Economist John Kenneth Galbraith is attributed with coining the term “conventional wisdom” in his 1958 book “The Affluent Society,” in which he discusses the disparity between public and private investment in a post-WWII America. Simplifying a central point, we as a society tend to put more value on cars, homes, jewelry and other status symbols rather than roads, bridges, parks, schools, libraries, the environment, etc.
Unpacking the reasons behind this phenomenon is a tall order and beyond the scope of this here humble blog, but I’d like to identify a few instances where following the conventional wisdom may lead one astray. Furthermore, technology and other structural shifts change relationships over time, making what was once “truth” no longer valid.
Which reminds me of the quote (debatably Mark Twain?): “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.”
The conventional wisdom tells us that stuff is good and not having it is bad. Status symbols (whether we can afford them or not) are signs of success. This indoctrination begins before conscious awareness through ever more insidious marketing schemes. Social queues confirm their value, creating an unvirtuous cycle.
On the flip side of the coin, social safety nets, investments in public projects are often portrayed negatively as hand-outs or wasteful malinvestments.
Home ownership can be particularly evocative, depending upon one’s personal experience. The conventional wisdom (from an American perspective) has been flipped squarely on its head. Just a decade ago, the US economy experienced the great recession fueled by a housing crisis. Previously, the conventional wisdom held that 1) housing prices never go down and 2) home ownership is the foundation of household wealth.
The greed of predatory lending practices and over-securitization by investments banks, coupled with the ignorance of consumers (and greed of speculators) created a perfect storm. Prices went down, in some regions of the US, precipitously, creating untenable situations for some.
Looking at the bigger picture, the implications of this implosion are more grave. The wealth generating machine of home ownership enjoyed by the baby boomer generation seems unlikely to be fully replicated by their millennial offspring. More young people are living with their parents for longer. Those choosing to rent rather than take on monstrous mortgages are increasing. These trends will continue to play our for years, as will their economic ramifications.
The conventional wisdom rears its ugly head when we look at habits and preferences around transportation . Why does it seem like everybody owns a freakin’ BMW? Honestly, what the heck is going on?
I can only speak from my own biased experience, based upon imperfect observational mental accounting. New England is generally a high cost of living area, with above average incomes. This aside, it seems like most are opting for newer, bigger, flashier automobiles than they need.
The public consumption side of transportation is a sad situation for many parts of the country, my own experience with Boston’s T (subway/bus/commuter rail) fits that description as well. Why is a public option such a nightmare in one of the preeminent cities in the country? I recall the delays, breakdowns, and service interruptions were commonplace when I commuted daily.
Why is the only affordable bus options to NYC and other regional cities necessitate the sketchiest vehicle know to mankind which may or may not catch fire somewhere en route? (I’m looking at you Fung-Wah)
Why don’t we have a high-speed rail option that spans the state from Boston to Albany, alleviating some of the daily congestion on the roadways?
In my mind, these are legitimate questions that continue to be kicked down the road.
The conventional wisdom as it relates to our education system may see the most abrupt about face in coming years. Society’s tacit agreement that a good education, coupled with hard work ultimately leads to professional and economic success is realized by fewer today than in previous decades.
That undergraduate degree is going to cost (your parents, future you or some other poor blank) well over $50k per year to attend a “good” college/university. That undergraduate degree no longer guarantees a job or a decent wage. Let’s not get into job stability or graduate school or pensions… it’s just too much…
Some (I think and hope) are making noises questioning the merits of such a (rotten) deal. Is a traditional college education even worth the cost anymore? How is this structure benefitting/retarding society?
Faced with the realities of higher education, people are beginning to look at alternatives in earnest. Online degrees, vocational training, college in a foreign country? These concepts that may have been at the periphery in the past are no longer so, which may result in a new landscape of potential “education paths” in the future.
The world is constantly changing. The conventional wisdom will always tell you what “you gotta do” because that’s what worked for some people in the past. I’m calling B.S.
In my personal quest to live a simple, yet fulfilled life, I delve into the realm of contrarianism often. It may be loud and overt sometimes, but more often this lifestyle manifests itself in the mundane, my quiet rebellions. I do not wish to be counterculture just to give society the proverbially F-you or to put a particular lifestyle upon a pedestal, while finger-waiving at the masses. I want my contrarianism to be rooted in what my heart tells me is important, to truly value the truly valuable.
In what ways has the conventional wisdom failed you?
How have technological or other changes affected the conventional wisdom in a particular area?
What are your “small rebellions?”
