What is the main message of Chapter 3 in Freakonomics?

The main message of Chapter 3 is that there are times when what everyone assumes turns out not to be true.  The authors look at a few different instances in which "conventional wisdom" turns out to be wrong.

The authors talk about how various people can have a stake in creating a given conventional wisdom even if it is wrong.  They note how a homeless advocate had a stake in making people think the problem of homelessness was much worse than it really was.  They also point out how the police had an interest in making people think that drug dealing was a much more profitable "job" than it really was.

So, the main point of this chapter is that people can be convinced of the truth of some conventional wisdom even if that conventional wisdom is false.  This often happens become someone has a stake in pushing that conventional wisdom.

What are the main ideas of Freakonomics?

The authors' intent, as they describe it, is to present a worldview comprised of five "fundamental ideas," easily expressed in terms of "main ideas": 1. incentive; 2. conventional wisdom; 3. remote, subtle causes for effects; 4. experts' informational advantage; 5. economic tools of measurement.

This book, then, has been written from a very specific worldview, based on a few fundamental ideas. ... Most books put forth a single theme, .... This book has no such unifying theme.

Using the Introduction to Freakonomics, the first idea Levitt and Dubner introduce is that while events may trigger a "scramble" for answers as to causes for the event, conventional wisdom may entirely miss the true cause, selecting logical and easily identifiable reasons instead. The example used is that the Roe v. Wade abortion ruling caused a drop in population in specific demographics resulting in an unexpected drastic, persistent drop in crime rates in the 1990s: "conventional wisdom is often wrong." 

The second idea introduced is that all actions are motivated by incentive. The authors call incentives--the things that motivate your choices and actions--the "cornerstone of modern life." They attribute the growth of incentives--"incentives were magnified tenfold"--to the rise of capitalism in the 1700s, leading to Adam Smith's economic philosophy book The Theory of Moral Sentiments published in 1759: "incentives are the cornerstone of life."

The third idea introduced is that causes leading to effects may often, as in the case of Roe v. Wade and crime reduction, be "distant, even subtle." This means that causes for events may be unidentified because remote and seemingly unrelated when in fact they have precipitated events: "Dramatic events often have distant, even subtle, causes."

The fourth idea introduced is that experts have motivation to suppress information--to misuse their "informational advantage"--so as to benefit themselves while not ethically serving the client. The other half of this idea is that the informational advantage can be "beaten" by disseminating industry-specific information being used by experts for personal advantage: "'Experts' ... use their informational advantage to serve their own agenda. ... in the face of the Internet, their informational advantage is shrinking every day."

The fifth idea is that the application of the tools of economics--knowing what to measure and how to measure it--untangles the complexities of the world we live in by demystifying it from the moralistic concept that the world "should work this way" to the economic concept that it "does work this way": "Knowing what to measure and how to measure it makes a complicated world much less so."