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theodore schultz an american economist was born in nineteen ninety and died in
nineteen ninety-eight he spent most of his career at the university of chicago
schultz was but i called a common-sense economist
he didn't have a grander complicated or unusual theories
but a lot of what he said in a row today seems to us almost self-evident
but at the time for made these points they were quite neglected
shilts is key idea it was the notion of human capital that economies become more
productive by investing in human beings for instance if we want to make that
work alter more productive
farmers need to learn the skills to produce more crops
schultz himself was born on a farm and he'd like to visit farms he once said he
got his key idea of human capital when he visited a farmer and his wife and
they seemed quite court if they were also happy
they explained to schultz that they had center for children to college and
giving them a good education and therefore they could rest content
from this anecdote scholz started thinking through the ski idea of human
capital
what are some of the key propositions that schultz before
most economic growth is from human capital
it's from our on jinu idiots from our skills its primary bilities
shilts also explained this is one reason
white connie such as germany or japan
recovered so rapidly after world war two they still had a lot of their human
capital impact
second shelter leon saw that nutrition and health
they're not just forms of consumption
but there are themselves ways of investing in human capital their ways of
investing in human beings and making this human beings more productive this
is again an example of his common sense economics
shilts you'd farmers as basically rational
and responding to incentives and is being economic agents
who would follow the laws of supply and demand who would pursue profit
who try to make better lives for themselves
schultz or farmers as entrepreneurs
economic agents
willing and able to take initiative when institutions allowed for that
in shelters deal we didn't need some special economic theory for developing
countries
neoclassical economics
was perfectly correct
it applied to farmers that applied to individuals in developing countries
but if those nations were to become richer that all came back to scholz is
ke fundamental idea
that if human capital
schultz testified there of this idea of human capital
was awarded the nobel prize in economics in nineteen seventy nine