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Culture role in formation of the human capital

05 September 2013
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In the modern economic literature there are different approaches to classification of human capital. I. Skoblyakov considers and evaluates the human capital at following different level: the certain person (the micro level — the personal human capital), the separate enterprise or group of companies (meso level — the human capital of firm) and the states in general (macro level — the national human capital).

In structure of the cumulative human capital there are: personal human capital (capital of health, cultural and moral capital, labor, intellectual and organizational and enterprise capital), the capital of firm (recognized assets of the personal human capital — patents, copyright certificates, a know-how, etc., firm intangible assets — commodity brands, trademarks, commercial secrets, etc., the organizational capital, the structural capital, a brand capital and the social capital) and national human capital (social and political capital, national intellectual priorities and national competitive advantages).

The human capital is very complex social, cultural and economic phenomenon. It can be said that it is very ambiguous phenomenon. Thus, the concept about this phenomenon is urged to express all multi aspect and multilayers of this phenomenon.

The human capital — the concept designating the accumulated knowledge, ability and skill which the person has and which are acquired by it thanks to the general and special education, special training and experience.

There are many approaches that define the human capital as economic category because it is very difficult and multi faced. This concept is quite capacious, it includes many different spheres such as social, economic, psychological and even philosophical as «there is no such aspect of human existence which in principle would not get under determination of the human capital» [2].

In the economic literature there are several definitions of «human capital». In scientific and organizational sphere this terminology was created by American scientists, Nobel Prize winners T. Shults and G.Becker.

One of them began his research about «human capital» in the beginning of 60s of last century. In 1964 Theodor Shults published monograph «Transformation of traditional agriculture» which identified new approaches in economics. In this and subsequent works he showed that the educational level of the population depends on its ability to use information and technology for economic development. The term «human capital» first appeared in the works of the economist who was interested in the difficult position of the underdeveloped countries. T.Shults wrote that improving the welfare of poor people did not depend on the land to its natural resources, but rather on knowledge. He called the qualitative aspect of the economy «human capital.»

Schults who got the Nobel Prize in 1979 gave the following definition: «All human abilities are either congenital or acquired. Each person is born with personal the complex of genes defining his abilities. Acquired qualities which can be increased by the appropriate attachments, we call the human capital» [3].

In 1960 T.Shults carried out estimations of cost of labor, including expenses for education of the person and «time spent on training and education». Prior T.Shults nobody considered these expenditures in economic development. He is a pioneer in reasons for «the human capital» as important economic resource of society. By the way, T.Shults marked that in addition to education «the human capital» shall include also states of health. Besides, he emphasized that «investments into the person raise not only labor productivity level, but also economic value of its time» [4].

According to T. Shchults, G. Becker, L. Turou, the formal and informal education, preparation on production, medical services and researches in the field of health care, expenditures on migration optimization and search information about state of the economy belong to the investments developing creative abilities of people.

The process of increase of quality of education T.Shults considers the same as natural results of investment of additional resources in education and as well as technical progress is result of investment on improvement of technological structure of production. Unskilled workers become capitalist not because of the result of diffusion of property of corporation, as it usually showed in popular publications, and acquiring the knowledge and skill having economic value.

Other author of the theory of the human capital Gary Becker (created model of the human capital and published about it in the monograph «Human Capital») puts in concept of the human capital of knowledge, skills and abilities of the person which promote growth of its productive force. In the Nobel lecture in 1992 he marked that the human capital consists of the acquired skills, knowledge, motivations and energy with which human beings are allocated and which can be used during the certain time frame for the purpose of production of goods or services [5].

G. Becker said that economic approach to analysis of social phenomenon compare to Marxist do not considers that motivation of individual is only egoism or material benefits. It is just the method of analysis, rather than a specific assumption about motivation. According to the G. Becker, people before choosing a particular decision of how to behave, they estimate how profitable or unprofitable will be this type of behavior. Such approach is typical for different spheres of human actions and decisions.

According to G. Becker and T. Shults, productive qualities and characteristic of the employee are special form of capital on the grounds that they are similar to physical capital and provide its owner with a higher income. Based on this approach, the cost of the individual to maintain their health, the acquisition of skills, education, or other changes in status and life serve as an investment in the future that should bring some income, not only to compensate for the invested funds, but also exceed them.

Over time the theory of the human capital became very widespread in the modern science. But in the beginning it was considered very hostilely as the idea of the human capital was perceived as humiliating in relation to people who were considered allegedly in this concept as a certain kind mechanisms. Although, G. Becker included in «investments into the person» expenditures, connected not only on the general and professional education, but also health care, migration, information search about the prices and the income, the birth and care of children, and other attachments promoting growth of productivity of the person. Besides this, author could make individual training and other forms of growth of the human capital by bringing them into accord with a hypothesis of rational expectations.

At that time the concept of the human capital was considered as following: «It is the form of the capital because it is a source of future earning either future satisfactions or together. It is human because of it is a component of person» [6].

Along with the concept «human capital» in the modern social sciences there are other concepts which close to its meaning: «human potential», «human development», «the social capital», etc.
It is known that the United Nations since 1990 carries out the annual analysis of accumulation and human development for each country on the basis of a technique IHD (Index of Human Development). It is necessary to tell that the technique of determination of IHD is based on three main criteria:

— The expected life expectancy defined in the birth;
— Education level (is defined on two third by literacy of adult population and on one third — spanning of the population formation of the first, second and third steps);
— Parity of purchasing power of the population (the standard of living determined by real GDP per capita).

This index allows establishing correlative connection with a level of development of «the human capital».
Researches showed that summary of influences of all factors which create «human capital» have following structure: 60% — education level, 40% — social origin, health and natural abilities.

According to the World Bank, as a part of national wealth of the USA the fixed business assets (technology equipment, buildings and constructions), make only 19 percent, natural resources — 5 percent, and the human capital — 76 percent. For Western Europe these indexes respectively — 23, 2 and 74 percent, and for Russia — 10, 40 and 50 percent.

It is necessary to tell that the concept of human potential appeared earlier than «the human capital» and it is wider. It includes also the abilities of the person used in addition to a primary place of employment (for him, for society, for career growth).

By comparison of concepts of potential and the capital two moments can be distinguished. First, specify that those properties of potential which can be used in the course of work mean. One of such properties the certain inventory of health, knowledge, skills, abilities, motivations created as a result of investments and saved up by the person which are expediently used in this or that sphere of public reproduction appears», promote growth of labor productivity and production efficiency and by that influence growth of earnings (income) of this person» [7].

Secondly, the part of authors is instruct to the specification stated above and emphasizes that the human capital as well as any other capital shall have ability to be reproduced, that is, the expenditures spent for its accumulation (formation) — investments shall bring in the future big incomes — dividends.

Thus, the problem of human potential in innovative economy arises as a chain of tasks: increase in human potential in two aspects, each personality and the population in general, creation of conditions for transformation of potential into the human capital, implementation of this chain in relation to special requirements of innovative economy. Actually, special requirements arise as professional, for the rest it is the general requirements of post-industrial economy.

The concept of the human capital is tightly connected to such concept as «human development». As the phenomenon human development represents process of support of people with wider choice in all aspects of human life (opportunity to live long and healthy life, to acquire knowledge and to have access to the resources necessary for a worthy standard of living).

In the 90th of the 20th century there was a reorientation of the purposes of political and economic development of the countries of the world community to the person. In this regard in social humanitarian science the concept of human development which serves for understanding as the reached level, and process of extension, satisfaction of vital needs of the person, formation of its abilities and their implementation in all spheres of public activity taking into account support of productivity of creative activities of people, social equality in aspects of their opportunities and a sustainable development was created.

Aristotle believed that prosperity obviously is not good thing which we look for, it is only useful to searches something another [8]. The modern paradigm of human development marks two-aspect nature of human development.
The modern scientists distinguish two sides of human development: the first is connected to formation of such human abilities as improving health and knowledge, the second, usage of these abilities for operation and leisure [9].

The essence of the concept of human development which theoretical kernel the paradigm of the human capital appears, is that welfare of people is estimated by their possibility of a message worthy life, but not on the level of the income of the population which is considered as the condition expanding possibilities of the person in such areas as health care, education, economic and public work.

As the most actual problems the following is considered: to live long and healthy life, to gain knowledge and to have access to the resources necessary for a worthy standard of living. All these problems are interfaced to questions of employment, increase of the income of the population and a solution of the problem of poverty.

Thus, human development carries to creation of such environmental economic, social, political and ecological environment which would promote increase of human potential and its implementation in the form of the human capital in all main spheres of human and social being.

In processes of interaction of economic science with other sciences nowadays appear such new concepts as «the social capital», «the cultural capital», «intellectual capital» and «the symbolical capital» gain the development. At first sight it seems that appearance of these new concepts shows domination of economic science and its central concept «capital» among other social sciences. However among economists the thought that there is a restriction of economic approach in relation to the economy makes the way in life more and more. Nevertheless, the World Bank and the Economic Cooperation Organization willingly use these concepts, try to add ideas of the economic capital these new concepts. So, for example, the World Bank often attracts these terms, in particular the concept «social capital».
In the western literature the social capital is defined as characteristic features of social life — interaction, norms and trust, — which allow participants to work more effectively together for achievement of common goals.

Now representatives of non-economic disciplines — P. Bourdieu, Zh. Kolmen, R. Petnam, F.Fukuyama and other authors aim to record the significance of social networks, resources, primordial (primary) forms of the social organizations. Norms of human relations, the religious organizations which are not marginalized communities, trust belong to the last a family. They, without being economic, increase efficiency of society in implementation of collective actions. One of the western social scientists said: «The market in itself does not provide socialization. The market mechanism overturns that fact that capitalism is a social order and that the market mechanism is not the only thing. Historical mission of accumulation, vital for capitalism, does not result from market the mechanism. It comes from primordial rise of hierarchies, rules, the power and glory that the market does not know anything» [10].

F.Fukuyama often writes about the social capital, defining it as «the set of the informal rules or norms shared by members of group and allowing them to interact with each other» [11]. Fukuyama shows that unlike norms of mistrust used by mafia and in criminal circles, the social capital is based on morally positive values, first of all on trust. It shows the significance of state’s role everywhere including economy.

The social capital in social sciences is considered as «the third sector» in comparison with economic and cultural activity today. It returns us to A. Smith not only from the point of view of people’s wealth, but also their customs.

The social capital appears a peculiar indicator of the valid changes in society and as the base of social policy. If civil society, the social capital is in a developed status, both the economy and the human capital function more effectively as creates them and develops all post-industrial society in general.

As for our determination of the human capital, we did not put as the special task to give such definition. It is not about it, but the main point is in understanding of entity («being») multi-faces, multi-layers sociocultural phenomenon and that is not only economy, but all culture and society with the spheres of social life participates in process of formation and development of the human capital. Philosophy, being peculiar «heart-shaped», the center and highest type of a human study, shall take the active part in it. It is considered that more or less complete definition of concept of the human capital is still ahead. But it also will be incomplete considering the above mentioned complexity and multidimensionality of both phenomenon and also concept of the human capital.

Process of formation of the human capital, including in the modern Kazakhstan, should be consider as sociocultural process grandiose in essence as it has spiritual culture as major component.


Literature:

1. I. Skoblyakov, Reproduction of the personal and public human capital in post-industrial economy. Abstract of research of the Doctor of Economic Science, Orel, 2008, page 20.

2. A. Koritsky Introduction to the theory of the human capital. Novosibirsk: 1999.

3. T. Schultz, Investment in Human Capital. N.Y., 1971, p.57.

4. T. Schultz, Investment in Human Capital. N.Y., 1971, p.127.

5. G. Becker Nobel lecture. The Economic Way of looking at Behavior//Journal of Political Economy, 1993. v. 101.

6. G. Becker Nobel lecture. The Economic Way of looking at Behavior//Journal of Political Economy, 1993. v. 101.

7. A.Dobrynin, Human capital in transitive economy: formation, assessment, efficiency of use// A. Dobrynin, S. Dyatlov, E. Tsyrenov, Transitive economy. Science, 1999, page 75.

8. See: Human development in Kazakhstan. Almaty, 2003, page 9.

9. See: Kazakhstan: Report on human development 2002. Almaty, page 6.

10. R. Heilbroner, Economics as Universal Sciences//Social Research. An International Quaterly of the Social Sciences.//2004, Vol.71, No. 3, P. 617–618.

11. F.Fukuyama, Social capital//The culture matters. How values promote public progress / under editorial board L. Harrison and S. Huntington. 2002, page 129.

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