I wanted to add that no-one rules out the role of "human capital" in the story _completely_. On the other hand, the Chicago School tries to use it to explain everything that's not explained by compensating wage differentials and the like.
BTW, if you think of "human capital" as a worker's ability to work (perhaps increased by good nutrition, education, experience, etc.) it's almost synonymous with Marx's labor-power. Of course, Marx's strictures against seeing wages as akin to interest on "human capital" still apply. On 7/15/06, Jim Devine <[EMAIL PROTECTED]> wrote:
Michael Perelman writes: > Since we have been discussing sports, I have a question about the > distribution of income. Inequality is supposedly a reflection of the > "human capital" of workers. CEOs are hundreds of times more productive > than ordinary workers. a lot of economists now reject this explanation, e.g., Krugman. It's really the Chicago school which clings to that view, redefining human capital in ways that make it close-to-tautological. > Here is my question: Looking at sports or entertainment figures you > find a similar expansion of inequality. I doubt that the ratio of > incomes of superstars of yesterday to that of the also rans was as as > extreme as today. Has anybody looked at this? look at Frank & Cook's THE WINNER-TAKE-ALL ECONOMY (which is mostly NC economics). It's all about that, with a lot of examples from sports. (It's a good description of capitalist competition, but I'd skip the last chapter of F&C.) CC writes: >Consider how many boys in Middle School must play football in order to generate just one high-paid NFL player? Consider all the B Teams. The junior-high coaches. The Little Leagues. On & On. There is a hell of a lot of human labor congealed in every pro athlete today. There was far less in the past.< MP asks: >Carrol, you may be correct, but how will that affect the ratio between the different levels?< in the winner-take-all market (which comes from Shewwin Rosen's "Economics of Superstars") suggests that there is a fixed number of "winners" in any market (e.g., the NFL players) and a large number of people struggling to get into the winners' circle. The income gap between the winners and the "losers" is gigantic (given a relatively small skill gap between the bottom winner and the top "loser"). The larger that gap, the more people struggle to get into the WC. (I haven't read Rosen, but F&C do a good job.) -- Jim Devine / "Capitalism has destroyed our belief in any effective power but that of self interest backed by force." -- George Bernard Shaw
-- Jim Devine / "Capitalism has destroyed our belief in any effective power but that of self interest backed by force." -- George Bernard Shaw
