The book ‘Freakonomics’ written by Steven Levitt and Stephen Dubner, is a novel written with a purpose to examine life’s oddities with the tools of economics. The third chapter of this book is entitled ‘Why Do Drug Dealers Still Live with Their Moms’, and the main idea of this chapter is to elaborate on the fact that people often assume things that are not true as it turns out. Authors prove this by showing statistics from various experiments and showing how conventional wisdom applies in these instances.
The chapter lays itself out with an opening of defining conventional wisdom. According to economic sage, John Galbraith, conventional wisdom is information that is convenient, comfortable, and comforting and typically untrue. Conventional wisdom appears untrue when it is sloppy or self-interested. Levitt and Dubner used an example of a statistic that seemed high, people didn’t really question it initially because it was said by an expert. Although experts can be very deceptive, they depend on journalists and vice versa. Authors Levitt and Dubner say advertising is their powerful tool for creating conventional wisdom. The example they used was Listerine, and how it was advertised as a breath freshener after originally being a floor cleaner. Authors also talk about an experiment regarding Black Disciples, a drug dealing gang.
Sudhir Venkatesh’s assignment was to visit Chicago’s poorest black neighborhoods with a clipboard and a seventy question, multiple-choice survey. He got to know members of the Black Gangster Disciple Nation and soon became intrigued by their drug dealing operation. His project was comprised of three sixteen-story buildings made of yellow gray brick. Sudhir was wrongly convinced by their false information at first, but decided to keep on going with his task until his questions were genuinely answered. He got to know them well in the 6 years of study. He learned that J.T. was the leader of the crack gang, because he was bred to be a boss.
Levitt and Dubner also elaborate on the gang structure, their payment, and how incentives affect these people as well. Being that J.T. was the leader of the gang, he reported to a central leadership called the board of directors. The way the business worked for these crack dealers was they were paid 20 percent of revenue. J.T.’s branch of the Black Disciples made larger amounts of money while lower members of the hierarchy made very little. J.T. allowed his officers to take home about $700 a month and his foot soldiers only $3.30 per hour, which is less than the minimum wage.
The reason these people are paid so little is later explained by Levitt and Dubner through the history of cocaine. Authors said that more people are doing this job, so it means they make less money off of it. People in the lower ranks of this business would end up quitting because they don’t ever end up moving any higher. The way wages are determined in this occupation is mainly based on the amount of employees doing this job as well. They also determine wages by the specialized skills required, the unpleasantness of a job, and the demand for the services that a job fulfills.
In summary, this chapter was written to explain the reason why drug dealers still live with their mothers. The reason for this, all in all, is because they are too poor. In this industry it is hard for them to work their way up and make more money. They can’t move up in status.
Different phenomena in human life have attracted explanations from experts and other observers, which unfortunately, have become to be regarded as the conventional truth even when they seem to fail. This paper seeks to analyze an article that describes the different explanations advanced for changing trends in crime, politics and other social factors in the American society.
The article is termed freakonomics, the authors (Steven Levitt and Stephen Dubner) analyze different social aspects of the daily life in the most dazzling way that defies conventional wisdom. The article mainly dwells on the changing trends of crime in the American society. It also uses other social indices such politics and professionalism to underscore the misconceptions that lead to erroneous explanations for different phenomena in the United States and the world at large.
Analysis
This article mainly intends to show that some of the expert views which are often held as conventional may be sometimes, if not always false.
The article begins by citing the soaring levels of crime that were witnessed in the 1990’s. The level of crime was rising at rates that had never been witnessed before.
The rising trends in crime got experts forecasting a more chaotic future. For instance, the article cites that in 1995, a criminologist named James Alan Fox produced a report that pointed to a sharp rise in cases of teenage homicide over a decade. Similar sentiments were being propelled from different quarters such as other criminologists, political scientists and other learned forecasters.
As time went by, it became apparent that the exact opposite of what had been forecasted was taking place. Instead of soaring levels of crime, the country was experiencing unpredicted decrease in crime levels. The sharp fall which peaked in the year 2000 was much more baffling than the later days when crime was the order of the day. False predictions were giving way to false explanations by the same experts.
According to the article, the sharp decrease in crime levels had everything to do factors such as tough gun controls, strong economy, and innovative police strategies, increase in the number of police, increase in the use of capital punishment, change in the crack and other drug markets, and finally the aging population factor. The authors shrugged off this type of explanation as cheap as all these efforts when were in place when the same experts predicted a sharp rise in crime.
According to the authors, the real cause of the drop in crime was the legalization of abortion across the United States. The legalization of abortion which had happened in the 1970 has lead to a significance drop in crime in the late 90s. The major step was towards countrywide legalization of abortion was initiated by a woman, Norma McCorvey.
She was from Dallas and had already given up two kids for adoption. She was not in a position to raise a child, she was uneducated, poor, unskilled, an alcoholic and other drugs abuser. This kind of characteristics would create unfavorable conditions for child up bringing. This increases the chances of raising a spoilt, frustrated child who may end up in the streets as a criminal.
The initial laws had restricted abortion thus creating a scenario whereby it was expensive to procure an illegal abortion or worse still, confer to unfit women the role of mothers.
As the authors quote, the forced child raising may lead to a distressful future and further impart a psychological harm to the child. It was argued that a woman who decides not to have a child has a good reason for that, for instance she might be too poor, unmarried or in a bad marriage.
This article cites other examples to show how conventional wisdom leads to false conclusions that mislead the masses. For instance, the power wielded by practitioners in different professional fields may be exploited at times to take advantage of a situation. The article cites, among others, a real estate agent who exploits their client’s inability to understand real estate matters.
The authors also point out the same flawed beliefs in the political arena, whereby rich politicians or politicians who spent more money during campaigns are almost certain of wining.
The authors claim that the electorate must have an inner connection with a certain candidate in order to vote for him. The authors do not however sound convincing with this example as indeed money plays a major role in gaining votes, especially in unjust systems where corruption and voter bribery are the order of the day.
Conclusion
This paper sought to analyze the article freakonomics by Steven Levitt and Stephen Dubner. The article is supposed to explore the bad side or everything, that’s according to the subheading. However, as much as it touches on other matters, it’s more seen to revolve around the crime, its causes and how abortion legalization has helped reduce rates of crime. The article uses other examples to show that what is often regarded as conventional wisdom or expert views may be sometimes false.
The book Freakonomics is a collection of numerous economics articles by Levitt. The author has gained an enormous reputation as an economist who has successfully applied economics concepts to diverse fields that have not been handled previously by any classical economist. The authors of the book, Levitt and Dubner propose that economics is basically the study of incentives. In their economics arguments, the authors ask such questions as between a swimming pool and a more dangerous gun? What are the major similarities between the schoolteachers and the sumo wrestlers? Try to establish the reasons why drug dealers never leave their mothers’ homes and the impacts of the legalization of abortion on the prevalence of violent crimes.
These do not form the typical economic questions. However, the author of the book is not interested in the conventional views of economics. He is much enthusiastic about understanding the riddles that entail our daily lives such as corruption, sports, crime and child nurturing; topics without any form of conventional wisdom. The book includes six chapters all of which handle varied life-related topics.
The author uses theories of economics to demonstrate the cheating that is done by the sumo dancers. Top division sumo dancers are expected to participate in fifteen matches during a sumo tournament; additionally, the wrestlers are supposed to win at least eight matches failure to which they are demonized. Levitt collects data from the wrestling matches in the sumo community and incorporates the corruption allegations of match-fixing to make conclusions. Levitt concludes that wrestlers with an eight-win record, who have already secured their place in the next tournament, often collude with those with a seven-win record to let them win.
Additionally, Levitt tries to exhibit the supremacy of data mining. This is exemplified by the investigations of dishonesty in the Chicago School system. Through the analysis of numerous databases and posing the right questions, Levitt emerges with various results.
The second chapter of the book deals with the visit of the author to the home of folklorist Stetson Kennedy. During the visit, the authors discuss Stetson’s explorations on the Ku Klax Llan. However, Levitt and Dubner later raise queries on the investigations that were conducted by Kennedy. They conclude that the effectiveness of the researches conducted by Kennedy was at times exaggerated (Levitt and Dubner 26). The authors observed that Kennedy’s portrayal of his investigations and other issues relating to the Klan were overly exaggerated.
Abortion is another issue that is handled in the book. The author investigates the impacts of abortion in Romania; he concludes that a lot of children who were born a year after the abortion ban would perform dismally in all measurable areas. According to Levitt and Dubner, these children would be poorer at school, the job market and would have higher chances of becoming criminals (118). The authors’ allegations were in contradiction of the proposed claims.
Freakonomics continues to argue that the need for additional police to combat crime can be eliminated by analyzing the electoral cycles. These allegations were partly evidenced by a computer programming error that occurred during the simulation. No relationship has been established between elections and the variations in the police recruitment process that establish a strong relationship between the effects of the police on combating crime.
In conclusion, Levitt and Dubner successfully portray economics as the study of incentives; the methods that people utilize to satisfy their needs and wants especially if other people desire the same thing. In Freakonomics the authors portray the hidden side of all things; from the activities of the illegal gangs, the theories of campaign finance to the covert of the Ku Klax Klan. The book ascertains an unconventional economics concept; morality dictates how the world is expected to work while economics dictates the actual working of the world.
Works Cited
Steven, Levitt and Stephen Dubner J. (2005). Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. William Morrow.
Critical writing is one of the most interesting models of writing that exits. It involves presenting a problem by exposing unimaginable and hidden issues that emerge as the answers to those problems. This form of writing invites a lot of debate and possible opposition to the writer s assumptions.
It has been called freakonomics (DiNardo 973). DiNardo continues to argue that Freakonomics is intended to entertain than to inform. There is a lack of “serious questions to ask and therefore it is even more impossible to imagine what serious answers would look like” thus becoming even the more entertaining (973).
Despite this simplification by DiNardio, Baker argues that freakonomics presents a problem in a “new way, associating factors that seem unrelated to the problem in trying to come up with the solutions” and exposing uncertainties about the knowledge experts hold as conclusive (para 1). This leaves a lot of room for disagreements on the author’s assumptions.
In their 2005 book on freakonomics, they propose alternative conclusions on several problems the American society is facing. Their arguments propose that just because “two things are correlated does not mean that one cause another.” They use the analogy of X being related to Y. This correlation does not “offer further information of the direction of the relationship.” They argue that maybe X cause Y or vice versa. Or may be both X and Y are caused by another unseen factor (10).
In analyzing the causes of the unexpected sudden 50% decline in crimes in the late 1990s America, many experts proposed a number of reasons. Key among them was an improved economy, so many would be criminals were gainfully employed, and better policing initiative by the American police.
However Freakonomics view of this event point to a little insignificant event 20 years earlier. It all stated when a young troubled 21 year old drug abusing alcoholic Norma McCorvey sought to abort her third pregnancy. Norma had previously given up her two other children for adoption. Her plight was adopted by pro abortionist. The result is that abortion was legalized. Levitt & Dubner argue that so many would be criminal were therefore never born, thus the decrease in crime rates years later (4-6). But can this conclusions hold water?
Freakonomists are very systematic writers. They follow a procedural criterion in seeking alternative solutions to the problem being defined. They first collect Information that includes statistical data to support their arguments. In presenting their case for the reason why crime suddenly dropped in America, Levitt and Dubner first collected all the information they needed to support their otherwise illogical proposal. This information included statistical analysis for example crime dropped by 23% in five states the allowed abortion (p 140).
This statistically proven conclusion outweighed the criminologist 8 most suggested reasons for the drop in crime which they dismissed as inconclusive. In their arguments, expert’s opinion is wrong most of the time because it basically focuses on and draws its conclusions from correlation, which just shows just a basic relationship and nothing more. Because this expert opinion is directly passed to the public for consumption through the media, without any debate it becomes the public truth (4, 5).
The 8 experts suggested alternatives were: innovative policing, which was cited 52 times, reliable prisons, decrease in drug markets, aging population, improved laws that control passion of guns, strong economy increased number of police officer and other such as capital punishment.
But when Levitt and Dubner presented their alternative argument supported by statistical data, these expert opinions crumbled like a cookie in water. Upon closer analysis only three of the above causes had a logical sense of reducing crime. All the others were “Figments of someone’s imagination.” It was just “wishful thinking” (4, 5).
It is important to note that freakonomists always tend to present their alternative argument on the basis of what effect it will have on the economy since they are economist. Take the analysis of the effects of guns on crime control.
They argue that tightening of gun control laws does not mean a decrease in crime. In Switzerland, every average male keeps an assault rifle for defense, yet it is the safest country to live. This is a stack contrast to America which has imposed tougher gun control laws, yet crime rates are much higher in America than in Switzerland.
To further support their argument, they use the analogy of a girl confronted by a mugger. If the girl had a gun, she would scare the mugger away and therefore the gun becomes necessary. But if the mugger had a gun he would accomplish his act therefore criminalizing gun possession.
The conclusion of their argument opposes expert proposals of reducing guns the fewer the number of guns in the streets the lower the crime rate. Their conclusion is that societies need to have more guns in the streets, held by the right hands to control crime (131- 133). A safer economy therefore needs more guns but in the right hands, like the young girl confronted by a mugger.
In conclusion, freakonomists have very systematic criteria for establishing an alternative proposal to any problem they are solving. Their priorities start with stating the problem at hand. They then highlight experts proposed alternatives before coming in with their own counter alternative.
They support it with tangible examples that include statistical data. The result is that always they end up trivializing experts and their opinions as inconclusive. A good example is their analogy of the causes of drops in crime in America. They first highlighted expert 8 most cited proposals for the decline before coming up with their own well statistically defended conclusion that nothing had reduced crime in 1990s America than the legalization of abortion.
Works Cited
Baker, Thomas. “The 2005 National Conference on Appellate Justice: Selected Presentation From The General Sessions: Applied Freakonomics: Explaining The “Crisis Of Volume”, The Journal of Appellate Practice and Process (2006). Web
DiNardo, John. Interesting Questions in Freakonomics. Journal of Economic Literature, 45. 4 (2007).
Dubner, Stephen. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. New York: Perennial, 2009. Print
The authors of Freakonomics: The Hidden Side of Everything, Steven. D. Levitt and Stephen. J. Dubner, have gone out of their way to challenge conventional wisdom using simple analysis in what they term as the ‘economic’ side to reality. Though the article does not have a baseline plot, the authors lay down several ‘truths’ which they use to test conventional wisdom.
These fundamental ‘truths’ are; according to the current life we live in, a cornerstone of Incentives, conservative wisdom is at times wrong, staged effects have distant causes, professionals use their advantage in information to serve their own agenda, and finally, Knowing what to gauge and how to measure it makes the world less complex. Using these ideas, they analyze in Chapter 4, the sudden drop in crime from the late 90’s against earlier predictions that crime rates would soar.
First, the authors tear apart several opinions given for the sharp decline in crime using a realistic and sensible approach that relies on facts and statistics. They find that the reason crime reduced so drastically was because of the legalization of abortion through Roe v. Wade, and this fact has more weight than any other explanation.
Problem Definition
The authors of Freakonomics begin Chapter 4: Where Have All the Criminals Gone?, with a brief summary of Nicolae Ceausescu’s communist regime in Romania, which they use as a reversed image of the American scenario.
While Ceausescu prohibited abortion leading to a huge population growth, the US at around the same time legalized it through Roe v. Wade. The large number of teenage youth in Romania finally led to Ceausescu’s execution in 1989. Similarly in the US, the reduced number of teenage youth led to a lower crime rate.
Through the way the authors frame their arguments, they clearly define the issues at hand. They begin by showing rising trends in crime before the early 90’s and the prediction of various criminologists such as James Alan Fox that crime would eventually spiral out of control as the years progressed.
The authors then show us the folly of experts such as criminologists, police, economists and politicians attempting to explain the decline while none had foreseen it. They then systematically analyze each of the opinions given as per the information available in the LexisNexis database and find flaws in the arguments. Finally, they show why abortion is the most logical reason for the sharp decline in crime after the 90’s.
Information used
The authors rely on studies and other relevant research materials to justify their arguments. In Chapter 4, they first obtain all the expert opinion articles published on the decline of crime from the year 1991 to 2001 available from ten of the largest circulation papers in the LexisNexis database.
The authors then analyze each opinion on the probable cause of the decline is analyzed using research studies e.g. a 1977 study called On Behalf of a Moratorium on Prison Construction which the authors use to counter the opinion that increased reliance on prisons is one of the reasons for the crime decline. They also use crime statistics obtained from various police departments in the US.
Interpretation
One thing that is strikingly interesting about Chapter 4, Where Have All the Criminals Gone?, is the authors’ analysis and interpretation of issues in a logical sequence. Perhaps another ingenious analysis technique is the way the authors frame the issues into a larger context without leaving room for doubt as to the sustainability of their argument.
Again, their interpretation differs from that of the so-called ‘experts’ since they approach the topic from an economic sense and not a moral one. A good example of this is the analysis of a strong economy as a good explanation for the crime drop. The authors begin by accepting that there was a significant improvement in the economy in the 1990’s.
They first show that this rationale only applies for non-violent crimes, which is true. Secondly, they rely on studies to show that a drop in unemployment rates reduces non-violent crime by a mere 1%. They kill off the rationale by comparing the scenario to the 1960’s where the economy grew at the same rate as crime.
The analysis of the impact of Roe v. Wade and how it led to a lower crime rate separates the authors’ interpretations of the issues from those of the experts. They first take statistics of the number of abortions carried out after Roe v. Wade and the impact this had in terms of lowering abortion costs, preventing unwanted children who would most likely have turned into criminals and finally, the link between causality and correlation in the issue of crime and abortion.
While other experts have preferred ‘positive’ and easily explainable explanations such as better policing and stricter gun control laws, the authors have diverted from this appealing ‘moral’ view to a more realistic solution.
Conclusion
Freakonomics is well researched and analyzed but has some flaws such as its disregard of positive crime reducing measures. While the authors have ‘expertly’ analyzed the drop in crime using economic realities, they agree that the other opinions are not too far fetched.
They also do not state that the decline was as a consequence of one act, but instead, they seek to establish the most logical explanation. Their finding of the legalization of abortion as being a major cause of the crime drop though vexatious to many is shockingly accurate, judging on the convergence of statistics and the support by facts such as the corresponding years between the US and Romanian cases.
When one hears of a winner of the John Bates Clark Medal, the first thought that comes to mind is that of someone that came up with a new economics theory or a formulae that has helps economists solve a problem that has been in great economist minds long enough to make him deserve the medal.
Contrary to this, and unexpected of such a decorated economist, Steven Levitt represents a new form of economist. Though armed with economics honors in form of an undergraduate degree from Harvard and a Doctorate of Philosophy from the Massachusetts Institute of Technology, Levitt admits to knowing very little as far as economic theories and monetary equations are concerned.
The only thing that has propelled him to such a status in the economics world is the fact that he does not look at the world from the same perspective as everyone else. Levitt’s third eye has allowed him to spot economic anomalies and strategize from such experiences. This third eye of his led to his getting requests from economically established individuals to solve anomalies, and even from non-economic individuals and groups that know they are missing a certain view of the duties they claim responsibility for.
The Excellent Science that is Economics
Economics is the science that defines the sequential processes involved from the production of utility goods and services to the end consumer. “Levitt considers economics a science with excellent tools for gaining answers, but has a shortage of interesting questions” (Levitt & Dubner 6).
The whole economics fraternity is more than glad to have him present all the interesting questions entailed in economics. Economics as a science breaks down market phenomenon in order to explain what triggers certain reactions in the market, and how to get the best out of these reactions. Economists do not need all the interesting questions in the world, as even simple questions can help solve the biggest of problems (52).
The Hidden Side of Everything
Steven Levitt has used this phrase to refer to the basic things that go on around people, but ignorance or a bad situation has redirected their view to things that seem to be the bigger picture, but are insignificant to their causes. They find themselves looking away and slowly letting go of their dreams as they brace themselves to survive the reality that is life. This leads the reader to a short story narrated by the author.
Consider Paul Feldman, a successful agricultural economist who always wanted to liberate the world from hunger, but ended up working for the US Navy (51). Mr. Feldman had a very well paying job but ended up quitting it to follow his ‘destiny’; and it paid off. His brand new supply chain around Washington DC ended up with him earning as much as he made during his tenure at the white-collar job that he was not supposed to quit.
The book could therefore be advocating for all those with their inner voices pointing towards a different direction in life to go against all odds and engage in what they think will reveal the best of their abilities. Like Paul Feldman, they should be cautious and take their time to analyze the venture they are going to undertake, identify challenges and strategies that will manage them before giving up what they have, lest they find themselves chasing after the wind.
Skepticism
Freakonomics as a guide was a book designed to encourage skepticism in economics as a whole. This, backed by claim that it is human nature to cheat, raises questions on the integrity of economics, the science. The author goes ahead to give the example of sumo-wrestlers, schoolteachers and day-care parents who engage in cheating as a day-to-day vice (51). Sadly, the rest of the world does not follow with this.
The algorithm used to detect this cheating, though perfect, did not result in likewise ‘perfect’ outcomes (DiNardo 30). If everyone turns into a skeptic of all concepts that run the procedures involved in economics, arts or even in medicine, the world would then run out of the individuals that take passion in the work they do. There would be no more believers left of the earth as everyone will be positioned to ask questions instead of addressing the faults they see in humanity.
Enron presents another form of skepticism in form of white-collar crime. According to Levitt & Dubner, this is a form of silent crime with no direct victim, and hence the reason why the day ends with a richer employee, but no suspect (53). Yet another form of cheating that goes overlooked if left unchecked. The problem here is that the system becomes a victim of its own perfection as the experts who design it and run it reap off its loopholes in broad daylight.
Incentives
It is true that incentives play a major role in motivation. The new generation presents with it major and unique economic constraints. These new breed of challenges have led to people stretching every available opportunity of making an extra buck.
This involves coming up with new forms of business, hence the taking root of such services as mortgage and stock brokerage, real estate agents and even escort services. These individuals have specialized and mastered the relevant activities involved in the industries in that they know how to maximize the value for your money so to speak (13).
Unfortunately, Levitt does not share the sentiment. He goes ahead to tag them as humans like everyone else who respond to incentives (14). This may be true, though their expertise has helped in saving time taken in the hustle of looking for a buyer and without experience in the field.
It plays out as a strategy that catches two fish with single bait. This is because the owner goes ahead to conduct his/her other side business, while the broker/agent finds the buyer. Realistically, compared to that made within the same period by the seller, the money used to pay up the agent/broker may be significantly low.
Economists, among other experts should, and in fact do recognize and appreciate the challenges brokers and agents go through in order to come to terms with clients who already have in them the mindset that all brokers are just out to rip them off of their money. Levitt actually does acknowledge that these experts are human (14). The authors should give the reasons why they expected to respond in a different style to the same challenges faced by other workers in other fields.
Freakonomics versus Economics
The author clearly lacks the scholarly enthusiasm associated with the products of the higher education institutions he attended. For a graduate from Harvard and a doctor of Philosophy from the Massachusetts Institute of Technology, he does not represent the honors as expected.
He views the economic world of economics with utter skepticism and his wish is for the world to follow behind his steps loyally. In a world rigged with, among other economic forces, inflation and diversity from competition, it demands a keen view of the trends the market takes on every product.
It may be unclear to him when he points out that the economic boom in the late 1990s did not help in reducing the rate of murders being committed across the States (11).
As much as it reduced the number of potential criminals being born, abortion also reduced the number of great achievers and potential leaders who would have influenced positively and jolted this world to greater heights in all fields. As much as Levitt views this as a success as much as criminology is concerned, it has done more harm than good as compared to crime retention and the good that is humanity.
Conclusion
After a complete analysis of the ideology behind the book, a reasonable and crucial point to be noted, is that “Levitt’s only real message is to encourage confrontational questions” (Berg 2005) as these nee d not economist answers, but endless arguments that lead to outright criticism of what economics stands for as a science. It has reached a point that whether we embrace it or not, economics and everything that it comes with plays a major role in the everyday life of the average citizen, regardless of social class or age.
Works Cited
Berg, Chris. Why do drug dealers live with their mums? IPA (Institute of Public Affairs) Review, June 2005, 57 2): 46. Print.
DiNardo, John. A Review of Freakonomics. New York: New York Times, 2005. Print.
Levitt, Steven. & Dubner, Stephen. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. New York: HarperCollins Publishers, Inc., 2005. Print.
Steven Levitt and Stephen Dubner stirred controversy when they published the book Freakonomics: A rogue economist explores the hidden side of everything. This book takes a very unconventional view on matters of economics. The topics discussed in the book touch on issues that most people would prefer not to discuss; for instance, issues comprising of corruption and abortion. Critics accuse the authors of losing sight on the main topic, which is economics, and describe the book as more of a sociological book than a book on economics.
They also bring to question the criteria used in collection of data used in the formulation of ideas contained in the book to support the authors’ opinions. This paper looks at the controversies that develop from the book in view of real life experiences and how the book addresses the issue of macroeconomics.
The authors share the conventional notion on economics, which touches on distribution of goods and services coupled with the creation of wealth. Different other books on economics share this sentiment. One such book is The road to Serfdom written by Fredrich A. Von Hayek.
However, Levitt and Dubner go rogue from the very beginning and choose to define economics as the study of incentives. On reading the book, one would infer the word ‘incentives’ to mean bribes as that is the context in which it appears in the book. This may be a misleading approach, especially to someone new to the study of economics. Economics has elements of incentives in it, but not in the form described by Dubner and Levitt.
However, just as it is in philosophy, one needs to look at the book without any prejudicial view in order to understand the authors’ perspectives. For instance, although economics is not the study of perspectives as suggested by the authors and, even though their definition of the word incentive is not as it is usually applicable, the version of the word ‘incentives’ as described in the book (bribery) does exist in real life.
Corruption indeed exists in every aspect of societal interactions without the exception of the economics field. In chapter one of the book, the authors give the example of teachers and students. In their opinion, when teachers give students multiple-choice questions in high-stake tests, it amounts to cheating.
They add that this act amounts to giving incentives. The authors give the same example as applying to Sumo wrestlers. They argue that the perception of cheating or bribery in a match seems to affect the outcome of a match, whether the bribing indeed occurs or not. The former example can be easy to relate to in real life. For instance, a teacher who earns a small income would be more likely to jump on the opportunity of a promotion and would do anything within his or her power to ensure that he or she does not lose that prospect.
Such a teacher is more likely to be motivated into doing positive acts such as holding remedial classes for his or her poor students and negative acts such as giving exams that hint on the answers of the tests. In extreme cases, the teacher would go as far as giving sheets that include of some of the answers to the test in order to ensure that the students maintain a certain level in their scores.
Chapter four of the book touches on the role of legalising abortion in reducing crimes. Although these two ideas seem irrelevant to each other, the overall idea makes sense if looked at objectively. If looked at with a moral prejudice, which underscores the perspective that most critics seem to view the book from, the idea behind the concept and the resulting conclusion is lost.
The authors explain the idea in detail in chapter five. Their view is that children born after a ban of abortion are more likely to lead worse lives as compared to those born when abortion is permitted under law.
The example given is that of an abortion ban that took place in Romania around 1967. The authors are of the view that children born a year after the ban would perform poorly in school, fail in employment sector, and would thus be likely to be criminals. Although economists and other scholars criticise this premise for the method that was used in collecting the statistical data upon which the conclusion had its basis, the sense in this concept is logical.
The ban of abortion would have the effect of increasing the rate at which children are born as well as the number of children born every year, which has ripple effects in the macro economy. One such effect is the increase of unemployment specifically for this generation of individuals. The high numbers of children born would increase the number of children in schools. In turn, this move would affect the quality of education available to every child negatively.
Poor education has the adverse effect of reducing the skill set of an individual, limiting the chances that such an individual would get a good job. The result of this scenario is that the labour market gets flooded with people who have no discernible skills to offer.
Businesses thus recruit fewer employees as they have to use company resources to offer special training programs so that they add value to the business. The individuals who are not lucky enough to get such opportunities, which are the majority of the group, end up depending on crime and other unorthodox means in order to earn income.
Therefore, practically speaking, the theory proposed by Levitt and Dubner makes sense especially in relation to macroeconomics. Macroeconomics is a concept of economics that focuses on the entire workings of the economy of a large region such as a country or several countries.
It deals with the performance of a large region with regard to productivity, the structures put in place to control the economy, the behavioural aspects of people, and the way such aspects affect the economy among other aspects. Unlike micro economy, which focuses on a specific aspect or market, macro economy focuses on the entirety of a market system.
Factors that affect macroeconomics include, but are not limited to, unemployment as illustrated by Dubner and Levitt, inflation, and deflation, which entails the raising and falling of market prices respectively, and monetary policies that are set by governments in order to optimise the performance of their respective economies.
Although the book has its shortcomings, such as the methods used in the collection of statistics and the moral implications, an objective look into it is very informative as it highlights issues that most scholars avoid while providing practical examples.