Books - Human Capitalism: How Economic Growth Has Made Us Smarter—and More Unequal, by Brink Lindsey

When Culture Trumps Economics

by Yevgeniy Feyman

Human Capitalism: How Economic Growth Has Made Us Smarter—and More Unequal, 

by Brink Lindsey (Princeton University Press, 144 pp., $14.95)

Brink Lindsey on the opportunities and inequities of our free-market system

Once a mysterious concept to non–social scientists, “human capital” has become a generalized designation for an individual’s range of competencies—intelligence, creativity, and social skills, among others. The growing importance of human capital in a knowledge-based economy has led, Brink Lindsey argues, to a new system of “human capitalism.” 

Despite that gentle-sounding name, human capitalism is characterized by social and economic complexity, and it creates demand for people with the skill sets to deal with abstract issues: bankers, scientists, and doctors, among others. The widening inequality that has resulted is not a new subject, but Lindsey, formerly a scholar at the Cato Institute and now a senior fellow at the Kauffman Foundation, offers some original proposals for how to reduce it.

Inequality is more the symptom than the problem, Lindsey maintains. “Rising inequality is often depicted as a failure of capitalism,” he writes, “but in fact capitalism is operating exactly as we might wish it.” 

In the new American economy, he argues, jobs across the spectrum require ever-growing levels of human capital. There are and always will be people who work harder, who are smarter, and who can do more, and if the market values their contributions, there’s no reason why they shouldn’t be appropriately rewarded. 

Capitalism isn’t broken, but its economic incentives don’t seem to be working for those at the lower end of the income scale. But Lindsey believes that we can make the incentive structure apply more equitably.

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