Human capital

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Human capital발음듣기

If you wanted to build or produce most anything, I want to think a little bit about what you would need to do it.발음듣기

I have some pictures here, just to get our imagination going.발음듣기

These guys are up to making something with iron or maybe making iron bars, or making some type of thing out of iron.발음듣기

Right here is an old picture of some planes being made in a factory.발음듣기

Let's just think, in very general terms, of things you need to produce anything.발음듣기

First of all, you're going to need some land.발음듣기

That's definitely true if you're running a farm, or if you're trying to produce timber.발음듣기

You definitely need land even if you have a factory.발음듣기

Obviously, both of these factories are sitting on top of some land.발음듣기

Then, you're going to need a building, maybe.발음듣기

Most probably a building.발음듣기

You're going to need some tools and equipment.발음듣기

Tools and equipment.발음듣기

Then, you might need some raw material.발음듣기

In this case it might be iron.발음듣기

Over here too, you would need some metal.발음듣기

You might need some electricity or some oil to keep the production lines going.발음듣기

You're going to need some raw materials. Raw materials.발음듣기

Then, you're going to need people to actually work in your factory.발음듣기

These guys putting these hot bars of iron inside of whatever this thing right over here is, or the people working on the factory line.발음듣기

You don't see any here.발음듣기

This must be off time.발음듣기

You need people to actually work on the factory line, to tighten bolts and all the rest of things.발음듣기

You're going to need labor.발음듣기

If you put all of these things together ...발음듣기

Let me put them all together.발음듣기

If you put all of these things together then you should be able to produce your product.발음듣기

You'll be able to output whatever you set yourself to do.발음듣기

In the classical sense, when you think about all of these different things that you might put into production, sometimes they're referred to as the factors of production, they separate out ...발음듣기

This is in the classical sense.발음듣기

They separate out building and the tools and equipment as one of the classes.발음듣기

You have land.발음듣기

You have labor and you have buildings.발음듣기

Sometimes, just to throw it in there, sometimes you'll throw in management or organization in here.발음듣기

Someone needs to figure out how to layout all of this type of thing.발음듣기

This could also be a factor of production.발음듣기

Buildings and tools and equipment, they're kind of separated out from everything else.발음듣기

In the classical sense, they're referred to as capital.발음듣기

They are referred to as capital.발음듣기

They kind of have this separate distinction, because these are things that are made by human beings for the specific purpose of producing other things.발음듣기

Obviously, there are other things that are made by human beings.발음듣기

For example, you could have a ...발음듣기

Let me think of something that's nicely ... A hat.발음듣기

A hat is clearly made by a human being, but it's not produced to produce other things.발음듣기

It's meant for fashion.발음듣기

It's meant to kind of improve someone's quality of life.발음듣기

It's not made to make other things.발음듣기

In this case, the building and the tools, the whole reason why they were made is to make other things.발음듣기

In the classical sense, they are referred to as capital.발음듣기

If we go to kind of more modern times, you'll hear words like "human capital" or financial capital."발음듣기

You'll see a lot of different types of capital that people try to talk about.발음듣기

Human capital or financial capital, so what are they talking about?발음듣기

In the classical sense, capital were things that people made so that those things can help us make other things.발음듣기

The analogy is, is human capital isn't just straight up labor.발음듣기

It plays a role in it.발음듣기

In modern times, when people talk about human capital, they're trying to make the same analogy.발음듣기

They're kind of investments made in humans, so that those humans are better at producing other things.발음듣기

Human capital, when people refer to it, they are things like education, skills, talents that someone might have, talents, experience that someone might have inside of them or that were invested in them, (if you think about the situation of education) that make them more productive.발음듣기

They're things that are thrown into a human being that make them able to produce more output.발음듣기

This is what people refer to as "human capital" and how it's different than just straight up labor.발음듣기

Labor is just ...발음듣기

Look, any human being can go there and move something from one place to another or pick something up and put it on a shelf, or take it off of a shelf and put it on another shelf.발음듣기

What human capital is, are the investments in that person that make them more productive, more skilled, more able to do more interesting things.발음듣기

The same thing is true (just to throw it in there, just so you can kind of see this analogy) is financial capital.발음듣기

You could just say, "Look, there's something …"발음듣기

There's money for money's sake that you could use to buy a hat, or that you could use to buy really almost any of these other things.발음듣기

When people talk about financial capital they're talking about money that's being used for the purpose of producing more output.발음듣기

You could view it as the money that you actually need to run a factory.발음듣기

For example, they'll call it working capital.발음듣기

It's the money in the cash register, so that you can actually run your store or run your restaurant.발음듣기

Or, it could be money that's put to work by buying ...발음듣기

Kind of traditional capital, for buying these capital goods, so that you can produce more output.발음듣기

The whole idea here, I just want to introduce you to the idea of capital.발음듣기

It's central to the word capitalism in it's classical sense and then maybe in the more modern sense.발음듣기

Especially when people talk about something like human capital.발음듣기

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