Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training. Pierre Bourdieu offers a nuanced conceptual alternative to human capital that includes cultural capital, social capital, economic capital, and symbolic capital. Just as land became recognized as natural capital and an asset in itself, human factors of production were raised from this simple mechanistic analysis to human capital. It is broken down or defined, human capital is vitally important for an organization’s success; human capital increases through education and experience. Human capital is also important for the success of cities and regions: a 2012 study examined how the production of university degrees and R&D activities of educational institutions are related to the human capital of metropolitan areas in which they are located.
The transformation of raw human resource into highly productive human resource with these inputs is the process of human capital formation. The intangible human capital, on the other hand, is an instrument of promoting comprehensive development of the nation because human capital is directly related to human development, and when there is human development, the qualitative and quantitative progress of the nation is inevitable. United Nations publishes Human Development Report on human development in different nations with the objective of evaluating the rate of human capital formation in these nations. Human capital is distinctly different from the tangible monetary capital due to the extraordinary characteristic of human capital to grow cumulatively over a long period of time. Rate of human capital formation in the future generation happens to be more than the rate of human capital formation in the current generation.
Specific human capital refers to skills or knowledge that is useful only to a single employer or industry, whereas general human capital is useful to all employers. When human capital is assessed by activity based costing via time allocations it becomes possible to assess human capital risk.
Global Capitalism at War with Itself
This week the threatened tariffs from Canada, China, and the European Union that were initiated in response to the U.S tariffs initiated by #45 have gone into effect. Thousands of migrant parents from Central America have been separated from their children, while others are being detained in tent cities in the blistering Texas heat. At the same time, a similar scenario plays out in Europe where German Chancellor Angela Merkel is under fire for imploring the German people, as well as her European allies to develop an open and compassionate approach to immigration in this time of a global migrant crisis. In language that echoes the words of Jesus in his famous sheep and the goats parable of Matthew 25, Merkel has challenged her colleagues and citizens with the idea that how they handle the migrant crisis is a reflection of whether or not they truly embrace the democratic values of justice and freedom they freely proclaim. While these two issues at first glance may not seem connected, in reality, they are deeply connected as they are the result of a neoliberal capitalism run amok, benefitting the few at the expense of the many.
It’s a philosophy in which there are winners and losers, with no regret or recompense for the losers. Those in between are the pawns manipulated to justify the inequity. What is seldom acknowledged is that global capitalists made sure the game was rigged in their favor so that elections were bought and paid for, and few if any radical voices – like a Bernie Sanders or the new Mexican President Obrador – get in. Now the capitalists are fighting among themselves, instituting tariffs as a way of somehow protecting their economies that are inextricably linked together in the global capitalist web. Rather I could only marvel at how the people whose countries control an overwhelming percentage of world’s wealth could be so petty with each other and so callous toward the truly poor in their midst and the migrants on their borders.
God who abides with poor and the oppressed, looks on as thousands at borders long only for a comfortable bed, a safe home and the basic essentials of life, weeps. Metcalf, S. Neoliberalism: The idea that swallowed the world.
There is No Third Way
Writing during an age in which the expropriation of the means of production by the state and the imposition of full-scale socialism with central planning was a real possibility even in Western Europe, Röpke bravely defended private property, the free market, free international trade, and market-determined prices and wages. While out of step with the prevailing economic orthodoxies of his time, Röpke nevertheless helped save at least part of his fatherland from the poverty and stagnation that would have followed inexorably from the statist economic policies favored by German social democrats and Anglo-American occupiers. The neoliberal economists of the GermanFreiburgSchool, Walter Eucken and Wilhelm Röpke, denied that what Germany needed was more government control of the economy. If there is one area in which Röpke’s ideas can be praised without qualification it is in his advocacy of political and economic decentralism and the closely related idea of subsidiarity. Röpke pointed out that Switzerland was more genuinely democratic than any other Western country because political power was divided between a federal parliament and numerous self-governing cantons.
According to Zmirak, Röpke opposed the supranational economic and political organizations that began emerging in the wake of the Second World War. Although Röpke defended the autonomy of historic regions within larger political entities, he also defended the independence of the sovereign nation-state as a bulwark against the emergence of such supranational bureaucracies. According to Zmirak, Röpke accepted many of the socialist and traditionalist criticisms of historic capitalism. Röpke made a fatal concession to the socialist cause in agreeing that unrestrained capitalism had proven socially destructive and unsustainable. There are three inherent weaknesses with Röpke’s distinction between compatible and incompatible market interventions.
A passionate critic of socialism and the welfare state, Röpke was nonetheless keenly attuned to capitalism’s destructive elements and the intrinsic limits of the market. We need Mises, not Röpke, to save us from the despotic hand of the modern WelfareCorporatistState.