Human Capital Essay example

4722 Words Oct 13th, 2015 19 Pages
WHY IS THE HUMAN CAPITAL SO IMPORTANT FOR THE ECONOMIC DEVELOPMENT OF MAURITIUS?

Introduction
This assignment aims to look at the special importance of human capital to the economy of Mauritius.
First, we go about defining the concept of human capital.
Afterwards, there will be a section which talks a bit about the history of the economy of Mauritius.
Then we will move on to another section which tries to explore the different factors as to why and how human capital is important to Mauritius.
We will then have a concluding remark.
We will end by some possible recommendations.

What is human capital?
Adam Smith defined human capital as follows: “Fourthly, of Justin Slay’s types of capital which is of the acquired and useful
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The worker must actually work, exert his or her mind and body, to earn this "interest." Marx strongly distinguished between one's capacity to work, Labor power, and the activity of working.
A free worker cannot sell his human capital in one go; it is far from being a liquid asset, even more illiquid than shares and land. He does not sell his skills, but contracts to utilize those skills, in the same way that an industrialist sells his produce, not his machinery. The exception here are slaves, whose human capital can be sold, though the slave does not earn an income himself.
According to Marx, an employer must be receiving a profit from his operations, so that workers must be producing (under the labor theory of value) perceived as surplus-value, i.e., doing work beyond that necessary to maintain their labor power. Though having "human capital" gives workers some benefits, they are still dependent on the owners of non-human wealth for their livelihood.

The term appears in Marx's article in the New-York Daily Tribune article "The Emancipation Question," January 17 and 22, 1859, although there the term is used to describe humans who act like a capital to the producers, rather than in the modern sense of "knowledge capital" endowed to or acquired by humans.
Simkovic (2013), states that neo-Marxist economists such as Bowles have argued that education does not lead to higher wages by increasing human

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