My parents were on the brink of retirement at the same time as I was researching pension strategies in Israel. So, I couldn’t help thinking about them whenever retirees were discussed. It made things difficult for me, because every insurance agent and pension-fund manager I’d interviewed circled back to the same point: people were living longer than ever before. Far from being cause for celebration, this was a problem: from their perspective, lengthy post-work lives were a drain on already overburdened pension funds.
I understood the economics of the so-called “longevity risk” that pension professionals were talking about. Still, I found it upsetting that the lives of people I loved, or even just knew about, would be subject to cost-benefit calculations as cold as all that. I hoped my own parents would enjoy long and comfortable retirements. I couldn’t imagine anyone feeling otherwise about theirs. How, then, did we come to see it as a problem that people live longer?
The answer lies in a popular concept, human capital, that my research into pensions soon caused me to question. Economists and actuaries who lament that people live too long treat human life as capital: a vehicle of investment and accumulation. “Human capital” sounds good in development programs or economic textbooks—denoting investment in individuals’ education, skills, and earning power—but its implications are disturbing. In a society that appraises its members according to economic criteria, the value of the elderly has been depleted—no matter how substantial their humanity, no matter how cherished they are by their loved ones
The term “human capital” suggests that we create ourselves as social beings, and that society recognizes the outcomes of our self-making by assigning them a value. This value, like any other, can be exchanged for commodities and services of equal value. We see this whenever we apply for jobs—and in numerous social occasions, as well—as we’re assessed according to the value of our accomplishments. We spend our lives investing in skills and connections in a bid to make this value high. These skills and connections are the first things we think about when we assert our humanity. So, we are blindsided when we’re assigned negative value—when we become a risk, a drain, a problem of a life gone on too long.
What to do about human capital? One way to combat this disillusion is by reflecting on the political and economic goals that the notion of human capital was designed to fulfill. The books reviewed here show that we cannot fully understand ourselves as possessing and wielding human capital without pondering the system that inscribes us with value and controls its use.
In The Economization of Life, Michelle Murphy analyzes debates about the population among economists, and those influenced by them, over the past century. She shows how the seemingly innocuous practice of assigning value to human life means allotting differential worth—including negative value—to the lives of different people.
Human capital, Murphy demonstrates, only makes sense as something to be invested in—by countries, companies, or individuals—when humans are valued in terms of their contribution to a national economy. But states were not conceived of as economic systems before the 20th century. Only since the 1930s was national macroeconomic output even calculated. Yet, within half a century, even if a country did not calculate its gross domestic product (GDP), the International Money Fund (IMF) would estimate it—ensuring that all countries were assessed according to the relative strength of their economies. In this way, to paraphrase Murphy, the idea of the economy became a tyrant, one that demanded the rearrangement of lives, property, and relations to make it grow.
Life subsequently came to be valued according to its ability to foster the national economy. Economists turned their attention to aggregate rates of fertility and death. They calculated how to optimize human lives according to their current and potential contribution to the GDP. Life that didn’t contribute to economic growth was deemed a surplus to be managed. And managed it was: family planning, development, and global health initiatives strove to turn the lives of poor populations into economic assets rather than liabilities. In the shadow of a “population bomb” that economists warned against, only some lives were regarded as worthy of reproducing. Others—mostly nonwhite and poor lives—had to be prevented from holding back the rest.
Murphy’s most powerful example—showing the interests behind the equation of humans with their economic value—is of girls in Bangladesh who were given the opportunity to get an education. At issue, for Murphy, is not whether popular empowerment programs like the Girl Effect campaign have helped these girls. Instead, she warns about what happens to a society whose members are evaluated according to the returns its economy might offer global investors.
So-called “backward” countries, explains Murphy, once had a better chance of increasing their GDP by averting births rather than by harnessing the average labor of their living adults. Such labor simply wasn’t that profitable. But by the 21st century, economists discovered education to be as cost-effective in averting births as birth control. The added bonus was that education made these adults’ work more profitable and, consequently, their lives more valuable. A girl not invested in by age 12 might give birth or contract HIV by 15. Conversely, educated girls would have fewer babies, become a healthier and more highly skilled workforce for hire, and earn more, thereby raising their country’s GDP per capita.
From the perspective of global investors in Bangladesh, the lower the initial value of Bangladeshi girls (being female, being poor, being nonwhite, being uneducated) for their economy, the higher the potential returns on investment in their education. Local enterprise would be able to feed on their more highly skilled work, while the Bangladeshi economy would not be weighed down as much by the need to support those who could not earn a living.
The value of a Bangladeshi girl either accrues or diminishes, then, according to how global investors game the riskiness of her milieu. Initiatives to promote her human capital mitigate the risk of investing in Bangladeshi enterprise. These initiatives also rally material and moral support for what is conceived to be the empowerment of underprivileged girls.
It takes a study as rigorous as Murphy’s to expose the double-edged nature of human capital: galvanizing self-improvement of, and popular support for, underprivileged populations, even as it does so according to metrics that have investor interests—rather than general well-being—as their goal.
The examples on which Murphy focuses are conveniently removed from Western elites’ frequently rewarded efforts to increase and leverage their own human capital. Books that focus on the United States force the implications of this concept closer to home. I will examine two such books, which issue from very different perspectives.
The first book examines human capital at the level of its first exemplars. Michael Zakim, in Accounting for Capitalism: The World the Clerk Made, aims to examine capitalism from the bottom up, by looking through the lens of the experience of antebellum merchants’ clerks.
Human capital sounds good in development programs or economic textbooks, but its implications are disturbing.
As market exchanges increased in volume and complexity around the middle of the 19th century, these young American clerks migrated from farms to offices, taking up the drab, sedentary work of accounting, filing, and overseeing trade. Zakim considers these clerks the pioneers of human capital. Indeed, they were capital personified: men who made the market by making themselves. Zakim shows how human capital became the bedrock of modern capitalism, by examining delightful correspondences between man and market.
If I were to pick my favorite of Zakim’s anecdotes, it would have to be the one centered on constipation. Clerks were obsessed with what went into and, even more so, came out of their bodies. Tracking the movement of their feces—just as they tracked the ins and outs of capital, the ups and downs of markets—was, for them, a way of negotiating chaos and control, fragment and whole.
Clerks countered their frayed nerves with a regime of personal hygiene, exercise, and self-diagnosis. Their nausea and headaches were acknowledgements that the world was being turned upside down, but that they had what it took to put it right. Self-observation and self-making churned out far more neurotics than farm or factory work ever had. Nervous bodies resonated with the times, embodying in the human the nervous fluctuations of capital.
The book abounds with such nifty echoes between persons and profits, which Zakim draws out of magazines, pamphlets, and other 19th-century texts. He tells how penmanship and bookkeeping helped synthesize market equilibrium and movement, individuality and universality. These were also the poles that clerks navigated in their own lives, uprooted from the soil and untethered from family and tradition. Leveraging newly acquired skills, they personified the market’s opportunism and availed themselves of its contractual freedoms. As society was increasingly embedded in grids of costs and benefits, clerks made profit-seeking appear natural, or, at least, more current than old-fashioned values like honor or fidelity.
Consider life insurance. By transforming wages into generation-spanning assets (which also functioned as contingency funds in the event of death), life insurance—as adopted by the clerks and as sold by them to others—purported to turn the unstable market into a source of stability. A properly insured society would no longer depend on the good will of family and friends, since everyone would be in a position to help themselves. What’s more, a salable insurance policy, with its growing credit, would transform its owner into an asset of significant value. This, for Zakim, was the epitome of the human refashioned as capital.
Although Zakim’s account of life insurance ends there, it is important to remember that this refashioning cuts both ways. Since the “risk” of long-living retirees is such a headache for life insurance, as discussed above, it is clear that assigning life a market value in no way guarantees that this value will be high.
Zakim doesn’t dwell on the oppressive aspects of human capital. Determined to demonstrate that all capital is in some sense human, he focuses, instead, on the ways in which the bearers of human capital harmonize with capitalism and animate markets through their personal ambition. However inspiring this assessment, it probably will not resonate with readers forced to compete for jobs in a system that bears down upon them. Zakim’s book is best read alongside the others reviewed here, whose emphasis is, rather, on how the market—human creation though it is—dominates its creators through the value it assigns them.
The next book examines the building blocks of human capital—namely, personal data—to reveal just how invasive is capital’s power. If Zakim’s clerks are distant in time and Murphy’s Bangladeshi girls removed in space, data is inescapably part of all of our lives. It’s what we grasp for when asked to identify ourselves.
First, we state our name, age, and gender. Then, our profession and nationality, race and religion. Prodded further, we delve into our intelligence and education, tastes and hobbies, skills and sensibilities. For authenticity’s sake, we might let slip a neurosis or two. We curate this data with an eye to the goals it might help us accomplish, and we relate to others on the basis of theirs. We find it creepy, though, when offered products or enjoined toward causes because of this data. We feel seen through or reduced by new media in ways that seem unprecedented.
Yet, according to Colin Koopman, data collection, interpretation, and mobilization are far from new. In How We Became Our Data, Koopman dates these practices back to the first decades of the 20th century, when information-gathering technologies were developed in the United States. These technologies have fastened individuals to prefabricated categories (like age, gender, and religion, as well as other categories listed above), solidifying us as persons of a certain kind. Koopman examines data collection, as well as the human adoption of such data to represent individual identity, in order to make such practices visible before data becomes our second nature.
Understanding human capital alerts us to the uphill battle we face, as we age, to maintain our value—especially as we are deemed a risk to others.
Koopman begins his story with birth-registration campaigns—early 20th-entury efforts to encourage the voluntary registration of newborns and the standardization of their demographic classifications—by examining such registration’s attendant forms, protocols, and audits. He continues with the tax, wage, and benefit tracking of Social Security numbers, the creation of which likewise involved massive information harvesting. Having stabilized identities on the basis of pure convention (that is, random numbers), Social Security numbers were adopted by one organization after another for diverse purposes.
How We Became Our Data also probes personality psychology: a different mode of data collection, which added depth by classifying individuals according to gradated traits that could potentially apply to anyone.
Koopman’s analysis reaches a crescendo when the story turns to personal data’s implications. He invites us to think about the thousands of boxes we’ve ticked over our lifetimes, beside which are written the conventional words of racial taxonomy. The data collected from these boxes is used to build correlations, supporting all manner of political and economic programs.
Koopman revisits the early days of real-estate appraisal: a profession that required predicting residential real estate’s value as well as its “obsolescence.” Replacing an earlier terminology of “undesirables” and “nuisances” with newly collected technical data, real-estate appraisers substituted moral reproach of such undesirables with bland accounts of a seemingly natural process. Real-estate appraisal data thus coded racism as neutral and scientific, preparing the ground for government redlining.
Unlike Murphy and Zakim, Koopman makes no explicit reference to human capital. The term implies self-creation, while his concern is with the political and economic institutions that initiated the collection and consolidation of human capital’s components—namely data—for their own purposes. But his descriptions of the care with which we manage our data invoke human capital: Why would we willingly curate and display our data, if not to increase our relative value?
Even as we feel estranged from such classification (we consider ourselves to be so much more than our data or human capital), we cultivate, display, and leverage our socially recognized arsenal of valued traits—no matter how worrying the manner in which they were consolidated—whenever circumstances call for it.
Human capital, then, is something other than the sum total of our ambition. Like other kinds of capital, its value is set by market dynamics that support a larger process of accumulation. As successful as we may be in increasing our human capital relative to that of others, we are unable to determine how much we are worth to our society. And yet our competitive realities obfuscate society’s final judgment by making us obsess about our relative standing.
The idea of human lives as surplus—superfluous to society rather than being its building blocks—offends our robust sense of self. This holds true despite our social identities being no more than the assemblage of prefabricated categories. In designating a selfhood unique yet classifiable, a personal project of self-creation yet a collective subject of political policy, we end up with human capital.
At best, we take human capital as impetus to apply ourselves and as an indication that society values our skills and talents. At worst, we feel oppressed by constantly having to demonstrate our worth in a matrix of investments and returns. It’s hard enough seeing our parents enter the class of people constituting a “longevity risk,” let alone contemplating such a future for us all. Understanding human capital alerts us to the uphill battle we face, as we age, to maintain our value—especially as, slowly but surely, we are deemed a risk to others.
This article was commissioned by Ivan Ascher. 
