Posted tagged ‘Human capital’

Thomas Sowell, Human Capital More Important Than Physical Capital.

March 11, 2013

Thomas Sowell discusses the effect of foreign aid on human capital in the countries receiving it in this interview with William F. Buckley on his show Firing Line. It is from his book “The Economics And Politics Of Race”, written in 1983, (a book I highly recommend). If foreign aid affects human capital in the countries who receive it, how much does our bloated welfare system, and Government regulations affect the human capital of our own country today?

Quotes from the video about foreign aid, “ are simply transferring the wealth that has already been created, but you are not transferring the ability to create that wealth……too often in foreign aid you are rewarding people for doing all the wrong things….you are subsidising irresponsibility.

Physical capital is the tools, machines, and infrastructure used to produce goods and services, which in turn increases the wealth of a country. Human capital is the knowledge and skills needed to maintain and increase this physical capital stock. (more…)