"The value of human life – economic view

Introduction
From an economic viewpoint, we see human life as human capital. Generally human capital can be defined as a set of knowledge and skills of man. This seminar paper summarizes the definition of human capital from a historical perspective to the present. It looks at human capital in relation to the economic growth of countries. In conclusion it mentions about Czech republic.
Explanation of the concept
„The human life value concept is one segment of the general theory of human capital. Depending upon the circum stances and the definitions used, the two may be considered to be one and the same concept. While this general area of inquiry has been under From an economic viewpoint, we see human life as human capital. Generally human capital can be defined as a set of knowledge and skills of man. This seminar paper summarizes the definition of human capital from a historical perspective to the present. It looks at human capital in relation to the economic growth of countries. In conclusion mentions the Czech reublice data.
discussion and analysis for over four centuries, only in recent times has the interrelationship be tween human capital and life insurance been acknowledged. In the last fifty years the human life value concept has risen from an occasionally mentioned sales tool to the place of prominence which it now holds as the economic foundation of life insurance.“ [1]
„That which we call a human life has always been recognized as having to its possessor, and perhaps to others by reason of affection, a paramount and immeasurable value. That it may have also a money value has been acknowledged in various way, notably in the institution of slavery. From early times the ownership of the services of a human being has had a worth in accordance with the excess of earn things obtainable above the necessary cost of subsistence. This value has not usually been computed with accuracy in each individual case, but in a general way a price has been fixed for a slave, taking into consideration his age, physical condition, and capacity for the kind of service desired of him.“ [2]
„It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions. Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training.“[3]
Historical perspective
„Sir William Petty was the first economist to be credited with using the concept of the economic value of a man. The purpose of his discourse was to show that factors other than area and population were important in determining the wealth and strength of a nation. He attempted to demonstrate through statistics that Eng land, while small in area, had natural ad vantages (e.g. excellent and inexpensive shipping facilities) which could make it the greatest of all nations and that the impediments of Englands Greatnefs are but contingent and removable. About fifty years passed before another economist made a contribution to the concept of human capital. This was Philip Cantillon. Cantillon's evaluation was based on the cost of maintaining the slave and his offspring rather than on the earnings that the slave created. This was in direct contrast to Petty, who capitalized the earnings of labor. Cantillon was more interested in the valuation of slaves for the individual farm or plantation, in contrast to Petty, who emphasized the measurement of total national wealth. Unlike his predecessors, Adam Smith was not interested in determining the value of human capital. He was interested in the difference in wages in different fields of endeavor, and tried to explain these differences in terms of the concept of human capital. John Stuart Mill figures as a dissenter in the theory of human capital. In his book, Principles of Political Economy, he argued that "in propriety of classification the people of a country are not be counted in its wealth“. Later in this work, Mill attempted to distinguish between the skill and the personality of the worker, some what in the manner of Smith. He included under wealth the skill of a worker, but not his personality. In making this distinction, some authors felt that Mill destroyed the value of his first position. Marshall's viewpoint regarding this topic is clearly stated (and later amplified in the last of his famous Mathematical Notes). He points out that value added to a country's wealth due to the arrival of an immigrant has been estimated by others, but that it should be calculated along the lines of "human capital", that is: ... we should 'discount' the probable value of all future services that he would render; add them together, and deduct from them the sum of the 'discounted' values of all the wealth and direct services of other persons that he would consume: and it may be noted that in thus calculating each element of production and consumption at its probable value, we have incidentally al lowed for the chances of his premature death and sickness, as well as of his failure or success in life. of all future services that he would render; add them together, and deduct from them the sum of the 'discounted' values of all the wealth and direct services of other per sons that he would consume: and it may be noted that in thus calculating each ele ment of production and consumption at its probable value, we have incidentally al lowed for the chances of his premature death and sickness, as well as of his failure or success in life. Many economists have discussed the concept of human capital since the time of Marshall, and it would be possible to continue to chronicle the development of this idea down to our own time. Early in the 1880's, however, the concept was ap plied to life insurance for the first time. A great many philosophers and econo mists have contributed to the develop ment of the human life value concept. Some semblance of the idea existed in the old Anglo-Saxon Law where it was used to determine the compensation to be al lowed to the relatives of an individual who was killed by a third party. Sir William Petty is credited with being the first economist to recognize the eco nomic value of a man. This occurred in the late seventeenth century. He was fol lowed by a long succession of economists who made use of the concept in one form or another. In 1853, Sir William Farr, an economist and statistician, derived the first set of equations used to describe the hu man life value. In so doing he laid the basic foundation of the theory as we know it today.“ [1]"