Branko Milanovic (HT Mark Thoma) misses the point about the usefulness of the concept "human capital". To explain the point, let me talk about "land capital" instead.
Raw land, in it's natural state, often isn't very productive. Before you can grow wheat on it, you usually need to clear it, or drain it, or fertilise it. There's an up-front investment, which is costly in the "opportunity cost" sense, because it uses resources that could have been used elsewhere to produce something else.
What we call "land" is as much capital as land. The rents on "land" are as much a return to capital as they are a return to raw land.
Some land needs very little investment to make it productive; other land requires a lot. Some land gives a high return on investment; other land gives a low return. It's all different.
Labour is like land in those respects. Labour usually needs education and training to make it productive. There's an up-front investment, which is costly in the "opportunity cost" sense, because it uses resources that could have been used elsewhere to produce something else.
What we call "labour" is as much capital as labour. The wages on "labour" are as much a return to capital as they are a return to raw labour.
Some labour needs very little investment to make it productive; other labour requires a lot. Some labour gives a high return on investment; other labour gives a low return. It's all different.
"Human capital" is not a synonym for "labour". It tells us something important about the investment needed to make labour productive.
Branko says "Calling it “human capital” appears a mere terminological quirk: We could just as well say that a more skilled person has greater “skilz” or whatever we decide to call it."
No. This misses the point. Some land is more productive than other land, but there are two possible reasons for that difference in productivity; it might be due to greater investment; or it might be due to the land itself. It's the same with labour. No matter how much you invest in me, my "skillz" as a hockey player would never be that great.
There is one difference between land and labour, as Branko points out. "Entirely lost is the key distinction that for you to get an income from your human capital, you have to work. For me to get an income from my financial capital, I do not."
Labour gets disutility from working (at least at the margin, though some of us actually enjoy our jobs, and get positive total utility from working even if we get negative marginal utility from working an extra hour); land doesn't.
So what? Does the highly-trained worker, with high human capital, get more disutility from working than the less-trained worker, with low human capital? (If anything, I would say it's maybe the other way around). Investment in human capital is not what makes work unenjoyable.
"Capital" is just the name we give to the time-structure of production (Hayek?). It can be embodied in labour, and in land, and in machines. But machines are really just a more refined version of land capital. We take natural resources, like iron ore, and convert them into machines, like screwdrivers. It's just like converting scrubland into good wheat land. There's human capital and land capital. Period. [Update: OK, that "Period" is maybe too strong. You could make a reasonable case that intellectual capital, reputational capital, and social capital, really are capital too, at least in some cases.]
If there is a term that does need to be abolished, it's "financial capital", which is just a fancy name for "IOU's". But you can have IOU's in a world with no capital or investment at all, if there are consumption loans. "Financial capital" is not capital. "Financial capital" only obfuscates.
[Update: of course, as someone who works in the human capital investment business (or at least claims to), I might be ideologically biased.]