Something akin to human capital ideology is as old as classical political economy. We see it the political economists’ reified conception of capital: they viewed capital as a thing — “stock,” which issues in “revenue” for its “proprietor” — rather than as a definite social production relation. Thus they placed capital on the same level as the other “revenue sources” — land, which issues in rent, and labor, which issues in wages. This “trinity formula” (which Marx famously critiques in Capital Vol. 3) is a supremely non-parallel list, which completely conceals the category of surplus value, and its source in the exploitation of labor. Yet since this exploitation is established through a formal exchange of equivalents (the sale of labor-power for a wage), it disappears, and what appears on the “surface of society” is the trinity formula of comparable “revenue sources.”
The idea of human capital flattens the false parallelism of this reified conception even further. If wages are the “revenue” that issues from labor, why shouldn’t we consider the worker a “proprietor of stock” too? That “stock” being her own particular laboring capacities?
This turns the matter upside down, but it’s not mere bamboozlement— it’s the appearance of “a world that is really turned upside down” (Debord).
What does the worker exchange for her wage? She sells a commodity — labor-power, the capacity to labor for a determined length of time. Like every other commodity, labor-power has a dual character, a use-value and a value. The value of labor-power is determined by the labor time socially necessary to reproduce it at the prevailing level of development of the productive forces and the given socio-historical context. It is the value of labor-power which is paid for by the wage (in theory; in reality, as accumulation proceeds through inter- and intra-class struggle, it’s the deviation of prices from values, with labor-power as with every other commodity, that drags social labor around). The realization of the value of labor-power in the wage takes place in the sphere of circulation, the labor market, and thus appears as a perfectly lawful and just exchange of equivalents between two contracting parties. But labor-power also has a use-value — this is the actual work that a given worker can perform, and once the worker sells her commodity, this use-value belongs to capital. The use-value of labor-power is consumed outside of the public sphere of circulation, ruled by the exchange of equivalents, in the “hidden abode of production.” There, all the value the worker creates by adding her living labor to the dead labor of the means of production legally belongs to capital. The difference between the total value which the use-value of her living labor is able to produce during the working day, and the value of her labor-power (that is the labor-time socially necessary to reproduce it, objectified in her means of subsistence), which she received in the form of the wage — this difference, between necessary labor-time (necessary to produce the value equivalent to that of the worker’s labor-power) and the time the worker actually works, is the surplus value, the source of capital’s profit. Thus the wage is not really an independent and parallel “revenue source” for the worker, but a mere deduction from the profit available to capital for accumulation, all of which is produced by workers. The labor-power it buys is a cost for capital among other “factors of production.” Labor itself is thus a moment of capital, subsumed under capital, its productive powers appearing as those of capital. It is that moment of capital which has the unique capacity to expand value, whereas the other factors of production only pass on a portion of their value — thus Marx calls it “variable capital.”
The concept of human capital, then, is something like a mystified appearance of the commodity labor-power, comprehended as the worker’s revenue-source, not one of capital’s production costs, all of which must ultimately be paid for out of accumulated alien labor-time.
But the concept as we know it has a particular inflection that marks it as belonging to a given level of capitalist development. It would seem rather odd to call the labor-power of the workers in Smith’s pin factory their ‘human capital,’ consumed as it was in a totally mindless task broken down and simplified to the extreme.
This valence of human capital ideology can be grasped through other Marxian categories: simple labor versus skilled, or complex, or qualified labor (the latter is Perlman's translation of Rubin’s rendering of Marx’s term, which we prefer for its polysemy, suggesting labor that both possesses qualifiers and requires qualifications; plus we can use it as a verb, and speak of labor’s qualification far less awkwardly than than we can speak of labor’s skilling).
How do we understand the difference between the packing worker who gets paid $10 for an hour of labor on the production line, and the programmer who gets paid several times that for an hour of labor coding? Isn’t an hour an hour?
The packing worker’s labor is simple labor, while the programmer’s labor is qualified labor — and to make it clear right now, these terms do not refer to an axiological judgement on Marx’s part, or on the part of the acting subjects in bourgeois society, as to what different sorts of labor ‘ought to be worth,’ rather they refer to an objective ‘judgement’ that really is made over people’s heads, blindly and anonymously, by the law of value.
The reproduction of the packing worker’s labor-power requires only the barest necessities — food, shelter, clothing — which themselves cost ever-less labor-time to produce with the development of the productive forces. But the cost of the programmer’s labor-power includes the labor-time expended on the acquisition of complex skills, as well as on everything it takes to keep her in a condition of adequate mental acuity, and what’s more, to keep her ‘socially adapted’ so that she is interested in and even identifies with her work — or at least enough so that she performs it at the level of productivity currently prevailing in that branch of production. But because the total social process of the exchange of commodities reduces everything to quantities of abstract labor-time, this qualitative difference appears as one hour of coding being ‘worth,’ say, five hours of packing (or whatever the relation actually is) — the qualified labor counts only as a multiple of simple labor.
This difference in the value of the reproduction of simple and qualified labor-power is what is implied, in mystified form, by the concept of human capital. The ‘acquisition’ or ‘development’ of human capital is really the labor-time expended on the production of qualified labor-power, which appears in the wage differential.
The determination of the value of labor-power, as Marx insists, includes “a historical and moral element.” It depends on the class struggle, the “level of civilization” prevailing in a given socio-historical context, and, of course, the development of the composition of capital. In the past century the organic composition of the total capital has risen enormously — that is, many, many branches of production have become increasingly technified so that far smaller quantities of living labor are required to set far greater quantities of dead labor in motion. This process (itself driven by competing capitals’ hunt for the surplus-profit to be temporarily obtained by raising the productivity of labor through technological innovation so that their commodities can be sold under their prevailing market value so as to capture greater market share) raises the costs of capital formation precipitously, so that smaller capitals are increasingly absorbed by or put out of business by ever-larger capitals: this is the law of the concentration and centralization of capital Marx spoke of.
All this has a tremendous effect on the kinds of use-values capital requires when it buys labor-power. Technification of production increases the demand for qualified workers (like our programmer); concentration and centralization means that myriad ‘higher level’ functions that may have once been performed by the owners of small firms themselves are now distributed amongst the ‘white collar’ workers of various ‘professional and managerial’ strata (and part of the cost of reproducing such people’s labor-power includes everything it takes to socially integrate them as bootlicking conformists and pompous self-deceived idiots who identify with their role in the process that dominates them — place the labor-time spent writing books on human capital ideology here). And in order to actually sell the ever-more monstrous accumulation of commodities, new social needs for them must be produced, a task which falls to the advertising industries (including their more insidious outgrowths like the ‘social media’) which, while not value-productive in themselves, are necessary to facilitate the realization of the value already created in potentia. And with the rising barriers to capital-formation combined with the tendentially declining general profit rate that rising organic composition inevitably entails, credit and finance assume an ever-greater role — into which, on the other side, workers are increasingly tied through pension-fund investment plans and the extension of consumer credit (generally to supplement stagnating wages, meaning the economy is fed by hot air at both ends).
All of this, which obviously reaches its apogee in the most developed capitalist economies, fragments the population into vast intermediate swaths structured by the capital-labor relation, but who do not necessarily appear on the surface of society as ‘pure’ capitalists or laborers.
They appear to be merely monads who receive different quantities of ‘revenue,’ which presumably bear some relation to the skills they’ve acquired and the tasks they carry out. Thus since the mid-20th century, the (over)developed capitalist world has been able to present itself as what Adorno called a “false classless society” — more evocatively translated as a “classless class society.” It is this social world, with its deceptive semblance of a culturally egalitarian, ‘pluralist’ meritocracy, that allows one to imagine the seller of the commodity labor-power as the entrepreneur of her human capital. In many phenomenal ways, the seller of highly qualified labor-power (who flatters herself that she’s a ‘human capitalist’) seems to have more in common, experientially and ideologically, with the actual capitalist who owns the hip tech start-up and exploits her labor-power than she does with the seller of simple labor-power who cleans the toilets. And she’ll have a strong impetus to cling to this mystification, as it may be all she has left as she finds her labor-power increasingly difficult to sell — or at least to sell at its value. This is the difference between an ‘owner’ of ‘human capital,’ and an owner of actual capital — the latter can always ‘cash out,’ withdraw their capital from the productive circuit, and either invest it in financial speculation, or just hoard it in a Swiss bank — and this is exactly what huge numbers of capitalists have done over the past forty years with profit rates on productive capital in the toilet. This is a big problem for the valorization of the total capital (hence intractable global crisis), but particular capitalists can potentially make out like bandits, as indeed they have. But the ‘owner’ of ‘human capital’ cannot cash out and live a life of luxury hoarding or speculating with their ‘capital,’ because what they actually ‘own’ is labor-power, however qualified, and if they don’t sell it for a wage, their ‘revenue stream’ dries right up.
See, socially necessary labor time is not some kind of material goo that, once it’s been ‘congealed’ in a commodity, just stays there, maintaining its stable substantiality in perpetuity like the plastic congealed in all the junk floating in the ocean. Its objectivity is purely social — labor-time expended in production has to be validated in exchange for it to count as having been ‘socially necessary.’ That is, we only know what was socially necessary post festum, if the commodity sells to someone who can pay for it. If no one buys the thing, it devalorizes, the labor-time expended on it, it turns out, was not socially necessary, but socially superfluous. What happens to the excess stuff? Who cares, fuck it, throw it in the ocean— all that matters to capital is that labor must be transferred to another branch of production where it can be expended on commodities that’ll actually sell. This is how the law of value works. It of course works like this for the commodity labor-power too. If a significant amount of labor-time (in training, education, acculturation, etc.) was expended on producing qualified labor-power, but a buyer can’t be found for the labor-power at its value, and it either goes unsold, or is sold under its value, it devalorizes, and a large portion of the labor-time expended on its production is judged to have been socially superfluous according to the law of value. So when we (and other contemporary communist critics) talk about an epidemic of social superfluity, a vastly expanding “surplus proletariat,” we’re not just talking about a delimited ‘underclass’ of slum dwellers who can’t find formal employment at all (though this is a remarkably prevalent phenomenon) — we’re saying the economy is leaking unrealizable value at every level. There’s a bit of ‘surplus’ in every proletarian who has to sell her labor-power under its value — superfluity cuts through the whole proletariat.
Throughout the state-mediated boom that followed the second inter-imperialist war’s massive destruction of capital values, and throughout the successive bubbles that were supposed to stave off its collapse with their ‘new economy’ hype, there was a huge amount of labor-time expended on producing qualified labor-power (which got dressed up as ‘human capital’ by ideologues of the Western bloc committed to promoting their semblance of a classless class society against the semblance of a classless class society reigning in the Eastern bloc). Up to a point there was demand for it, due to the above-mentioned tendencies — technification, concentration and centralization, financialization, production of new needs for new products, etc. But now the market’s increasingly glutted, and the stuff’s got to be sold at any price just to move it at all.
This is, in many ways, a symptom of the deepening disjunction between the production of material wealth and the production of surplus value, which Marx identified in the Grundrisse as the “moving contradiction” that is capital itself. As Marx pointed out, as capital accumulation’s drive to increase productivity to capture surplus-profit presses ever onward, the “great well-spring” of material wealth increasingly becomes not labor-time in the direct production process, but the application to production of the “general state of science and the progress of technology.” What he calls “the general intellect” “become[s] a direct force of production.”
Sure, amounts of qualified labor-time are expended on developing the “general state of science and technology,” but the “‘powerful effectiveness’” of the “agencies” (e.g., insert here a list of all the wondrous new devices, programs, apps, and apparatuses from some tech-worship bible like Wired magazine) which issue from this development is “out of all proportion to the direct labor-time spent on their production.” And what’s more, they eliminate the need for an increasing amount of direct labor-time in production; this is, after all, their purpose — the firm that gets its hands on the new gadgets first can shed living labor, sell its wares under their market value, undercut competition, and watch that surplus-profit roll in… for a time, until the new invention becomes generalized across that branch of production. Then the labor-time socially necessary for the production of the commodity in question is redefined down to the lower level achieved by the labor-saving innovation. This process drives capital’s incredible technological dynamism and rapidly increasing material productivity, but it also saws off the branch on which it rests — because it rests on value. Capital posits wealth not as material wealth, but as socially-neccessary abstract labor time, expressed in value, which must expand to preserve itself as value, therefore change forms from money to commodity to more money. The less direct labor time expended in production relative to capital applied, the less surplus value available at the level of the total capital to throw back into the valorization process — this is what lies at the heart of the stagnation of the global economy for the past fifty-odd years.
What’s more, the thing about developments in the general intellect, science, and technology that are “all out of proportion to the direct labor-time spent on their production” (and many of them are not necessarily even developed in a capitalistically-organized production process) is that in many instances, once a discovery’s been made, an invention’s been invented, a program’s been written, etc., they’re just there to apply to production, without requiring much, if any, labor-time to reproduce them (perhaps the definitive example of this phenomenon is software, and digital files of all sorts, that can be nearly instantaneously duplicated, shared, and accessed simultaneously). And once a given level of productivity’s been reached in given branches of production, you just can’t go back to a lower level. You could destroy all the fixed capital in a war and suck some living labor rebuilding it all, which would give a temporary boost to the profit rate, but the technical knowledge doesn’t get wiped from the social brain. The level of technology, and thus of productivity, doesn’t go back to what it what it was 50 years ago. Generally, after such bloodlettings, productive capacity gets rebuilt at an even higher level (as we saw after WWII), with all the old, obsolete, depreciating plant and machinery wiped out.
The point is that the technical innovations devised by qualified labor to eliminate direct labor from production also tend to, over time, eliminate qualified labor too, at least relative to supply. There are of course many forms of qualified labor-power other than that of engineers, programmers, and whatnot, but if anything, there tend to be even harder limits as to how much the market for such labor-power can expand, especially since one of the key industries that employs highly qualified labor-power is the principal industry that produces qualified labor-power: education.
As the competition increases to sell qualified labor-power at a price that bears some relation to its production costs, many people who have been taught to think of themselves as entrepreneurs marketing their own personal ‘brand’ will resort to all manner of desperate measures — performing loads of free labor under the guise of ‘gaining experience,’ beating themselves into the most reprehensible and degrading shapes, and executing the silliest strategems and the most supine supplications — to avoid resigning themselves to selling their labor-power under its value in branches of production where there’s demand, because generally, the fastest-growing branches of production in developed capitalist economies are those that employ unskilled simple labor for a low, stagnant wage producing service commodities.
This is not merely out of elitism or vanity, but because in many cases, they debt-financed the qualification of their labor-power, and now have huge debt overhangs they’re trying to pay off. In this sense, the situation of the ‘human capitalists’ stuck simultaneously with an ‘overaccumulation’ of ‘human capital’ and a market with a barrier to entry they still can’t meet, all the while owing their kidneys to their creditors, is not unlike the situation of actual capital. And we see this is not just an idle punning comparison when we remember that student loans (to take only the most obvious example of the debt-financing of labor-power qualification) are themselves treated as capitalized revenue streams by their creditors, bundled with other forms of debt, and sold as byzantine financial instruments to prop up further ‘economic activity’ (that slippery bourgeois euphemism) hither and yon. But debt is just a mortgaged mass of future labor, and if a huge portion of the debtors can’t actually sell their labor-power at its value, thus can’t perform the anticipated future labor to pay off the mortgage, then everything financed via the capitalization of those debt obligations is resting on… nothing. The devalorization of ‘human capital’ redounds back on the devalorization of actual capital — all of which ultimately points back to the fact that capital progressively renders superfluous its own basis, “the theft of alien labor-time” in production, thus rendering value as the social form of wealth untenable and absurd.
 In fact, the argument can be made that at a deep systemic level, labor-substance and value-form have become uncoupled. So much labor-time has become so superfluous that it can no longer serve as immanent measure of value expressed in money, which has essentially become a semblance indirectly propped up by the state-finance nexus. We tend to think this is the case, but as the argument cannot be rigorously unfolded here, we will remain at a level closer to the ‘surface’ through which this valorization crisis plays out.