Re: human capital market

Robin Hanson (hanson@econ.Berkeley.EDU)
Fri, 27 Feb 1998 10:09:33 -0800

Lee Daniel Crocker writes:
>The more I think about this "Human Capital Market", the more I'm
>convinced that we already have exactly that, and have had them for
>years--they're called Visa and Mastercard. What's the difference
>between Grameen Bank's lending a man $100 to improve his farm, and
>Visa lending me $300 for that new hard disk?

Grameen Bank *isn't* an example of a human capital market. The
difference is between equity and debt, which affects the allocation
of risk. As any finance text will explain, the difference is real
and it matters.

Robin Hanson
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614