People, will miss newspapers when they are gone?
Stephen J. Dubner is the Co-author, along with economist Steven D. Levitt, of the 2005 international best-seller Freakonomics. The arguments of the book, which uses anecdotal information and shows how even the most innocuous things can be explained by simple economics, have been kept going via a blog.
Stephen J. Dubner is the Co-author, along with economist Steven D. Levitt, of the 2005 international best-seller Freakonomics.
The arguments of the book, which uses anecdotal information and shows how even the most innocuous things can be explained by simple economics, have been kept going via a blog. Now, the two are following up with a new collaborative effort tentatively titled Superfreakonomics. Dubner, a former journalist with The New York Times, was one of the speakers at the recently-held India Today Conclave and spoke with BT’s Kushan Mitra.
Does the current economic collapse fascinate someone like you, given the complex web of facts that brought this maelstrom upon us?
Rather than a complex web of facts, I would argue that it was a complex web of incentives. People had very misaligned incentives, if you take the real estate industry just to take one, if you take any one transaction, you will find at least 10 people or companies that have a “play” in that transaction and whose incentives are often at odds with each other. For example, the mortgage broker will get a commission regardless of how good the underlying mortgage is. The real estate broker will get a commission regardless of what happens to the mortgage down the line. The buyer will get the house even if he or she is not qualified to pay for it.
The seller wants to sell the house. The banker, who used to underwrite and keep the loan, now by carving up and selling the loan down the line has no incentive either. So, everybody has misaligned interests.
Freakonomics was fascinating—wasn’t it a challenge, however, to put all those examples together?
You know what—I read an interesting story on the flight over here about apple orchard farmers, trees and bees. The story went how everything meshes together and the story had a footnote by an economist and it was a beautiful footnote because usually, economists don’t write very well. It said that facts are as difficult to acquire as jade and just as difficult to authenticate.
Levitt and you made information fun in the book, but wasn’t that a challenge? And wasn’t it just as challenging to validate the information, particularly given that we live in a world full of rumours and misinformation and given that people often take information on sites like Wikipedia as the gospel truth?
As someone who has disparaged Wikipedia (the online user-generated encyclopaedia) several times over the years, I have to admit that in certain realms, particularly scientific and technical ones, it has become very, very good. If the premise of the question is if it is fun to make facts fun, obviously it is. But I also believe that whether you’re a scholar, journalist, you’re all trained differently and all rewarded or penalised differently. But different people can draw different conclusions from a fact or statistics...
One thing we have to do is to not only distinguish fact from fiction but also understand that there are different orders of facts. There are first order facts that are either true or not true and then you can keep growing the orders. What I mean by that is that if I say there is 70 per cent more CO2 in the air than there was a few decades ago— fact, true. But if I use that fact as a fulcrum to force a style of thinking, it ignores the fact that is just one fact in a very complex system. So, what we do is to treat first order facts as first order facts but also give context to whatever any fact will mean.
The advantage of collaborating with an academic economist is that he has reams and reams of data. So, any one fact will get smoothed out by the accumulation of data. But some people don’t like that; there is this humanist notion that we can’t describe any one person in what is typical for people. The fact that a child who grows up in X circumstance will have a different future than a child growing up in Y circumstance— it is very disconcerting for some people.
So, what about your new book with Levitt, why Superfreakonomics?
I don’t know how popular it is in India, but there is a rather popular song called Superfreak and, well, that is how the name came up. In fact, the book contains several anecdotal stories from India, and readers over here would love those I’m sure because some of those are really interesting.
The second book has been done with a level of collaboration that did not happen for the first book. When Freakonomics happened, I was still getting to know Levitt. This time around, we are both more involved in the process and hopefully that will show. This project is, I believe, a far more collaborative project and we have used our blog as a great sounding board through our posts and the comments we get there.
And when can we expect it?
Oh I don’t know, maybe late in 2009 but definitely by the middle of next year.
You said the blog (http://freakonomics. blogs.nytimes.com/) has been very popular, but as a former journalist, how do you feel about the state of the American print media right now and the rise of the web media?
It hurts to see good papers cutting back and good people lose jobs. I have been in touch with several of my friends from the (New York) Times because I spent a lot of my life there and while the Times hasn’t cut back as yet, things are tough there, too. And you know what— people, and that includes all these websites, will miss the newspapers and magazines when they’re gone, because true journalism still happens there and these papers provided the fodder for the websites. Nobody might say it today but you’ll see.
And how did you end up as an author?
Well actually I did a course in fiction writing in college, and I wanted to be a novelist.
But your book made the “non-fiction” best-seller list?
Well, (laughs) but it did sell a lot of copies and hopefully the new one will, too.
The arguments of the book, which uses anecdotal information and shows how even the most innocuous things can be explained by simple economics, have been kept going via a blog. Now, the two are following up with a new collaborative effort tentatively titled Superfreakonomics. Dubner, a former journalist with The New York Times, was one of the speakers at the recently-held India Today Conclave and spoke with BT’s Kushan Mitra.
Does the current economic collapse fascinate someone like you, given the complex web of facts that brought this maelstrom upon us?
Rather than a complex web of facts, I would argue that it was a complex web of incentives. People had very misaligned incentives, if you take the real estate industry just to take one, if you take any one transaction, you will find at least 10 people or companies that have a “play” in that transaction and whose incentives are often at odds with each other. For example, the mortgage broker will get a commission regardless of how good the underlying mortgage is. The real estate broker will get a commission regardless of what happens to the mortgage down the line. The buyer will get the house even if he or she is not qualified to pay for it.
The seller wants to sell the house. The banker, who used to underwrite and keep the loan, now by carving up and selling the loan down the line has no incentive either. So, everybody has misaligned interests.
You know what—I read an interesting story on the flight over here about apple orchard farmers, trees and bees. The story went how everything meshes together and the story had a footnote by an economist and it was a beautiful footnote because usually, economists don’t write very well. It said that facts are as difficult to acquire as jade and just as difficult to authenticate.
Levitt and you made information fun in the book, but wasn’t that a challenge? And wasn’t it just as challenging to validate the information, particularly given that we live in a world full of rumours and misinformation and given that people often take information on sites like Wikipedia as the gospel truth?
As someone who has disparaged Wikipedia (the online user-generated encyclopaedia) several times over the years, I have to admit that in certain realms, particularly scientific and technical ones, it has become very, very good. If the premise of the question is if it is fun to make facts fun, obviously it is. But I also believe that whether you’re a scholar, journalist, you’re all trained differently and all rewarded or penalised differently. But different people can draw different conclusions from a fact or statistics...
One thing we have to do is to not only distinguish fact from fiction but also understand that there are different orders of facts. There are first order facts that are either true or not true and then you can keep growing the orders. What I mean by that is that if I say there is 70 per cent more CO2 in the air than there was a few decades ago— fact, true. But if I use that fact as a fulcrum to force a style of thinking, it ignores the fact that is just one fact in a very complex system. So, what we do is to treat first order facts as first order facts but also give context to whatever any fact will mean.
The advantage of collaborating with an academic economist is that he has reams and reams of data. So, any one fact will get smoothed out by the accumulation of data. But some people don’t like that; there is this humanist notion that we can’t describe any one person in what is typical for people. The fact that a child who grows up in X circumstance will have a different future than a child growing up in Y circumstance— it is very disconcerting for some people.
So, what about your new book with Levitt, why Superfreakonomics?
I don’t know how popular it is in India, but there is a rather popular song called Superfreak and, well, that is how the name came up. In fact, the book contains several anecdotal stories from India, and readers over here would love those I’m sure because some of those are really interesting.
The second book has been done with a level of collaboration that did not happen for the first book. When Freakonomics happened, I was still getting to know Levitt. This time around, we are both more involved in the process and hopefully that will show. This project is, I believe, a far more collaborative project and we have used our blog as a great sounding board through our posts and the comments we get there.
And when can we expect it?
Oh I don’t know, maybe late in 2009 but definitely by the middle of next year.
You said the blog (http://freakonomics. blogs.nytimes.com/) has been very popular, but as a former journalist, how do you feel about the state of the American print media right now and the rise of the web media?
It hurts to see good papers cutting back and good people lose jobs. I have been in touch with several of my friends from the (New York) Times because I spent a lot of my life there and while the Times hasn’t cut back as yet, things are tough there, too. And you know what— people, and that includes all these websites, will miss the newspapers and magazines when they’re gone, because true journalism still happens there and these papers provided the fodder for the websites. Nobody might say it today but you’ll see.
And how did you end up as an author?
Well actually I did a course in fiction writing in college, and I wanted to be a novelist.
But your book made the “non-fiction” best-seller list?
Well, (laughs) but it did sell a lot of copies and hopefully the new one will, too.
