The visible hand in economics

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Consider the ‘traditional’ capitalist (envisage the Monopoly™ man). This capitalist owns the means of production, such as a factory, or piece of machinery, a building, or piece of land. The capitalist uses their means of production to extract economic profit.

Times are changing. As we move towards a service based economy, like all other developed countries, increasingly the means of production take the form of human capital. Human capital is the capital that is built up within an individual, for example through education, on the job training and everyday work. The holder of human capital is herein referred to as the ‘modern’ capitalist (envisage a slimmer, more refined Monopoly™ person, possible black, possibly Asian, possibly a woman, possibly trans-gender – we don’t discriminate).

Human capital is the foundation of professional service firms, ranging from the glamorous, such as private sector economic consulting firms, to the pedestrian, such as lawyers and accountants.
But this trend towards human capital accumulation brings us to what I term the curse of human capital. Read the rest of this entry »

In Nazi Germany, women were rewarded for having children. An estimated three million women ‘won’ a medal for having four or more children in 1939. Other incentives provided to women to encourage mass reproduction included marriage loans, tax allowances and health services.

In Labour-led New Zealand, women are rewarded for having children. The Working for Families scheme is “designed to help make it easier to work and raise a family” through paying extra money to those that have at least three children.

The in-work tax credit pays up to $60 a week for families with three children and up to an extra $15 a week for each additional child. The Working for Families scheme also offers an accommodation supplement and help with childcare costs.

Hitler offered his scheme to build up the Third Reich. A large population was critical to his vision of an Aryan super-state.

Arguably, Helen Clark is not as interested in an Aryan super-state. So why are she and her government so keen on giving reproduction rewards?

Read the rest of this entry »

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