What is employment? And what is the key difference between an employer and an employee? The employer provides the money and the employee provides his services. The employer decides what the employee should do, and the employee does what he is able to do within the larger framework set up by the employer. The employer can ask the employee to leave, and the employee can leave himself. But the employee can never ask the employer to leave. That is because the environment is under the control of the employer. Imagine this conversation between Mallya and his CEO. “I think you are a bad employer, rather than leave myself I am firing you”. “But” Mallya would reply, “you can’t fire me because I own the building we are in and also employ the guard who decides who can enter this building”. The poor CEO therefore cannot do much here but leave himself, at great cost to his own income and lifestyle.
When the employer throws out an employee, all of his income gets impacted. When the employee resigns, some part of the employer’s profitability may get adversely impacted and therefore some of his income also gets negatively affected. However the employer still gets some profits from other employees. Therefore the employee has greater income and lifestyle dependency on the employer.
So not only is the employer less dependent on each employee for maintaining a good lifestyle, the employee cannot take it away from the employer. Therefore the employer has greater power over the employee.
After all that onion skinning, lets get to our high caste professionals.
Take lawyers for instance. Through the duration of a problem/case the client cannot really replace the lawyer. It is a rare client who would resort to this. Why? Because a successful outcome requires many different arguments and processes that are all a part of a single strategy. Changing legal help midstream is fraught with dangers. At the same time, the lawyer can leave midstream with no skin off his back. In other words, the client has much more to lose if the relationship falls part. The lawyer, ladies and gentlemen, has power over his client through the lifespan of a legal process. I call this, owning the client.
I always wondered why lawyers like Ram Jethmalani are so revered. As far as I know he loses most cases, but somehow when people are in extreme distress they love to go to him for help. The likely loss of cases Mr Jethmalani fights could be either due to the fact that he takes on cases and people who have little chance of winning, or that he has poor legal skills. Either way, it is heartening to note that he can get away by charging quite a bit for his appearances. In other words, no one can really tell whether Mr Jethmalani is a good lawyer or not, just the fact that judges hear him out is good enough for people to trust his skills. Because if among a sea of lawyers there are only a few that the judges listen to carefully, they must know something that the clients do not and smartest option is to go to such known faces/names. In other words choice is rather limited in the legal profession even though there are thousands of lawyers. Therefore, there are few lawyers that the client can go to for his specific problem, and when he does find a lawyer, the lawyer eventually own him.
But there are thousands of lawyers, aren’t there? True, yet not true. Yes there are many people who have a degree. But not everyone can practice everywhere. More importantly, different types of lawyers specialize in different things and the Bar council also limits some activities. Taken together, I can’t just get anyone to fight my case if I get framed for killing my business partner and wife. The person has to have the right reputation. He needs the right networks with other lawyers. He needs to have a good reputation with the judiciary as well. Therefore though there are thousands of lawyers, only a very few get to argue the important or the tough cases, and only a few are experienced enough. Consequently the range of fees in the legal profession are astounding – the topmost lawyers (experienced, well branded ones) charge in the crores per hearing, while the lowest in the hundreds – a factor of a 100,000.
Lack of competition combined with ownership of the client both essentially mean that consumers cannot chose adequately – either before or during the duration of a case. When choice gets limited markets naturally fail. When markets fail, economic justice is impaired. But when markets fail in the legal profession, all of justice is diminished.
The same problem also works in the medical profession; and indeed with all high caste professionals. Notice how people talk to doctor sahib. ‘Ji doctor sahib, yes doctor sahib, more tests doctor sahib? Thank you so much doctor sahib, you saved his life doctor sahib…’. It’s quite distressing really – how we treat a service provider. Meanwhile the doctor, who may have graduated with 40% and a compartment, struts around ruling on people’s lives. No one dare question him; no one says can you discuss this with another doctor before prescribing? All he gets is deep reverence that Indian’s typically only reserve for the Sachin Tendulkar.
But patients have been known to change the doctor midstream, and even if they don’t, they are quite likely to get a second opinion. Consequently the client in the case of the medical profession can exercise a limited amount of control on the service provider. But this control is quite limited. Imagine if you are going to get an appendicitis done though you don’t have a stomach ache. “Doc sahib, my stomach is absolutely fine; it’s just that my scrotum is itching”. “But an itching scrotum is a rare case where dirt in your appendix seeps into your blood and gets into the scrotum”. The rarer the disease the more health care become important and I have a strong suspicion that both patients and doctors love the theatrics associated with rare diseases. Anyhow, once the disease is well set, doctors also settle in and start to own the patient. The poor little market mechanism we love so well fails completely.
So, high caste professionals do own their clients. What is considered to be a service actually is not one. It’s a power and ownership game where the market mechanism is all screwed up. So what is the solution? A very different form of regulation. Also I will take up the solution, using the teaching profession as a hook before I close this series.