LefFrea 05-8-140


A Rogue Economist Explores the Hidden Side of Everything



Steven D. Levitt and Stephen J. Dubner

William Morrow, 2005, 240 pp., ISBN 0-06—73132-X


Levitt is a young genius economist and Dubner is a writer.  This is a fascinating book about how everything relates to everything else – sometimes in freakish ways.  The aim is “to explore the hidden side of ... everything.” (14)  What interests Levitt is “the stuff and riddles of everyday life.  His investigations were a feast for anyone wanting to know how the world really works.”  He is especially interested in explaining how people get what they want.  (xi)


Just because two things are correlated does not mean that one causes the other.  A correlation simply means that a relationship exists between two factors...but it tells you nothing about the direction of that relationship.” (10)


“Morality, it could be argued, represents the way that people would like the world to work—whereas economics represents how it actually does work.” (13)


“Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing.  Economists love incentives.  They love to dream them up and enact them, study them and tinker with them.”  “An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation.”  “There are three basic flavors of incentive: economic, social, and moral.” (20,21)


“Who cheats?  Well, just about anyone, if the stakes are right.”  Did you kick your golf ball out of the rough?  Take a bagel from the office with the intention of paying for it later – and didn’t?  “Cheating is a primordial economic act: getting more for less.”  (24-5)


“Information is a beacon, a cudgel, an olive branch, a deterrent, depending on who wields it and how.  Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect.” (67)


“Information asymmetries everywhere have been mortally wounded by the Internet.  Information is the currency of the Internet.”   “As a medium, the Internet is brilliantly efficient at shifting information from the hands of those who have it into the hands of those who do not.”  To price caskets, go to www.TributeDirect.com  (68)  


“If you were to assume that many experts use their information to your detriment, you’d be right.  Experts depend on the fact that you don’t have the information they do.” (70)


Do you think a doctor would never recommend unnecessary treatment?  “...a doctor may have the same economic incentives as a car salesman or a funeral director or a mutual fund manager.”  “Experts can exert a gigantic, if unspoken leverage: fear.” (71)


“For black Americans, the four decades between World War II and the crack boom had been marked by steady and often dramatic improvement.  ...the telltale signs of societal progress had finally taken root among black Americans.”  “Perhaps the most heartening gain had been in infant mortality.”  “Then came crack.”  “After decades of decline, black infant mortality began to soar in the 1980s, as did the rate of low-birthweight babies and parent abandonment.”  “Crack was so dramatically destructive that ... the group’s postwar progress was not only stopped cold but was often knocked as much as ten years backward.  Black Americans were hurt more by crack cocaine than by any other single cause since Jim Crow.  And then there was the crime.” (113)  “Nearly 5% of all arrests in the United States are still related to cocaine. (134)


In 1989 crime was just about at its peak in the U.S.  A further sharp increase was forecast but it began falling with suddenness and speed in the early 1990s.  (119)  “The crash of the crack market accounted for roughly 15 percent of the crime drop of the 1990s.” (135)


The primary cause of the drop in crime rate was Roe v. Wade in 1973.  “By 1980 the number of abortions reached 1.6 million (one for every 2.25 live births), where it leveled off.”  “These two factors—childhood poverty and a single-parent household—are among the strongest predictors that a child will have a criminal future.  Growing up in a single-parent home roughly doubles a child’s propensity to commit crime.  So does having a teenage mother.”  (138-39)


“Perhaps the most dramatic effect of legalized abortion, however, and one that would take years to reveal itself, was its impact on crime.  In the early 1990s, just as the first cohort of children born after Roe v. Wade was hitting its late teen years—the years during which young men enter their criminal prime—the rate of crime began to fall.”  “Legalized abortion led to less unwantedness; unwantedness leads to high crime; legalized abortion, therefore led to less crime.” (139)


“And the post-Roe cohort was not only missing thousands of young male criminals but also thousands of single, teenage mothers—for many of the aborted baby girls would have been the children most likely to replicate their own mothers’ tendencies.” (141)


“To discover that abortion was one of the greatest crime-lowering factors in American history is, needless to say, jarring.”  (141)


“Indeed, there are plenty of people who consider abortion itself to be a violent crime.  One legal scholar called legalized abortion worse than either slavery (since it routinely involves death) or the Holocaust (since the number of post-Roe abortions in the United States, roughly thirty-seven million as of 2004, outnumber the six million Jews killed in Europe).” (142)


“No one is more susceptible to an expert’s fearmongering than a parent.  Fear is in fact a major component of the act of parenting.”  “The problem is that they are often scared of the wrong things.” (149)  Most of us are terrible risk assessors.  The risks that scare people and the risks that kill people are very different. (150)


“When hazard is high and outrage is low, people underreact.”  “And when hazard is low and outrage is high, they overreact.” (quoting Peter Sandman, a self-described ‘risk communications consultant)  (152)


“The data show that car seats are, at best, nominally helpful.” (152)  “Many parents so magnify the benefit of a car seat that they trek to the local police station or firehouse to have it installed just right.  Theirs is a gesture of love, surely, but also a gesture of what might be called obsessive parenting.”  “Most innovations in the field of child safety are affiliated with—shock of shocks—a new product to be marketed.” (153)


In Why Children Turn Out the Way They Do, Judith Rich Harris argues that “the top-down influence of parents is overwhelmed by the grassroots effect of peer pressure, the blunt force applied each day by friends and schoolmates.” (154)


 “...by the time most people pick up a parenting book, it is far too late.  Most of the things that matter were decided long ago—who you are, whom you married, what kind of life you lead.  If you are smart, hardworking, well educated, well paid, and married to someone equally fortunate, then your children are more likely to succeed.”  “...it isn’t so much a matter of what you do as a parent; it’s who you are.” (175)


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