Leo XIII spoke in a time of social and economic upheaval, of heightening tensions and actual revolt. Against this dark background, the brilliance of his teaching stands out in clear relief.
As is well known, the outlook that prevailed on economic matters was for the most part a purely naturalistic one, which denied any correlation between economics and morality. Personal gain was considered the only valid motive for economic activity. In business the main operative principle was that of free and unrestricted competition. Interest on capital, prices—whether of goods or of services—profits and wages, were to be determined by the purely mechanical application of the laws of the market place. Every precaution was to be taken to prevent the civil authority from intervening in any way in economic matters. The status of trade unions varied in different countries. They were either forbidden, tolerated, or recognized as having private legal personality only.
In an economic world of this character, it was the might of the strongest which not only arrogated to itself the force of law, but also dominated the ordinary business relationships between individuals, and thereby undermined the whole economic structure.
Enormous riches accumulated in the hands of a few, while large numbers of workingmen found themselves in conditions of ever-increasing hardship. Wages were insufficient even to the point of reaching starvation level, and working conditions were often of such a nature as to be injurious alike to health, morality and religious faith. Especially inhuman were the working conditions to which women and children were sometimes subjected. There was also the constant spectre of unemployment and the progressive disruption of family life.