05 April 2011

Fuzzy Descriptions Of What Should Be

Sometimes ideas about how to solve the problems in our society are fuzzy.  You have an intuitive notion about what they should look like before you have a rigorous argument for why they should be that way or how we will get there.  The intuition may be accurate, may be nostalgia for a past that may never have even been, or may be inaccurate products of cognitive biases.  But, it doesn't hurt to articulate and examine them in incomplete form.  This is what I'm doing today.

* We need to develop more middle ground in our economy and social class system between winner-take-all successes and those who are just getting by; to invigorate the middle class.

For example, lawyer income is bimodal.  The high end is a cluster of lawyers making very high earnings working at big firms (or sometimes botiques) for big businesses and their senior managers; it also has a modest number of plaintiff's lawyers who have been very successful at taking them on in big dollar case.  The low end has lawyers in small and medium sized firms and government agencies dealing with the issues presented by small businesses and individuals.  There is very little middle ground.

The absence of middle ground is surprising, because there is an obvious niche to fill.  In theory, it makes sense to have lawyers making in between incomes, with credentials that are good but not top ten law school honors and law review and Supreme Court clerkship class, working less insane hours than large firms, doing what they call in the trade "commodity work" (i.e. recurring, predictable, moderate stakes matters, as opposed to "bet the company" disputes and deals that big firms want) , doing competent work in an assembly line fashion, and charging less for it.  There are some specific areas where this happens: foreclosure practice, a few tax dispute resolution shops and insurance defense law firms.  But, there are lots of kinds of practice where one would expect it, but you don't see it: employment cases and a lot of business planning work.

We also have a lot of valueable legal work that isn't done, or is done by overworked and underpaid idealists, because it is hard to make pay.  This includes a lot of family law in low asset/low income households, a lot of termination of parental rights litigation, a lot of criminal defense work for moderate to low income individuals, representation of consumer defendants in debt collection and eviction and foreclosure cases, a fair amount of probate litigation in low asset estates, and immigration law work in areas other than employer visas.  Lawyers with seven years of post-high school education are very expensive ways to meet the public need to counsel and advocacy in these areas, but many individuals who are involved in these kinds of disputes aren't qualified to represent themselves competently.  If independent specialized paraprofessionals who could just hand child custody cases, or just handle criminal defense work, or just handle immigration work could do these kind of cases with an associates or undergraduate pre-professional degree, rather than a law degree, unmet legal needs could be filled in an affordable way that is more competent than the status quo without really impacting the market for existing lawyers much, and a lot of middle class jobs would be created in the process.  In some cases, the most sensible way to handle these cases would be the way we handle most criminal cases - with their services provided by a government agency with professional employees on payroll, but this wouldn't have to be the case.

This has happened somewhat in the area of tax law, where certified financial planners and certified public accountants, tax preparers, and enrolled agents before the IRS fill the gap between what people need and what they can afford that lawyers cannot bridge.  In the area of bankruptcy, in theory, independent paraprofessionals are mere scrivners, but in practice, they subtly provide more guidance to bankruptcy petitioners than their formal duties suggest.  There is also a very small niche conceirge/personal assistant niche of people who help people with personal consumer disputes sometimes formalized as a "health care advocate" when it involves medical bills.

Another example is in the mental health field.  We have psychiatrists, whose investment in becoming an M.D. makes them very expensive and gives them an immense amount of training that is irrelevant to what they actually do, who can prescribe mental health medications but are too expensive to take a more wholistic view, and a lot of psychologists, counselors, and the like who have some relevant education and credentials, but can't prescribe the medications that would be necessary to best address some of the cases that they encounter.  Some states are experimenting with empowering lower paid mental health professionals to write some prescriptions.  Colorado has a provision that allows some non-medical doctors to do this, but the rules are very restrictive. 

It would also be good if mental health could move to a less transaction/fee for service/medical model, to something closer to a pastoral care kind of model where anyone in the appropriate group, however defined, would receive care as needed, despite the tendency (often desirable) toward commodification in other parts of professional practice.  Some mental health issues are episodic and succeptible to being "cured" but many are life long conditions that are fundamentally a part of who someone is and always will be.  An injury/disease model of care is a poor way to address those cases.

We are seeing the development of middle ground to some extent with the establishment of urgent care centers as middle ground between family practice and the ER, and the establishment of retail location based clinics staffed mostly by RNs at places like Walgreens, Wal-Mart and King Soopers that handle not-so-urgent primary care needs like vaccinations and well child checkups and minor infectious diseases and pregancy testing.  We are also seeing the resurgence of the midwife who is not an M.D. as a middle ground health care provider.  Indeed, to some extent, the evolving health care industry model of having many different professions dealing with specialized parts of the total problem, after receiving intermediate levels of training and receiving intermediate levels of pay, is a model that would make sense in other.

* We need a more healthy environment for medium sized businesses.

Another area where a gap has emerged, not unrelated to the gap in legal services, is the gap between the truly small business and the large publicly held business.  There aren't mid-range lawyers because there aren't mid-range enterprises for them to represent in the numbers that there used to be. 

The United States is particularly deficient in the ranks of its medium sized businesses - small restaurant and retail chains, manufacturing ventures that employ a few hundred people, and so on.  We have some really impressive very national and multinational firms that account for an increasing share of our economy, and we have a large sector of not very economically important proprietorships or very small businesses, but surprising few that involve dozens to hundreds of employees, that involve single or double digit millions of dollars of revenues, that involve dozens to hundreds of equity investors.  Venture capitalist and angel investors can funnel small businesses to the big time, and consolidators come along and turn industries dominanted by small firms into industries dominated by big business now and then, but somehow, medium sized businesses seem to lack staying power.

Some of the areas where small and medium sized businesses thrive are dying out or on borrowed time.  Liquor stores in Colorado fiercely defend their perogatives, because they know that if grocery stores can sell their goods that they will die.  Wal-Marts have shuttered thousands of small town independent businesses because they are more competitive on price.  Better quality control and marketing have led franchises to squeeze a large share of the independent fast food businesses out of the market.  Blockbuster pretty much wiped out the independent videostore industry through consolidation and competition before it collapsed itself.  Small evangelical churches are losing ground to megachurches.

There are exceptions.  Craft brewing of beer and spirits and small vinyards seem to be holding their own.  Medium sized venture charter schools seem to be springing up left and right.  Urgent care centers and ambulatory surgery centers are cutting into the near monpology that large hospitals used to have on those kinds of medical services.  There are a host of new medium sized medical marijuana ventures.  Farming seems to be shifting from proprietorships to medium sized operations.

But, we need to better understand what leads medium sized ventures to be optimal from an economy of scale perspective, and look at the possibility that modest policy changes that don't do undue damage to consumer prices can make the economy more attractive to medium sized businesses in parts of the economy. 

We also need to get a better philsophical grasp on what medium sized ventures can offer the economy that big businesses and small businesses do not so that we can promote medium sized ventures in parts of the economy where they add value that the current economic system may not be adequately capturing.  For example, one of the lessons of the financial crisis has been that there are systemic risks involved in having "too big to fail" enterprises in the economy.  It is also becoming increasingly clear that the existing model of management dominated publicly held corporations that are highly insultated from shareholders is an ineffective way of keeping senior management performing well, making prudent judgments for the long term, and keeping senior management from self-dealing in its own compensation.

Some of the gap is less monetary.  We need to have more institutions where it is easier to reach someone in the organization with real authority.  We need to have more firms that have humanity and individuality.  We need to break up centers of wealth and power so that our society is not dominated by plutocrats.  We need the "warm glow" that comes from dealing with something other than a massive impersonal bureaucracy.  We need institutions that recognize that consumers would prefer not to deal entirely with robots and powerless bureacrats on the other side of the phone in who knows where when you have a problem.

Put another way, what benefits to big businesses have over medium sized businesses and why?  Is the problem that our securities laws and tax laws don't facilitate the financing of these businesses well?  Is the problem that big businesses have better economies of scale in regulatory compliance?  Is it a matter of marketing?  Is it a shortage of executive leadership?

In the legal industry, this is central to the discussion about the "death of big law".  Big law firms seem to be offering increasingly little value added simply by being big.  There seem to be few common assets and synergies.  Whole departments routinely jump ship to form their own firms or join other firms.

The approach to regulating unnecessarily large firm size in all industries, through anti-trust laws has largely been a bust.  So, we need to throw out that model and look for different ways to create the right incentives for these businesses to thrive when it is appropriate.

* We need to find better options for members of the less educated working class.

One of President Clinton's iconic stances was his plea that working people who played by the rules should get a fair deal in life.  If you graduate from high school, marry before having children, stay married even when times are tough, make your best efforts to find work when you are not disabled, don't commit crimes, and do your job reasonably competently, you ought to be able to expect a decent, if modest life for your family like a decent place to live in a safe neighborhood, access to the health care you need, an ability to send your kids to college if they are academically up to it, a safety net when you can't find work for no fault of your own, a chance to retire when you are old.  Few developed countries in the world do a worse job of fulfilling that promise.

In truth, we need an even broader promise.  We need to have an economy that makes playing by the rules going forward a good option, even if you aren't married to the other parent of your children, even if you somehow or other failed to get a high school diploma in your late teens, even if you have committed a crime in the past, even if you really screwed up on your job in the past and were fired for good cause, or if you incurred more debts than you could pay destroying your credit, or what have you.

We need to have a system in which somebody feels responsible for finding the most productive and meaningful thing that we can put each person who is able and ready to work to do, to insure that people who take that path get what they need to have a decent life, and to subsidize the difference between the value that they create and what it costs to provide a decent life if necessary.

We should find something for people to do that adds value to society first and figure out how to turn that value into money second.  Better to have someone doing work that has a market value of $5 an hour and to subsdize the rest of the cost of having them live a decent life, than having that person sit idle and trying to deal with the costs that are created when that person's family can't get by.

There are some people whose lives are screwed up because they are simply dysfunctional people.  But, most of the people in the United States whose lives are screwed up are willing to work, would place a lot fewer burdens on the public if they had the resources to meet their basic needs, but can't manage to earn enough to meet their basic needs.

For example, there are some hard core homeless people who are just incapable of functioning in normal society, often due to severe untreated mental health issues or disabilities or disagreeable personalities.  But, there are far more for whom the problem is simply not having enough money to afford a modest apartment.

A lot of child abuse and neglect, a lot of families that have trouble staying together, a lot of crime, a lot of failure in the education system, is driven by poverty pure and simple, and would go away with a steady job that pays enough to support a family.

Sometimes a little skill training or further education will allow the person to find employment and provide for their family without further assistance, but often it won't.  Some people will need help finding decent work only in periods of high unemployment, others will be persistently hard to employ.  In a minority of cases, it may be easier simply to let someone have a pension and not trying to find anything for them to do, as we do in the case of people who are classified as having total disabilities or are retired.

* We probably devote too many resources to selling things.

Economics suggests that the amount of a particular good or service that is sold and the number of people involved in selling it, are only dimly related.  Supply, demand and price are the key factors in sales volume.  If labor was more scarce, we could sell just as many cars and refrigerators and annuities and nails and houses with fewer people.  Commission sales have Malthusian tendencies.  The sales force expands until everyone involved in selling is barely making it, instead of staying at a size just large enough to sell what the market wants with a minimum of staff making maximal compensation.  Big box stores have made their fortune, in part, by recognizing this fact and having smaller sales staffs per dollar of revenue so they can offer lower prices.

In part, this is a good thing.  Selling stuff is often a mid-level job that lots of people can do that seems to create demonstrable value, so it has picked up a lot of the slack as farming, fishing, forestry, mining, manufacturing, utilities, and so on have become more efficient and no longer require such a large share of the labor force.  But, the ratio of people who actually make the stuff we need in the economy, to the people who are selling and administering and financing the distribution of that stuff once it has been made seems like it has gotten out of hand.  It takes nine administrators to send out bills for the work of two and a half doctors.  Marketing costs have become a substantial share of the costs of all sorts of goods and services compared to the cost of the goods itself.

It isn't that marketing and administration aren't important.  We don't want to end up like the Soviet's with factories churning out goods that nobody wants to buy because marketing isn't given the importance that it deserves.  But, is our economy really better off with an Aurora Mall that has a third or more of its retail space devoted to selling cell phones and associated accessories, with large number of locations at the same mall often all competing to sell goods made at the same factory and services provided by the same operations company?

* Our society is goods rich and service poor.

People who would often really benefit from services don't receive them because they can't afford them from their own earnings.  Our nursing homes and hospitals are frequently understaffed.  Our probationers and parolees are frequently undersupervised.  Our classrooms could benefit from having more teacher's aides in them.  Our kids could use more mentoring and tutoring.  Our neighorhoods would be nicer is our sidewalks were professionally clearned every time it snowed and our sidestreets were professionally cleared by people with the right equipment, rather than waiting for snow to melt off roads and for individual households to clear these sidewalks.  Our jobless could use more career guidance and training.  Our ailing bridges and road could use more repairs.  Our addicts could use more counselers.  Our criminal defendants could use more public defenders and investigators to manage the crushing case loads.  Our old houses could use more maintenance and rennovations.  Our call centers could use shorter waits and better quality service.  We would benefit from a society with more art and more performing artists.  Lawn care professionals would probably do a better job that the do it yourselfer homeowners usually do.

Efficiency is a good thing.  But, when it comes to providing services it is harder to sever the amount of labor provided and the amount of benfit confered by the services.  The quality of a refrigerator is an objective thing, and is no worse if it can be achieved with fewer man hours.  Fifteen minutes of therapy can rarely be as helpful as two hours of therapy, even with an extremely qualified therapist.

We need some better way to turn idle labor into beneficial services, and to turn beneficial services into money for the people who provide those services, so that we can increase the size of the pie and as a result, make our society more affluent.  But, for some reason, the market economy is failing to do that, in part, because the people who need services often have trouble affording them when they need those services.

We seem close to the point where we are producing all the goods that our society needs.  But, we need to find a way to redirect effort that goes towards selling goods and services and administrating their provision and potential work that goes idle because no one has found an economic way to utilize it, into efforts to create additional services that have value. 

The mismatch between ability to pay, and need for goods and services is reducing our society's productivity. 

* We need more authoritative attention to complicated problems.

No court system in the world has as few judges per lawyer, or per case, as the United States.  As a result, our court procedures tend to focus on reducing judicial effort even when more judicial effort would create value.  There are some classes of cases where this is not a problem, because they are largely pro forma, or where this merely shifts work from the public sector judiciary to the litigants who really care about the outcome.  But, there are lots of cases where taking the time to understand and deal meaningfully with the merits of a dispute early on would make a huge difference in the maount of private sector time devoted to resolving it.

The tendency isn't limited to the courts.  Public policies that are clearly failing, like the crack-powder cocaine differential in the criminal justice system, persisted for a couple of decades before legislators did something about the problem.  Judicial calls for legislative reform of an issue that comes up in a case producing a bad result frequently go unheeded.  Prison administrators who know that abuses are taking place under their watch don't have the inclination or the authority to solve those problems.  Failing schools fester for decades, for want to guidance and leadership from someone with authority on what to do about them.

One of the bigger problems in a democracy is that the need for an electoral or legislative mandate denies people on the ground the authority to deal with problems that they understand better than anyone else and solve them, even if they know of a solution that would work.

* We work too much.

Americans work more hours per year than any other country in the world.  We take few vacations.  We have very little maternity leave.  We rely heavily on day care.  We retire late.  We have few holidays and little personal time.  Part-time jobs are often not viable alternatives even for those who would prefer to work fewer hours for less money.  We need to find a way to negotiate more balanced alternatives.


Anonymous said...

You said "It would also be good if mental health could move to a less transaction/fee for service/medical model, to something closer to a pastoral care kind of model where anyone in the appropriate group, however defined, would receive care as needed, despite the tendency (often desirable) toward commodification in other parts of professional practice."

I think you are exactly right. We need services that fit the person, not the other way around!

That's what we're trying to accomplish at Metro Crisis Services (888-885-1222) www.metrocrisisservices.org

We are completely "open access" --everyone is considered qualified to call for help 24/7 regardless of place of residence, money, insurance, condition, age, etc....And the sad part is that "open access" is unusual in this business.

Andrew Oh-Willeke said...

I'm not striking this post as spam because I think that Metro Crisis Services performs a valuable service to the community and see it as a public serivce announcement.

This said, a "crisis" oriented model shouldn't be the core of a mental health care system in an ideal world. A large share of all mental health conditions are essentially permanent after an initial time of onset and must be managed for many decades to come. While it is important to address a crisis when it arises, particularly in someone who hasn't been diagnosed, comprehensive diagnosis and condition management should, in an ideal world, make a crisis much more rare and involve an "early warning system" for those at risk of a crisis that is personal and pro-active.