With their first book, Freakonomics, and now SuperFreakonomics, Steven D Levitt, an economist, and Stephen J Dubner, a journalist, have pioneered a new sub-genre of pop economics that addresses such pressing questions as why suicide bombers should buy life insurance and prostitutes are patriotic. G Sampath asks the authors what’s the point of it all.
You apply the ‘economic method’ to subjects not naturally associated with economics. Can there be a new approach to the study of macro-economics?
That’s an interesting question. I don’t think macro requires an entirely new approach at all, but rather the inclusion of some of what we know from “the economic approach” and microeconomics — particularly an understanding of how important incentives are.
Your books make for entertaining reading, but what is the point? For example, it may be true that drunk walking has a higher fatality rate than drunk driving, but can one seriously apply this knowledge to one’s decision-making?
It’s true that much of what we write about borders on the trivial. I think it’s up to people wiser than us to transpose this knowledge to more important topics — although, to be fair to ourselves, in SuperFreakonomics we do write about larger subjects like terrorism and global warming.
You state that your book is based on a basic assumption about human nature: people respond to incentives. Which is another way of saying that people are basically selfish. Take someone like Jesus Christ. What was his ‘incentive’ to go on the cross?
Saying that people respond to incentives is, in my opinion, very different from saying that people are selfish. As we write, there are strong incentives for people to be altruistic, for instance. As for Jesus Christ: that is a phenomenally interesting question, but one better answered by someone other than me. (For what it’s worth, please note that I posted your question on our blog, and it inspired many fascinating replies.)
Have you considered the ethical implications that go with the theory that people respond to incentives? Does it not reduce ‘good’ to merely what is ‘convenient’?
It’s important to acknowledge that incentives can be used to produce what you are calling ‘good’ or ‘moral’ behaviour, just as easily as they can be used to produce ‘bad’ behaviour. But that’s our point: people generally aren’t ‘good’ or ‘bad’; people are people, and people respond to incentives. Not, by the way, just financial incentives, and not just negative incentives.
You write about the media-created hysteria over shark attacks. Do you think something similar has happened over the H1N1 swine flu panic?
A reasonable upper bound of worldwide shark attacks would still not cause many deaths. A reasonable upper bound of H1N1 flu deaths could cause many, many deaths. So while there has certainly been some media hype about H1N1, and plenty of misconceptions, I think it’s well worthwhile for public-health officials to be extremely vigilant.
You assume thatno matter how bad a mess we get ourselves into, technology will bail us out, every time. Will newer technology allow us to continue with our present rate of consumption (without leading to ecological disaster) for, say, the next 500 years?
Focusing on consumption is a mistake; it is efficiency that we should be more concerned with. Growing more food, for instance, with less acreage: that has been a huge success of efficiency. That said, it is hard to imagine gains from efficiency being so great that the planet could support, say, 20 billion people consuming at the level we now consume.
You think economics can be politically neutral?
Perhaps not, but it certainly doesn’t hurt to try.
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