I’ve discussed the history and implications of the concept of human capital in economic theory. But there’s a new area of economic history that has discovered the origins in slavery of what we have often taken to be purely capitalist forms of management, including the accounting of human capital.
Caitlin C. Rosenthal is one such historian.
Rosenthal, a Harvard-Newcomen Fellow in business history at Harvard Business School, found that southern plantation owners kept complex and meticulous records, measuring the productivity of their slaves and carefully monitoring their profits—often using even more sophisticated methods than manufacturers in the North. Several of the slave owners’ practices, such as incentivizing workers (in this case, to get them to pick more cotton) and depreciating their worth through the years, are widely used in business management today.
As fascinating as her findings were, Rosenthal had some misgivings about their implications. She didn’t want to be perceived as saying something positive about slavery.
Rosenthal needn’t worry. The fact that modern management techniques resemble the methods used by slaveowners doesn’t indicate anything about the positive aspects of slavery but, rather, the similarities between contemporary capitalism and the treatment of human beings as chattel. The ability “to make sophisticated calculations and measure productivity in a standardized way” and “to experiment with ways of increasing the pace of labor” allow both groups of employers “to determine how far they could push their workers to get the most profit.”
In other words, what both systems have in common is the extraction of a surplus from their workers. And treating workers as human capital is one of the conditions for accomplishing this goal, then as now.
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Who would have thought that slave owners would have been so meticulous in such record keeping and experimentation in extracting greater productivity from their chattels? I would have thought that methods for increasing productivity would have been left to the hired overseers on command from plantation owners. I wonder if some plantations were ever owned on a shareholder basis?Now there would be a direct relationship to the modern corporation.
The subheading to this article says “There’s a new area of economic history that has discovered the origins in slavery of what we have often taken to be purely capitalist forms of management, including the accounting of human capital”. That’s putting the cart before the horse. This area of economic history locates the origins of capitalist forms of management in the accounting of human capital, aka slaves. And it’s far from new. In 1847, Karl Marx wrote in The Poverty of Philosophy “Direct slavery is just as much the pivot of bourgeois industry as machinery, credits, etc. Without slavery you have no cotton; without cotton you have no modern industry. It is slavery that has given the [American] colonies their value; it is the colonies that have created world trade, and it is world trade that is the pre-condition of large-scale industry. Thus slavery is an economic category of the greatest importance to capitalism”.