Ordinary capital refers to tangible items and investments: cash, property, equipment. It can be sold, split up, moved around. Human capital is the accumulation of knowledge, skills, abilities, etc. inside a person. As such, it can’t be separated from the human in which it resides.
Human capital comes in two types: specific human capital is the set of skills that someone needs to do a specific job. (For example, knowing how to use a particular home-grown piece of software, or an idiosyncratic manufacturing process.) This is non-transferable: if the person goes to work for a different company, they can’t really take it with them. General human capital is the set of skills and abilities that an employee can take with them, and hence makes them (theoretically) more valuable to employers in a supposedly free marketplace.
So the question is: who should pay for a person to develop that general human capital, which by definition cannot be separated from the person in which they reside? Back in the 1960s, neoclassical economics said: well, duh, the person is responsible for that themselves of course. Say hello to human capital theory, the fall of free education, and the rise of the gig economy, zero-hours contracts, and out-of-control inequality.
On my course this term I’m doing the Learning & Development module! And in the first week, our lecturer Dr Rebecca Whiting dropped this paper on us: “The Human Capital Hoax: Work, Debt and Insecurity in the Era of Uberization” by Peter Fleming, which takes an axe to the whole edifice.
He stands clearly in the corner of human dignity and social equality, but he uses the tools of economics to draw a straight line from the foundations of human capital theory to the obviously flawed practical outcomes we see in the world right now: “This has allowed the genuine yearning for worker independence to be hijacked and transformed into an instrument of proletarianization”
Fuck yeah. One more quote I’m especially fond of:
“[…] a more balanced employment relationship is indispensable if self-determination is to be successfully renegotiated to create fairer life chances. […] One cannot truly express individualism, self-reliance and choice when desperately dependent on an unequal power relationship.Fleming (2017)
It’s an academic essay, so it’s not quite a casual read, but it’s a powerful tonic when the world outside looks a bit grim.