|Keywords: Economics, current affairs, politics
Authors: Steven D. Levitt and Stephen J. Dubner
Freakonomics is one of those books that sets people talking for all the right reasons. It's well-written, extremely interesting and very thought-provoking. In this case the best-seller status and the countless plaudits are an adequate reflection of the quality of the book rather than the result of hype.
For those who've not been keeping up with the news, Freakonomics is a book about the work of economist Steven D. Levitt. If your idea of economics is interest rates, monetary policy and the like then think again. Levitt's not interested in that at all. He views economics as the science of making choices, and that's what he looks at - the choices that people make and the often unforeseen consequences of those choices. With journalist Stephen Dubner as co-author, the book explores some of the surprising outcomes of Levitt's work, from crime and social policy to race and estate agents.
Levitt's modus operandi is to pick a question and then to attack it with hard data, creative ideas and plenty of lateral thinking. The choice of question he tackles is fairly eclectic - Why do drug dealers still live with their moms? Where have all the criminals gone? - but the methods he uses are the same. Rather than accepted opinion or conventional wisdom, he wants to look below the surface at what people really do rather than what they say they do. That means looking for data and then the patterns in that data. And, as if often the case, if there's no direct measure to match the question he's looking he'll go for a proxy. It's this insistence on data that gives his work such enormous power.
Of course the results of his analyses are what have made the book a best seller and which have generated so much heat. For example, his finding that the crime drop in US cities in the 1990's was probably the result of the drop in the birth rate due to the legalisation of abortion in the 60's, was greeted with outrage by some people. But Levitt's analysis took into account the main alternative theories - which ranged from changes in policing to gun control to increases in wealth - and showed how each of them was flawed and not supported by the evidence.
There are deep political implications to some of these results. To stay with the crime reduction example, it suggests that policy-makers in the UK should focus on reducing the enormous teenage pregnancy problem if they are serious about long-term crime reduction. In other work, with the black economist Roland G. Fryer, and also detailed in the book, black underachievement in schools is examined. Is it the result of racial differences, as some on the far-Right allege? Analysis shows that the issue resolves largely to class - it's not a black/white issue but a rich/poor issue. No surprise perhaps, but an important finding to counter those on the Left and the Right who prefer to racialise every issue.
The book itself is very well-written, it's engaging, gripping and impossible to put down. While the ideas and the research are Levitt's, Dubner has worked his craft to turn a set of papers into a readable and accessible volume. If there's a complaint it's that the book isn't long enough.
Whether you agree with Levitt or not, there's no doubting that he is redefining the way people think about economics. Rather than a dry academic science, increasingly technical and highly mathematical, he shows how economics is about people and the societies they create. This is one economics title that everyone should read.
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