Freakonomics. It’s one of those books with a cult following and nine pages of cover quotes from A-list academics and celebrities. I’d been hearing about Freakonomics for several years and, upon receiving a copy for Christmas, finally read it this January.
Freakonomics is a book about the small-scale, seemingly random questions that we never think to ask. Do elementary school teachers cheat? What was the KKK’s secret weapon? Does your name make you poor? All these and more are outlined in Steven Levitt and Stephen Dubner’s New York Times Best Seller.
Freakonomics is about “the riddles of everyday life,” and its chapters have no unifying theme other than their shared focus on human behavior. This disjointedness can make Freakonomics somewhat difficult to read at times, but it also helps grab your attention. Since every chapter covers something new, it’s difficult to get bored.
One of my favorite chapters surrounded the microeconomics of crack dealerships. Yes, you heard that right. The authors pulled on economist Sudhir Venkathesh’s undercover work in the Chicago slums to explain how crack gangs surprisingly operate quite similarly to a McDonald’s franchise. In the 1990s, the Black Disciples, a large inner-city gang, was run by a twenty-man board of directors. The board regulated crack dealerships in several neighborhoods, splitting the city into various franchises with clearly defined territorial borders. A franchise manager reported to the board of directors and was contractually obligated to give them twenty percent of all incoming revenue.
The Black Disciples’ income distribution was also quite similar to a legitimate corporation’s. The board members each made roughly 500,000 dollars per year (1990s, unadjusted for inflation) and each general manager earned 100,000 dollars. However, lower-level drug mules were paid a pittance, far less than minimum wage. In fact, many drug salesmen still lived at home with their moms. There were few job opportunities in the Chicago slums thirty years ago, and many young men joined gangs hoping to rise through the ranks and take a seat amongst the wealthy board members. Tragically, the chance of being killed after four years in a neighborhood gang was twenty-five percent. Most gang members wouldn’t live long enough to be promoted.
Freakonomics is chock-full of these deep dives into how our environment and incentives shape our behavior. Although some of its chapters may seem useless on the surface, they pose thought-provoking questions that you’ll find yourself wrestling with as you fall asleep. More than anything, Freakonomics teaches you to question the unquestioned. I highly recommend every IHS student to find a copy and at least read the prologue. My guess is that you’ll keep reading.
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