Economists have long known that people are an important part of the
wealth of nations. Measured by what labor contributes to output, the
productive capacity of human beings is now vastly larger than all other
forms of wealth taken together. What economists have not stressed is
the simple truth that people invest in themselves and that these investments
are very large. Although economists are seldom timid in entering
on abstract analysis and are often proud of being impractical, they
have not been bold in coming to grips with this form of investment.
Whenever they come even close, they proceed gingerly as if they were
stepping into deep water. No doubt there are reasons for being wary.
Deep-seated moral and philosophical issues are ever present. Free men
are first and foremost the end to be served by economic endeavor; they
are not property or marketable assets. And not least, it has been all too
convenient in marginal productivity analysis to treat labor as if it were
a unique bundle of innate abilities that are wholly free of capital.