ABSTRACT
I begin this paper with a discussion of Adam Smith’s concept of the useful abilities acquired through education, study or apprenticeship, always at a real expense, which consists of capital fixed in people. Investment in this form of capital is motivated by the expected rate of return. I then consider the implications of the lack of a theory of the extension of markets. A compelling theory is still an unfinished part of economics. Lastly I turn to human capital in the modernizing economy with its proliferation of human capital, vast specialization and its increases in the value of human time and advances in useful knowledge.
