Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

All But in Name: Human Capital and Economic Growth in the Discourse of Early Modern Economics

Schabas Margaret, University of British Columbia

In 1992, Gary Becker received the Noble Prize for his work on human capital and the term has become deeply entrenched in professional economics. While the correlation between schooling and future earnings has been amply established by empirical studies, the causes at work are still under debate. It is not yet established whether it is the quantity or quality of the education, or at the early or late stages, that matter most, or even at all. Some scholars discredit schooling as nothing more than a signal regarding inculcated behavioral traits that are conducive to a productive workplace. Basic education has little in common with job training. Adam Smith was one of the first to articulate the core idea of human capital, to deem the investment in human skills as akin to the fixed capital of a machine, but as will be argued here, the groundwork for this was indebted to ideas laid out by John Locke, William Petty, and David Hume. This paper will trace some of the early modern literature on concepts of self-ownership, the arguments for the acquisition of skills in the workplace, and the role of education and knowledge more generally, as a factor for economic growth. Notwithstanding this rich intellectual heritage, this overview will serve to strengthen the view that the causal assertions of human capital theory remain dubious.

Area: Eshet Conference

Keywords: Human Capital Theory, John Locke, David Hume, Education

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