Deconstructing Reality

Freakonomicsby Steven D. Levitt and Stephen J. Dubner

William Morrow. 242p $25.95

Thomas Carlyle might not have called the study of economic matters dismal if, instead of debating the gloomy Thomas Malthus on population growth, he had come across the economist Steven Levitt and his often humorous takes on whether drug-dealing really pays or the effect that the name a parent selects has on a child’s prospects.

Yet the 19th-century historian, whose Calvinist mien led him to apply the sobriquet dismal science to economics, not while sparring with Malthus but in a spirited defense of slavery just as it was abolished, would have been shocked by the lengths to which Levitt is willing to pursue numbers wherever they take him. Much the same is true of the reaction in our time to Levitt’s best-known study.

Along with his colleague John Donohue, Levitt acquired a measure of notoriety in 1999 because of a scholarly paper he had published connecting the legalization of abortion in the 1970’s to reduced crime in the 1990’s. Critics tarred the University of Chicago professor of economics for practicing the kind of eugenics attributed not long before to Richard J. Herrnstein and Charles Murray, of the 1994 work The Bell Curve.

Herrnstein and Murray, however, expressly took up race and intelligence as their subject. Moreover, Murray already carried on his back the monkey of his well-known conservative advocacy against affirmative action.

All the evidence available suggests that Donohue and Levitt reached their conclusions by process of elimination and without an a priori opinion on what caused the crime rate to decline. It is also important, and most often unreported in the press, that Levitt has argued that the same decline in the crime rate would have occurred had the aborted children been born, but in more nurturing circumstances and to parents whose caring would have led them to grow up with a sense of being wanted and loved. To find out exactly how Levitt’s calculus works, you’ll have to read Chapter 4 of Freakonomics.

The book is a series of essays in which the development of Levitt’s pointed and unsparing mathematical models is turned into lively narrative that reads almost as fast as thriller fiction, no doubt through the ministrations of his co-author, the journalist Stephen Dubner.

Anyone desiring to instruct youths against joining street gangs, for example, is well directed to the chapter Why Do Drug Dealers Still Live with Their Moms? The short answerthey can’t afford to move outis almost the denouement of the story of how a Chicago graduate student stumbled upon a drug-trafficking gang while attempting, in one of the most dilapidated public housing projects in the city, to administer a survey about how blacks feel about themselves.

I found myself laughing out loud at the initial exchanges. But I was intrigued once it developed that the gang leader had formal postsecondary education in business management; not far behind lay the comparison between the gang and a corporation, with startling similarities and vast differences, mostly in the pay and working conditions of the employees.

While the Catholic reader might disagree with certain aspects of Levitt’s chapter on crime and abortion and agree wholeheartedly with the essay on drug dealing, Levitt strives mightily to avoid taking positions. The book argues that it has no unifying theme, although one message is clearly present in all chapters: morality is about what ought to be, while Levitt’s economics are simply about the incentives or disincentives that make human beings behave the way they actually do.

Teachers, for example, are supposed to inspire, enliven and encourage learning. We value them, we bring them apples. Yet under the Freakonomics microscope, it appears that a significant proportion of teachers cheat and show greater concern for approval (and monetary rewards) than for the education of their charges.

Despite Levitt’s razor-sharp analysis and his careful eliding of value judgments, he cannot entirely avoid taking some positions that give the impression the economist is a blue-stater.

It remains clear that what he is after is not to impart an idea or an ideology, but a critical and skeptical way of examining the reality around us. His economics are closer to the Greek oikonomos, the management of the household, than to the vagaries of the prime rate and the stock exchange.