Do we need humans?


Human capital is the stock of competencies, knowledge, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value. It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions. Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training.

“Human capital” has been and is still being criticized in numerous ways. Michael Spence offers signaling theory as an alternative to human capital. Pierre Bourdieu offers a nuanced conceptual alternative to human capital that includes cultural capital, social capital, economic capital, and symbolic capital. These critiques, and other debates, suggest that “human capital” is a reified concept without sufficient explanatory power.

It was assumed in early economic theories, reflecting the context, i.e., the secondary sector of the economy was producing much more than the tertiary sector was able to produce at the time in most countries – to be a fungible resource, homogeneous, and easily interchangeable, and it was referred to simply as workforce or labor, one of three factors of production (the others being land, and assumed-interchangeable assets of money and physical equipment). Just as land became recognized as natural capital and an asset in itself, and human factors of production were raised from this simple mechanistic analysis to human capital. In modern technical financial analysis, the term “balanced growth” refers to the goal of equal growth of both aggregate human capabilities and physical assets that produce goods and services.

The assumption that labour or workforces could be easily modelled in aggregate began to be challenged in 1950s when the tertiary sector, which demanded creativity, begun to produce more than the secondary sector was producing at the time in the most developed countries in the world

Effects of Social Capital

2013-10-15 21.27.53

Although social capital has been defined in several different ways by different experts, however, most commonly it can be called as the outcome of social relations. It not only comprises of financial benefit but also includes expectative benefits that are derived from the cooperation between various groups and individuals.

the major difference between the financial capital and social capital is that the latter fosters positive relationships and thus enhances the fulfillment and the confidence. Even after having so many benefits, social capital can also produce some unwanted results. Yes, it is surprising but true that when we analyze the other side of social capital, we may find that it can put burdens on the society.

Social capital producing negative outcomes is generally called as negative social capital. The potential downsides include restrictions on individual freedom, excess claims on group members and exclusion of outsiders. Additionally, instead of focusing on creating the bond between the two worlds – rich and poor, it emphasizes on bridging the gap between them. The result is that it is deepening the gap between the two. It also puts a barrier in social mobility.

Individuals working in social enterprises need to abide by certain rules and regulations and are supposed to do only what is expected. Their personal development and new ideas in most cases are not welcome. In such a scenario, it gives a sense as if it were creating unwanted results. Though every feature of social capital produces desired results but along with this, it also produces a liability too.