36: The Human Capital Hoax – Employment in the Gig Economy

Episode 36 represents a momentary break from older seminal readings to a very recent essay covering a timely topic – the negative effects of ‘Uberization’ and the gig economy on the economic and social fabric.

Peter Fleming

While the text and the phenomena are quite recent, the author analyzes these matters by re-reading a classic approach in economics and tracing its ‘dark’ influence on contemporary dynamics. The podcasters, therefore, were eager to sink their teeth into this piece as it shows how much understanding fundamental discussions might help us to make sense of current issues — an argument we explored in Episode 40, covering the Symposium on the Sharing/Gig Economy!

The Independent Social Research Foundation recently held an essay contest with the winners being published in Organization Studies journal. The runner-up was Peter Fleming’s “The Human Capital Hoax: Work, Debt, and Insecurity in the Era of Uberization,” a treatise and pointed critique of the emergence, development, implementation, and negative effects of Human Capital Theory.

Fleming’s essay traced the beginnings and promise of Human Capital Theory in the 1960s and 1970s as a result of a desire to endow workers with ‘responsible autonomy.’ The argument was that if workers were granted more freedom and authority to do their best work for the company, they would perform better. Human Capital Theory (HCT) emerged to capture how workers behaving individualistically could be viewed as capital separate from the organization itself, much like an organization’s equipment or facilities. The allure for firms is efficiency, and for workers is flexibility. But as Fleming warns, there is a ‘dark side’ to this idea, which is becoming manifest in reduced job satisfaction, poor work-life balance, deep debt for education, and intensified management of individual contracts.

What questions are unanswered? What should policymakers consider in addressing the problems Fleming raises? How does society try to rebuild the social fabric that appears to be crumbling in industrialized societies?

You may also download the audio files here:  Part 1 | Part 2 | Part 3 

Also read a response to our podcast by one of our listeners — Reflections on The Human Capital Hoax by Benoit Gautier
Read with us:

Fleming, P. (2017). The human capital hoax: Work, debt, and insecurity in the era of uberization. Organization Studies 38(5), 691-709.

To know more:

Bregiannis, F., Bruurmijn, W. J. M., Calon, E., and Duran Ortega, M. A. (2017). Workers in the gig economy: Identification of practical problems and possible solutions. Paper submitted for the Geneva Challenge 2017.

Mumby, D. K., Thomas, R., Marti, I., and Seidl, D. (in press). Resistance redux. Organization Studies.

Also, the article has natural links to several previous episodes.

  • Episode 18 on the Gig Economy and Algorithmic Management with Arianna Tassinari, which discusses fundamental concepts of the gig economy.
  • Episode 1 on Taylor and Scientific Managementgiven that the ‘uberization’ described by Fleming represent at the same time a departure and a re-emergence of the bad sides of Tayloristic approaches.
  • Episode 34 on Trist and Bamforth’s article on organizational changein the coal mining industry; while these authors shows how industrialization/bureaucratization upset social cohesion and Fleming posits that the gig economy is undoing worker’s solidarities and creating ‘individualized’ work arrangements.