[[BACKPOST]]: Second-Best Theory II

Posted on 18 Apr 2013 @ 6:35am by
Edited on 18 Apr 2013 @ 6:53am

1,648 words; about a 8 minute read

HOVER OVER all Vulcan within for translations!

ON:

[[2356: LECTURE HALL 87, VSA VULCAN]]

At the natural lull, he segues back into his point. "A cost-benefit analysis is a calculation that attempts to describe the benefit of a public endeavor on the radial population, to determine if a venture will be successful enough to justify the cost of implementing it. That being said, the analysis primarily focuses on benefit to the whole as opposed to the individual." He writes down a simple equation. 4%-8% (6.5%) vlitau'tath'eu-fi tav 10% khartau heh nosahp'kal (-masu) R/O = (rufahlar _ = rai'rufah) sutra _ (ost'synlar) rufaisu. "Can anyone describe to me what the -" he adds a few extra characters to the side, "- Net-Present Worth is?"

"It is a calculation of the impact a stream of payments will have on a specific venture," Tamev, a burly equatorial Vulcan answers in a foreign lilt. "Whether or not negative cash will return positive cash." He repeats the words in his notes, taken from the odd, outdated, alien textbooks.

"Meaning what?" Liyar turns to eye Tamev closely. "Examples."

Tamev doesn't understand the relevance, but he needs this course to account for his total score, so he quiets his discontent. The relevance of cash flow. Money. Vulcan hadn't a monetary system in thousands of years. What example could he possibly use?

"Branch out, Tamev. It is not about paper."

"The effort, expended in a project, would need to be worth the result of the project," Tamev tries. "If one wants to build a starship, they need to mine the materials, replicate them, coordinate with engineers and construction workers."

"Right. There is a lot of work that goes into any public project. Organization, allocation, purpose, desirability. Some resources simply cannot be replicated. Dilithium and many other useful elements must be mined. Tell me, how many Vulcan mining ships do you know of?"

"Mining for ore is a dangerous profession," Ak'weth says. "My brother's bondmate works in that profession. He says there are often accidents, and people are killed frequently. There are only twelve fleet ships devoted to the process."

"Correct. Many Vulcans would not find it logical to pursue that career path, as they would be entering dangerous situations and gaining little. Would you enter that profession? Would you leave your bondmate to do so, when you could easily pay another?"

"No."

"No, of course not. Those who do professions that dangerous typically do so on the basis that they will get a reward, that they have a purpose for doing so. For fifty strips of latinum, you could pay a Ferengi merchant to do the work for you, keep yourself and your family safe from harm. What does that mean?"

"Vulcan exists in the same interstellar economy as every other planet in the Alpha quadrant," T'Elin fills in.

"Exactly. What we need, what we are willing to do, exists in a continuum. Who is willing to do the work, who is able, and why. For the majority of our planetary operations, we are self-sufficient. No one in Shi'kahr spends cash," he said wryly. "No. In Gol, maybe. Tectonic plates make extracting resources extremely difficult, and so the only Vulcans wiling to do so are desert tribes, who require payment. Yet, for the most part, we are past the point where we need to worry about our basic needs. A member of a desert tribe can easily choose to live here, among us, and be well cared for. Yet, it does not reduce the fact that we do have needs, and therefore, require to expend in order to receive. To exist as Vulcans, on Vulcan, in the Federation, in the Alpha quadrant. The Net-Present Worth is a calculation of net expenditure in relation to potential long-term profit. Is what you put into a project worth what you will get out of it?" EKD=EK'LA DON = FA'WAK0 / (1 + i)0 + F1 / (1 + i)1 + F2 /(1 + i)2 + .... + Fn /(1 + i [ka'na ten tav)n [meilaktra nosahp'klai] (1), he marked down as he spoke. "Who can tell me what economics-accounting for water is?"

Vasak speaks up. "It is the commonly used macroeconomic indicator of national accounting in the Federation." This one is easier. It isn't a hundred years out of date. "The amount of resource expenditure per any population of people is balanced by income distribution, and costs associated with breakdowns of water, power, shelter, pollution and unsustainable living."

Nakh'na Potun Iskan Muhl'es, Liyar starts in a new panel. "NPIM, our main indexer of Federation and Non-Federation Aligned colonies and worlds. The NPIM or as we call it; accounting-for-water, is a calculation of the following items. Personal consumption, plus public, non-military expenditure. Minus private military expenditure. Plus capital formation, plus services of domestic labor, minus costs of environment. Minus depreciation of natural capital." He underlines the equation. "The EKD, NPIM. Can anyone tell me the last one associated with the cost-benefit analysis?"

T'Elin pulls out her PADD and recites her notes. "The classification codes list. There are three specific codes, which describe microeconomics; household, family, consumer. Health, education, welfare, labor and demographic economics.

"Correct." JEL: D63, JEL: I31, JEL: J18. "Normative criteria, welfare, basic needs. Living standards. Quality of life, demographic econ," Liyar says. "These are everything about the society that you are planning on integrating your project into. How the society functions now is important as it will help you determine how the society will function once you introduce your project. Now we will move onto a basic cost-benefit analysis calculation." The panels move again. Slowly, the board has evolved from three simple characters into a sprawling complex of information. "Define the planning horizon. Specify the rate of discount you desire. Describe the cost-benefit profiles in economic terms. Compare benefits to costs using a specified measure of worth, such as annual equivalent. For the purposes of this lecture let us say we are building a library in Gol. Gol is tectonically unstable, and only very few are willing to work in that province. The Order, the kolinahru, do not disturb the land. Therefore, you rely on others, such as the Kav'tevan. Our planning horizon, what is it?"

"Whether or not this project is short or long term," another student answers. As the class progresses it's clear that this instructor prefers input. They're opening up. Slowly.

"Correct, Lasen. Let us say this is a five-year project, the average amount of time devoted to a typical economic endeavor. Tell me, Lasen, in five years, how much are you willing to sacrifice to build this library? How much profit do you want to make?"

Lasen leans forward on his desk. "I want to spend the least amount, but get the most work."

Liyar ducks his head to the side. "Logical, of course. Give me numbers. Are you willing to spend two hundred bars of latinum? A thousand? Four thousand? This is the part where you look at your budget. A budget is any system of resources or expenses that one is willing or able to use. This is taken from the sum total of resources that you have at your disposal. Say you make approximately 60 thousand bars of latinum a year and you get a loan of one hundred thousand bars of latinum from the FCA. The FCA therefore collect interest on that loan from the time they give it until the time you pay them back. The KTV take the loan, and do the work. They build the library. One of them dies and you now need to pay funeral expenses. That is one hundred and fifteen bars of debt, plus added interest and expenses. How will you pay them back?"

"I cannot," Lasen says. "I have no money, and I have nothing to offer them. The library does not bring me profit, it is a public utility."

"Could Vulcan pay them back?" Liyar prompts.

"Yes. Vulcan possesses the resources to do that."

"Now you are bringing in multiple points of contact. The FCA, and now the PCV. Link them together."

"It would not be possible to build that library on my own. I would be required to consort with the PCV in order to obtain the necessary resources to pay back my loan. But I am now in debt to the High Council," Lasen points out. "I still do not have resources to pay them back."

"You have jobs," Liyar says. "A resource is a resource," he spoke to the rest of them. "Contributions could easily be made by attendees. Equipment, books. Whether that is money, work, land, minerals, wood, clan alliances, those all comprise your potential budget. This is why the planning horizon is the most important aspect of the cost-benefit analysis. Vulcan does not use monetary trade, but that does not mean we do not trade, or compensate, every single day. Each endeavor we take, is a calculated maneuver," he gestures with the side of his hand and goes straight into the next calculation, continuing the lesson with as much energy as before while he writes. B: 174, 180, 136, 80, 136, 178, 89. D: 4, 60, 10, 8, 10, 2, 14. C: 100, 120, 90, 80, 70, 110, 50. B-D-C: 1.7, 1.0, 1.4, 0.9, 1.8, 1.6, 1.5. (136 - 89) - (10 - 14) / (70 - 50) = 51/20 = 2.55. (136 - 136) - (10 - 10) / (90 - 70) = 0/20 = 0....

OFF:

Liyar
NPC Students

RSS Feed