Steven Levitt obviously overstates the breadth of his work in the subtitle of Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, but he can be forgiven in his zealousness. He claims to be founding “freakonomics” as a new field of study, one that asks unusual questions that others fail to see or to embrace. Within that context, a claim that freakonomics explores “the hidden side of everything” is not so exaggerated, and social scientists within many disciplinespolitical science, sociology, and economics among themhave attempted to construct overarching theories that capture most of what they see as the important dimensions of the world. Within this volume, however, Levitt explores only a few topics to illustrate the kinds of issues that can be addressed using his approach.
In stepping outside what are commonly accepted as the boundaries of the field of economics, Levitt actually steps back a century or two into the past. Before economics was recognized as a discipline in its own right, it was part of what was called political economy, which encompassed both politics and economics, among other areas. Even further back, the types of questions Levitt studies were considered part of “moral theory”; Adam Smith, now recognized as one of the key figures in early economics, also wrote on what he called the theory of moral sentiments. Levitt seems to acknowledge this history, at least subtly: The table of contents for Freakonomics recalls a nineteenth century work. After each chapter title is a brief statement of the chapter’s contents, then several phrases indicating key points made in the chapter. There are no subheadings within chapters, and in fact the material within each chapter blurs together, sometimes leaving the reader wondering how Levitt makes the leap from one topic to another.
In fact, it is not always clear who is writing and whose research is being reported. Before each chapter appears a short excerpt from an article about Levitt written by coauthor Stephen Dubner for the August 3, 2003, issue of The New York Times Magazine. The chapters themselves report Levitt’s research results and theories both from his and from an outsider’s (Dubner’s) perspective. Much of the time, data sources are not attributed in the text, so it is not always clear if research is Levitt’s (rarely), is coauthored by Levitt (commonly), or, in the case of some minor results, is someone else’s entirely (acknowledged in the source notes at the back of the book).
What, then, is Levitt attempting to do with his new field of freakonomics? He states that he is taking economics back to its basics, as a study of incentives and the ways in which people attempt to get what they want, given that scarcity and competition exist. Levitt stresses that he is exploring how the world really works, rather than examining issues of morality or how people would like the world to work. The text is markedly nontechnical, with no equations and only a few summaries of data. Levitt seems to ask the reader simply to trust him that the data actually show what he claims, although the extensive notes to the book do provide citations to academic papers (his and others’) containing more complete analyses. Levitt thereby both invites nonspecialists into his field of study and opens his analysis to scrutiny by those who wish to delve deeper.
Chapter 1 begins with a brief discourse on incentives. Levitt believes that most incentives do not arise organically; instead, someone had to invent them, with some goal in mind. This opens the question of whether such artificial incentives actually do achieve their goals. He gives an example of a day-care center faced with the problem that some parents were late picking up their children. The center decided to levy a small fine each time a child was picked up late. The result was that parental tardiness increased; apparently, parents balanced the small fine against their own inconvenience in being on time and decided that the cost was worth it. The fine also may have converted a social or “moral” issue (“I should pick my child up on time because it’s the right thing to do”) into an economic one (“How much will it cost if I am not on time?”). Throughout the book, Levitt stresses that types of incentiveseconomic, social, and moraloften play off or replace one another.
The example raises the issue that when rules are set, cheating often follows. Levitt expands on this concept in an...
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