In the 80’s crime rose sharply in the US. Instances of murder, robberies, muggings all went up in the big cities. Experts were crying doom, predicting that it could only get worse. Then it got better. Not just a little, but a lot. The question is Why?
Giuliani took credit for cleaning up New York City. The police took credit for having more people and better methods. Politicians took credit for passing tougher laws. But the real credit, according to Steven D. Levitt lies with Roe vs. Wade, the supreme court decision from 1973 that made abortion legal all over the US. Because abortion was now legal, many young, poor, single, uneducated mothers chose that option rather than having children – children with the exact background most likely to lead to a criminal future.
This is just one of the claims put forward in the book Freakonomics, A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner. The book’s motto might be “It’s all in the numbers – if you can get them”. There is no one common theme to the book, in which Levitt uses economic and statistical tools to look at areas such as The Ku Klux Klan, cheating in Sumo wrestling and why your real estate agent isn’t really interested in getting you the highest possible price on the house you’re selling.
Rather the book’s central message is how far you can go by looking at the numbers – and that you must keep an open mind to some of the startling and counter-intuitive realizations that might bring you. Reading this book is an unbroken string of Aha-experiences, where common sense thinking is shown to be just plain wrong.
Levitt is by all acounts a brilliant young economist, who hasn’t yet been tied into one field. A more senior economist is quoted in the book as saying “He’s twenty-six years old. Why does he need to have a unifying theme? Maybe he’s going to be one of those people who’s so talented he doesn’t need one. He’ll take a question and he’ll just answer it, and it’ll be fine”. And anyone with the creativity and open-mindedness to look into the correlation between crime and abortion as explained above (not to mention the guts to take the controversy it has generated) certatinly seems to fit that bill.
This has got to be the most entertaining and eye-opening book on economics I’ve ever read. Can you apply anything from the book directly to your endeavours? Probably not. But it gave me a sense that the world is more complex than common sense would dictate. And that by looking at what is actually going on, rather that just running on the usual assumption, you can actually get a better, more accurate understanding og the world – one that is simple in its complexity. As illustrated in this quote.