A lot of our premises have turned out to be wrong lately. I’m talking not about evanescent bits of conventional wisdom that have shifted but about overarching assumptions that were widely shared across the political spectrum—big things that experts and nonexperts agreed about—until they were proved false.
For instance, before 1989, virtually all Sovietologists agreed that the USSR was highly stable. Before 2001, few Middle East scholars worried that the United States was vulnerable to a major terrorist attack. Before 2003, everyone from neocon hawks to French lefties agreed that Saddam Hussein had weapons of mass destruction. Before 2008, few economists wondered about the fundamental soundness of the American financial system. Popular opinion echoed the expert consensus on each of these points. Those who challenged the groupthink—such as Soviet dissident Andrei Amalrik, renegade counterterrorism expert John O’Neill, former weapons inspector Scott Ritter, and pessimistic economist Nouriel Roubini—tended to be dismissed as provocateurs, wackos, or (in Ritter’s case) worse.
So at a moment when everything we once assumed seems suddenly up for discussion, it may be worth asking the question: What other big stuff could we be wrong about? I’m looking for issues on which the received wisdom may well be completely right—but deserves a stronger dose of skepticism than it usually gets.
Nuclear proliferation is bad. It seems self-evident that countries joining the nuclear club—India, Pakistan, North Korea, and, perhaps, now Iran—create a greater risk of catastrophic war or accidental launch. But in a famous 1981 paper, the political scientist Kenneth Waltz argued that nuclear rivalries help keep the peace because “they discourage states from starting any wars that might lead to the use of such weapons.” In this view, nukes are inherently defensive weapons, and the countries that want them do so for good reason. Waltz argues that joining the nuclear club induces restraint and caution, causing irresponsible regimes to behave more responsibly. In this video, he applies his idea to Iraq (where he joined in believing the WMD fallacy) and North Korea. Waltz’s argument that “the slow spread of nuclear weapons will promote peace and reinforce international stability” is buttressed by another: You can’t stop nuclear proliferation even if you try.
Climate change will be catastrophic. We all know civilization is doomed if we don’t reduce carbon emissions, right? Physicist Freeman Dyson disagrees. Dyson (a strong opponent of nuclear proliferation, by the way) doesn’t dispute that human activity is causing warming. But he challenges the scientific consensus that warming will be catastrophic. He is skeptical about climate models, which, he has said, “do not begin to describe the real world that we live in.” In a New York Review of Books essay, Dyson wrote that warming “is mostly making cold places warmer rather than making hot places hotter.” Carbon emissions could make the earth more fertile and prevent harm from a separate phenomenon of global cooling that isn’t caused by humans. And if it really turns out that there is a serious problem, genetically engineered carbon-eating trees might fix it.
China is stable. The prevailing academic view of China resembles that of the Soviet Union in the old days, but with far greater measure of admiration. Twenty years after the Tiananmen Square crackdown, the Chinese Communist Party apparatus shows every sign of being in firm control. The economy has continued to grow at 9 percent a year since 1978, fueling China’s rise as a global power. There’s little sign of opposition. But remember that rising living standards tend to produce political discontent and have driven democratic change throughout most of the rest of East Asia. Samuel Huntington, the late political scientist, argued that regimes become vulnerable at a level of per capita income that China is fast approaching. As its free-market flourishes and access to information grows, it becomes an overwhelming challenge for the CCP to justify its rule and repress challenges to its legitimacy. Why should we assume that China will be immune to demands for democratic change?
Homeownership is better for us. The assumption that owning beats renting has been the basis for American social policy since at least the New Deal, when Congress first insured and subsidized mortgages through the Federal Housing Administration and Fannie Mae. Over time, the long-standing tax deductibility of interests evolved into a specific mortgage-interest deduction. It’s a natural assumption that owners have more of a stake in their communities. But even if that’s true, why should it outweigh the obvious disadvantages of homeownership? As many more people have discovered lately, it means taking on enormous financial risk. It encourages community involvement at the expense of labor-market mobility. It encourages longer commutes. And at least one study says it makes you fat and unhappy.
Stocks outperform bonds in the long run. The thesis of Jeremey Siegel’s Stocks for the Long Run has been the most pervasive financial wisdom of recent decades. Siegel uses historical data to show that since 1802, stocks have returned an average of around 7 percent a year, better than any other asset class, with less risk. Others have claimed that stocks outperform bonds for any isolated 20- or 30-year period since the late 1800s. But in a recent paper, two business school professors contend “that stocks are actually more volatile over long horizons.” The better performance of stocks might be the product of specific historical circumstances. But if stocks really have outperformed with lower risk over a long period, that means they’ve been undervalued relative to other assets. And now that investors recognize the undervaluation, there’s no reason it should persist. This Bloomberg chart shows that as of 2009, the 30-year Treasury index has beaten the chief global stock index for the past 30 years.
Detroit can’t compete. No one is optimistic about American carmakers right now. For decades, they’ve been losing ground to better-built, better-value foreign imports. The Big Three bet against fuel efficiency and smaller cars and lost. The inability of GM and Chrysler to sell recovery plans to the government underscores the notion that Detroit suffers from an incurable malaise.But look: American manufacturing practices have greatly improved in the past couple of years. The Big Three’s labor costs have come way down. Shanghai GM is China’s leading auto manufacturer. Buick recently tied with Ford-built Jaguar in an owner survey as the most reliable car brand. Ford looks as if it might have built the best mid-size hybrid, the 2010 Fusion. There’s an argument that Detroit’s real problem is its overhang of debt, high health care costs, and pension liabilities—all of which can be fixed through financial restructuring—as opposed to a deep inability to make cars that people want to buy.
We’re running out of fossil fuels. When oil spiked at $147 a barrel last summer, the interesting question seemed to be whether we had enough left for the next 40 years or the next 100. But some people believe we will never run out. An essay Dyson wrote about scientific heresy tipped me off to Thomas Gold, an Austrian scientist who taught at Cornell and died in 2004. Gold argued that oil and gas weren’t fossil fuels derived from decomposed vegetable matter but were, rather, the products of geological reactions that take place deep underground and leak upward. One experiment conducted by chemists at the Carnegie Institute supports this idea. The scientists found that methane, which is natural gas, could be produced by the interaction of geological elements known to exist miles below the surface of the earth by replicating the pressure and temperature where they’re found. As Dyson writes, “The Carnegie Institute experiment shows that there is at least a possibility that Tommy Gold was right and the natural gas reservoirs are fed from deep below.” In other words, we might not be running out of gas.
The Cubs will never win the World Series again. Oh, never mind.
