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Over the last decades a breakdown occurred in this vicious circle. Internationalization of capitalistic markets and the introduction of new nonmaterial electronic-information technologies have put competitive pressure on companies, forcing them to restrain costs by increasing productivity and saving on labor costs. When productivity grows so do profits. But salaries and employment decrease. If workers want to grow in number or just preserve their jobs, they have to diminish the cost of their work, which means: working more and earning less. This flexibility explains that if the economy has to grow, we should adapt to earning less. So then : why and for whom is it necessary that the economy grows? The answer from the classic economic world is that growth in productivity and profits makes for new investments that in turn create new possibilities for raising income and employment. But in reality this is not so. In fact a rise in productivity doesn't translate into extensive investments that increase production and employment, but rather in intensive investments in financial activities: shares, obligations, bonds: namely in those activities that greatly determine the movement of wealth and income towards those who don't work and produce, thus operating a socially perverse redistribution. In parallel, socially fair distribution is restricted; namely: expenses for public investments destined to health care, to social protection, to the common good. (24:1) Should we be surprised if societies that, on the average, become richer and richer then manifest signs of uneasiness, frustration and, often among the most disadvantaged social classes, even despair? (24:2) When the growth of gross national income is not accompanied by growth in employment and salaries, young people look to the future with dismay and the middle classes, the grass roots, fall into a distressing condition of insecurity, that in turn determines a more accentuated political instability. (24:3) To square the circle we need to break this perverse logic. The ever-increasing fruits of productivity should not stagnate in a competitive economy as an end in itself, and should not be wasted in the virtual economy of speculative finance; they should be invested in increasing quantity in activities that are freed from the rigid logic of the competitive market; they should satisfy the even more pressing collective needs of the of the environmental, social and cultural well-being. It is only in these terms we can find a logical solution to the problem of unemployment and social degradation. (24:4) To carry out and finance this process of decanting we need to invent new methods of redistributing the fruits of productivity. The traditional one based on withholding taxes and national expenditures is no longer sustainable in a richer, ever more restless and frightened society. It is clear therefore that the classic economic theory is no longer able to solve the growing disarray in the world. Economists continue to conceive the system as a mechanic process where supply and demand are like oscillations in a pendulum. It is enough to consult any text on economics to understand that the economy, in brief, is a "giving" and "taking" process based on curves of supply and demand. When the demand of a certain good or service increases, the price rises. When it rises too high and the demand weakens either it concentrates on other goods and services, or the price lowers.
(24:5)
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