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"Freakonomics"

This was the third book I read this year (I'm still catching up with blogging my January and February reading).

More than one friend had recommended Freakonomics: A Rogue Economist Explores the Hidden Side of Everything to me as a "must-read". It didn't disappoint.

Co-author Steven Levitt is known as a kind of maverick economist, studying the economics of crack dealing rather than, say, fluctuations in the money supply. He's best known for his hypothesized connection between Roe v. Wade and the drop in the crime rate in the 1990s:

In 1995, the criminologist James Alan Fox wrote a report for the U.S. attorney general that grimly detailed the coming spike in murders by teenagers...

And then, instead of going up and up and up, crime began to fall. And fall and fall and fall some more. The crime drop was startling in several respects. It was ubiquitous... It was persistent... And it was entirely unanticipated...

The magnitude of the reversal was astounding. The teenage murder rate... fell more than 50 percent within five years. By 2000 the overall murder rate in the United States had dropped to its lowest level in 35 years....

Even though the experts had failed to anticipate the crime drop -- which was in fact well under way even as they made their horrifying predictions -- they now hurried to explain it... It was the roaring 1990s economy, they said... It was the proliferation of gun control laws... It was the sort of innovative policing strategies put into place in New York City...

There was only one problem [with these theories]: they weren't true.

There was another factor, meanwhile, that had greatly contributed to the massive crime drop of the 1990s...

As far as crime is concerned, it turns out that not all children are born equal. Not even close. Decades of studies have shown that a child born into an adverse family environment is far more likely than other children to become a criminal. And the millions of women most likely to have an abortion in the wake of Roe v. Wade -- poor, unmarried, and teenage mothers for whom illegal abortions had been too expensive or too hard to get -- were often models of adversity. They were the very women whose children, if born, would have been much more likely than average to become criminals. But because of Roe v. Wade, these children weren't being born. This powerful cause would have a drastic, distant effect: years later, just as these unborn children would have entered their criminal primes, the rate of crime began to plummet.

Fundamentally, Freakonomics is about using economics as a tool to understand why and how people behave the way they do: why sumo wrestlers rig certain matches... how some teachers help their students cheat on tests, and how to detect them... why African-American mothers often give their babies unique names... or how a crack dealing gang is like a fast-food company:

So how did the gang work? An awful lot like most American businesses, actually, though perhaps none more so than McDonald's. In fact, if you were to hold a McDonald's organizational chart and a Black Disciples org chart side by side, you could hardly tell the difference.
Reading Freakonomics changed, at least for a while, how I looked at interactions with people. I'd ask myself, "what is their economic motivation for behaving the way they do?" And it turns out to be a useful exercise to run. A few weeks after finishing it, I no longer think this way all the time, but I believe that viewing people and their behaviors from an economic motivation sense is now a tool that I'll always have around to use.

One of the things I liked best about the book was how unconcerned Levitt is with whom he offends. His Roe v. Wade hypothesis upset people from both ends of the political spectrum, but especially (and quite predictably) anti-abortion advocates on the right. But he surely didn't make any friends on the left with this analysis:

In a given year, there is one drowning of a child for every 11,000 residential pools in the United States. (In a country with 6 million pools, this means that roughly 550 children under the age of ten drown each year.) Meanwhile, there is 1 one child killed by a gun for every 1 million-plus guns. (In a country with an estimate 200 million guns, this means that roughly 175 children under ten die each year from guns.) The likelihood of death by pool (1 in 11,000) versus death by gun (1 in 1 million-plus) isn't even close. [A child] is roughly 100 times more likely to die in a swimming accident... than in gunplay.
I would have liked more detail throughout the book. Freakonomics breezily takes us through many years of Levitt's research, with footnotes to a multitude of articles in mostly-inaccessible economics journals our only method of learning more. A follow-on book, much longer and with much more detail, would be welcome. But this is a minor complaint about a wonderful book that opens up new ways of seeing everyday life.

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Comments

I knew you would like this book. I think the thing that I took with me from the book is there are a few people who have brains that are tweaked just a little differently. Thank goodness for them because they ask the questions that wouldn't occur to the rest of us. Albert Einstein was another one. It makes me a tiny bit envious but mostly just grateful for their existence.

Thanks for being one of the friends who recommended it to me!

Thanks for suggesting this. It sounds really interesting. This and James Risen's "State of War" are tops on my to-get list at the moment.

You're most welcome! Nice blog, by the way -- I just subscribed.

Hey thanks. Same to ya. Been reading yours for a while.

Nice to have finally joined the masses in the Blogosphere.

The challenge now is resisting the urge to post and get work done...

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