Re: human capital market

Michael M. Butler (butler@comp*lib.org)
Fri, 13 Feb 1998 19:17:38 -0800


Human capital markets are (if I understand what you mean) possibly in
resurgence.

I'm really enthusiastic about the idea. Grameen Banks could be set up in
other parts of the word--Peru? Chiapas?

Currently, I'm facing the following problem:
Problem is that it can look like indenturement and indenturement can look
like slavery.

Let's talk more about this.

At 01:47 PM 2/13/98 -0800, you wrote:
>Why canŐt I call my broker today and tell him to sell 100 shares in my
>future income stream? Economics tells us the problem is information and
>incentives. Potential investors in my human capital donŐt have enough
>information about my potential income, and it is too costly to monitor my
>activities to make sure that I will work hard and pay the dividends on
>time and in full.
>
>As tracking, communication, and monitoring technologies continue to
>develop, these problems may be overcome and a human capital market
>develop. People would be interested to sell their human capital to
>diversify their investment portfolio or because they have a high discount
>rate for the future. While this should make the economy more efficient and
>everyone better off, it could also increase the inequality of wealth in
>society. One reason the level of inequality in our society now is not
>higher is that the government subsides and forces self-investment in the
>form of education, and the market does not allow people to sell off that
>investment. If people are able to sell their human capital, then some
>might be tempted to trade an expensive lifestyle now for poverty in the
>future. (In some sense they can already do that with credit cards, but an
>efficient human capital market would allow them to do it to a much greater
>extent.)
>
>One reason extropians might be interested in the development of a human
>capital market, besides that it give people choices they didnŐt have
>before, is that it may allow greater investment in human capital in a
>scenario where this is especially risky. For example, suppose people
>expect that there is an even chance of cheap AIs developing in the next
>ten years. If that happens they will lose a lot of their income potential
>as the AIs compete with humans in the labor market. If a human capital
>market did not exist, this would lead people to substantially reduce
>education and other forms of human capital investment in order to
>diversify into (say) AI company stocks or physical resources. A human
>capital market would allow the level of human capital investment to stay
>at more efficient levels (although it would still be lower than if there
>was no chance of AIs developing).
>
>
>
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