On Experts...

The blessings and blindspots of subject matter mastery.

I love my collection of subject matter experts like some folks love a collection of cars or fine wine. It’s my own version of luxury. I’m passionate about the hunt for new sources of expertise. It’s true for many reasons, not least of which is the fact I have so very little of my own.

My collecting journey started some twenty years ago as a professional necessity, but over the years, it turned into simple passion. At this point, I’m certain I will never quit. Like any collector, I get excited - quite literally so - when I hear rumors of the latest new work product or interview just released. Even more so the discovery of a new source of reliable insight and information. My reverence for such things is total.

But perhaps even more than the sheer enjoyment and satisfaction of curiosity, I’ve come to truly count on this collection of experts over the years to help me understand the world around me and therefore to help me feel grounded in it - something that’s become increasingly important over the last decade or so as the tectonic plates have started to truly grind. It’s not a perfect system though and it never will be. There is a structural flaw in this collection that cannot be fixed simply by adding more. I realized that long ago, first during the financial crisis.

In times like this too, the structural flaw is visible everywhere around me. And so I say what follows with the deepest possible respect and the most profound gratitude:

They’re all wrong. Every last one of them. At least in one specific but vitally important and unavoidable way.

The reason is simple and it has nothing to do with a flaw in their work or their reasoning. It’s more structural than that. It’s a matter of perspective. That is to say we all struggle to see beyond our own. The more specialized the expertise, the worse this effect tends to be. The more commonly shared a consensus view is, the worst this effect seems to be.

The more crises I’ve lived through, the more I’ve come to notice again and again that there is always a difference inherent in the lens that any single subject matter expert sees through and the perspective of the U.S. government itself (or financial markets in aggregate, for that matter). There’s a mismatch.

Each expert is producing insights and research. The government (or the market), by contrast, is sythnesizing it all into a decision matrix. One can (and often does) find two completely qualified experts - masters of the same field - who look at the same situation and draw completely opposite conclusions. The government (or the market) has to decide which is right.

But the problem I’m driving at is bigger and broader than that.

By this I mean that an absolute master of one subject matter area may well know little about another of often equal or greater relevance. For instance, in the case of war and geopolitics, a master of military affairs with decades of experience and subject matter mastery may well know nothing at all when it comes to the internal plumbing and forces that move the Treasury or oil markets. The breaking point in the latter is perhaps when this war will end more so than the former. Similarly, an expert on financial markets may not understand well the capabilities or practical limitations of air defenses or naval assets and thus reach poor conlusions about what’s likely to happen or why. In most cases, very few of these masters is also an expert on the individual personalities or internal politics and history of this regional government as well as that one.

The same could be said recently, for instance, of the master students and practitioners of international affairs who seem to have lacked sufficient working knowledge of the energy business to know that the East-West pipeline across Saudi Arabia is deeply buried and the above-ground pumping stations can often be repaired in a matter of a few days as opposed to months or years. That single detail alone can wildly influence the conclusions drawn about geopolitical strategy and risk in war. Another example might be an oversimplified understanding of the relationships between the Houthis and Iran or the Houthis and Saudi Arabia or the United States. Poor assumptions here based on a lack of expertise or mastery can wildly swing a broader understanding of the conflict.

The broader point is that all of this stuff matters as part of a holistic landscape in matters of war - especially modern war in a highly-globalized and highly-financialized world. All of these considerations feed and funnel into the decision matrix facing policymakers in our government (and in our adversaries'). The reality is that it simply isn’t possible to be an expert in everything, certainly not if one devotes enough time to be a true specialist in anything. Good ones will incorporate insights from adjescent areas of expertise, but it simply isn’t possible to master, monitor, and know it all at once. There are invariably going to be blindspots. This is also why the best analysts are often very clear about what they don’t know and are usually very reluctant to express certitude.

It’s been my observation that intellectual humility is utterly required here, but is nevertheless rare. I think in some instances because even experts fall victim to a very common trap: they don’t know what they don’t know and a single flawed assumption underpinning an entire field of consensus analysis can so easily (and does so often) prove wrong.

I’d only add in support of an appeal for intellectual humility here, that none of us - none of these experts we get to hear from - have access to the full depth and breadth of classified information that top policymakers have, which is by its very nature some of the most crucial information and insight to have to be able to assess a situation accurately.

Moreover, this intelligence too crosses beyond and through all of these verticals. Even here, the vast majority of those with a clearance don’t have the full picture. Someone with access to military satellite feeds almost surely doesn’t see what somebody on the bond desk at the Federal Reserve sees. Both perspectives matter in a war such as this one. Both are points of risk and points of potential strength.

These inherent blindspots and gaps of cross-knowledge / cross-context differ immensely from the perspective of the policymakers actually making the decisions, whether in our own government or in our adversaries’. Each area of context is only one aspect of a greater whole. Each piece of context interacts with all the others. None stand alone as a consideration.

In essence, the perspective of any individual subject matter expert is not and never will be the same perspective of a well-informed government (separate and apart from the question of whether we have one right now). Point is, they’re inherently looking at fundamentally different landscapes. The best we can do, in my opinion, are often two (and a half) groups of experts: the veterans of the intelligence agencies who have made it their business to understand the cross-currents and interplay across many different verticals of knowledge. The other are commodity traders who have, by necessity, a similar professional need to understand as much broad context as possible. There was a time when I wouldn’t have hesitated to throw top journalists in there as well, but with the steady closure of bureaus around the world and the shrinking of newsrooms more generally, there are simply fewer folks out there who can truly dedicate the time needed to cover complex subjects constantly and comprehensively.

Perhaps the worse, however, are the pundit class in the West. It’s the political and market commentators most often seen on TV who I find have the least knowledge, insight, and curiosity, but the most certitude about what “we’re seeing”.

I observe this most often with economic analysts looking at policy like the trade war (or even Iran) and saying “this makes no economic sense”. Ditto for domestic political analysts. Perhaps it makes no sense through your specialized lens of analysis, but this focus may overlook the reality that fighting a hot war with China over Taiwan (or trying to fight a simutaneous war over Taiwan and Hormuz) makes even less sense.

If we look at the last twenty years of economic and security policy, it should be clearer than it seems to be that what’s good for maximizing economic growth (or winning the next midterm) may well be jeopardizing vital security concerns. Important consideration there, in my opinion, but it’s also not the job of an economist or pollster to think that way.

We need a broad view of context. Siloed expertise - as good as it may be - doesn’t give us that.

It’s been my observation over time that subject matter mastery and subject matter focus understandably leads military experts to see combat and deterrence with China (or Iran) primarily through the lens of military assets, platforms, and capabilities when one might well argue that the greatest deterrence and primary weapons and realm of warfare with both Iran or China may well involve currency pairs, liquidity depth, cash flow needs, and balance sheet strength.

I’ve written in the past about the difference in experience and perspective of being a curious and hard-working generalist (as many in intelligence and markets are by necessity) compared to narrowly-focused specialist. I am reminded every day reading about Iran why this generalist perspective can often lead sometimes to very different conclusions about what one is looking at. Finally, as I’ve argued previously, a generalist is what all heads of state must be by default. It’s how they must ultimately see things if they’re doing their job right. They must be well-informed across all verticals and taking a holistic perspective of the challenges and opportunities before them. That’s how they decide, ultimately, at least if they’re doing the job right.

It’s very rare indeed that their decisions in war can ever be influenced by considerations in one policy vertical alone (or that any action they take in one vertical doesn’t have knock-on effects for the others).

This is true for the U.S. government, but we’d do well to remember, I think, that it’s also true for the government in Tehran as well. We often aren’t seeing or thinking about the whole board, friends. We’re only looking at one part of the board or one category of pieces. And it’s very difficult indeed, in my view, to size up a chess game correctly when that’s the case. We’re not clueless, by any means, but I’d argue misguided certitude at this stage of war based on inherently limited perspective might be even worse than clueless. Caution and care is the order of the day.

As the great Mark Twain once put it, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”