Why all labor is rewarded equally
Workers in NEO are paid only for the effort they actually exert, not for circumstances that contributed to the market success/failure of a product of that effort. For example, favorable personal characteristics or physiological endowments like beauty or the ability to perform in sports above peers with comparable training are not the results of own effort and consequently can't be considered factors that would warrant a higher economic reward. However, the greater value of output such workers often generate is a motivationally important signal of their abilities and is therefore rewarded with non-material Merit reward.
Factors of production costs are not reimbursed - why?
Unlike labor, costs of factors of production like tools, buildings or production inputs costs are not reimbursed in NEO. The reason is, that funds used to purchase them are payments from Rovas the workers received in the past. Reimbursing such costs would therefore constitute duplication of the reward for effort, that was already rewarded.
Material goods have value for people...
It is true that income provides people with not only a measure of "merit," but also with means that can be used to fulfill their needs and desires. NEO rewards an hour of labor with a set reward and an argument might be brought up, that inability to earn more exchange value for more valuable work is not fair. Existence of a maximum number of Chrons that can be earned in a given time period also might appear limiting. One reason for the rule is, that NEO respects research-confirmed preference of people for equal distribution of resources. The concept of fairness that is the base of these beliefs was generalized into two principles of justice by John Rawls. The 2nd principle loosely interpreted states, that if people did not know what circumstances they were going to be born into (they might be born into poverty or wealth, with higher or lower level of creativity, e.t.c...), they would choose wealth to be allocated among people equally. In other words, any economic benefits that result from such circumstances are a common human heritage.
How does NEO prevent false work reporting?
No economic system is free of fraud. Even in developed countries like Germany or the US an estimated 20% of potential taxable is unreported. A 100% cooperation of all economy participants albeit desirable is therefore not necessary for maintaining stability of the system. Regardless, NEO implements several mechanisms designed to limit the occurrence and impact of false labor reporting:
- Information about all work rewarded by Rovas with advance payments is publicly accessible. It means that everybody can see what a particular worker produced and how long it took to do so. Workers can monitor reports of work in their "sphere of interest" (performed physically close to them or done in the field of their expertise) and make a judgement about the validity of the report. If they determine that the labor reported was not performed, they can punish the offending worker by paying some amount of own Chrons to liquidate (say) 10 times the Chrons of the offending worker. That act would also subtract a set number of Merits from the offending workers' Merit account (which, as a result, can become negative). The "facts checking" workers may also broadcast their suspicion about fraud to other workers, to judge if a punitive action should be undertaken. It is expected that most workers will not attempt to report non-existent labor, due to the fact that their publicly visible Merit scores might show negative value.
- In Merit economy it is not the Chron balance but the Merit score that psychologically motivates the economy participants to act. Merits can be earned only by selling one's (products of) labor, which means that ownership of Chrons is psychologically harmless.
- The Rovas algorithm allows only a maximum of 24 hours of labor to be reported in a single day, providing an upper limit to any potential fraud. Excessive labor over long periods of time can also be algorithmically detected by Rovas and made public or even not rewarded on the grounds of being physiologically impossible.
- Ultimately, the system should be stable also if all economy participants "defected" and reported 24 hours of labor, because the factor responsible for the market dynamism is the desire to maximize one's Merit score. Merits however can be earned only for valuable work and that means (equal) Chron ownership should be harmless to the system performance.
How much would worker in NEO earn?
The global GDP for year 2016 is estimated to be 75 trillion USD. At the end of that year the total world population was 7 432 663 275 people and global labor participation rate was around 63%. Therefore income per year and per-capita was 16 818 USD. (GDP is 75 trillion, divided by 4459597965 people and that is 16 818 USD).
This means, that if all working people worked the same number of hours, they would each earn an equivalent of 16 818 USD. Assuming 220 working days @ 8 hours daily, the hourly wage equivalent would be ~ 9.5 USD/hour
How to invest in NEO?
The economy participants can invest own Chrons into projects they believe will make profit and as a result generate large Merit rewards. Unlike capitalism however, investors receive no economic value benefit from their investments. In fact, as discussed above in the Factors of production costs are not reimbursed section, they are guaranteed to loose all Chrons invested. Other (hypothetical) implementations of the Merit economy principles might relax this rule, but NEO rules grant economic reward only for own labor.
Investments can be directed into any of the myriad projects NEO participants will hopefully conceive. Investors can also inquiry about investing into development of the core "piece" of the economy - the Rovas application.