Autobiography/Memoir Behavioural Economics Book review Recommended Read

Book Review | Superfreakonomics

Ever since Freakonomics attained a cult status in 2005, a legion of pop economics books has inundated the bookshelves. While a great deal of them is a futile exercise to cash in on the new-fangled love of readers for ‘easy economics’, there are a few that actually tower above the trendsetters such as Tim Harford’s ‘The Undercover Economist’ and Malcolm Gladwell’s ‘Outliers‘.

Team of Steven Levitt and Stephen Dubner joined forces once again in 2009 to write “Superfreakonomics” which, in essence, is no different a book from its predecessor.

It keeps the eclectic mix of stories, each peppered with razor-sharp wit and childlike inquisitiveness. Just like the first one, this one has no unifying theme either. The authors nonetheless confess to the extraordinary oversight with ‘Freakonomics’ revealing that the theories of ‘People respond to incentives’ and ‘the law of unintended consequences’ were at the heart of the first book and are central to Superfreakonomics, too. I nod my head in agreement and acknowledge the authors’ humble admission.

Superfreakonomics is a worthy sequel as it improves upon the original in terms of a more riveting story-telling and wittier case-studies. And, what’s more, for those who like their sequels saucier, this one has everything – from street prostitutes, big-ass volcanos, crazy experiments to Suicide bombers and yes, somewhere there is tons of horse shit, too. All in all, Superfreakonomics matches the original in every aspect. Sadly, it retains some of the flaws of the original as well.

Authors kick off the book in a familiar flamboyant fashion as they analyze and dissect the revenue constructs of Chicago’s street-based prostitutes and those of the entrepreneurial madonnas. If you are not lost in titillation, then by the end of the first chapter, you might be better off on many basic principles of economics such as principal-agent problem, adverse selection, price discrimination, laws of demand and supply, etc. And, this is precisely the reason why Freakonomics and its successor ended up on bestsellers lists.

Steven Levitt and Stephen Dubner intersperse their engrossing stories with important theories of economics and significant derivations thereof. In the same degree, second and third chapters of the book unleash a blizzard of hidden economic insights: Indirect costs of terrorism such as fear of the next attack and its economic repercussions make terrorism more effective than any other form of resistance, good doctors’ patients often have a higher death rate because the sickest patients often single out the best doctors for treatment and so forth.

Where the aforementioned insights sound compelling, there are some that actually confound you, perhaps, because they aren’t supported by data and have to be consumed at the face value. For example, in the second chapter, the authors state that death rates have actually fallen in areas where the patient-doctor interaction has fallen or diminished due to certain circumstances.

They conclude that more times than not, the not-so-sick patients are also administered equally heavy prescriptions as really-sick patients, thus, psychologically impacting their well-being. This correlation is at best, half-baked, in light of the absence of data to support it.

This also highlights the flaws that Superfreakonomics seems to have inherited from Freakonomics – there are a few conclusions in this book that by the virtue of being counterintuitive sound tempting but a careful scrutiny only raises more questions about their veracity. However, there are some sections in the book for which authors have received criticism that in my opinion is rather unilateral and inequitable.

Authors’ mind-bending solutions to the ‘thorny’ problem of Global warming created a ruckus in the literary circles and drew a great deal of flak from those in the field of climate science. The company which both Levitt and Dubner took counsel from for their research is called Intellectual Ventures – a non-descript company teeming with physicists, engineers and biotechnologists. As a matter of fact, several of the global warming solutions proposed by the authors are actually the brain-child of Intellectual Ventures(IV).

One of the propounded solutions involve pumping of Sulfur dioxide into the stratosphere to recreate the conditions caused by the eruption of Mount Pinatubo in the Philippines back in 1991, which had led to a major drop in the level of global temperatures at that time. It’s this particular idea that has come in for heavy criticism from the scientific community. However, in all fairness, not all criticism mounted on authors and IV could be labeled as fair.

Over the last decade, humanitarians-cum-celebrities like Al Gore and several climate scientists have pitched hard for the idea of CO2 emission reductions. Thus, any counter-offer now that doesn’t include CO2 emission reduction is highly unlikely to sit well with this community.

I am not giving the authors a clean chit but then I believe they deserve a fair trial. For those who indiscriminately jumped on the author-bashing bandwagon, please read the introductory chapter wherein authors clearly state that through this book, they are only starting a conversation, not having the last word.

So even if the solutions proposed by authors and IV sound over-the-top and unfeasible, you can’t really rail against them for propounding something that doesn’t sound like the long worn-out spiel of Al Gore. The whole point is to start a debate and think beyond CO2 emission reductions.

Now the chapter that appealed to me the most was ‘Unbelievable stories about Truth and Altruism’. Partially, this was because of my personal inclination to finding the answer to the question: Are humans actually hardwired to philanthropy?

The Authors astutely divert the answer to the premise of the book – people are rational and they respond to incentives. From their perspective, altruism, in itself, is a noble exercise but it won’t be the same if there were no subtle incentives attached to it. For example, in India, thousands of people make donations to charity organizations such as HelpAge, CRY every year.

Levitt and Dubner’s skeptical take on altruism makes you wonder whether the quantum of donations will be the same in the absence of huge tax rebates tied to these donations. The answer could be anything but positive.

Superfreakonomics is a decent read. Even with its share of weaknesses and loopholes, it’s still a book that rarefies your mental faculties inducing you to further pore over the matters discussed and do your own research.

The best thing about the book is that even if you don’t agree with many of authors’ conclusions, you might still acknowledge their effort in having started a conversation on many hitherto unusual topics.

Finally, nobody has ever written nor will ever write a book that gets an across-the-board thumbs-up. There have always been and will always be critics ranging from a mere handful to truckloads; from pure cranks to straitlaced perfectionists. Superfreakonomics owing to some of its content can’t escape critics’ hawk-eyes either. However, the wit, the story-telling, the interesting correlations and the authors’ uncommon insights make Superfreakonomics a sheer fun read.

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