Free Liberal

Coordinating towards higher values

Human "Capital"?

by Robert Capozzi

Strong agreement with my colleague Paul Gessing on his blog A Free Market in Education? David Brooks's assertion that "the market is failing to supply enough human capital," not only fails on Gessing's point (the education "market" is almost entirely controlled by government.) But, perhaps audaciously, I'd ask, Who's to say if there's "enough" human capital? Who's to say that formal education is the optimal way to develop human "capital," a term that is utterly squishy. I suspect Brooks means something more like "skills and abilities," but whatever.

Citing dropout rates from high school and college seems weak proxies at best for developing the workforce's skills and abilities, and weaker still for productivity. Most productivity measures that I've seen are improving, so Brooks seems to be making some rather major logic leaps.

And, of course, what are the reasons why drop-out rates have increased? Funding "education" more might be a case of throwing good money after bad unless there's good reason to believe that this is a resource problem.

-Robert Capozzi

« A Free Market in Education? | Main | Free Liberals at the National Taxpayers Union Conference »


Personally, I consider the term "human capital" morally abhorrent. The term refers to human beings as little more than tools which can be bought and sold--it strikes me as another word for "slaves." The proper term for the potential human efforts bring to the economic process is "labor." Individual ownership of his own labor potential is inalienable; there is no such thing as "human capital." If they must refer to some aggregate labor potential, perhaps "total labor capacity" would be better. Personally, I think even that term would be meaningless.

Referring to humans as "capital" is just the next step toward the total commoditization of individual rights, the first step having been the folding of land into the term "capital." I am not a national resource.

# posted at by Tarvok [TypeKey Profile Page]