ABSTRACT
The concept of human capital is not difficult to grasp: Humans, like computers, can be "programmed" to do certain tasks. The chapter discusses five areas in which human capital's peculiarities have significant implications: inequality of nations and regions; migration and "brain drain"; social underinvestment and political failure; democratization; and wars and warfare. If human capital indeed has increasing marginal productivity, then existing inequalities between nations and regions is tend to persist or grow. Advanced societies, rich in human capital and innovative capacity, can readily find substitutes for most of the land-, labor-, and resource-intensive products of less developed economies. The complementarity of physical capital and increasingly fluid financial markets-a change that Rosecrance has rightly stressed-imply that new investment is also flow disproportionately to the advanced economies. In a rare scholarly consensus, human capital has emerged in the last decades of the twentieth century as the magic key to economic and political development.
