“Human capital” is an interesting term. The “Investopedia” website defines it as “a loose term that refers to the educational attainment, knowledge, experience, and skills of an employee. The theory of human capital is relatively new in finance and economics. It states that companies have an incentive to seek productive human capital and to add to the human capital of their existing employees. Put another way, human capital is the concept that recognizes labor capital is not homogeneous.”
The concept of “human capital” or “labor capital” causes a few problems when we look at economics from a personalist perspective, however, and not just because it is a “loose term.” It’s because it’s a flat-out contradictory and extremely misleading term.
Aristotelian-Thomist personalism divides the universe into “persons” and “things.” Economic personalism divides the factors of production into “labor” (the human or personal factor) and “capital” (the non-human factor). Labor is thus an inherent part of the human being or person, while capital is not. Both, however, are or can be owned by every human person, respectively, and ownership means exactly the same thing in both cases.
In binary economics the concept of “productiveness” displaces that of “productivity.” Where productivity is generally defined as output per labor hour, productiveness is explained differently. While humans contribute to economic growth through all forms of labor, capital assets such as machines and technological processes are making an even bigger, ever-increasing contribution to overall output, in relation to that contributed by human labor.
In other words, human beings aren’t improving. What’s improving is things (capital) and how human beings use things — capital. “Human capital” is thus as oxymoron, as it should be “how humans use capital” . . . or “productiveness.” Today’s podcast illustrates this point very well, even though it’s about sports, not economics:
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