Why Freakonomics Can’t Beat Geekonomics

Weekend drama: Formula 1, NFL, Sunday talk shows? Forget it: this weekend, the drama was in the econoblogsphere — where the new book SuperFreakonomics inspired a mass freak-out. Freakonomists Steven D. Levitt and Stephen J. Dubner’s chapter on climate change met furious charges of irresponsible journalism and deliberate contrarianism from economists, climate scientists, and journalists alike.

I think there’s a deeper one. The real problem with the Freakonomics school of thought is this: it’s economics 1.0 applied to the entire natural, social, and political world. But what today’s world demands is a more relevant, accurate, and better-informed economics: economics 2.0.

The challenge today’s economists face isn’t applying the same old thinking — models, assumptions, and logic — everywhere: it is building fundamental better thinking in the first place.

And that’s the problem with Freakonomics school of thought. It’s interesting, and it’s cute. But it’s built on assumptions that are already perhaps obsolete, and need deep revision. So can it really help us build a better world?

As I wrote last week, one of the fundamental problems with econ is this: “because it seeks to describe an ideal world, much of it has little relevance in terms of helping build a better one.” Take, for example, the famous observation in the first Freakonomics book that legalizing abortion led to a decrease in crime a generation later. What policy recommendations should we infer from this “relationship”? Should we strive to (ahem) minimize birth rates among the poor? Or should we shift to a Philip K Dickian precrime model, because we now “know” that children of poor mothers are likelier to be criminals? It’s a slippery slope, which leads ineluctably to criminalization or eugenics.

I enjoyed Freakonomics, as I enjoyed the fifty or so imitators that followed. Yet, they are to economics what Friends is to culture. And ultimately, they represent the trivialization of a great system of thought. Instead of improving that system of thought, they apply already questionable assumptions to what are socially the lowest-value uses.

Those assumptions are what demand reinvention — not broader application. Economics needs fundamental reinvention — not trivialization. That’s going to take a new era of geeking out, getting philosophical, and re-examining the basic assumptions on which econ is founded. Freaking out is fun, but getting constructive is where the future of economics lies.