News & Analysis
Elite 'Cult of the Expert' Erodes
The New Year usually starts with a new set of resolutions about things to do and what needs to be avoided. While most make resolutions concerning their physical health, not much attention is given to financial health or investment planning, say experts. – Times of India
Dominant Social Theme: It is necessary to listen to an expert.
Free-Market Analysis: In this article, we want to examine the dominant social theme of "expertise." This meme is much in the news these days because the Internet itself is making the elite's promotion of the "expert" increasingly untenable. Whether it is vaccinations (see other article this issue), archeology (a network of drowned cities around the world that are as yet resolutely unexplored) or high-finance itself, the truth-telling of the Internet is undermining the common wisdom and providing alternatives to expert perspectives.
It is important for investors, especially, to understand that the cult of the expert is gradually being eroded. This has important social consequences because modern Western societies are built around the idea that certain individuals have wisdom beyond others. Television is an incredible promoter of the cult of the expert and women are a special target because they are more often at home during the day. Daytime TV, in fact, bombards women with "experts."
The idea is to inculcate the perception that one is not qualified to make life decisions at any level. TV talk shows are to be seen as ministries of helplessness in this regard. Human action must not be taken before the appropriate professional is consulted. As the cult of the expert erodes, society will change. Even fundamental building blocks may begin to be challenged – and economic opportunities may change radically as a result.
Let us begin with the most ubiquitous of them all, the "financial expert" – see article excerpt above. The later 20th century saw the rise of the financial planner who attempted to weave together a variety of investments with a larger life-plan to create a seamless web of profit producing instruments. Financial planning emerged with the advent of the personal computer and blossomed with its computing power. As computers were able to do more, so was the financial planner and plans became more elaborate and so did financial planning projections.
In the later 20th century, certain planners began to adapt investment theory to financial planning. Instead of preaching diversification via arbitrary formulas, these planners, advisers and brokers offered asset-allocation perspectives based on modern portfolio theory. The idea was to generate a risk/reward horizon and then an investment protocol that tracked it. Only a few fund managers could be used for this discipline however as the funds themselves had to be developed within a proprietary context. Someone who used non-specific funds was ultimately performing asset-allocation rather than asset-CLASS allocation. The latter discipline was held to be more accurate than the former.
Of course the crash of 2008 knocked down the asset-allocators just like the asset-class allocators. It was proven basically that there was no difference between them; the market itself did not discriminate. One of the only investments that did well in the 2000s was precious metals – gold and silver. Gold has appreciated something like five-times from its initial price early in the decade. This did not help investors who were not invested in gold because their planners, advisors, allocators and brokers had not included it in their portfolios as it was not easily securitized.
We can see from the above evolution that current-day mainstream "experts" are in large part of a function of the TECHNOLOGY that is available at any given time. Financial planners emerged when personal computer power made individual analysis possible. Human beings are above-all tool-using creatures. An investment "expert" – as we can see from the above overview – is one who makes use of cutting-edge tools to create hypotheses that may or may not actually be viable.
Wall Street produced tens of thousands of investment experts in the late 20th century, but much of the expertise unraveled in 2008 because the central-banking-based monetary system itself proved to be flawed. In fact, mercantilist central banking always produces too much money over time and too much money creates tremendous booms and ruinous busts. The Western economic system was essentially bankrupt in 2008 and has not recovered a great deal since them despite the injection of tends of trillions in paper money by panicked central banks.
The Western economic system is generally based on expertise, but as our brief review of the modern financial industry shows, expertise and tool-making (and its utilization) are closely linked. Is it possible that there are no "experts?" One could argue that certain kinds of expertise are a function of power-elite strategy rather than fundamental competence. Seen from this perspective, Western jurisprudence itself is built around the priorities of the power elite, and demands for an ever-more concentrated (centralized) civil society.
There are other kinds of expertise that parallel economic expertise. Medical expertise is largely built around a base of pharmaceutical prescriptions because the power elite is much invested in Big Pharma. Scientific expertise is concentrated in areas that support the power elite's portfolio as well – military products, especially. Advertising expertise involves the promotion of a portfolio of multinational corporations. Political expertise concentrates on ways to advance a false right-left dichotomy that proposes public solutions to private problems at every level. Historical expertise often revolves around the "great-man" theory.
We can see in so many areas that the expert is merely the individual who has acquired the training (and degrees) necessary to properly promote the agenda of the Anglo-American power elite. It is an agenda that revolves around centralizing power and authority in order to expand global governance. When people refer to an expert they are referring to someone who has obtained advanced degrees in educational disciplines that promote the elite's centralizing agenda.
Conclusion: It might be said that the only real expert is the individual himself – and the only determinant of expertise is the way a decision interacts with the market in a real-life context. In a sense, therefore, experts and expertise are a kind of dominant social theme – promoted by the elite. People are taught to defer their own "human action" to those who have advanced degrees and illusory authority. Doctors, scientists, lawyers and politicians – all are to be seen as experts, repositories of hard-won knowledge not available to the ordinary citizen. But in the end, the Invisible Hand will have the final say, not the "expert." The market is the final arbiter. The higher authority is natural law, not an advanced degree.
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Posted by Jemlyn on 01/16/11 06:53 PM
Thinking of the experts in terms of modern medecine: sure they have learned to do fantastic things but why should it take such a large percentage of the GDP? It was not so in earlier times. The system uses fear tactics to frighten the public into seeking testing when they are well and seeking treatment for every tiny annoyance. Then, while they have you in attendance, they write a prescription (which will cause side effects and will be followed by another to counteract the first) and sign you up for further appointments and co-pays all of which enriches big pharma, the insurance industry, etc.
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Posted by Ryan on 01/12/11 01:49 PM
Here are some more "experts" in the UK.
It has a gigantic supercomputer, 1,500 staff and a £170m-a-year budget. So why does the Met Office get it so wrong?
Click to view link
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Posted by Ryan on 01/12/11 11:20 AM
To see this meme in action go to NPR (US state media) and search for "experts", sorted by date:
Click to view link
Hardly a story goes by without an "expert" cited.
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Posted by Ryan on 01/12/11 11:17 AM
My point was look at the experts bringing a central bank and other trappings to the engineered "secession" in Sudan.
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Posted by John Blenkins on 01/11/11 10:00 PM
@John Danforth. Very juicy article yesterday thanks I also
read the other food articles.India food price inflation at 18%,
Riots in North Africa, Certainly the poor get kicked the hardest
as a bigger proportion of there money is spent on food to stay alive.
Regardless of what the G20/G8 mouth commodity speculation is without doubt going to exacerbate prices forcing inflation
(possibly Hyperinflation) as oil heads further North.
Euro and Dollar on life support. Banging on about this since sept
unfortunately it don't look good,where will prices be in 3,6,12 months? I have a feeling events will see much discussion on these pages over the coming months.
Rioting students is one thing riots by the famished quite another.
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Posted by Ryan on 01/11/11 09:11 PM
Click to view link
At the beginning of November 2010 representatives of the north and south asked Switzerland to carry out a technical and comparative assessment to help them in the negotiations that would follow the referendum. In particular in the economic areas of credit, debt, banking system and currency.
Southern Sudan also asked, in the event of secession, for Switzerland's help in building its capacities to create a central bank and its own currency.
Last November we therefore sent an expert to Khartoum and Juba. Then on November 28 and 29 we organised a technical workshop in Bern for representatives of both sides to discuss these subjects, the continuation of economic relations between north and south, as well as other questions, for example economic contracts in the event of separation.
We made available experts from the economics ministry, the Central Bank and the National Archives as well as other external experts. The Sudanese were very satisfied with this assistance and asked us to continue this support in the future.
Reply from The Daily Bell
Your point being?
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Posted by MetaCynic on 01/11/11 08:09 PM
Maybe the definition of a real expert is one whose answer to almost every question is, "I don't know." Wise men are all experts in how little they really know.
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Posted by JOHN ROSSI on 01/11/11 07:25 PM
Introduction to professionals and great heroes to "jay". The basic course teacher, jay's father and many others. Jay arrived home from his eight grade class enthralled by new information received in class that day. The class was dedicated to a great military general assigned to the pacific theater of ww2.
The childlike enthusiasm was allowed to run it's course, awaiting fathers response.
Jay had been taught from an early age that regardless whether the response was in agreement or disagreement that there existed very few instances of total one side 100%, opposite side zero, thus expected a response regarding this great and professional individual.
The response was, "much greater harm and destruction of careers from generals to the lowest rank of commissioned officers, death to hundreds of thousands through arrogance, an egotistic attitude to both peers and the system of authority including the president of the united states of america".
Jay was advised to avoid any negative debate "as wisdom dictates the allowance of the tides to rise and recede it's normal phase and through the years take notice, withholding opinion thus weigh the negatives to the positive, question all". Jay has lived a full life admiring those men and women that had caused the least damage in the execution of the beneficial gifts to human kind.
Jay was taught that great and admired persons exist due to the lauding and acceptance of the lesser humans, this is not a reliable scale rather an emotional one. There are millions, perhaps hundreds of millions of great admirable, brave humans, seldom in high positions. A constant flood of information bestowed on the masses to provide the false gods to fill the empty minds seeking a fulfillment.
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Posted by j on 01/11/11 05:03 PM
and may the corporations of corruption be swept away, see link
Click to view link
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Posted by Arild Eide on 01/11/11 02:01 PM
@Gilbert Chapman "
I agree with you that Hayek and Taleb are two outstanding examples of "experts" who realise their limitations. Hayek even went so far as to name his Nobel Prize lecture "The Pretence of Knowledge" " that must have been a torn in the eye of the selection committee, the other prize winners, every wannabe prize winner, etc.
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Posted by Jonathan on 01/11/11 07:16 AM
Hi DB,
On a different theme .. Have you considered the destructive potential of HAARP weather modification and electromagnetic warfare.
Apparently there are probably a number of HAARP locations throughout the world, the use of which is believed to coincide with massive bird and fish kills in various regions. Such bird/fish kills occurred at the time of the Haiti earthquake, Indonesian tsunami and other 'natural' occurrences.
If the elite are desperate enough, this may be a feasible means to a rapid global takeover (in my fearful imagination, anyway). I would welcome your thoughts about this " I can't find a DB article on it. Thanks for your support.
Click to view link
Reply from The Daily Bell
Thanks for the link.
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Posted by AmanfromMars on 01/11/11 03:42 AM
"Experts are most often front men for the ruling elite meme, not honest seekers of cause and effect. Investors know this because they are always trying to invest in the next hot story, but are not usually nimble enough to bail out before it ends. They also do not know what a bargain is. Current example: US Treasuries " buy them and weep." .... Posted by Ranger on 1/10/2011 1:49:02 PM
With Uncle Sam forced to buy its own toxic waste/junk bonds/US treasuries, presumably because the markets know better than to continue buying into their intelligence failures and Ponzis [Man is getting smarter?] ......
Click to view link
..... and that crazy QE2 purchases policy is surely most accurately described as an insane, catastrophic and suicidal capitalist cannibalism, and if you accept the veracity of what you can read here ......
Click to view link
..... are things going down the tubes spectacularly.
I hope y'all have secured an advantageous vantage point for the show.
"Andrew Carnegie: Well, he was a poor boy who became a great steel maker. That's really something. It isn't all or nothing, DB. Life's a smorgasbord." .... Posted by Heuristic on 1/10/2011 2:46:36 PM
Hmmm ... Some smorgasbord you can eat and they are a treat, whilst others may contain dodgy meat which may be rotten to its core, Heuristic. And is this more or less true ....... ""We're all very different people. We're not Watusi. We're not Spartans. We're Americans, with a capital 'A', huh? You know what that means? Do ya? That means that our forefathers were kicked out of every decent country in the world. We are the wretched refuse. We're the underdog." -- John Winger, Stripes"
And Andrew Carnegie, himself a Scot immigrant/emigrant [for both nouns are surely appropriate] is well remembered for many things, with the least of them not being his shared pearls of wisdom, which are, if not more relevant today, then certainly as relevant as in his day. ..... Click to view link
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Posted by Tiamet on 01/11/11 12:43 AM
The experts destroyed Tesla, Schauberger,Rife, Reich, and many other brilliant independent thinkers, innovators, and look what we have now? Toxic civilization rather than one with free energy, freedom, and free money for commercial endeavors, business, exchange of products and services. What kind of people create derivatives backed by bets on paper instruments? Will we become crushed dixie cups?
Reply from The Daily Bell
No.
Reply from The Daily Bell
Great find. Thanks.
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Posted by Ingo Bischoff on 01/10/11 10:54 PM
@ MetaCynic on 1/10/2011 6:53:14 PM
I like your observation. When it is related to the experts trying to run a central banking system, one appriciates the futility of such attempt.
Natural Law is a wonderous thing. It sooner or later shows up all those cock sure "experts" for the "fools" they really are.
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Posted by Weeble on 01/10/11 10:39 PM
@ Zenbillionaire
I remember once going to a specialist who had the authority, judging by his wall hanging that stated he was a professional, to practise his skill like a connoisseur of culture. Hey, I'm getting the hang of it! That last word is growing on me . . .
Gone to pick up Lucy. . . remember to continue to think outside the box.
Click to view link
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Posted by LibertyBelle on 01/10/11 10:25 PM
@ Ranger:
Said with a smile..."Gentlemen"...??? Gosh, I realize I am in the minority around here, but, is it OK if I read too? or should I drop the "e" at the end of my name from now on?
@ DB: Aren't there any elf maids peeking over the conference table in that castle of yours Anthony?
Not being a touchy feminist, just thought Ranger's assumption was very funny!
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Posted by IndianaJohn on 01/10/11 08:09 PM
RIP. Howard S. Katz, 'The One Handed Economist'. Dec. 23, 2010 Mr. Katz rips 'em up real good (institutional economists), current and archives;
Click to view link
Reply from The Daily Bell
Thanks. Von Mises Institute has something as well. Here is our contribution:
When Alfred Kahn, Jimmy Carter's anti-inflation czar, was told by his political superiors never to use the word recession, he agreed to substitute the word banana; he was soon heard muttering about "the worst banana you ever saw." (NYTimes/Saffire)
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Posted by Ori on 01/10/11 07:52 PM
Good article.
I don't think the issue really lays down to " following experts" but to make them accountable for their " expertise". Very few expert have taken responsibility for their failure to properly warn the masses about the economic crisis and these same individuals are " praising" the actions taken by the government. There is no accountability. Worse, the few people that understood the current economic and financial paradigm still struggle to be heard by the masses.
Thanks to the internet, it is much more easier for them to express their views. Imagine how hard it must have been for the likes of Murray Rothbard, Mises and Harry Browne to spread their views only a few decades ago.
The establishment is crumbling, not because people are discovering their false precepts, but because there is no mean for them to manage the and control the flow of ideas from their competition.
As a matter of fact, when ones dare to click on the Click to view link website, it doesn't take too long for that individual to grasp the extent of his brainwashing ( I know I did 3 years ago.) The experts livelihood depends on the current power paradigm and the Power need the experts to give them an air of legitimacy; therefore, they will continue their work and it is our duty to muscle up until we win the final battle.
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Posted by Zenbillionaire on 01/10/11 07:37 PM
It so happens that I'm an expert on experts and I agree with the expert opinion of the Daily Bell.
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