Table of Contents

Intangible Capital

Intangible Capital

Its Contribution to Economic Growth, Well-being and Rationality

John F. Tomer

Despite increasing research efforts, there is still much confusion regarding the nature and contribution of the most intangible forms of capital. This book develops a comprehensive and unifying conception of intangible capital in order to understand its role with respect to economic growth, well-being, and rationality. As the book illustrates, utilizing the intangible capital concept enables many new and important economic insights. Intangible capital is defined to include standard human capital, noncognitive human capital (including personal capital), social capital, and other intangible manifestations of human capacity. Understanding intangible capital is a key to realizing the full human potential of our economic systems.

Chapter 7: Intangible Factors in the Eastern European Transition: A Socio-Economic Analysis

John F. Tomer

Subjects: economics and finance, behavioural and experimental economics


7. Intangible factors in the Eastern European transition: a socioeconomic analysis INTRODUCTION Given the state of economic ideology and the predominance of neoclassical economic theory, given the loss of confidence in the communist system among many of the citizens of the formerly communist countries in the late 1980s, and given these people’s impatient desire to move quickly to scrap the old system, it is hard to imagine that the Eastern European economic transition could have occurred much differently (Adam, 1999: 3; Gora, 1991: 146). Western economists’ advocacy of a rapid radical transition was what many, especially the post-communist political elite, wanted to hear. There was not much opportunity for alternative voices to be heard. Although these historical forces were no doubt irresistible at that time, this should not prevent us from trying, even at this late date, to learn how the transition process could have gone better and how our understanding of the economics of transition could be improved. The transition in Eastern Europe has provided a severe test for economists and economic ideas, and despite some successes, it looks like, overall, the test has failed. Too few of the transition economies have achieved sustained economic growth a decade later. Mainstream theory’s most notable failure is its inability to appreciate the intangible or softer side of how economic systems and organizations operate. In the context of large scale change, it is particularly important to appreciate not just the structured, explicit and definite aspects of relationships but also...

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