Tavis: Stephen Dubner and his co-author Steven Levitt are now out with the follow-up with their provocative best seller, “Freakanomics,” which became an instant best seller. “Super Freakanomics” is once again on “The New York Times” best-seller list. Stephen, good to have you back on this program.
Stephen Dubner: Thank you, sir. Nice to see you.
Tavis: You too. I was laughing with our producer Vanessa a little bit ago, thinking about the fact that I think earlier we had you booked on the show, tried to get this worked out, and something went wrong and we couldn’t get you here.
Fortunately you’re in L.A. today, so we wanted to have you on the program now. But I was laughing because when we tried to get you on, the book was on the best-seller list. Months later you’re here and the book is still on the best-seller list.
Dubner: You were worried, though – we had you worried, yeah. (Laughter) I’ll tell you, the only reason we kept it on there was so that it would still be on when we came here.
Tavis: So that I could say that, yeah. (Laughter) What do you make of the fact, though, that this stuff, it obviously works? People are fascinated by this data.
Dubner: You can’t explain the appetite for bad taste, I guess, can you? People really like it. (Laughter) No, look, we do something that’s very simple, really, which is look at a lot of things, situations, whatever, ranging from crime, cheating, politics, global warming in this book, prostitution. We look at a lot of things just differently than other people do.
So my co-author, Steve Levitt, is an economist, which means he works with big sets of data. He’s not the kind of economist that can explain the economy – in fact, it turns out most economists can’t explain the economy either. We set the bar much lower. We go for easier targets, but we try to answer questions like women who are prostitutes – why? Why do they do it? What’s the wage attraction to it and things like that, and we ask a lot of questions that other people aren’t asking.
I also think that people have a suspicion that the world is different than the way they’re a told the world is. there are all these conventional wisdoms that they’re asked to believe in, and we kind of poke holes in them and tell them that the things that you think are very, very dangerous often aren’t. The things you think that really change your life a lot, don’t.
We’re not pessimists. In fact, I’d argue we’re optimists. We show the way the world really works.
Tavis: This stuff is fascinating. That’s the best word I can come up with, is fascinating. But every time I read you-all’s stuff, and I do, I’m asking myself after I read it okay, I’m fascinated by that – what’s the value for my life?
Dubner: I think we provide zero value. (Laughter) But I think we do provide a service in that for someone who, like you or anybody that reads one of these books, if they are so inclined they can start to act the way we do, which is to ask questions, to challenge the conventional wisdom a little bit.
So yeah, you might learn something in there that kind of tickles your fancy or makes you have something to talk about at a cocktail party, and I agree – that’s pretty much close to zero value. In terms of policy, we don’t do policy. The reason we don’t, frankly, is because I think we’re more valuable, as it were, as honest brokers.
In other words, we write about things that run up against the healthcare debate. We write about global warming, we write about a lot of different pieces of the real world and the economy.
What we don’t tell people is what we think they should do. What we do say is here’s what’s going on, here’s a way to look at global warming, here’s a way to look at problems in healthcare, here’s a way to look at prostitution, and then people who actually work in that realm, then they can figure out and they can take it.
Sometimes people do. We hear from a lot of politicians around the world who read our books and say, “We’d like to try this, would you be interested in helping us talk this through?” We’ve met with the fellow who seems to be the future prime minister of the UK, who was very interested in some of these ideas.
So I think what we do, we’re not setting policy, we’re not telling people what to do. What we try to do is describe the world in a way that other people haven’t.
Tavis: I want to talk about some of these issues in specific in just a second. First, though, in this book, the new one, “Super Freakanomics,” you all argue that people are neither good nor bad, but that they respond to incentives. I’m still wrestling with that, trying to figure out whether or not I agree with you, with the two of you, that people are neither good or bad but that we simply respond to incentives. I don’t know where I am on this yet, but tell me where you are on this.
Dubner: Well, you’ve expressed exactly what we say, and let me say that when we say incentives, a lot of people hear the word economics or even freakanomics, they assume incentives means money, and it doesn’t. It can, but there’s all kinds of other incentives.
How you look in the eyes of people who love you and you love, whether – how you act in front of an authority figure versus somebody else. So we say – I think this is a fairly provocative idea – that people aren’t – that a given person is not good or bad, and in fact we write about experiments that seem to prove altruism, seem to prove how generous people are.
But then you tweak the experiment a little bit and you see the same people who looked like altruists in one experiment, you can turn them into a pack of thieves just by tweaking the incentive a little bit.
What that tells me, what that tells us, is that thinking in these terms of that’s a good person, that’s a bad person, is a real handicap, and I’ll tell you why – if you assume that people are generous at the baseline or good at the baseline, when they do something that’s bad you assume that’s a big mistake and that’s an anomaly and whatnot.
In fact what you want to do is you want to figure out what are the incentives that make people behave the way you want them to behave. That’s what governments need to do, that’s what families need to do.
Tavis: The problem with that, I would think, for some people watching this right now is that they don’t want to be told that they’re neither good or bad. They know that they’re a good person, or if a thug happens to be watching – hello – (laughter) he or she says very clearly, “I’m a thug, I’m a hustler, that’s who I am and I’m proud of that, and I’m the best hustler in my neighborhood, I’m the best thug in my neighborhood.”
The point is that do people want to be told that they’re neither good or bad, because that seems to suggest that I am capable, good person that I am, of being a thug.
Dubner: Yeah. Well, look, it’s a matter of extremes, right? You’re probably not capable of being a thug.
Tavis: You never know – I might be. (Laughter)
Dubner: Maybe I’ll learn right now. (Laughter) I think the important thing is if you put too much faith in the idea that people are bad and that when they – and then they’re not gonna do any – people are good and they’re not gonna do anything bad, you just make a set of assumptions that – I’ll give you an example.
Altruism, we feel that people are very generous, very altruistic, we see it. Haiti – look at the outpouring, unbelievable, right? But then we make assumptions about other kinds of altruism, like organ donations, right? Now, we know that we rely on altruism in this country for people to give, let’s say, kidneys. A lot of people have failing kidneys, their lives can be saved. You or I could give one of our kidneys and live fine with the one, save someone else’s life.
If you depend on altruism, you’d expect there to be no shortage. There’s 300 million people in this country – plenty of spare kidneys to go around. And yet thousands of people die every year on the kidney waiting list because we are not rushing forward.
Now granted, that’s an extreme form of altruism. To give a kidney is not the same as sending a check for $100 to Haiti. That said, I feel it’s really important to look it in the eye and say hey, wait a minute. If we want to be the kind of society we want, and if we’re going to rely on the goodness in our hearts and it doesn’t get the job done, as in the case of kidney donations, then maybe it’s time to reassess what we think is in our hearts.
Again, I believe that people generally want to be what we call good. They want to cooperate with people, they don’t want to steal, they don’t want to cheat. But everybody has a price, everybody has an incentive.
Tavis: I’m trying to figure out where the intersection is, what the juxtaposition is between good and bad on the one hand, wrong and right on the other hand. You see where I’m going with this.
Dubner: Yeah, I do, yeah.
Tavis: If you say to me that people are neither good or bad, that we respond to incentives, then I’m trying to figure out how we know what wrong from right is, and if we’re neither good nor bad, and I’m capable of doing wrong or right at any point in time, and I don’t want to accept the fact that I live in a world where people do not know the difference between what is wrong and what is right.
Dubner: I would say look, that’s a great question. That’s probably more for a philosopher than for a guy like me, but what comes to mind when I think that is wrong or right, we’re usually helped along. We know those rules because those are rules and laws, okay? That’s why there’s so much damn fighting for laws to get established, because that’s what establishes wrong and right.
I can give you an example – let’s say somehow we’ve magically gotten to this place in civilization without the aid of alcohol or marijuana, okay? Kind of hard to imagine, because alcohol has been -
Tavis: I think you’re high to suggest that. (Laughter) But that’s another issue, go ahead.
Dubner: Exactly, right? Every king, every queen, every toast that’s ever been drunk, and alcohol’s – but let’s just pretend that we got to where we are now, no alcohol and no marijuana to boot. Both of them are discovered overnight, okay? How do we think that alcohol and marijuana would be regulated and distributed? I can guarantee you it would not be the way it is now.
In other words, alcohol is pretty much freely available, regulated barely a little bit – a few laws in place to kind of try to discourage behavior that results from it. Marijuana, entirely different, entirely banned. Almost any economist would tell you, holy cow, if you add up the damage that alcohol can cause versus the societal benefit, and then look at marijuana, it’s insane. We should either be outlawing alcohol or taxing marijuana, which I know California is a place that’s seriously considering it.
Now is that right, to be able to drink and not smoke? Look, I don’t smoke marijuana, even though I could go to some states where it’s now legal. I’m tempted. (Laughter) So I have no horse in the race, but what I do find interesting is that when you do these thought experiments, and that’s really what we do – we do thought experiments and say, hey, wait a minute – turn off the part of you that says, oh, that’s a good thing, that’s a bad thing, that’s a right thing, that’s a wrong thing.
Abortion – everybody has very strong feelings about abortion. What we wrote in the first book wasn’t about how we feel about it; it was about what it does, what’s in effect. One of the strangest unintended consequences of abortion, of legalized abortion, was that it drive the crime rate down because what abortion really was was a mechanism for which fewer unwanted children could be born.
Not necessarily poor children. We can overcome poverty, families can overcome – it’s not easy, but families can do it. Overcoming unwantedness if you’re a baby, that’s hard, because what that means is that the parent, the people who were meant to steward you through life do not want to do that job, and that’s really hard.
So we looked at that, abortion and the relationship with crime. That’s a very kind of unsettling topic to a lot of people, but that’s a question, I think, worth asking.
Tavis: Let me go back now to the book itself, some of the subtitles, and throw some of these things at you and let you pick them apart. It’s impossible to look at the book and not have that phrase, “patriotic prostitutes” (laughter) jump out at you. Since you mentioned prostitutes earlier, please unpack this for me.
Dubner: Well, let’s see. This takes a little unpacking. We write about an empirical study of street prostitution in Chicago, where a fellow, Sudhir Venkatesh, a great researcher who we’d worked with before, went and sent trackers, women who were usually former prostitutes themselves, to sit with street prostitutes in Chicago and record every transaction that they did.
So everything from the price to the sex act performed to the age and race and marital status of the customer – all these data – and then analyzed it. What we found – many interesting things, one of which is the relative wage of street prostitutes versus 100 years ago in Chicago has fallen dramatically.
Mostly it seems having to do with the feminist revolution, in that the feminist revolution allowed or enabled or encouraged women, more women, to have more sex for free with men, even men like me, before marriage, okay? What that meant is that prostitutes were no longer as in demand from men.
It used to be that 20 percent of all American men lost their virginity to a prostitute – probably the most of the rest of them in marriage. That began to change and demand for prostitution fell, and therefore the price fell.
But what we found interesting is that in one neighborhood in Chicago, Washington Park, which is where the Olympics would have been centered had Chicago gotten the Olympics, there was a very robust prostitution market in the summertime, especially because there were a lot of big family reunions and big parties that would go on and on and on.
Apparently for some of those people who came to those reunions, getting caught up with Aunt Ida and having potato salad wasn’t exciting enough and they’d go – (laughter) and there was a huge demand around the holidays, July 4th in particular, for prostitutes.
What you’d see is the prostitutes would work that area, would charge more because they’re entrepreneurs, but also prostitutes from other neighborhoods would come in, but amazingly, women who did not work the rest of the year as prostitutes at all are coming to work during those times because the demand and price was so great.
So are they truly patriotic by coming in on the 4th of July? (Laughter) It’s hard to say, but we do know that the market changes about then.
Tavis: You unpacked that quite nicely.
Tavis: In the minute or so that I have left – and this is quite a shift – but since we’re moving toward, in a matter of days, this televised come-to-Jesus meeting of Mr. Obama and the members of Congress about healthcare. Again, you’re not engaged in public policy debates, but tell me the healthcare connection.
Dubner: Oh, well, it’s – there’s a lot of it, and mostly what economists do, or the economic way of thinking is is looking at inefficiencies. What we’ve got is a healthcare system full of them.
You’ve got inefficiencies and then what you’ve really got is perversely misaligned incentives. People are being incentivized for the wrong things. We’ve heard about a lot – doctors for procedures rather than creating wellness or maintaining wellness.
Whenever you’ve got that going on – here’s something else you won’t hear many say. It’s politically very incorrect. I can say it because I have nothing – I have nothing to lose. Our healthcare system, for those of us who are fortunate enough to have insurance, it’s essentially an all-you-can-eat plan. It’s like the buffet. When you go to the buffet and it’s all-you-can-eat, a lot of people eat too much.
When you have an all-you-can-consume healthcare plan, which many of us do, what you get, a lot of people think about a shortage of services right now. I think what we’re seeing more than that is an overconsumption of services by those who have the ability to do so, and that is a big part of what’s causing the crowding out.
So what you need to see is a lot more focused and more efficient use, so screening for every disease seems like a good idea until you find out the false positive rate is so high that you’re doing a lot of procedures that don’t need to be done and you’re crowding out the sick.
Tavis: I’m going to send all that mail to you.
Dubner: Thank you.
Tavis: Because I know it’s coming. (Laughter) His name, so you know where to send the mail, is Stephen J. Dubner. He, along with Steven D. Levitt are the perennial “New York Times” best-selling authors. The new book is called “Super Freakanomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance.” I know you’ll want to get it to read about that, if nothing else. Good to have you on the program.
Dubner: Thanks very much.
Dubner: Thank you.