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December 21, 2005
Economics: the freaky science?
Much has been written about the bestselling book, Freakonomics, by economist Steven Levitt and his journalist sidekick, Stephen Dubner, but having been up to my ears in business school lately, I only got around to reading it this week. The New York Times says Freakonomics is the most blogged-about book of 2005, so I guess I'm a little late to the party. Another blog entry about Freakonomics is like another song about Paris -- as Dave Frishberg would say, like another cup of water in the sea.
Nonetheless, the book is a fascinating examination of some of the unexpected ways people behave. I guess the first insight that caught my interest was the authors' observation that "Morality ... represents the way that people would like the world to work -- whereas economics represents how it actually does work."
And this book is all about the way the world actually works. There's been a lot of hullaballoo about one of the book's main investigations: the relationship between legalized abortion since Roe v. Wade and a decline in crime rates since then. The authors make a pretty good case for what should be obvious: give society a way to avoid bringing unwanted children into the world, and a lot of the ill effects wrought by those unwanted children won't happen.
But there are a lot of other interesting aspects of society discussed in the book as well. Which brings me to my only complaint about Freakonomics: it's too short! A mere 207 pages is nowhere near enough space to discuss abortion, a Chicago crack-selling gang (a fascinating segment featuring inside information rarely available to the general public), cheating patterns in sumo wrestling, the migration of baby names from upscale to downscale kids, and one of the book's most startling revelations -- that money does not actually buy elections. I'd like to see a separate book on each of these topics; this is unlikely, but rumor has it that the authors are working on a second book, tentatively entitled, Superfreakonomics.
But another important aspect the book discusses -- and one that hasn't been sufficiently played up, in the reviews I've read and seen -- is that in case after case, "conventional wisdom" is wrong.
I've often pondered the question of how many of our assumptions -- the ones on which personal and societal behaviors, and public policies, are based -- are just plain wrong. Awhile back, I discussed how this inherent bias in favor of "conventional wisdom" tends to distort news coverage. Editors think they already know the story before they've sent a reporter out to investigate it, so they assume their conclusion and insist that the reporter write an article in support of it -- instead of in support of whatever truth he might actually find out there.
This is one of the main reasons I've become so disenchanted with American politics -- both parties are hidebound by their own conventional wisdom, and few politicians are willing to be politically incorrect and develop policies based on how the world really works, instead of how they'd like it to work.
Freakonomics is unlikely to change much of that, but the authors certainly aren't afraid to be politically incorrect, in any number of ways; they just go out, do research, and call 'em like they see 'em.
Posted by Urbie at December 21, 2005 06:26 PM