Quotation of the Day

by Don Boudreaux on May 9, 2017

in Data, Inequality

… is from pages xiii-xiv of Tom Palmer’s superb Foreword to the new (2017) English-language translation of the volume of collected essays edited by Jean-Philippe Delsol, Nicolas Lecaussin, and Emmanuel Martin, Anti-Piketty (link added):

41V5t7RQI0L._SX326_BO1,204,203,200_Since the authors of Anti-Piketty do such a fine job of dealing with Piketty’s sometimes head-scratchingly strange moves, I’ll just note one of my favorites, namely, his argument for excluding from the capital stock almost all the capital I have, which is my modest human capital, for the accumulation of which I invested years of schooling, foregone income, tuition fees, and more.  Piketty claims that there are “many reasons for excluding human capital from our definition of capital,” but the only one that he advances is that “human capital cannot be owned by another person or traded on a market (not permanently, at any rate)” (Piketty 2014, 46).  That’s an interesting stipulation.  Human capital is something in which people invest heavily (look at all the time and money invested in schooling, training, and the like; I didn’t go to school all those years just for the fun of it) and it yields a measurable income stream.  So why does Piketty exclude it from his definition of capital?  Well, because if you think that human capital is important to include in the capital stock, you must be a very, very wicked person because you are an advocate of slavery!  According to Piketty, “Attributing a monetary value to the stock of human capital makes sense only in societies where it is actually possible to own other individuals fully and entirely – societies that at first sight have definitely ceased to exist (Piketty 2014, 63).  And there you have it!  Any number that might undermine Piketty’s narrative about an allegedly inexorably growing share of national income going to “capital” – and including human capital would effectively knock his case off the coffee table – can be dismissed because trying to measure human capital is tantamount to advocating slavery.

DBx: A scholar, such as Piketty, who claims to measure the size of the modern-world’s capital stock yet who excludes the value of human capital from his measurement is akin to a scholar who claims to measure the volume of water on earth but who excludes from his measurement all the water in the Atlantic ocean.


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