Book Review: Freakonomics by Steven J. Levitt and Stephen J. Dubner

Right from the top, this book acknowledges it's major shortcoming: it's more a collection of interesting observations (and journaled research) than it is a book. If you're the kind of reader who can pick up The Guinness Book of World Records and cruise through unrelated nuggets of fact, storing a few away for the next cocktail party, you'll find this book smart and entertaining. If, however, you're looking for AN ANSWER - a universal law of economics, you won't find one here.

Levitt, a University of Chicago wunderkind, has made a career of asking -- and answering -- questions that, at first, seem to fly in the face of common sense; but on second glance leave you scratching your head and going, "Yeah -- why is that?". Coupled with New York Times writer Stephen Dubner's always-accessible prose, the book moves from question to question like a diner at a Vegas buffet, polishing off each small plateful before another tasty morsel catches the eye.

For example, the duo tackles the question: "If there's so much money to be made in illegal drugs, why do most drug dealers still live with their mothers?". I'll leave it to the reader to find the answer for themselves, but in this and the other questions the author's address, you have to admire the rigor used to, as the actuaries say, "substitute facts for appearances".

If there is an underlying theme, it is that in the end, economics reflects the fact that we are all human beings responding to the incentives laid before us in very human ways. In short, all Macroeconomics is the sum of Mircoeconomics which is, in its turn, a sum of human interactions. This is a point that has been made by others (say Hayek), but rarely in a manner as entertaining and painless.