Business Book Reviews – for the Busy Business Owner
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything By Steven D. Levitt and Stephen J. Dubner, Harper Perennial, 2009, 315 pp. (including bonus matter, notes, and index), $15.00 (Paperback)*
Capsule review:
Pluses: A fascinating and enormously entertaining examination of how seemingly unrelated events, phenomena, and trends may in fact be interrelated, and the ways in which economics – which Levitt believes is the study of incentives – is at the heart of most of these events. Invites the reader to look at the world in new ways.
Minuses: In some places the authors may be overstating their case, claiming links and relationships where perhaps none exist. At times they seem to confuse correlation and causation, even though they criticize others for committing that very error. The book probably doesn’t have any direct applicability to small business owners or entrepreneurs.
Details: In the unlikely event that the title of this book doesn’t get your attention, the subtitle almost surely will. Whoever heard of a “rogue” economist? In the hierarchy of public perception, economists generally rank just below accountants on the boringness scale. It’s true that in decades past, economist authors such as John Kenneth Galbraith and Eliot Janeway have attempted to make economics not only understandable but also engaging to the average person. Overall, however, economists have usually not been on the A-List for most talk shows, and the idea of a rogue economist would seem, on the surface, somewhat ludicrous. Then a few years ago, Steven D. Levitt, a controversial and award-winning American economist, changed some of that public perception, with the aid of journalist Stephen J. Dubner. Freakonomics burst onto the scene in 2005, and suddenly economics was almost cool.
You could say that the Freakonomics phenomenon really began in 2003, when Dubner wrote a piece about Levitt that was published in the New York Times. What made Levitt unique among economists, Dubner noted, wasn’t that this celebrated young academic had answers to economic puzzles, but that he had an astounding gift for asking some really interesting questions. According to Dubner, Levitt believed that the science of economics provided excellent tools for finding answers, but something was missing in the discipline: those interesting questions. No wonder economics put so many generations of students to sleep.
Some of the questions that intrigued Levitt were truly off the wall: What’s more dangerous – a gun or a swimming pool? And then there were more serious questions: Why hate crime rates plunged in the past decade or so? How much of a problem is created by schoolteachers who cheat to meet high-stakes testing standards? How much does parental influence really matter in a child’s development? It was Levitt’s abiding interest in these and other questions that fueled Freakonomics, a product of his own gift for research and Dubner’s journalistic skills. The result of their collaboration became an international bestseller; over four million copies have been sold to date, and Freakonomics has been translated into 35 languages. And much like Malcolm Gladwell’s The Tipping Point, this book has, in many respects, changed the way a lot of folks look at the world.
For the general reader and the perpetually curious, there are many things to delight in about Freakonomics. (Economists and statisticians are another story; they’re an understandably tougher audience for books of this nature.) Freakonomics is certainly an entertaining book, not just for the questions it raises and the possible answers it offers, but for the experience of seeing a creative mind at work asking the weird questions or questioning the obvious. It’s a pleasure to accompany Levitt as he explores how seemingly unrelated events, phenomena, and trends might in fact be interrelated, and it’s interesting to see him demonstrate the ways in which economics influences these events.
Levitt believes that at its heart economics is not the study of dry numbers and boring statistics; rather, it is the study of incentives. As Dubner noted in his New York Times article about Levitt, many people, including some of Levitt’s peers, have questioned whether his work really has anything to do with economics at all. In Dubner’s view, however, Levitt has merely “distilled the so-called dismal science down to its most primal aim: explaining how people get what they want, or need.” Levitt’s gift is to sort through mounds of data to find stories no one else has found, and to figure out ways to measure effects that veteran economists have deemed immeasurable.
Levitt is particularly interested in crime and corruption, and these interests are reflected in his popular works as well as his academic ones. As might be expected, some of his conclusions are controversial, such as his declaration that legalized abortion was a big factor in the aforementioned drop in the crime rate. But controversy has always sold books, and Freakonomics is no exception to this rule.
If nothing else, Levitt and his collaborator invite and inspire readers to look at life in new ways, to question long-held assumptions, and to never assume that something is true just because it seems so or, worse, because it is “common wisdom.” And that may be its greatest value to the reader.
Freakonomics is not a flawless work, however. Apart from the complaints some have made that this isn’t economics at all, but merely sociology dressed up to make it seem more impressive, there are other problems. Regarding the complaints that Levitt’s work is not economics, this is one of those times when it pays to consider the source(s). Any popular book by an academician will inevitably fuel turf wars and even a bit of jealousy, so these issues may not be of much import to most readers.
However, a more substantial problem with Freakonomics is that in some places in the book, the authors teeter on the brink of overstatement, claiming links and relationships where perhaps none exist. Furthermore, at times they seem to confuse correlation and causation, even though they criticize others for committing that very error. Sometimes it almost seems as if they’re doing this just to be provocative.
Looking at things from a strictly utilitarian point of view, Freakonomics doesn’t have any particular applicability to running a small business or being an entrepreneur. This probably isn’t one of those books without which your business or marketing bookshelf will not be complete. Unless, of course, you see the path to your business’ success as somewhat “outside the box,” and want something to help kickstart the unconventional thought processes that can get you there.
In any case, it is an immensely entertaining and informative read. Even if you don’t agree with the author’s conclusions, or if you agree with them but argue with his methodology, you may find this book quite enjoyable. It may, in some roundabout way, get your own creative juices flowing, and who knows, it could even help you discover new ways to answer questions or solve problems that are related to your business. At least you can tell yourself that while you’re stealing time from your busy schedule to read a few more chapters.
For those who simply can’t get enough of Freakonomics, there is the “freakquel,” SuperFreakonomics, which explores some even more off-the-wall questions, such as whether a pimp or a Realtor offers more value, and whether or not eating kangaroo meat can save the planet. If anything, this book is even more controversial than its predecessor. If you want some eye candy to go with that Super serving, there’s the oversized, glossy, and lavishly enhanced SuperFreakonomics: The Illustrated Edition. And then there’s the DVD of Freakonomics… and who knows what the authors will be cooking up next.
Economists and academicians can argue among themselves, but as far as this reviewer is concerned, long may America’s favorite rogue economist and his collaborator live – and write.
* Freakonomics is currently available in a variety of hardcover, paperback, audio, and digital formats.
- Amazon link for trade paperback print edition of Freakonomics reviewed here: www.amazon.com/Freakonomics-Economist-Explores-Hidden-Everything/dp/0060731338
- Visit the Freakonomics Web site at http://www.freakonomics.com (which contains information about and links to the “freakquel(s)” and the DVD).
- The article that started it all: the 2003 New York Times article about Steven Levitt by Stephen J. Dubner: http://stephenjdubner.com/journalism/economist.html
The author of this review was provided the book by Capital Access Network, Inc. The views expressed represent those of the author and do not reflect those of Capital Access Network, Inc. nor its subsidiaries. Any opinions and/or advice expressed by the author do not imply endorsement by Capital Access Network, Inc. nor its subsidiaries.







