Academic discourse on economic theory and human capital without actionable leads

CHAPTER 7: PETTY’S IDEA How We Got to this Point I said that if] had any sense, I would have left the worms in the can by pretending to believe (4.1) as Mill did and as the rest of the world seems to do. Charts and tables confirm his prediction in his and their terms as well as mine. But Piketty’s argument was rightly criticized for leaving human capital out. Someone might or might not have faulted mine on the same ground if I had stopped at the end of Chapter 4. Whether they would have or not, every composer knows that the critic to hear is the one inside. What that critic told me was to gamble a case already won, open the can, and follow the argument and worms wherever they lead. That’s why my title promised other surprises. I risked following it past clarification into digression when I argued the pay rule. I since tried to justify the digression, if there was some, by showing how that rule could explain Piketty’s data for pay/net profit ratios in the twentieth century. And I tried to show how the pay rule and depreciation theory combined, making pay all human depreciation and no realized work at the end, gives the only convincing explanation of age-wage profiles showing rising or steady pay as human capital grades smoothly to zero. Risk theory reinforced this argument by revealing time discount rates for human capital as those made plain for physical capital owned by the same ageing cohorts. Every step was an adventure, and every step led to the next one. But I opened other questions and cans along the way, and the same critic tells me to follow the worms a little farther. I said that the cost of survival is adult consumption for the sake of investment in the next generation, that pure consumption is more or less the same, and that we will understand the maximand when we understand pure consumption. These threads lead into evolutionary biology, which reasons how traits are selected for lineage survival. The faithful need not take alarm. Although I mean natural selection, divine Chapter 7 Petty’s Idea 2/3/16 1 HOUSE_OVERSIGHT_011060