When amateurs outperform professionals, there is something wrong with that profession.
If ordinary people, with no medical training, could perform surgery in their kitchens with steak knives, and get results that were better than those of surgeons in hospital operating rooms, the whole medical profession would be discredited.
Yet it is common for ordinary parents, with no training in education, to homeschool their children and consistently produce better academic results than those of children educated by teachers with Master's degrees and in schools spending upwards of $10,000 a year per student-- which is to say, more than a million dollars to educate ten kids from K through 12.
Nevertheless, we continue to take seriously the pretensions of educators who fail to educate, but who put on airs of having "professional" expertise beyond the understanding of mere parents.
One of the most widespread and dramatic examples of amateurs outperforming professionals has been in economies that have had central planning directed by highly educated people, advised by experts and having at their disposal vast amounts of statistical data, not available and probably not understandable, by ordinary citizens.
Great things were expected from centrally planned economies. Their early failings were brushed aside as "the growing pains" of "a new society."
But, when centrally planned economies lagged behind free market economies for decade after decade, eventually even socialist and communist governments began to free their economies from many, if not most, of the government controls under central planning.
Almost invariably, these economies then took off with much higher economic growth rates-- China and India being the most prominent examples.
But look at the implications of the failure of central planning and the success of letting "the market"-- that is, millions of people who are nowhere close to being experts-- make the decisions as to what is to be produced and by whom.
How can it be that people with postgraduate degrees, people backed by the power of government and drawing on experts of all sorts, failed to do as well as masses of people of the sort routinely disdained by intellectuals?
What could be the reason? And does that reason apply in other contexts besides the economy?
One easy to understand reason is that central planners in the days of the Soviet Union had to set over 24 million prices. Nobody is capable of setting and changing 24 million prices in a way that will direct resources and output in an efficient manner.
For that, each of the 24 million prices would have to be weighed and set against each of the other 24 million prices. in order to provide incentives for resources to go where they were most in demand by producers and output to go where it was most in demand by consumers.
In a market economy, however, nobody has to take on such an impossible task. Each producer and each consumer need only be concerned with the relatively few prices relevant to their own decisions, with coordination of the economy being left to supply and demand.
In short, amateurs were able to outperform professionals in the economy because the amateurs did not take on tasks beyond the capability of any human being or any manageable group of human beings.
Put differently, "expertise" includes only a small band of knowledge out of the vast spectrum of knowledge required for dealing with many real world complications.
Nothing is easier than for experts with that small band of knowledge to imagine that they are so much wiser than others. Central planning is only the most demonstrable failure of such thinking. The disasters from other kinds of social engineering involve much the same problem.
Surgeons succeed because they stick to surgery. But if we were to put surgeons in control of commodity speculation, criminal justice and rocket science, they would probably fail as disastrously as central planners.
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