human capital

Reflections on the “Human Capital Hoax”

Inspired by Episode 36. THE HUMAN CAPITAL HOAX – EMPLOYMENT IN THE GIG ECONOMY

By Benoit Gautier

Thanks to Talking About Organizations Podcast, I have been Reading P. Fleming’s ‘The Human Capital Hoax’ (Episode 36). The basic claim of the paper is that human capital theory has opened the gates for the ‘uberization’ of the workforce. My main problem with it is that the author reasons from a few striking examples rather than from statistics or even patient ethnography.

It makes me think of Günther Ander’s works on automation, where he examines extreme man-machine interactions and tells us that in theory, man is not worth anything anymore. The (quite mainstream) narrative is that in the Fordist golden age, everyone worked in a large automobile plant with social security benefits, a large HR service, managers and unions, you know, the normal situation. The problem is that this image of normality is a pure artefact – it was made up by a fraction of the managerial elite in the middle of the 20th century. But the majority of workers still were employed in very small, barely automated workplaces.

Nowadays, we have a reverse image : the whole working class is to be seen as a congregation of über drivers, or something akin to it. There flow discourses that we sociologists know well: the fear of social atomization, anomy, the fall of institutions, the tearing of the social fabric, and so on. Durkheim was worried about exactly the same thing during the industrial revolution, when he lamented the crumbling of the Ancien Régime’s productive order. Just after that, he wrote a famous book on suicide, which might sound familiar to those who deal with burn outs and other psycho-social woes and tribulations of today’s workforce.

My fear is that the change from Fordism to uberism is nothing but a change in managerial ideology, rather than a change in actual productive organization. I’m always baffled by how hard it is for social sciences/management researchers to distinguish between the two. A very famous French sociology book about ‘The New Spirit of Capitalism‘, claims we entered a new era of capitalist ideology, based on a very scrupulous analysis of a large corpus of management literature. It is very well, but a change of ideology doesn’t mean anything if you don’t look at the way the lingua franca of consultants and management academics translate to actual management policies. We never really had the same work done for management tools and practices. So we have to keep talking about ideas.

Managerial ideology is created by a small elite that sets the terms of the debate on what organizations should look like. But most managers don’t really care about this ideology. Often, they could not comply to the last ‘management fad’ even if they wanted to. In the 70’s – 90’s Toyotism was omnipresent in discussions. Just like ‘uberization’ today. Saying workers should be married to their employer one day and saying they should hookup with whatever company they feel like the other is certainly a shift in the dominant discourses. But a lot of employers still need to attract and retain workers, and to try to stabilize the workforce because their business model needs it. They don’t care if they look like outdated industrialists, because they do not write in fancy journals or perform life changing Ted talks.

At the end of the day, these changes in dominant discourses are used to forge a distorted image of the workforce. They make you believe that everyone is a uber driver. And that dominant representation is normative. That means that discourses can have an effect on reality, by the intermediation of public policies and law. Politicians rarely have access to the world of the workplace. So when members of the managerial elite describe the workforce according to the Fordist or the uberist model, they have no choice but to believe them. Unless they listened to academics who still go in organizations, or union leaders, but, who’s kidding who? The problem is both academic and political. We cannot take for granted representations of work forged by the managerial elite, according to its needs. That is why we need empirical inquiries on the realities of work.

 

Benoit Gautier – Université Paris Nanterre

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.