A year ago, conventional wisdom proclaimed that the dollar would continue to decline. Instead it went up against both the yen and the euro. Now the consensus is that the housing boom is tapering off. Anyone about to buy or sell a house could get hurt if that also turns out to be wrong.
Economist Steven Levitt and co-author Stephen Dubner explain in their best seller, Freakonomics, why conventional wisdom is so often wrong and “why knowing what to measure and how to measure it is the key to understanding modern life.”
The first step in not getting misled by conventional wisdom is asking the right questions, they say, and then analyzing the data. For instance: Which is more dangerous, a gun or a swimming pool? (Swimming pools kill more children than gunshots.)
If drug dealers make so much money, why do they still live with their mothers? (Because, as in any organization, only the guys at the top get rich—the foot soldiers barely scrape by.)
What caused the crime rate to drop unexpectedly in the 1990s? (More cops and smarter policing made some difference, but the main reason was that the legalization of abortion 20 years before meant fewer abused, unwanted babies were being born, reducing the pool of potential lawbreakers.)
While these conclusions may seem puzzling, even disturbing, Levitt's data seem pretty solid. And how reliable are the conventional wisdoms on which we base healthcare decisions? Just think of the ones that have been debunked. To prevent childhood infections, take out the tonsils. Treat peptic ulcers with lots of milk. And remember this from a couple of years ago? The more reps you send out, the higher your ROI.
You might also recall certain assumptions about the endless rewards to be gained from DTC commercials—the more provocative the better.
John Kenneth Galbraith, the economist who coined the term, explained that conventional wisdom is so widely accepted because it is simple, convenient and comforting. He might have added, especially if it's backed by “experts.”
For years, discussions of homelessness assumed that there were 3 million homeless people in the US. The source: Mitch Snyder, the experts' expert, testifying before Congress. Later, pressed for his data, he admitted he'd made it up.
In my own experience in charge of public information for a voluntary health agency, I used the frequently cited figure that there's a child born with cerebral palsy every 50 minutes. One day I got curious and tried to find the original study. It turned out that everyone who quoted the statistic referred to a previous secondary source, so I asked our medical director for help. His advice: Don't ask too many questions. Bad advice.
Based on Freakonomics, we might well examine a few accepted wisdoms that guide our actions today. A low-fat diet prevents breast cancer and cardiovascular disease. See the Journal of the American Medical Association, Feb. 8, for the latest data.
Or how about this: Doctors approve of DTC. Most surveys agree, but many seem to have been conducted by people with self-interest in the outcome.
And finally: You can trust what columnists report or it wouldn't be in print. By all means, go to the original source: Freakonomics, published by William Morrow. It's also fun to read.
Warren Ross is editor at large of MM&M