Hacker News Reader

Comment by RationalDino | Hacker News Reader

Patio11 is the best resource that I'm aware of to understand how our institutional world works. And its biases. Over and over again it is built in a way that incentivizes some behaviors, and doesn't incentivize others. One behavior that is always incentivized is that the professional and managerial classes should always have prioritized access.

This article walks through it in how banks work internally. Much more painful is https://www.bitsaboutmoney.com/archive/the-waste-stream-of-c..., which shows how rules that supposedly protect poor people from abuse, in practice only help those with access to the skills of the professional and managerial classes.

I wish there was a way to summarize his point of view and explain it to people. Part of the problem is that every system where it happens is very complicated. And the complications are exactly why you need professional and managerial class skills to get priority access.

View on HN

> patio11 is the best resource that I'm aware of to understand how our institutional world works.

As a former CTO for the Americas region of one of the world's largest banks', which owns consumer banks and divested one recently, I couldn't comment here on the prior article that he's writing about, but I have linked this particular patio11 discussion to a few people.

Take from that what you will.

// Caveat: @patio11 has published some takes this year that are less forwardable (mostly asserting reasons or rationales for things that ring true at several layers down in a bank, but are not actually what's at play). I suspect it's partly from the level or siloing of who he's interacting with, and partly from the nature of some types of banks he may have spent more time with, rather than other types of banks, such as G-SIFIs:

https://www.fsb.org/work-of-the-fsb/market-and-institutional...

That said, industry executives interested in improving things would do well to read all of it, because "perception is reality", as seen by @patio11 through a different lens than usual.

Even if differently attributed, you can likely derive what you'd need to work on to alter that perception, leaving your bank the better for it.

It's absolutely great how @patio11 managed to recreate exactly the same system within stripe despite being fully aware of it.

(I save up my karma points precisely so I can burn them on comments like this.)

I'm not sure which part you are referring to by "exactly the same system", or to what extent patio11 is personally responsible for it.

However listen to his explanations of the incentives, benefits, and downsides. Then remember that he was working within a company that had the exact same incentives (eg same regulatory regimes), who was going to be hiring people out of the same financial system. And remember that there are parts of this that he think really make the world better.

Therefore the expected result really should be, "Somewhat better iteration on the basic thing that everyone else does." And so it is no surprise that it would include enough of what you don't like that you'd see it as "exactly the same system".

My impression of what he wrote is that it's an explanation of the status quo, not a denunciation of it. In his conclusion:

> Although it certainly doesn’t feel like it to people who hit edge cases, the tiered support model is a technology which took us decades to popularize and which made the world much better. It brought down the cost of financial services and supported product innovation which would have been impossible under the mid-century bank staffing model. We could not have credit cards or discount brokerages without the tiered support model. The biography of Charles Schwab makes this point persuasively at considerable length: competent telephone operations were instrumental to bringing equity ownership to the middle class. You should prefer a world with credit cards and discount brokerages to one which doesn’t have them, even as you listen to hold music occasionally

Tiered support is here to stay because tiered support is cheap and resistant to the "unintelligent customer DoS" (my words, not his). As he points out, you can have professional troubleshooters with the capability, authority, and expertise to troubleshoot the problem, but their labour costs in the hundreds of dollars an hour.

I personally think there is a reasonable model of the world where customers explicitly pay a hundred dollar fee to have a highest-tier escalation to the office of the CEO/equivalent troubleshooting team and have them take a look at your case, but this is a model that has not yet been developed or in wide use anywhere.

I’ve been having a fun ride reading “QualityLand” [0] .

In that world - those who have QualityPoints can exert far more escalation force on all parts of their life (change the traffic signal now for 10 units) than lower level folks. Your comment reminds me of a world where paying fees gets you faster and better access. Sadly - Sounds familiar.

[0]https://www.bookbrowse.com/reviews/index.cfm/book_number/406...

This sounds like effectively the same premise as Doctorow's Down and Out in the Magic Kingdom.

Fastrak anyone?

> there is a reasonable model of the world where customers explicitly pay a hundred dollar fee to have a highest-tier escalation to the office of the CEO/equivalent troubleshooting team

It is tricky. On a first order I agree with you, but then i think about second order consequences: What if the escalation route becomes profitable? Will that incentivize the company to keep the pain points, or perhaps even engineer more of them?

Also, would it be clear what does the money pays for? Imagine a situation where the computer says no (that is the system makes a decision adverse to the customer’s interest, such as closing an account, not approving a loan, security freezing assets etc), and the costumer pays the fee to get it escalated. The CEO office person reads the case, applies their troubleshooting skills, and they independent of the computer come up with the same answer. Now from the point of view of the costumer it feels they paid hundreds of dollar for nothing. From the point of view of the company they gave the customer what they promised: spent valuable resources on escalating the customer’s complaint. If they give the fee back to the customer they are loosing money, if they don’t they further antagonise a bad situation. Which can have reputational effects, and or wasting even more resources.

And this might sound like an edge case, but if the system is well operating these kind of cases will be dominating. Simply because if the CEO’s office overrides the normal processes too often then either they are profiting from the escalation route (see first point) or the normal system is faulty.

How would you dodge these two bullets?

>I personally think there is a reasonable model of the world where customers explicitly pay a hundred dollar fee to have a highest-tier escalation to the office of the CEO/equivalent troubleshooting team and have them take a look at your case, but this is a model that has not yet been developed or in wide use anywhere.

This already exists in a sense. High net worth clients/well established business clients with long term relationships do get priority remediation and troubleshooting. The cost is just much higher than $100.

People call it "premuim banking", and it's a widely popular thing that costs not that much

The problems with tiered support are back to where all problems come from. Humans.

As someone that's managed technical teams for 3+ decades, I've seen the deterioration, first hand. It's all about costs/profits.

C-suites view support (IT in my case) as a cost-center, without seeming to understand that our infrastructure is what all revenue travels over. We are a cost, but a cost with a purpose. In the pursuit of ever-higher numbers, they continue to replace local staff with 3rd party entities who are incentivized to close calls, not solve problems. These 3rd parties often have wholly unqualified staff. In some cases, the staff is qualified, but doesn't have the access or the information required to address the issue.

Let's not go to paid access to support. With humans involved, in less than a decade, there will be 1 person answering the "poor folks" line, that you'll wait for 2 hours to speak to, while being told every 30 seconds just how important your call is. The rest of support will be "generating revenue" by resolving problems for better-heeled clients.

> C-suites view support (IT in my case) as a cost-center, without seeming to understand that our infrastructure is what all revenue travels over.

I think that's well understood as cost-centers go. What's also understood is that improving that infrastructure beyond a certain point doesn't change how much revenue travels over it.

What's not understood is 100MB switches are OLLLLDDDDDDDD and outdated, and in some cases, the reason IT can't get your radiology image to transfer between DICOM servers in a reasonable amount of time.

It works, so it doesn't need to be changed is how most infrastructure deteriorates. Ask me how I know this. :)

That's not in conflict with what I'm saying. Costs centers require a certain amount of investment to ensure the business runs efficiently. If you under fund it, the results are often catastrophic. However, if you over fund it (as in, put in more money than is needed to keep things working properly), there's generally no additional positive impact on the bottom line. So, from the business side, your main goal tends to be to find ways to keep cost centers running efficiently with less money... without inviting disaster.

Old, under-performing and flakey switches do have a negative and potentially disastrous impact on the business, but if you replace the network with "gold-plated" high-performance 100GbE switches, you're not likely to see much more upside than if you just had properly sized and maintained switches.

what he do?

Human organizations are, strangely enough, natural systems, which are notoriously hard to control without making them worse. It's one thing to know how a beaver dam works; it's another to muck about with the river hoping to come up with a better dam.

Seriously someone should create Kubernetes - but for company-building.

Are you confusing Patrick Collison, who cofounded Stripe, with Patrick McKenzie, who joined years later to work on documentation?

This was my thought. This write-up is for understanding a system not to fix it, but to abuse it and profit from it. It's sort of black hat in a way.

Tangential: the lead picture in the article linked in this comment immediately came across as AI generated, whereas the one in OP's article did not: I had to go back and look at it again to realise that it too is AI generated. It is quite complex, similar to the human drawn abstract art one might find in an Atlantic or Wired or New Yorker article, the garbled text nearly the only thing giving it away. The article in the comment is from August 2023, so the difference in quality represents only a few months of progress (DALL-E 3?).

Or maybe they're from the same source, and the author just chose different aesthetics for the different articles. Quite nice, in any case.

> which shows how rules that supposedly protect poor people from abuse, in practice only help those with access to the skills of the professional and managerial classes.

Maybe the world's problems and solutions are inherently too complex for someone without those skills to have any hope of navigating. Maybe the only real solution is to use Patrick as an example for everyone and ask/demand that professionals spend some amount of time advocating for people less fortunate/educated/knowledgeable than themselves?

I also love Patio11's writing - but the formal thinking in this space is generally within the bountiful sub-disciplines that exist between and within Anthropology and Sociology. James C. Scott is, among other things, an Anthropologist[1].

Social scientists of various stripes write about these kinds of things quite often. I don't know much about the banking sector, but there are lots of authors writing accessible, detailed books that look into the intersection of politics, technology, society, identity, and other factors.

I think part of what makes Patio11's writing so attractive to the HN crowd is that he writes with technical rigor in a way few social scientists can manage. A lot of social science is, in my opinion, nibbling around the edges of a lot of the "stuff" in digital worlds - but there is a lot to get through and it's not a huge field! So reading a lot of the source texts can be kind of frustrating: good stuff, but if they're describing a field you work in there will probably be parts it seems like they got wrong. Patrick, on the other hand, does get the details right - and the general sociology.

[1] He's also been a CIA asset! A man of contradictions (or patterns - there are a surprisingly large number of good Anthropologists who are arguably bad humans).

I've found these blog posts of his to be like Moldbug's - compelling in a way, consisting mostly of true statements, but also trying to aggressively push a very particular worldview on you. I would advise mixing him with other sources and taking care to be sceptical.

It's very verbose and self assured. You might enjoy it the first few times but I don't anymore.

Here's my take at a summary: systems designed and implemented by the enfranchised, regardless of intent, invariably are biased against the disenfranchised.

agreed, he has a great piece on japans system

Reply on news.ycombinator.com