CONCEPT
Stranded Human Capital
Stiglitz’s diagnosis of the AI transition’s deepest injustice: the years of investment—tuition, training, accumulated expertise—deposited in skills that the market no longer needs, with the entire cost of the sudden devaluation falling on the individual who made the investment in good faith, responding to signals that were accurate until they were not.
Human capital is the economist’s term for the accumulated skills, knowledge, and capabilities embodied in a person. Unlike physical capital, it cannot be separated from its owner, sold on a secondary market, or repurposed when the market it was built to serve disappears. When the demand for a specific form of human capital collapses, the person carrying it bears the entire cost of the collapse.
Joseph Stiglitz’s analysis of inequality identifies this asymmetry as one of the least examined features of technological transitions: the employers who captured the productive output of specialized skills during their period of scarcity bear none of the transition cost; the shareholders who earned returns on that output bear none of it; the customers who received better products at lower prices bear none of it. The cost falls on the individual whose fifteen years of accumulated expertise in software