Bob Neal

None of us has the time, nor perhaps the skills, to learn everything we want to know about everything that interests us, so we rely on others to develop a body of knowledge to guide us.

That knowledge becomes the conventional wisdom, defined as a generally accepted set of ideas or explanations, and we can take it as a starting point to figure out stuff. Except when we can’t.

Four cases come to mind in which conventional wisdom has failed, wholly or in part. First, that China would become more moderate, even democratic, as it became more capitalistic. Second, that federal deficit spending always causes inflation. Third, that powerful countries can use sanctions to bend less powerful countries to their will. Fourth, that hard work guarantees success.

China first. Deng Xiaoping wasn’t China’s leader, but as No. 2, he began an economic marvel. In 1978, his “socialism with Chinese characteristics” opened China to free enterprise and trade.

President Bill Clinton summed up the conventional wisdom on China, which he said “is … agreeing to import one of democracy’s most cherished values: economic freedom. When individuals have the power … to realize their dreams, they will demand a greater say.” Wrongo.

As the Harvard Business Review put it in 2021, “China is not an authoritarian state seeking to become more liberal but an authoritarian state seeking to become more successful.” And, it wants both success and control over the system. That’s what President Xi Jinping is building as he slashes China’s limited freedoms and widens its military footprint in East Asia.

So, score it conventional wisdom 0, reality 1.

On to inflation. I’m no economist, but I bought the conventional wisdom that when deficit spending rises, inflation will follow. So, what happened during three recent presidencies?

Under Ronald Reagan, the deficit rose by $1.4 trillion. But inflation fell to 4.1% from 10.3%. Under Clinton, deficit spending fell by $63 billion but inflation rose to 3.4% from 3%. And under Donald Trump, deficit spending rose by $8.6 trillion as inflation fell to 1.2% from 1.3%.

It’s not certain that the deficits rung up by Trump and President Biden added to recent inflation. “Greedflation” likely contributes as much or more. That’s when big companies raise prices rather than compete on price. Pepsico (Pepsi, Frito Lay, etc.) has raised prices 16% this year. That may be part of the higher prices you’re feeling if you’re addicted to high-fructose corn syrup and salt.

And, the European Central Bank estimates inflation rose in Europe by 8.8% between Russia’s invasion of Ukraine and January 2023. Ukraine raises much of the grain eaten in Europe. Western allies boycotted Russia’s natural gas and oil as sanctions to halt Russia’s war.

Some of that food and energy inflation spilled over here — still, our inflation hasn’t come close to Europe’s — because producers had new market demand in Europe, pushing up prices all over.

Considering that deficits didn’t trigger inflation under Trump and that other factors may be far more important under Biden, let’s call this a loss for conventional wisdom, as well.

The score now, conventional wisdom 0, reality 2.

Speaking of sanctions, many of us have long believed we can use sanctions to oust malignant regimes. Sometimes it works. Change came slowly to South Africa, and sanctions by western countries and corporations probably contributed to the coming of colorblind democracy.

Time will tell whether the sanctions on Russia will force change. One reads of Russians desperate for food and money, but that doesn’t seem to budge Vladimir Putin, Russia’s leader.

Let’s call it a mixed reading on sanctions. Score now, conventional wisdom 0.5, reality 2.5.

Finally, hard work makes success. Mainers work hard. An appraisal you often hear of a person out here in the sticks is, “That one’s a worker, ain’t she?” Or, “not much of a worker, that one.”

But work won’t guarantee success. Thirty years ago, New Sharon had 11 dairy farmers. Now it has two. Eight of the nine who went out of business were hard workers. I knew them all.

Or I could cite a hardworking turkey farmer who made a living on the farm but after 30 years sold it for barely $2,000 more than he and his wife had put into it. Low return on investment.

Wherever you are, you may know somebody or several somebodies who worked hard but never got ahead. For a million reasons. For the turkey farmer, it was grain prices. When grain went to $570 a ton from $176, the farm lost its salability, and he was grateful just to get back the money his wife and he had got by liquidating their IRAs to build up the farm.

It’s not just farmers. Paper workers I know worked hard. But 11 Maine mills closed. Restaurant servers work hard but may not get ahead if their hours get cut or other hard workers tip less. Etc.

To use a science term, we can say that hard work is necessary but not sufficient for success. The conventional wisdom is at least partly wrong, so score it as conventional wisdom 1.0, reality 3.0.

Next time someone says “conventional wisdom,” you may want to roll your eyes. Or just look for the reality on your own.

Bob Neal worked at newspapering for 33 years and then farmed for 30 years before retiring in 2015. He reads five newspapers a day, looking sometimes for holes in the conventional wisdom. Neal can be reached at bobneal@myfairpoint.net.