09/25/2005   English German
  Edition # 56  
San Francisco, 09-25-2005

Freakonomics
Figure [1]: Freakonomics" by Steven D. Levitt and Stephen J. Dubner

Recently, I devoured a book that I absolutely must recommend. The intellectual father of "Freakonomics" is Steven D. Levitt, an economist, but not of the ordinary kind. Unlike millions of business students who mindlessly parrot the principles of Adam Smith, Levitt approaches questions with an open mind and scientific rigor. The book is not about macro- or microeconomics. It is about human, all-too-human reactions to economic stimuli.

For example, in Japanese sumo wrestling: During the annual championships, wrestlers must win eight or more out of 15 matches to remain in the league. This raises the question of how two wrestlers typically fare when one is already on the safe side (with eight or more wins), while the other (with seven or fewer wins) still desperately needs points. Is it conceivable that in such situations, the better wrestler might take it easy and let the weaker one win? Indeed, the analysis of the data confirms this hypothesis.

Or what was the reason for the unexpected decline in crime in the USA in the 1990s? Was it the drastic increase in prison sentences for even minor offenses? Surprisingly, much suggests that it was actually the legalization of abortion (a Supreme Court decision called "Roe vs. Wade") that made a significant contribution to reducing crime.

Such explosive conclusions naturally encounter tumultuous resistance, especially in the ultra-conservative USA. However, Levitt is not politically interested at all; he merely draws conclusions that can be proven with reliable data.

A brilliantly written book by someone who is committed only to the truth, no matter how uncomfortable it may be. Hats off.

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