A nation with increasing productivity is one with an increasing standard of living for its citizens. So goes the unchallenged economic rule of enhanced productivity.
Economics is, for the most part, correct when it posits that productivity growth increases the overall standard of living – to the extent that one defines standard of living as an increase in material wealth. I just don’t believe that people define their standard of living quite so narrowly. I think a better measure would be “quality of life.”
Whereas standard of living measures gains in material wealth, quality of life measures an additional component: purposefulness. Material wealth without the time to enjoy it is not wealth at all. Additional time to choose activities means nothing without a sense of being useful. Few people thrive without a purpose to their lives. Take away a man’s purpose and he’ll starve as surely as if you’d denied him bread.
By this measure, our system is failing. While we certainly have greater material wealth and comfort, millions now lack purpose in their lives. If we are to advance as a society, we must correct this failing in our economic models.
The answer is as simple as asking a different question: Will the action being considered improve the quality of life for the nation’s citizens? I said it was simple, not easy.
The nation’s financial infrastructure was salvaged by the extraordinary actions of the Federal Reserve and, to a lesser extent, the federal government. But to what end? Millions are unemployed with no prospects of finding a job anytime soon. Millions more have lost their homes. And each and every one of us has become jointly and severely libel for $15 trillion in government debt. Meanwhile, productivity has continued to advance as companies do more with less. Has our quality of life improved? The answer is no.
We spent trillions of dollars to save a broken system with the promise that all of that money would ensure our beloved systems wouldn’t crumble. Yet the promised outcomes have not materialized. Why?
It’s simple, really. We are paying the accumulated bills from the last 40 years of excess permitted by an overly indulgent Federal Reserve and politicians anxious to buy votes with the people’s purse. We are not buying a better future, but paying for a raucous past. One problem with this plan: We are paying the bill with a credit card that should have been cancelled years ago.