The Political Power of Human Capital

In the 21^st century there is no capital so important as human capital.

High-quality human capital consists of people who are educated, educable, and who are excited about what they are doing. They’re golden threads in the haystack of humanity. Put them together with a supportive environment and you get growth.

Since computing was invented the United States has been the leader in human capital. We attract it, we train it, and we deploy it better than anyone else.

Increase the percentage of high-quality human capital you have, in relation to the other kind, and your society can grow very quickly. Think Singapore or Hong Kong. Think Israel or great cities like London. If your cities or nation is a magnet for human capital, what Richard Florida called “the creative class,” wealth will be yours.

There used to be another aid to human capital that made the United States unique. This was computer infrastructure. When you combine human capital with computer infrastructure and financial resources, it’s like a super-charger. Think Silicon Valley.

Clouds and devices change the equation, and we’re just starting to realize this. A smartphone is a supercomputer you hold in the palm of your hand, and a broadband cellular network can access clouds with ease. Suddenly an entrepreneur in Nairobi has access to the same infrastructure as someone in San Jose.

In 2017, with devices making clouds accessible to everyone, and with financial resources able to cross the globe at the speed of light, human capital is more important than ever.

Until very recently, no one could question America’s leadership in this area. But we have been frittering away that lead for decades.

We have let our education system atrophy, and control over it pass to fearful parents and ignorant preachers, who are teaching millions of American children flat-out lies.

We have let dangerous drugs overtake our country because, at first, it was a problem for “those people,” for black and brown people. But now the problem, and the resulting pathologies, are deeply embedded in white, formerly middle-class societies. If you’re a young black man in the central city of Atlanta, you have it tough, but you can get out, if you’re disciplined. If you’re a young white man in the hollows of West Virginia, or a small town in Nebraska, it’s not that easy. The ghetto has moved.

Our success in the manufacturing era, when human capital meant less than financial capital, and in the resource era, when money came out of the ground, its value manipulated by a financial elite, its access controlled by our political and military elites, meant we could cover up the growing problem of human capital, hide it away.

We can’t do that anymore, and it is the greatest economic threat our nation faces.

The 2016 election means the minority which believes solely in manufacturing and resource capitalism now have control of all branches of our government. Technology took the support of government for granted for 70 years, and that support is entirely gone now.

Today’s government denies that climate change even exists. It denies the right of workers to organize, it denies the needs of human capital entirely. Just look at the returns. Those areas where human capital is most abundant voted Democratic. Those areas where it isn’t valued voted Republican. And the Republicans swept.

As I have written before, this is an existential threat to the technology industries which have been nurtured by our system of human freedom. The new Administration wants to close us off from access to imports of human capital, it seeks to balkanize the Internet resources that human capital needs to succeed, and it rejects support for education as elitist.

Technology took the support of government for granted until it became the most important part of our economy – the part that counts – and now it has had that support stripped away from it.

What technologists do in response to this will determine the history of the next generation. It could simply route around the blocks, moving headquarters to Asia, to Europe, maybe even to Africa, where it will be welcomed with tax breaks and political power. If we don’t value technology, the rest of the world certainly does. This is their chance.

Or, technology could do what the resource industries did a generation ago, and what the manufacturing industries did two generations ago. That is, fight back, and seize America’s politics.

This election resulted from the same demographic trends that gave a previous generation Jimmy Carter. Back then, it was the people of the New Deal who were still around, whose knees could still jerk in numbers large enough to elect a supporter of manufacturing over the party of resources. Today, it is the people of the Nixon era who have overstayed their welcome, and whose knees jerked in numbers large enough to elect supporters of the resource economy, who bemoan a “war against coal,” giving them complete power within our government.

Technology has been lazy, but there remains hope, in the example of history. Because the oil industry did not take Jimmy Carter lying down.

In the late 1970s the oil industry organized, as it never had before. It created causes, it created think tanks, it backed like-minded academics and created entire schools of political thought dedicated to its interests. It destroyed Carter’s Democratic Party and has been at war with it ever since.

Technologists need to do the same thing to the Trump Party. Their effort may take different forms. I like what Steve Case was trying to do with his “Rise of the Rest” tour, which sought to extend Silicon Valley’s wealth to other cities and states. But most of what the industry did in the last year was desultory, and lacked any commitment.

That must change. Because there are plenty of places where human capital will be welcome, if it’s not welcome here. There’s a global “rest” that wants to rise, smartphones in hands, access to clouds guaranteed. The world is filled with cities, and those cities are filled with human capital, looking to take America’s power away from it.