We think we know how the world operates, but we really don't, write the authors of Freakonomics. And in that ignorance we make choices that often have significant—if not catastrophic—results. Take the decision made by the parents of an eight-year-old, who decide that little Allison will not be allowed to play over at Mary's, because Mary's dad keeps a gun in the house. But they have no opposition to Allison visiting Monica down the street, whose family has a swimming pool. Parents can be terrible assessors of risk: The likelihood of death by pool is 1 in 11,000; by gun, 1 in 1 million-plus.
Freakonomics uses the science of economics and concrete data to challenge our assumptions about everything from teenage crime to the motives of real estate agents. And what the authors find is that incentives—not a sense of right and wrong—make the world go round. "Morality, it could be argued, represents the way that people would like the world to work—whereas economics represents how it actually does work."
For example, the authors take us back to 1995, when eminent criminologists, political scientists, and even President Clinton warned that murders by teenagers were about to take an alarming spike. Instead, those crimes fell by half over the next five years. What happened? Effective gun laws? A rising economy lifting all boats? Neither, Freakonomics contends. Instead, the biggest contributor was the U.S. Supreme Court decision in Roe v. Wade, which legalized abortion. That is, children from disadvantaged environments, who were more likely to commit crimes, were not born.
Levitt, who teaches economics at the University of Chicago, and Dubner, a New York Times writer, provide page after page of research demonstrating that:
- Incentives are the cornerstone of modern life.
- The conventional wisdom is often wrong.
- Dramatic effects often have distant, subtle causes.
- "Experts"—from criminologists to real estate agents—use their informational advantage to serve their own agenda.
You'll walk away with not only a few good party tidbits (Did you know that popular baby names start with well-to-do parents and work their way down the socioeconomic ladder?), but also a more critical eye to many things presented as fact. (Timber cutter is the most dangerous job in the United States, the government claims. But the government evidently hasn't compared that occupation to that of crack dealer.)—Sean Silverthorne