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Louis Proyect lnp3 at panix.com
Tue Aug 6 07:06:27 MDT 2002


New research shed a new light on the Marxist pardigm.

Das Human Kapital:
By Oded Galor and Omer Moav

This paper hypothesizes that the demise of the 19th century's European
class structure reflects a deliberate transformation of society
orchestrated by the capitalists. Contrary to conventional wisdom, it argues
that the demise of this class structure has been in part an outcome of a
cooperative rather than purely a divisive process. The research suggests
that the transition from this class structure may be viewed as the outcome
of an optimal reaction of the capitalists to the increasing importance of
human capital in sustaining their profit rates. The paper argues that the
process of capital accumulation has gradually intensified the relative
scarcity of skilled labor and has generated an incentive for investment in
human capital. Due to the complementarity between physical and human
capital in production, the capitalists were among the prime beneficiaries
of the potential accumulation of human capital by the masses. They had
therefore the incentive to financially support public education that would
sustain their profit rates and would improve their economic well being,
although would ultimately undermine their dynasty's position in the social
ladder. The research suggests that Karl Marx's highly influential
prediction about the inevitable class struggle due to declining profit
rates, stemmed from an under-appreciation of the role that human capital
would play in the production process. The basic premise of this research,
regarding the positive attitude of capitalists towards education reforms,
is supported empirically by a newly constructed data set on the voting
patterns on England's education reform proposed in the Balfour Act of 1902.

The entire research can be viewed at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=246295



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