Devaluing Human Capital

Photo: CA Hawthorne

Photo: CA Hawthorne

Recently, I read a poem I’d written for a small group and one woman was stunned. Her mouth agape, she asked how an idea could form in my mind and then become a poem. I smiled, not because I was smug or felt superior, but because I’ve fielded similar questions before. My smile, you see, was because I invariably unearth the questioner’s talent they take for granted. They might have an uncanny knack for training dogs or horses. Maybe the dishes they cook would reduce me to tears. Sewing? My mother was gifted, but not me. How about painting? Photography? Caring for others? Teaching?

The list goes on and on.

Everyone has value, but how unfortunate that so many don’t see the value they possess, for our society is the worse for those talents that go unrealized. At least, that’s what I thought…

In business there’s a concept known as “Opportunity Cost.” Basically, according to it works as follows:

A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.
Opportunity costs are fundamental costs in economics, and are used in computing cost benefit analysis of a project. Such costs, however, are not recorded in the account books but are recognized in decision making by computing the cash outlays and their resulting profit or loss.

In simpler terms, you’re choosing between A and B. A has more value so you choose it. B is the opportunity cost, the value of what you didn’t choose. H’m, I wondered about the opportunity costs for a society where individuals don’t fully realize their potential. That was the direction this post was supposed to take: me talking about a society where each person’s inherent talent possessed value.

Google’s business leaning orientation nixed the idea.

I investigated Social Opportunity Cost and found endless variations on the following from Oxford Reference online:

The amount of other goods which has to be forgone because resources are used to make some particular good. When any goods or services are produced, the resources used to make them are not available for other purposes. Social opportunity cost takes account of any externalities, as well as direct costs to the producers. It is contrasted with private opportunity cost, which takes account only of direct opportunity costs to the producers, disregarding any externalities.

In other words, the same business-like definition that applies to a corporation is here applied to society. What about human value? I tried again with Human Opportunity Cost, but had to settle for the next closest term, Human Capital Opportunity Cost (HCOC). Wikipedia describes it as the “stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.”

In other words, if someone doesn’t produce the upmost in economic value there is no opportunity cost, which means those who produce less economic value are valued less. I’ll admit that I only invested about 90 minutes in my searches, but even so all roads led me back to human value being equated with human capital.

*Again, my goal wasn’t to determine each person’s worth, for they’re all equal, but to find the cost to society when any one human doesn’t realize their full potential. For instance, the scientist who was too poor to obtain an education and performed different work instead.

Me? I’m a struggling writer and on a spreadsheet possess no value.

By a business measure a Wall Street trader possesses considerable value as a human being and a teacher virtually none. Why? Because in the business model a student is the crop and the teacher is the migrant worker who plants it (compare CEO compensation to teacher pay). But, you might ask, what about our children and their future? According to HCOC education is an expense that must be recovered via fees (thus, high student debt). Of course, if you choose an economically producing vocation you can then afford quality education for your children. Everyone else? Not so much.

In my mind all humans have equal value, but when you live within the business model that doesn’t hold. Try it. Suffer a job-ending illness and see what happens to your value. This, everyone, is what happens when your country is run like a business. Human capital eventually ceases to be human at all.

One Reply to “Devaluing Human Capital”

  1. Pingback: Devaluing Human Capital | Christina Anne Hawthorne

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