Its Contribution to Economic Growth, Well-being and Rationality
Chapter 12: Government Policy and Intangible Capital
It is widely acknowledged that governments should play an important role in fostering investment in standard human capital through the provision of education and training. Should governments play a similar role with respect to the more intangible forms of human capital? What about noncognitive human capital? Diﬀerent forms of personal capital? Social capital? First, it is doubtful that there is much of a need for a standard government regulating role utilizing laws and regulations that correct for the problematic incentives associated with positive or negative externalities. Rather than the government as regulator, what may be needed more is the government as coach in which the government role is the same as or quite similar to the government role in certain kinds of industrial policy (see Tomer, 1993: 216–20). Let’s start by considering industrial policy eﬀorts to foster organizational change in ﬁrms. Charles Hampden-Turner (1988: 44) has asked: ‘Is it possible . . . for capitalist free enterprise to be “coached” to greater humanity and success?’ His answer (and my answer as well) is a resounding yes! Firms’ socio-economic performance can be raised through appropriate coaching. Coaching makes sense when we conceive of ﬁrms as organisms that learn, organisms that not only compete but cooperate, and organisms that are involved in complex social networks. Further, the coaching approach follows when we conceive of ﬁrms as fully human, socioeconomic entities whose learning (and cooperation) can be nurtured, facilitated, prodded, and otherwise encouraged. It is through such means that the human ﬁrm’s...
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