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Yes, I used "culling" specifically, because many think editing just means copy editing or proofreading (even those are separate functions).
Your experiment probably will work. What's lost in that mix is a training ground for the next crop of editors. If editors are all working freelance at home, you've wiped out learning through direct training as well as by osmosis.
I'm not saying today's publishing industry is ideal. It's just that there are tradeoffs in the transition, and we should be aware of them.
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