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Freakonomics: Should you read it?

July 25, 2021

“Why do drug-dealers still live with their mothers?”
“Are Sumo wrestlers corrupt?”
“Legalized abortion led to decreasing crime rates”
“Are real-estate agents really acting in your best interest?”
“Does a child’s name have any effect on their lives?”
“Do parents really matter?”
“Are swimming pools more dangerous for kids than guns?”
“Why should teachers cheat?”

Freakonomics is a study of bizarre, mundane and exceedingly interesting questions. It employs the arsenal of mathematical sophistication to unearth truths and secrets that are hidden from plain sight. Written by an uncanny duo, Steven D. Levitt (the economist) and Stephen J. Dubner (the journalist) as part of an unexpected collaboration.

Our world is so bafflingly connected and complex, it takes sheer effort to identify correlation ( When two variables are connected), indicators (When one variable indicate an information about another) and causality (When one is really the cause of another).

The book warns that if morality dictates what people should do, then economics tells us what they really do. And no wonder, Levitt, a co-author, is a curious economist – a breed of closed-society intellegentsia who are trained to worship rationality over morality, prudence over emotions and numbers over talks because people may lie, numbers don’t.

Yes, Levitt is all that but more. He asks a lot of questions. His questions are a strange assortment of irrelevant (apparently) and outrageous. He had his share of unpleasantness and scorn because after all, even Levitt knows the bell curve of human intellectual distribution.

In a world dominated by people who loves to take sides, Levitt offers the rare third person perspective standing on a pedestal and presenting the true states of affairs. The book doesn’t build on any underlying theme – and perhaps that is the appeal. During an interview, someone asked Levitt “What is the unifying theme of your works?”. He was offered an answer by philosopher Robert Nozick,

“He’s twenty-six years old. Why does he need to have a unifying theme? Maybe he’s going to be one of those people who’s so talented he doesn’t need one. He’ll take a question and he’ll just answer it, and it’ll be fine.”

My thoughts on morality:

People tend to be good, generally. But only if their goodness is recognized and rewarded. If there is a bigger incentive for them to cheat or be bad and/or be assured they won’t be held accountable, they will become bad. There are always outliers, like in any discussion on economics. That is, people who are good just because that’s what they are.

In conclusion

Economics, at its barest, is understanding how people get what they want or need. Incentives strongly dictate human behavior (moral? eh, that’s debatable). Conventional wisdom is more often wrong than right. Measurement of data and its interpretation is essential.

I personally enjoyed reading this book.

Basil | @itbwtsh

Tech, Science, Design, Economics, Finance, and Books.
Basil blogs about complex topics in simple words.
This blog is his passion project.