Friday, November 4, 2016
Freakonomics
Knowing what to measure and how to measure it makes a complicated world much less so. If you learn to look at data in the right way, you can explain riddles that otherwise might have seemed impossible. Because there is nothing like the sheer power of numbers to scrub away layers of confusion and contradiction.
So the aim of this book is to explore the hidden side of…everything. This may occasionally be a frustrating exercise. It may sometimes feel as if we are peering at the world through a straw or even staring into a funhouse mirror; but the idea is to look at many different scenarios and examine them in a way they have rarely been examined. In some regards, this is a strange concept for a book. Most books put forth a single theme, crisply expressed in a sentence or two, and then tell the entire story of that theme: the history of salt; the fragility of democracy; the use and misuse of punctuation.
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Of all the truisms about politics, one is held to be truer than the rest: money buys elections. Arnold Schwarzenegger, Michael Bloomberg, Jon Corzine—these are but a few recent, dramatic examples of the truism at work. (Disregard for a moment the contrary examples of Steve Forbes, Michael Huffington, and especially Thomas Golisano, who over the course of three gubernatorial elections in New York spent $93 million of his own money and won 4 percent, 8 percent, and 14 percent, respectively, of the vote.) Most people would agree that money has an undue influence on elections and that far too much money is spent on political campaigns.
Indeed, election data show it is true that the candidate who spends more money in a campaign usually wins. But is money the cause of the victory?
It might seem logical to think so, much as it might have seemed logical that a booming 1990s economy helped reduce crime. But just because two things are correlated does not mean that one causes the other. A correlation simply means that a relationship exists between two factors—let’s call them X and Y—but it tells you nothing about the direction of that relationship. It’s possible that X causes Y; it’s also possible that Y causes X; and it may be that X and Y are both being caused by some other factor, Z.
Think about this correlation: cities with a lot of murders also tend to have a lot of police officers. Consider now the police/murder correlation in a pair of real cities. Denver and Washington, D.C., have about the same population—but Washington has nearly three times as many police as Denver, and it also has eight times the number of murders. Unless you have more information, however, it’s hard to say what’s causing what. Someone who didn’t know better might contemplate these figures and conclude that it is all those extra police in Washington who are causing the extra murders. Such wayward thinking, which has a long history, generally provokes a wayward response. Consider the folktale of the czar who learned that the most disease-ridden province in his empire was also the province with the most doctors. His solution? He promptly ordered all the doctors shot dead.
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And what about the other half of the election truism—that the amount of money spent on campaign finance is obscenely huge? In a typical election period that includes campaigns for the presidency, the Senate, and the House of Representatives, about $1 billion is spent per year—which sounds like a lot of money, unless you care to measure it against something seemingly less important than democratic elections.
It is the same amount, for instance, that Americans spend every year on chewing gum.