Freakonomics- Steven D. Levitt & Stephen J. Dubner

I first read Freakonomics when I was still in secondary school, and I think it may have been the catalyst of the revival of my interest in books. It challenges conventional wisdom and other assumptions we have about our world, in a fun, light-hearted and leisurely manner.

“I just don’t know very much about the field of economics. I’m not good at math, I don’t know a lot of econometrics, and I also don’t know how to do theory. If you ask me about whether the stock market’s going to go up or down, if you ask me whether the economy’s going to grow or shrink, if you ask me whether deflation’s good or bad, if you ask me about taxes- I mean, it would be total fakery if I said I knew anything about any of those things.”

Levitt is being humble and self-deprecating- but the truth is, nobody else really knows whether the stock market’s going to go up or down, or whether deflation’s good or bad. It’s far too complex for any individual to wrap his head around. He’s embodying a sorely lacking Socractic wisdom here- acknowledging his own limitations. Nassim Taleb would approve!

Economics is a science with excellent tools for gaining answers but a serious shortage of interesting questions.

The fundamental idea that seems to be expressed in Freakonomics is that incentives matter, that people respond to incentives, though almost always not in the way that we intend or expect them to.

Together, Levitt and Dubner describe how crime rose in the 90’s, attributed to the “superpredator” teenage criminal- and how everyone predicted that it was going to get a lot worse. Crime fell dramatically instead, and explanations attributed ranged from the economy, gun control laws and better policing. Levitt and Dubner argue that it was legalized abortion that did it- that the people most likely to have abortions were those most likely to otherwise raise children in an adverse environment- children who’re apparently more likely to become criminals. So criminals simply stopped being born.

Do real estate agents really want the best for you? Surgeons don’t operate on themselves, and we don’t have records of mechanics

Real estate agents will hold out for the best offer when selling their own homes, but will push you to accept the first decent offer that comes along- the additional money they get on commission from a better offer on your house isn’t enough incentive to get them to stick around longer- they prefer faster turnovers, selling more houses.

Is it money that wins votes, or is it a candidate’s appeal that wins both money and votes? There’s actually a way to test this out- by holding the candidates constant, and changing the spending. This actually happens all the time- candidate A runs against candidate B in consecutive elections. And it turns out that a winning candidate can cut his spending by half and lose only 1% of the vote.

Incentives are the cornerstone of modern life. Understanding them, or ferreting them out- is the key to solving just about any riddle, from violent crime to sports cheating to online dating.

Conventional wisdom is often wrong.

Dramatic effects often have distant, even subtle, causes. (This is interesting to explore in parallel with Malcolm Gladwell’s The Tipping Point or Seth Godin’s Unleashing The Ideavirus.)

“Experts”- from criminologists to real-estate agents- use their informationa advantage to serve their own agenda.

Knowing what to measure and how to measure it makes a complicated world much less so.

It is worth remembering that Adam Smith, the founder of classical economics, was first and foremost a philosopher. He strove to be a moralist, and in doing so, became an economist.

At a daycare center, some parents would be late in picking up their children at closing time. This was troublesome and wasteful for the teachers. A $3 fine per incident was added, to a monthly bill of about $380. The number of late pickups doubled- people used to try not to be late out of social obligation, but now that there was a financial cost to it, being late no longer made parents feel guilty. When a small financial stipend is given to blood donors, they tend to donate blood less- a noble act of charity becomes a painful way to earn a few dollars. What would happen if the late-coming fine were much higher, or if blood donors were paid a lot more? In the first case- latecoming would drop, but so would enrollment- you’d generate lots of ill-will. In the second- blood donations would skyrocket, but people would try to exploit it- perhaps stealing blood at knifepoint, use fake IDs to circumvent donation limits. Whatever the incentive, whatever the situation, dishonest people will try to gain an advantage by whatever means necessary.

White collar crime presents no obvious victim. Smaller communities have less crime than larger ones.

Why don’t we commit a lot more crime? Every one of us regularly passes up opportunities to maim, steal and defraud. Jail is a strong disincentive, of course (described here as economic penalties- losing your job, your home, your freedom). But when it comes to crime, people respond to moral and social incentives the most. The idea of being labelled as a criminal is worse than actually going to jail. If you could go to jail without anybody ever knowing, you’d probably be more likely to commit a crime.

My Mass Effect Experience

I want to talk about Mass Effect. I first started when I played Mass Effect 2 on my friend’s Playstation 2. As with Dragon Age, I wasn’t supposed to care. I wasn’t supposed to get emotionally invested. I never cared for Star Wars or Star Trek, so I figured maybe space and sci-fi wasn’t really my thing.

Oh boy, how wrong I was! My story began with a custom character in ME2- a male Shepard that I made to look like me. In the story I wrote in the DLC where you choose what happens in ME1- I saved the council, romanced Ashley and then sent her to die, killed the Rachni Queen, chose Wrex over whoever else. I think I was a Spacer War Hero (or perhaps sole survivor). I quickly and naturally fell into a predominantly Paragon path. I did everybody’s loyalty missions. I let Kasumi keep the box. I left Zaeed to die for being such an asshole. I didn’t allow Garrus or Mordin to kill their targets. I helped them find redemption instead. Destroyed the Collector Base. I was romancing Miranda all along. When I found Jack, though, I didn’t have enough Paragon meter to get them to seek compromise. I had to choose between one or the other. I chose Jack. I thought Miranda was being overbearing- as Commander, I expect my crew to look out for each other, or at least leave each other alone. I felt that Miranda was being the aggressor, which I felt was a direct assault on my principles. Siding with Miranda would be clear favouritism, too. I imagined that Miranda would understand where I was coming from.

Bollocks- I lost both her romance option and her loyalty! Women’s logic prevails. I was really upset about that, but I felt like it was the right thing to do, given the situation. (Given that I wasn’t man enough to get both of them to listen to me.) My favourite ME2 moments- drinking brandy with Dr Chakwas was one. Eavesdropping on the engineers. Getting closer to the crew- I liked how my Shepard and Jacob became bros later in the game. I enjoyed conversations with Thane and hearing Garrus’s funny sex stories. I was intrigued by Samara’s mysticism. I loved Kasumi’s depth and humour- I wish she was more than DLC. I found Tali to be kind of like a cute little sister type character. I enjoyed eventually helping to soften Jack.

Mass Effect 2 felt like a great buildup to Mass Effect 3. Unfortunately, I had lost my ME2 save- it was on a friend’s PS3, which subsequently got fried. So I ended up starting ME3 from scratch. (I decided to play FemShep instead, because she’s absolutely amazing.) It was a tad depressing, because I had watched many of the videos on Youtube about what happens when you DO carry your characters over- the romance options, the backstory. So I had to play those things in my head. I had to imagine Jack was around (my eventual, genuine romance option), when she wasn’t. It was painful to know that Thane was already dead, and it was kind of sad that I didn’t get to see Legion or Samara. The most painful thing for me was that I couldn’t save Tali. See, in ME2, I had the best possible outcomes for both Tali and Legion. In ME3, Tali is exiled by default. I made a silly mistake- I initiated the final Quarian mission without first rescuing the Admiral. This denied me the opportunity to broker peace, a ceasefire between the Quarians and Geth. I had to choose the Geth. The Geth had just recently attained self-awareness and self-actualization, and they had only acted in confusion and self-defence. The Quarians, in comparison, were insecure, needy and generally fucked up. Tali was their only saving grace. When forced to choose between the two, I had to pick the Geth. Tali- my old friend, who I had been through so much- committed suicide in horror.

I was shattered. I knew what the possible outcomes were in advance, but I wasn’t expecting to have cornered myself into a situation where I would have had to pick one or the other. It was like the Miranda/Jack situation again. I accepted this as a part of my story, my playthrough. I made a bad call- I should have gone for the Admiral. I’m not sure if that would have changed anything, if I would have been able to seek compromise, and brought Tali with me to the end. Some people online suggest that it’s impossible to get that best option without porting over an ME2 save. Oh well.

I remember being genuinely emotionally distraught after Tali’s death. I found myself thinking that I ought to stop playing the game altogether. How much loss should one have to sit through? I had already witnessed the deaths of countless people- Turians, Asari, Humans, Krogans- all of whom made the noblest of sacrifices just so that me and my crew would have the slightest glimmer of a chance, at hope.

They died so that we might TRY. But at that moment, I found myself thinking- how much more could I possibly take? It was Garrus who pulled me through. After Tali’s death (and knowing, especially, that Garrus and Tali would have had a romance if you romanced neither), I confided in him that I was losing faith, and losing hope. And he told me- “and this is when your best friend in the galaxy picks you up and tells you that you’re the most fantastic commander…”. It wrenched my heart, it really did.

We have to carry on for those who are still alive, who are still fighting. I have a lot more to say, but I’ll leave it at this for now.