FREAKONOMICS

review by

Larry Shallenberger

FREAKONOMICS: A Rogue Economist Explores the Hidden Side of Everything

by Steven D. Levitt & Stephen J. Dubner

(Morrow)

BEST FOR: Adults

READ:

Economics entertain, it’s true. When most of us think about economics, our eyes glaze over as we picture mind-numbing spread-sheets sprawling for acres. But Levitt’s unique approach to economics changes all that. Instead of focusing on monetary concerns, Levitt focuses his attention on more interesting subjects like “How are school teachers and sumo wrestlers similar?”, “How is the Klu Klutz Klan and realtors alike?”, and “If drug dealing is so lucrative, then why do so many dealers still live with their mom?” Levitt’s mind connects two seemingly disconnected ideas and electricity happens.

Levitt drops a provocative presupposition early on that defines the world view of the book: “Morality, it could be argued, represents the way that people would like the world to work—whereas economics represents how it actually does work. Economics is able all a science of measurement.” (p. 13)

A second presupposition that defines Freakonomics: If you know what to measure and how to measure it that you can simplify and understand any complex situation.

Armed with these two ideas, Levitt makes magic. In Chapter One, “What Do School Teachers and Sumo Wrestlers Have in Common?” Levitt explores the issue of incentives and how the application of rewards changes behavior, and sometimes not in desirable means. Levitt uncovers how to incentives offered to pubic school teachers in Chicago had accurately created a system that encouraged teachers to cheat on behalf of their students on standardized tests.

In chapter 2, “How Is the Ku Klux Klan Like a Group of Real-Estate Agents?” Levitt exposes how experts, any group of experts, use a scarcity of knowledge to hold power over others. The chapter tells the story of Stetson Kennedy and how he single-handedly de-fanged the terrorist organization by infiltrating it and giving away the Klan’s most secret information to children via the Superman Radio Show.

Chapter 4, “Where Have All the Criminals Gone?” is an important chapter that requires the careful attention of Christian readers.  Levitt suggests that the decrease in crime rates in the United States correlate to Roe v. Wade and legalized abortion. While Levitt’s theory is definitely arguable, it’s worth stating that pragmatism isn’t moral argument.

Freakonomics is a page turner worth the time to read. The unique blend of economic theory, story telling, and provocative questions will stimulate you and leave you wanting the sequel.

THINK:

• In Chapter 1, Levitt shows us that applying incentives can change behavior in unexpected ways. Think about the rewards you offer your children. What is the behavior you are trying to change? Have you ever noticed any unexpected consequences of offering rewards? Have you ever noticed your child “cheating” to earn the reward? Does God use incentives to motivate his children?
• Chapter 2 points out how real estate agents use a “scarcity of knowledge” to control their customers. How does the Church handle its “special knowledge??” How can your church be more democratic in how it dispenses information?
• Levitt posits that some occupations operate on a tournament theory (Chapter Three): There are many contestants but only a few winners. In your opinion has “tournament theory” infected religious circles? How? How could this situation be fixed?
• In Chapter 4, “Where Have All the Criminals Gone?” Levitt sees a correlation between the legalization of abortion and a decrease in crime rates. How do you feel about his theory? What should the Christian response be to an argument that abortion improves society somehow?

LIVE:

Read Matthew 6. What are the economic theories that drive God’s kingdom? How can you choose to live this week in compliance with these principles?

--Larry Shallenberger