March 2, 2011 § Leave a comment
I just watched the “Freakonomics” movie, having read the book some time ago, and I was struck again by the most controversial assertion Steven Levitt makes: That the dramatic drop in crime of the 1990s was due to the legalization of abortion in the 1970s, which (in short) killed off a great swath of would-be 1990s criminals in utero. The statistical basis for Levitt’s argument has been attacked by others already. I’m actually far more disappointed in Levitt’s logical dissonance.
Levitt’s central economic philosophy is that human beings are motivated by incentives. In considering the possible reasons for the decreased crime rate, then, Levitt should would have been expected to look at incentives to would-be criminals. In this case, though, I believe that Levitt has ignored some important incentives to criminals, and how those changed in the late 1980s.
Crime is generally about a risk vs. reward equation carried out in the mind of the potential criminal. Few of us would risk prison time to steal a dollar, but with equal access to a potential million dollars to steal, the risk of prison time may be less persuasive. Levitt admits that about a third of the decrease in crime rates was due harsher law enforcement and higher incarceration rates; however, Levitt accepts the official line that prison terms kept criminals off the street and that lead contributed to a lower crime rate. What he doesn’t discuss is the change in the risk/reward calculation represented by that harsher enforcement and increased incarceration rate.
Further, Levitt’s analysis also seems to ignore that crime is also a physical threat to criminals, and so fewer people should choose to become criminals as crime becomes more dangerous because, again, the risk/reward calculation has changed.
In Levitt’s case, looking at incentives is a way of avoiding falsely equating correlation with causation. But, when it came to the correlation between legalized abortion and decreased crime, the desire to make the controversial political point was too much for even the usually more logically consistent Steven Levitt.