There is no question that we live in a knowledge-based economy. Most means of living have transitioned from manual labor such as farming to industrial work to what we now call knowledge professions. Throughout these separate eras and the periods between them, the nature of our work has always been designed to answer a specific need – to cultivate the land for feudal lords, to create goods for sale, and to manipulate (not doctor) information for value generation. These types of work were thrust upon us to serve a purpose – but it’s not always been for our benefit as a society.

What is human capital and how did the concept originate?

Since Mincer’s inception of human capital in 1958, people have been relegated as a mere part of a larger system that revolves around creating economic value, rather than a central component that necessitates the system in the first place. For almost 70 years, we have been formally classified as just one of five types of capital, the others being financial, natural, produced, and social (Goodwin, 2003). Our economic contribution beyond personal consumption is our know-how, our skills that allow us to do something, whether it’s developing software or delivering healthcare services through years of rigorous training (Lundvall, 2004).

Knowledge has been touted to achieve all manner of great and noble things, from establishing the foundations of a functioning democracy to governing ignorance and advancing mankind.

Is knowledge a rivalrous good? Why are corporations commoditizing it?

A non-rivalrous good, knowledge has empowered us to perpetuate this system, theoretically, without depletion, unlike natural resources like oil or mineral deposits. And yet, while capable of being both excludable and non-excludable, knowledge has been commercialized by us as we trade in the excludability of our know-how as a means to deliver value to our employers, who in turn do the same to their customers.

This almost goes against the noble intentions of the pursuit of knowledge itself, as it has been touted to achieve great things from establishing the foundations of a functioning democracy by early Greek philosophers to governing ignorance and advancing mankind by Madison and Tocqueville (Rich, 1979). However, in an emerging social system where the main currency is knowledge, virtuous intentions naturally get replaced by economic motivations. 

Who owns human capital?

The problem is that people being classified as capital implies ownership. We are subject to business priorities and therefore can be manipulated like any other resource that a capitalist outfit owns. We are developed through professional experience and training to increase our ability to deliver maximum value to the enterprise. While we lay claim to our skills, our work is rarely ever ours. Humanity has become a macroeconomic concept.

References

Goodwin, N. R. (2003, September 1). Five kinds of capital: Useful Concepts for Sustainable Development: Economics in context initiative. Economics in Context Initiative. https://www.bu.edu/eci/2003/09/05/five-kinds-of-capital-useful-concepts-for-sustainable-development/  

Lundvall, B. Å. (2004). The economics of knowledge and learning. In Product innovation, interactive learning and economic performance (Vol. 8, pp. 21-42). Emerald Group Publishing Limited.

Mincer, J. (1958). Investment in Human Capital and Personal Income Distribution. Journal of Political Economy, 66(4), 281–302. http://www.jstor.org/stable/1827422 

Rich, R. F. (1979). The Pursuit of Knowledge. Knowledge, 1(1), 6-30. https://doi.org/10.1177/107554707900100102