I forgot to mention something in my last post. It isn't so much the assumption of liquidity, but the assumption that given the particular kind of liquidity, the efficiency (in terms of opportunity cost) can be the same.
When I said liquidity of human capital, I did not want to mean person P moves from company X to company Y. I wanted to mean person P's production power (in terms of output, factoring in creativity, and the myriad of other factors), within the system (which also factors in P's capacity to induce disruptive changes) gets transferred seamlessly from X to Y. Again, this does not seem at all possible. Neither does this factor in effects of people spontaneously regrouping (i.e. forming startups). Having people in stable structures inherently slows down regrouping quickly, and you cannot assume that capital (money, enticement, whatever) can induce it to become efficient, simply because transfer of resources takes time and distance.
Of course, with the ideal assumptions of perfect information and instantaneous transfer of all resources, this would seem to work, but these are the same assumptions that ground many economic models permanently in theoretical territory.
Now, is there still a good reason to think the systems can be the same?
