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Human Capital

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TANSTAAFL Posted: Wed, Jun 22 2011 8:11 AM

Is it correct to think of humans as capital?

The phrase is thrown around frequently and rather loosely. I can see the connection between education, or rather an individual breaching asymetric information, as making a person more valuable. In a division of labor world specialization is key. Specialization requires information. Information allows us to make better decisions.

I think humans are actors. Capital is the excess production resulting from our acting to achieve ends. Capital is created by man, man is not capital.

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1. A person can use a word any way he sees fit, as long as he make himself clear to his readership.

2. The definition I've heard of capital is not excess production. If a farmer grows so many tomatoes they have to rot in the sun, those tomatoes are not capital. Even if they do not rot, they are consumer goods, not capital.

I've seen capital defined as tools. In other words, anything that will increase production by its existence more than if it did not exist. This includes money saved up which can be used to buy tools.

So by that definition, humans are not capital. But I imagine that when people say "human capital", they are using the word in a very loose sense, meaning humans when examined in their role as potential producers of goodies.

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It's easy to refute an argument if you first misrepresent it. William Keizer

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Capital - Need some help understanding

What Capital, according to Böhm-Bawerk?

What is a capital good?

What is 'capital consumption'?

and probably most precise:

Ludwig von Mises and The Theory of Capital and Interest

 

And just for fun, this question made me think of this:

 

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