This Paper hypothesizes that the demise of the 19th century's European class structure reflects a deliberate transformation of society orchestrated by the Capitalists. Contrary to conventional wisdom, it argues that the demise of this class structure has been in part an outcome of a cooperative rather than purely a divisive process. The research suggests that the transition from this class structure may be viewed as the outcome of an optimal reaction process of the Capitalists to the increasing importance of human capital in sustaining their profit rates. The Paper argues that the process of capital accumulation has gradually intensified the relative scarcity of labour and has generated an incentive to augment labour via human capital accumulation. Due to the complementarity between physical and human capital in production, the Capitalists were among the prime beneficiaries of the potential accumulation of human capital by the masses. They had therefore the incentive to financially support public education that would sustain their profit rates and would improve their economic well being, although it would ultimately undermine their dynasty's position in the social ladder.
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Publisher Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2701.
Oded Galor & Omer Moav, 2000.
"Das Human Kapital,"
Working Papers
2000-17, Brown University, Department of Economics.
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Find related papers by JEL classification: N30 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth - - - General, International, or Comparative O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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