Human capital creates national prosperity | Decode Your 20s 49

What creates national wealth and prosperity?

In an old society, wealth used to be proportional to natural resources and geography. All old empires were either having some essential natural resources or a geographical advantage.

Egypt and Persia benefited from fertile lands from rivers. Arabs and Turkish benefited from being located on trade routes. Spanish, Portuguese, Dutch, and British benefited from extensive ocean access.

In modern society, national wealth and natural resources are uncorrelated (some say they are inversely correlated). Prosperity is brought by human capital and well-functioning institutions. Human capital represents knowledge and skills that are helpful in producing goods and services. The more human capital one nation has, the more valuable goods it can create. Wealthy countries such as Japan, South Korea, Europe, Singapore, and Switzerland have essentially no natural resources. However, they have well-functioning institutions and a highly educated population (=human capital).

00:00 - Introduction
00:33 - Technology makes some resources valuables
01:30 - Human capital is the current valuable resource
01:50 - Old world: wealth is brought by natural resources: Italy, Egypt, Persia
02:40 - Modern society: human capital
04:30 - Wealth is man-made. Europe after WWII, Africa
05:27 - Conclusion

Видео Human capital creates national prosperity | Decode Your 20s 49 канала Andrei Margeloiu