Freaknomics demonstrates that academic ideas can be disseminated to the masses by being controversial, engaging and read-able.
Steven U. LEVITT is exploring Causal Relationships that Have Become Conventional Wisdom. He wants to disprove them as spurious. Demonstrate other intervening variables. Levitt wants to discover what causes what: more police causes more murder….for example? His goal is to find causal relationships that he believes are more likely to explain phenomena. Stripping away the surface layer of a subject. This is an academic exploration using data.
• Incentives are the corner stone of life.
• Conventional Wisdom is often wrong.
• Dramatic effects have subtle causes.
• Morality is greatly influences by economics.
• Experts use informational advantage to serve their own agenda.
• Knowing what to measure and how to measure it will explain confusion.
• There is no unifying theory in Freakeconomics.
• Numbers Do Not Lie.
• Incentives need to be invented.
Conventional Wisdom: (CW) is a term used to describe ideas or explanations that are generally accepted as true by the public or by experts in a field. The term implies that the ideas or explanations, though widely held, are unexamined and, hence, may be reevaluated upon further examination or as events unfold. The term is often credited to the economist John Kenneth Galbraith, who used it in his 1958 book The Affluent Society: The ease with which an idea is understood + the degree to which it helps ones personal wellbeing = Conventional Wisdom.
Expertise is Power: Increased C-Section -> Decrease in Births. When business is tough Doctors will ring up C Sections. The increase in C Sections is caused by a decrease in birth rates. The doctors incentive is to create employment for himself given his influence as a Doctor he can justify anything using his expertise. He may not recognize it but he has disproportionately advocated C Section because of fiscal concerns that he has rationalized in another way. Stoke-brokers churn trades. Real Estate agents trick people into bidding low. Real Estate agents will always advertise with false enthusiasm. Experts use their expertise to their advantage every time. The Abuse of Information…converting information into fear is a powerful weapon.