Human Capital: The World Economic Staple

Parents insist they love all of their children equally for different reasons. Teachers preach that everyone is special in their own way. Church meetings welcome everyone as a unique individual with potential. Politicians repeatedly promise they have everyone's diverse needs on their agenda. Girls pat each other on the back saying, "Girl, forget him. You deserve so much better," after a breakup. Boys slap each other on the rear saying, "Dude, you got this," before plays in a big football game. Grandmothers will forever pinch our cheeks saying, "Well, aren't you just the cutest!"

Why?

         Because it's truth.

Okay, maybe not all truth, but the underlying principle is. We all have value. We all have different cards to bring to the table. Some of us have acquired more cards, skill, or experience than others; regardless, when 2+ people get together, they have substantially more human capital than a lone individual.

A couple books that I've recently read illuminate the value of human capital and interaction:

Jonah Lehrer explores the creative benefits, one form of human capital, that come from our interaction with one another in his novel  Imagine . Even the exposure to another's human capital seems to produce powerfully innovative results. Lehrer quotes Geoffrey West, a former physicist at Standford University and Los Alamos National Laboratory, saying, "When people come together they become much more productive per capita. They exchange more ideas and generate more innovations. What's truly amazing is how predictable this is." This is why cities, he argues, are the most important invention in human history. This is why, I argue, the family is the most important institution within those cities. Family's are the garden for the growth of human capital. Others may say that it's in the education system. I say that the family is the education system. As I stated in my previous post, the home is where we learn to learn.

The Alchemist, by Paulo Coehlo, presents some intriguing insights on the value of each person. "Each person forms its own exact function a unique beings . . . It is we who nourish the Soul of the World, and the world we live in will be either better or worse, depending on whether we become better or worse." Where does an individual first learn to become better or worse? In the home. In the Family. Our society will become better or worse depending on what we teach our children.

The innovation, morals, work ethic, social skills, resourcefulness, and resilience-- a few elements of human capital-- originate in the home. These are the elements that drive our economy and society forward. People are our greatest resource. Why, then, are we bringing less of them into the world?

Demographers have come out with some frightening statistics about declining fertility rates. While the world population continues to rise-- a result of lengthened lifespans-- birthrates have dramatically decreased. As our older generation begins to die off, our population will peak and then is predicted to steadily decline. Just as population can exponentially growth, it can exponentially decrease. Are we to fear extinction??? No... that's a little dramatic, but one thing we do have to fear is social and economic decline. You see, a decline in people means a decline in human capital-- a decline in innovation, work force, support, and skill diversity.

Dr. Paul Ehrlich promoted the idea of declining population in 1968 as the author of The Population Bomb. He alerted the world to the possibilities of extreme pollution, devastating environmental degradation, and mass starvation as a result of overpopulation. The effects of overpopulation, according to Ehrlich, would surely destroy the world if we reached 5 billion people. Did Ehrlich's predictions come to pass? In short, no. We're sitting at a comfortable 7 billion people right now. Is there pollution? Yes. Is there environmental degradation? Yes. Is there starvation? Yes. But human capital is at an all time high. The technology boom is one obvious example. It has made information more available than it has ever been. Communication and interaction has been taken from a local to a world wide scale for anyone with a computer or telephone. Ideas are being exchanged at a rate that Ehrlich would not have believe even if he had seen it coming. New, promising solutions to age old problems are being explored. These are the results of increased population, increased human capital.

Producing human capital comes down to having children and rearing them in a positive home environment. This positive home environment will be repeatedly explored in future posts. If you would like to know more about the fertility decline, its causes and effects, and how it's linked to a decline in families and children, please visit this link for a fabulous documentary: Demographic Winter.

And finally, for your enjoyment, Let's Get Together.