Human Capital

Specifically, Ron Burt says:

Second, the player has human capital. Your national qualities--charm, health, intelligence, and looks--combined with the skills you have acquired in formal education and job experience give you abilities to excel at certain tasks.

Adam Smith, in The Wealth of Nations (New York, Random House, Modern Library ed., 2000, p. 306)says:

Fourthly, of the acquired and useful abilities of all the inhabitants or members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise of that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit.

Quants don't like it because it's rather smushy. But if the entrepreneur doesn't have any, the entrepreneur isn't going far. I made a series of blog posts about human capital back in October, so I'm not going to say more about them here.

Wikipedia, the free, on-line encyclopedia, has an entry on it, too, so go ahead and read that one. Apparently critics claim that advocates of human capital try to explain everything by it. I don't see anyone seriously doing that, not if their sane and/or serious. There are ways of measuring human capital though, and those are helpful to the entrepreneur. I guess some people will oppose anything.

What do you think about this? Are you flush with human capital? Post a comment.

Entrepreneurship informs all of my professional activities. For entrepreneurial real estate, go to www.yourstopforrealestate.com./blog and for entrepreneurial writing, go to www.kearneymusicschoolmurders.blogspot.com