MALE SPEAKER: There's a
freakishly large number of book sales on "Freakonomics." I mean, 7 million is
the public figure. I'm sure it's probably a bit
more than that in reality. STEVEN J. DUBNER: Why do
you assume that it's more? It could be that we lie. MALE SPEAKER: I think
it was a 2014 figure. STEVEN J. DUBNER: It could be
that we inflated it by 100% though. [LAUGHTER] MALE SPEAKER: It wouldn't
surprise me, I suppose. STEVEN J. DUBNER:
But you're right. You're right. [LAUGHTER] MALE SPEAKER: I can see
how this is gonna go. The blog itself has had
about 3 million downloads on each of its episodes,
which is pretty impressive. And of course there is the
one thing which all of us Googlers who are
looking for things to do once we leave Google. We think about careers to do. And so Steven is going to
talk to us about robbing banks today, I think. STEVEN J. DUBNER: Yeah. MALE SPEAKER: Cheers. STEVEN J. DUBNER: All right. Thank you. I appreciate it. Good morning. I apologize for being
late, but it is entirely your Queen's fault. The book
is called "When to Rob a Bank," which is almost entirely random. So if you really want to know
more about how to do that, I can tell you. Although the short
answer is "don't." The ROI on bank
robbery is terrible. That's what it's
really all about. It's actually a story of how
the book came to be called what it came to be called. So if we want to get
into that later in Q&A, we can, which is how little
leverage authors exert with their publishers
even when they've sold a few copies of a book. Because that was our
third or fourth title. The first few got rejected. So anyway, there is a book
called "When to Rob a Bank." It is a book that
is a compilation of the best, the greatest hits,
of our blog from 10 years. So we published by now
about 8,500 blog posts over the course of 10
years, most of which were terrible either in
the moment or beyond. They just didn't last. But we went through,
and we found about 500 that we actually
still enjoyed reading. Then we whittled
that down to 132. So that's what's in the book. So I'm gonna talk for a while. Then I'll take
questions, because I know every time I speak
at a Google event, there are a lot of questions
which I really enjoy. So I'm not gonna talk
too long right now. But the occasion of the
book was the 10 year anniversary of the
publication of our first book, "Freakonomics." So this is our fourth
book, and for 10 years, I've been working together
with Steve Levitt, who's an economist at the
University of Chicago. And we've been doing
this project together that's had many different forms. The first couple
books were, largely but not exclusively, based on
academic research he'd done. Our third book was called
"Think Like a Freak," which was using everything
we'd learned from not only methodology
but from getting out in the real world to work
with firms and governments to try to solve problems. Because after the
first couple books, we were called in by
people who thought we'd be useful in that way. Almost always we
weren't, but we set out a blueprint for problem
solving, essentially. And then this fourth
book, which as I said, is a compilation of blog
posts marking 10 years of us doing our thing together. So it is inherently
a retrospective time. As all anniversaries are. And because we've been doing a
long time you start to think-- or I've started to think--
a little bit about legacy, and what it means to do anything
for that long a time, and what kind of mark if any one leaves. And so I wanted
to share with you, I think, the
perfect illustration of the legacy of "Freakonomics"
as gleaned last night. When I was here in London I was
doing media all day yesterday. It started about 8:00 AM, and
it went till about 11:30 PM, right? And the last stop was the
500th BBC visit of the day, and it was "News Night." So does anybody
watch "News Night?" I assume not, really. So I'm in the green room
at "News Night," which is the room where they put
the guests before they go on. And there were a couple
of MPs, male MPs who-- one conservative, one liberal,
or whatever you call them, Labour-- and [LAUGHTER] They were and they
were just chatting very amiably with each other. And then they got ushered in to
the set to go do their piece. And then someone else
came in, and this was a woman who was also an MP. And she's standing now for
the head of Labour Party. So I probably shouldn't
name her because of what I'm about to tell
you about what she said, although it's not that bad. And I understand there
are three women running? So you'd have to actually go
back and watch last night's show to narrow it down. So I'm not going to
do that work for you. But one of the three women
who were standing for Labour, you could tell right away she's
a great politician because she looks at us, and she
wants to know who we are, what we're doing,
very friendly, chatty, sticking out her hand to shake. She has her bike
helmet, which I'm sure she brought along with
her in the taxi to look good. And she says what
are you in for? That's what they always ask you
when you're in a green room. And I always say
homicide, because that's what they ask in my country when
they say what are you in jail for. So then she said, what
are you gonna talk about? And I said, I'm an author. I'm gonna talk about the books. She said what books? And I said, I write
the "Freakomics" books. And she said oh, oh. And she starts nodding. And she said, yeah. I've loved-- I remember
reading "Freakonomics." She said that was the book
with the ridiculous names like Shithead that's pronounced
"Shuh-teed," right? And I said, yeah, yeah. And this is what the MP who's
running for head of Labour remembers about the book, right? She says, oh, yeah, Shithead. I loved Shithead. That was fantastic. So it's not about any of
the public policy stuff. It's not about the relationship
of abortion and crime. It's not about drug dealing. It's not about anything. It's Shithead. And then furthermore,
she says, yeah, I really love how you
wrote that when parents give their kids these
ridiculous names, they ruin their lives for them. And what I wanted to
say, what I always want to say in that
situation but never do is that, actually, you've
got that exactly wrong. The argument that we made
using the data on naming, and parents education, and the
outcome of children, and so on was that the name that
you give your child doesn't matter at all. All the name is is an indicator
of who the parents are. But if your Parents A, and
you have a boy named James, or parents B and your
observationally equivalent to Parents A, and you name your
boy Shithead-- or "Shuh-teed"-- Shithead and James are not
going to have any substantially different outcome in their life. That's what the data
showed, and yet, most people who read
this and remember, remember exactly wrong. So the two things that the
potential ahead of Labour Party remembers about our legacy is
Shithead, and she got it wrong. So that's my legacy. That's what I'll be
remembered for, if anything. And I guess it's deserving. Because let me tell you
know how I spend my day. So I know you all
are mostly engineers? All engineers? Anybody here not an engineer? Anybody sneak in? Where did you sneak in from? Yeah. Are you in the building? [LAUGHTER] AUDIENCE: So I'm not
even in this building. I'm in our sales
office, but I managed to sneak in from another door. STEVEN J. DUBNER: OK. That's why you have such better
glasses than the engineers. [LAUGHTER] There were a couple others. Are you? Yeah, it's so easy to pick
out the non-engineers, I have to say. [LAUGHTER] AUDIENCE: I sneaked in
from the same building. I work in marketing. STEVEN J. DUBNER: OK,
and there was one more? Yeah. AUDIENCE: I work in editorial. STEVEN J. DUBNER:
OK, so a good half a percent's smattering of sales,
marketing, and editorial along with engineers. OK, so I know how you all
spend your day generally. I couldn't survive doing
what you do for half a day. I have no idea how
to do what you do, but I generally understand
what it is you do. So let me just tell you
briefly how I spend my day. I live in New York in
the Upper West Side. I have a nice family. I've got a wife. I've got two kids. I've got a little dog. And my office, which is another
apartment near where we live-- it's about two blocks away. So in the morning, I get up. I have some coffee. I read some papers, say
goodbye to the kids, and I go to my office
at about 7:30 AM. And I usually walk the dog along
the park, which is very nice. And then once I start
my day, all I'm doing is I'm walking with the
dog, looking at the park, and I'm thinking about stuff. I'm looking at people. I'm looking at the people
interacting on the street, in their cars, and
bikes, and pedestrians, and wondering why more
people aren't killed on that intersection,
because it seems to be a very dangerous one. I'm looking at weather,
how people respond to it. I'm just thinking about the
way people live their lives and how they make their
decisions, stuff like that. Then I get to my office,
give the dog some food. And then I just sit, and
basically all day long, I just keep doing that. I sit and think. And I read. And I write. And it's entirely
inconsequential. And that's I spend my day. So for instance, I
like economics a lot. I never really liked
the form of economics we study in university so much. It felt, for me at least,
overly mathematical, not that interesting, not that useful. It sounded like the
brightest people among the professional
economists were divided on the most
important issues of the day. In other words, we look to
them to describe the economy, to actually tell us how the
macroeconomy really works. And it turns out that they're
wrong more often than they're right, and that the
best and brightest argue with each other constantly
about the most essential facts of that. So I never really liked
that kind of economics, but I like the weirder
kind of economics, including that my partner Steve
Levitt has worked on for years. I like agricultural
economics, for instance. Get some of those journals,
like to read those. I grew up on a little
farm in upstate New York. And food is one of those things
that I marvel at every day. A century ago, it was thought
that we had roughly a billion people on Earth. It was thought that there's no
way we could support 2 billion. There's no way we can grow that
much food for 2 billion people. And then after that,
there was no way we can get to three
or five billion. Here we are at seven billion,
more than enough food for everybody. A lot of people still
don't get enough food, but that's almost
entirely because of political or
economic failures, is not because of
agricultural failures. So agricultural economics, to
me, are really interesting. How did we get so
good at this, right? It's not just economics,
obviously, but the way that it's sourced, the
way that it's resourced, the way it's distributed. When it goes wrong, like
in California right now, what's going on with
the water prices or with the water shortages
is plainly a product of water being badly, badly, badly
mispriced for many years in California. So agricultural
economics are fun for me. Like, I wonder why is it
that living in New York, I can buy a kiwi fruit and
a banana for less than it costs me to buy one apple, which
is grown often in New York, whereas the kiwi fruit
is grown in New Zealand, the banana's grown
somewhere in Latin America. Why is that? So those parts of economics
and agriculture I like. And one day, I was
reading this journal. And I just saw a simple fact. It was nothing but
one simple fact. And I'm curious
whether you guys, when you run across this
kind of simple fact, if it triggers the same
kind of thought process. I'm guessing it does. The fact I saw in
a journal said that of the turkeys that are bred
for consumption in the United States, that roughly 100%
of them, of those birds, are the result of
artificial insemination. So I thought, first
of all, weird. And I'd never in my life
thought about turkey sex at all. I did grow up on a farm. We didn't have turkeys. We had chickens. We had some other animals. I'd never thought about turkey
sex, so I see this fact, and I think that's odd. And then you immediately
start to think, well, who's doing that,
and how is it done? OK. But then I wanted to know why. What does it mean? Does it represent anything
interesting worth knowing? So whenever you see a fact,
or whenever I see a fact, the next instinct is then
to surround it or attack it with data so you can put it in
context and see what it means. Is it a blip? Is it part of a
trend, or whatnot? So of course then you go
to the data on chicken sex. Turkeys and chickens
are pretty similar when they're rates for consumption. If turkeys are 100%
bred artificially, I assume chickens are too. Then you go to the chicken
data, and it turns out that's not the case at all. So it turns out that most
chickens breed naturally as God intended, right? But turkeys don't. So why is that? They're relatively similar. So then I went looking
for other fowl data, and there just wasn't that much. We don't really eat enough
other fowl in the States to have a whole lot of data. So it was really
turkeys and chickens, and they were really different. So then I wanted to know more. So you go try to
find some other data. Then you try to find
people who know why things are the way they are. And that's what you do. You get on the phone. You start writing emails. So here's what the
story turned out to be. In the States, particularly
but also here and in other countries
were where there's a lot of turkey--
so first of all, turkey consumption has risen a
lot in the last 40 or 50 years. Now turkey plus poultry
plus chicken consumption almost equals red
meat consumption, which is a big, big
change from the old days. And as Americans began to
eat more and more turkey, it became very evident
that the preference, the primary preference,
was for breast meat, OK? People like white
meat of turkeys. Now, I don't. I'm a dark meat person. My personal thought is
that people don't really like the white meat
that much, but it's a better delivery system for
gravy and for mayonnaise. But anyway, they
want the white meat. OK. So how did that change things? Well, breeders began to
grow, to breed, turkeys with larger breasts, OK? So if you look back
at the turkeys that were bred for consumption
50 years ago in the States, they had a very, very,
very scrawny breast and big hind quarters. They were like wild turkeys. They bred them to have larger
and larger breasts over time, OK? So now the male
and female turkeys are both bred to have
larger and larger breasts. So you can imagine
in the old days, the turkeys had
scrawny little chests. But now they're growing,
and growing, and growing, and growing like this. So now they get to the
point where the turkeys now that are bred for consumption
have such large breasts that when they meet
in the barnyard or where they meet, and they
try to get close to have sex, they can't get close
enough to physically have sex, thus the need for
an entirely new industry, which is the turkey masturbation
and artificially insemination. This is how I spend my days. So then I wrote a
piece about this. [LAUGHTER] I wrote a piece about this. I thought was
pretty interesting. I maintain it's
very interesting. And it's so interesting to me. You try to surround an
issue, or surround a problem, and consider all the
possible data, all the possible explanations,
and then you write it, or you put it out there. And I'm sure this happens with
you guys with coding as well. You try to think about all
the possible avenues, where it can go, but also how it
can be responded to once the public gets hold of it. So one thing that
happened with that story afterwards that I never
could have anticipated was that there was a small but
very, very, very vocal group of people who's just
railed against the story on the grounds that we were
glorifying turkey rape. And they said that you can call
it artificial insemination, but what it really is is
removing the rights of living creatures to
naturally procreate, and you're raping them in
order to make more of them to eat them. So when you put it like that,
it does sound pretty bad. Honestly, it was something
I hadn't thought about. I did eat less turkey
for a month or so as a result of that,
but I've since resumed. So like I said, this
is how I spend my day. So it's fitting that my
legacy from the MP is Shithead and that she got the notion of
the way the names move exactly wrong. I'll give you another example
of how I spend my day. OK, education. I'm guessing that the
median level of education here is somewhere
between M and PhD, yeah? So you guys have many, many,
many, many years of education under your belts. If you were to look at every
form of investment known to humankind, it's hard to make
this argument definitively, but I would argue that the
single best investment ever in history is education, right? So if you have one hour,
or $1, or one brain cell to spend on something, if
your primary concern is ROI that's scalable, education
is the best investment. So the data for that
are pretty overwhelming. If you didn't know it-- I
think it would be surprising if you didn't know it-- which
is that the higher you go up the scale, the
greater the ROI is. So it's the opposite
of diminishing returns. You guys with PhDs and M
degrees earn a lot more than those with B degrees,
which diminishing returns would argue against. So we know that, and it's great. And it's the reason that so
much of our public policy tries to encourage people
who are in position to set up education systems to get
their kids educated and so on. Why we urge them to do that is
because it's not only the best investment, it's
the best insurance. I mean, if you want to ensure
against criminal behavior, against poor health behaviors,
against risky behaviors, education is a phenomenally
leveraged unit. So when we know that. In the past recent years
with the recession, there were a lot of
people coming out of college with degrees,
with good degrees, not able to find a job. So that began this big
debate in the States, and I assume here as well, that
oh, maybe it's not worth it. What's the opportunity cost? Maybe it's way too high. You know, Steve
Jobs didn't finish college, Mark Zuckerberg,
Bill Gates, dadadadada. You can find a handful
of really famous dropouts and say maybe it's
a really bad idea. So we did a pretty
multifaceted analysis of the cost of education
and the payoff of education for college. And we came to the
same conclusion that all the other
scholars have, which is it's still really good. So whenever you have
something that's really valuable-- in this case
it's expensive and valuable. Those two don't always go
together-- you also wonder, well, are there people
who want to get the value part without paying the cost? Are there people who are gonna
try to cheat or try to steal? So this became a really
interesting question, in part because it's really
hard to figure out. So whenever you're trying to
learn about illicit behavior, you know, drug
dealing, prostitution-- all the regular kind of crimes--
embezzlement, bank robbery, and so on, the obvious hard
part of getting those data is because it's an
illicit activity, it's a hidden activity. Because it's hidden, the
data are hard to get. So one thing that we've
spent a lot of time doing the past bunch of
years is finding ways to get data from those
realms of illicit behavior. So there's this amazing
fella named Sudhir Venkatesh. Some of you may remember his
name from "Freakonomics." Although if the MP remembered
only Shithead, I'm doubting you're gonna remember
Sudhir Venkatesh's name. But he's an amazing guy
who's a sociologist, who at the University of Chicago
showed up and ultimately ended up embedding himself
in a crack gang and lived with this gang
for five or six years. And among the trophies
he walked away with was a set of financial
records from the gang. So they weren't quite KPMG
audit quality financial records. But they were pretty good. And from those data,
we were able to write about the economics
of the crack gang. Until you have that data
that, you're guessing. When you watch movies
about drug gangs, they're based usually on
one person's story that's usually exaggerated,
and magnified, and distorted in many ways. So to try to get data
like that, getting data like that is really valuable. Similarly, with Sudhir
we did a project a few years later on street
prostitution in Chicago. So again, if you're trying to
ask a very basic question like, why do people do prostitution? Is it because they actually
have no choice whatsoever and they're driven
there by desperation? How well does it pay? What are the risks of
arrest, of violence, of disease, and so on? But until you can get some data
you can answer these questions. So again, in this
case, we went out and solicited data, set
up a bunch of, basically, grad students with
clipboards to sit with prostitutes before
and after every trick and fill out a survey. And survey data is
often very squishy, as I'm sure you all know. But in this case, it
worked out pretty well. We could verify that the
data was pretty good. And so from that we were
able to learn a lot of things about the cost of
different sex acts. We were able to learn
what kind of premium a prostitute would demand
for having the john not use a condom. We were able to look at
the interaction between law enforcement and prostitution,
which illustrates really beautifully what's known
as the principal agent problem. You guys knows the
principal agent problem? Most of you? Some know? The principal agent problem
is-- again, keep in mind I'm not an economist. So everything I say that
the economics you should check the textbook afterwards. But the principal agent
notion in economics argues that when there are
two parties, let's say, a principal and
agent, who would seem to have their
incentives aligned, it's often the case that
they're not aligned for reasons that I'll explain right now. So let's say in a
police department, you would think everybody
in the police department wants to arrest people who
are doing crimes, right? That's their mission. But let's say that the
mayor Chicago tells the chief of police
in Chicago, you know, we're bidding on the
Olympics and we really want to clean up the streets. And we need to wipe out the
most obvious prostitution, OK? So let's make it a mission
to get rid of the most obvious street prostitution. So then what happens? The chief of police tells
the cops on the street, you know what? Let's go Arrest a bunch of
prostitutes for a few months and just tell them
that they have to get off the street for a year
or so, or maybe take it inside or whatever. So it would seem to be that's
an alignment of incentives. Everybody's getting paid to
do the job, which in this case is to get prostitutes
off the street. But the way the
real world works, you often have a
principal agent dilemma, which is that the
principal has a clear goal and the agent, who's supposed to
be carrying out the principal's wishes, seems to have
a clear goal, but then personal incentives
come into play. Because there are the
personal incentives and the public incentives,
or the official incentives. So as it turns out,
from the data what we learned about this particular
case of the principal agent problem was that a given
prostitute in Chicago was more likely to
have sex with a cop for free than to
be arrested by one. In other words, the cops found
it much more to their liking not to arrest the
prostitutes and actually to take advantage
of them the way the customers did,
except, because they had the leverage, for free. So those are the
kind of findings, if you want to call
that, that you just can't get without data. So we work to get those data. And when it comes to education,
and college diplomas, and college degrees, we
were interested to know, since they're so valuable
and so expensive, how many people cheat? How many people steal
them in some way, right? There are a lot
of different ways to cheat to get a college
degree or a diploma. So we began looking
into, and it's turned out to be really hard to
get any kind of firsthand data. The best we could
do, however, was an FBI agent who had spent years
doing this, looking into it. And he was really good. Plus, it helps when
you're with the FBI. You can go to the
people who have the data and demand that they
give you the data, which you and I can't necessarily do. And what was really
interesting about this guy is he, like a lot of the
people that we write about, a lot of the people that I
consider heroes for the way that they try to solve
problems, he was motivated by, he was driven by a
personal interest. And in his case, this was a guy
who was an FBI salaried worker. So he's not making
a ton of money. And had two daughters getting
ready to go to college. He lived in North Carolina. And he realized that even if
he sent them to very good state colleges, like University of
North Carolina at Chapel Hill, that it was going to
cost-- I don't know-- maybe $60 to $80,000. If you add in everything, maybe
$100,000 for the two daughters to get their college degree. And the human in him,
not the FBI agent in him, the human in him was just
thinking that's a lot of money. I wish I could just
buy them a fake diploma and buy them a fake degree. And I would pay $5,000
or $10,000 for that happily if it was good
enough to convince everybody that needed convincing. So obviously, that's not what
we think of as education. That's what we think as just
the outcome of the education. But if you think about it, when
you show up to apply for a job, they don't really ask-- except
maybe at Google-- what you studied in philosophy class. They just want to
know that you have it. And nobody even ever
asks for the degree. So he thought if
I'm willing to pay that money for fake
diplomas for my daughters, and I'm an FBI agent,
presumably there are some other people out there
who would be willing to do it. So he begin to explore
the world of diploma mills and counterfeit shops. So it turns out there are a
lot of different kinds of ways to get a fake diploma, or
to make a fake diploma, and to market it. And the two basic ones
are diploma mills, which would be basically like
you could take a correspondence course in, like, golf
course maintenance from some university. And you could then parlay
that one correspondence course into a bachelor's degree
for an extra $500 or $1,000. OK? then So that's the
diploma mill form. And then there are
counterfeit shops where they can just, basically,
print very, very, very good diplomas. And the market being what it
is, the price variance is huge. But for like about
$5,000 or $6,000 you could get a beautiful
indistinguishably inauthentic medical degree from Harvard
for about $5,000 or $6,000. OK? So when this agent began
to gather these data, arrest these people, find their
sources, find their customers, began to measure the customers
against the actual number of college graduates, it turned
out that approximately 1% of all college degrees awarded
in the United States every year were totally fake. So 1%. So you think 1% of anything
is not necessarily that much, except when it's 1% of a big
number like that for whom this credential is supposed
to be kind of life altering, and for which you're
supposed to have spent four to eight years and
maybe $100,000 on, it's pretty significant. So the bottom line
of that statistic is if you work with,
let's say 100 people, and how many people are in this
room today would you say, Will? [LAUGHTER] So I won't point any fingers,
but if you look around, the odds are that someone
here is totally piping it in and that their diploma
is entirely fictitious. Now, it doesn't mean that
that person's actually gonna be a worse employee
than the people who went to school for the
four years or eight years, but that's what the data say. This is how I spend my days. It's in some ways, I guess,
not that different from yours, in some ways fundamentally
very different. So I'd love to open it up
to questions now and see what you'd like to know. MALE SPEAKER: Please raise your
hand if you have a question, and wait for a microphone. AUDIENCE: Thanks for coming. I think it's fascinating,
this interaction between the counterfeit diplomas
and the ROI on education that you mentioned. Is the ROI in the bit of
paper or in the knowledge that you get? STEVEN J. DUBNER:
That's the question no one can answer, honestly. If you could come up with
a good way to measure that, I'd love to know. There are ways you could
imagine measuring it, but no one that I've ever
found has actually done that. It's not hard to imagine that
the vast majority of the value lies in actual knowledge
and skills acquisition, but there are those who argue
that a great part of the value in a college education lies
in communicative skills, networking skills, and so on. And if you think about the
cost of a college education, both in terms of dollars or
pounds, and in terms of hours, which are very, very,
very substantial. The people who make the argument
that a lot fewer people should go to college, people who make
that argument, their argument is that the opportunity
cost is huge. So let's say you take
10 students in the UK. And in terms of
academic ability, you take numbers 4 through 7. 8 through 10, you say they're
going to a university. 1 through 3, maybe they're
going to trade school or going straight to a job. Let's say we take
4 through 7, and we have to decide what we're
going to do with them, or what would be the
best outcome for them personally and for society. There are those who would
argue that the opportunity cost of college is so huge that
if you took two years or four years and the amount of dollars
that are spent and invested them in that person, or that
person was able to invest him or herself in
a small businesses or in other training, that could
far, far increase the output. So basically the most nuanced
argument that I think is valid is that the way that
college is pitched to and positioned for
all students is pretty poor for all students, in
that there should be a lot more segmentation than there is. That's the bottom line. So I think you could argue
that for a lot of people who go to college expecting
the skills and knowledge acquisition to be the thing
that makes them more successful, it doesn't happen-- absolutely. But we don't know. I've never seen
great data on that. Even the data, honestly,
on the ROI in college are very hard to come by. Because if you think about
it, you can't randomize that. What you'd want
to do is you want to take like 10
cities in the UK, and pick 1,000 graduating
students from those cities, and randomize them all, right? And maybe just do two
groups, maybe do four groups, but you send some to
great universities, some just out to get
a job, and so on. And then you'd
measure the effect of the university itself. But we can't do that. So the best studies
that have been done are these natural
experiments, one having to do with the military
draft during the Vietnam War when there were
a bunch of people who would have gone to
college but didn't, and then other observationally equivalent
people who did go to college. And from that one study and
from some other similar ones, the conclusion has been had
that the ROI is gigantic. But even then, the answers
are not nearly as foolproof as we might wish. AUDIENCE: If the alternatives
are going to college or going to war, I guess, yeah. STEVEN J. DUBNER:
Agreed, agreed. Yeah. Next, please. AUDIENCE: What were
your proposed book titles that got rejected? STEVEN J. DUBNER: Oh, OK. So I'll tell you. It's probably not
interesting to anyone but me. And Penelope, who's
with the publisher might prefer that I not tell the
story, but it's not a big deal. So titles with us have
always been a bit of a thing. So our first book,
we'd written it, and it was just this heap of
unrelated stories about baby names, and crack dealing, and
sumo wrestlers, and cheating teachers, and nonsense. And so it was very hard
to think of a title. We just thought of it
as a book about nothing, but that wouldn't work, exactly. So we and the
publisher we're trying to come up with all kinds of
things that were horrible. One was "It Ain't
Necessarily So," which is a wonderful old
song but a bad title. One was "E-Ray Vision,"
like x-ray vision, but E for economics, which
is really quite-- yeah. [LAUGHTER] Right, so even when you
get it, it's pretty bad. And then Steve Levitt's
sister, whose name is Linda Jines, who had been
in publishing and advertising for a bunch of years, we
gave her the manuscript and asked her to
come up with names. And she came up
with "Freakonomics." And here's what
Levitt maintains. Levitt maintains that he loved
it initially and I hated. I maintained that I thought
it was so bad that it might be good, but I wasn't
quite sure if it was just so bad that it was purely bad. But anyway, we presented
to the publisher, to the American publisher, and
they dismissed it entirely. Said it's just too weird,
said freak is going to make people think of sex. It's going to be
weird sexonomics. That can't work. It's too long. It doesn't mean anything. That's what they said. It doesn't mean anything. And I said, have you ever
heard of a portmanteau? People make up words. They even make even
make up titles. So I made up a word one time. I think this is the only
good word I ever made up. You know you run into someone
that you used to date, and they got married afterwards? And you realize you
were the last person they dated before they married? So what you call that person? There should be a
word for it, right? OK, try this-- penultimore. [LAUGHTER] Right? So I thought "Freakonomics"
was pretty good. And it took the
publisher-- it was right up to the 11th
hour of publications, and they finally said, OK. We'll go with "Freakonomics." Then the book came out,
and it did very well. And they immediately
claimed total credit for having come
up with the title. So that was "Freakonomics." Then we did "Super
Freakonomics," which was not that
controversial, although the publisher,
again, was worried that the estate of Rick James
was going to come after us, which they did not. And then we did
"Think Like a Freak." That was actually
pretty agreed upon. But this one, think
about the signal you're trying to send
with a title, right? it's interesting. We make the argument that
names don't matter, right? But the argument that
titles don't matter is much harder to make. And the reason is that
the name of a person is not marketing in the
same way that a product title is marketing, right? So if you name something
Google or even ESPN, there are people who are
going to hear it repeatedly before they start to use
it and learn whether it's any good for them and so on. But a name is a
little different. You hear the name,
you meet the person, and you know that person. And name becomes secondary. It doesn't continue to
serve a marketing function. So a book title name
seems to be important. Again, it's very
hard to tell. there's not a lot of A/B
testing in this realm. And for this one, the
book title we came up with was drawn from one of the
posts that's in this book. And it was called "Hurray
for High Gas Prices." So we liked that
because we're American, and we talk about gas
prices all the time. And there was a
post about peak oil this, peak oil that, gas
price is too high, too low, the gas tax-- whatever. There's a lot I could talk
about with gas and oil. But this one posted said
high gas taxes are great, because what they
help do is capture the cost of this activity
that otherwise isn't taxed very well, like water. When water is free
for farmers, of course they're gonna use it all and
not leave any for downstream. So when gas is cheap, of course
people are gonna drive a lot. And then that causes congestion,
accident risk, pollution, et cetera, et cetera. And unless you can
raise the gas tax, which federal officials in DC won't
for a variety of reasons, then people just drive a lot. So the post was called
"Hurray for High Gas Prices." So that, our American
publisher said, yeah, great. And than the British publisher,
excellent publisher, Penguin, got hold of it. And they say, well, gas doesn't
mean here what it means there. So it'd have to be
"Hurray for High Petrol Prices," which
doesn't work at all, or it's gonna sound like it's
a book of gastroenterology of some kind. So then they said,
can you come up with a different title
for the British edition. And so I say yeah, but
we don't like the idea because it's not
fun to write a book and want it be called different
things in different places. But then we came up with
a title that we absolutely loved, which I thought
would be the perfect title for the book, which is called
"We were Only Trying to Help." Right? [LAUGHTER] Isn't that good? Because a lot of the
blog posts in this book are basically where we just
run an idea of the flag pole. Maybe it's about paying
politicians more. Maybe it's about gas prices. Maybe it's about
proposing a sex tax. All these different kinds of
things, knowing that they're either not fully enactable
at all, or even a little bit enactable, or just
a question to ask to get a different kind
of conversation started. Because my frustration is that,
politics being what they are, institutional
inertia being what it is, institutional habits
being what they are, it's really really, really
hard to make any real change. I mean, change in
most institutions is two degrees this
way, when really if you look at health
care, education, sometimes you need like 90
degrees or 180 degrees. So a lot of what we
do is just proposing these kind of outlandish ideas. One post was Steve
Levitt wrote one saying that terrorism
is a concern in the US, even though incidents are
very, very, very rare. But we're spending a lot of
money, a lot of mindshare on it. So if we're really
serious about it, we should try to think
of all potential ways that a terrorists could attack. So on the blog, he wrote
asking, dear readers, if you were a terrorist,
how would you attack? Which seemed like a really
good idea at the time. We were only trying to help. But as it turns out,
"The New York Times," which was then running
our blog, immediately panicked, and shut down
comments, and, I think, called the FBI on us. It was brutal. [LAUGHTER] So "We Were Only Trying
to Help" was a title that we proposed to
the British publisher. And the immediate response
was yeah, perfect. And that's why I love our
British publisher so much. And then I said to the American
publisher, you know what? We got a better title than
"Hurray for High Gas Prices." "We Were Only Trying to Help." And our editor said, yeah. That's great. That's awesome. And then like three weeks
later, on the same day, I get a call from
both publishers. Because the way it works now in
publishing, the editorial team, and even the marketing team,
and the PR team, no offense, they have zero leverage. It's a little bit like probably
around here where the engineers have all the juice, right? So in publishing, sales
has all the juice, right? So it's the sales team
will take a book, title, and cover out to the
book stores, the chains, and Amazons, and so on. And they'll say, this is
a new book by these guys. And then one person at
the book chain will say, I don't like that. That sounds stupid. Or that sounds like they're
being self-flagellating or something. So on the same day, I got
a from both publishers that said sorry, "We Were Only
Trying to Help" won't work. So then we just had to
go looking for a title. And we went looking
in the posts that we'd selected for the book. And one post that we
liked a lot was this one called "When to Rob a Bank." And the reason we liked
it was because it's not about how to rob a bank,
which is kind of procedural. It's not about why to rob
a bank, which is obvious. It's about when. And that's the kind of
question that we like to ask, which is if you're gonna do
this, this thing that turns out to be pretty stupid. So it turns out the
biggest point of this post is that the ROI on bank
robbery is just dreadful. In Britain, you take
home about, I think, two and a half or three
times the amount of money you get from an average
bank robbery in the States, which is interesting. I think it has to do with
just more cash on hand. But the rate of arrest, the risk
of arrest is about the same. So you're likely to get
arrested after just three bank robberies. So even if you take
on 10,000 pounds, you get arrested
after three times. So for 30,000 quid, you're going
to spent a few years in prison. And so the ROI is dreadful. If you really want
to rob a bank, mornings are much
better than afternoons. And yet, the vast
majority of bank robbers work in the afternoons,
which indicates clearly they haven't looked up the data. Because if they had,
they'd be working mornings. But maybe they just can't
get up in the mornings. Maybe they're not
morning risers, which is probably why
they're having to rob banks in the first place. And the very most interesting
part of "When to Rob a Bank" for me was that this
was all inspired by the story of a woman
in Iowa who was embezzling from the bank where she worked. And it turned out to be a
bank owned by her father, or run by her father. So if you're gonna rob a bank,
rob it from inside, right? They said the best way to
rob a bank is to own one or at least to work at one. But what was interesting
about this woman was she had been working at
this bank for many years, 15 or 20 years. And she was finally
caught because she got so burnt out and
exhausted that she had to take some time off. And then they discovered
that she'd been keeping two sets of books all along. And she's embezzled, I
believe, about $2 million. And this was in the
1960s, so that was a lot. Again, from her father's bank. And as it turns out,
the way that she had covered it for
all these years was by keeping two sets of
books, but by never taking a single vacation day,
which is how she got so exhausted that she
finally broke down. So after she served
her time in prison, her parents took her back. They were very forgiving. And then the FBI or some
law enforcement agency said do you want to come
help us catch embezzlers? And one of the things that
she introduced them to was the notion that
one of the best metrics to identify in looking
for embezzlement is extraordinary vacation
or sick time pay. Because if you're not taking it
either when everybody else is taking it, or not
taking it all, it's almost certainly because you're
doing something with your books that you don't want
anybody to see. So that's when to rob a bank. Other questions? Yes, please. Oh, you have a mic? Yeah. AUDIENCE: On the
turkey story, the thing I found most astonishing
was that the same wasn't true of chickens. Why wasn't the same
true of chickens? STEVEN J. DUBNER: So short
answer, I don't know. If I had to guess, I would
say it's one of two things. So one would be that
physiologically, even if we want
to breed chickens to have as a large
breast as possible, that their breasts
don't get large enough to the point of interference. Two is there's some artificial
insemination in chickens. So it could be that there is
a segment of chicken breeding where the breasts are
protrusive to the point that it requires
artificial insemination. And I would think
that's probably true. Now that you mention it,
that's an obvious question that I should ask and
find out, because it would be interesting to know. We did a podcast once called
"Weird Recycling," which I really liked. It was about three
different stories about where people
took something that was of no value
or even negative value, and reused it in a way that they
gave it great positive value. So maybe we didn't even
include horse manure. Horse manure was one
that used to be that. Horse manure in the olden,
olden days was worth something. In cities that were
growing, they'd have a lot of horse manure. In the cities, they'd
sell it to farmers, but then there was a horse
manure glut as cities grew. So London and New York were
paralyzed by horse manure because of the economic glut. There was so much of it
that they couldn't sell it. But then the car came along. There are many fewer horses. And now horse manure
is quite expensive. So that's a case. The other instances, there
was spent nuclear fuel. So there are some
nuclear engineers who figured out how to
make nuclear power by using what we call spent fuel. And then one example
was chicken feet, or what they call in the
industry chicken paws. So in the States, almost nobody
eats the feet of chicken. Do you eat them here at all? So if you go to certain
Chinese restaurants-- and they look like
this, really clawy. And there's that one
spur that's right here. They look very much
like a human hand was tortured-- a
little bit smaller. And they are definitely
an acquired taste. I mean, I guess they're
an acquired taste. And very few people in
the States eat them, and obviously here. But in China, they're huge. So it used to be that chicken
producing firms in the US would throw away
billions of chicken feet every year at great cost. And then as they begin to
do more global business, it turns out that they would
sell a whole lot to Asia. And now big chicken producing
companies like Purdue tell me that they
would not be profitable were it not for the
sale of chicken paws, that that's how close
the margins are, and chicken paws put
them over the top. That said, in the States
and here, the taste is plainly for the white
meat of chicken as well. So I'm guessing that
what you would see is that there are some chickens
that are bred for that, and that among
those, there might be artificial insemination. But I don't know enough about
bird reproductive-- I should now, but yes, I don't know. That's a good question. Yes, anyone else? MALE SPEAKER: Could
you pass the mic over? AUDIENCE: Hi. So why are politicians
so resistant to evidence-based policymaking? STEVEN J. DUBNER: Why are
they so resistant to what? AUDIENCE: Evidence
based policymaking. STEVEN J. DUBNER: Oh. Well, before I join with
you in accusing them, let me defend them for a minute. Why is everybody averse to
evidence-based decision making? I'll just give you two
very quick parallels. I'm just going to guess here. A bunch of people sitting
here are Google engineers. I'm guessing probably
at least 5% of you have a parent who's
a doctor, an MD. raise your hand if you
have a parent who's an MD. OK. That's about right. So medicine is fascinating. There's so much be grateful
for and thankful for, but it's also very,
very frustrating. Because even though there's
a lot of science in it, most doctors aren't
remotely scientific. And it turns out that
most doctors are also terrible with data, that they're
unbelievably bad with the most basic sets of probabilities. Many doctors are, at least. And then when they communicate
it to their patients, it gets even worse, because it
becomes a game of telephone, whereas you have a 2% chance
within 10 years of developing a potentially fatal condition. And many people hear that
in many different ways, but a lot of people
hear it in a way that nobody who knows any
statistics would ever embrace. So doctors, I always
grew up thinking, were scientific in the way
that we think of scientific, meaning the scientific
method, and things are tried and proven. There are hypotheses. There's data gathered and so on. And it turns out that
most medicine isn't really built that way. And the only medicine
that's really build that way these
days is pharmaceuticals and some forms of
medical interventions, actual treatments. But the vast
majority of it is not what you would really
call evidence-based. And that's a pretty scary
thought at the end of the day. And so we've done stories
recently in our podcast, again, where even when there are
evidence-based proofs of sorts of treatment or in the
realm of medical health care delivery that's known to
be efficient, even then, policymakers aren't
crazy about adopting it. So there's this one case we
did a podcast about in Camden, New Jersey that's a very,
very labor intensive, cost intensive intervention,
where turns out it in this area but in many geographical areas,
roughly 5% of the medical patients are responsible for
consuming about 50$ of all health care costs
of all health care. So it's a huge,
huge, huge problem. You've just got
massive concentration among people who are going to
the emergency room 100 times a year, just consuming
all kinds of cost. So these people came
up with the thought what if we, instead of
treating things the way we are now, which
is terribly, what if we come up with a new plan
to invent a social services multifaceted network where
we offer medical care but we also offer counseling
so people actually understand what drugs they're
supposed to take and when, so we actually help
them get to the doctors they're supposed to go to. So if they need to go to drug
rehab, they're doing that, and so on. So an expensive,
hands-on project that ended up being very
effective and very cost effective, considering
what it saved. So even after this kind
of thing is proven, no one in the federal
government associated with Medicare and
Medicaid, I'm told, really wanted to have
anything to do with it. Because the
constituencies are just so large and ingrained that
they really couldn't make any persuasions. So in health care,
evidence-based medicine is still more of a dream. In education,
evidence-based curricula are only beginning
to come online. So for politicians,
I would argue, yeah, they're particularly
visible in the way that they fail to
embrace evidence, but I don't think they're
very unique at all. And why they don't do it is
because, I think, that most politicians--
unfortunately, it's a principal agent
problem in a way. They're the agents and
we're the principals. So we're the voters. We want to problems solved that
we think government is best suited to solve. And these are typically
long term, complex scenarios with a lot of different
players-- transportation, health care, education-- things
like this-- geopolitics-- that individuals can't do,
that businesses, private firms don't necessarily do that well. So we think, well, this is
what governments are gonna do, and that's what we want
our politicians to do. And that's what
we elect them for. But then once they
get in office, the way the system is set up
in democracies at least is that they are encouraged to respond
to different incentives, which is short term
self-interested incentives of getting elected, raising
money, consolidating power, getting on the right committee,
consolidating more power, raising more money in order
to perpetuate their own-- So even though we don't
like it-- We hate that. We all hate that. But for me, it's hard
to blame them for it, because that's the
set of incentives that they walked into. There are a few maybe
idealistic people who buck it, but very few people's
ideology is really as strong as the incentives
that they're responding to. So one solution to this
that we've proposed, I think, in this book,
in "When to Rob a Bank," and I've talked about this
with many politicians. And they always nod and smile. They say, oh yeah. Great, great, great idea. But at the end of
the day, they hate it because it's totally possible. The idea would be A,
we should probably try at least, we should
experiment with paying politicians a lot more. So how many parliamentary
districts are there in the UK? AUDIENCE: 625. STEVEN J. DUBNER: 625? So it would be really fun
to take that, divide it in two or four, randomize,
and raise the sal-- what's an MP get paid? 100,000 a year or something? [LAUGHTER] STEVEN J. DUBNER: OH, really? AUDIENCE: About 80, I think. STEVEN J. DUBNER: 70,000 pounds? AUDIENCE: Yeah. STEVEN J. DUBNER: So $100,000--
70,000 pounds, we'll say. It would be really fun
to take an experiment. So for five years, in two
districts, we leave it. In one district, we have it. In one set of districts,
rather, we do this. And in one set of
districts, we double it. All you're really
looking for, initially, is do higher salaries attract
a different kind of person to go into politics? So some empirical work that
has been done on this already. The answer's yes. So in some place
in South America, I believe in Mexico--
in Singapore, they pay politicians a lot. There's a lot of
things that some people don't like about Singapore. Most political
observers, however, argue that it's easily
one of the most efficient, uncorrupted, and practical
federal governments out there, one reason being-- not
all-- being that they make the job incredibly attractive. So rather than maybe coming
to Google for a career, the same person
might actually want to go into council election
or a parliamentary election. So that's one. You could explore
the idea of changing the status of
political jobs, just the way we explore changing
the status of teachers, which we haven't done
yet either, by the way. But that's one idea. But then here's the
bigger, bolder one that will never,
ever, ever happen, but what I think could
really, really work. If the problem is
as I described, which is that their incentives
are not aligned with ours, because they have short
term, self-interested ones, we have long term
public-interested ones. Well, what if we try
to align them better? And one way to align
them better would be to remunerate them based
on their achievements, merit-based pay, right? So right now, if
think about it, how does a politician build
up capitol, or build up value in their careers? By being more visible, by
being usually safe, right? So that they're gonna turn
their political career into a lobbying, or consulting
career, or whatever afterwards. But what we really
want them to do is be working on those
transportation, and education, and health care problems
that we sent them to do. So what if we were to pay
them for doing those problems, and pay them a lot? So let's say that there's
a Department of Education. And we decide that-- I saw that
your British math students, you're even worse
than Americans. You're terrible, right? Where do you find
engineers in this country? Right? AUDIENCE: [INAUDIBLE] British. STEVEN J. DUBNER: So
your math scores-- OK, so let's say that the
goal for the next 20 years is for British school math
scores to rise 15% or 10% against international
averages, whatever. AUDIENCE: Make the
tests easier then. STEVEN J. DUBNER: OK, well,
that's a good solution. That's a very political
solution, certainly. So immediately I know you'd
be an excellent politician, because you would have a very
cheap, effective solution right out of the gate. So let's say that
that's your goal. Then let's set up
a project to try to figure out how to get to
that goal with measurables with all along the way. And you declare somebody
the arbiter of these goals and the measurables. So maybe it's an
accounting firm, whoever. We know how to do that. We now how to set up
projects with measurables. And let's say that you've
got a Secretary of Education and 100 people working
on this project who do all kinds of
experimentation, who put into effect all kinds of
curricula, changes, blah, blah, blah. And then let's say
20 years from now, those goals are met, right? So if you raised the test
scores of British schoolchildren by 15% in 10 or 20
years, whatever, what's that worth to society? A lot, a lot. It's worth a lot
to individuals too. And so what would be wrong with
therefore paying the people who worked on that in politics to
make it happen a share of that? So I'd love to write a
check for a million pounds or two million pounds to
the Secretary of Education as a kind of vested stock
option 10 or 20 years from now if their plan worked out. So basically, it's merit pay
in the form of stock options for elected and appointed
political officials, which, I think, is a no-brainer. I think it works. Because that's the way the
whole world works, right? If you do well,
you get rewarded. If you do poorly, you're gone. The other thing I think
is really important to do in politics that I
would steal from football is I would relegate. So every year, I would
relegate the bottom 15% of all politicians in
every political system just to flush them out the bottom. So that's how I
would fix politics, but as you can imagine, we were
only trying to help, you know? [LAUGHTER] Are we out of time? MALE SPEAKER: We're out of time. STEVEN J. DUBNER: OK, thank you
very much for having me today. I appreciate it. Thank you. [APPLAUSE]
