1. Quoth Noah: “Human capital is more fair, because it makes the capitalists work.” This is pretty baffling. Yes the use of physical capital usually requires labor. It does not require the labor of its owner and typically does not entail the labor of its owner. What this has to do with ‘fair’ I have no idea. At issue is whether Capital’s fundamental differences with Labor obviate the terminology of human capital. Fair has nothing to do with it. It’s an analytical issue. In fact the whole idea of Capital is that its basic nature subordinates the identities and peculiarities of its individual owners. It becomes a social and economic force in its own right.
2. The reforms Noah alludes to are arguably the consequence of labor mobilization in the 30s, and enduring union power through the 60s. Politics, not human capital. Sometimes the economic lingo is really unequal to the tasks of analysis. As for whether that debunks my ‘nominally democratic’ crack, the reference is to recent decades, as pressure builds to undo those reforms.
As we speak, the next presidential contest bids fair to feature a Clinton versus a Bush. Are you excited? I know I am. For a more academic treatment, I’d refer readers to the recent Larry Bartels piece, reported on here: http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/04/08/rich-people-rule/.
Of course there is some democracy. It’s hard to measure, but I suggest easier to detect its direction, namely going south. This kind of argument is never easily settled.
Nick Rowe visits (thanks!) and says can’t we model college as an investment decision. Sure we can. Or you can. Wake me when you’re done. I’d say economists are sufficiently ingenious to account for labor of different skill levels without confusing labor with capital. Nick suggests the human capital complicates the simpler division of labor from capital. I’d suggest that it muddies the fundamental distinctions and simplifies in an unconstructive way. In the quote provided by Lee Arnold, I think Schumpeter does this too.