fallen into disuse.
During the time of the Kingdom, pineapple farming was the mainstay of Theodia's economy, consistently contributing to 100% of the country's GDP. It was hoped to begin pressing the pineapples' leaves into paper for use in calligraphy, so as to produce something of particular interest to tourists; but interest in economic activity has been in decline since 2011. Coconut and orange farming were also once considered as means to further economic advancement, but no progress was ever made in this area, either.
Theodia's first company was Arrowe Softworks, which was developing the MMORPG Quest for Power. The project was begun in 2006, and the first beta released in 2009. Approximately sixteen unique people registered free accounts at the time of the first beta. Plans for an enhanced version of the game were announced back in 2010, after Arrowe came under Theodian jurisdiction, but there was little news of the game's progress until late 2011, when the company announced that the game's engine had been upgraded . No news of the game or the company have come since then.