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Brian Lehrer: Wait, that's not the Brian Lehrer Show theme song, but surely many of you will recognize it. It's been 20 years since Freakonomics was published, and 15 years of radio stories that uncover the hidden side of everything as they do. Ever wondered what makes a perfect parent? Or why drug dealers still live with their parents? For the last 20 years, we've read and listened to Freakonomics host Stephen J. Dubner explore questions like these, using the tools of economics in a way that anyone can understand and enjoy.

In honor of the 20th anniversary of the original Freakonomics book, Stephen Dubner and his co-author, economist Steven Levitt, have released a new edition. Stephen Dubner joins us now to reintroduce us to Freakonomics, preview what's in the new version, and give us a taste of what's to come. Stephen, always great to talk. Welcome back to WNYC.

Stephen Dubner: Brian, hi. Thank you. Hi, everybody listening to WNYC. Happy Thanksgiving.

Brian Lehrer: To start at the very beginning, the name Freakonomics. [chuckles] I was surprised to learn that your publisher 20 years ago didn't like the name. What were you going for and why did it stick?

Stephen Dubner: Why would you be surprised to learn that a publisher doesn't like the author's selection for a title? I've been in a few creative industries now, the music industry and journalism and publishing and radio, and now getting into TV. I do find-- this is not the question you asked me, sorry, but I do find that if you make stuff for a living and you want to do it with your whole heart and soul, that the industry that invites you in as an ally, you have to--

It's tricky, because they're businesses, and so they often have a different way of thinking about making stuff. With Freakonomics, we'd written this book, we had a manuscript that we liked quite a bit, but it didn't have a central theme. Steve Levitt's sister, Linda Gines, who unfortunately died several years ago now, way too early, from cancer, she was helping us. We had a bunch of people helping us try to come up with a title. She had worked in publishing and advertising, and she came up with a list of maybe 200 titles, maybe 300.

Brian Lehrer: Wow.

Stephen Dubner: This was before AI, before you could feed a manuscript in and say, "Hey, give me a hundred titles. Now tweak--"

Brian Lehrer: Whoops, did we just lose you along?

Stephen Dubner: -Freakonomics? Sorry, I'm here. Can you hear me?

Brian Lehrer: Yes, you cut out. I think you cut out just as you were reaching the point of why you chose Freakonomics out of those hundreds of titles.

Stephen Dubner: Freakonomics just made us laugh, basically. We brought it to the publisher. Levitt, and I thought the title was so bad that it might actually be great. The publisher didn't see it that way in the beginning. Then we kept giving them future titles that were not very good. I wouldn't be honest if I didn't say we were intentionally giving them ones that weren't very good, [laughter] because we really thought Freakonomics was good. Finally, they agreed with us and we put it out and it worked out okay.

Brian Lehrer: Hey, AI, write me a hundred bad titles for my book about econo-- [laughter] The book, for people who don't know, is based on five fundamental ideas. Let's go through them one by one. First up, incentives are the cornerstone of modern life. Can you define how you mean incentives and explain how they reveal answers to life's riddles? Honestly, this one makes me shudder. Like, are we all just subjects in a B.F. skinner experiment?

Stephen Dubner: I think when a lot of people see the word incentives coupled with the word economics, they assume everything is about financial incentives. Money is obviously a really important piece of modern life, but there are many, many incentives that we all respond to all the time. I think we often have a fixed idea of who we are as individuals, how we want to be seen in the world, how we want to see ourselves. Adam Smith, the proto-economist, talked about the overwhelming urge of people to be lovely and to be treated as if they were lovely and to treat other people as if they're lovely.

If you go back a couple thousand years, you get a golden rule version of that. Don't do to anyone what you don't want done unto yourself. While financial incentives are strong, especially as the money gets bigger, I think we all have incentives about our own morality, our own ethics. We care about our reputations. If you just look at how much time people spend online curating their reputations, which in my mind is a bad way to spend time, because-- This goes back to something that basketball coach John Wooden used to talk about, the difference between reputation and character.

He would tell the young men, basketball players that he was working with, you should worry more about your character than your reputation, because your reputation is simply what other people think about you, whereas your character is who you really are. I think a lot of us struggle with the difference between character and reputation. Our argument is that incentives really do matter a lot, but often not the incentives that you think. You may make a certain decision, you may choose to adopt a certain ally or enemy even, and you think that you are living according to your own truest self, but actually there are all kinds of forces pushing us toward that behavior. Psychologists are quite good at understanding that. Incentives really matter.

Brian Lehrer: Listeners, anything you always wanted to ask Stephen Dubner listening to Freakonomics, now's your chance. 212-433-WNYC, 212-433-9692. Five fundamental ideas. We went through number one. Here's number two. The conventional wisdom is often wrong. Might be good to explain this through an example of something in the book maybe that-- The one you use is money buys elections. How is this wrong?

Stephen Dubner: Money is certainly important, but one really easy way to persuade yourself that money is nowhere near as important as one thinks is just look-- you could compile a list of the big money spending candidates over the past 20 years, just in New York City alone, you could do that. You could look at Mike Bloomberg's presidential run. I can't remember what the total count was for how much he had to spend to get every vote in the primary before he dropped out and revealed himself as a pretty poor candidate for president.

Incumbency does come with a lot of advantages. My co-author Steve Levitt did a study years ago that was a very clever way to explore this issue, which is looking at congressional races where the same two candidates ran against each other multiple times, one being an incumbent and one not. What money is-- Look, you saw with Mamdani in this election. How well was Mamdani funded early, early?

Brian Lehrer: I was going to say you only need two words to prove this point. Andrew Cuomo.

Stephen Dubner: Yes, for sure. It's a nice, lazy sound bite, nice square box of a conventional wisdom, if you like to complain about how broken and dysfunctional, et cetera, the political system is. I'm not going to argue with you that it does have a lot of problems. Money is not as powerful as one might think. What matters and what happens is attractive candidates attract a lot of money. Then once they start becoming a little bit more successful because they're an attractive candidate, then the money really flows. Money itself, I think, is grotesquely overvalued.

Brian Lehrer: Although to push back on this, at least theoretically, because I haven't done the analysis, but maybe you, as a data geek have, that you have to look not just at the exceptions, but at the role. If there's so much money being poured by people who have it into campaigns, then it must be for a reason. There must be a history of effectiveness more than not. Is that wrong?

Stephen Dubner: Look, I would argue that's not entirely wrong, but it's not entirely right either. If you get into the weeds on how political fundraising works, you see it's an industry just like any other. Also, let's not forget, most donors or voters are not working from a gigantic menu of choices. Most people, once they get involved in something, it's whittled down to two, four, maybe eight options.

These are people who want to get a piece of that action because they believe there is some kind of quid pro quo, either functional or moral, that they want to support someone that they think is better and they'll feel good about that, or they want to support someone that they think is better and that they will then benefit from that in some way. That doesn't really happen often until there's been quite a bit of selection already happening.

A parallel to maybe think about. This is not a perfect parallel. If you ask people in these exercises that I think you've done on this show quite a bit over the years, how would you spend the next trillion dollars of the federal budget, and how does that sync up with how the budget actually works? There's a pretty vast gap there. I would argue the same type of gap exists in the way that we think about giving money to campaigns.

Also not to forget, the amount of what you could call corporate capture or just donor capture in politics is large. Yes, if someone is doing well and I can come in with a $10 million donation thinking that this person is going to win and my $10 million is going to get me a lot of traction, then that's how people do it. Look, Sam Bankman-Fried was a really good example of how he played both ends against the middle to make sure that he was going to have as much influence as he could. Unfortunately for him, he's in prison, so it doesn't work.

Brian Lehrer: Stephen Dubner is with us. If you're just tuning in and you don't recognize the voice, host of Freakonomics Radio here on the station and on that podcast, and co-author of the original book Freakonomics, which is just out in a 20th anniversary edition. I want to acknowledge that a couple of people have written in to say that they really appreciate the way you sign off on Freakonomics Radio, which is, take care of yourself, and if you can, someone else too. One of these writers says, "That says it all about his character, but his reputation is great, too." [laughter] Echoing what you said before, comparing character and reputation.

Stephen Dubner: I appreciate that.

Brian Lehrer: Listeners, 212-433-WNYC for your Freakonomics questions. Jim in Astoria, you're on with Stephen Dubner. Hello.

Jim: Hey, good morning. Stephen, huge fan of your work, but out of the whole corpus, if you could revisit any one article or story, which would it be and why? I'll take my answer off the air.

Stephen Dubner: Oh, I'm so bad at this. I'm really good at multiple choice. Fill in the blank, I'm not so good. Let me think. if I could revisit. I like the question a lot, Jim. Also, just so you know, I'm slow. I'm a writer by nature, so my brain kind of usually takes a month to mull over something. If I had to really reexamine everything we've ever written, I don't know if it would be a specific story because we are deliberate. We have an idea, we do research, we interview people, we fact check and all that stuff. We don't publish clunkers or try not to at least. If we do, we amend them.

I would say a big thing that I've changed my mind about, at least to a significant degree over the last 10, 15, 20 years, is the degree to which the the beautiful version of free market capitalism is supposed to just work out. [chuckles] I think this was an idea that was promoted from the University of Chicago economics department, probably best exemplified by Milton Friedman, but then furthered by people even like Gary Becker, who was politically quite different, and my colleague Steve Levitt and many, many, many other economists at the University of Chicago that I've had the pleasure to get to really know and understand their work.

There has been, I think, a real deep belief that laissez faire free market capitalism is not only the best system available to us, but doesn't have many big flaws. I would probably still side on the first part of that equation, that it is probably the best system we've had available to us in the history of humankind and economics. The flaws are really significant. I think those flaws over the past 10 or 15 years have become so obvious to everybody, and have filtered into our political issues, our social issues, on and on and on, that we need to really examine the ways in which free market capitalism works and doesn't work.

I would say over the past five years, for me, that's been an evolution. Over the past five years, I've done quite a few episodes of Freeconomics Radio on the private equity industry. For instance, it's really easy to make not notice the private equity industry, but in fact, it has gone from controlling about maybe 4% or 5% of corporate equity about 15 or 20 years ago to now controlling about 20%. As you can tell by its name, private equity, it operates not in the harsh spotlight of the public markets. There are a lot of ramifications of this. There are a lot of private equity investment funds. There are more private equity investment firms in the US now than there are McDonald's.

They're very good at doing a lot of things that nobody else was really doing, including buying up or rolling up what we consider mom and pop businesses in any realm you can think of. Think of any store you've gone into over the last year. They are almost certainly a nice target. Target sounds a little pejorative, but a target for private equity investors because these are little businesses that are successful because someone has been running them with their heart and soul for the past generation or two. When that generation wants to get out and sell, it can be really tough. Car washes, pawn shops, veterinarian shops, on and on and on, those often get bought up, rolled up into private equity investments.

There are a lot of ramifications of that. Now, furthermore, there's a new Trump executive order maybe two, three months ago, which is paving the way for private equity investments to be bought in 401(k)s and other main street retail investors funds. I think there is a lot of examination that needs to continue happening about that issue and many other issues. Our economy is big, dynamic.

It's unparalleled in the history of the world, and it's produced many, many, many, many wonderful things for many, many wonderful people. We can't deny that. The downsides are also significant, everything from income inequality to wage differentials to the way customers are treated when companies grow and have only the bottom line in mind. I've become, I wouldn't say a cynic, but skeptical and deeply curious. I call up people and ask them questions and ask them to explain themselves. That's what I do.

Brian Lehrer: Does that generalize not just to capitalism itself, but to the field of economics and economic analysis? You have this line in the book that I think is from the new forward, correct me if I'm wrong, "The field of economics has been proven both incredibly important and somewhat impotent."

Stephen Dubner: Yes, I stand by that sentence, which I happen to have written. I feel like, for me-- I have had what I feel is a great privilege. I'm someone who liked economics. I'd studied it a bit. I'd been interviewing a lot of economists for a book that I was working on about 22 years ago that never got published because Freakonomics happened instead. Then Steve Levitt, my co-author on Freakonomics, became not just a great collaborator and a great friend, great, great, great, a great partner in every dimension, but he also just took me along as a wingman to join as an honorary member the fraternity of academic economists.

I got to see and learn a great, great, great deal from a lot of very smart and very good people. What I did see, however, is that like anyone who comes to talk their own book because they're so knowledgeable about it, it's easy to miss the forest for the trees. I think a lot of academic economists who get into government and policy roles, which is quite typical, they will have a theory or an idea about the way the world works, about the way the economy works, that to them is watertight.

They've seen the evidence, they've accumulated the data themselves, but it's often really hard for them to adjust their theories to the fact that the world isn't theoretical, the world is real. Actual people, individuals are living on the other end of those formulas that they write so elegantly. Yes, I think that especially when you get into macroeconomics, predictions about the way the economy will move. If you want to look at one big one where most of the really smart economists in America and elsewhere really missed, had to do with when China was admitted to the WTO.

The US happily and willingly offshored a great many of our manufacturing jobs. The quid pro quo was that not only will we get really cheap TVs and all kinds of other stuff from China and other manufacturing centers where we're offshoring our manufacturing, and, oh, by the way, we're also offshoring our manufacturing pollution, which is a nice thing. The air in the US didn't get so much cleaner just because we got better. It's also because we stopped doing all that dirty manufacturing.

What we were going to do, what the economists and the policy people told us was retrain everybody who'd been in manufacturing to have different types of jobs that would pay better and allow them to stay in their communities and have good jobs. It just didn't happen. The people on the other end of that formula were not invited into that circumstance. We see the ramifications of that in great distress among many, many people in this country. That's where I say that economists are really, really smart, but nobody's infallible. The future is really hard to predict. Anybody who tells you that they can do it, you should, I think, regard them with a good deal of skepticism.

Brian Lehrer: I think our next caller has a question about economic policy and whether that can be less impotent, your word, than the field of economics. Janet in Crown Heights, you're on WNYC. Hello.

Janet: Good morning. My question is the word now is affordability. I wonder if governments can really do anything about affordability besides maybe doing housing programs. I think if rent was cheaper, New York would be more affordable. Or maybe jobs programs, which Biden did, and it paid off for the workers. Thank you.

Stephen Dubner: It's a great question. It's a hard question. I don't mean to offer what sounds like a pretty simple solution to a very difficult question, but I will say this, this is where I do think economists are really good, and they've done a lot of work. It's been empirical work, it's been theoretical work. They will show you that if we just wanted to talk about affordability with housing, which I would say is really the big one. If you live in New York City, which I know many people listening to this show do, I do as well. If you want to talk about the cost of food, the cost of transporta-- The cost of transportation in New York is fantastically cheap if you use public transportation.

Even though it's risen, if you look at it as a share of your overall income, and if you look at it as a share of your income, if you live in a place without good public transportation, getting around New York City is phenomenally affordable. Food can be affordable, can be difficult, but really, it's the housing. What economists say you need to remove the impediments from the system. If you look at New York City housing policy, it reminds me of opening up a closet or a treasure chest that people have been stuffing little pieces of junk into over the past hundred years.

These are little policy planks that are meant to protect one little group and then another little group and then one big group. Look, I don't really know what Mayor-elect Mamdani plans to do with housing policy writ large. I do know that some of the people that he's invited into his administration are really smart thinkers about what works and what doesn't work. I think a lot of people who didn't vote for Mamdani are scared that it's going to be some kind of communist socialist utopia where everybody gets to live free wherever they want. I think that's a fairly absurd notion from the outset. Removing restrictions, removing regulations, making it easier.

You have to realize that for anybody to build a building, they have to have incentives to do so. You have to consider all the parties. If you look at where the population has grown in the rest of the country over the past 30 years, it's in places that have very loose housing. That means that developers want to come in and build more. When you come in and build more, the rent and the prices get cheaper. Here, we have just not bitten that bullet. We consider developers the enemy, which I think is a little bit kooky. These are the people who actually do the work to build the buildings that we live in. I think there's a reassessment of the way we need to think about how to solve that problem.

Brian Lehrer: Though, the ratio of market rate to affordable, that those developers have the power to get approved, that's obviously a big policy question that will be debated a lot after the new year. Let's revisit one more of your principles from the original Freakonomics book 20 years ago. Dramatic effects often have distant, even subtle causes. This is a really controversial one. You said Norma McCorvey, otherwise known as Jane Roe of Roe vs Wade, had more influence on the crime rate than gun control, a strong economy, or even new policing strategies. You wrote that 20 years ago. How so according to you at the time, and do you still believe it?

Stephen Dubner: I think that holds up well. Let me preface it by saying anybody who thinks that they should either endorse or not endorse abortion as a means of keeping crime down, it's not a good idea. It's not an effective tool. That's not what it's meant for. What the argument is really about is if a child is born into a situation where that child is not wanted or the parent or parents aren't in a circumstance to care well for that child, that child's likelihood of having a great life really diminishes a lot. We know that from decades now of social science research.

That was the mechanism by which the legalization of abortion led to a decrease in crime a generation later because families, moms were able to decide better, is this a time for me to have and raise a child and try to help that child thrive and prosper? In terms of why that was bigger than the other forces that you just named, gun control has been mostly a failure because of the way that we've practiced gun control. Not entirely. Gun buybacks are a great example. It's a very dramatic thing. Every police department that ever does it will get on the news that night. It's just the guns that people submit to those gun buybacks are the guns that weren't going to be used in crimes anyway, essentially.

That was an absurd argument in the totality. Strong economy, you would think there's a much stronger relationship between a strong economy and crime. It turns out that for most crimes, especially violent crime, there's not. Which is just a empirical fact. Then police strategies, look, policing continues to evolve. A lot of things that happen are much better now than they used to be. Some things not as much better as you'd like them to be. The fact is that the broken windows policing policy which was embraced here and I think probably had some significant positive effect, but also had some significant negative effect.

If you measure the degree to which better policing decreases crime, it's a complicated daisy chain. We all want better, smarter policing, but it's an evolution that I think is only really just starting now to gain fruition. I think when I see in cities like New York and Chicago and I think Atlanta, I may be wrong in Atlanta, I think the idea of bringing mental health professionals into the realm of policing in a way that does not take away the expertise of what police are good at, and in a way that helps the people who are in distress, and just as important, the loved ones of the people that are in distress. We care about the perpetrator, but let's care about the victims primarily because they're the victims after all.

I think what you see is that the police in this country were asked to do a lot of functions over the past several decades. There was never an intention of policing originally. I think they've often tried their best and not succeeded. Now, we are reimagining what modern "policing" is. What modern "policing" is, is often very different from this idea of showing up with 10 squad cars when there's an EDP, an emotionally distressed person--

Brian Lehrer: Disturbed person.

Stephen Dubner: Disturbed person, causing a lot of trouble. Like anything in life, as we go on further in civilization and humankind, we like to try to learn from the past and invoke better solutions. Honestly, that's kind of what our project has been about. We don't go around solving a bunch of things with Freakonomics, but we do try to explore new ideas to see if there might be an avenue for better, smarter people to solve problems.

Brian Lehrer: We're almost out of time. One quick follow up on that one. You've explained just now how some of the standard reasons that are given explanations for decreases in crime may not hold up. How do you prove with data that people who weren't born because their mothers had choice didn't commit crimes when they weren't even there to grow up?

Stephen Dubner: This was based on a research paper done by my co-author, Steve Levitt and a colleague, John Donohue, who a legal scholar, I believe now at Stanford. It's an amazing paper. I would really encourage everybody to read. The version that we wrote in Freakonomics was pretty thorough. We really tried to show the homework. If I were going to say that Freakonomics stands for one thing, it's trying to be less binary about any argument. This is good, this is bad, this is left, this is right. What that means is that you have to explore a lot of potential causes or contributors. That's what they did in this paper about abortion and legalization of crime. I'll give one example. They assemble--

Brian Lehrer: Real quick.

Stephen Dubner: Yes. They assemble a collage of evidence, one piece of which is that five states legalized abortion before Roe v. Wade in 1970, '71. If you use those as a variable to measure how crime moved in those places compared to the states that got Roe v. Wade later, that's a good indicator.

Brian Lehrer: That's one variable. Freakonomics, the original book, now 20 years old and re-released with a new forward by Stephen Dubner and Steven Levitt. Dubner, also the host of Freakonomics Radio, of course. You said you're doing television coming up. You want to promote it?

Stephen Dubner: Yes. I'm making a TV show. It can't be seen yet. We're shooting a season right now. It's the most fun I've had since I was a kid. It's also the scariest thing I've done since I was a kid. We're privately producing and funding season one because I believe, like I said at the beginning, if you want to make something good the way you want it to be, you need to do it yourself. I think it's going to be-- I don't know. I'm the host of it, so it's hard for me to say. It's going to be called Better in Person, which is a blue belief that most of us are better in person. I've already interviewed a series of amazing people. They range from architects to rabbis to musicians to former NFL players who now teach math at MIT, et cetera, et cetera. It's a little bit-- I love Dick Cavett from the old days. I liked Charlie Rose a lot. Charlie Rose turned out to have some character flaws that we all know about. Going deep with really smart people is something I love. There will be a show called Better in Person with me hosting, available somewhere in 2026.

Brian Lehrer: All right. Now we know to look for it. Stephen, thanks a lot. Keep it up.

Stephen Dubner: Thank you, Brian, so much. Appreciate it.

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