The Dunning–Kruger effect
How the Dunning-Kruger effect will stop techies buying houses • The Register
The Dunning-Kruger effect is an example of cognitive bias in which "people reach erroneous conclusions and make unfortunate choices but their incompetence robs them of the metacognitive ability to realize it". The unskilled therefore suffer from illusory superiority, rating their own ability as above average, much higher than actuality; by contrast the highly skilled underrate their abilities, suffering from illusory inferiority. This leads to a perverse result where less competent people will rate their own ability higher than relatively more competent people. It also explains why actual competence may weaken self-confidence because competent individuals falsely assume that others have an equivalent understanding.
...Those in the FSA are, by definition, those not good enough, or not competent enough, to be making millions somewhere in the bowels of a bank. They are those only sufficiently competent to earn a pencil sharpener's salary, and that's why they are where they are.
Thus when you decide 18 months into your contracting life that you want to buy a house and find you cannot get the finance, you can nod knowingly and mutter 'Dunning-Kruger'. Those who made the rules were those who quite simply overvalued their own skills and knowledge, and thus made the rule that will trip you up.
We also see exactly the same effect right across the activities of those who would rule us. Take, for example, the EU's insistence that hedge funds must now be regulated. Hedge funds didn't have anything to do with the crash or the recession, but those making the rules in the EU are sufficiently incompetent that they've decided that because there were lots of people making lots of money, they must have had something to do with it.
Now we might think that there's a simple solution to this: string up the idiots from the lamp posts and let's get on with it ourselves. After all, we all know what should be done to make the world a better place. But that's where we come to the second part of our problem. We who do in fact know the right course of action don't think that we do: we suffer from illusory inferiority. So we just keep our heads down and get on with what we really do know how to do: coding, running large and complex systems, and, you know, just in general demonstrating competence and knowledge while those without either are the only ones who put themselves forward to try and run the world....
Quite what the solution to all of this might be is difficult. If it really is true that only the incompetent have the self-confidence to put themselves forward to try and rule us all, then it makes anarchy remarkably attractive.
Quite - and I'm sure you can supply your own examples....