Thomas Shogren, Chapter 6, Question #6

Chapter six talks about human capital and its role in the economy. An example that is used in this chapter is stripping people of all of their assets and leaving them on the side of the road. For example if Bill Gates was left on the side of the road along with a drug addict, who would turn out the best? In almost every case Bill Gates will turn out better because of his human capital. Bill Gates has the skills to help others and will most likely become employed. The drug addict will probably not get hired and if he does Bill Gates will still have the better job. Another example in this chapter is a society in which all the people are farmers and a guy with a Ph.D. in agronomy comes into town. The agronomist can help create a better plow making himself better off along with the farmers. This leads to a growth in the size of the pie of the economy, not an increase in the size of the slices. As human capital rises the society will tend to evolve.