Freakonomic: Business Social Economics Success Book Review

Freakonomics is a joyously entertaining book (at least up until page 179). It’s an intellectual romp. But there are problems. Let’s leave those for a moment and concentrate on the good parts.

We’re told early on that economist Steven Levitt is very good at asking questions. Indeed, he is. He’s also good at using the tools that he’s mastered as an economist to answer some of those questions in novel and interesting ways. That’s why this book is a charmer. Consider some of the questions as used in the chapter titles:

What do schoolteachers and sumo wrestlers have in common? (This chapter is about incentives, how they work in the world and how you can analyze them.)

How is the Ku Klux Klan like a group of real estate agents? (This one looks at the power of information in markets.)

Why do drug dealers still live with their moms? (Which talks about “the conventional wisdom,” a term coined by John Kenneth Galbraith.)

Where have all the criminals gone? (Facts and fiction of crime, we’re told.)

What makes a perfect parent? (Which works on answering a different question like “do parents matter?”)

Perfect parenting part 2: Would a Roshanda by any other name smell as sweet?

Levitt’s answers to these questions and others are tightly reasoned, interesting, and often provocative. They’re what make the book worth reading. Whether you think they’re enough to make the book worth buying depends on how you react to some of the problems.

There’s a problem with hype. Start with the title.

This is not “Freakonomics.” Levitt uses the same tools that other economists use. His conclusions are not unique. They are fascinatingly phrased and intended for a general, rather than an academic audience, but they’re still pretty mainstream.

Levitt is not a “rogue economist” either, as the jacket claims. Instead, he’s a very well respected economist. He just received the John Bates Clark medal that’s awarded every two years to the person judged the best American economist under forty.

There are also problems with the book itself. It’s really fun and fast-moving up to page 179. At that point the authors seem more intent on filling out the page count than on being interesting. Analysis and prose which have tripped along lightly till now begin to slog through a look at American first names.

There is another problem with the content. Throughout the book, we’re offered a series of interesting, thoughtful, well-reasoned and interestingly presented but hardly comprehensive arguments. Other points of view are ignored or quickly blown off.

For example, according to the authors, there is one cause for the decline in the crime rate, and that cause is the Roe v Wade decision. Levitt makes a good case for this, but he only analyzes national factors. A more thorough analysis might also compare different crime rates in different cities and seek out causes for the disparities.

Crimes rates in New York and Chicago should both benefit from the abortion ruling. But those cities have followed different policing strategies and they have very different murder rates.

In fact, Chicago, with about a third of New York’s population actually had more murders in 2001. Levitt doesn’t explain this, or even address the issue of local differences.

Throughout the book a tendency to offer Levitt’s one right answer, rather than an interesting insight into a complex question. My problem is not with the analysis that Levitt offers us; it is with the limited nature of what is analyzed.

The bottom line for me is that this is a fascinating and interesting book. It is a great read most of the way. But there are problems. I won’t be taking my copy back, but you may want to think twice before you spend your money for this book.