Conclusions
In economic history, human capital is usually treated as an enhancement of the capacity to produce. In this chapter, we explore ways of perceiving it also as a capacity to enjoy.
As a result, it is argued that human capital should be integrated into the standard of living debate, in this case in the framework of pre-industrial Europe. In order to make this a manageable exercise, human capital is limited here to formal cognitive skills—reading and writing—and attention is focused on its two basic uses. On the one hand, it is like a producer good, which is invested in so as to increase productivity, and thus is irrelevant to any evaluation of the standard of living that employs levels of durable material consumption as the yardstick. On the other hand, it is the immaterial means to various forms of non-physical gratification, one of which—exemplified here by book reading for its own sake—is examined in some detail. The picture that emerges shows that between the sixteenth and the eighteenth centuries an enormous rise in literacy took place and represented a deliberate allocation of resources by individuals who in this way sought to augment this form of satisfaction. To this extent, there was an increase in welfare and this has to be factored into the traditional modes of assessing the long-term movement in the standard of living. In a short and more technical section, we propose a way of quantifying such increments, at least for certain social strata. Although this is a very tentative approach, the result suggests that the welfare gains obtained from human capital could be relatively large and may contribute to a needed clarification of the standard of living debate in pre-industrial times.