Ok, it was a nice read. Fast paced, interesting, engrossing etc. etc. Let’s leave that to the book reviewers. But what’s so great about this book?

Basically, it is a collection of research studies carried out by Steven D. Levitt (one of the authors and an economist). Along with his coauthor, Steven J. Dubner (writes for New York Times), Levitt sets out to answer these questions:

• What do real estate agents and the Ku Klux Klan have in common?
• Why do drug dealers live with their mothers?
• How can your name affect how well you do in life?

So what do real estate agents and the Ku Klux Klan have in common?

The answer: The role of information. Levitt explains to us about something called information advantage. It’s simple. You go to a market to buy a second hand cellphone. You know what the price would be in the company’s store but you also know that you’d get it for less here (that’s why you’re going). The problem, however, is you dont know how less exactly. But the dealer knows. Suppose the actual price is Rs. 12,000. You may be expecting it for, say, about Rs. 7000 here. The dealer must’ve got it for Rs. 3000 only (might be a stolen good, who knows?). So when you start settling the price, he would start with a price of, say Rs. 9000. You start bargaining and the guy keeps saying “Saab, virginal maal hain!” (pardon the pun ). You being bargaining furiously. The place resembles a battlefield and finally, you both settle the price, say Rs. 7000. You’re quite satisfied. You might’ve had to shell out 12000 bucks for the same thing in the company store! You might also be feeling a little sad for the dealer “Bechara 9000 bola, maine 7000 mein udaliya!”. But as I said, the dealer got it for just Rs. 3000. You didnt know this. In fact, he’d also be thinking “Eda 3000 ka cheez 7000 mein liya! Hahaha!” The dealer had an information advantage here.

Levitt says something similar happens in real estate deals (as if we dont know ). But with the proliferation of the Internet and other information sources, the information advantage held by a real estate dealer or the cellphone dealer I talked about can be reduced to a great extent. So, information plays a key role in this kind of business.

Coming to the KKK. What does information have to do here? KKK is a terrorist organisation. Terrorists operate in networks. So, information and its flow is crucial if it has to function properly. If you tap this information, you can use it against them (for example, if we get to know their next bomb target and the time of detonation, we can prevent the blast). Levitt explains how Stetson Kennedy actually infiltrated the KKK (secretly of course) by enrolling himself and joining the organisation.

KKK has a language of its own. Kl is a prefix to many Klan words. Like, for example, a member of the KKK is called a Klansman. When two Klansmen talk, they’re having a Klonversation. Klansmen is also a secret organisation like all terrorist organisations. The use of passwords is a must. Naturally, being a member, Kennedy would get to know all these cryptic passwords. After he collected a considerable amount of information, Kennedy leaked it.

Kennedy thought of the ideal outlet for this mission: the Adventures of Superman radio show, broadcast each night at dinnertime to millions of listeners nationwide. [...] Kennedy began feeding his best information to the Superman producers. [...] And Kennedy told the producers the current passwords, agenda, and gossip emanating from his own Klan chapter… [...] The radio producers began to write four weeks’ worth of programs in which Superman would wipe out the Ku Klux Klan. [...] Kennedy couldnt wait for the first Klan meeting after the show hit the air. Sure enough, the Klannern was in distress. [...] At the following week’s Klan meeting, the room was nearly empty; applications for new membership had fallen to zero.

That’s the funda. Tap information, use it in the right fashion and work wonders. This is the part of the book I liked most.

Be warned, the book has no underlying theme. I have explained in a crude sort of way how Levitt feels information is a crucial factor in shaping peoples’ behaviour. The other funda is how economic principles or incentives, affect the way people behave. I guess this is what is meant by the lines on the back of the book:

The answer: Freakonomics. It’s at the heart of everything we do and the things that affect us daily, from sex to crime, parenting to politics, fat to cheating, fear to traffic jams. And it’s all about using information about the world around us to get to the heart of what’s really happening under the surface of everyday life.

What’s so novel about the information funda, you ask? I’ve been asking the same question. After finishing the book, I’ve been left feeling that, armed with stats and language skills, he made me believe that it’s an entirely novel idea. But he’s telling us something we already know in some sort of way (remember the cellphone dealer?). He knew that the reader wouldnt really know what’s inside the book unless he reads. If he has to read, then he has to buy (which means lots of money for the author). The bugger used information advantage against me! He made a fool of me!
I shall leave the next two questions. You go read and find out the answers. What’s the point if I leak the whole thing. And why should I be the only fool around?