1. Economics and Work Economic Value of a Good: Concept of a Just Price Human Capital Social Capital as a Means to Decrease Economic Deprivations

2. Concept of a Just Price  Price or valuation of a good derived from any form of exchange.  Such an exchange is ruled by commutative justice, that is, an exchange of goods and services mutually considered as equal in value by the contracting parties in the act of exchange.  It reflects the significance of things exchanged in relation to need, i.e. desirability and utility as well as fluctuations in supply, i.e. scarcity.

3. Exchange Value of a Good Objective valuation: labor and other inputs Subjective valuation: reflects the significance attached to the good desired in relation to all other uses of the money in the buyer’s assessment. Opportunity cost. Risk.

4. Aim of any Exchange: Market Equilibrium {Net returns to consumption} equal to {Net returns to production} equal to {Net returns to society}. Government is traditionally seen as the institution that will protect the interests of society. But the interests of society is in itself a task of private individuals and entities Economic externalities and public goods. Education and health

5. Human Capital Capital is a stock which has value as a source of current and future flows of output and income Human capital is the stock of skills and productive knowledge embodied in people. It refers to the productive capacities of human beings as income producing agents in the economy.

6. The yield or return on human capital investments lies in enhancing a person’s skills and earning power, and in increasing the efficiency of economic decision-making both within and outside the market economy. Ownership of human capital in a free society is restricted to the person in whom it is embodied. Human Capital

7. The exchange of human capital services is best analyzed as a rental market transaction: income and output flows such as wage payments and earnings. Net time investment on education = {Benefits derived from investing on education now} less {Earnings foregone due to schooling}. Has consequences on occupational choice. Learning from experience. Evaluation of training programs Human Capital

8. Investments on Human Capital {Net returns to consumption and production} = {Net returns to society} R/D in Pharma –{Net returns to consumption} less than (Revenues less cost of R/D done by firms} greater than {Net returns to society}. Imbalance. –{Net returns to consumption} equal to {Revenues less cost of R/D less donations or greater discounts} equal to {Net returns to society}

9. Investments on Human Capital with Positive Externalities The firm bears the cost of the added positive effect of R/D to society and individuals Profits are also obtained by firms. Average of 30% to 40% discounted rate of return. Very high. Firms owning the patent right have a definite advantage

10. Economic Deprivations Inability to transform or convert income into the capability to live a minimally acceptable life. Examples: proneness to illness, living in a flood-prone and storm-prone area, variations in social climate, discrimination, gender inequalities These deprivations do not allow certain sectors of society to acquire lifetime earnings.

11. Social Capital Social capital are features of social organizations such as trust, norms, and networks that can improve the efficiency of society by facilitating coordinated actions. Basis: trust and norms. Where social capital resides is in networks or a system of cooperation

12. Social Capital Approach Medicine –Firms cooperate when serving the African Market on HIV drugs. Very low price. Only 2 firms are doing so –Prevalence of International NGOs monitoring prices. Lobbying in international organizations such as the WTO to radically change existing laws on sale and distribution of medicine Financing –Group lending. Microfinance Institutions