I launched this series of posts by taking a brief tour of a regrettable society called Acirema, in which a race of experts called Masters, though a tiny minority, lorded it over a sub-race of non-experts called Slaves. We’re back, now, in America and wondering if Acerima society might offer a moral for us.
Not that long ago – say, one very long generation or two medium generations – America looked nothing like Acerima. The world was a much simpler place, and consequently experts were few and far between. Everyone except children and the feeble-minded made their own decisions about how to live their lives, for better or worse.
As an example, consider the interesting case of Albert Einstein, who wished to warn American citizens about the dangers of nuclear technology. He sent a telegram to a few hundred people he considered to be experts in fields such as law, medicine, education and so on and figured he’d covered all his bases. That’s how few experts there were in America in 1946.
But gradually over the ensuing decades experts began to proliferate. Sending a telegram today to “a few hundred” experts might cover the ones who live in a small Midwestern town. Civilized life has quickly become so impossibly complicated that no one can get through a day without the help of an expert in law, medicine, education, or whatever. The consequences of trying to make our own decisions and live our own lives has become too ruinous to be contemplated.
Who are these experts, and what sort of guidance do they offer? An expert is a person who, through law or custom, has earned the right to tell the rest of us what to do in some field of endeavor. This right is earned via long years of education and specialization in the substance of the field, years of experience practicing in that field, and extensive credentialing. There are minor exceptions, of course. Some areas of expertise are lighter on education and heavier on experience and credentialing – journalism, for example.
Regarding education, a college degree is by no means sufficient to qualify anyone as an expert in anything. These days, nearly 25% of adult Americans hold four-year degrees and college education has been dumbed down from an elite accomplishment to the bare minimum required to live a middle class life. For nearly two decades, the earnings gap between high school grads and college grads has been narrowing, for the simple reason that graduating from college now qualifies a person to do approximately nothing that he or she couldn’t have done with a high school education half a century ago. (Even at Google roughly one-sixth of the firm’s employees have no college degree.)
To be among the elite in America now requires, with few exceptions, at least a graduate degree in some field, professional or otherwise. A masters likely won’t cut it, since a masters degree adds less than 10% to a person’s annual income. You need a doctorate or a professional degree, either of which now bespeaks “expertness” in some field. Only 2% of Americans hold a doctorate and only 1.5% hold a professional degree. Those are the experts, the elite, representing the top 3½% of the population. That 3½% tells the other 96½% what to do in virtually every aspect of human existence that is worth quibbling about.
Since this society we’re speaking of – America – is starting to sound uncomfortably like that nasty place we visited last week – Acirema – perhaps we should look into the matter more closely. What are these areas of expertise we’re talking about, for example? Well, everything of any importance. Before we do anything of moment we need to consult – and obey – experts in the law, medicine, finance, nutrition, insurance, education, journalism, environmental science, IT, architecture, engineering, and so on and so on.
In many cases, it’s not just advisable to listen to what these experts have to say, it’s a matter of law. This is the case, for example, with experts who are judges, experts who are bureaucrats working inside the vast Federal, state and local regulatory systems, and, to a considerable extent, other kinds of experts whose advice, should you choose to ignore it, can get you fined, fired, or even imprisoned. Think of corporate auditors, accountants who give tax advice, human resources experts, and so on.
On top of the experts who must be obeyed, there is an almost limitless list of experts whose advice we would be very seriously nuts to ignore:
* You have cancer but don’t bother to undergo the chemotherapy/immunotherapy your doctor recommends. No one is going to fine you or put you in jail but you will probably die soon.
* You’ve sold your company and have millions of dollars sitting in cash. Your financial advisor recommends a diversified portfolio. You don’t have to do it, of course, you could invest all the cash in penny stocks. But you’ll likely go broke.
* Your insurance agent recommends that you buy a term life insurance policy. No need to bother, of course, but when you keel over your family might be destitute.
* You’re annoyed that the house your architect has designed is so expensive, so you cut many corners. You saved lots of bucks but in a few years your house will fall down.
So pervasive have experts become, and so oppressive can they be, that even a vocally liberal newspaper near and dear to my heart (okay, it was the Pittsburgh Post-Gazette) recently complained about the practice of Federal agencies hiring administrative law judges (another species of experts) to hear cases and hand down punishments. “Letting the same federal agencies make the rules, charge people with violating them and decide their guilt or innocence is a rejection of basic constitutional principles,” the paper editorialized.
In short, like it or not we are stuck with experts of every stripe telling us what to do in virtually every aspect of modern, complicated American life. I’m one of those experts myself, so I’m part of the problem. We’ll look at that issue next week.
Next up: Democracy, Populism and the Tyranny of the Experts, Part 3
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Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.