“Superfluent Human Capital”

I know it has been a topic of discussion since the Industrial Revolution, but we must have the difficult conversation about the constant displacement of Human Capital. Human Capital is a term popularized by Gary Becker, an economist from the University of Chicago, and Jacob Mincer that refers to the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor, which is then used to produce economic value.

Our nation’s Human Capital endowment—the skills and capacities that reside in our people and that are put to productive use—is the most important determinant of our long term economic success. These human resources must be invested in, but also leveraged efficiently in order for it to generate economic returns—for our citizens as well as our economy as a whole. 

Human Productivity, describes the various measures of efficiency of labor in production.  In order to increase Human Productivity, each worker must be able to produce more output. This is referred to as labor productivity growth. The only way for this to occur is through a decrease in Human Capital in the production process. This decrease can be in the form of decreasing the number of workers and asking the remaining workers to do more but more often is generated through innovative improvements in the production process, such as capital expenditures in robotics and other innovations, which replaces many workers and make less workers more productive on a per capita basis.  But where does it end? 

Throughout history innovative improvements have constantly increased Human Productivity.  We witnessed Human Productivity leap significantly during the Industrial Revolution.  Most experts, however, estimate that Human Productivity will increase exponentially, and grow at an extraordinary pace over the next 10 years, through improved robotics, more powerful computer processing and the advent of partial and fully implemented artificial intelligence. These huge Human Productivity increases, give rise to the real plausibility that smarter and better built robots, will create what I call “Superfluent Human Capital” or unproductive, excessive, expendable, gratuitous and redundant labor, conducted by humans in the future production processes.  

But what is the value of Human Capital?

When considering human-powered equipment, a healthy human can produce about 1.2 horse power or 894.84 watts briefly, in orders of magnitude, and can sustain about 0.1 hp (74.57 W) indefinitely; trained athletes can manage up to about 2.5 hp (1.85 kW) briefly and 0.35 hp (260 W) for a period of several hours. The Jamaican sprinter Usain Bolt produced a maximum of 3.5 hp (2.6 kW), 0.89 seconds into his 9.58 second 100-meter dash world record in 2009.  So there is indeed a calculable measurement of Human Capital, in both horse power and Watts…and hence in economic value.  This also means there is a measurable labor-loss value that can be associated with the implementation of robotics, used to displace Human Capital. 

In the past, the low tech jobs that vanished based on innovations that displaced workers, were replaced by higher tech, and often higher wage, jobs.  In light of the most recent technology innovations, this may no longer be the case in the future.  When an intelligent robot is stronger, faster and has the ability to make decisions quicker than humans, Human Capital may become obsolete and unnecessary to bring goods and services to market.

In an interview with Quartz editor-in-chief Kevin Delaney, Bill Gates explained why robots that take jobs away from people shouldn’t get a free pass when it comes to paying income tax.  While making “Robot Citizens”, with hypothetical “Robot Income Taxes” might not be the correct solution, there will be a point where “Superfluent Human Capital” becomes a problem for our society and where robots continue to displace workers.  Especially, if Robots also fulfill, through artificial intelligence, the higher tech jobs which may also be created.  Superfluent Human Capital, must in some way be calculated, taxes and then reimbursed to the citizens. We must begin thinking of a plan to assist our citizens, as well as our economy as a whole, if (or when) Human Capital, is no longer required to perform labor, and used to produce economic value.  


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