Review of the Book: FREAKONOMICS

Freakonomics is a good read. Its not meant to be a phd paper but a book of looking at things around the world(mostly america) with an economist's prespective.
Sadly Dr Gopalakrishnan like many academics in India especially in the IIT's and IIS's suffer from a very narrow and rigid mindset. This review merely exemplifies.
Thats why India's produces only produces more number of papers(and software professionals) ...and not innovations ..as they fail to immerse in current scheme of things.

VSG,

Adnan and GT wrote some good posts.

I dont know ur era but given the spirit of approch to the study of economics in India (as known to u)....it's totally different here in the west.

For eg. George Akerlof's (this guy taght at ISI, Calcutta and Delhi School of Economics) 'Market for Lemons'. It sounds outright silly but the analogy and the underlying study gave him a Nobel Prize in Economics.

The emphasis on monetary aspect & over emphasis on economic indicators san peoples' welfare indicators is the spirit of Indian approach, whereas it's out and out people-centric approach in the west.

In any case the author (I didnt read this book) was talking abt non-serious topics.....so pl take it easy.

#4 Posted by DrDr:

What??!!! The guy is an applied economist.

ive heard this on the radio & his arguments seem 2 b of the reductio ad absurdum variety

Mr. VSG,

Its not that bad. Its just a new way of looking at things. If you are really into that much economics, I would suggest Undercover Economist and/or Armchair Economist. You would find them more to your liking.

Dear Mr. Gopalakrishnan,

Levit's book has been quite a craze and he has become a darling of the media. Levit is following on the footsteps of Becker, another Chicago prof. in the department of economics. And you are right, their work lies on the cusp of economics and sociology. Like Becker, this guy too will get the Nobel someday.

You are not alone in asserting that the author's work is beyond economics. But many in the discipline believe that the assumptions normally made in economics are too far removed from biology, sociology and political science, thereby reducing the applicability of economics.

Take racial seggregation for example. Economists were really puzzled for quite some time. Were blacks refused jobs because they did not have the required skills? If so then there was nothing 'wrong' to it. In a recent article by Bertrand and Mulainathan (which preceeds Levitt's work), the authors drew up 6 types of fictitious CVs and randomly assigned them to black and white sounding names. These CVs were then mailed to companies seeking employees. White sounding names got more interview calls than black sounding names. Also, higher education had very little impact for blacks. Thus it was not 'skill' but 'blackness' which mattered in the Bertrand and Mulainathan paper!

Now this is important for economists and economics. They now need to deal with "blackness" on top of profit and utility maximization!

I totally disagree with your criticisms of Freakonomics. Your only objection to the book is that it is not what you consider to be "Economics". But so what? You probably did not like the book because you thought it would be a boring diatribe about the inner workings of the Laffer Curve or a new way to calculate the Gini Coefficient.

I bought the book because I wanted something refreshingly different. And I was thoroughly satisfied! The author states in the start that the book is all about taking the analytical tools offered by mainstream economics (like studying incentive structures, information asymmetries and game theory) and applying these to social issues. So you're right in saying the book was not strictly under the jurisdiction of economics, but I ask again, so what?

Readers will find this book refreshingly different from any other book on economics. It's also surprisingly lacking of econ-jargon, so it can be understood by a wider cross-section of society. It's primary role is to question and intrigue, not to answer.

On a side note, the reviewer's attitude is very typical of most mainstream economists, who refuse to consider anything that is remotely different from the paradigms of neo-classical economic theory. It is this attitude specifically that has made economic theory quite irrelevant in analysis and diagnosis in a rapidly changing global economic order. Almost all advances in the field of economics over the past century have built upon assumptions of perfect competition, information symmetries and theories of 'rational' behavior, assumptions that are now starkly in contrast with reality, especially in non-Western communities. The field of economics needs new blood that takes economics outside of dusty library shelves and into living, breathing markets. And I believe Steven Levitt, the author of Freakonomics, is on the right track as far as this is concerned.

Sorry Mr. Gopalakrishnan, I did not mean to single you out, but I have been simmering about this for a long time.