what is the difference between human capital , physical capital & mental capital . [marks-6]
The term mental capital as used in the question is not clear. However, the difference between human capital and physical capital is as follows:
Human capital refers to the stock of skill and expertise of a nation at a particular point of time. On the other hand, physical capital refers to the stock of all the tangible assets, such as building, machinery tools etc. which are used in the process of production
Human capital and physical capital are distinguished on the basis of following points.
|
Basis of Difference |
Human Capital |
Physical Capital |
|
1. Consists of |
It consists of the skill and knowledge of the human beings.
|
It includes all the physical tools and machinery used for production. |
|
2. Nature |
It is intangible in nature.
|
It is tangible in nature. |
|
3. Tradable |
The services of human capital can be sold in the market, not the human capital.
|
Physical capital can be sold in the market. |
|
4. Mutual Relationship |
Human capital is not created by physical capital.
|
Physical capital is created by human capital. |
|
5. Wear and Tear |
Human capital does not depreciate except the age which is renewed again with education and health.
|
While, physical capital is depreciated over time due to constant use. |
|
6. Benefits |
Human capital creates both private as well as social benefits.
|
Physical Capital creates only private benefits. |
|
7. Mobility |
Human capital has relatively restricted mobility due to cultural and nationality obstacles. |
Physical capital is relatively more mobile. |