Freakonomics : A Rogue Economist

The book begins by saying that economics has more incorrect arguments than any other study. The two critical reasons for this are: People don’t care about the long term health of the public, as much as the care about the short term gain in their private lives. Special interest groups create or reuse correct-sounding fallacies to promote their viewpoint. Economics consists in looking at more than the immediate policy; It includes seeing the problems of the policy for not just one group but for all groups. The misconception that government spending boosts the Economy, is a result of a system of misconceptions. The fact that, we don’t address deficit spending and inflation and assume that public spending will be covered in taxes, is a delusional dream.

The chapter starts by giving the example of how the head of Coca-Cola Europe decided to give away Coke to East Germans as the Berlin Wall was falling in 1989. This gamble, which began as a loss, eventually paid off for Coca-Cola. Six years later, the former East Germany had matched West Germany in the consumption of Coke, an excellent example of the power of markets. The author gives a simplistic explanation of the communist economy. There is no law of supply and demand. The price of an item is the same regardless of where one buys it. This is due to the fact that every business is paid the same by the government for selling a specific item regardless of the amount sold. Our economy is a market economy and economists make two important assumptions.

The definition of public goods is: A public good is an item consumed by society as a whole and not necessarily by an individual consumer. Public goods are financed by tax revenues. All public goods must be consumed

1. The first chapter in the book is about the market and its inner workings. The book briefly explains the idea of supply and demand, in which the price of a certain good or service will reach the point where all the demand is equivalent to the supply. However, the value of something is not determined by its necessity, but its desire within society, as seen by the difference in cost between a diamond and life giving water. Markets operate as they do because people try to maximize the amount of utility for themselves. Nevertheless, a strict rationalism model cannot be used for predicting all the occurrences of a market because of the ever changing behavior of people; thus economists must take precautions against

Book IV: Of Systems of Political Economy The Role of Government Provide a revenue for the subsistence for the people (through public work) Provides infrastructure To provide revenue for the provision of public goods Mercantile System Money is the instrument of commerce/ the measure of value “To grow rich is to get money” Including countries? Money (gold and silver) is a “steady hand” as compared with consumable goods holding value Nations benefit from accumulating gold and silver to pay for future expenses So, wouldn’t countries benefit from limiting the exportation of gold and silver (imports of goods and services)?

1. It’s highly predictable The wave arrival pattern is highly predictable. They arrive day and night and harbor more energy than other renewable sources like wind and solar. Wind energy and solar energy, on the other hand, are highly unpredictable.

In chapter 8 of the text we are exposed to the relations businesses have with the government. In order for the government to protect the public good, they have to have certain regulations and relations with businesses to ensure that. The first type of regulation government imposes on businesses that we came across was anti-trust laws. The text defines this as, Laws that prohibit unfair and uncompetitive practices by businesses (Webber 171). This means that one business can’t pay off other businesses to not purchase a product, and only purchase a version of theirs.

In chapter 2 of Freakonomics the main argument is that the absence of information can be used for personal gain. The main example used to display this tactic is when the KKK is compared to real estate agents. Although the crafty practice of real estate agents is in no way similar to the horrors of the KKK, they have a distinct similarity when it comes to the hoarding of information. The majority of the chapter focuses on the history of the KKK and Stetson Kennedy’s effort to stop it through the infiltration and exposure via radio of the Klan. Since the Klan was dependant on their violent—despite not being extremely violent—reputation, the disclosure of the information they had withheld from the public rendered them powerless. The narrators

On a scale of one to ten, I would rate Freakonomics an eight (8). In Freakonomics, Levitt and Dubner reform the conventional perspective of economics—a tiresome profession concerning monetary and fiscal matters—into a sui generis method of evaluating the world around us. Levitt and Dubner seek to expand the minds of their readers with the idea that economics can be found in obscure places. This can be exampled through the juxtapositions formed between the Ku Klux Klan and real-estate agents and between teachers and sumo wrestles. Additionally, in the beginning of the text Levitt states, “This book boasts no such unifying theme.” It is evident that from the beginning of the novel Freakonomics is like nothing I have read before. From

Levitt next examines the incentives that cause people to cheat. The first example of cheating is a story of teachers cheating in Chicago public schools. To avoid the risk of getting fired or getting penalty by the government for low test scores, many teachers chose to cheat and inflate their students ' scores. They cheated by allowing the students to have more time during test, giving away answers, and even by changing students’ answers by themselves. In this case, we can see that the schoolteachers are driven by economic incentives. For them, moral and social incentives are not as strong as economic incentives. Similar cheating can be seen in sumo wrestling. In Japan, sumo wrestling is a very popular sports and the high-ranked wrestlers get great honor. Also, among sumo wrestlers, their rank determines their salary, reputation, how they are treated, and even how much he gets to eat and sleep. Because they are so desperate for higher rank, the incentive for cheating is very powerful. In the crucial matches that determines sumo wrestler’s ranking, they cheat by

In chapter 1, Levitt and Dubner describe how many people in different cultures and walks of life, which are otherwise inclined to be honest, find subtle ways of cheating to advance their position or increase monetary awards when incentives are strong enough. The authors define an incentive as “a means of urging people to do more of a good thing or less of a bad thing,” and identify three varieties of incentives. Economic incentives are those, which a person responds to in the marketplace. Social incentives motivate people to respond in a certain way because they care or are worried about how they will be viewed by others. Moral incentives appeal to a person’s sense of right versus wrong. Three case studies of the

The movie “A Bug’s Life” greatly portrays the way humans have interacted within various economic systems. It resembles the old traditional economies like imperialism, modern market capitalism and historical revolutions.

After reading Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner, it opened my eyes to the most interesting approach to the world. The book name in itself is an odd and unique title. It defines Steven Levitt’s irregular approach to the world of economics and makes you “forget your image of an economist as a crusty professor worried about fluctuating interest rates”, says Publishers Weekly. Steven Levitt focuses his attention on relevant everyday life situations that truly are world issues. The purpose of writing Freakonomics is to make the reader aware and convinced that there is a hidden but obvious side to everything, if you just dig deep enough. Throughout the book, Levitt and Dubner make it clear that economics is a “set of tools, as opposed to a subject of matter” to explore any issue, despite if it is quite unusual. The authors do not single out a certain group of people, but it strongly appeals to young adults. The book talks about education, raising children, and buying homes which are all subjects that apply to young adults’ lives. The authors portray an attitude that is an objective tone which appeals to a younger audience because it is seemingly practical and neutral, but also light hearted and amusing. Freakonomics is meant to be fun and captivating rather than strictly boring facts and statements, which is why it draws in younger adults as well as older adults too. Overall, I have found this book to

Chapter 8: A question that has stuck with Wheelan for years, asked by one of his peers was, “If people know so much about public policy, then why is everything so messed up” (175)? The reason for that is because it leads to something far more significant: Even when economists reach consensus on policies that would be to our advantage, they frequently run into political opposition. And when it comes to interest groups in politics, it pays to be small because the tail can wag the dog. This can have a huge impact on the economy. They are usually the most successful because the consequence of requests they receive are spread over a large, disunified group of people. Wheelan states that small problems begin to distort the simplest jobs of a market

When I first looked into finding this book I didn’t think much of it as I just thought it was just another type of text book or some sort. I was thinking that this would be some kind of auto biography or something I would not be interested in. In fact after reading this book I was stunned by the different views and aspects of economics that was explain and I would had never thought about them in that sort of way. This book covers a lot about we discussed in class. This book explains different examples of economic concepts that may be used in our daily lives. They