ABSTRACT
Many of the problems which are involved in the so-called brain drain arise because of certain fundamental differences in the way in which human capital enters the process of decision making by contrast with physical capital. Physical capital tends to enter into the information system in the form of balance sheet items, in terms of dollar value. Because of this it is fairly easy to construct a system of legal obligations which distribute the equity in physical capital among various owners and which therefore builds up a structure of legal obligations in the form of debt which are then subject to charges in the form of interest. Decisions in regard to accumulation, decumulation, migration, or utilization of the physical capital are made in the light of this complex of balance sheet information and in the light of legal obligation and charges involved. Thus, it would be theoretically possible to amalgamate all the balance sheets in which all the physical capital of the world appeared, in which case all debts would cancel out and we would be left with the value of physical capital on one side of the world balance sheet and its distribution among the net worths of various owners on the other side. Furthermore, for any particular item of physical capital it ought to be possible to break its value down into a total of net worths of particular equity holders. The migration of capital then means simply that there is geographical dispersion between the site of physical capital and the owners of the equity in it. When this dispersion crosses national boundaries, of course, it becomes foreign investment. However, the problem is a 236perfectly general one and applies within countries as well as between them.
