Recreation is our tertiary human capital after investment, after our job (primary), and leisure (secondary). Recreation is third not because we invest less of our human capital in it, but because its rate of return is lower. Together, the subordinate investments of leisure and recreation diversify our human capital portfolio in the same way risky high-growth stocks and safe municipal bonds diversify the blue chip heart of the small investor’s financial portfolio. Like that investor, we diversify to minimize our risk exposure, while trying to maximize our gain within the constraints of a diversification strategy.
Safety comes at a cost -- we could get a higher return by putting all our eggs into one basket, but this risks bankruptcy should that investment fail. The recent Wall Street scandal provides numerous examples of what can happen when investors abandon prudence to chase high returns. When the investments are of human capital instead of financial capital, going bust means the loss of identity, which risks insanity. To the extent that social human capital is differentially invested in one activity instead of a healthy diversified range of vehicles (family, friends, organizations, causes, etc), this risk is realized. To avoid bankruptcy or even the perception of its risk, we bear the cost of searching out, making, and monitoring several separate investments rather than efficiently tending to one. This allows the constraints of diversification to be seen as necessary redundancy in human capital investment.
In turn, this raises the question of why we need to protect against the loss of human capital. After all, isn’t human capital just the knowledge, skill, and ability we bring to our job? In a word, no. Human capital is much more complex: we have biologic, social, and psychological human capital, all contributing to our sense of self. This is as true for the individual as for any size or level of organization. We protect that identity by diversifying our human capital portfolio. (This is important to a better understanding of leadership as structural leadership is diversified; personality-based leadership is not, making the identity of the organization dependent on that of the leader). Consider how much identity we invest in our job, how frequently define ourselves by job title. Consider the impact of job loss, and not to psyche alone, but to the social life of the unemployed, as well as to the body. If you don’t work, you don’t eat; if you don’t eat, you die. There are impoverished, famine-plagued nations where this happens all too often, but it happens in America too.
Some might say we bear the costs of diversification out of instinct – we are social animals and cannot help making recreational investments in friends and family, nor avoid the tax of subsistence activity (job) on our lifetime. This is part of the picture, but not all of it. While this view allows for biologic investigation of economic activity, it neglects both leisure and recreation, leaning too heavily on the determinate elements of existence at the expense of the indeterminate ones.
Safety comes at a cost -- we could get a higher return by putting all our eggs into one basket, but this risks bankruptcy should that investment fail. The recent Wall Street scandal provides numerous examples of what can happen when investors abandon prudence to chase high returns. When the investments are of human capital instead of financial capital, going bust means the loss of identity, which risks insanity. To the extent that social human capital is differentially invested in one activity instead of a healthy diversified range of vehicles (family, friends, organizations, causes, etc), this risk is realized. To avoid bankruptcy or even the perception of its risk, we bear the cost of searching out, making, and monitoring several separate investments rather than efficiently tending to one. This allows the constraints of diversification to be seen as necessary redundancy in human capital investment.
In turn, this raises the question of why we need to protect against the loss of human capital. After all, isn’t human capital just the knowledge, skill, and ability we bring to our job? In a word, no. Human capital is much more complex: we have biologic, social, and psychological human capital, all contributing to our sense of self. This is as true for the individual as for any size or level of organization. We protect that identity by diversifying our human capital portfolio. (This is important to a better understanding of leadership as structural leadership is diversified; personality-based leadership is not, making the identity of the organization dependent on that of the leader). Consider how much identity we invest in our job, how frequently define ourselves by job title. Consider the impact of job loss, and not to psyche alone, but to the social life of the unemployed, as well as to the body. If you don’t work, you don’t eat; if you don’t eat, you die. There are impoverished, famine-plagued nations where this happens all too often, but it happens in America too.
Some might say we bear the costs of diversification out of instinct – we are social animals and cannot help making recreational investments in friends and family, nor avoid the tax of subsistence activity (job) on our lifetime. This is part of the picture, but not all of it. While this view allows for biologic investigation of economic activity, it neglects both leisure and recreation, leaning too heavily on the determinate elements of existence at the expense of the indeterminate ones.
Functionally, recreation differs from leisure in that whereas leisure is about expanding the self, recreation is about consolidating it. Too much leisure, and we tend toward idiosyncrasy, through eccentricity, and finally to insanity. Too much recreation and we stagnate, stultify, and ossify. Recreation balances leisure while creating a basis for leisurely exploration. Leisure balances recreation while developing new skills that can be enjoyed repetitively for the simple pleasure of doing something well. Recreation is comfort ritual; leisure is discovery play. Each has its pleasures. In this, both are distinct from work, with which they share only inherent risk.
No comments:
Post a Comment