Extending the Peter Principle for General Competence

The Peter Principle is a management concept posited by University of Southern California professor Laurence J. Peter in the late 1960s. The principle states that employees get promoted based on performance in their current roles, rather than on their qualifications relevant to their intended roles. Therefore, employees stop being promoted only when they become ineffective in their current role and “managers rise to the level of their incompetence”.

Peter Principle diagram

I think the Peter Principle can be applied not only to career advancement, but also to overall life success. As independent AI research Eliezer Yudkowsky puts it, “One of the major surprises I received when I moved out of childhood into the real world, was the degree to which the world is stratified by genuine competence.” So if we were to generalize the Peter Principle to life broadly, we might say that the amount of overall life success people see (i.e. financial, emotional, and psychological) rises to the level of their incompetence (it’s a clunky statement that will be more clearly rephrased in the last sentence of this article). Making an observation about a CEO conference he attended, Yudkowsky claimed that:

 

“These people of the Power Elite were visibly much smarter than average mortals.  In conversation they spoke quickly, sensibly, and by and large intelligently. When talk turned to deep and difficult topics, they understood faster, made fewer mistakes, were readier to adopt others’ suggestions. No, even worse than that, much worse than that: these CEOs and CTOs and hedge-fund traders, these folk of the mid-level power elite, seemed happier and more alive.”

Obviously, this is anecdotal evidence, but it seems true in every case in which I’ve interacted with folks from the power elite. Whenever I’ve encountered families who own sports teams, they always come across as abnormally wealthy, happy, beautiful, and well-adjusted. They simply seem like better humans, practically closer to aliens than to people.

The same sense hits me whenever I meet wildly successful founders or their descendants (within 2 -3 generations). And if we believe that intelligence (read: general competence) is genetic, then it makes sense for parents and their children to be more successful. If a freakishly competent person aims to meet a significant other of similar intelligence, they’ll be pretty well off to begin with, and their shared intelligence will likely be compounded when they have children.

But this reveals something we as a society don’t want to admit. Yudkowsky states that the last thing the masses want to hear is that an elite “who is wealthier than you, is also smarter, happier, and not a bad person morally.” While we don’t want to hear it, at least anecdotally it seems to be true. Ultimately, if the amount of overall life success people see rises to the level of their incompetence, those who have extreme general competence will accrue exorbitant amounts of success across numerous areas of their lives.

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