Productivity, Profitability, and Economic Insecurity

Abstract

For some time, social economists and conventional economists alike have taken note of a reversal in the historic rise in living standards in the U.S. and its serious consequences. Namely, for some persons and families, living standards of late have not improved at all and, worse yet, for others their financial fortunes have actually deteriorated. One reason commonly assigned for this economic malaise is a low rate of improvement in productivity. Wallace Peterson, for example, points to 1973 as a “watershed year” for fundamental changes in weekly earnings, family income, and productivity and has branded 20 years of sluggish economic performance the “silent depression” [Peterson, pp. 9, 42].

The integral development of the human person through work does not impede but rather promotes the greater productivity and efficiency of work itself, even though it may weaken consolidated power structures.

Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property as well as a stable currency and efficient public services. Hencethe principal task of the state is to guarantee this security so that those who work and produce can enjoy the fruits of their labors and thus feel encouraged to work efficiently and honestly. The absence of stability, together with the corruption of public officials and the spread of improper sources of growing rich and of easy profits deriving from illegal or purely speculative activities, constitutes one of the chief obstacles to development and to the economic order.

Centesimus Annus, chapters 4 and 5.