When I was at the IHS seminar Scholarship and a Free Society this summer, I was privileged enough to talk a while with Adam Martin and Pete Boettke about basic income. Adam directed me to a paper he at Pete had written for Basic Income Studies in a special edition they did for libertarians. After being assigned a project this weekend that involved starting my lit review for my dissertation (very preliminary), I grabbed it from the website (aside: so happy to have access to journals again!!).
A great read, their argument boils down to two major themes: 1) government is not a black box and 2) as a consequence civil society or the market may be better at providing the Basic Income intervention. Comparative political economy rests on the work Austrian and Public Choice economics. It uses a critical evaluation of "the rules of the game" in the political, market, and civil spheres and how well each solves the problem of limited knowledge and the problems of incentives. In other words, are institutions in each realm set up so that knowledge problems can be solved through coordination and that even when people act like assholes, their efforts will minimally hurt society at large.
I won't go into detail on their argument, other than to say that I find one convincing and the other less so. Where Boettke and Martin are most enlightening is where they discuss the problems of actually enacting Basic Income legislation. Given what the legislative process looks like, the bill would never become enacted as a policy-maker set out. In the 70s, it was only introduced after a work requirement was put on. Politicians logroll, horsetrade, and buy each other off in ways that can pollute the bill. One the bill is passed (in whatever form), transfer payments are by nature prone to capture by political entrepreneurs.
These arguments are difficult to refute. They also exemplify how social theorists generally treat favored policies as happening exactly as planned. If we were to take into account what politics actually looks like ("politics without romance" in Buchanan and Tullock's words), there would be alternately depressing or tedious sections appended to every policy article.
I find their arguments less convincing on solving the knowledge problem. They oddly conclude that a basic income does not address the knowledge problem as well as those in the private sphere. I believe that consumers, once financially empowered with the funds for a basic income, would be able to solve knowledge problems on the front end of social welfare transactions. They would be able to pay for services, housing, food, and everything else as they see fit, instead of central planners. Instead of providing for sprawling, overlapping bureaucracies to determine allocations for services on the backend, people would be permitted to direct funding to organizations (state or private, civil or market) that can more intelligently helping the poor. Furthermore, I think that a basic income may actually provide a more fertile marketplace for social entrepreneurs, as people will be able to pay nominal sums for supplementary, individualized services.
I recommend the article for anyone interested in how libertarianism can be arrived at through political economic reasoning, as it does an excellent job of explaining how liberals arrive at the conclusions for a minimal state by examining how the political process works. I still have a lot to work out before my dissertation, but it will be hard to think about a basic income without these insights in mind.
Saturday, September 15, 2012
Thursday, August 30, 2012
Who is the bloodiest, Johnson or Paul?
Over at the excellent Bleeding Heart Libertarians blog, Matt Zwolinski delves into the BHL case for Gary Johnson. The reasons he lists are excellent and well-taken. There is little dispute that there are a great many things that Johnson would do in office that benefit the least-advantaged. What is not mentioned in the article is Johnson's plan for entitlement reform.
Johnson proposes across-the-board 43% spending cuts in all areas, including social support programs. He maintains that as governor of New Mexico he was able to drastically reduce Medicaid spending by switching to a managed care model--a model taken from the more technocratic side of progressivism. There is also a good case to be made that by block granting Medicaid and allowing states to experiment, they will find unique ways of saving money. However, this mandate of spending is harsh, immediate, and non-negotiable.
Compared with Ron Paul's plan for entitlement reform, it introduces greater volatility into the market. Paul's plan calls for social welfare programs to be phased out over the very long term, and provides drastic cuts in spending in other departments to cover the cost of those currently in the system or who had significantly planned to do so. Finally, it provides an exit option for those who would like to opt out of the system entirely--pay nothing in, get nothing out. Overall, the Paul plan is a more radical proposal in that it provides an end to these programs, but is also the more compassionate, in that it does not significantly disrupt the market for those in the system or those who are about to enter.
In addition to Johnson's proposal for healthcare, his tax reform plan is similarly problematic. Johnson supports the abolition of the income tax and replacing it with the Fair Tax, a 23% consumption tax on all goods. The Fair Tax provides rebates for all purchases made up to the poverty line, in anticipation of arguments related to its effect on the poor. However, the poor are more likely to spend most of their money on consumption--unlike the rich who save and invest more--so will likely be impacted more by the Fair Tax. In addition, senior citizens who have paid into the income tax system will be taxed heavily again on consumption. Paul did not present a detailed tax reform proposal, so comparison is difficult.
Both candidates would eliminate HUD, which supplies the housing vouchers many poor families depend on. These vouchers actually have a perverse effect on the housing market, but it is left unclear in both proposals if these HUD department functions would be subsumed into another agency or eliminated outright--I assume the former. Neither candidate has proposed cuts to food stamp programs.
The positive BHL case for their economic proposals likely rests on the reader's acceptance of free market economics. Neither is likely to win converts for slashing corporate taxes, but many would encourage their excising all corporate welfare. Both would repeal the federal minimum wage which would allow states the opportunity to opt out of the system altogether. This is a key feature of economic justice, as the minimum wage eliminates marginal employment or drives it underground.
So where do we end up? I give the nod to Paul for his entitlement reform plan. Johnson's would likely create too much uncertainty in the market and lead to drastic reform. This would eventually even out, but the transition in Paul's plan is much smoother. Keep in mind, however, that Paul's is the most comprehensive plan put forth by any candidate Republican or Obama to reform Medicare and Social Security. Until the fiscal situation become dire enough, that will inevitably continue.
Johnson proposes across-the-board 43% spending cuts in all areas, including social support programs. He maintains that as governor of New Mexico he was able to drastically reduce Medicaid spending by switching to a managed care model--a model taken from the more technocratic side of progressivism. There is also a good case to be made that by block granting Medicaid and allowing states to experiment, they will find unique ways of saving money. However, this mandate of spending is harsh, immediate, and non-negotiable.
Compared with Ron Paul's plan for entitlement reform, it introduces greater volatility into the market. Paul's plan calls for social welfare programs to be phased out over the very long term, and provides drastic cuts in spending in other departments to cover the cost of those currently in the system or who had significantly planned to do so. Finally, it provides an exit option for those who would like to opt out of the system entirely--pay nothing in, get nothing out. Overall, the Paul plan is a more radical proposal in that it provides an end to these programs, but is also the more compassionate, in that it does not significantly disrupt the market for those in the system or those who are about to enter.
In addition to Johnson's proposal for healthcare, his tax reform plan is similarly problematic. Johnson supports the abolition of the income tax and replacing it with the Fair Tax, a 23% consumption tax on all goods. The Fair Tax provides rebates for all purchases made up to the poverty line, in anticipation of arguments related to its effect on the poor. However, the poor are more likely to spend most of their money on consumption--unlike the rich who save and invest more--so will likely be impacted more by the Fair Tax. In addition, senior citizens who have paid into the income tax system will be taxed heavily again on consumption. Paul did not present a detailed tax reform proposal, so comparison is difficult.
Both candidates would eliminate HUD, which supplies the housing vouchers many poor families depend on. These vouchers actually have a perverse effect on the housing market, but it is left unclear in both proposals if these HUD department functions would be subsumed into another agency or eliminated outright--I assume the former. Neither candidate has proposed cuts to food stamp programs.
The positive BHL case for their economic proposals likely rests on the reader's acceptance of free market economics. Neither is likely to win converts for slashing corporate taxes, but many would encourage their excising all corporate welfare. Both would repeal the federal minimum wage which would allow states the opportunity to opt out of the system altogether. This is a key feature of economic justice, as the minimum wage eliminates marginal employment or drives it underground.
So where do we end up? I give the nod to Paul for his entitlement reform plan. Johnson's would likely create too much uncertainty in the market and lead to drastic reform. This would eventually even out, but the transition in Paul's plan is much smoother. Keep in mind, however, that Paul's is the most comprehensive plan put forth by any candidate Republican or Obama to reform Medicare and Social Security. Until the fiscal situation become dire enough, that will inevitably continue.
Friday, August 24, 2012
Reply to Josh
Evidently, there is an HTML limit on characters for replies. Here is my reply:
I'm sure there are natural rights theorists who would disagree with both of us, and have some good reasons why, but while natural rights are a semi-useful philosophical tool, I find them lacking as an overall framework.
Since you don't really list what assumptions you find implausible, it's hard to get at what you mean. And since the conclusion you draw (a closed, non-dynamic system) are so far from what Austrian economics argues for (creative destruction, entrepreneurship, marginal revolution, price theory), I think you need to look at the source material a little more. In fact, the closed system is explicitly found within both Rawls and Keynes, for example, who restrict immigration and hope to solve the "money problem" so we can all get on living the good (non-economic) parts of life. Most theories of regulating the free market argue that the churning of unrestricted competition results in too much variation on the macro scale, justifying government intervention to keep people from being swept up in fray. So, yeah, I'm not really sure how you get there.
Libertarian thought is focused on individual actors within a radical change framework. While acknowledging the failures of the market to address both the problem of imperfect (and lumpy) knowledge and that institutions must be designed to guard against the self-interest of actors, it argues that voluntary market exchanges do so better than other alternatives.
For arguments for anarcho-capitalism and the problems therein, I would go to David Friedman's Machinery of Freedom which deals with many of these argument. I heard him talk at one of my IHS seminars, and while his investigations into private police, private courts, and war within an anarchocapitalist state are interesting and enlightening, he openly admits they do not fit into a coherent, persuasive whole.
For a minimal state, which libertarianism does advocate, international relations don't seem to be a self-evident problem. That's actually one of the few things the federal government is supposed to do. Non-intervention and peaceful trade are backed up by a strong national defense (not insane, conservative strong mind you). All but the most radical libertarians tend to view things like national defense as a collective action problem that actually requires government to solve.
Number 2 is actually a well-taken point. Many anarchists believe that any state, even the minimal state, is inherently unstable and will assume more and more power. Robert Higgs would be a good example of such a theorist (youtube: Robert Higgs: Warfare, Welfare, and the State).
But, if I can take some license here, I'm assuming that you mean a minimal state would lead to domination of the people by large corporations? In that case, we need to disentangle the concepts of capitalism and corporatism. Generic Republicans, the Chamber of Commerce, and business lobbies argue for corporatism cloaked in free market rhetoric. A true free market allows entry and exit from institutions and provides for greater self-correcting (THOUGH FAR FROM PERFECT) mechanisms than what we have today.
For number 3, it's a little hard to prove something like this, but given the increase liberalization of the past few centuries, we have seen violence precipitously decline as coordination and tolerance increase. While it is unlikely that continuing to liberalize society would result in increased crime, increasingly liberal orders are more likely to be able to adequately deal with increases in crime as their institutions are more robust.
With regard to inequality, for all but the most doctrinaire egalitarian some inequality is justified. Within a market, it is important to distinguish between efficient and inefficient inequalities. Efficient inequalities are the results of entrepreneurial action and point others towards where profits and social gains are. Inefficient inequalities are the result of market failure or government failure. Within a classical liberal framework, inefficient inequalities are minimized as opposed to institutions with larger amounts of government intervention (as government corrections to market failures run into many systemic problems).
Classical liberals do value equality. Equality before the law, mainly. And that the institutional framework treats all those before it equally. Indeed, those who are unhappy with that institution are free to leave and create new ones (social entrepreneurship). Fairness is a condition that does not necessarily imply a social democratic or welfare state order, however. As John Tomasi in Free Market Fairness shows, classical liberalism can satisfy the requirements of justice as fairness.
Regarding your last point, it does take some extra work to show why the minimal state is necessary. The best examples are Hayek, Buchanan and Tullock, and Mises. I've found Buchanan and Tullock in the public choice school to be most approachable.
I'm sure there are natural rights theorists who would disagree with both of us, and have some good reasons why, but while natural rights are a semi-useful philosophical tool, I find them lacking as an overall framework.
Since you don't really list what assumptions you find implausible, it's hard to get at what you mean. And since the conclusion you draw (a closed, non-dynamic system) are so far from what Austrian economics argues for (creative destruction, entrepreneurship, marginal revolution, price theory), I think you need to look at the source material a little more. In fact, the closed system is explicitly found within both Rawls and Keynes, for example, who restrict immigration and hope to solve the "money problem" so we can all get on living the good (non-economic) parts of life. Most theories of regulating the free market argue that the churning of unrestricted competition results in too much variation on the macro scale, justifying government intervention to keep people from being swept up in fray. So, yeah, I'm not really sure how you get there.
Libertarian thought is focused on individual actors within a radical change framework. While acknowledging the failures of the market to address both the problem of imperfect (and lumpy) knowledge and that institutions must be designed to guard against the self-interest of actors, it argues that voluntary market exchanges do so better than other alternatives.
For arguments for anarcho-capitalism and the problems therein, I would go to David Friedman's Machinery of Freedom which deals with many of these argument. I heard him talk at one of my IHS seminars, and while his investigations into private police, private courts, and war within an anarchocapitalist state are interesting and enlightening, he openly admits they do not fit into a coherent, persuasive whole.
For a minimal state, which libertarianism does advocate, international relations don't seem to be a self-evident problem. That's actually one of the few things the federal government is supposed to do. Non-intervention and peaceful trade are backed up by a strong national defense (not insane, conservative strong mind you). All but the most radical libertarians tend to view things like national defense as a collective action problem that actually requires government to solve.
Number 2 is actually a well-taken point. Many anarchists believe that any state, even the minimal state, is inherently unstable and will assume more and more power. Robert Higgs would be a good example of such a theorist (youtube: Robert Higgs: Warfare, Welfare, and the State).
But, if I can take some license here, I'm assuming that you mean a minimal state would lead to domination of the people by large corporations? In that case, we need to disentangle the concepts of capitalism and corporatism. Generic Republicans, the Chamber of Commerce, and business lobbies argue for corporatism cloaked in free market rhetoric. A true free market allows entry and exit from institutions and provides for greater self-correcting (THOUGH FAR FROM PERFECT) mechanisms than what we have today.
For number 3, it's a little hard to prove something like this, but given the increase liberalization of the past few centuries, we have seen violence precipitously decline as coordination and tolerance increase. While it is unlikely that continuing to liberalize society would result in increased crime, increasingly liberal orders are more likely to be able to adequately deal with increases in crime as their institutions are more robust.
With regard to inequality, for all but the most doctrinaire egalitarian some inequality is justified. Within a market, it is important to distinguish between efficient and inefficient inequalities. Efficient inequalities are the results of entrepreneurial action and point others towards where profits and social gains are. Inefficient inequalities are the result of market failure or government failure. Within a classical liberal framework, inefficient inequalities are minimized as opposed to institutions with larger amounts of government intervention (as government corrections to market failures run into many systemic problems).
Classical liberals do value equality. Equality before the law, mainly. And that the institutional framework treats all those before it equally. Indeed, those who are unhappy with that institution are free to leave and create new ones (social entrepreneurship). Fairness is a condition that does not necessarily imply a social democratic or welfare state order, however. As John Tomasi in Free Market Fairness shows, classical liberalism can satisfy the requirements of justice as fairness.
Regarding your last point, it does take some extra work to show why the minimal state is necessary. The best examples are Hayek, Buchanan and Tullock, and Mises. I've found Buchanan and Tullock in the public choice school to be most approachable.
Thursday, August 23, 2012
The concept of emergence
Having gone through the Institute for Humane Studies seminars and now my social work PhD program orientation, I feel as though I am straddling between two very distant camps again. In philosophical backing, there is a healthy amount of deontology in libertarianism. Randian or natural rights theorists provide bedrock for many libertarians and their arguments are at times convincing. Overall, I find their arguments lacking because they are absolutist, largely closed-canon, and become less clear-cut under close scrutiny (what the hell are natural rights without a creator?).
In my social work world, post-modernism reigns over much of the intellectual space. I have not engaged enough with postmodernism to thoughtfully criticize it. However, my experience with it is mainly in deconstruction, criticism, and the insight that there is no big-T Truth. I find myself within the interpretivist camp (in regards to social science, not hard science) so it's pretty comfortable to use post-modernist thought and analysis. I also LOVE critical theory, so again pretty safe territory for me.
All of that being said, I still wonder "what comes next?" After tearing down the pretense of absolute knowledge, what do we do now? This is where classical liberal economic theory points me to the concept of emergence--how individuals acting on their own information and values coordinate to create increasingly complex and robust truth. It is an evolutionary process, incredibly sensitive to context. I don't yet know enough about it to really come up with a modestly cogent definition or explication of the concept of emergence, but as I learn more, I will try to think more about what it means.
In relation to the sociological paradigms (and the title of this blog) emergence is a concept that is most salient in the radical humanist paradigm, where radical change and interpretivism hold.
Tuesday, July 24, 2012
Libertarian Welfare State
What would a more libertarian welfare state look like? It's a tough question. The orthodox answer is that it would look like charity does today, only it would not be crowded out by government intervention. I like that answer, but I find it unconvincing for many reasons. I cannot ensure that that system will better serve the interests of social justice, that people may fall through the cracks, and that the innovations may not lead to the long-term betterment of those in need.
But, if we are to keep in mind the ideal free charity state in mind, can we find a waystation between that place and where we are today? In other words, what would the privatization of the welfare state look like? This is the positive part of my dissertation. The libertarian critiques of welfare state institutions are pretty robust and easy to make. They are ready to go off the shelf. So to are the free charity cases made by moral philosophers. What's more difficult is coming up with some palatable policy proposals to use libertarian insights to build better institutions. I think I may have (absent the math I need) come up with the broad framework I will advocate for.
Milton Friedman, the famous monetarist economist, came up with an idea for welfare reform that would obviate the need for a welfare state. It was the negative income tax. It set a point at which, if people made below that amount, they would be entitled to a straight check from the government for the difference. Let's say we set that amount for simplicity's sake at $15,000. That's over twice what people get on SSI (government assistance to the disabled) because I am including other government programs for which those recipients qualify But, let's say Frank is part of the working poor. He only makes around $4,000 a year. He would be entitled to $11,000 from the government. Basically, we say that as a society, we cannot allow people to dip below a certain point. A Rawlsian would say that below that amount, they cease to have the ability to be enjoy their basic freedoms and be self-authors.
Let's call this value the Basic Income. All people are entitled to it. It is dispensed via a system similar to DirectExpress (a debit-card like system for SSI) every two weeks or every week. There are no restrictions on how the money can be spent. The vast majority of welfare recipients spend their money from the government in rational ways. For some, they give more weight to housing and food than to medical care and substance abuse treatment. For others, they value their drug of choice, unhealthy foods, or dangerous habits over healthier alternatives. This is part of respecting people as rational self-authors and empowering them as agents of change in their lives.
With a system in place that provides a basic income to all, a world without government intervention would require robust institutions of private charity and mutual aid. While some libertarians argue that government interference in social support institutions crowds out private investment, the most salient point against government as a redistributive mechanism is its overwhelming inefficiency and self-perpetuation sustained by the knowledge problem inherent in coordinating from the top down. I propose that whatever percentage of funds currently used to fund redistributive social support programs be liberated from government control so that people can fund organizations and causes directly. Not only would this address the knowledge problem inherent in federal control over social support institution by empowering people to become more involved with their redistributed funds, it would foster an immense amount of competition, innovation, and entrepreneurship in the social service sector by injecting market forces and prices into a previously restricted market.
Privatizing redistribution provides market forces in charity on the back-end of client service. The price of a particular social good to an individual, groups, or society as a whole is valuable information. However, the most important information in a system is contained in the prices for service. The entire point of a social safety net is that people of lesser means cannot afford the help they need, and therefore, must receive help in procuring services. If consumers of services are given a set amount of income to help themselves, they can afford to pay user fees for various services at these charitable institutions. By injecting price mechanisms on the front end, we support the inclusion of market forces (competition, innovation, and entrepreneurship) into a currently noncompetitive system and gain an objective measure of consumer satisfaction that is sorely lacking. Our back-end subsidization of the system provides information on giver satisfaction, and user fees provide information on consumer satisfaction.
That's the proposal in a nutshell. 1) Negative income tax and abolition of the welfare state institutions. 2) Privatization of redistribution. and 3) User fees in social service programs. There are many benefits to a system such as this, but I will name only a few here. This system would lead to better engagement with resources due to a sense of ownership of services (this is my therapist, counselor, food allowance). They will engage more sincerely with treatment when it is not coerced as in the current system and they will feel empowered as individuals. The system would also serve to create a class of social entrepreneurs who seek to capitalize on the new money found in low-income housing, healthcare, and other services. It would allow immense flexibility and experimentation that the current system cannot accommodate. Most importantly, it would provide for better oversight of our social welfare institutions both on the front-end through individual support recipients giving according to their conscience and knowledge and on the back-end with individual donors seeking services from competing entities. It would liberate donor, recipient, and service worker from the suffocating anti-humanism in the current system, and mold people of lesser means to become successful individuals by spending their money in their long-term best interest.
But, if we are to keep in mind the ideal free charity state in mind, can we find a waystation between that place and where we are today? In other words, what would the privatization of the welfare state look like? This is the positive part of my dissertation. The libertarian critiques of welfare state institutions are pretty robust and easy to make. They are ready to go off the shelf. So to are the free charity cases made by moral philosophers. What's more difficult is coming up with some palatable policy proposals to use libertarian insights to build better institutions. I think I may have (absent the math I need) come up with the broad framework I will advocate for.
Milton Friedman, the famous monetarist economist, came up with an idea for welfare reform that would obviate the need for a welfare state. It was the negative income tax. It set a point at which, if people made below that amount, they would be entitled to a straight check from the government for the difference. Let's say we set that amount for simplicity's sake at $15,000. That's over twice what people get on SSI (government assistance to the disabled) because I am including other government programs for which those recipients qualify But, let's say Frank is part of the working poor. He only makes around $4,000 a year. He would be entitled to $11,000 from the government. Basically, we say that as a society, we cannot allow people to dip below a certain point. A Rawlsian would say that below that amount, they cease to have the ability to be enjoy their basic freedoms and be self-authors.
Let's call this value the Basic Income. All people are entitled to it. It is dispensed via a system similar to DirectExpress (a debit-card like system for SSI) every two weeks or every week. There are no restrictions on how the money can be spent. The vast majority of welfare recipients spend their money from the government in rational ways. For some, they give more weight to housing and food than to medical care and substance abuse treatment. For others, they value their drug of choice, unhealthy foods, or dangerous habits over healthier alternatives. This is part of respecting people as rational self-authors and empowering them as agents of change in their lives.
With a system in place that provides a basic income to all, a world without government intervention would require robust institutions of private charity and mutual aid. While some libertarians argue that government interference in social support institutions crowds out private investment, the most salient point against government as a redistributive mechanism is its overwhelming inefficiency and self-perpetuation sustained by the knowledge problem inherent in coordinating from the top down. I propose that whatever percentage of funds currently used to fund redistributive social support programs be liberated from government control so that people can fund organizations and causes directly. Not only would this address the knowledge problem inherent in federal control over social support institution by empowering people to become more involved with their redistributed funds, it would foster an immense amount of competition, innovation, and entrepreneurship in the social service sector by injecting market forces and prices into a previously restricted market.
Privatizing redistribution provides market forces in charity on the back-end of client service. The price of a particular social good to an individual, groups, or society as a whole is valuable information. However, the most important information in a system is contained in the prices for service. The entire point of a social safety net is that people of lesser means cannot afford the help they need, and therefore, must receive help in procuring services. If consumers of services are given a set amount of income to help themselves, they can afford to pay user fees for various services at these charitable institutions. By injecting price mechanisms on the front end, we support the inclusion of market forces (competition, innovation, and entrepreneurship) into a currently noncompetitive system and gain an objective measure of consumer satisfaction that is sorely lacking. Our back-end subsidization of the system provides information on giver satisfaction, and user fees provide information on consumer satisfaction.
That's the proposal in a nutshell. 1) Negative income tax and abolition of the welfare state institutions. 2) Privatization of redistribution. and 3) User fees in social service programs. There are many benefits to a system such as this, but I will name only a few here. This system would lead to better engagement with resources due to a sense of ownership of services (this is my therapist, counselor, food allowance). They will engage more sincerely with treatment when it is not coerced as in the current system and they will feel empowered as individuals. The system would also serve to create a class of social entrepreneurs who seek to capitalize on the new money found in low-income housing, healthcare, and other services. It would allow immense flexibility and experimentation that the current system cannot accommodate. Most importantly, it would provide for better oversight of our social welfare institutions both on the front-end through individual support recipients giving according to their conscience and knowledge and on the back-end with individual donors seeking services from competing entities. It would liberate donor, recipient, and service worker from the suffocating anti-humanism in the current system, and mold people of lesser means to become successful individuals by spending their money in their long-term best interest.
Sunday, July 8, 2012
A response to Let It Bleed
Josh was nice enough to send my way an article from the Crooked Timber blog critiquing the moral philosophy of Bleeding Heart Libertarian position(s?) on labor law. I figured it would be best to respond here, since this is where I normally write about this stuff.
There has evidently been a long conversation back and forth between the BHL and Crooked Timber folks, which is a really heartening thing to see. The article raises some important points about the BHL approach thus far towards workplace inequality. Unfortunately, the article also falls victim to many of the same pratfalls as other policy analyses I have seen from the left.
The post begins by convincingly explaining the terribleness of domination in the workplace. So far, nothing too controversial. Making people not pee while working is evil.
There are many vagaries in contract law that allow for this to happen, and these should be remedied through regulation... Well, just what kind of regulation should be pursued?
Let's take the example of voting for John Kerry, as given in the article. Let's say we wanted workplaces to ban the termination of any employee for supporting (through voting, organizing, or talking about) a political party. This would surely help an average blue collar, Bruce Springsteen-type worker employed by an evil capitalist Limbaugh dittohead. He could not be fired just because he disagreed with his boss at the polls, on the streets of his community, or in the lunchroom. I can see how that would be a good thing for him.
But what about a woman who wants to work for a senatorial 2012 reelection campaign? Can she be fired for organizing for the other party in her spare time? Would you want that person working for you? Would you trust her to work the long and grueling hours in a campaign and put forth her best effort if she did not believe in the cause? Should that campaign be allowed to ask who she is going to vote for before hiring her?
This example extends out throughout the political realm. Would a Democratic direct-mail firm employ someone who supports Romney outside the office? Would AFSCME? I argue that it would be impossible to craft legislation that would lead to a just outcome in many of these cases, let alone all of them. This is a great example of the unintended consequences of legislation. While it may do what it was designed to do, it may do other things that work against the interests of justice.
Furthermore, who determines what constitutes just cause for firing a person? What is the model here? The unionized public workforce is must be terminated with just cause. This had lead to police departments with unfirable employees that abuse their power, pensioned employees that are felons, the notorious rubber rooms in New York City public schools, among other abuses. The right to have just cause for firing instantiates an apparatus that may be overly deferential to fairness and justice.
Another unintended consequence of such regulation would be to simply shift those nakedly political reasons for firing a person and find a simple way around regulation. There are always loopholes in regulations.
Speaking of loopholes, those who are most adept and finding and exploiting those loopholes? Larger corporations who help write those regulations! Regulatory capture is the process by which large corporations in a given domain take control over the regulatory and legislative apparatus. Who will now how to get around a new regulation? The people it is intended to affect the most.
More than its mere predictive value, regulatory capture and it's cousin rent seeking are so profitable because they limit competition in the market. When new safety standards were set on toys, it was Mattel pushing the legislation and small businesses who were fighting against it, as only large corporations have the ability to money to implement the new regulatory regime. This eliminates the greatest true check on workplace domination other than general human decency--the ability of workers to change employers.
These are all knowable consequences of workplace regulation. Any person applying basic public choice theory to workplace regulation knows that what is argued in the article is far too simplistic and idealistic. The public choice objections are not addressed in the article. Feasibility is an important part of justice. I would argue that it should be a first-order concern, or that we should value second-order concerns more greatly. If we know that a regulatory regime would predictably lead to significant injustice, then deciding between a BHL or left-regulatory regime is a matter for empirical, not philosophical analysis.
In that analysis, we must take into account not just the here-and-now timeslice on which the article would base its sense of justice. We must take into account the progression of workplace domination through the centuries. The story that arises from a historical analysis is one where competition, rising living standards, and technology make workers' lives better at an exponential rate. A person in antiquity would owe all of their money to a lord, who would let them keep a pittance of their labor. Subsequent to that, one's job was likely to remain their job for life, as there were a very limited number of trades into which a person could enter and travel between places was much more difficult. Compare that to today when a person could pack up and leave without giving notice at a job to start at a competing firm for more money. One could pack up and leave for another country to find employment in an industry.
Aha, but what about those who are poor? They have less options than the people in the middle and upper classes, therefore government must intervene to provide a fair playing field for all. Again, we lose sight of how much better off the poor of today are than even those of a few decades ago. Of people in poverty today 98% have a refrigerator, a stove and oven, and a television; 81% have a microwave; 78% have air conditioning. Similarly, their choices in employment have grown considerably. Competition in the marketplace is the bullwark against employer domination.
The article drastically undervalues the importance of exit from a job and the ability to start a new one. My father left his job to start his own advertisement circular for a few years. He then went back into the industry. It was a rough time for our family, but that transition was not unjust as the language in the article would make you believe. It may be easier for single people with no children to move jobs, but it's not unduly difficult for married adults with children to either. It is part of an overall calculation where a person decides whether the bullshit they put up with at work is worth disrupting the lives of their family members so that he or she can pursue another job. Sunk costs and psychological sequellae included, it does not meet my standards for injustice. In that slice of time, the injustice that lead that worker to leave will not be eradicated, but the uncoordinated actions of workers through time to leave unjust conditions for better ones does lead to the reduction and eradication of workplace injustices such as those outlined in the article.
Two other small notes on the article: I hate it when people on the left trot out hackneyed stereotypes of libertarians. This article contains two of them: that libertarianism means a person can sell themselves into slavery forever with a court-enforceable binding contract and that sexual harassment is not of concern (or in the article not coercive) to libertarians. I can't speak of all of us, especially the old guard, but those two points are hogwash. We are not all absolutists. We do not all believe in unimpeachable, unassailable property or contract rights. We are not all Robert Nozick. You should read more of us. You'll find we're not assholes.
One bright point of this article, however, was its criticism of BHL's reliance on a Universal Basic Income without ever really specifying what that would mean or look like. I'm a little new to the UBI idea and the BHL treatment of it. I brought it up at IHS and was pointed to a journal article by Pete Boettke where he gives a critique of that approach. I also plan to write a paper evaluating UBI versus a negative income tax. But before I do that lit review, I won't know the arguments for the UBI against the criticisms in the article. But, I find those feasibility concerns to be very convincing and agree with the authors that gesturing uncritically towards a UBI to alleviate coercion concerns is an easy shortcut.
However, as noted above, the authors themselves fall victim to a similar shortcut when they gesture uncritically towards "regulation" without once explaining what that would look like.
There has evidently been a long conversation back and forth between the BHL and Crooked Timber folks, which is a really heartening thing to see. The article raises some important points about the BHL approach thus far towards workplace inequality. Unfortunately, the article also falls victim to many of the same pratfalls as other policy analyses I have seen from the left.
The post begins by convincingly explaining the terribleness of domination in the workplace. So far, nothing too controversial. Making people not pee while working is evil.
There are many vagaries in contract law that allow for this to happen, and these should be remedied through regulation... Well, just what kind of regulation should be pursued?
Let's take the example of voting for John Kerry, as given in the article. Let's say we wanted workplaces to ban the termination of any employee for supporting (through voting, organizing, or talking about) a political party. This would surely help an average blue collar, Bruce Springsteen-type worker employed by an evil capitalist Limbaugh dittohead. He could not be fired just because he disagreed with his boss at the polls, on the streets of his community, or in the lunchroom. I can see how that would be a good thing for him.
But what about a woman who wants to work for a senatorial 2012 reelection campaign? Can she be fired for organizing for the other party in her spare time? Would you want that person working for you? Would you trust her to work the long and grueling hours in a campaign and put forth her best effort if she did not believe in the cause? Should that campaign be allowed to ask who she is going to vote for before hiring her?
This example extends out throughout the political realm. Would a Democratic direct-mail firm employ someone who supports Romney outside the office? Would AFSCME? I argue that it would be impossible to craft legislation that would lead to a just outcome in many of these cases, let alone all of them. This is a great example of the unintended consequences of legislation. While it may do what it was designed to do, it may do other things that work against the interests of justice.
Furthermore, who determines what constitutes just cause for firing a person? What is the model here? The unionized public workforce is must be terminated with just cause. This had lead to police departments with unfirable employees that abuse their power, pensioned employees that are felons, the notorious rubber rooms in New York City public schools, among other abuses. The right to have just cause for firing instantiates an apparatus that may be overly deferential to fairness and justice.
Another unintended consequence of such regulation would be to simply shift those nakedly political reasons for firing a person and find a simple way around regulation. There are always loopholes in regulations.
Speaking of loopholes, those who are most adept and finding and exploiting those loopholes? Larger corporations who help write those regulations! Regulatory capture is the process by which large corporations in a given domain take control over the regulatory and legislative apparatus. Who will now how to get around a new regulation? The people it is intended to affect the most.
More than its mere predictive value, regulatory capture and it's cousin rent seeking are so profitable because they limit competition in the market. When new safety standards were set on toys, it was Mattel pushing the legislation and small businesses who were fighting against it, as only large corporations have the ability to money to implement the new regulatory regime. This eliminates the greatest true check on workplace domination other than general human decency--the ability of workers to change employers.
These are all knowable consequences of workplace regulation. Any person applying basic public choice theory to workplace regulation knows that what is argued in the article is far too simplistic and idealistic. The public choice objections are not addressed in the article. Feasibility is an important part of justice. I would argue that it should be a first-order concern, or that we should value second-order concerns more greatly. If we know that a regulatory regime would predictably lead to significant injustice, then deciding between a BHL or left-regulatory regime is a matter for empirical, not philosophical analysis.
In that analysis, we must take into account not just the here-and-now timeslice on which the article would base its sense of justice. We must take into account the progression of workplace domination through the centuries. The story that arises from a historical analysis is one where competition, rising living standards, and technology make workers' lives better at an exponential rate. A person in antiquity would owe all of their money to a lord, who would let them keep a pittance of their labor. Subsequent to that, one's job was likely to remain their job for life, as there were a very limited number of trades into which a person could enter and travel between places was much more difficult. Compare that to today when a person could pack up and leave without giving notice at a job to start at a competing firm for more money. One could pack up and leave for another country to find employment in an industry.
Aha, but what about those who are poor? They have less options than the people in the middle and upper classes, therefore government must intervene to provide a fair playing field for all. Again, we lose sight of how much better off the poor of today are than even those of a few decades ago. Of people in poverty today 98% have a refrigerator, a stove and oven, and a television; 81% have a microwave; 78% have air conditioning. Similarly, their choices in employment have grown considerably. Competition in the marketplace is the bullwark against employer domination.
The article drastically undervalues the importance of exit from a job and the ability to start a new one. My father left his job to start his own advertisement circular for a few years. He then went back into the industry. It was a rough time for our family, but that transition was not unjust as the language in the article would make you believe. It may be easier for single people with no children to move jobs, but it's not unduly difficult for married adults with children to either. It is part of an overall calculation where a person decides whether the bullshit they put up with at work is worth disrupting the lives of their family members so that he or she can pursue another job. Sunk costs and psychological sequellae included, it does not meet my standards for injustice. In that slice of time, the injustice that lead that worker to leave will not be eradicated, but the uncoordinated actions of workers through time to leave unjust conditions for better ones does lead to the reduction and eradication of workplace injustices such as those outlined in the article.
Two other small notes on the article: I hate it when people on the left trot out hackneyed stereotypes of libertarians. This article contains two of them: that libertarianism means a person can sell themselves into slavery forever with a court-enforceable binding contract and that sexual harassment is not of concern (or in the article not coercive) to libertarians. I can't speak of all of us, especially the old guard, but those two points are hogwash. We are not all absolutists. We do not all believe in unimpeachable, unassailable property or contract rights. We are not all Robert Nozick. You should read more of us. You'll find we're not assholes.
One bright point of this article, however, was its criticism of BHL's reliance on a Universal Basic Income without ever really specifying what that would mean or look like. I'm a little new to the UBI idea and the BHL treatment of it. I brought it up at IHS and was pointed to a journal article by Pete Boettke where he gives a critique of that approach. I also plan to write a paper evaluating UBI versus a negative income tax. But before I do that lit review, I won't know the arguments for the UBI against the criticisms in the article. But, I find those feasibility concerns to be very convincing and agree with the authors that gesturing uncritically towards a UBI to alleviate coercion concerns is an easy shortcut.
However, as noted above, the authors themselves fall victim to a similar shortcut when they gesture uncritically towards "regulation" without once explaining what that would look like.
Sunday, June 24, 2012
Libertarian Global Justice: 2 Myths from the left
I'm at my second IHS seminar for the year, Scholarship and a Free Society. It's a wonderful experience. I can't recommend it highly enough to those who are interested in classical liberal ideas. There are very few places in the world where you can gather with other like-minded professionals and talk about a whole range of topics. In addition, it gives you access to some of the best minds in the profession and great starting points for research.
In fact, it gave me the inspiration for this blog post. I'm punching a bit above my weight here because my background is in social work not global justice (and certainly not banking). However, I've happened across two arguments from my Occupy-minded friends on the left that misconstrue where libertarians and classical liberals would fall on vital issues related to the market.
1) Icelandic financial crisis. In 2008, Iceland went bankrupt as part of the global financial crisis. The reckless actions of their banks prior to that (their GDP to debt ratio was at nearly 900%) made them one of the first dominoes to fall. Libertarians may disagree with the decision to nationalize all the banks, and I will claim incompetence in arguing that point. However, what libertarians celebrated was the Icelandic people's refusal to pay back the loans that were made to those banks. By referendum, the public decided that it would not be held liable (to the tune of ~100/month per person for the next 15 years) for the idiotic decisions of their major banks. Loans are made with risk built in--hence, interest rates! After a short and hectic period of readjustment, their economy is now the fastest growing in Europe.
2) Global debt forgiveness. In my last IHS seminar, I was amazed at how a libertarian perspective on global justice and debt made a bunch of classical liberals sound like Occupy wall street acolytes. A conversation arose about how to deal with debt that was incurred by a despot of a poor nation. Are the international banking powers who provided those loans allowed to recoup their losses on the backs of the citizens of that country who, in this case, deposed their evil autocrat? The universal response was hell no! Loans involve risk, and when banks loan to despots in poor countries, they assume the risk that they might be deposed and a new government may not honor those commitments (as the person who made them is dead or in exile). In addition, it is against the interests of justice to make those loans in the first place. If you want to help poor people in poor nations, you trade with them, eliminate subsidies in your home country, and buy as much of their stuff as you possibly can. You don't give lots of money to despots who then seem like benevolent dictators who hand out pittances to their subjects while squirreling away most of the loot for themselves. That is the objection to foreign aid that libertarians make. It supports despots. So, even if you were for some reason disposed to help out these banks who made loans on the assumption they would be paid back by a poor nation, you can't square that with any sense of morality to helping those in need. Yoking their fate to debts made by long-deposed tyrants who impose their will at gunpoint is anathema to libertarianism, respect for free markets, and the importance of contracts.
In both of these examples, the main takeaway is that libertarians believe in a system of gains and losses in the market. When an actor can privatize gains and socialize losses, he is a crony capitalist and the institutions that support him are unjust and should be overthrown. It is a false caricature of libertarian and free-market ideology to assume that we would side with bankers making loans. We don't. We side with the people who rise up and say they are not liable for contracts made by someone else. That's why libertarians were against the bailouts of the financial sector and automotive sector. If you want to help homeowners or autoworkers, I don't agree with that but there are better ways to do it than eliminating the losses made by those in charge, keeping them in their high-paying jobs, and proving to them that they are not responsible for their actions because the government will make sure they never suffer the losses of making mistakes.
Occupy people, we have a lot of common ground here. We may disagree on the constitution of justice, but you will find a lot in free-market thought that you can agree with. You will also find many people on this side willing to engage you in debate, argument, and conversation. We're here. Come talk with us!
-rule of law, enforcement of contracts
-profit and loss
-public choice, monies interests, mercantilists, elites
In fact, it gave me the inspiration for this blog post. I'm punching a bit above my weight here because my background is in social work not global justice (and certainly not banking). However, I've happened across two arguments from my Occupy-minded friends on the left that misconstrue where libertarians and classical liberals would fall on vital issues related to the market.
1) Icelandic financial crisis. In 2008, Iceland went bankrupt as part of the global financial crisis. The reckless actions of their banks prior to that (their GDP to debt ratio was at nearly 900%) made them one of the first dominoes to fall. Libertarians may disagree with the decision to nationalize all the banks, and I will claim incompetence in arguing that point. However, what libertarians celebrated was the Icelandic people's refusal to pay back the loans that were made to those banks. By referendum, the public decided that it would not be held liable (to the tune of ~100/month per person for the next 15 years) for the idiotic decisions of their major banks. Loans are made with risk built in--hence, interest rates! After a short and hectic period of readjustment, their economy is now the fastest growing in Europe.
2) Global debt forgiveness. In my last IHS seminar, I was amazed at how a libertarian perspective on global justice and debt made a bunch of classical liberals sound like Occupy wall street acolytes. A conversation arose about how to deal with debt that was incurred by a despot of a poor nation. Are the international banking powers who provided those loans allowed to recoup their losses on the backs of the citizens of that country who, in this case, deposed their evil autocrat? The universal response was hell no! Loans involve risk, and when banks loan to despots in poor countries, they assume the risk that they might be deposed and a new government may not honor those commitments (as the person who made them is dead or in exile). In addition, it is against the interests of justice to make those loans in the first place. If you want to help poor people in poor nations, you trade with them, eliminate subsidies in your home country, and buy as much of their stuff as you possibly can. You don't give lots of money to despots who then seem like benevolent dictators who hand out pittances to their subjects while squirreling away most of the loot for themselves. That is the objection to foreign aid that libertarians make. It supports despots. So, even if you were for some reason disposed to help out these banks who made loans on the assumption they would be paid back by a poor nation, you can't square that with any sense of morality to helping those in need. Yoking their fate to debts made by long-deposed tyrants who impose their will at gunpoint is anathema to libertarianism, respect for free markets, and the importance of contracts.
In both of these examples, the main takeaway is that libertarians believe in a system of gains and losses in the market. When an actor can privatize gains and socialize losses, he is a crony capitalist and the institutions that support him are unjust and should be overthrown. It is a false caricature of libertarian and free-market ideology to assume that we would side with bankers making loans. We don't. We side with the people who rise up and say they are not liable for contracts made by someone else. That's why libertarians were against the bailouts of the financial sector and automotive sector. If you want to help homeowners or autoworkers, I don't agree with that but there are better ways to do it than eliminating the losses made by those in charge, keeping them in their high-paying jobs, and proving to them that they are not responsible for their actions because the government will make sure they never suffer the losses of making mistakes.
Occupy people, we have a lot of common ground here. We may disagree on the constitution of justice, but you will find a lot in free-market thought that you can agree with. You will also find many people on this side willing to engage you in debate, argument, and conversation. We're here. Come talk with us!
-rule of law, enforcement of contracts
-profit and loss
-public choice, monies interests, mercantilists, elites
Wednesday, June 13, 2012
A Provisional Definition of Social Justice
I was asked a very simple question by Nigel Ashford during my IHS seminar. One I was not very prepared to answer. What is my definition of social justice? I made the same arguments that I have made before, namely that social workers use the word all the time without ever really defining it and that its scope has grown to encompass all injustice.
In thinking about it enough, I have found a definition with which I am pretty comfortable. Social justice is the betterment of opportunities and outcomes for marginalized people. Let's define some terms. By betterment I mean both in the sense of in-time and across a longer time period. This is definitely not an egalitarian argument wherein a person is only made better off if they have equal stuff to everyone else at a particular time. My definition of social justice includes a longer timeline and finds inequalities to be justified so long as the system under which they arise benefits marginalized people.
By opportunities I mean the ability of a person to be, in a Ralwsian way, a responsible self-author. Or, even in a libertarian sense, to have liberty and freedom to actualize their inner potential. There is a salient argument that people cannot be considered free if they do not have the material ability to express their innate liberty. A child dying of starvation in Darfur is not free. It is not merely the absence of official coercion that is important, as some libertarians may argue. So, social justice seeks to increase the opportunity for individuals to play out their capacities.
Outcomes is probably the fuzziest concept in that definition. I mean it to instill as sense of consequentialism into the definition. I would find both subjective and objective measures to be compelling in this sense. Whether people found a particular intervention or set of social welfare policies to help them person is a valuable contributor. In addition, the positive rights that liberals are very eager to instantiate actually make serviceable metric for social progress. These are often imposed from without and with a naivete that sees conditions unequal to our own to be unjust. However, the approximation of outcomes to what we currently experience could be seen as a measuring tool of social justice, but not proof that a condition is itself unjust. This is an ordinal scale, not nominal.
Two takeaways from this: Nowhere in this definition does it mandate that income or other goods or abilities must be forcibly redistributed. Indeed, there would be no just authority that could allocate resources in a just way, in my opinion. All decisions in that system would be unjust. Justice requires that the decision-making be on the individual level.
In addition, this does not provide for a sense of group rights. Group analysis can take place in assigning the label "marginalized" to a particular person, but those groups are more widely understood. In addition to ethnic groups or social classes, it includes criminal defendatns, for example.
I need to think this through a lot more, but this is at least a start. So there, Nigel.
In thinking about it enough, I have found a definition with which I am pretty comfortable. Social justice is the betterment of opportunities and outcomes for marginalized people. Let's define some terms. By betterment I mean both in the sense of in-time and across a longer time period. This is definitely not an egalitarian argument wherein a person is only made better off if they have equal stuff to everyone else at a particular time. My definition of social justice includes a longer timeline and finds inequalities to be justified so long as the system under which they arise benefits marginalized people.
By opportunities I mean the ability of a person to be, in a Ralwsian way, a responsible self-author. Or, even in a libertarian sense, to have liberty and freedom to actualize their inner potential. There is a salient argument that people cannot be considered free if they do not have the material ability to express their innate liberty. A child dying of starvation in Darfur is not free. It is not merely the absence of official coercion that is important, as some libertarians may argue. So, social justice seeks to increase the opportunity for individuals to play out their capacities.
Outcomes is probably the fuzziest concept in that definition. I mean it to instill as sense of consequentialism into the definition. I would find both subjective and objective measures to be compelling in this sense. Whether people found a particular intervention or set of social welfare policies to help them person is a valuable contributor. In addition, the positive rights that liberals are very eager to instantiate actually make serviceable metric for social progress. These are often imposed from without and with a naivete that sees conditions unequal to our own to be unjust. However, the approximation of outcomes to what we currently experience could be seen as a measuring tool of social justice, but not proof that a condition is itself unjust. This is an ordinal scale, not nominal.
Two takeaways from this: Nowhere in this definition does it mandate that income or other goods or abilities must be forcibly redistributed. Indeed, there would be no just authority that could allocate resources in a just way, in my opinion. All decisions in that system would be unjust. Justice requires that the decision-making be on the individual level.
In addition, this does not provide for a sense of group rights. Group analysis can take place in assigning the label "marginalized" to a particular person, but those groups are more widely understood. In addition to ethnic groups or social classes, it includes criminal defendatns, for example.
I need to think this through a lot more, but this is at least a start. So there, Nigel.
Thursday, May 31, 2012
Classical Liberal or Libertarian?
If you are interested at all in this blog, please stop reading this post and instead spend the next 30 minutes reading last month's Cato Unbound in which Matt Zwolinski and John Tomasi bring their idea of Bleeding Heart Libertarianism to the libertarian body politic. The BHL project attempts to marry Rawlsian social justice with classical liberal and libertarian thought. The more I read Zwolinski and Tomasi (whose Free Market Fairness I am currently reading and loving), the more uncomfortable I become with the label libertarian versus "classical liberal."
Although one of the respondents to their Unbound essay quibbles with their version of libertarian history, it is personally convincing that libertarianism, to its detriment, elevates property rights above all other rights as a reaction against property rights being excerpted from modern or high liberal thought. The further this sinks in, the more skeptically I view hardcore libertarian arguments from those like Rothbard and Nozick. The reduction of all rights to property rights is absurd. The classical liberal emphasis on the material betterment of the poor (and society as a whole) rings far more true to me.
Perhaps this is why many libertarians refer to themselves as "small l" libertarians. They are oriented towards free minds and free markets (to quote Reason's tagline), but they do not subscribe to the abstract and extreme arguments of the libertarian tradition. So, I suppose I should choose between small l or classical liberal.
Although one of the respondents to their Unbound essay quibbles with their version of libertarian history, it is personally convincing that libertarianism, to its detriment, elevates property rights above all other rights as a reaction against property rights being excerpted from modern or high liberal thought. The further this sinks in, the more skeptically I view hardcore libertarian arguments from those like Rothbard and Nozick. The reduction of all rights to property rights is absurd. The classical liberal emphasis on the material betterment of the poor (and society as a whole) rings far more true to me.
Perhaps this is why many libertarians refer to themselves as "small l" libertarians. They are oriented towards free minds and free markets (to quote Reason's tagline), but they do not subscribe to the abstract and extreme arguments of the libertarian tradition. So, I suppose I should choose between small l or classical liberal.
Thursday, May 3, 2012
Incentives, Determinism, and Humnanism
I would like to start with a case vignette. I work with a man whose girlfriend is also a consumer at our agency. They are in a long-term relationship and share responsibility for their respective children. Each of them maintains their own residence and subsidy. Our housing department is seeking to join their households officially by providing them a better voucher in order to free up their slots in the current program. This transition would reduce their total amount of resources, but would provide the amount of resources deemed necessary for a household that size. What the incentives for my clients? And is my role to help my client maximize his total amount of resources and protect him from risk, or to help them transition to the lower level of resources that more accurately reflects their current arrangement?
The incentives for my client are to remain where he is and allow his girlfriend to take the voucher separately. His disincentives for joining households as follows:
The concept of incentives brings to mind a video from reason.tv where they interviewed Charles Murray, the author of Losing Ground and The Bell Curve. In it, Ronald Bailey asks a very poignant question. The criticism Murray levels at the welfare state rests on the assumptions of economic determinism, and to a lesser extent, cultural determinism. Though Murray's thesis--given a set of incentives, people will behave in ways that make sense to them-- is humanist in origin, when taken to its extreme, it attempts in a very behaviorist way to explain choice as a function of its environment. While his explanatory valuables have validity, they are necessarily incomplete, as they cannot incorporate the panoply of variation in motivations for behavior. His explanatory valuables also harken back to old social conservative tropes, and though he walks a tight line, it is difficult to fully believe his faith in, for instance, the feminist revolution. When a social scientist examines behavior through a Functionalist lens, her data is necessarily biased by her own personal opinions.
I linked there to one of my favorite pieces of information I have ever come across. Burrell and Morgan's sociological paradigms fundamentally shifted the way I think about most things, and I cannot recommend it highly enough as a lens through which to view most of life. The reason I detest the methods of scholars like Charles Murray is that I find my natural place on the opposite end of the spectrum--the Radical Humanist side. (Hence the name for the damn blog.) How does an Interpretivist (in the social realm, at least) who focuses on radical change rather than regulation understand incentives? An appreciation for an individual's unique motivations and choices and antipathy towards environmental influences that suppress her self-actualization skews the perception incentives significantly. While the strictures of marriage or the conditional nature of privatized aid to the poor may be looked at as significant in shaping a person's behavior, he or she ultimately decides based on an infinite number of sociological, economic, and even biological factors too many to compute and whose precise balance and emotional valence can never be fully known.
Social workers, by training, largely trend towards the Interpretivist side of the Functionalist quadrant. We are trained to become empathy machines, keenly sensing and taking the perspective of our clients. Our solutions to social programs are necessarily Functionalist, but our micro-level concern is one of extreme subjectivism. It's a tenuous line to walk. Perhaps this is another source of the frustration with "the system." It seems foisted upon our clients. The chosen incentives put in place and their intended and unintended consequences are necessarily from without, subject to their own outcomes measures and necessarily incomplete pictures.
Perhaps that is because the system we have is just that: the system. Our nation has one way of dealing with social problems. The incentive structure, assumptions, bias, and everything else are applied to everyone. No personalization of resources. No customization of care. With problem cluster A, you provide B interventions, and expect C level of response. The diversity of motivation, thought, and choice plays only a limited role in what outcomes happen. Competition also plays a very structured, stunted role with outcome studies, evidence-based practice models, and best practices that reflect the results from a specific well-controlled group in a specific time at a specific place. Important thought they may be, they are lagging indicators of fact with limited explanatory power. They are not the real world. They are not what social workers and clients experience every day.
A good illustration of how social policy is unresponsive to results and evidence is harm reduction. Harm reduction is has a wide evidence base and is slowly gaining recognition in the helping professions, and to a lesser extent, in policy. This transition happened both in the professional literature and on the political level at a snail's pace. It's influence was first on the private level, then on the local level, and is currently impacting state policy. However, harm reduction has no bearing on federal policy. Macro-level change is only possible when obstacles to the results of social experiments can impact policy. To date, the federal government promotes almost no harm reduction policies, and more distressingly, enacts the majority of harm done to people with mental health and substance abuse issues.
Returning social support to state, local, and private entities may bring about better outcomes for individuals. My hope is that by bringing the planning and money closer to the helper and client, we can create better practices that are more responsive to consumer need and actually incentivize good decisions. Unfortunately, to do so would dismantle the entire welfare system as we know it.
The incentives for my client are to remain where he is and allow his girlfriend to take the voucher separately. His disincentives for joining households as follows:
- Their total food stamps would markedly decrease.
- Their TANF is unlikely to but may decrease.
- No one can authoritatively tell them how much money they will lose. The only person who could tell them is a government employee, whose incentives are to give as little as possible. If they were to ask one directly about what they should do, they would likely decrease their payments regardless given their knowledge of the household.
- The social support network is biased towards the mother. She would ultimately hold the voucher. If the relationship ends, he could become homeless. Though our organization would likely rehouse him, they may not have funds at the time.
My coworker lamented to me that the system is not set up to incentivize good decisions. It discriminates against marriage, work, and stability. It supports mothers to be child-raisers, but allows fathers to remain untethered to their children and families. A father who is involved with the family has no incentive but his own emotional investment.
Our clients are more than willing to give up a housing voucher. I'm sure they are happy that by joining their households, another person can get housed. That same logic, however, does not apply to government-administered financial supports. They do not know that their food stamps will go to another needy person--only that the government will save money. Their possibly reduced TANF funds may not go to another person. Finally, should the household comes apart, the system may be too slow to react or not care at all that they now require additional supports and help.
Perhaps my coworker and I will be lucky. Our clients may understand that society has deemed that a couple deserves X amount of support while a broken family deserves more. They may accede to this arrangement because their treatment provider told them to. But I can sympathize with not wanting your resources reduced and more risk and uncertainty in your life.
Perhaps my coworker and I will be lucky. Our clients may understand that society has deemed that a couple deserves X amount of support while a broken family deserves more. They may accede to this arrangement because their treatment provider told them to. But I can sympathize with not wanting your resources reduced and more risk and uncertainty in your life.
The concept of incentives brings to mind a video from reason.tv where they interviewed Charles Murray, the author of Losing Ground and The Bell Curve. In it, Ronald Bailey asks a very poignant question. The criticism Murray levels at the welfare state rests on the assumptions of economic determinism, and to a lesser extent, cultural determinism. Though Murray's thesis--given a set of incentives, people will behave in ways that make sense to them-- is humanist in origin, when taken to its extreme, it attempts in a very behaviorist way to explain choice as a function of its environment. While his explanatory valuables have validity, they are necessarily incomplete, as they cannot incorporate the panoply of variation in motivations for behavior. His explanatory valuables also harken back to old social conservative tropes, and though he walks a tight line, it is difficult to fully believe his faith in, for instance, the feminist revolution. When a social scientist examines behavior through a Functionalist lens, her data is necessarily biased by her own personal opinions.
I linked there to one of my favorite pieces of information I have ever come across. Burrell and Morgan's sociological paradigms fundamentally shifted the way I think about most things, and I cannot recommend it highly enough as a lens through which to view most of life. The reason I detest the methods of scholars like Charles Murray is that I find my natural place on the opposite end of the spectrum--the Radical Humanist side. (Hence the name for the damn blog.) How does an Interpretivist (in the social realm, at least) who focuses on radical change rather than regulation understand incentives? An appreciation for an individual's unique motivations and choices and antipathy towards environmental influences that suppress her self-actualization skews the perception incentives significantly. While the strictures of marriage or the conditional nature of privatized aid to the poor may be looked at as significant in shaping a person's behavior, he or she ultimately decides based on an infinite number of sociological, economic, and even biological factors too many to compute and whose precise balance and emotional valence can never be fully known.
Social workers, by training, largely trend towards the Interpretivist side of the Functionalist quadrant. We are trained to become empathy machines, keenly sensing and taking the perspective of our clients. Our solutions to social programs are necessarily Functionalist, but our micro-level concern is one of extreme subjectivism. It's a tenuous line to walk. Perhaps this is another source of the frustration with "the system." It seems foisted upon our clients. The chosen incentives put in place and their intended and unintended consequences are necessarily from without, subject to their own outcomes measures and necessarily incomplete pictures.
Perhaps that is because the system we have is just that: the system. Our nation has one way of dealing with social problems. The incentive structure, assumptions, bias, and everything else are applied to everyone. No personalization of resources. No customization of care. With problem cluster A, you provide B interventions, and expect C level of response. The diversity of motivation, thought, and choice plays only a limited role in what outcomes happen. Competition also plays a very structured, stunted role with outcome studies, evidence-based practice models, and best practices that reflect the results from a specific well-controlled group in a specific time at a specific place. Important thought they may be, they are lagging indicators of fact with limited explanatory power. They are not the real world. They are not what social workers and clients experience every day.
A good illustration of how social policy is unresponsive to results and evidence is harm reduction. Harm reduction is has a wide evidence base and is slowly gaining recognition in the helping professions, and to a lesser extent, in policy. This transition happened both in the professional literature and on the political level at a snail's pace. It's influence was first on the private level, then on the local level, and is currently impacting state policy. However, harm reduction has no bearing on federal policy. Macro-level change is only possible when obstacles to the results of social experiments can impact policy. To date, the federal government promotes almost no harm reduction policies, and more distressingly, enacts the majority of harm done to people with mental health and substance abuse issues.
Returning social support to state, local, and private entities may bring about better outcomes for individuals. My hope is that by bringing the planning and money closer to the helper and client, we can create better practices that are more responsive to consumer need and actually incentivize good decisions. Unfortunately, to do so would dismantle the entire welfare system as we know it.
Wednesday, April 18, 2012
Elizabeth Warren -- Public Choice Posterchild
Elizabeth Warren is an outspoken critic of big business. She believes that businesses and the rich should pay their fair share. She is a proponent of Obamacare, which included many anti-business cost savings measures. ...Except when that business is from Massachusetts, whose Senate seat she is hoping to fill.
In her op-ed for Mass Device (a trade publication for medical device manufacturers), Warren comes out in favor of repealing the medical device tax, a major cost-savings measure included in Obamacare, and increasing government handouts to those companies for R&D. She proposes nothing to offset this large government giveaway to big business. The reasons she gives for her position sound as though they are taken from industry lobbyist boilerplate.
Not only is it fun to watch hypocrisy in action, but it is such a crushingly potent argument for public choice theory. One of the main objections I hear to the idea that politicians are generally self-interested and only motivated by increasing personal wealth and power is that we need to elect the right people who will not fall victim to these incentives. What Warren's op-ed so potently points out is that no one, not even a severe (to use RMoney's word) Progressive like Elizabeth Warren, is immune from promising handouts to major industries in her home state.
What does it say for the prospects of Obamacare's cost-savings measures when even Warren is coming out against them? I disagree with her on everything, but in this case, you would at least expect her to stand on principle. Unless, of course, you are a student of public choice and you realize that she does not do it from avarice, malice, or personal corruption. She is merely a state actor acting in her own best interest, according to the incentives within the system.
Incentives
As a social worker, I do not feel I have done my job properly until my client has all of the resources to which she is entitled. But is my job also to gauge whether or not a person truly needs those resources? For instance, should I help a person in poverty whose depression is not very severe apply for SSI monthly income (which is based on a mental health diagnosis) while they look for work in this terrible economy? Is it my job to advocate as forcefully as possible to assist that person in getting whatever income and assistance I can? Or is it my job to use my clinical judgment to asses what they truly need?
The answer to me and all others I have spoken with about this is that it would be immoral to not inform or not assist someone regarding a program that could potentially help them, even if their eligibility for that program is suspect. The burden for judging whether that person is deserving of aid or not is made by someone far away in a government oversight office. Their determination, in turn, is based on an application I fill out with that client. If my incentive is to get them as much as possible, I am going to make them look as needy as I can (without lying) in order to ensure that they receive assistance. If I don't do this, I risk making that same immoral mistake of not helping them as best I can.
In the current system, the people who are judging whether or not to administer aid to a person knows almost nothing about them, has never met them, and only has a minimal amount of information colored by the bias of self-report and my incentive to assist the consumer. In the case of SSI, most of the questions are the forms are irrelevant to people with mental illness as they have to do with physical limitations. Some questions are more specific and the 3rd party reporting form for psychiatrists definitely goes into some detail; however, the information given is cursory, based on self-report or biased report.
The assistance that is offered (with notable exceptions) is largely an all-or-nothing proposition. A social security administrator cannot, for instance, provide greater assistance based on financial status. There are some gradations in difference between housing status and health status, but generally there is only one fixed amount that is given to the lion's share of mental health consumers. Bureaucrats must then judge whether a person meets the minimum requirements (whatever those are, as they are not published), and then say "yes" or "no."
Their incentives are to deny as many people as possible to contain costs. My incentives are to get as many people on assistance as possible (otherwise, life gets REALLY hard). The client has similar incentives but very little agency throughout the whole process. Once received, the client has little motivation to look for work. Working part-time will reduce your SSI payment by an amount dictated by some arcane formula. Working full-time will eliminate it. Both of these will adversely impact other entitlements such as Medicaid status and Food Stamps. SSA, meanwhile, often will not react to changes in work status quickly, leaving clients with overpayments (which have to be paid back later) or underpayments (which clients have to lobby forcefully to rectify).
Because these programs are administered so far from the individual, they adjust poorly to changing conditions. They cannot be tailored to the client's individual needs which change over time. They incentivize individuals to be dishonest in order to receive help. They put up barriers to self-sufficiency. Are the incentives in these programs really the ones that we want for our clients and social workers?
Sunday, April 1, 2012
What is social justice?
Let me start off by saying that this is a preliminary post. My concept of social justice is not fully formed. I have yet to see a definition or operationalization of social justice with which I fully agree. However, in thinking about the issue further (thanks to Jacob, my first non-friend commenter) I reflected on what the modifier "social" means. I believe the process of determining social justice first involves classifying people by group. When we say that, for instance, the drug war is unjust because it disproportionately affects African-Americans, we are making a social justice argument. Though libertarians are repelled by the idea of divining rights based on group affiliation, this does not preclude them from using social justice arguments in critiquing policy, as evidenced above.
What libertarians should have a problem with is when people make social justice arguments by only focusing on the intended effects for a given population, rather than on society as a whole (or different groups or individuals). As Bastiat masterfully stated and Hazlitt drilled into my skull, a policy must be evaluated on both its intended and unintended consequences (that which is seen and that which is unseen). While we can say that affirmative action or diversity requirements may help some specific groups on the grounds of justice, we must also examine the policy's unintended effects. A libertarian conception of social justice has a more holistic perspective--one that incorporates the experiences of individuals, all affected groups, and society as a whole. When you only focus on a policy's effects on the target population, social justice is perverted, and groups have the most clout can gain unfair government-induced advantage.
There are many classifications that can include a person in a group. These include certain ethnic groups such as the ADL, La Raza, and the NAACP, age groups like the AARP, or sexual orientation groups such as the myriad LGBT organizations. These group identities are not chosen and are given by accident of birth. Other group identities are chosen to some degree, such as religious affiliation, union membership, and occupation. Like the former organizations, advocates for these groups will often make social justice arguments. Finally, group identity may also be assigned based on life circumstances, including income, employment, and disability, each of which have attendant government programs. The individuals covered under these group labels are part of what I will term the ingroup.
Groups with well-organized and easily defined ingroups (where people will identify the strongest) can exert higher influence. We can see this most clearly when government programs--each subject to overall budget priorities in the federal government--must compete against one another for centrally administered funds. The well-defined, organized, larger, least controversial, and best connected organizations will get the most funding. What is spent in one program, cannot be spent in another. The benefits of that program will only apply to a given population, and its costs will be spread unevenly throughout the other groups. By measuring how the policy affects all other affected groups, one can more broadly understand the overall justice of the policy being debated.
Here are some groups that are often excluded from social justice analysis:
- People from the future. No, seriously. Future people are a group of people who have no true advocates in the policy arena. The incentives for today's social justice advocates and practitioners is to get as many resources as possible. I would never stop until I believed that my client had every resources available to help them. This approach, however, does not include the cost of these services to, for example, the future poor. The future poor are made much worse off by social welfare spending and government spending in general. Their money will likely be worth much less than ours, their debt load will be much higher, and they will not have the money to pay for as many services as we do today. This is true of the "future" version of any group. Today's group takes money away from what could be spent in the future, as we finance more and more of social spending with deficit spending. This is not in the interests of the future group, its members, or society taken as a whole.
- Disfavored groups. Just as often as policies are made to encourage a given identity they are made to discourage another group from expressing itself. People who engage in socially unacceptable behaviors are defended by libertarians, and often only by libertarians. When the majority attempts to ban the activities of a certain group (or groups) of people, it is an important social justice issue. Those who use state power to discriminate against minority groups are acting in violation of social justice. Absent harm, there is no just cause for discriminating against any group, regardless of how they are classified (see above). An example would be people who use or sell drugs and people who engage in prostitution.
- The opposite people. When a policy is designed to help a certain favored minority group it creates another group--everyone that doesn't fit into that group. For instance, policies that are designed to benefit married people discriminate against the single people. Policies to assist homeowners discriminate against those who rent. Libertarians will often make arguments against a given policy based on injustices to the outgroup, or specific groups therein. Outgroups often contain clusters of smaller outgroups that carry additional classifications as part of their identity.
Whether we can't see them, don't like them, or they are poorly organized, minority groups that are left out of the common conception of social justice are included in the libertarian one. The overall point being that (again) just because a policy would benefit one group, does not mean it is socially just. One must look at the ingroup, outgroup, individual, and society before determining the relative social justice of a policy.
Discriminatory policies, ones that have a larger ingroup than outgroup and harm others, abide by the inverse rule of dispersed benefits and concentrated costs. A discriminatory policy will only be continued if it negatively affects a small, poorly organized group of people (or cluster of groups) where the affiliation with that identity is weak. Simultaneously, its positive effect on the ingroup is so small, that few will notice its presene. The feeling that we are not directly getting over on a minority group ensures that these policies will be incredibly difficult to change. Humans are often poor with affective perspective taking, and will have trouble understanding the behaviors, experiences, and motivations of others. By substituting the amount this policy impacts their life in the ingroup instead of appreciating how much it can affect another person's life in the outgroup, social injustice sustains itself.
Social justice, as stated previously, must also include analysis based on individual considerations of justice, but this is generally termed civil rights and is thought of as a separate entity. Finally, social justice must conclude by evaluating all group and individual data in totality, how it will affect the society as a whole in the scheme of history.
Libertarianism is unique in its holistic approach to social justice, and its insights would do a great deal in refining modern conceptions of the term. Social justice necessarily involves grouping people. That process requires the prevention of harm towards any individual or group, with certain moral limitations. So, in a backward way of getting at a definition, social justice is determined by the degree to which the interests of individuals, all groups, and society are served. Advocacy or implementation of these policies the the process of achieving social justice.
That's about as close as I can get.
PS: I agree that the word "social" is used too often. It's getting like "public" which has almost no meaning at all anymore.
Why the potential defeat of the PPACA is a good thing
The Patient Protection and Affordable Care Act, known annoyingly as Obamacare, was given a serious constitutional vetting in the Supreme Court this past week. The constitutional objections point to the expansion of the Commerce Clause beyond the odious Gonzales v. Raich and Wickard v. Filburn rulings. That's not really a topic for this blog, but I will generally use any chance I can to talk about them. What I want to address in this blog post are reasons why the repeal of the PPACA should be cheered by both the right and the left and seen as an opportunity to create a much better law.
1) Employer-based healthcare. How anyone can be happy that this vestige of wage controls from WWII is still a main feature of American healthcare is beyond me. This is the primary distortion in our insurance market. It creates a ton of problems and has no sincere reason for its continued existence other than it is the status quo. No proposal from either party, to my knowledge, sought to address this problem after single-payer was taken off of the table. Democrats, with their belief in positive rights (including one to health care), hate the employer-based model because losing your healthcare with your job is a social justice issue. Republicans should see the government distortion in the health insurance market through regulations dating back 60 years and be driven mad by free-market wailing and gnashing of teeth. So, who kept it in there?
2) The individual mandate. The individual mandate is not a feature of this law, it is a cost control measure. Putting aside again the constitutional issues, the intended effects of the individual mandate are to punish people who do not buy insurance until they are sick (likely to be young and healthy) and to offset the increased cost of insuring people regardless of preexisting conditions. Like Obama said on the campaign trail, if mandates could fix social problems, we could eliminate homelessness by making not having a home illegal. An individual mandate would not be part of the perfect Democratic or Republican proposal (though Matt Zwolinski makes a philosophical case for it in "Is the Welfare State Justified"). A single-payer system covers everyone with no need for sanctions if a person does not carry insurance. Mandating that a person buy a certain product as a means of regulating it makes no sense in a free market system. Who actually likes this feature?
3) Insurance companies love this law. Remember the stakeholders when this law was being written? The insurance companies, Pharma, and the AMA. This legislation was passed with their input, assistance, and endorsement. How could you get any better for an industry than if the government mandates each American to buy your product? And further mandate that they buy the most expensive option that, regardless of need, covers absolutely everything? As we have seen most recently with SOPA, industry attempts to collude with government instead of innovating to increase their revenue. Centralizing power with and doling out money to the large insurance corporations are repugnant to both liberal and conservative sensibilities (though practiced by both with astonishing regularity). Why are those industries on the receiving end of these new regulations in support of reform instead of fighting tooth-and-nail against it?
4) We are better off without more federal involvement. Neither liberals or conservatives are going to agree on anything at the national level, and for good reason. Not every model works for each part of the country, each group of people, or each individual. Federal mandates means that the most important regulations and decisions are made far away from the people helping and the people being helped. They are also the most difficult to change for both ideological or practical reasons. Want victory for your proposed solution? There are states with excellent single-payer insurance like Vermont. Move it like right-to-work legislation--through the state legislatures. You can push your solution further if power is retained by the states.
5)It increases the cost of health care. Obamacare was sold as a cost-saving measure. This opinion is not shared by the OMB, CBO, or any serious policy organization. It was made up whole-cloth by the Department of Health and Human Services. By double-counting, the PPACA pretends to simultaneously cover the costs of other mandates and extend the Medicare trust fund (as reported by the OMB). The law does not include the yearly adjustment to Medicare reimbursement to doctors, which this year will top $276 billion and whose annual price tag will only increase for years to come (according to the CBO). Finally, the cost-savings measures and pilot programs built into Obamacare (according to the CBO) have not achieved their goals at all, and those programs that have helped are likely to be snuffed out by the health insurance industry. Dramatically driving up the cost of health insurance makes it more difficult to achieve the ultimate goal of universal coverage.
6)A personal reason. One of the mandates of the PPACA requires electronic documentation of all medical records. This presents an unfunded mandate to health care providers, including my company, who must now upgrade their software. For us, this means compliance with Department of Mental Health specifications. Our software upgrade included two things--a new, attractive visual interface and back-end changes so our program could talk to DMH. The actual acts of writing notes, looking at charts, and updating records became more time-consuming and frustrating as we are straddling between two iterations of the same software. The upgrade has taken money away from the organization, has stretched out over-deadline, and has no other purpose than to conform to this regulation. The upgrade surely was not for the benefit of the end-users.
I have always found it difficult to understand why people who favored health care reform actually liked this law. I understand that it was important to do something about these problems. But that do-something attitude got us a terrible piece of legislation. Just because it may be overturned on constitutional grounds does not mean that supporters should ignore the practical case against it. If the Supreme Court sides with the convincing (to me) constitutional objections to the PPACA, it will likely invalidate the entire law--giving Congress another opportunity to actually address the important problems with health care. People of all ideologies should be happy with that result.
Tuesday, March 13, 2012
Public Choice and Burnout
The revolutionary assumption of public choice is that those in power serve their private interest. Previous scholarship assumed that public figures acted in the public interest. By passing through the apse of the state building, a person is transformed from a mostly rational, mostly self-interested person into a perfectly rational, publicly-motivated servant. A casual glance at Washington DC or your local statehouse shows the fallacy of that illogical idea. People are who people are. This logic trickles down to the staff members, bureaucrats, and regulators, as well.
As someone who works in an industry entirely dependent on government assistance, I feel that there is a subliminal lie told to social workers that they too act largely in the public interest. I don't consider myself a bureaucrat, but I don't see why the same assumptions should not apply to me. I can think of countless things I do each day because my incentives are to do them or not to do them. There is an infinite number of things that would benefit my clients, other staff, or the general public that I do not do because there are disincentives for that behavior. Just the same, there are some things I do in my job that are not good for certain clients, other staff, or the public that I engage in because the system incentives me to do it (or sometimes outright requires it).
When a person's belief in government is shaken by some of the conclusions of public choice theory and a critical examination of policy, politics, and results (as it well should be), people generally withdraw from government. Talk to any hill staffer who has burned out, and you will hear the voice of a semi-libertarian. They instinctively dislike government and will largely stand clear of it. Once you know how the sausage is made, you really don't want to eat it.
But what happens to a person who grapples with the same problems, toiling in a system that is flawed for the same reasons, but who has made a life choice to dedicate themselves to this career? What happens when a person realizes they are serving their own interests, not those of the public or their clients? Burnout is a phenomenon that is not well-understood in mental health literature. It is often brought up as secondary to job stress and difficult client interactions. I believe that those cause vicarious traumatization and deleterious stress effects; however burnout is an almost spiritual affliction. It robs a social worker of their very drive.
Perhaps if we were taught to embrace our own self-interest, to approach this work for our own various interests--be they financial, psychological, political, or what have you--we would suffer from less burnout because that conflict between public interest and private interest would be obviated. That conflict robs the individual of their sense of duty or calling when they are forced to act in their own self-interest and to reflect upon and relive that fact every day.
Saturday, March 3, 2012
Redefining Social Justice
One of the core values of social work is a commitment to social justice. Social justice, in it's current form, is generally a province of the political left. There is, in fact a great deal of animus on the Right side of the aisle towards the idea of social justice. But, they commit the same fallacy of Bastiat's quote about socialism (I posted it earlier in the blog), that just because government should not do it doesn't mean it should not be done. It is an aspect of the social sphere, which while it can enter the realm of politics, it doesn't mean that the government has to be involved. There may be better ways of achieving the ends of social justice without the current means. At the very least, turning a critical eye towards the implementation of social justice is important.
But when we examine the redistributive system of economic justice, we find that marginalized populations receive a smaller share of benefits from the government than do middle and upper class people. This is not a system we should support. The aims of social justice have been used to provide advancement for people who do not genuinely need it. Furthermore, their distorting effects have lead to increased investment in these programs, taking more money from not only the present poor but the future poor we are borrowing from. Our clients do benefit from the welfare state, but they do so at a reduced rate, because spending (social, and spending in general) is spent on those who are better off financially than those who actually need assistance.
One of the more surprising things, when I speak to my more liberal friends about my views, is that there can be a libertarian case for social welfare spending. Most assume that people who identify as libertarian or hold similar beliefs automatically ascribe to the more radical side. But there are many libertarian icons who are in favor of social spending. In the Road to Serfdom, Hayek makes his case while maintaining a sizable welfare state. Milton Friedman advocated for a reverse income tax, whereby income would be redistributed with minimal cost and with little bureaucracy.
An incremental approach to a libertarian social system demands that we make compromises along the way to what we want. If we grant that social spending on the poor should stay as is, how much of the welfare state would continue to exist? Corporate welfare, the mortage interest tax deduction, medicare and social security spending on the upper classes, etc. The welfare state shrinks considerably when the aims of social justice are well-defined and basic.
In the end, the argument comes down to how to best administer aid to the poor. From working in my city, I see that the services provided by government are not achieving the ends of social justice. The decisions for funding and the administration of services is made far away from the target population. Services exist in a structure that makes less and less sense every day. Though the government does provide my clients with a steady monthly payment to subsist on (once they get it), the services supporting that spending have little control over their funds. They cannot direct them in the most efficient and just manner. Instead, my clients are forced to submit to a system of social control, of limiting the costs of social problems, and a general indifference towards the life experience of those in need. Funding for these programs is constantly at risk because it is inextricably tied to the overall financial health of the government. How much did spending on the financial crisis and overseas war outpace spending on those in need? What is spent in one area cannot be spent in another. The government does a poor job of allocating resources. When you see Obama advocating for green jobs or nationalizing a car company or Romney cheer for war with Iran or defend farm subsidies, think of what that money could be better spent on.
We all generally agree that more money should be spent on the social safety net. We are hesitant to cut spending because of the values of helping others and social justice. What if we were to control that spending more directly? Many a clever comedian has posed to direct their social spending in better directions. Perhaps itemizing spending and letting us pick which areas we would like to support. Well, we can do that if we are the ones administering the funds. When people control that spending, they will do so with greater involvement in their efforts. They will ensure quality and promote community. The depth of help offered will be much greater, as spending will be closer to the client and to those administering the help. Organizations will be allowed to take interesting forms. In our current system, organizations that help those in need are confined to one of a few prescribed roles because of regulations tied to funding. If these organizations are liberated, how much better could they get? The libertarian values of choice and competition could flourish and allow for more innovative and effective practice.
Finally, once social spending is removed from the government sphere, it ceases to become a matter of controlling social problems. That motive towards social order is the will of the majority, the general population. The organizations and their donors have a greater purpose, individual liberation. In my work, that is liberation from intrapsychic and extrapsychic problems. Allowing them to voluntarily engage with the help they need and truly design their own recovery.
Working in harm reduction, I saw how the aims of social justice can be perverted by politics and ideology. The vast majority of people support these efforts, but many of these compassionate policies are denied funding or are downright illegal in some states. Needle exchange, housing-first, wet shelters, high-dose opiate therapy, medical marijuana for sick people--how can these interventions exist in a political climate? Meeting people where they are at is not something that can be done on a federal level. By devolving the power to people themselves, spending will be given by people who can take political risks. It's their money, and they may have an useful idea.
I don't know enough yet to know if this system will serve the interests of social justice better than our current social spending programs. I need to know more about the time when social spending was not directed by government in this country, economic arguments showing its solvency and adequacy, and a positive argument for why a private system would at least be as adherent to the ethics of the helping progressions as our current system.
Social justice is a value that almost everyone holds. Libertarians, just as much as progressives, should direct themselves towards policies that serve these ends. And the competition between the methods of these two forces will hopefully create a better system than the one we have today. The points these two ideologies agree on is already large--drug legalization, ending corporate welfare, ending war. If achieved, those would be true victories for social justice. Maybe some liberals would be willing to cut social spending to the wealthy, as well. To then argue over how best to delegate funding from there is an argument worth having and one which will only lead to the better service for those who need help.
Tuesday, February 21, 2012
Cost Inflation and Control
The provisional solution I entertain on this blog to the conflict of libertarianism and social work is replacing the current welfare state with a private charity market. I intend to make no positive case for the private charity solution in this post, but it is important to keep it in mind as an alternative to the status quo.
Leaving aside (for the moment) the moral argument over whether people are entitled to charity or should only receive it through the voluntary kindness of others, we must examine the economic issues inherent with a centrally planned welfare state. The premier economic issue is, unsurprisingly, cost. Since the cost is not determined by the dynamic forces of supply and demand, it must be set by politicians who make appropriations for bureaucrats to administer. There is a limited amount of money and naturally what is spent on one program is not spent on another. Thus, the need to control costs is paramount. That is what this post is about.
Speaking from my experiences as a mental health case manager, the government programs that my organization (and all of those like it) rely on for almost all of their funding are Medicaid and Medicare. I was originally surprised that many of my clients had Medicare, but unbeknownst to me, a person qualifies for that program after receiving two years of SSI. Billings to these programs provides the budget for my entire organization. (It does not have a development department and neither did my last company.)
Our billing is based on the DSM, the bible of psychology. However, government insurance does not cover every diagnosis in the DSM. In fact, only five diagnoses are reimbursable for adults in case management--Major Depressive Disorder, Bipolar Disorder, Schizoaffective Disorder, Schizophrenia, and Psychotic Disorder NOS. Anyone who does not fall into those five diagnoses cannot receive mental health case management services paid for by the government. This includes people with Personality Disorders (an estimated 10.6% of the population, and I would venture an even higher percentage of people with low-income), Anxiety Disorders(an estimated 18% of the population and I would again venture a greater percentage in the population I serve), and those with the myriad other diagnoses present in the DSM. Even our women's trauma team cannot bill for services under Post-Traumatic Stress Disorder. So, diagnoses are made to fit billing rather than the person.
Within that chunk of the mental health population we can actually work with, the government applies the fee-for-service model of reimbursement (as does private insurance). A case manager can only bill for interventions designed to address functional deficits related to a client's particular diagnosis. That this conceptualization flies in the face of strengths-based social work is important, but secondary to the discussion here. Part of the difficulty I face in billing for my services is that some things I do are either not directly related to functional deficits or address practical rather than clinical problems. It's not enough to say "this needed to happen, so I did it" in your billing.
Say I bring Ralph, who is diagnosed with paranoid schizophrenia, to the social security office. I go over the goals of our visit on the car ride there (billable). I talk with him about his vocational goals, manage his mood, and engage him in conversation for the first hour we wait (billable). If in the second hour of our wait time, he were to become tired of my yammering and clam up, I can no longer bill for sitting with him. Even though if I were to get up and leave, he would never complete this appointment and might lose his income, I can no longer bill for supporting him while we wait.
In addition, one cannot bill for teaming with another service provider, coordinating care, or talking on the phone with a client. At this point, hours of work I do every day is not billable for my company and I am not reimbursed for my time. After I work with the client directly, I write up a service ticket for how long the intervention was and provide the billing code for "individual case management." I also bill for group services for the three groups I co-lead at my company.
Speaking broadly across the country services in case management are either provided by state or local governments, or more commonly, by non-profit or low-profit companies. (I work for a non-profit.) These companies are built on a relatively straightforward mathematical model. A minimum amount of billable hours is required of each case manager daily(mine is 5.5 hours) so that in the aggregate their combined billings will cover the costs of operating the company--perhaps leaving some room for reserves (depending on the quality of the company). My company genuinely needs me to meet that quota each month because it cannot support my salary without those funds. Most companies will work with a person struggling with their productivity for a period, but will let them go if they are unable to fulfill their requirements.
If this system were to operate without oversight (like the home health aide industry does), there would be rampant fraud. Simply input the correct things into the system, and out will pop money! Audits are performed yearly (I believe) by our local Department of Mental Health. I assume this is a state function in real states (I live in DC). DMH reviews a sampling of our clinical notes. Whatever percentage of that sample does not pass the inspection, Medicaid and Medicare recoup the costs. For example, if 5% of our notes are audited and we have a 40% failure rate, 2% of our total revenue is taken back by the government. The standards by which notes are graded are not published, but there are rough guidelines that my agency is attempting to implement that lead me to believe that there is some knowledge of expectations. So, my agency is graded on an unpublished rubric (or the whims of auditors, perhaps) with some guidelines that are discernible beforehand. This has left us in a pretty stable financial situation compared to other organizations.
Unfortunately for my company, this auditing regime will not be in place for much longer. Because of the constantly worsening fiscal situation in the government, auditors need to recoup more and more of the money they have paid out without explicitly cutting anything and all under the guise of preventing waste and abuse. Within the next few years, the failure rate of billable notes will not only be applied to the sample of notes in the audit, but the agency's total billings. Using the same numbers as my previous example, 40% of our billings would be taken away by the government and we would likely be bankrupt within the month. The regime our billing model was built on will be fundamentally changed, and our organization must change with it.
A few points on note failure make this situation even more dire. The longest notes are also those most likely to fail an audit (think about my example with Ralph). So, the notes from which the agency derives the most money are also those it will likely lose in the future. To compensate for this, we are encouraged to divide up our service tickets into chunks of time, each becoming a note unto itself. Adding further to the time of writing notes, an comprehensive agency guideline has been produced to increase overall note quality. While this is actually useful in many different ways, one of its consequences is that case managers spend more uncompensated time of their workday completing notes instead of working with clients to make that productivity quota.
But what does note auditing actually measure? No auditor actually checks to see whether people are with their clients for the exact amount of time. Nor do they check whether the interventions mentioned in the note match with what actually happened. Heaven forbid if audits were intended to judge quality of services. Auditing is subject to test-effects. Learn the right way to arrange some thoughts and you can meet your productivity quota--regardless of what actually happened in real life.
This is fraud. It's one of the worst things I have encountered in my almost two years as a case manager. Most case managers know it as either "rounding up" for hours in service or as "making shit up." The better of our peers will round up to the next increment for billing, as DMH thinks everything between 8-22 minutes only counts for 15 minutes of service. The worst of them will work 5 hours a day and submit 12-hour work days that any auditor would balk at (you know, if they looked at patterns in individual case manager's notes). Just how prevalent fraud is in case management is an interesting question. I'm nervous to just talk about it here. I'm pretty sure most of my peers would rather admit drug use in a survey than fraud. It's an incredibly difficult thing to quantify. An unscientific and extremely limited guess from intuition alone would put that number at around 20% of all case management billings in my city.
Why do practitioners commit fraud? Oddly, it's not for profit. Whereas a doctor who charges for unnecessary services or pads his billing is usually looking to line his pocket, case managers are not directly reimbursed for their services. Most are salaried employees whose billings are taken by the organization as a whole. Individuals generally do it because there is simply not enough time to do all of that work. And though the hours in the day and the pay has not changed over the past few years, the requirements for billable hours has increased secondary to cost control measures from the government. As the government compensates and recoups more costs, the organizations will find ways to adapt to the new environment and inflate their costs to survive. Like the struggle of hacker vs. security professional, the dance of cost inflation and cost control will continue on in perpetuity until our social spending hurls itself over a precipice.
It is the structure of the system itself that is unsustainable. In addition to the problem of fraud, organizations rely on Medicaid and Medicare for funding, which pay the lowest rates for mental health workers (and set the floor for private insurance reimbursements). Yearly reductions in these rates are commonplace and are expected at case management agencies. Those expectations, in turn, are manipulated by the government who will often make the fiscal situation seem more dire than it actually is (20% cuts!!) so that the actual reduction (only 10%) will seem less bad (and the result of hard work by people fighting for those who help people in need!!!) Playing with expectations in this way has many effects on individual case managers:
- organizations may raise productivity requirements on case managers, further incentivizing fraud
- case managers will be less likely to provide services to clients that they cannot bill for
- they will think of clients in terms of the DSM and deficit-based model
But this policy also affects the organization as a whole. How can organization plan ahead one year, if its leaders do not know how much money they will be receiving this year? How can they open new centers, bring on-line new programs, or invest their money in (for example) recovery-based housing if its gross revenues will be reduced by as much as 20% from last year?
The answer is that they must keep more money in reserve (and away from clients) than they would have otherwise done if those figures were stable or knowable and there were less regime uncertainty. Government control of mental health funds means less investment in innovative programs or continued investment in current ones. Money that would have been spent helping clients must instead be hoarded as a bullwark against the interventions of government. Maintaining an organization under these circumstances is incredibly difficult, let alone growing or starting one. This leads to less innovation and competition among mental health agencies.
Ultimately, we have a sclerotic industry based on unsustainable math whose last consideration is for the client being served.
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