The neoliberal myth of human capital
Which involves atomization of workers, each of which became a "good" sold at the "labor market".
Neoliberalism discard the concept of human solidarity. It also eliminated government support of
organized labor, and decimated unions.
Under neoliberalism the government has to actively intervene to clear the way for the free "labor
market." Talk about government-sponsored redistribution of wealth under neoliberalism -- from
Greenspan to Bernanke, from Rubin to Paulson, the government has been a veritable Robin Hood in
Human capital, as defined by the Organisation for Economic Development and Cooperation is the knowledge,
skills, competences, and other attributes embodied in individuals that are relevant to economic activity
(OECD 1998). The term coalesces around the concepts of the use of skills in an economy and the need
for "personal investment" to develop these and that this investment, like capital itself, should bring
Human capital has now become a core plank of neoliberal ideology. One of the first theorists of human
capital, Gary Becker, of the Milton Friedman Chicago School of Economics (2002:3) explains:
Human capital refers to the knowledge, information, ideas, skills, and health of individuals.
This is the ‘age of human capital’ in the sense that human capital is by far the most important form
of capital in modern economies. The economic successes of individuals, and also of whole economies,
depend on how extensively and effectively people invest in themselves.
‘Investing in themselves’ stands for education, now understood as the crucial enabler of the development
of human capital.
This fake concept of "Human capital" allows education and neoliberalm to be woven together ever more
tightly and brainwash student into neoliberal thinking more effectively. This link is not new:
formal public schooling has always served, primarily, the interests of capital. Critics of neoliberal
education have a tendency to present the present phase of the industry-education takeover as something
qualitatively different, a new ‘rule of terror’ and the eclipse of democracy (Giroux 2004).
But justifiable outrage against the present effects of neoliberalism tends towards implying that
there was a previous, kindlier version of capitalism which took education seriously and left the autonomous
sphere of culture and learning alone. There was none.
History shows that education has never been free of the ideological constraints, and never was an
ideologically neutral zone. The introduction of universal education in the late nineteenth century owed
more to the pressures exerted by the needs of industry whose increasing complexity required specific
literacy and mathematical skills, than it did to motivations of democratic inclusion. Universal compulsory
schooling provided other important social benefits to controllers of capital. It socialized children
into the discipline and expectations fostered by industrial capitalism and acted as a valuable shock
absorber to the social upheavals being wrought by industrialization (Bowles and Gintis 1976:27).
Higher education, at a later phase of capitalism in the 20th century, played a different social role.
It was reserved for potential employers, professionals, top public servants and managers and formed
the top rung of education whose main function was to train the ruling class to rule. Samuel Bowles and
Herbert Gintis refer to this process as the ‘correspondence principle’ in education whereby education
replicates in various ways class division (Bowles and Gintis 1976: 130-132; see also Belamy Foster 2011:8).
Universities, they claimed, function mainly as select institutions to replicate the top end of society,
and, under the aegis of intellectual achievement and meritocracy, legitimise social hierarchy. The Italian
socialist, Antonio Gramsci, provided, I think, a more subtle elaboration of the role of universities
in capitalism. He described how modern capitalism required a different kind of leaders to the cultural,
formal-juridical graduates from the classical universities. It needed an intellectual and technical
university combined, one which would produce both professionals and teachers but also specialised functionaries
and managers for scientific industrial production (Gramsci 1971: 28). While there was always a gulf
between university graduates and the working class, universities as they widened their social functions,
Gramsci points out, also produced independent thinkers and radical critics of the system (1971: 342).
This seeming contradiction, as well as accounting for how universities can simultaneously represent
the establishment and give voice to radical opposition, constitutes a dynamic in capitalist education
that a literal reading of the ‘correspondence principle’ would seem to ignore.
In many countries including Ireland, university remained highly selective right up until relatively
recently. In 1960, just 5% of Irish students who completed secondary education went on to college; twenty
years later it was still only 20% (DES 2011: 35). The official view of a university then was th
Human capital encapsulates this binding together of knowledge and expertise with their function and
value in the economy. Knowledge is reclassified as an economic category and human endeavour linked to
productivity: the greater its outcomes, the greater its value. Where workers become human capital they
are also reduced to the level of a commodity to be sold to a willing buyer (Perelman 2011:11). A person’s
potential to learn things becomes something measurable in terms of returns on investment, and someone’s
labour a quantifiable thing that can be priced, bought on the labour market.
This representation of human beings, knowledge and work has specific ideological effects. Human capital,
when it was first coined by Becker in the 1960s, was considered to be too debasing to be used publicly.
The term was seen, correctly, as objectifying people and only suitable to refer to anonymous ‘others’.
Even today, despite the apparent wide acceptance of the term, it is, in practice, only used in official
documents and hardly at all in ordinary conversation. (Who, indeed, would spontaneously describe themselves
as human capital?) When Samuel Bowles and Herbert Gintis criticised, from a Marxist perspective, the
use of the term in the context of education in America in the 1970’s, they argued that human capital
· treats labour as a produced means of production whose characteristics depend on the total configuration
of economic forces,
· centres on differentiation in the labour force and
· brings basic social institutions previously relegated to the purely cultural and superstructural
spheres into the realm of economic analysis
· formally excludes the relevance of class and class conflict to the explication of labour market
(Bowles and Gintis 1975:74-75)
Their study highlights how capital, as applied to individuals, invites identification with
guaranteed returns on a fixed sum of money (with money being taken as something with which individuals
are miraculously endowed). The metaphor erases social relations. Capital here, unlike how Marx described
it, is drained of class content Neoliberalism, human capital and the skills agenda in higher education
102 | P a g e 102
and becomes a given, separate from the society in which it was produced7. Likening human work to
this understanding of capital reduces what is a potential to something already existing, and makes quantifiable
that which is unquantifiable. Furthermore, neither waged or salaried work in capitalism have a fixed
or stable value; rather, both tend to be subject to what the employer, taking account of labour supply,
will pay. One might say, therefore, human capital is not very like capital - even in the neoliberal
understandings of the term - nor very human.
7 For Marx, capital as a material product divorced from social relations, was part of ‘vulgar economics’
which could not explain where wealth came from: ‘capital is not a thing, it is a definite social relation
of production pertaining to a particular historical social formation’ (Marx 1991: 953)
8 As of 2011, Irish universities charge registration fees rather than tuition fees. Historically
these have been low but the cutbacks in education have seen them rise to as much as €000 per year
The ideological function of human capital is that it draws education closely into the ambit of the
economy and also transforms the notion of education. When the neoclassical school of economics first
focused on human capital, they did so as part of measuring the link between levels of education and
earning potential or ‘the activities that influence future real income through the imbedding of resources
in people’ or ‘investing in human capital’ (Becker 1962: 9). The adoption of the human capital frame
positions education on the first rung of the education-jobs-rewards ladder. Learning thus becomes something
primarily aimed at increasing an individual’s earning potential and, by extension, something for which
an individual, not society, is responsible. Investment becomes thus not an investment for all society
but an investment for the individual, a financial commitment which will supposedly pay dividends to
the individual in the future. It follows that if human capital is an investment for an individual, an
individual should be responsible for paying for it.
The Hunt Report describes as ‘essential’ the introduction of a direct contribution from students8.
‘The only realistic option’, it goes on to say, is ‘to support growth in participation and to require
students or graduates to directly share in the cost of their education, reflecting the considerable
private returns that they can expect to enjoy’ (DES 2011:16). The assumption in the human capital template
is that earning potential afforded by higher education is the only consideration for students. The Hunt
Report, in this respect, follows the trend elsewhere. For example, the 2010 Browne report on Higher
Education in Britain adopts the same train of thought. Students are understood to be consumers of Higher
Education and they ‘are best placed to make the judgment about what they want to get from participating
in higher education’ and the major element of this is in terms of which courses will lead to higher
earnings (Collini 2010).
However, education seen as an individual investment completely ignores, from a variety of viewpoints,
the social dimension to education. As argued in the last section, class privilege and the special access
that it affords to higher education is decisive in the securing of better paid employment. What’s more,
education as an investment assumes that it is instrumentalism alone that drives people to become educated.
Concerns about employment prospects are very important, but so too, from a broader social perspective,
is the question of learning. Narrow skill-getting for an imagined job is a poor and alienating representation
of the rounded lived experience of education. Equally, over reliance on the student to know in advance
what her learning
experience will be omits the element of the unknown present in all learning. The student’s ability
to assess accurately where the learning process will take her or what exactly will be learnt can, of
necessity – from the standpoint of the student - only be a partial judgement. ‘Student choice’, despite
the accepted refrain that it has now become, focuses only on one side of the education process, and
is an impoverished, transactional view of what the education process involves.
If education human-capital-style is about looking after oneself, it follows that it is also about
greater competition between individuals. Human capital inevitably stresses skill differentiation. The
social, cooperative, creative component of education reconverts into a narrow, self-seeking activity
whose end results will ultimately pit one person against another on the labour market. William Morris,
writing in the 1880s, noted amid the erosion of craftsmanship in assembly line capitalist production,
how education was becoming debased and wrote, with striking prescience (1888):
.. just as the capitalists would at once capture this education in craftsmanship, suck out what little
advantage there is in it and then throw it away, so they do with all other education. A superstition
still remains from the times when 'education' was a rarity that it is a means for earning a superior
livelihood; but as soon as it has ceased to be a rarity, competition takes care that education shall
not raise wages; that general education shall be worth nothing, and that special education shall be
worth just no more than a tolerable return on the money and time spent in acquiring it.
In our times, debt has replaced ‘a tolerable return’ on the money spent on education, but the same
critique of functionalist and alienating education applies.
Besides human capital presenting a drab grey view of education, its reasoning does not correspond
to how the world, or capitalism, actually works. The prime mover of economic growth, unlike what neoclassical
economics dictates, is not individual enterprise but capital investment for the profit motive. When
capital, as a result of the crisis, is not being put into production of goods and services, it might
be argued, following the logic of capitalism, that education should diversify into broader objectives
or concentrate on less employment specific outlets, even as these dry up. Similarly, it might be argued
that the breakneck speed of expansion of higher education should be reviewed and alternatives discussed.
Instead, official pronouncements advocate that the numbers of those designated to acquire skills in
higher education is not only to be continued, but expanded. ‘If Ireland is to achieve its ambitions
for recovery and development within an innovation-driven economy, it is essential to create and enhance
human capital by expanding participation in higher education (DES 2011: 10). Skill development is still
regarded as the aim of higher education even if it is far from clear exactly how skills are going to
kick-start the economy or where the capital investment, in a world-wide slump, is going to come from.
In reality, the very functionalist priorities for higher education which may have seemed to make
sense in the boom days of the Celtic Tiger, repeated now in the chill winds of a slump run the risk
of heightening the spectre of economic failure. Brown and Lauder point out the political disadvantage,
from the point of view of policy makers and governments, of stressing the overlap between education
and the Neoliberalism, human capital and the skills agenda in higher education
104 | P a g e 104
economy. Creating the expectation that supplying skills will bring jobs, especially when it will
be individual families who will be making further sacrifices to get their children into higher education,
leads inevitably to political disillusion. They state that (2006:50):
…an unintended consequence of the application of human capital ideas to public and economic policy
is that it is creating increasing problems in the management of expectations. The developed economies
are in danger of creating a heady cocktail of discontent: students and their parents may find that a
degree fails to deliver the standard of living they have been led to expect and employers will have
too many overqualified and disgruntled employees.
In Ireland, expectations around skills and human capital as a magnet for investment and the creator
of jobs have become the mantra of official government policy. The elements of ‘a heady cocktail of discontent’,
which turned out to be true for Britain (Swain 2011), are also present in Ireland. While emigration
may have siphoned off some of this, it remains to be seen how, in the longer term, Irish young people,
and their indebted parents, will respond politically to the bitter reality of widespread graduate unemployment.
Education policy, capital and the state.
The official policy for higher education in Ireland may be driven by international capital and its
desire to ensure the smooth supply of labour in the future, but for implementation and legitimisation,
it is dependent on a local state. In the case of the Hunt Report in Ireland, international capital and
national policy are interwoven to such an extent that it is difficult to disentangle the two.
The strategy group which devised the report for the government was chaired by Dr. Colin Hunt, now
Director of the Irish branch of the Australian financial corporation, Macquarie Capital Advisers, an
organization which has interests in the privatisation of education. The other report group members were
from the World Bank, Irish Government Departments and Advisory Boards, members of boards of multinationals
in Ireland, and just two Presidents from Institutes of Higher Education (DES 2011: 39). Despite the
declared wish to consult with those working in universities and ‘engage with wider society’, there was
just one practising academic (from Finland), out of the total of 15 group members, and no representative
from community or wider social or cultural organisations.
The process by which reports such as these become national policy is interesting. The 2004 OECD report
on Higher Education was adopted, with no amendments, by the Irish cabinet a few months after publication
(Holborow 2006:93). The Hunt report, having been endorsed by the current Labour Minister for Education,
Ruairi Quinn, and publicly posted on the Irish Department for Education and Skills’ website, it too
has effectively become government policy (Quinn 2011). Naomi Klein (2007) speaks of the way corporate
think tanks forge theories that become the real shock doctrines of government, and there are striking
similarities in what she writes for education. Parliamentary processes, involving elected representatives
who draft bills, who discuss, amend and vote in full view of the public on what will become law, are
105 | P a g e
cursorily dispensed with, it seems. Corporate ‘expert’ reports have supplanted public policy. Between
the publishing of the Hunt Report and now, it should be remembered, a general election took place with
a change of government; yet through all of this, the Hunt Report remains the point of reference for
Irish Higher Education Policy. The corporate take-over of public policy, with corporate interests and
the state speaking as one, represents considerable democratic deficit.
In Ireland, the way in which higher education policy has also come to include industrial relations
in the education sector is another example of the overlap between corporate reports and public policy.
One of the most detailed sections of the Hunt Report is devoted to the ‘effective deployment of resources
in higher education’ and deals very specifically with Human Resources issues (DES 2011:118-9). Educational
policy has now come to include the neoliberal view of cutting the cost of education through paring back
on the salaries and working conditions of those who work in education. The section of the report which
deals with this bears a striking resemblance to those found in the present Public Service Agreement
(Dept. of Finance 2010). Greater productivity through tracking of individual performance, a comprehensive
review of contracts to include a broader concept of the academic year, adjustments to existing workloads
and the introduction of flexibility and mobility to deal with structural changes are all to be found
in the same detail as in the Public Service Agreement. If the ‘modernisation of work practices’, ‘comprehensive
review of contracts’ and ‘greater managerial discretion to deal with ‘under-performance’ now forms of
part of educational policy, it is not difficult to see that both policy and politics in neoliberal thinking
merge as one. Yet again, neoliberal directives in education assume the starting point to be the point
of view of the employer and subordinate the interests of those who work in education – the academics
and the administrators - to their interest-laden dictates.
What these developments show is that corporate dominance occurs not through by-passing the state
but by enlisting the state as its ever more effective instrument. In education, even in neoliberal,
privatising times like our own, the state continues to play a crucial role. It has often been argued
by those critical of neoliberal globalisation that today’s world is ‘transnational’, driven by a transnational
capital class (Sklair 2010); that in the age of neoliberalism, education is controlled by global actors
such as the IMF or the World Bank (Robertson and Dale 2009:33); or that the new global system was ‘deterritoralised’
and that nation states in today’s world have a lesser role (Hardt and Negri 2001). Such interpretations
underestimate the fact that corporate monopolies in competition with others depend on their own national
states for competitive advantage and that states and capital are economically, structurally and politically
interdependent. Nowhere is this fact more evident than in the educational arena. Capital needs states
for facilities that are not necessarily provided by the market: the vital infrastructures and the social
foundations – including a national education system - provides capital with an ongoing and suitably
skilled supply of labour power (Harman 2009: 264-270). Sidelining the importance of the state in contemporary
capitalism makes too many concessions to the state-free view of the world promoted by neoliberal ideology.
Neoliberal governments, contrary to their pronouncements, have actually overseen a rise in state spending
and influence (Béland 2010; Harman 2007). Small government is a flourish of ideological rhetoric which
has been revealed as such as states intervene with gusto in Neoliberalism, human capital and the skills
agenda in higher education
106 | P a g e 106
the debt crisis. As has been pointed out, the lengths to which states would go in the protection
of large chunks of capital, particularly those tied up in finance, makes nonsense of the idea that the
neoliberal state stands to one side to let the market do its work (Callinicos 2009; Žižek 2009). The
invention of the word ‘sovereign’ debt, through which private banking debt became public responsibility,
deftly captures the tightness of the state-capital overlap. In education, too the state is indulging
in ideological hyperbole when it argues that education needs to be more and more privatised. Alongside
the neoliberal pronouncements extolling a withdrawal of the state in education, in practice the state
remains decisively hands on. Educational systems, even in neoliberal times, are still overwhelmingly
funded by the state, dependent on state policy, and centralised under state moderated curricula and
exams. Education also fulfils a socialising role that the state ignores at its peril. As Lipman points
out, governments are keenly aware that too much state withdrawal from education could create a ‘crisis
of social reproduction’ as the functions of education - social stability, political legitimisation,
and the reproduction of the labour force – are not guaranteed in private hands (Lipman 2011:124). Governments
know that they cannot afford to underestimate the wider social role that education plays and sometimes
they seek to engineer developments in education to suit specific political ends. For example, in Ireland,
the Hunt Report’s specific call for a further doubling of the capacity of higher education in the next
twenty years (DES 2011: 10) may carry political advantages for the government of the day. For example,
having young people registered in college may be preferable, for political reasons, than having that
number of young people on the dole.
Education and the wider movement of resistance to austerity
Neoliberal dictates in education and financial pressures on students are the ingredients that elsewhere
have led to student radicalism. In Ireland, the exclusive emphasis on the skills-for-jobs perspective,
against the backcloth of ever higher rates of student participation in third level education and sharply
rising graduate unemployment, makes the crisis in Irish Higher Education potentially more acute. It
was the presence of just such pressure points which made student explosions erupt – in 1968 but also
in Britain in 2011 - and it is not unreasonable to expect that higher education in Ireland will be affected
by the same tensions between education and the economy.
In Ireland, which has seen the implementation of one of the severest austerity programmes, resistance
across the working class movement, up until now, has been sporadic. In February, and then in November
2009, large demonstrations and well supported public sector strikes involved thousands of students,
teachers and lecturers in a united show of opposition to the Government. In 2011 however, the trade
union leaders’ complicit agreement to cutbacks in the public sector tended to drive resistance to a
more localised level, although by early 2012 that appeared to be changing as widespread resistance to
local household charges grew.
This paper has attempted to lay out a critique of the neoliberal view of education, not from the
belief that it suffices to show how capitalism distorts education but because of an awareness that in
the present crisis, the controllers of capital attack on every front – including a concerted ideological
campaign to regain the ground that they have lost over the debt crisis (Žižek 2009; Holborow 2012).
Gramsci, writing in a 107 | P a g e
similar period of crisis in the 1930s argued that struggle against the existing order had to take
place on all fronts, the ideological as well as the practical and organisational. He explained (1971:178)
A crisis occurs, sometimes lasting for decades. This exceptional duration means that incurable structural
contradictions have revealed themselves … and that, despite this, the political forces which are struggling
to conserve and defend the existing structure itself are making every effort to cure them, within certain
limits, and to overcome them. These incessant and persistent efforts ... form the terrain of the 'conjunctural'
and it is upon this terrain that the forces of opposition organise.
Gramsci’s insight is apt for the present situation – the crisis is protracted and the ruling class
is persistently taking advantage of its uncertainties to drive through their own agenda of protecting
profits at the expense of workers’ living standards. Gramsci is sometimes quoted to justify a ‘counter-hegemonic
strategy’ that prioritises critical analyses, cultural practices or rather broadly defined ‘social movements
and pedagogic work’ (Apple, Au and Gandin 209:14) over and above specific questions of social class
and the role of education in the capitalist system as a whole. Gramsci’s writings, which included the
question of education, discussed the necessary strategies and tactics to achieve, not just a shift of
policy, but, following his experience during the occupation of the factories in 1919-21, the need for
social revolution. Immediately after the passage quoted above, Gramsci warns of the twin dangers, in
revolutionary movements, of an ‘excess of economism’ which sees trade union struggles alone as sufficient
and also (perhaps particularly relevant to some strands of Critical Education) to the danger of an ‘excess
of ideologism’ in which there is an exaggeration of voluntarist or individual elements (Gramsci 1971:
178-9 ). His perspective for revolutionary change is one that sees the organisational and the ideological
as part of an integrated whole.
Following Gramsci’s perspective, we can say that degree of success of any challenge to neoliberalism
in education depend on the robustness of resistance in the wider working class movement and its ability
to mobilise against the current assault from the rule of capital. Identifying neoliberalism as the specific
ideology of a section of the capitalist class is vital to understanding what is happening in higher
education. Neoliberalism is not just an aberration, an excess of the market mindset, the voluntaristic
take-over of the university by market fundamentalism that needs to be ‘reigned in’ (Mautner 2010:22).
It is an ideology in the sense that Marx used the term when he referred to ruling ideas which are ‘are
nothing more than the ideal expression of the dominant material relationships, the dominant material
relationships grasped as ideas’ (Marx and Engels 1974:64). The ‘human capital’ notion is one such expression
of the dominant material relationships, and, in this way, central to the embedding of neoliberalism
in higher education. During the boom, neoliberalism provided a unique ideological template which fused
ultra- individualism with the needs of the capitalist economy. In the context of the present great depression,
I hope I have shown here, the underlying ideological imperatives of human capital become sharply exposed
and this realisation can play a role in bolstering resistance both to the neoliberalisation of education
and to the logic of capitalism itself. Neoliberalism, human capital and the skills agenda in higher
108 | P a g e 108
Marnie Holborow is a lecturer
First, for neoliberals, humans are only and everywhere homo economicus. This was not so
for classical economists, where we were market creatures in the economy, but not in civic, familial,
political, religious, or ethical life. Second, neoliberal homo economicus today takes shape as
value-enhancing human capital, not as a creature of exchange, production, or even interest. This is
markedly different from the subject drawn by Smith, Bentham, Marx, Polanyi, or even Gary Becker.
likbez said in reply to Dan Kervick...
My impression is that "human capital" is one of the most fundamental neoliberal myths. See, for
example What Exactly Is Neoliberalism by Wendy Brown
As for people betraying their own economic interests, this phenomenon was aptly described in "What's
the matter with Kansas" which can actually be reformulated as "What's the matter with the USA?".
And the answer he gave is that neoliberalism converted the USA into a bizarre high demand cult. There
are several characteristics of a high demand cult that are applicable. Among them:
- - "The group is preoccupied with making money."
- - "Questioning, doubt, and dissent are discouraged or even punished."
- - "Mind-numbing techniques (for example: meditation, chanting, speaking in tongues, debilitating
work routines) are used to suppress doubts about the group or its leader(s)." Entertainment and,
especially sport events in the US society serves the same role.
- - "The group's leadership dictates – sometimes in great detail – how members should think,
act, and feel." Looks like this part of brainwashing is outsourced to economy departments ;-)
- - "The group is elitist, claiming a special, exalted status for itself, its leader(s), and
members (for example the group and/or the leader has a special mission to save humanity)."
- - "The group has a polarized, "we-they" mentality that causes conflict with the wider society."
- - "The group's leader is not accountable to any authorities (as are, for example, clergy with
- - "The group teaches or implies that its supposedly exalted ends justify means (for example:
collecting money for bogus charities) that members would have considered unethical before joining."
- - "The group's leadership induces guilt feelings in lower members for the lack of wchivement
in order to control them."
- - "Members are expected to devote inordinate amounts of time to the group."
- - "Members are encouraged or required to live and/or socialize only with other group members."
It is very difficult to get rid of this neoliberal sect mentality like is the case with other
high demand cults.
Monday, November 30, 2015 at 12:42 PM
cm said in reply to likbez...
What has any of this to do with human capital? "Capital" is basically a synonym for productive capacity,
with regard to what "productive" means in the socioeconomic system or otherwise the context that
is being discussed.
E.g. social or political capital designates the ability (i.e. capacity) to
exert influence in social networks or societal decision making at the respective scales (organization,
city, regional, national etc.), where "productive" means "achieving desired or favored outcomes for
the person(s) possessing the capital or for those on whose behalf it is used".
Human capital, in the economic domain, is then the combined capacity of the human population in
the domain under consideration that is available for productive endeavors of any kind. This includes
BTW e.g. housewives and other household workers whose work is generally not paid, but you better
believe it is socially productive.
"Human capital, in the economic domain, is then the combined capacity of the human
population in the domain under consideration that is available for productive endeavors of any kind.
This includes BTW e.g. housewives and other household workers whose work is generally not paid, but
you better believe it is socially productive."
This is not true. The term "human capital" under neoliberalism has different semantic meaning: it presuppose
viewing a person as a market actor.
See discussion of the term in http://www.jceps.com/wp-content/uploads/PDFs/10-1-07.pdf
Neoliberalism and Human Capital The
The making of human capital is increasingly seen as a principal function of
higher education. A keyword in neoliberal ideology, human capital
represents a subtle masking of social conflict and expresses metaphorically the commodification of
human abilities and an alienating notion of human potential, both of which sit ill with the goals
of education. The recent National Strategy for Higher Education to 2030 (the Hunt Report) which appeared
in Ireland in January 2010, is a representative example of official articulation, on the part of
government and corporations, of the human capital/skills agenda in post-crash Ireland. Human capital,
now commonplace across official discourse in Ireland, is a complex ideological construct which, in
the educational arena, gives voice to two specific interests of capital: the provision of a workforce
ever more narrowly suited to the current needs of employers and the intensification of competition
between individuals in the labour market. The construct subtly reinvents socio-economic processes
as acts driven solely by individuals and reconstitutes higher education as an adjunct of the economy.
However, this paper argues, a skills-driven higher education can neither deliver large numbers of
high value jobs nor overcome the deeper causes of the present crisis. This raising of false expectations,
alongside a crudely reductionist view of education, sets limits on the unchallenged hegemony of this
particular strand of neoliberal ideology. In the current recession, during which the state is attempting
to shift the burden of educational funding from public to corporate and individual contributions,
those involved in higher education need to provide a robust political economy critique of human capital
ideology in order to strengthen practical resistance to it.
Neoliberalism, human capital and the skills agenda in higher education
leave a comment "
The making of human capital is increasingly seen as a principal function of
higher education. A keyword in neoliberal ideology, human capital represents
a subtle masking of social conflict and expresses metaphorically the commodification of human abilities
and an alienating notion of human potential, both of which sit ill with the goals of education. The
recent National Strategy for Higher Education to 2030 (the Hunt Report) which appeared in Ireland in
January 2010, is a representative example of official articulation, on the part of government and corporations,
of the human capital/skills agenda in post-crash Ireland. Human capital, now commonplace across official
discourse in Ireland, is a complex ideological construct which, in the educational arena, gives voice
to two specific interests of capital: the provision of a workforce ever more narrowly suited to the
current needs of employers and the intensification of competition between individuals in the labour
market. The construct subtly reinvents socio-economic processes as acts driven solely by individuals
and reconstitutes higher education as an adjunct of the economy. However, this paper argues, a skills-driven
higher education can neither deliver large numbers of high value jobs nor overcome the deeper causes
of the present crisis. This raising of false expectations, alongside a crudely reductionist view of
education, sets limits on the unchallenged hegemony of this particular strand of neoliberal ideology.
In the current recession, during which the state is attempting to shift the burden of educational funding
from public to corporate and individual contributions, those involved in higher education need to provide
a robust political economy critique of human capital ideology in order to strengthen practical resistance
Chronicles of a Capitalist Lawyer Human Capital and Neoliberalism
considered as a part of Law and Economics development at the University of Chicago.
Within Becker's theory, human is viewed as a rational being that always wants to maximize his own
interest. It does not mean that human has a perfect capacity of calculating the entire costs and
benefits of his action. It simply means that when they are making their decision, they pay attention
and respond to incentives, and thus, to certain extent, human behaviors are predictable.
A separate note though, even Becker agrees with Foucault that a perfect rational men is a fictional
concept. What matters is that the theory is useful to understand the world in an insightful way by
taking certain aspects of human behavior and make a simple model. After all, all theories are fictions,
and a good theory of fiction is the one that works the best among many other fictions.
Then, why this kind of theory is liberating? According to Foucault, economists are seekers of truth,
their analysis is not based on moral or legal issues, rather they focus on human behavior and incentives,
and they also prioritize liberty (through free market concept). This is important for Foucault who
sees the possibility of maintaining order without any coercion or doctrine as presupposed by laws
But the Neoliberalism view of Gary Becker is not totally free from any problem. Although it may be
a liberating theory it can also be used to suppress the people and here we are moving to Gary Becker
theory of Human Capital which is an essential part of Neoliberalism. Becker believes that human capital
is very important, i.e. investing in people, making them to be a better and more productive person
which will contribute to the welfare of the society.
The problem with that view, at least according to Harcourt and Foucault, is that once human is viewed
as a part of capital, the government may favor certain group above other groups, discriminating and
investing only in people who will produce the highest benefits and left the ones who are bad to suffer
in the slumps. An example would be the case of mass incarcerations in the United States that target
most of African Americans and poor people based on various criminal actions. Eugenics can also be
a problem here since there was a time where the Government of US actually allow the sterilization
of imbeciles and people with mental disorders.
Furthermore, viewing human as only a part of capital production could be degrading, i.e. human is
viewed like a machine with the sole purpose of producing more capital and whose value is solely determined
on how much capital will be produced and accumulated by him in the long run. I take this as the modern
critics of Neoliberalism and Capitalism in general.
Becker's response was simple. His theory on human capital is established to liberate the people and
while he agree that some aspects of economics theory on production and capital can be used to analyze
issues on human capital, human capital is still a separate subject (and thus the reason why he makes
a separate class on human capital in the University of Chicago).
From any point of view, human cannot be fully compared with machines. We can put machine in the warehouses
and easily disassemble them whenever we want, we can't do that with human. Furthermore, the theory
put a lot of stress in building human capital so that everyone may reap the benefit of social welfare.
It includes investment in education, on the job training, health, etc.
The most interesting response from Becker is that his theory of human capital focuses on efficiency,
but most of the time, things that are efficient, are also equitable. Through his theory, Becker want
to show that human is the most important part of our capital. By investing in people, we hope that
they can develop themselves and free to make their own life decisions without any interference. He
also notes that there is an underinvestment in poor people and that is actually an inefficient thing
to do, since better human capital always lead to better welfare maximization.
I completely agree with Becker's notion. This is indeed the main purpose of introducing the concept
of human capital, preserving freedom and reducing paternalism, finding the most efficient way to
allocate resources among the people. And I think this should be the main idea of Neoliberalism. It
is just too bad that politicians and even some academics are using this concept in such a misleading
way that they confuse the original concept of Neoliberalism that focuses on liberation and freedom
of the people with crony capitalism, dictatorism, and the freedom to do anything without any legal
liabilities which are not even parts of original concept of Neoliberalism.
Neoliberal Restructuring of Public Education
When President Obama appointed Arne Duncan, former-CEO of Chicago Public Schools, to head the
U.S. Department of Education in 2008, he signaled an intention to accelerate a neoliberal education
program that has been unfolding over the past two decades. This agenda calls for expanding education
markets and employing market principles across school systems. It features mayoral control of school
districts, closing "failing" public schools or handing them over to corporate-style "turnaround"
organizations, expanding school "choice" and privately run but publicly funded charter schools, weakening
teacher unions, and enforcing top-down accountability and incentivized performance targets on schools,
classrooms, and teachers (e.g., merit pay based on students' standardized test scores). To spur this
agenda, the Obama administration offered cash-strapped states $4.35 billion in federal stimulus dollars
to "reform" their school systems. Competition for these "Race to the Top" funds favored states that
passed legislation to enable education markets.
Race to the Top, although originating in U.S. government, is actually part of a global neoliberal
thrust toward the commodification of all realms of existence. In a new round of accumulation by dispossession,
liberalization of trade has opened up education, along with other public sectors, to capital accumulation,
and particularly to penetration of the education sectors of the periphery (e.g., Latin America, parts
of Asia, Africa). Under the Global Agreement on Trade in Services, all aspects of education and education
services are subject to global trade.4
The result is the global marketing of schooling from primary school through higher education. Schools,
education management organizations, tutoring services, teacher training, tests, curricula online
classes, and franchises of branded universities are now part of a global education market. Education
markets are one facet of the neoliberal strategy to manage the structural crisis of capitalism by
opening the public sector to capital accumulation. The roughly $2.5 trillion global market in education
is a rich new arena for capital investment.5
In the United States, charter schools are a vehicle to commodify and marketize education. Charter
schools are publicly funded but privately operated. They eliminate democratic governance, and, although
they may be run by nonprofit community organizations or groups of teachers or parents, the market
favors scaling up franchises of charter school management organizations or contracting out to for-profit
education management organizations that get management fees to run schools and education programs.6
For example, EdisonLearning, a transnational for-profit management organization, claims it serves
nearly one-half million students in twenty-five states in the United States, the United Kingdom,
The market mechanisms and business management discourses and practices that are saturating public
education in the United States are all too familiar to teachers and students worldwide. Globally,
nations are restructuring their education systems for "human capital" development to prepare students
for new types of work and labor relations.8
This policy agenda has been aggressively pushed by transnational organizations such as the World
Bank, International Monetary Fund, and Organization for Economic Cooperation and Development. Objectives
and performance targets are the order of the day, and testing is a prominent mechanism to steer curriculum
and instruction to meet these goals efficiently and effectively.
In the United States, the neoliberal restructuring of education is deeply racialized. It is centered
particularly on urban African American, Latino, and other communities of color, where public schools,
subject to being closed or privatized, are driven by a minimalist curriculum of preparing for standardized
tests. The cultural politics of race is also central to constructing consent for this agenda. As
Stephen Haymes argues, the "concepts 'public' and 'private' are racialized metaphors. Private is
equated with being 'good' and 'white' and public with being 'bad' and 'Black.'"9
Disinvesting in public schools, closing them, and opening privately operated charter schools in African-American
and Latino communities is facilitated by a racist discourse that pathologizes these communities and
their public institutions. But "failing" schools are the product of a legacy of educational, economic,
and social inequities experienced by African Americans, Latinos/as, and Native Americans.10
Schools serving these communities continue to face deeply inequitable opportunities to learn, including
unequal funding, curriculum, educational resources, facilities, and teacher experience. High stakes
accountability has often compounded these inequities by narrowing the curriculum to test preparation-producing
an exodus of some of the strongest teachers from schools in low-income communities of color.11
Neoliberalization of public education is also an ideological project, as Margaret Thatcher famously
said, to "change the soul," redefining the purpose of education and what it means to teach, learn,
and participate in schooling. Tensions between democratic purposes of education and education to
serve the needs of the workforce are longstanding. But in the neoliberal framework, teaching is driven
by standardized tests and performance outcomes; principals are managers, and school superintendents
are CEOs; and learning equals performance on the tests with teachers, students, and parents held
responsible for "failure." Education, which is properly seen as a public good, is being converted
into a private good, an investment one makes in one's child or oneself to "add value" in order better
to compete in the labor market. It is no longer seen as part of the larger end of promoting individual
and social development, but is merely the means to rise above others. Democratic participation in
local schools is rearticulated to individual "empowerment" of education consumers-as parents compete
for slots in an array of charter and specialty schools. In Chicago, twelve thousand parents and students
attended the 2010 "High School Fair" sponsored by Chicago Public Schools, and six thousand attended
the "New Schools Expo" of charter and school choice options. The political significance of this neoliberal
shift stretches beyond schools to legitimize marketing the public sector, particularly in cities,
and to infuse market ideologies into everyday life.
UPDATED What is Neoliberalism
Nothing requires a greater effort of thought than arguments to justify the rule of non-thought.
-- Milan Kundera
16 · 12:18:45 PM
Nice one, Philoguy. Nice one, Philoguy.
Only thing I would add, putting on my cultural studies hat for a second, is that neoliberalism
reinforces all of these economic presecriptions with a theory of the individual subject, who is deemed
to be responsible for negotiating their place in the market. This is crucial, because an isolated
subject who is responsible for their own assets and liabilities cannot be considered a victim of
This can be summed up in the notion of human capital, which circulates in neoliberal ideological
circles: in the reckoning of human capital, an individual is an "entrepreneurial self," an "enterprise
of one" who must essentially "sell" themselves within a broader marketplace of ideas. By this reckoning,
there is no such thing as an unemployed person: someone who is unemployed is, according to this thinking,
in transition between a less profitable activity and a more profitable one.
This, of course, doesn't acknowledge that the worker was kicked to the curb by machinations beyond
her control. Instead, it implies that the worker herself failed to recognize the unprofitable nature
of the previous job, and now must vote with her feet, find employ in a different place. But the responsibility
for this lies squarely with her (so the thinking goes): if she remains unemployed, it's because she's
holding out for a job in which her wage demands see eye to eye with the corporation's own. Barring
this, she is someone who is failing to "perform," someone who is unable to sell herself to the marketplace
in an effective way.
All of this helps to explain a great deal about our present circumstances. Minimum- or living-wage
legislation is opposed by neoliberal ideologues on the grounds that it is a destructive interference
in the individual's quests to negotiate a wage with prevailing market forces. The whole legacy of
"welfare reform," complete with manifestations of "workfare" in various Western countries, comes
out of the idea that welfare provisions are an unnatural distortion of the labor market that rewards
"entrepreneurial selves" for being unproductive. Austerity measures are deemed good not only for
the fiscal bottom line for corporations, but impose a moral accounting that establishes the grounds
for a proper neoliberal subject, one who isn't coddled by well-meaning but destructive policies of
Both the macrolevel and microlevel of neoliberalism work in lockstep with one another; the dissemination
of ideas about the ideal worker, "liberated" from the old impediments of a bureaucratic postwar compact,
help to cushion the blow of austerity measures great and small, from interest rate "shock doctrine"
to corporate downsizing.
Recommended 49 times
Remove Comment | + Children
16 · 01:02:46 PM
I love irony, hence can't help but get a kick from I love irony, hence can't help but get a kick
this little phrase: "the dissemination of ideas about the ideal worker,... help to cushion the
blow of austerity measures great and small..." I hope not too many take the bit of text as an endorsement
of the "virtues" of fuckyourneighbor Gekkothinking.
Softpanorama hot topic of the month
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