The widely acclaimed publication of Hernando De Soto's The Mystery of Capital (Basic Books, 2000) has hit a very important nail on the head. It seems to me, however, that no one, not even De Soto, is aware of exactly how far his insights into the abstract life of capital and its embodiment in the form of transferable representations can go.
The as-yet-unnoticed added value present in De Soto's work follows from an elementary observation. As De Soto says, non-Western countries are saddled with trillions of dollars worth of dead capital because property in these countries is not represented in the form of standardized documents. Legal title facilitates the easy measurement of an asset's attributes, so as to give the property an abstract life of its own as fungible capital.
My point is that the human sciences, and their ostensible clients in education, health care, and human resource management, are also saddled with an untold wealth of dead capital: human abilities, health, and performance measures are unable to take on the abstract life of living capital because the test, survey, and assessment instruments providing these measures, are not appropriately calibrated [i.e., are not set up to produce numbers with well-defined properties], and standardized by making them traceable to reference standard metrics. Measures in the human sciences remain mired in local dependencies on the particular instruments used and the particular persons measured, even though methods for achieving a much more rigorous level of mathematical generality and standardization have been available for decades.
Just as, in De Soto's words, non-Western property is "trapped in the physical world of rigid, nonfungible forms," so, too, is human capital. In the same way that the Third World and former communist countries can learn from the West how to liberate their property and entrepreneurial poor, so, too, can the human sciences learn to liberate human capital by standardizing its expression in transferable representations.
Just as top-down impositions of property law have historically failed in all countries, and bottom-up cultivations of "the people's law" have worked, so, too, have top-down impositions of educational and health measures failed, and bottom-up cultivations of locally-recognized measures of human capital are gaining momentum.
The larger nail that De Soto has, possibly unknowingly, hit squarely on the head is the fundamental metaphysical tenet of philosophy and science, namely, that abstract, living meaning is created via a process of coordinating signs and symbols with things and ideas. Postmodern, post-structuralist, and deconstructionist philosophy and science uses recognition of this tenet, and vigilant monitoring of its implementations, to set themselves off from "modern" philosophy and science, which remain blind to their metaphysics even as they must necessarily remain subject to it.
What De Soto calls the "mystery of capital" is, then, also the mystery of the success of science. What De Soto does not address is the fact that human capital as well as physical capital can be brought to life. This is done by providing it with the transferable legal documents through which people will be able to represent their abilities and health, and hireability, retainability, productivity, and promotability, in a recognizable objective, universal, standardized format.
Thus we see again that Rasch measurement in and of itself is insufficient for bringing about the fulfillment of the human sciences' potentials for improving peoples' lives. We need the cooperation and expertise of
1) end users in each field who know nothing of measurement theory but who are essential for bringing improved measurement to bear at the point of use within a metrologically coordinated framework;
2) lawyers and legislators capable of extending the legal infrastructure of property law into the domain of human capital;
3) economists who can document the reduced transaction costs and added efficiencies that the invariant metrics of transferable representations offer; 4) political leaders who can marshal the resources and broad-based popular support an initiative such as this will require.
I strongly urge everyone to obtain and read De Soto's book, the Mystery of Capital, and to think of ways in which his insights can be extended to human capital.
(Anyone who can suggest a publisher for my own 300-page text on this topic, please contact me!)
The challenges we face are huge, but, with energy, determination, hope, humor, imagination, and intelligence, we can become bigger than they are.
William P. Fisher, Jr.
The "Mystery of Capital" and of the Human Sciences. Fisher W.P. Jr. 15:4 p. 854
The "Mystery of Capital" and of the Human Sciences Fisher W.P. Jr. Rasch Measurement Transactions, 2002, 15:4 p. 854
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