Friday Ephemera

Valuable Knowledge

Human capital is the ability to create the material things that constitute wealth… A classic example: In the 1970s, Uganda decided that the Gujarati population, from India, were just too wealthy and controlled too much of the economy. The Ugandans expelled them and wouldn’t let them take their wealth with them. And so the Gujaratis arrived, mostly in England, destitute. Meanwhile, the Ugandan government had taken over all of this material stuff. A few years later, the Gujaratis were prosperous in England, and the Ugandan economy collapsed. Because they didn’t have people who knew how to do what the Gujaratis were doing. It’s also one of the problems of trying to finance things by confiscating the wealth of the wealthy. All you can confiscate is the material wealth. You cannot confiscate human capital.

Thomas Sowell on wealth, poverty and Flat Earth economics:  

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