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 good counter to freakonomics December 4, 2008
1 out of 2 found this review helpful
Overall, this book was at its best when explicitly rebutting the bad arguments in Freakonomics. Levitt's main point in Freakonomics is that the market has a lot of inefficiencies and is rampant with dishonesty. Freedomnomics, though brief and simplified for the layman, successfully argues that markets function remarkably well and provide constant incentives for honest behavior.
First off, the good: Lott demolishes four of Levitt's arguments. 1) that there's an adverse selection problem in used car markets. Lott shows empirically how prices on cars don't drop as precipitiously as claimed by Levitt and how reputation/warranties can solve the information problem here 2) that there's a principal-agent problem in the real estate market. (Levitt even compares real estate agent to Klansmen!) Lott shows how reputations function to keep such agents honest 3) that Lo-Jack is a public good. Lott shows that its "underproduction" in the market is really just a reflection of how it's not a good product and 4) most controversially, that abortion reduced crime in the 90s. Lott points to flaws in Levitt's methodology (ie assuming that there were no abortions in states where abortions were banned pre-Roe v Wade) and in ignoring that abortion decreased the "cost" of sex. "Cheaper" sex meant more children born out of wedlock and single parents. Hence, if anything, abortion increased crime rather than reduced it.
Lott's book provides a few arguments that should be familiar to readers of free market literature by Sowell, Friedman, etc: ie how "price gougers" and speculators are socially valuable, how occupational licensure limits entry and hurts consumers, how price discrimination makes markets more efficient, etc. That being said, he makes a few more original arguments. For example, he argues that corporate criminals are excessively punished by the legal system because their blacklisting from well paying jobs after being convicted is a large enough deterrent. Moreover, he invokes stock shorting as a means of defending oneself from predatory pricing. One of his best sections of the book is his well-corroborated argument that governments are the most predatory pricers (because, unlike private firms, it doesn't care how much it loses).
Now, the few reasons I can't give this book 5 stars: first of all, in the second half of the book (on crime and voting), Lott presents a lot of empirical arguments. (The first half of the book is more theoretical.) He invokes statistics to argue that concealed carry laws/the death penalty have cut crime whereas affirmative action has increased it. Moreover, he uses stats to say women's suffrage has increased the size of government. His theoretical explanations for the alleged results are very sound. However, though I like his willingness to challenge politically correct orthodoxy, I'd like to see regressions/more tables/a fuller explication of his methodology in reaching such conclusions.
Now Lott is one of the best and most cited economists in America. So he's very capable of providing stronger empirical evidence. His legendary "More Guns, Less Crime" is that sort of meticulously researched, thoroughly defended, variable by variable, empirical masterpiece. However, Freedomnomics is a pop econ book that doesn't try to defend its stats/charts/assertions as vigorously. As a result, Freedomnomics is very short for a book of its breadth, but I found myself wanting a little more.
However, Freedomnomics, unlike most of Lott's work, never pretends to be a serious academic work. The main reason I'm denying it 5 stars is its section on politicians' honesty. It tries to argue that politicians also, by and large, behave honestly. His methodology in reaching the claim is very shoddy. His theoretical explanation for honesty in markets makes sense: good reputations increase profits. That explanation is inapplicable however to government representatives shielded from the profit/loss system. Nonetheless, his attack on campaign finance reform that accompanies this argument on political honesty is strong anyway.
Overall, this is a layman's book and it's meant to be a layman's book. Its thesis is a welcome antidote to Freakonomics' thesis. And it brilliantly demolishes four of the book's worst arguments. Moreover, it has enough fairly rare material, from how women's suffrage expanded government's role in the economy to the state's own predatory pricing, to keep the economically literate reader interested. Also, its attempt to apply economics to everything from crimonology to voting rivals Freakonomics application of economics to things like sumo wrestling.
Overall, this is a strong refutation of Freakonomics. However, for a less direct yet much stronger refutation of Freakonomics' anti-market thesis, I'd advise the economically literate reader to pick up "Why Popcorn Costs So Much at the Movies" instead.
 Freedom-Fries! November 19, 2008
2 out of 8 found this review helpful
If you think "Freedom-Fries" was an intelligent idea you will appreciate this book. Otherwise....don't bother.
Consider the source November 11, 2008
3 out of 9 found this review helpful
This books is a personal attack on Levitt (one of the authors of Freakonomics.) What do you expect from Regnery, logic?
Conservative drivel October 28, 2008
3 out of 17 found this review helpful
The same flawed - and conservatively-biased - thinking that is behind the collapse of our economy. Smart guy with a questionable moral compass. Read and follow it at your own peril.
Freakonomics vs. Freedomnomics September 20, 2008
2 out of 2 found this review helpful
Do you think economics is boring? Do you struggle to understand economic principles? If you answered yes to either question, then check out Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner. These two economists apply their knowledge to such a wide variety of subjects that it is hard to keep up.
For example, did you ever wonder why drug dealers live with their moms or what schoolteachers and sumo wrestlers have in common? Levitt and Dubner address these and other equally unusual topics. By applying well-known, basic economic principles to unique circumstances, the authors help readers better appreciate the complex world of money matters. You'll have so much fun reading this book that you won't even realize you're learning something about economics.
Considering the success of Freakonomics (it reached the number two spot on the New York Times nonfiction bestseller list), it is not surprising that Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't by John R. Lott, Jr. was published a short time later. Freedomnomics, as the front cover tells us, is a rebuttal to Freakonomics and more. Although not as popular or as well written, Freedomnomics scored points with me because I am a firm believer in capitalism and the free market society. I also found some of Lott's economic research to be intriguing. For instance, in the chapter on women's suffrage and the growth of government, Lott tracks changes in government spending both before and after women finally obtained the right to vote.
Freedomnomics does not rehash all of Levitt and Dubner's material, but it does attempt a point-counterpoint on several topics, including abortion and crime in the United States. Read both books and make your own decision about who is right and who is wrong.
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