The term ``the conventional wisdom'' has become so much a part of
the language that people forget that the phrase was coined by John
Kenneth Galbraith just 30 years ago in ``The Affluent Society.''
Professor Galbraith said that, in some measure, the articulation
of the conventional wisdom is like a religious rite - ``an act of
affirmation like reading aloud from the Scriptures.''
Business executives would feel better for hearing the virtues of
free enterprise praised once again. Economic scholars would feel
secure in hearing the efficiencies of the free market reaffirmed.
At the higher levels of scholarship, Galbraith said, the
conventional wisdom made originality highly acceptable ``in the
abstract'' and, indeed, the vigorous advocacy of originality even
became a substitute for originality itself.
Yet Galbraith held that conventional wisdom had an important
function: It protected society from too facile a flow of thought.
He warned that a great stream of intellectual novelties, if all were
taken seriously, would be disastrous for society.
However, the conventional wisdom, in both capitalist and
Communist societies, is not fixed; it is periodically overcome, not
by new ideas, but by the march of events, which may expose old ideas
as useless or dangerous.
In the Soviet Union, economic stagnation has exposed the follies
and dangers of central planning and control. And General Secretary
Mikhail S. Gorbachev is congealing the new conventional wisdom into
the terms ``glasnost,'' or openness, and ``perestroika,'' or
reconstruction; wherever one meets them, at home or abroad, Soviet
spokesmen cite the terms as the new gospel.
What is the emergent conventional wisdom in the United States?
Here is brief rundown of some of its key elements:
- ``A new international monetary system is needed.''
Floating exchange rates, which not long ago were hailed by
nearly all economists as the optimal means of permitting individual
nations to pursue their own national policies for growth and
stability, as they chose, have proved too disturbing to trade,
investment, financial markets and national economic development. So
the conventional wisdom now calls for a return to fixed, or at least
much more stable, exchange rates. But the wisdom does not yet say
what that new international monetary system should be.
- ``In an interdependent world, closer coordination of
national macroeconomic policies is essential.''
The alternative of trade barriers and capital controls to serve
national interests is unacceptable, as the sinking fortunes of Rep.
Richard A. Gephardt in the presidential race signifies. Since
protectionism is out, new rules for coordinating national policies
are needed. …