November 10, 2013 human capital
(1990’s? | academese (economics) | “employable population,” “what one has to offer”)
In 1979, an economist named Theodore Schultz won the Nobel Prize. He was noted for studying “human capital”; in fact, he used the term in his acceptance speech. At that time, the word remained the exclusive property of economists, in or out of academia. (The first citations in LexisNexis come from Paul Samuelson’s Newsweek columns in the mid-1970’s.) President Carter used the phrase in a Labor Day Proclamation in 1980. After that, it began to show up more often in reporting and editorials. Politicians and journalists started to use it, and it has become pretty ordinary by now.
This phrase bears a slippery resemblance to another expression that has flourished since my youth, “human resources.” If we are human capital en masse, then each of us might be considered a human resource, just another bit of carbon-based raw material for the all-embracing economy, from whom all blessings flow. But that isn’t how we use “human resources,” which doesn’t exist in the singular. It’s part of a company — the part known as “personnel” when I was a boy — in charge of hiring and firing and employee relations. Oxford Online defines “human capital” to mean “the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country,” which covers pretty thoroughly the ways in which the term is used.
Most of the time the emphasis falls on “capital” when this expression rears its head. The purpose of human capital is to benefit an employer — that is, it’s what you bring to the job. That means the employee can be treated as a commodity, whose salary and benefits amount to rent for whatever attributes she has that boost the employer’s profits. (Here‘s a useful distillation of that point of view.) Economists blandly employ this sort of thinking every day: You are what you’re worth. But it also possible to place the emphasis on “human.” I found a brief but rather touching post on deloitte.com that urges thinking about your employees as more than additions and subtractions on the balance sheet. Unlike physical capital, human capital needs to be nurtured and recognized for its good work. If not, it can always leave the employer high and dry if it feels mistreated. As long as there’s another boss out there willing to act a little more humane and less capitalist. (Of course, the employer is also free to rescind investments in human capital, in the form of education, vocational training, affordable housing, better health care (or child care), etc. If the boss isn’t satisfied with the return, he can always cancel the benefits.)
Many screeds stand to be written about this phrase, so glibly tossed around by bureaucrats and technocrats. To me its most disturbing aspect is the way it makes us worth anything only insofar as we contribute to the gross domestic product — only as long as someone is making a buck off us. The category “human capital” is generally opposed to “physical capital,” but they are both judged by their profit potential; all other talents, abilities, and attractions are strictly subservient. Another point against the phrase: it turns us all into servants — in fact, you don’t have to mumble much for it to resemble “human chattel,” which may in turn remind us of cattle. It’s true that even the few at the top are, strictly speaking, part of the whole economy’s pool of human capital, and therefore serve the same remorseless, soulless capitalist machine as the rest of us. But the one percent — who may, like the machine, have little in the way of soul — have grasped the levers of power. They may serve the system, but they don’t serve the boss.