Freakonomics

FREAKONOMICS: A ROGUE ECONOMIST EXPLORES THE HIDDEN SIDE OF EVERYTHING
By Steven D. Levitt and Stephen J. Dubner

As a university student, lo these many years ago, I used to hear about certain professors who were considered to be “hot profs.” What this meant was that they were hip, engaging, entertaining, media savvy, interested in popular (even “pop”) subject matter, and taught courses that weren’t seen as being very difficult. Perhaps it was just my contrarian nature, but I found all of the hot profs I encountered to be about as attractive as a case of venereal warts.

I have no idea if Steven Levitt has ever been voted a hot prof by his students at the University of Chicago, but on the basis of Freakonomics I would guess he fits the bill. The book is basically just an expansion of an embarrassingly fawning puff piece on Levitt by Stephen Dubner that originally ran in the New York Times Magazine (“the most brilliant young economist in America,” “genial, low-key and unflappable, confident but not cocky,” “considered a demigod, one of the most creative people in economics and maybe all the social sciences,” “a noetic butterfly that no one has pinned down,” etc.). The magazine profile was a trailer, a bit of pre-publication advertising for this fuller helping of some of Levitt’s “cute but ultimately insubstantial ideas” (his own self-deprecating but entirely accurate estimation).

Taking a microeconomic, social journalism approach, Levitt and Dubner eschew any big theme. In so far as one can be found it is in the assertion that incentives “are the cornerstone of modern life.” What is meant by an incentive, however, is left rather fluid. As far as a definition of economics is concerned, here again things get vague as the authors try to distill the dismal science “down to its most primal aim: explaining how people get what they want, or need.” To my mind this is almost useless, and, what’s even worse, even at this level of generality doesn’t seem to cover everything the book talks about. How does it apply to the relationship between abortion and crime rates, for example? Or trends in baby names?

Predictably, the book fails to live up to its own rather considerable hype. One never learns what it is that makes Levitt, clearly an institutional man from the word go, a “rogue” economist. The essays are simply glib and facile demolitions of the most tired clichés of “conventional wisdom,” and not always convincing at that. Is there anyone old enough to have had dealings with real estate agents who is not aware of the fact that their main goal is just to score a quick commission from selling your house? We are supposed to be surprised that all the kids selling crack on the streets aren’t filthy rich? And why even bother equating conventional wisdom with the predictions of experts? The predictions of experts are always wrong (for a primer on the subject, see Dan Gardner’s Future Babble). And yet time and again we see statistics being trotted out like so:

. . . relative to the size of the black population, lynchings were exceedingly rare. To be sure, one lynching is one too many. But by the turn of the century, lynchings were hardly the everyday occurrence that they are often considered in the public recollection. Compare the 281 victims of lynchings in the 1920s to the number of black infants who were dying at that time as a result of malnutrition, pneumonia, diarrhea, and the like. As of 1920, about 13 out of every 100 black children died in infancy, or roughly 20,000 children each year – compared to 28 people who were lynched in a year. As late as 1940, about 10,000 black infants died each year.

So . . . in the “public recollection” (rather hard to get a handle on, but whatever), lynchings were “often considered” (how often? don’t ask) to be an “everyday occurrence.” That is not conventional wisdom. It’s a straw man. And it gets knocked down when we are instructed, once again, to compare . . .

But why? Why compare lynching deaths to deaths of black children who died in infancy? What is the point? Such a use of statistics is merely rhetorical. It’s like:

In a typical election period that includes campaigns for the presidency, the Senate, and the House of Representatives, about $1 billion is spent per year – which sounds like a lot of money, unless you care to measure it against something seemingly less important than democratic elections.
It is the same amount, for instance, that Americans spend every year on chewing gum.

You see? You think a lot of money is spent on political campaigns, but just throw in a random number pulled out of the air and presto! It’s not any more! The same can be done with gun ownership. You think having a gun in the house isn’t safe? Just compare (again) deaths in backyard swimming pools. They’re way more dangerous!

The only reason such arguments (to give them a convenient name they don’t really deserve) catch our attention at all is because they speak in the language of numbers. And numbers – or “data” or “the facts” – don’t lie.

The curious notion that economists are thoroughly objective, hard men of facts dealing in unpalatable truths is one that is regularly invoked now by a lot of writers. Paul Krugman appeals to it, more or less persuasively. Joseph Heath’s genuflections before it are a little harder to swallow, coming from a self-abasing philosophy prof. But regardless of the source, I find the premise unpersuasive. Numbers are easily manipulated: Just dare to compare apples and oranges! (Is this the point, by the way, of Freakonomics‘ celebrated cover image of a sliced-open apple revealing the sections of an orange?) Data can always be made to lie, usually with some political purpose or agenda in mind. At times Levitt and Dubner don’t even bother appealing to numbers to make their case. This blew up in their faces when their anecdotal account of an upsetting of information dissymmetry leading to the downfall of the Ku Klux Klan turned out to be bogus.

There are other problems. Seeing incentives as the engine of modern life, for example, just seems like a form of conventional wisdom to me. The problem is not just that incentives can take many different, sometimes contradictory forms, but that it assumes people act in what are basically rational ways. I can understand why economists would like to believe this, but I don’t see it as a safe bet. And I would have thought it obvious to anyone with an interest in real estate.

The wild success of this book can be attributed to a combination of great marketing and the fact that it is an almost total waste of time. There are no revelations of the hidden side of anything, much less the promised “everything.” It will, however, confirm most readers in their preconceived notions about the subjects it deals with.

It is, in other words, a solid defense of the conventional wisdom.

Notes:
Review first published online January 17, 2011.