Discussion Tuesday

Today, let us discuss the conclusion from this post about language and Piketty:

The language of economics often treats people as commodities: the phrases “representative agent” and “human capital” are examples of this.   Sometimes these phrases are useful abstractions, but they also contribute to the sometimes pernicious indifference of mainstream economics to issues of justice.  Piketty’s take on human capital might make us a little less indifferent.

5 replies
  1. VMC
    VMC says:

    The phrase that has always grated with me the most is “Human Capital”. As someone who studied history at one time, including periods of history when humans really were capital, and could be bought and sold and mistreated at an owner’s will – i have always thought the term was careless or crass. Especially when terms such as “skill levels” were readily at hand.

    • James K
      James K says:

      But slaves aren’t capital, they still generate labour – they just aren’t allowed to profit from their labour. In economic terms “capital” doesn’t simply mean a thing that can be owned and sold. Capital acts as a force multiplier to labour, which is why it makes sense to call skills “human capital”, but it makes zero sense to call slaves “human capital”.

      I think this is a problem caused by interpreting technical jargon as if it was plain English.

  2. Chris
    Chris says:

    To be fair to the use of the term agent, that’s the term Bourdieu uses to describe individuals, and there’s some crossover in the use of the term representative agent between economics and sociology. Human capital is also used by Marxists who describe themselves as humanists not to debase the form or nature of human capital, but to accurately represent what workers are in that system: commodities. So there’s a good argument for the first term in practical, descriptive ways, because some of the disciplines that pride themselves on being focused on the wellbeing of people also use that term with other connotations. It’s worth noting that agent may be dehumanising in some ways, but it can also have connotations of change, reaction, etc (think: agent for change, chemical reaction caused by an agent).

    Using human capital in a different way where power is not single sided, transmitted down from classes, means that human capital has necessarily negative connotations. However, most models of power, including Bourdieu’s concede that power is actually a two-way street. In other words, human capital can be an exploitative term, but with the right organisation and the right market conditions, your status as a commodity can be exploited by you, or by groups of you. While individuals, unless operating in key roles in institutional structures, can have very little hope of changing systems by themselves and can only hope for individual victories, collections of human capital can often be their own forces for change (think: unions, professional membership bodies, academia).

    Piketty’s definition doesn’t work for me, because it excludes two factors. First, that human capital can still be literally owned, and still is. It assumes that the slave trade or use of indentured labour stopped with the end of the US Civil War. So both people and their labour can still be owned and traded in a literal sense. Secondly, there is no literal ownership required for the owners of the means of production to own human capital in all but name. Economic systems (what I would term concrete representations of systems of capitalist ideology – not necessarily a negative thing, either) mean that we make conscious decisions to be owned by the owners of the means of production (I’m avoiding using the B word). In other words, it may not be that we cannot be literally owned and so human capital as a definition must be invalid. Because we consent to be owned, and we do so by buying goods, taking out loans, mortgages, owning credit cards, and doing everything consistent with the way of live we know.

    Now, I haven’t read Piketty, only a few reviews. But I have seen the word hegemony thrown about in those reviews, and I’m going to assume that Piketty tackles that idea at points. But a key feature of hegemonic rule is that it’s rule by consent. We might consent to rule and we can also consent to a form of ownership. We might also consent to others being owned, as long as we’re able to free ourselves at some point from our debt obligations. So I’m not sure that human capital is so invalid, as long as you appreciate that power to use human capital is a two way street, and that every single day, we consent to being used as that in the smallest of ways.

  3. Elinor_Dashwood
    Elinor_Dashwood says:

    Good morning Matt, I hope it’s OK to use this medium to ask a not-very-related question. I don’t know what I think about Gareth Morgan’s flat tax plus universal basic income proposal, and wondered if you’d either written about it yourself or know of anybody similarly economically literate and knowledgeable of the New Zealand context who has? thanks and regards

    • Matt Nolan
      Matt Nolan says:


      I’m not around too much right now – hence why I’ve been a bit slack on comments/posts. I’ll have an ask around, I’ve done the odd article – but no research. I know of lots of research, but none of it for NZ. However, I do know some people to ask 😉

      If you want to ask about anything like this, feel free to email me – I think it is in the about us section, but the address is matt@tvhe.co.nz

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