Freakonomics is the study of how powerful causes have distant effects. Henry Kissinger once asked Zhou Enlai, premier of People's Republic of China, to assess the consequences of the French Revolution. His response: "It's too soon to say." That's what we mean by the art of considering and discovering distal stimuli!Using massive data sets, Levitt and Dubner methodically dismantle the "conventional wisdom" that the economist, John Kenneth Galbraith, disdained: "We associate truth with convenience...with what most closely accords with self-interest and personal well-being." Real understanding of economic and social behavior entails attention to complexity. Comprehending the true character of events "is mentally tiring. Therefore, we adhere, as though to a raft, to those ideas that represent our understanding," rather than to those that might lead us to richer insight.
Because Structural Dynamics is a way of seeing connections that might not be intuitively obvious, it is closely aligned with the mode of thought presented in Freakonomics. This way of thinking can lead to radical and controversial conclusions.
And, nowhere is this more evident in Levitt and Dubner's work than in their analysis of the sharp decline in crime rates that began in the 1990s. Ranking their frequency of mention in article in the US' ten largest circulation newspapers from 1991-2001, eight crime-drop explanations are investigated:
- Innovative policing strategies
- Increased reliance on prisons
- Changes in crack and other drug markets
- Aging of the population
- Tougher gun control laws
- Strong economy
- Increased number of police
- All other explanations (e.g., gun buybacks)
Instead--and here's where it gets controversial--the authors found a direct and powerful connection between the decline in unwanted babies being born and the drop in crime that occurred approximately eighteen years later. "A woman who does not want to have a child, usually has a good reason. She may be unmarried or in a bad marriage. She may consider herself too poor to raise a child. She may think her life is too unstable or unhappy or she may think that her drinking or drug use will damage the baby's health.
She may believe that she is too young or hasn't received enough education....Two factor--are among the strongest predictors that a child will have a criminal future. Growing up in a single-parent home roughly doubles a child's propensity to commit crime." Thus, in 1973 when the US Supreme Court said that Norma McCorvey (aka Jane Doe), a poor, alcoholic drug-user who had already given up two children for adoption at age 21 had privacy rights that included the right to an abortion, the pool of those who were likely to commit crimes against others became much smaller. (It should be noted that McCorvey renounced abortion in 1994.)Even though Levitt and Dubner take great pains to not state an opinion on the morality of abortion, the very fact that they demonstrated a direct link between the right to an abortion and a precipitous drop in crime has made their book both reviled and celebrated.
LIke manyexploration of systemic dynamics Freakonomics is an presents the narrative without presenting the picture. (See our blog entry on Microtrends for a more detailed example of the negative consequences of this approach to information.) However, it makes a potent case for the value of structural dynamics. Understanding anamolies--phenomena that aren't easily explained--will usually take us far past the first, the second or even the third answer, the conventional wisdom, into an analysis of the system of interrelated forces that tweaked one way or the other produce very different outcomes.
