Thursday, May 26, 2011


I recently watched the documentary of Freakonomics, which I recommend, if only to save yourself reading the book. That makes it sound bad, but it isn't. It's actually good and interesting. But it does not, to my mind, live up to this kind of hype:
Freakonomics establishes this unconventional premise: If morality represents how we would like the world to work, then economics represents how it actually does work. It is true that readers of this book will be armed with enough riddles and stories to last a thousand cocktail parties. But Freakonomics can provide more than that. It will literally redefine the way we view the modern world.
Assuming that the movie is a fair reflection of the book (perhaps even the best parts of the book) then I would say it will definitely not redefine (or even change) the way we view the modern world. Unless we are idiots.

Here are some examples. Some kids in high school work hard and get good grades but others don't, even though getting good grades is an important means to making more money (something these kids want) in later life. How might this change if kids are given financial rewards at the end of each month in which they get good grades? Get ready to have your view of the world redefined: some of them work harder, but by no means all of them do. Maybe if the incentives were larger, or given even more immediately, or both, they would make more of a difference. Who knows? That's it.

Example number two. After some scandals in the world of sumo wrestling, including insiders whistle-blowing, some people were still not convinced that there was widespread cheating going on. Wrestlers who win 8 out of 15 bouts are rewarded, and it was alleged that those who had already won 8 but still had a bout left would allow their opponent to win if that would bring him up to 8 wins. A statistical analysis suggested that this was indeed what was happening. Economics saves the day and blows the lid off sumo corruption? Not exactly. For one thing, those needing to win that last fight have much more of an incentive, all cheating and bribery aside, to win than do those who already have the 8 wins they need. Lacking motivation is not cheating. For another, many disciplines use statistical analysis. It is not a win for Economics every time this proves useful.

What else is in the movie? People with the kinds of names that poor people have tend to do badly in life, but because they start off poor, not because of their names. On the other hand, people with names associated with black people are less likely to get interviews (in the USA at least) than are people with white-sounding names. Is this really all that surprising?

I don't mean to overdo it. There are interesting findings here, and some that are hardly surprising nevertheless do contradict what some people have thought. So they are worthwhile too. But "statistical analysis confirms common sense" more often sums up what the 'freakonomists' have to say, it seems to me, than anything about turning conventional wisdom on its head or making you gasp in amazement. One idea that is repeated in the film is that incentives matter, people respond to them (but not all in the same way or to the same degree, as the high school incentive scheme shows). If that rocks your world then you should definitely strap yourself in for a bumpy ride and read as many of these books as you can. Or else just watch the movie.       


  1. But what about the one section of the movie (and book, I assume) that I thought we were both intrigued by -- the idea that the national legalization of abortion in the 1970s contributed to the (otherwise incompletely explained) drop in serious crimes in the 1990s?

    That didn't strike me as one of those "yuh, no duh" moments. Did it you?

  2. No, it didn't. I forgot about that when I was writing this. But I'm not sure (as in, I just don't know and haven't investigated) how much there is to that theory. Also, as it was presented, there wasn't much, if any, reason given for thinking that the drop in crime is otherwise incompletely explained. I'll try to look into this a bit more.

  3. After extensive research I have found this. Key sentence: "Donohue and Levitt claim that with these new changes the results are smaller, but still statistically significant." I haven't got far enough yet to know how small they mean.

    If it's very small, then I think my (slightly) cynical take is still about right. Common sense would tell you that legalized abortion means fewer unwanted pregnancies, which means fewer sub-optimally-raised children, which might mean less crime. If the drop is as high as 50% then this is more than common sense would suggest, I think, but if it's significantly less then I stand by my snark.

  4. Well that attempt to link to this: didn't work. Sorry.

    I'm not qualified to judge the mathematics involved, so I'll just bow out and accept that Levitt is probably right. While I'm on his side, I should add that he makes no outrageous claims in the movie for what he has found. His method is basically to think up a reasonable hypothesis and test it using statistical analysis. I have no objection to this as a practice, and it sometimes seems to produce interesting results.

    My problem is with the hype. Levitt does not have some way (that I know of) of just crunching numbers and seeing all the expected and unexpected results they throw out. He investigates specific hypotheses, and he doesn't waste his time on crazy ones. Good for him. But then all the "You won't believe the CRAZY results these guys come up with!!!!" stuff is misleading.

    Secondly, and maybe this is just me, but I have got the impression that this is all supposed to prove that economics is a kind of super science. Again, Levitt doesn't appear to make that claim, but it seems much more like applied mathematics than economics to me. So I don't see that it proves much about the value of economics per se.

  5. My problem is with the hype. [...] He investigates specific hypotheses, and he doesn't waste his time on crazy ones. Good for him. But then all the "You won't believe the CRAZY results these guys come up with!!!!" stuff is misleading.

    This is contrarianism, which has in recent years become so commonplace that there is now an English word for it.

    In my book (the one published last year) there is a discussion of contrarianism near the end of the final chapter. It is in fact one of the more explicitly Wittgensteinian passages in the book. I suggest that it is characteristic of our times, in a way that is hard to put into words, that certain views are repeatedly presented, in a conceited and self-congratulatory manner, as somehow "dangerous", "explosive", "heady", "forbidden" etc. when in fact they are merely unpopular, unconvincing, or both.

    I refer to Rai Gaita's pointing out in Good and Evil that if some view is really forbidden in a culture, this is shown by the fact that the view is considered a reductio ad absurdum of itself, so that merely expressing the view already comes close to losing the argument. (D. Z. Phillips makes similar points in a slightly different context in this paper.) Levitt's claims clearly do not pass this test, so his claims just aren't that "forbidden" when compared with genuinely forbidden views (e.g. Nicholson Baker's view in his Human Smoke that both sides of World War II were equally bad morally). Yet they are constantly presented by both Levitt and those who adore him as if they were. Which I feel is very revealing of something.

  6. Yes, this is better put and better supported than anything I've said, but it hits the nail on the head. With Levitt we seem to have a kind of faux contrarianism, as if any interesting claim or finding has to be explosive, etc. What it suggests is extreme boredom on the part of our society. No one wants more of the same, everyone wants something completely different (though not in the Monty Python sense, sadly). Of course that's an exaggeration. There are people (at least where I live) who want orthodoxy, or what they mistakenly think is orthodoxy, but these are explicitly religious people. (I'm thinking of a former student of mine who posted a Christian rock music video on Facebook this morning and assured everyone that the theology in it was sound.) But the most popular kind of religion these days seems to be new as well. People aren't flocking to become Catholics (unless it's in traditionally non-Catholic places) or Episcopalians (similar proviso). Those who get religion (seem to) (tend to) want something new. Which all suggests that people are not satisfied with what they've got, with the culture and values they have inherited. But perhaps I'm being too hasty again. I should emphasize the word 'suggests'.