Freakonomics: Introduction

Unfortunately I’m late to the game of reviewing Freakonomics, Steven D. Levitt’s new book. Other bloggers received free advance copies, while I had to buy mine from Amazon.com. Not fair.

But I am going to outdo the other reviews by reviewing the book one chapter at a time, which is pretty easy because there are only six chapters plus the introduction.

In fact, the first impression of the book when I opened my box from Amazon.com was its lack of heft. No way is it worth its $25.95 suggested retail price. For only an extra $3, you can buy I am Charlotte Simmons by Tom Wolfe which will give you four times the reading material. If someone is going to write a book this small, the price tag should be small to match!

The next thing we observe about the book is that a second author is credited with writing it: a journalist named Stephen J. Dubner. We presume that Dubner is the guy who really wrote the book. I guess once you become famous like Levitt, you can write a bestselling book without even having to do much writing.

Dubner wastes a page before each chapter quoting his own article from the NY Times. I guess he’s trying to add a few extra pages to the book so people think they are getting their money’s worth. We’re not fooled.

And now we come to the official introduction. It’s subtitled “the hidden side of everything.” Levitt plugs his most controversial theory, that abortion lowered crime. I’ll explain later why this is one of his weakest theories, but for now let us just note that this is shrewd marketing. If his book had emphasized his studies of sumo wrestling instead of abortion, I doubt it would be on the bestseller list.

Levitt tries to explain why all this stuff is economics. But the problem is, it’s not economics. It falls under the broad rubric of sociology. Sociology is “the systematic study of the development, structure, interaction, and collective behavior of organized groups of human beings.” Economics is “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services.”

Sorry Steve, your book isn’t economics. The only topic in the book that might fit the definition of economics is the one about real estate agents, because they’re selling a service. But even that’s iffy. The book should be renamed Freakiology: a Rogue Sociologist Explores the Hidden Side of Everything.

As a short overpriced sociology book, Freakonomics is a pretty good book. Even the introduction has some very important points that all should heed.

Morality, it could be argued, represents the way people would like the world to work—whereas economics represents how it actually does work.

If we replaced “economics” with “science,” I would like the quote even better. I have the same attitude here at my blog. I write about how the world really works, even if the truth about the world is politically incorrect. For example, I recently wrote about how people from lower social classes are uglier. That post received a comment for an outraged reader. Sorry, I’m just writing about how the world is, not how it should be. It’s better to see the ugly truth than to be blind.

Finally, Levitt lists five “fundamental ideas” of his book, and the first two are especially worth repeating: (1) “Incentives are the cornerstone of modern life” and (2) “The conventional wisdom is often wrong.”

These two ideas are both fundamental to my blog. For example, in my recent post about getting into an elite college, I pointed out that colleges have a pecuniary incentive to prefer admitting applicants with leadership potential, because leadership jobs pay more money and such alumni will have more money to donate to their alma mater.

Every post I write about the housing bubble is about the conventional wisdom being wrong, because the conventional wisdom is that this is a great time to buy house. Just as in 1999 when the conventional wisdom was that shares of Cisco were a great long term investment. But people get mad at you when you tell them the conventional wisdom is wrong. Contrarians are never loved.

Please stay tuned to my blog for reviews of the remaining six chapters.

Comments

[Michael H.]

Hi Half Sigma
Economists tend to view sociologists as economist wannabees. There is an old joke: "If you are a good economist you will receive good karma and be reincarnated as a mathematician. But if you are a bad economist, you will receive bad karma and come back in the next life as a sociologist."