'Freakonomics': Everything He Always Wanted to Know
By JIM HOLT
Published: May 15, 2005
A FEW years ago, a young economist named Steven D.
Levitt became briefly notorious for collaborating on a
research paper that contained a strikingly novel
thesis: abortion curbs crime. What Levitt and his
co-author claimed, specifically, was that the sharp
drop in the United States crime rate during the 1990's
-- commonly attributed to factors like better
policing, stiffer gun laws and an aging population --
was in fact largely due to the Roe v. Wade decision
two decades earlier. The logic was simple: unwanted
children are more likely to grow up to become
criminals; legalized abortion leads to less
unwantedness; therefore, abortion leads to less crime.
Thomas Fuchs
FREAKONOMICS
A Rogue Economist Explores the Hidden Side of
Everything.
By Steven D. Levitt and Stephen J. Dubner.
242 pp. William Morrow. $25.95.
First Chapter: 'Freakonomics' (May 15, 2005)
Forum: Book News and Reviews
This conclusion managed to offend nearly everyone.
Conservatives were outraged that abortion was
seemingly being promoted as a solution to crime.
Liberals detected a whiff of racist eugenics. Besides,
what business did this callow economist have
trespassing on the territory of the criminologist?
Economics is supposed to be about price elasticities
and interest rates and diminishing marginal utilities,
not abortion and crime. That is what makes it so
useful to undergraduates seeking relief from insomnia.
Levitt has strayed far from the customary paddock of
the dismal science in search of interesting problems.
How do parents of different races and classes choose
names for their children? What sort of contestants on
the TV show ''The Weakest Link'' are most likely to be
discriminated against by their fellow contestants? If
crack dealers make so much money, why do they live
with their moms? Such everyday riddles are fair game
for the economist, Levitt contends, because their
solution involves understanding how people react to
incentives. His peers seem to agree. In 2003, Levitt
was awarded the John Bates Clark Medal, bestowed every
two years on the most accomplished American economist
under 40.
''Freakonomics,'' written with the help of the
journalist Stephen J. Dubner, is an odd book. For one
thing, it proudly boasts that it has no unifying
theme. For another, each chapter begins with a
quotation from the under-author (Dubner) telling us
how great the over-author (Levitt) is: a ''master of
the simple, clever solution,'' a ''noetic butterfly''
(!), ''genial, low-key and unflappable,'' etc. Yet a
little self-indulgence can be tolerated in a book as
instructive and entertaining as this one.
(''Freakonomics'' grew out of a profile Dubner wrote
about Levitt in The New York Times Magazine, where I
am also a contributor, but we've never met.)
The trivia alone is worth the cover price. Did you
know that Ku Klux Klan members affixed a ''kl'' to
many words (thus two Klansmen would hold a
''klonversation'' in the local ''klavern'') or that
the secret Klan handshake was ''a left-handed,
limp-wristed fish wiggle''? In the mid-1940's, a Klan
infiltrator began to feed such intelligence to writers
for the radio show ''The Adventures of Superman,'' who
incorporated it into the plotline, thereby making the
Klan look ridiculous in the eyes of the public and
driving down its membership. Levitt uses the rise and
fall of the K.K.K. to illustrate the power of hoarded
information. He finds a parallel in the world of real
estate, where brokers employ code words in
advertisements to let potential buyers know that an
apartment can be bought for less than its listing
price. ''Spacious'' and ''great neighborhood'' are
associated with a low closing price, whereas ''state
of the art'' and ''maple'' are associated with a high
price.
Sometimes Levitt seeks out his raw material, and
sometimes -- as with a stack of spiral notebooks kept
by a Chicago crack gang -- it falls into his lap.
These notebooks, obtained by a graduate student,
Sudhir Venkatesh, who spent a scary period all but
living with the gang, contained sales figures, wages,
dues, even death benefits paid to families of murdered
members over a four-year period, at the peak of the
crack boom. By analyzing them, Levitt and Venkatesh
were able to work out the organization of the crack
business, which turned out to be rather like that of
McDonald's. The leader of the gang did fairly well,
making around $100,000 a year (tax free). But the
gang's ''foot soldiers,'' who sold the crack on the
streets, cleared only $3.30 an hour -- less than the
minimum wage. For this pittance they ran a one-in-four
risk of being killed during the period in question,
worse than the odds for a Texas death-row inmate. Why
would anyone take such a job? Like other ''glamour
professions,'' the crack trade is best viewed as a
tournament, Levitt observes. You have to start out at
the bottom to have a shot at the top job.
Levitt is happiest grappling with questions that have
the potential to overturn the ''conventional wisdom.''
''Where did all the criminals go?'' proved to be the
perfect instance of such a question. The sudden and
precipitous crime drop in the 1990's took everyone by
surprise. Plenty of plausible-sounding hypotheses were
put forward to explain it. But when Levitt turned an
economist's eye to the data, he found that most of the
supposed causes -- innovative policing strategies,
stricter gun control, a strong economy, the aging of
the population -- had a negligible effect. Others
could be shown to play a limited role: increased
imprisonment seemed to account for a third of the
crime drop; the crash of the crack market for 15
percent; the hiring of more cops for another 10
percent.
FREAKONOMICS
A Rogue Economist Explores the Hidden Side of
Everything.
By Steven D. Levitt and Stephen J. Dubner.
242 pp. William Morrow. $25.95.
First Chapter: 'Freakonomics' (May 15, 2005)
Forum: Book News and Reviews
And the balance? Here is where Levitt and his
collaborator, John Donohue of Stanford Law School,
showed unsettling originality. Since abortion was
legalized in 1973, around a million and a half women a
year have ended unwanted pregnancies. Many of the
women taking advantage of Roe v. Wade have been
unmarried, poor and in their teens. Childhood poverty
and a single-parent household are two of the strongest
predictors of future criminality. As it happens, the
crime rate started to drop in the early 1990's, just
as children in the first post-Roe cohort were hitting
their late teens, the criminal's prime. Hence Levitt
and Donohue's audacious claim: the crime drop was, in
economists' parlance, an ''unintended benefit'' of
legalized abortion.
A controlled experiment to test the truth of this
theory is obviously out of the question. In
''Freakonomics,'' however, Levitt does the next best
thing, teasing out subtle correlations that render the
abortion-crime link more probable. (States like New
York and California that legalized abortion before Roe
v. Wade, for example, showed the earliest drops in
crime.) In the social sciences, that is about as close
as you can get to demonstrating causation. To insulate
himself from the charge that he is advocating abortion
as the cure for crime, Levitt does a little
cost-benefit calculation. Suppose, for the sake of
argument, we say a fetus is worth one one-hundredth of
a person. Even then, he shows, the number of averted
murders would not justify the number of abortions.
This is clever but disingenuous. Anti-abortion groups
do not hesitate to cite undesirable consequences of
abortion. Why shouldn't abortion rights advocates get
to cite its desirable consequences, like a drop in
crime resulting from fewer unwanted children?
Economists can seem a little arrogant at times. They
have a set of techniques and habits of thought that
they regard as more ''rigorous'' than those of other
social scientists. When they are successful -- one
thinks of Amartya Sen's important work on the causes
of famines, or Gary Becker's theory of marriage and
rational behavior -- the result gets called economics.
It might appear presumptuous of Steven Levitt to see
himself as an all-purpose intellectual detective, fit
to take on whatever puzzle of human behavior grabs his
fancy. But on the evidence of ''Freakonomics,'' the
presumption is earned.
Jim Holt reviews books for The New Yorker and The New
York Review of Books, among other publications.
Mario Gagho
Agra University
www.ppi-india.org
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