FREEDOMNOMICS: WHY THE FREE MARKET WORKS AND OTHER HALF-BAKED THEORIES DON'T by John Lott

Freedomnomics is John Lott’s free market retort to the wildly popular book, Freakonomics—that pastiche of thin analysis that skims over topics as diverse as sumo wrestling, real estate rip-offs, used car prices, and children’s names.

In particular, Lott disputes the most explosive claim in Levitt and Dubner’s work—that Roe v. Wade was a major factor in the stunning drop in crime in the 1990s. That huge assertion, based on four pages of analysis that included the negative impact of Communist Romania’s no-abortion policy, could easily have been labeled “fewer blacks, less crime.”

Lott argues, by contrast, that the Supreme Court’s legislative fiat in 1973 actually increased crime by boosting out-of-wedlock births and single-parent households. These crime-correlated statistics exploded in the 1970s and 80s as social sanctions against extra-marital sex disappeared and as the legal but odious option of abortion was rejected by millions of now-pregnant unmarried women.

If abortion isn’t the life-saving procedure that Levitt and Dubner suggest it is, other factors must have caused crime rates to plummet during the last decade of the 20th century. Accordingly, Lott provides evidence that the reinstitution of capital punishment in the early 90s explains some of the drop—a conclusion that coincides with the findings of other analysts and confirms what most folks, including criminals and police officers, sense intuitively—that people go out of their way to avoid being killed. Stated otherwise: harsher penalties, less crime.

The incarceration of more criminals is Lott’s next explanation for lower crime rates. Only among academics, the author notes, would it seem strange that “more inmates” results in “less criminality.” Individuals who rob banks, Willie Sutton might have noted, can’t engage in that illicit activity when they don’t have access to the place where the money is kept.

Lott’s third explanation for the 90s crime recession is, not unexpectedly, more guns among law-abiding citizens—a proposition to which Lott devoted his well-known 1998 book. In this regard Lott notes that “for the first eight to nine years that concealed-carry laws are in effect, murder rates fall by an average of 1 to 1.5 percent per year, while robbery and rape rates decline by about 2 percentage points.”

The beefing up of municipal police forces also helped to reduce crime in the 90s—especially in places like New York City, where a precipitous decline in murders coincided with a 50% increase in police officers and improvements in the quality of recruits. These elevated recruitment standards, Lott notes, reversed the general degradation in force quality that was often associated with “affirmative action” hiring policies.

Concerning traditional economic topics, Lott is much more business friendly than his Freakonomics counterparts. While Levitt and Dubner compare real estate agents to Klan members (with inside information) and warn consumers that “many experts use their information to your detriment,” Lott emphasizes the economic value of reputation and provides data that contradicts or mitigates Levitt and Dubner’s unflattering assertions about used car prices and real estate agents. Lott even provides a plausible market-based explanation for high wine and liquor costs at restaurants.

Among other topics that Lott analyzes in 194 pages of text are the following: the 2000 Presidential vote in Florida (Bush wins!), the vote-depressing effect of measures that make voting (and voter fraud) easier, the left-bias of mainstream media, and the idea that a correlation exists between the cost of political campaigns and the size of government. With respect to the last point, the author notes that all the House, Senate, and Presidential candidates in 2004 spent a mere $2.17 billion for the privilege of dispensing a trough of 2.23 trillion federal dollars. Meanwhile, that same year, Proctor & Gamble spent 3.9 billion on advertising. The logic of this unwelcome campaign finance tale is simple: more government, more campaign dollars.

Another hornet-stirring correlation that Lott considers is one between female voting and big government—a linkage greatly attenuated by marriage and the responsibilities of parenthood. Lott also notes that felons, even more than unmarried and divorced women, vote overwhelmingly for Democrats—a fact that explains the ardor Democrat leaders are exhibiting to restore the “voting rights” of victimizers.

Perhaps the most revealing anecdote in Lott’s book occurs in the introduction. Here the author discusses the severe professional pressures that were brought to bear against him because of his work on behalf of a property tax elimination measure in Montana. The relevant correlations in this case involved more taxes, more money for government-funded educators, and more intimidation of professors who don’t go along with the program. Put succinctly: more state subsidies, less speech.

In sum, Freedomnomics is just the sort of product one would expect from an author whose book begins with the assertion, “The free market works,” and whose economic analysis starts with these words, “If something becomes more costly, people will do less of it.” Such frankness would have resonated with the late Merryle Rukeyser, a blunt talker who once repeated these no-nonsense definitions on his son’s popular financial program: “A liberal is someone who’s liberal with other people’s money, and a reactionary—that’s someone who can count.”