Dec 3 JDN 2460282

By now, human capital is a standard part of the economic jargon lexicon. It has even begun to filter down into society at large. Business executives talk frequently about “investing in their employees”. Politicians describe their education policies as “investing in our children”.

The good news: This gives businesses a reason to train their employees, and governments a reason to support education.

The bad news: This is clearly the wrong reason, and it is inherently dehumanizing.

The notion of human capital means treating human beings as if they were a special case of machinery. It says that a business may own and value many forms of productive capital: Land, factories, vehicles, robots, patents, employees.

But wait: Employees?

Businesses don’t own their employees. They didn’t buy them. They can’t sell them. They couldn’t make more of them in another factory. They can’t recycle them when they are no longer profitable to maintain.

And the problem is precisely that they would if they could.

Indeed, they used to. Slavery pre-dates capitalism by millennia, but the two quite successfully coexisted for hundreds of years. From the dawn of civilization up until all too recently, people literally were capital assets—and we now remember it as one of the greatest horrors human beings have ever inflicted upon one another.

Nor is slavery truly defeated; it has merely been weakened and banished to the shadows. The percentage of the world’s population currently enslaved is as low as it has ever been, but there are still millions of people enslaved. In Mauritania, slavery wasn’t even illegal until 1981, and those laws weren’t strictly enforced until 2007. (I had graduated from high school!) One of the most shocking things about modern slavery is how cheaply human beings are willing to sell other human beings; I have bought sandwiches that cost more than some people have paid for other people.

The notion of “human capital” basically says that slavery is the correct attitude to have toward people. It says that we should value human beings for their usefulness, their productivity, their profitability.

Business executives are quite happy to see the world in that way. It makes the way they have spent their lives seem worthwhile—perhaps even best—while allowing them to turn a blind eye to the suffering they have neglected or even caused along the way.

I’m not saying that most economists believe in slavery; on the contrary, economists led the charge of abolitionism, and the reason we wear the phrase “the dismal science” like a badge is that the accusation was first leveled at us for our skepticism toward slavery.

Rather, I’m saying that jargon is not ethically neutral. The names we use for things have power; they affect how people view the world.

This is why I always endeavor to always speak of net wealth rather than net worth—because a billionare is not worth more than other people. I’m not even sure you should speak of the net worth of Tesla Incorporated; perhaps it would be better to simply speak of its net asset value or market capitalization. But at least Tesla is something you can buy and sell (piece by piece). Elon Musk is not.

Likewise, I think we need a new term for the knowledge, skills, training, and expertise that human beings bring to their work. It is clearly extremely important; in fact in some sense it’s the most important economic asset, as it’s the only one that can substitute for literally all the others—and the one that others can least substitute for.

Human ingenuity can’t substitute for air, you say? Tell that to Buzz Aldrin—or the people who were once babies that breathed liquid for their first months of life. Yes, it’s true, you need something for human ingenuity to work with; but it turns out that with enough ingenuity, you may not need much, or even anything in particular. One day we may manufacture the air, water and food we need to live from pure energy—or we may embody our minds in machines that no longer need those things.

Indeed, it is the expansion of human know-how and technology that has been responsible for the vast majority of economic growth. We may work a little harder than many of our ancestors (depending on which ancestors you have in mind), but we accomplish with that work far more than they ever could have, because we know so many things they did not.

All that capital we have now is the work of that ingenuity: Machines, factories, vehicles—even land, if you consider all the ways that we have intentionally reshaped the landscape.

Perhaps, then, what we really need to do is invert the expression:

Humans are not machines. Machines are embodied ingenuity.

We should not think of human beings as capital. We should think of capital as the creation of human beings.

Marx described capital as “embodied labor”, but that’s really less accurate: What makes a robot a robot is much less about the hours spent building it, than the centuries of scientific advancement needed to understand how to make it in the first place. Indeed, if that robot is made by another robot, no human need ever have done any labor on it at all. And its value comes not from the work put into it, but the work that comes out of it.

Like so much of neoliberal ideology, the notion of human capital seems to treat profit and economic growth as inherent ends in themselves. Human beings only become valued insofar as we advance the will of the almighty dollar. We forget that the whole reason we should care about economic growth in the first place is that it benefits people. Money is the means, not the end; people are the end, not the means.

We should not think in terms of “investing in children”, as if they were an asset that was meant to yield a return. We should think of enriching our children—of building a better world for them to live in.

We should not speak of “investing in employees”, as though they were just another asset. We should instead respect employees and seek to treat them with fairness and justice.

That would still give us plenty of reason to support education and training. But it would also give us a much better outlook on the world and our place in it.

You are worth more than your money or your job.

The economy exists for people, not the reverse.

Don’t ever forget that.