Katie Jo Hibbs – Honorbound
In 1985, Steve Jobs was fired from Apple, the company he co-founded with Steve Wozniak out of his parent’s garage. How did this affect him? Did he go back home to live with his parents? Did he stand on the corner with a hand written cardboard sign saying, “Anything will help”? No! Steve Jobs possessed an invisible force that would lead him to start another computer company called NeXT (which he eventually sold to Apple for over $400 million). At the same time he bought a small computer animation company called Pixar that nine years later produced “Toy Story,” one of the most popular animated movies of all time. How did he do all of this when he had been fired from his own company? He did it with “human capital.”
Human capital is “the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, and entrepreneurial vigor” . All of the traits that enabled Steve Jobs to found Apple were still with him when he got fired, and he knew it. As Jobs stated in a 1996 interview, “the thing that drives me and my colleagues is that you see something very compelling to you, and you don’t quite know how to get it, but you know, sometimes intuitively, its within your grasp” . Human capital makes it possible.
By contrast, a High School dropout with minimal meaningful work experience would probably be considered to have lower Human Capital than Steve Jobs. The dropout would find great difficulty trying to start a new company or finding a job in a highly technical field. That is not to say the dropout is a bad person. However, a lack of human capital leads to limited opportunity and lack of productivity.
Societies are improved by having a population with high levels of human capital. Public schools, libraries, and even free Shakespeare in the Park are all ways that a society can raise human capital.
Bill Gates, another entrepreneur with high levels of human capital, recognizes the value that a healthy, well-educated population can bring to poverty-stricken countries. Since 2008, “Gates and his wife Melinda [an Ursuline Academy of Dallas graduate] have given away $28 billion via their charitable foundation – including $8 billion to improve global health” .
As Wheelan states in Naked Economics, “Human capital is inextricably linked to one of the most important ideas in economics: productivity” . A healthy, educated population is a more productive one, and productivity is the key to raising the standard of living for everyone. Public policy should be directed at enabling all people to maximize their invisible force for productivity: Human Capital.