When most of us think about the concept of Capital, images of a bank account or shares of Google fill our minds. However, the type of Capital that Becker discusses in his book, has to do with education and the investments in individual knowledge - for these too are forms of capital in a sense that they improve health and raise earnings. More importantly, he draws from various studies to make the argument that investments in knowledge have a direct correlation with increase earnings. Similarly, he also cites evidence which indicates that countries grow more rapidly when education and other skills are abundant."Yet the evidence is now quite strong of a close link between investments in human capital and growth. Since human capital is embodied knowledge and skills, and economic development depends on advances in technological and scientific knowledge, development presumably depends on the accumulation of human capital."Interestingly, the lack of Human Capital in students may have a direct correlation with the academic Achievement Gap. "The benefit from embodying additional knowledge in a person may depend positively rather than negatively on the knowledge he or she already has. There is a similar assumption behind the mastery of learning concept in education pedagogy, where learning of complicated mathematics and other materials is more efficient when the building blocks of elementary concepts are mastered." Essentially, students who enter formal education with more Human Capital tend to be more successful academically. Becker cites research which indicates that parents with more Human Capital tend to "pass" on that capital to their children - something that disadvantaged families simply don't do. As a result, those students enter school with an advantage over their peers.
Gary Becker is a University Professor in the Departments of Economics and Sociology at the University of Chicago. Most notably, he is also the winner of the coveted Nobel Prize in Economics.
The Problem with Human Capital
An article by Samuel Bowles and Herbert Gintis make an argument for the theory of Human Capital. They state that "it offers no theory of reproduction at all and presents a very partial theory of production, one which abstracts from the social relations of production in favor of technical relations." They go on to state that "the failure to encompass social relations and to offer a theory of reproduction accounts for the more serious shortcomings of the standard treatments of the demand for human capital by firms, the supply of human capital, and the interpretation of the theory's central analytic concept: the rate of return to human capital." Essentially, Human Capital is poor science for understanding the intricacies of a capitalistic economy."...the educational system does much more than produce human capital. It segments the work force, forestalls the development of working class consciousness, and legitimates economic inequality by providing an open, objective, and ostensible meritocratic mechanism for assigning individuals to unequal occupational positions."
