Human capital theory resurged in the 1960's primarily through the work of American

economists Theodore Schultz (1902-1998) abd Gary Becker (1930-2018). During this
time, economists began making tangible connections between education and its impact
on the ability of humans to earn higher wages. Schultz, a Nobel prize-winning
economist is credited with estabilishing the term "human capital". (Becker 2006) In
his 1958 paper, "The Emerging Economic Scene and Its Relation to High School
Education", Schultz was the first to write about the connections between education
and productivity. Schultz identified people as the source of the economic growth
when other economists were attributing national growth to improvements in
technology. (Fitz-enz, 2000). Schultz argued that traditional economics did not
correctly calculate or consider the value of human knowledge. Jac Fitz-enz in his
book, The ROI of Human Capital (2000), quoted Schultz's description of human
capital :
"Consider all human abilities to be either innate or acquired. Every person is born
with a particular set of genes, which determines his innate ability. Attributes of
acquired population quality, which are valuable and can be augmented by appropriate
investment, will be treated as human capital"
This paper compares the work of two contemporary economist who made significant
contributions to human capital theory during the last half of the twenty-first
century, Samuel Bowles (1939 - ) and Gary Stanley Becker (1930 - ). There are many
notable economists, who have influenced human capital theory, but this paper
focuses on two of the more recent influential figures who have shaped mordern human
capital theory, but more importantly, continue to contribute to the field of
economics and human capital theory. This paper examines two reoccurring themes in
the work of Becker and Bowles with regards to modern human capital theory. This
paper examines two reoccuring themes in the work of Becker and Bowles with regards
to modern human capital theory. First, human behavior is based on the economic
self-interest of inviduals operating within freely competitive markets and second,
education increases worker productivity.
In modern human capital theory it is commonly regarded that all human behavior is
based on the economic self-interest of individuals operating within freely
competitive markets, but this assumption is where Bowles and Becker disagree.
Bowles contends that all human behavior is NOT based on the economic self interest
of individuals operating within freely competitive markets. Becker generally
supports and promotes the notion that humans are motivated by self interest and
operate frelly within markers. However, Becker also writes extensively about
discrimination in the market place which seems to indicate that there are factors
that preclude the individual from operating within markets. Becker concludes that
discriminatio reduces the real incomes of those that discriminate as well as those
of the minority. (Becker 1992) Ironically, Becker never seems to make the
connection that individuals might not be operating freely in the market if
discrimination is present. Bowles challenges traditional human capital theory and
postulates that human capital theory and postulates that human capital theory
formally excludes the relevance of class and class conflict which thereby imposes
restrictions on an individual's ability to operate within the market. (Bowles,
Gintis 1975)