Sophisticated market economies require their participants to possess increasingly specialized skills. Gone are the days of polymathic craftsmen and service providers; the “barber-surgeon” of the Middle Ages is no more. As modern economies have grown larger and more complex, the multiplicity of economic models, intricacy of value chains, and penetration of technology within every industry all contribute to deeper, highly specialized expertise having become more highly valued than broader, generalized knowledge.
To the extent narrow expertise is put to commercial ends, it can be monetized to considerable advantage on behalf of employers or oneself, allowing for significant wealth accumulation. The last 25 years have witnessed the creation of many large fortunes in precisely this manner, and the fact that economic rents increasingly inure to specialists has largely passed without particular notice.
These developments leave a critical question unasked: can too much functional or professional specialization ever be a bad thing for society?
Contemporary nation-states are not merely economies, they’re also polities, and nearly all market economies entail some degree of democratic participation. Concerns over how money influences the democratic process are not new, nor are worries about the impact of high and increasing degrees of wealth stratification on social cohesion. The perceived outsized influence of wealthy political donors, concerns about regulatory capture by favored oligarchs and their companies, and the proliferation of self-funding candidates who risk crowding out voices of lesser means all risk undermining public faith in democracy. As economies become increasingly sophisticated, opportunities for concentrated wealth to exert influence inexorably rise.
This influence extends not only to government, but to the elite institutions which play a critical role in maintaining a healthy civil society. NGOs, foundations, universities, think tanks, certain media outlets, arts, and entertainment — these and myriad other organizations rely on the benefaction of the uber-wealthy.
Moreover, as we live in an information-saturated age that has recently experienced a great leveling associated with advances in computing power and the ubiquity of social media, the lives and preoccupations of the rich are no longer a mystery, with partially obstructed views available only through social registers and the society pages. The great fortunes created in the last several decades in technology and alternative investments were neither created nor do they exist in obscurity. Notwithstanding the denigration of sundry traditional values and sensibilities in the timeframe concurrent with a sharp increase in the economic rewards conferred upon those with narrow expertise, the American public still rightly prizes entrepreneurship, along with the commercial success and wealth earned through one’s own labors.
Unfortunately, the confluence of immense wealth (and related wealth concentration) realized through increasingly narrow specialization, the respect accorded the achievements which give rise to the economic fruits of such expertise, and the influence gained over the public sector and elite institutions all serve to aggregate enormous clout to, and confer perceived moral authority upon, what are in many cases intellectual one-trick ponies.
Examples of this are not difficult to find: Bill Gates, a software entrepreneur, has chosen in his emeritus years to focus on public health issues. Larry Fink, the chairman and CEO of Blackrock, the largest investment advisory firm in the world, has taken an abiding interest in climate change. The recently concluded World Economic Forum in Davos, as is its custom, featured panels and conclaves covering a wide range of issues, attended by business and financial elites, designed to address the (in many cases non-commercial) policy challenges of the age.
One’s professional success, particularly in commercial endeavors, does not necessarily impart expertise nor particularly unique insights into out-of-area disciplines. This is not to say the non-specialist has nothing to add — to the contrary, the wider lens available from a distance can often allow one to see past groupthink and offer outside-the-box perspectives — but these contributions are not as valuable as legitimate, earned expertise. We all have opinions about matters with which we have only a passing familiarity and possess no expert knowledge — and a functioning demos requires well-informed citizens with general knowledge of a wide array of issues — but the conceit that deep expertise is transitive across disciplines is a dangerous one.
Celebrity causes provide an instructive contrast with such “expertise drift.” One can appreciate the passion of an actor or recording artist with firm convictions about some hobbyhorse issue or avocation, but only in rare cases would one believe that said celebrity is proffering an expert opinion about the matter in question.
In a three-decade career in financial services, I’ve observed the application of non-transitive expertise up close. The same bull-headed certitude that allows financial services executives and institutional investors to succeed in their chosen fields can spill over into other areas. Successful investors, in particular, often possess a highly specialized and narrow form of intelligence; uomo universale need not apply. While I’d happily engage such professionals for their asset management expertise provided they respect appropriate fiduciary guardrails, I’m not terribly interested in their thoughts on gun control, climate regulation, or the war in Ukraine, notwithstanding the fact they tend to hold these views with the same level of conviction with which they maintain a public securities or private equity investment position.
It is curious that this phenomenon has arisen in an era in which expert opinion more generally is increasingly derided (with the COVID-19 public health response offering only one prominent example); this loss of public trust in expertise is perhaps another consequence of the flattening of information and media. Public perceptions notwithstanding, this much is clear: credentials aren’t expertise, legitimate expertise is too frequently harnessed to ideological ends, and authentic expertise in any given field is non-transitive. To maintain otherwise will only serve to further erode any authority “expert opinion” still retains.
Only a Luddite would seek to roll back economic progress and devalue the expertise associated with narrow intelligence. And these skills should of course continue to earn market-based rewards for the value they create. But governments, institutions, and society more generally should take the out-of-area policy prescriptions of such “experts” with a healthy dose of salt — and for its part, the Davos crowd could stand to imbibe an equally generous and well-deserved serving of humility.
Richard J. Shinder is the founder and managing partner of Theatine Partners, a financial consultancy.
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