From the Human-capital Approach to a Political Economy of Human Resources

The economics of human resources seems to be almost synonymous with the human-capital approach, if one takes the majority of Anglo-Saxon publications as the relevant criterion. That had led one of its outstanding proponents to assert that, ‘the human-capital research programme, however, has no genuine rival of equal breadth and rigour’, (Blaug, 1977, p. 54). That this leaves many strands of burning policy issues uncovered, is recognised even by Professor Blaug himself, when he candidly admits in the final sentence of that same article, with regard to the human-capital approach as confronted with public finance, ‘that it does not address itself to the more interesting questions about government intervention in education, health, migration, and training’ (Blaug, 1977, p. 56). Making one further step towards obliteration, and considering the human-capital approach from the point of view not of breadth and rigour but of realism, one finds that even the area traditionally cultivated by its theoretical and econometric analysis does not lend itself as a safe basis for policy-making. Follow the well-trodden path of calling in question the outrageously over-simplified assumptions of the human-capital approach, inherited from its neo-classical background, then many of the conclusions of empirical human-capital economics are seriously threatened.