AOC now says basic economics is racist and dehumanizing

Given the conversation it has provoked, the fuss from Rep. Alexandria Ocasio-Cortez over President Trump’s economic adviser Kevin Hassett’s use of the phrase “human capital stock” might have to be upgraded to an all-out brouhaha. The socialist congresswoman melted down over Hassett’s language in a recent tweet:

Now, given that Ocasio-Cortez does apparently have a degree in economics, we might assume that she has come across this basic Econ 101 phrase before. Thus, the congresswoman really should know that its meaning is entirely the opposite of the one she’s claiming, falsely suggesting that it means that we’re just worker bees, drones, perhaps even slaves to be put back to laboring. So, too, all Hassett’s other critics, from Sen. Elizabeth Warren to writers at Vox and Rolling Stone, should know better.

Sure, “human capital” is economic jargon, and the technical phrase can easily be misunderstood. But you do have to make quite the reach to say that human capital means that workers are just that labor that can be whipped back at whatever cost to our health from the pandemic. For the technical meaning is precisely the opposite.

“Human capital” is that unique set of skills and attributes that we each have. Take me, for example. I know recondite bits of economics and alarmingly large amounts about the rare earth metals markets. You might know how to cook well, while your neighbor has the fashion skills to make sure the curtains and cushions don’t clash. This is human capital.

What Hassett actually meant, as opposed to what people are claiming, is that we’ve not forgotten how to do those things that we knew how to do those couple of months back. So, when the economy reopens we’ll be able to get back to doing those things. The economy, therefore, will bounce back.

Hassett’s point is that we all still know how to do all the things that made the economy work before the coronavirus crisis.

As any musician knows not playing even for a few days allows that muscle memory to deteriorate. As days move into months, the skills decline again until at some length of time they disappear. But, human capital takes quite a time to vanish.

This is the reason Germany’s economy grew so quickly after World War II: There was still that personal and also societal memory of how an economy worked, and people went back to doing the right things to make it do so. Hassett is just saying, stripped of the jargon, that this is going to be true of all of us as the lockdown ends.

That is, over the next few months, America’s economy is going to grow faster than it ever has done. Just as, and because, the last few months have seen it shrink at equally stunning velocity.

Ocasio-Cortez and Warren surely know that’s what he meant. Referring to “human capital stock” is not to say that we’re all undifferentiated labor to be driven back out to the fields. In fact, it’s to insist upon precisely the opposite, that we’ve individual and specialized skills, to be cherished and celebrated. It’s those without human capital that are the mere labor used for nothing but totin’ cotton, pickin’ bales, and liftin’ barges.

Critics are just playing partisan politics.

Hassett’s actually just said that Americans are hugely skilled and productive and that the lockdown hasn’t damaged that too much. People really shouldn’t be shouting at him for pointing out the very reasons that Americans are the richest large group of people that have ever lived, exactly and precisely because they’re the most productive and skilled large group of people there ever has been.

That is, lots of “human capital stock.”

Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at the Continental Telegraph.