Why Total Wealth Planning Must Replace Individualised Finance
For decades, mainstream economics — and by extension much of financial planning — has rested on a deceptively simple idea:
People earn what they are worth because they are productive.
This belief, known as human capital theory, is so embedded in modern thinking that it often goes unquestioned. We talk casually about “investing in yourself,” “maximising your value,” or “earning your market worth,” as if income were a direct reflection of personal merit.
But what if this idea is not just flawed — what if it is actively harmful?
A powerful paper by economist Blair Fix, The Rise of Human Capital Theory (2021), exposes a fundamental error at the heart of this worldview. The implications are profound — especially for anyone committed to ethical, human-centred, and empowering financial planning.
The hidden flaw in human capital thinking
Human capital theory assumes that income is caused by individual productivity — that skills, intelligence, effort, or talent reside within a person and explain why some earn vastly more than others.
Fix demonstrates that this is a category mistake.
Income is not an individual trait.
It is a social outcome.
It emerges from:
- hierarchy and power
- institutional structures
- access to networks
- bargaining position
- historical and political context
To confuse income with personal productivity is like claiming a medieval king was wealthy because he worked harder than his subjects.
This error matters, because once income is framed as individual merit, inequality becomes justified — even moralised.
When “optimising individuals” breaks systems
One of the most striking examples in the paper comes not from economics, but biology.
In experiments with chickens, researchers tried two approaches:
- Breeding the most productive individual hens
- Breeding the most productive groups of hens
The first approach failed spectacularly. Productivity collapsed as aggressive, dominant “super-hens” attacked and suppressed others.
The second approach succeeded. Group productivity soared.
The lesson is simple and unsettling:
In social systems, optimising individuals can destroy collective wellbeing.
Human capital theory ignores this entirely. It treats humans as isolated units rather than social beings embedded in systems.
Financial planning has inherited the same blind spot.
Why this matters for financial planning
When financial planning adopts human-capital logic, it quietly:
- rewards dominance over cooperation
- blames individuals for structural harm
- equates wealth with virtue
- treats the poor as “unproductive”
- treats the wealthy as inherently deserving
This thinking shows up everywhere:
- in performance-based pay myths
- in “alpha” obsession
- in shame-based client narratives
- in advice models that privilege accumulation over wellbeing
It is not neutral.
It is ideological.
And historically, Fix shows, it is the sanitised successor to eugenics — stripped of genetics, but retaining the belief that some people are simply worth more than others.
The Total Wealth Planning alternative
Total Wealth Planning begins from a radically different premise:
Humans are not units of capital.
Wealth is not proof of worth.
Flourishing is collective, not competitive.
Instead of asking “How do we optimise this individual?”, we ask:
- What system is this person operating within?
- What power dynamics shape their outcomes?
- What capabilities increase resilience and agency?
- What structures reduce dependence and risk?
- What does a good life actually require?
This is why Total Wealth Planning integrates:
- purpose and values
- human capital development (skills, adaptability, health)
- financial literacy and agency
- structural awareness
- ethical constraint
- community and interdependence
Not to rank people — but to restore dignity, coherence, and choice.
From extraction to empowerment
Human capital theory underpins extractive finance.
Total Wealth Planning underpins regenerative finance.
One tells people:
“If you’re struggling, you need to be better.”
The other says:
“Let’s redesign the system you’re navigating.”
At the Academy of Life Planning, we are not trying to create “high-value individuals.”
We are cultivating capable, conscious, sovereign humans — and planners who know the difference.
Because the future of financial planning is not about maximising capital.
It is about enabling human flourishing.
The Academy of Life Planning
Replacing extraction with empowerment.
Join our movement. Visit www.aolp.info.
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