Is Everybody In The Knowledge Economy A Human Capitalist?

Is Everybody In The Knowledge Economy A Human Capitalist?

It may be tempting to consider everybody that has a modicum of skill in the knowledge economy to be a human capitalist. The question is beyond mere semantics and, clearly, turns on what it means to be a human capitalist. In fact, the idea an individual may control capital, but not necessarily be a capitalist in any meaningful sense, is foundational to our analysis of human capital markets.

So what does this really mean? We begin by defining the central terms. In a fundamental sense, we can define capital as something that increases the ability to perform economically useful work. We think of capital within the firm as existing in, among other things, machinery. With appropriate machines economic work is increased. The machine is not the product, it is, plainly, an input in the production function. Of course, capital also exists in far less obvious guises than machines in a factory. When a government uses tax revenue to build roads, for example, these kinds of capital projects have, at least if planned well, a positive impact on the ability to generate economic goods and services.

These two examples demonstrate that capital, even in these simple scenarios, exists in a contingent sense. Economic resources are not capital in and of themselves, they are capital when they perform this basic function of increasing the efficiency of producing a good or service. This contingency requires that we use active voice in our discussion of capital. It is the capitalist that actively creates capital.

Fundamentally, the human capitalist has three basic market offerings: problem identification; problem solving; and innovation. These offerings may differ qualitatively and quantitatively in degree between individuals, but, they are the sine qua non of human capitalism. The human capitalist, by our definition, is creating human capital to increase his or her outputs of one or all of these outputs. The absence of all these economic outputs itself defines the individual's output as mere labour.

We all, of course, have an endowment of economic resources, large or small, and participate in markets accordingly. When we define capital in our contingent sense, we can say that the capitalist -- regardless of the nature of that capital -- is the individual that forgoes immediate gratification through consumption of his or her endowment of economic resources -- traditionally expressed in terms of 'utility' -- and, instead, converts these resources into capital to increase economic productivity. Fundamentally, the human capitalist has three basic market offerings: problem identification; problem solving; and innovation. These offerings may differ qualitatively and quantitatively in degree between individuals, but, they are the sine qua non of human capitalism. The human capitalist, by our definition, is creating human capital to increase his or her outputs of one or all of these outputs. The absence of all these economic outputs itself defines the individual's output as mere labour.

So, accepting the bluntly reductionist nature of this treatment of a marvellously rich concept, we can say that, at least on our terms, that to be a human capitalist requires two things: one, an intentionality behind the conversion of available economic resources into human capital; and, two, sufficient human capital to create a market offering beyond mere labour that identifies a problem, solves a problem, or innovates. In our lights, then, a great many individuals that operate on the knowledge economy fail both prongs of this'human capitalist test'.

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