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Monday 12 December 2011

Scepto-nomics (a review of "Freakonomics")

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 Steven D. Levitt stormed onto the social science scene like a rock star with his unconventional questioning and sometimes controversial conclusions on certain matters. He has come to define the term “rogue economist” and has made numbers sexy. At least that is the way his co-author Stephen J. Dubner wants us to see him. “Freakonomics” introduced Levitt to a far wider audience outside of the world of academic papers by asking unusual questions about a vast array of subjects in modern life. Each chapter is based on the academic work that cemented Levitt’s reputation for good or ill. Levitt is presented as being something of a mental enigma and I guess Dubner is his translator to us mere mortals. This debut book looks at links between such disparate subjects as cheating school teachers and rigged sumo matches. He uncovers the reason why estate agents don’t have your best interests at heart when it comes to selling property by tenuously linking this truth to what led to the growth and decline of the Ku Klux Klan. Along the way, the certain myths about the drug industry are blown apart by asking the question “Why do drug dealers live with their parents?”

Since the publication of this book, there has been a successful sequel, a regularly updated website/blog and a 2010 documentary film called “Freakonomics”. I think I am not over-stating matters if I were to say that “Freakonomics” can now be considered a modern classic in at least the genre of popular social science work. The work is now often cited and has probably done a lot to promote interest in economics. However, by having such a popular appeal one is poised to asked how credible is it?

After his headline grabbing academic papers on a variety of subjects and the cult success of this book, Levitt’s work has been targeted by several critics. This is not just down to his controversial claim that an abortion law passed in 1973 is the main reason why there was a huge decline in crime in the early 1990s, but also because several other economists do not see this as a work of economics. It has been more likened to sociology. The authors – most probably Dubner – even make the argument in the book that economics is more art than science. Such comments are bound to rub up on tender spots amid social scientists who often find their disciplines grouped under the heading “soft science”, implying less practicality, empiricism or scientific accuracy than the “hard sciences”. Not being a numbers man or a person with any scientific standing, this is territory I will save for another day. After all, the main reason why I bought the book was for the apparently undeniable argument put forward by the authors that sumo wrestling is fixed!

The authors state early on that the book has no theme. However, it is this aspect that I find so appealing. I am always fascinated with genuine and abstract links between different subjects. If you are trying to get across a single methodology or approach this can be one of the best ways to entice potential learners. So, although it might put off the more serious academic it certainly works well with the rest of us great unwashed masses.

“Freakonomics” might not be pure economics, but the methodology that Levitt applies is pretty sound and when it comes down to the numbers – which Levitt asserts “never lie” – he has few serious detractors. Aside from the arguments regarding his controversial implications I did notice there was some surprisingly familiar territory. According to software developer and “What’s the Harm.Net” creator, Tim Farley “Skepticism [US sp.] is the intersection of science education and consumer protection. We help people learn from science to avoid spending their money on products and services that do not work.” Although the book does not expose complimentary and alternative medicine or debunk psychics, it certainly provides potentially important information for the consumer based on the analysis of data. Such examples of this can be seen in the investigation into the fixing of sumo wrestling matches, understanding the data that revealed the cheating of school teachers and why estate agents have little incentive to sell your property at the best price possible. However, despite not being a work that is typically listed alongside books like Michael Shermer, Carl Sagan, Martin Gardner and Ben Goldacre, “Freakonomics” ticks many of the sceptical boxes. The edition I own blurts the slogan “Assume nothing, question everything”, which sounds like a motto befitting of the modern empirical sceptic movement. Fortunately it’s boast to explore “the hidden side of everything” does not mean we are embarking on a series of silly conspiracy theories, but appears to use good sceptical tools. The most obvious of these is the acknowledgement of the “cum hoc ergo propter hoc” logical fallacy or why correlation does not prove causation. This is particularly important when it comes to mining data. Although there is confidence in the way the authors assert certain conclusions, one feels that they are open to criticism and don’t commit the cardinal sin of pseudo-rationalists by implying absolute certainty.

Actually proof of their desire to be honest about their research and data can be seen in a later edition of this book, where apparently the authors admit to readily buying into the somewhat exaggerated stories of author/activist Stetson Kennedy’s undercover crusade against the Ku Klux Klan. However, the anecdotal style of each chapter, which cleverly links these otherwise very different subjects, is again a massive appeal of the book. Being more an historical and cultural orientated sceptic than one whose natural inclination is towards science and mathematics, I certainly found the background information on the rise of crack cocaine – and the fascinating analogy with the rise of nylon stockings – to be very interesting. I found the authors’ explanation that the crack cocaine trade, as worked through street gangs all the way to criminal corporations, to be no more than a tournament an apt description. The controversial theory on why the crime rate fell dramatically in the US in the early ‘90s is also very convincing and compelling if you can put aside personal biases. By using other countries as comparisons and by also examining the legitimacy of other theories put forward at the time is also both insightful and provides an interesting overview of the human capacity for cognitive bias. Left-wingers want to believe stricter gun laws helped when they miss the point that most people involved in gun crime would have obtained their weapons from a healthy black market. Right-wingers want to believe that new police initiatives had an impact, when there is little evidence to prove this to be true. I found the whole chapter’s conclusions to have been presented in a pretty even-handed and balanced way, and this probably stems from the initial controversy caused when Levitt published his paper on the theory.

The previously mentioned Ku Klux Klan story was also of great interest to me and long before I read the relatively modest list of criticisms targeted at the first edition of the book, I did some research of my own into this particular anecdote. After all, the idea that the makers of a Superman radio show helped to drastically reduce the membership and diminish the fear of the Ku Klux Klan is a pretty exciting idea. Although the general consensus is that the story reproduced in “Freakonomics” comes from the somewhat overblown memoirs of Stetson who went undercover, the evidence supports the whole crux of the chapter. Namely, that the influence and appeal of the Ku Klux Klan was in part down to the fear of their reputation. This reputation was dealt a severe blow when secret information of the group’s current passwords, rankings, ceremonies and rituals were broadcast in radio plays that pitted America’s favourite boy-scout against “The Clan of the Fiery Cross”. The embellished true story is actually secondary to the interesting data produced by Levitt. He asserts that the Klan’s appeal came down to their reputation built on a violent past. The figures that show lynchings attributed to the Klan diminished steadily even as the membership dramatically increased is a possible indication of this; although not to fall prey to the aforementioned logical fallacy, “Freakonomics” compounds this hypothesis with the way membership and overt influence of the Klan fell after more was known about them.

Finally the two chapters on child-rearing nicely dovetailed into the research and information I gleaned from Richard Wiseman’s “59 Seconds” as well as “50 Myths of Popular Psychology”. Being a parent, I would rather understand how little an influence I have over my child’s mental and cultural development than to deceive myself. It won’t stop me from taking my daughter as many museums as possible or from reading to her at night, but sometimes it is nice know you are sharing something for its enjoyment rather than being put under pressure to educate.

“Freakonomics” deserves a place on the bookshelf of most sceptical readers. The question as to where it fits in exactly might be a little tricky, but I know that many have been enticed into reading more about economics and the social sciences because of this book.
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