‘Our people are our machinery’: HappinessTM in Overland 217 and human capital in the post-industrial age

Now my new book Six Capitals is out, I’ve been thinking through and talking about the various manifestations of the four ‘new’ capitals – intellectual, human, social and relationship, and natural capital – whose application in business and economic life is embryonic, nascent.

The new It Capital – and the one I’m most interested in – is natural capital, which made its formal appearance on the global stage in 2012 when it was adopted by the United Nations as a statistical standard with equal status to GDP. So far it’s yet to be widely used in practice, but the UK’s early forays in natural capital accounting have proven controversial. They’ve been fiercely opposed by George Monbiot and vehemently defended by others, including long-time environmentalist Tony Juniper, many ecologists, and environmental economists such as Robert Costanza. (I wrote a little about natural capital here two years ago.) I’m planning to write about the language of natural capital in relation to the G20, especially regarding Tony Abbott and Joe Hockey’s rhetoric which pits climate change against the idea of economic growth, as if the economy existed only in a mathematical model and not as a human activity here on earth.

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The simplified view of one proponent of natural capital

 

But in the meantime I have been reading an absolutely fascinating essay in the new Overland (Issue 217) by Christopher Scanlon called ‘HappinessTM’. Scanlon writes about the applications of ‘positive psychology’ to incite happiness in workers in call centres and other service industries who must be ‘up’ all the time in order to do their jobs properly. He writes:

‘Call it HappinessTM: a form of happiness that, like any other industrial product, is manufactured in a predictable, standardised and, perhaps most importantly, reproducible fashion. As we’ll see, Happiness TM is both a management tool to ensure compliant and efficient workers, and a product in its own right.’

I’m interested in the resonances of this for the idea of human capital, a concept which has emerged in accounting because we humans are now among businesses’ most important assets (who knew we weren’t?), thanks to the advent of the information age and the slow demise of the industrial era with its factory production and blue collar workers.

As management guru Peter Drucker noted in 1999: ‘The most valuable assets of a 20th century company were its production equipment. The most valuable asset of a 21st century institution, whether business or non-business, will be its knowledge workers and their productivity.’

Attempts to value employees – or ‘human assets’ – date to the 1960s, but only recently have a few companies begun to include such information in their financial statements. Notable among these are India’s global technology company Infosys and corporate giant Tata. In 2012 Infosys valued its ‘human-capital externality’ at US$1.4 billion. This value is generated largely through its intensive technical training program. Infosys has built the world’s largest corporate university, which trained 100,000 software professionals between its founding in 2002 and 2012.

The authors of Natural Capitalism: Creating the next industrial revolution – who advocate natural capital accounting as well as human and social capital accounting – argue that just as nature needs to be accounted for and safeguarded, so society and humans must be nurtured in the same way to prevent their breakdown and exhaustion:

‘Just as ecosystems produce both monetised “natural resources” and far more valuable but unmonetized “ecosystem services”, so social systems have a dual role. They provide not only the monetised “human resources” of educated minds and skilled hands but also the far more valuable but unmonetized “social system services” – culture, wisdom, honour, love, and a whole range of values, attributes, and behaviours that define our humanity and make our lives worth living.’

And just as there are better and worse ways of handling nature, so there are ‘unsound methods of exploiting human resources’ that can ‘destroy the social integrity of a culture so it can no longer support the happiness and improvement of its members’. When people are overworked and undervalued, and when their jobs are insecure, community and civil society break down.

UnknownLike all the new capitals, the idea of human capital is … a double-edged sword? While it might offer ways to rethink the value of employees, argue for investment in their training and education, for their better care, the stories Scanlon tells from the frontline of call centres sound more like Aldous Huxley’s Brave New World with its soma-numbed humans.

He quotes Stuart, the Manager for Culture at one call centre, who said:

‘Our people are our machinery and so we need to invest money in order to maintain that machinery. If that means giving someone an opportunity to put a streamer up, or giving someone the opportunity to celebrate their birthday or a birth or a marriage or something else that’s important to them, then we need to make that happen.’

As Scanlon says, ‘Just as a steel mill needs to ensure its machinery is operating efficiently, a call centre needs to grease the wheels of its employees’ emotional lives. The growing interest in managing the emotional lives of employees is not at all surprising. It is the logical outcome of a shift towards services-based work.’

Online-channel-powered-by-call-centres

And in services-based work, we have to be happy – or, as Scanlon puts it ‘projecting a positive outlook and, more importantly, being able to elicit positive emotional responses from clients matters much more than in manual labour’.

‘If you work in a service role, emotions aren’t just one part of the job – displaying emotions and, in turn, inducing emotional responses is your job. Emotions are the product.’

Welcome to our brave new world.

It’s a thought-provoking essay in a strong issue of Overland (which happens to be the last issue under the brilliant editorship of Jeff Sparrow).

And next up here, moving right away from capitals and happiness into the throes of doomed passion, is Maurice Guest, about which the great literary blogger John at Musings of a Literary Dilettante said: ‘As a study of obsession and erotic love it has few equals. Madame Bovary comes to mind as the obvious touchstone … But there’s something about the very European Maurice Guest that defies comparison, even with the great novels.’

 

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5 Responses to ‘Our people are our machinery’: HappinessTM in Overland 217 and human capital in the post-industrial age

  1. Dear Jane,
    I’m curious as to the methods that will be used to quantify/measure human capital. (all aspects of the Copiosis algortihm) Great photo of the call center does which does evoke Brave New World or Farenheit 451 and yet I see that as only a perception (which of course is all we have actually…perception…) — the world today, a place of so many transformational ideas converging rapdily. Assuming we all have to hold on for the ride, I’m choosing to perceive a gentle ride. Erica

    • Yes, I’m also curious about that, Erica. Human capital is the speciality of pioneering accounting professors Baruch Lev and Paul Zarowin from NYU. Lev co-developed the model Infosys used to value its human capital externality, which seems to be based largely on the investment the company made in its employees’ training through its university and other training programs. And yes, may it be a gentle ride …

  2. Thanks for the mention, Jane. (You are far too kind on your categorisation though!) Me thinks I should have remained an economist as the developments in environmental and human capital over the last couple of decades have been very interesting. And I’ve only dipped into the poetry in the latest Overland, so I’ll have to get to that essay. Thanks for pointing it out. John

  3. Pleasure, John. (I am certainly not too kind about your wonderful blog!) So you were an economist?! How fascinating. You wear it very lightly … would love to hear more.

  4. Pingback: Natural capital: is translating nature into the language of economics the only way to make it count? | bookish girl

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