The Harrod-Domar model is taken as a starting point. Both its insights and its weaknesses open the door for an analysis of the role of human capital. Since then, there has been a ‘dethronement of GNP’ and a shift towards a basic needs strategy within which human capital moves more directly into the centre of the analysis and takes on a new meaning. This is illustrated on the basis of various ‘vicious circles’ and specifically by looking at the problems of children. South Korea is discussed as an example of the prime importance of human capital.