Home Economics Grossly, Wildly, Misunderstanding Human Capital On Pierre Omidyar's Dime

Grossly, Wildly, Misunderstanding Human Capital On Pierre Omidyar’s Dime

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Today’s dose of someone in The Guardian wildly, grossly, misunderstanding economics is devoted to the subject of human capital. The author is a Natasha Lennard who apparently works at The Intercept. A useful conclusion here being that perhaps Pierre Omidyar might try spending his money a little better. Perhaps upon people literate in the subject under discussion.

The complaint is that this human capital stuff is all ripping off da youf because we live in a capitalist society where the billionaires get everything. Except, of course, human capital is capital, all of which is personally owned by the workers who have it, making us all – OK, all those who can read and write, have the skills and training which are that human capital – capitalists and thus participants in the glorious adventure which is a capitalist economy.

It is also true that human capital is by far the largest source of capital in our society. Vastly outweighing financial capital, even property and pensions capital. It is also vastly more equally distributed than those other three forms of capital.

It is this which means that those of us with this human capital – that readin’ ‘n’ ritin’ bit, perhaps a modicum of ability at making a cup of coffee – that means we can flit from not very onerous job to not very onerous job as a barista on $30k a year. Vastly higher than the average global income (about 5 times the average global GDP per capita in fact, probably somewhere up in the top 10% of global incomes using a reasonable PPP measurement). And if we have more human capital than that, perhaps we opted for a STEM not arts degree, we can gain two and three times that income again in not very onerous jobs.

Our possession of human capital is the very thing that means we’re not undifferentiated labour to be exploited by the capitalists who own all the capital. Because we own the largest chunk of that capital that exists in our society – the skills and abilities that exist inside our heads and our muscle memories.

That is, a world where we were taught to accrue, indeed to become, “human capital”, turning ourselves into walking investments in our future capacity to earn and produce value. While wages have stagnated in recent decades, even some of the most privileged young people have taken on unprecedented amounts of student debt to chase the promise of a sustainable future available to a vanishingly small number of people.

These conditions apply as much to millennials as they do to members of so-called Generation Z. While the affective experiences of current teenagers differ to those of early millennials, we’re in the same boat when it comes to the imperative of becoming human capital. “As it turns out,” wrote Harris, “just because you can produce an unprecedented amount of value doesn’t necessarily mean you can feed yourself under twenty-first-century American capitalism.”

This should not be surprising: that capitalism depends on human life as exploitable labour is a feature, not a bug. The boomer experience of postwar wealth and full employment on a living wage was the exception to this rule. The pandemic and its attendant economic crisis are now exposing the horrifying stakes involved when life is reconfigured wholly in market terms.

All of which goes to show that we don’t really need to worry about those billionaires, those accumulations of financial capital. Sure, we normally think that the clogs to clogs process takes three generations but Omidyar apparently wants to speed it all up. All that cash made out of e-Bay is being spent upon this sort of nonsense, employing the ignorant to reveal their lack of knowledge to us – all of which becomes for Omidyar a display of social piety as ludicrous as the Arab princeling with his goldened Lamborghini.

Ah well, it is his money to waste after all. But it does mean we’ve not got to worry about that institutionalisation of power as the billionaires pile up the cash ever higher. They always do find a manner of pissing it all away.

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