Abstract
This paper explores the extent to which a cultural work ethic can improve the performance of an economy. It argues that a variety of technological and institutional features of labor markets tend to cause Pareto sub-optimal amounts of labor to be supplied to the economic nexus. As a consequence, a proper work ethic can improve economic efficiency as well as material well being. “A man does not ‘by nature’ wish to earn more and more money but simply to live as he is accustomed to live and to earn as much as is necessary for that purpose. Wherever modern capitalism has begun its work of increasing the productivity of human labor by increasing its intensity, it has encountered this leading trait of pre-capitalistic labor.” Max Weber [ The Protestant Ethic and the Spirit of Capitalism (1904/1984, p. 60)]. ‘Sacred to the city, however, is the work ethic; office workers think nothing of leaving for work at 6a.m. and staying on to 9 or 10 at night. That, rather than economic management, is the explanation for the Brazilian miracle of the past 40 years’. The Economist (April 25, 1987), p. 22. 1 1 Also see for example Max Weber (1927), Daniel Bell (1976) or Gerhard Ditz (1980).
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