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.
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.