With Kelly Koch, UGA
The C3 Framework states that knowledge of human capital is an essential component of economic reasoning;
“Economic reasoning and skillful use of economic tools draw upon
a strong base of knowledge about human capital, land, investments,
money, income and production, taxes, and government expenditures” (p. 35).
Covid-19 has revealed a need for critical human capital literacy in light of continual evocations of “back to work” and danger the most “essential” workers face when they do go to work outside their homes.
Senior White House Economic Adviser Kevin Hassett made national headlines when he commented to CNN that “Our capital stock hasn’t been destroyed, our human capital stock is ready to get back to work, and so there are lots of reasons to believe that we can get going way faster than we have in previous crises”. In a subsequent article for Rolling Stone, Wade (2020) wrote, “Calling people “stock” is next level apathetic, and the way Hassett used the term so casually lines up with the lack of empathy shown to the victims of the coronavirus by Trump’s administration and Republicans since the crisis began months ago”. Highlighting another of Hassett’s statements, Wade wrote, “But calling human beings “stock” — especially as essential workers are putting their lives and bodies on the line right now — is undeniably absurd and heartless”. Wade was drawing attention to Hassett’s use of “stock” a word that means assets, commodity and merchandise; a word that brings to mind livestock and the stock market. It makes us angry because it sounds profoundly inhuman, reducing people and individuals to indiscriminate things stripped of humanity and dignity. We should be angry about this comment and the many other callous comments made by politicians, such as those of Texas Lieutenant Governor Dan Patrick who suggested that the nation’s grandparents would willingly sacrifice themselves for the economy. It should also be noted that “back to work” ignores both those frontline workers who have not stopped working since the covid crisis began and parents and caregivers working first, second and third shifts.
Wade called the “human capital stock” metaphor absurd. Is it? Yes and no. It depends on how absurd is defined. Hassert’s comments are not surprising or even shocking because they are so deeply entrenched in mainstream economics and economic education and the history of economic theory. We think a dismissal as “absurd,” can obscure this history. However, if by “absurd” Wade means “no rational or orderly relationship to human life” then we can agree that Hassert’s statements were indeed absurd.
We interrogate the conditions that made Hassert’s statement possible in light of economics’ personhood problem, considering the implications for social studies education and the teaching and learning of K-12 economics.
The Power of Metaphors
“Human capital” is a metaphor. Economists rely heavily on metaphors to make their arguments. They are “the language economists use” to say that something is “like” something else (McCloskey, 1983, p. 502). The market is a metaphor, as is game theory, supply and demand, and elasticity, to name a few. Metaphors are so entrenched in the discourse of economics and economists that “few economists recognize the metaphorical saturation of economic theories believed to be literal” (McCloskey, 1998, p. 40). Since “each step in economic reasoning…is metaphoric” (McCloskey, 1998, p. 40) and since they are repeated so often, they become real.
Nobel prize winning economist Gary Becker is responsible for popularizing ‘human capital’ and was adept at using metaphor to “compare noneconomic with economic matters” (McCloskey, 1998, p. 43) as part of economics’ imperialistic tendency to invade and economise other fields (Conrad, 1998; Lazear, 1999; McCloskey, 1998). In the human capital metaphor, McCloskey noted, “human skills was at a stroke unified with the field [through]… investment[s] in machines” (p. 43) which Becker (2019) describes as;
Schooling, a computer training course, expenditures on medical care, and lectures on the virtues of punctuality and honesty are…[examples of human] capital. That is because they raise earnings, improve health, or add to a person’s good habits over much of his lifetime.
Crucially, it is human-capital “because people cannot be separated from their knowledge, skills, health, or values in the way they can be separated from their financial and physical assets” (Becker, 2019). Expenditures on education are considered investments in human capital and increased human capital is thought to increase productivity and long-term earnings (i.e. the difference between a high school and college degree). Human capital is an optimistic term. It assumes the myth of meritocracy- that increased skills somehow lead to better outcomes for the people who possess them rather than the corporations or industries that capitalize on them.
Human capital is inhuman
That “children are durable goods” is, Deirdre McCloskey put it “among the less bizarre” of Becker’s metaphors. Take, for example, the “theory of the demand for consumer durables” as a “useful framework in analyzing the demand for children” (Becker, 1960, p. 211). “An Economic Analysis of Fertility” did this to great effect by suggesting that “as consumer durables, children are assumed to provide “utility”” (Becker, 1960, p. 211) and that “for most parents, children are a source of psychic income or satisfaction, and, in the economist’s terminology, children would be considered a consumption good” (p. 210). Becker compared the decision to have children and how to raise them to decisions about buying a luxury or simply average car. In a section entitled “quality of children” Becker writes about the various “choices” parents have in determining what and how to spend on their children “whether it should provide separate bedrooms, send them to nursery school and private colleges, give them dance and music lessons, and so forth” (p. 211). Becker concluded that “the rich simply choose higher quality children as well as higher qualities of other goods” (p. 214). To explain this, Becker wrote “I will call more expensive children ‘higher quality’ children, just as Cadillacs are called higher quality car than Chevrolets.” Knowing that “quality” had certain connotations, Becker tried to explain that “higher quality does not mean morally better” (p. 211). Instead of continuing that sentiment, however, Becker continued with the classist presumption that “if more is voluntarily spent on one child than another, it is because the parents obtain additional utility from the additional expenditure and its is this additional utility we call ‘quality’” (p. 211). Although this a very short introduction to a much larger argument, you can see where Becker is going with these equivocations. In mainstream economics, of the sort taught and promulgated in school and society, it is possible to put children/humans on the same level as cars and refrigerators. It is possible for an economist to assume that parents can simply choose to raise high quality children, and that children bring about the same kind of pleasure as a car or appliance. Moreover, Becker flippantly states that “children of many qualities are usually available, and the quality selected by any family is determined by tastes, income and price” (p. 213). Again, Becker treats childbirth and rearing as equivalent to shopping at a car lot. Finally, Becker chalked up families with a large number of children as either “ignorant” of contraceptives or “desirous”of children, which totally ignores so many human concerns such as price and availability of contraceptives. Economics relegated children and contraceptives to the personal rather than political or social realm, thus absolving health insurance companies and the government of responsibility. It makes possible statements and sentiments such as one I overheard recently by male college students (paraphrasing) “health insurance should not cover childbirth because insurance is for accidents, Like car insurance, it’s only only supposed to be used in an emergency, not for “personal choices” like birth. Most of all, it ignores the general functioning of the human body, as is consistent with “dematerialization of the body” in economics (Ruccio and Amariglio, p. 101). Thus, we can begin to see the inhumanity inherent in mainstream economics and in the term “human capital”.
(in)Human capital and economics education
Erin has written about economics education’s people-problem. For example, she showed how researchers critical of neoclassical theory in economic education cite the theory’s inattention to human agency and beingness (see Erin’s pubs page). K-12 economics standards, such as those in my state, reduce people to consumers and producers, with people given little mobility other than reacting appropriately to situations they cannot control (Author, 2019b). In these standards, people, if discursively present, were often phased out for more objective terms like buyer and seller. I noted that standards stripped individuals down to component parts whose value resided in their ability to function a certain way.
In the C3 Standards, human capital is just one of many “variet(ies) of resources that are used to produce good and services” (p. 37). Human capital is described there as “the skills and knowledge required to produce certain goods and services.” Students must “explain the relationship between investment in human capital, productivity and future incomes” (p. 37). When Hassett said “human capital stock is ready to get back to work” he meant he was ready to profit off of human knowledge and labor-exposing that real source of value lies not in entrepreneurs or CEOs but those that supply emotional, physical and intellectual labor.
Is human capital stock absurd?
As a noun “absurd” means “the state or condition in which human beings exist in an irrational and meaningless universe in which human life has no meaning” (Merriam-Webster Dictionary). It is this second part in “which life has no meaning” where Wade’s absurd most closely meets Hassert’s “human capital stock” because the metaphor not only shows a lack of regard for human life but transforms people into producers. It would be remiss, however, to label, or even dismiss, Hassert’s claim as absurd in its adjective sense, that is, “irrational, unreasonable or silly”. After all, in his observations of the capitalistic practices of his day, Marx wrote “capitalist asks no questions about the length of life” (p. 376) citing numerous examples of life-shortening practices. The “candidates for death” put to work in nineteenth century British bakeries (p. 378) are not so unlike the people that harvest, prepare, stock and sell food today or work in factories and warehouses-people who have recently lost their hazard pay even as they are forced to face (bodily) the Coronavirus. In economics, it is human capital, not human life, that matters. “Absurd,” stated with a tone of surprise and indicating “silly,” ignores the history of economic theory and practice. An exclamation of “absurd” that means human life without meaning is much more accurate, in that it exposes the inhumanity of the term human capital stock.
Revelations and Implications
Much like coronavirus itself, it’s revealing rather than new. It has exposed the apathetic and inhumanity embedded in American economic discourse.
Covid has revealed the true cost of labor, the true source of value (human beings). Why does it scare the government and capitalists? The expensive truths. Journalists like Nikole Hannah-Jones reveal the true source of America’s capital and demand due compensation. Value lies in caring professions (shutting down of schools brings economy screeching to a halt), in parenting, in un(der)undercompensated human labor, that laboring takes a toll on the body and that those in the lowest-paid professions are the most undercompensated. We say lowest-paid rather than low-wage worker. There are no low-wage workers, only low-wage employers.
Why are there calls to cancel the extra $300/week unemployment supplement? Some claim it discourages work. This call for cancellation reveals how essential labor is for corporate profit. The unemployment supplement normalizes a living wage. It throws down a gauntlet that other businesses would have to meet. It means higher wages employers are either unable to unwilling to pay.
And fears about school represent this constant need to accumulate and capitalize on human capital. The notion that children must not stop working, that human capital accumulation must not stop.
We hope that this has shed light on what human capital actually means and can prompt a rethinking of its use in educational discourse, particularly as Covid-19 raises questions about the undervaluing of human life and overvaluing of commodities.
References
https://www.cbsnews.com/news/human-capital-stock-kevin-hassett-trump-economic-advisor-back-to-work/
Erin on Econ 