Freakonomics

6/1/2005

By Steven Levitt, Stephen Dubner

William Morrow 2005 Page Count: 242 Paperback Buy here

Book Review
Reviewed by John Coleman

What’s the best way to assure that an unborn child never becomes a criminal? Kill him.

At the turn of the millennium, Steven D. Levitt sent shockwaves through academia and the popular culture when he published his unaffectedly titled paper “The Impact of Legalized Abortion on Crime.” Meticulous in his research, the young economist, who has authored such other crime related papers as “The Impact of Race on Policing, Arrest Patterns, and Crime” and “Juvenile Crime and Punishment,” contended that the crime rate drops of the 1990s were not primarily attributable to better policing techniques or the ebb of the crack cocaine trade but to the infamous 1973 Supreme Court decision, Roe v. Wade. According to his hypothesis, legalized abortion reduced the number of children born into “unwanted” family situations—those in which a child is most likely to turn to crime—and, consequently, reduced (20 years later) overall criminal activity in the U.S.

Descriptive rather than prescriptive, Levitt never argued the moral validity of this trade-off, only its statistical probability. Nonetheless, a bevy of responses followed.

Economists John Lott and John Whitley questioned Levitt’s data and his conclusions. Steve Sailer, following their lead, argued that legalized abortion actually raised the number of unwanted conceptions (thus canceling Roe’s impact on unwanted live births) and that contrary to Levitt’s assumptions, crime increased, not decreased, for the first post-Roe generation. Across the country, critics from Richard John Neuhaus to Chuck Colson lambasted Levitt’s motives and his results. If it accomplished nothing else, the hotly debated abortion paper proved that Steven D. Levitt has a knack for asking the kind of controversial, quirky, and insightful questions that ignite both academic and popular discourse.

Now, Levitt has the means to reach the masses with his breakout bestseller, Freakonomics. Stemming from a 2003 profile in the New York Times Magazine, Freakonomics, coauthored with journalist Stephen J. Dubner, is a piece of popularized economic literature that translates Levitt’s academic work into a Malcolm Gladwell style book of pop social science research. Covering everything from sumo wrestling to bagel selling, Freakonomics employs basic economic principles to illuminate a host of interesting and eclectic facts about human nature, in the process, introducing us to one of the hottest minds in economics today. 

The core appeal of Freakonomics is its shotgun blast of compelling questions—all of which are answered in a clear and readable way by the Dubner/Levitt team. If you are into pop-culture trivia and Ripley’s style kitsch, this is your book.

Have you ever wondered how the Ku Klux Klan is like a group of real estate agents? Levitt has; and his exploration of the topic employs a series of narratives at various times insightful, intriguing, and even uplifting.

Have you ever watched a congressional debate on campaign finance reform and wondered if a candidate’s war chest really matters more than her charisma or political appeal? If not, Levitt’s exploration of the topic will open your mind and rewire your conceptions about how much money matters to political victories (not as much as you think) and how much we Americans spend on the democratic process (about as much as we spend on gum).

Have you ever watched Cops and wondered why so many supposedly wealthy drug dealers are arrested in their mothers’ homes? To answer that question Levitt takes you on an astonishing journey with his friend and colleague Sudhir Venkatesh, a University of Chicago student who lived with a crack gang for several years and eventually exploded the mythology surrounding black market drug finance. Unlike any number of similar economists, Levitt never shies from narrative or analogy in the explication of “economic” phenomenon. At the basis of every transaction or reaction, there are individuals—and Levitt asks all the right questions to dig to the heart of the human psyche, even as Dubner finds ways to communicate these brilliant stories in a straightforward and accessible way.

Bolstering this sometimes analytic, sometimes statistical work are the principles that allow Levitt to analyze these phenomena in such a riveting, objective, and effective way; and as much as Freakonomics is a showcase for the eccentricities of its authors and our world, it is a textbook of core economic principles.   

Defining economics as the study of “how people get what they want,” Levitt quickly lists off a series of principles that guide his study of human nature—incentives matter, nothing is more powerful than information—and builds the case for these principles with parables from everyday (and not so everyday) life. To anyone who has studied economics, Levitt’s lessons are unsurprising, but in the context of Freakonomics they serve two very important purposes.

First, they bind the author’s various intellectual wanderings under something of an academic umbrella. It is hard to identify Levitt’s “unifying theme” and he has no discernable political or ideological axe to grind; but it is clear that Levitt is one hundred percent sold on what might be termed “the economic way of thinking,” and the iteration and reiteration of certain fundamental principles allows him to weave a philosophy of human nature, if not a theme, through his work. As Levitt notes, “…if morality represents how people would like the world to work, then economics shows how it actually does work.” And Freakanomics is one oddity-filled showcase that helps him demonstrate the benefit and fun of describing the human condition without necessarily prescribing its means for improvement.

Second, despite the elementary nature of Levitt’s and Dubner’s discourse, it accomplishes something revolutionary. It makes economics cool; and the repetition of these basic economic principles might just attract a whole new generation of young people to the dismal science exposing millions to the economist’s somewhat foreign, highly rational tools and beliefs. In the able hands of Dubner, concepts like “correlation versus causation” come alive against a backdrop of perfect parenting and political intrigue. Econometrics and data analysis seem weirdly alluring. And, with prose written at the level of a USA Today editorial, concepts are readily available to readers of all ages and educational backgrounds. In the parlance of our time, Freakonomics might be something of a “gateway drug” to harder economic knowledge—heartening at the very least to those who believe its insights lead primarily to advances in efficiency, prosperity, and human liberty.

And finally, as much as Freakonomics introduces us to sumo wrestling and swimming pool mortality, it showcases the cornerstone of the work itself—the oddly compelling and utterly charming Steven D. Levitt. Throughout Freakonomics we see more than Levitt’s machine gun intellect, we get glimpses of the man himself; and it may be this humanization that makes his analysis so much easier to digest. Levitt writes about abortion, but openly shares a story about the tragic loss of his own son, Andrew. In the chapter on perfect parenting, he is as self-effacing and sympathetic as he is statistically sharp. And when discussing the work of his colleagues, he nevers fails to paint them as human beings and friends. Dubner communicates this aspect of Levitt’s personality quite well, and perhaps it is Levitt’s intensely personal side—the side that is just as enthralled by Roland G. Fryer’s life as by his work—that most touches readers. We can connect with Levitt. We like him. And through this identification he reaches us as no detached and purely data-driven intellectual could.

Sure the book would benefit from a little more rigor and a little more length. It is too capricious at times, and it ignores the major opposition to and implications of some of Levitt’s more controversial claims; but, at base, it is an amazing book—a concise, witty, and informative must-read.

On the cover of Freakonomics is an ingenious little picture—an apple, sliced open to reveal on orange on the inside. Some things, it would appear, are more than they seem.

Freakonomics is like that. It is an economics text. It is, what the Guardian calls, an entry in “The Institute of Gladwell Studies,” and it is an intellectual odyssey that reads like a Michael Crichton thriller and provides more than enough fodder for astounding water cooler discussion. But more than any of these it is an introduction—a preface in the saga of modern economics and of economics’ next big thing. And while Levitt may not always be right, it is hard to argue that the dismal science won’t benefit from his happy influence—a quick-witted, highly respected Chicago-style “super-freak.”