Great Throughts Treasury

This site is dedicated to the memory of Dr. Alan William Smolowe who gave birth to the creation of this database.

Steven Levitt

American Economist, Author of Freakonomics

"A dominant father greatly resembles the political candidate who believes that money wins elections, when in fact if a candidate dislike voters will be elected even with all the money in the world."

"A growing body of research suggests that even the smartest people tend to seek out evidence that confirms what they already think, rather than new information that would give them a more robust view of reality."

"A rogue economist explores the hidden side of everything."

"A few years ago, the dismal science was being acclaimed as a way of explaining ever more forms of human behavior, from drug-dealing to sumo wrestling."

"A moral compass can convince you that all the answers are obvious (even when they?re not); that there is a bright line between right and wrong (when often there isn?t); and, worst, that you are certain you already know everything you need to know about a subject so you stop trying to learn more."

"After all, just because you?re at the office is no reason to stop thinking."

"After all, your chances of winning a lottery and of affecting an election are pretty similar. From a financial perspective, playing the lottery is a bad investment. But it's fun and relatively cheap: for the price of a ticket, you buy the right to fantasize how you'd spend the winnings - much as you get to fantasize that your vote will have some impact on policy."

"All of us face barriers?physical, financial, temporal?every day. Some are unquestionably real. But others are plainly artificial?expectations about how well a given system can function, or how much change is too much, or what kinds of behaviors are acceptable. The next time you encounter such a barrier, imposed by people who lack your imagination and drive and creativity, think hard about ignoring it. Solving a problem is hard enough; it gets that much harder if you?ve decided beforehand it can?t be done."

"After recent events, one wonders if the macro-economy is the specialty of any economist."

"An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation"

"And knowing what happens on average is a good place to start. By so doing, we insulate ourselv.es from the tendency to build our thinking - our daily decisions, our laws, our governance - on exceptions and anomalies rather than on reality"

"And while it sounds bad to hear that Americans underpay their taxes by nearly one-fifth, the tax economist Joel Slemrod estimates that the U.S. is easily within the upper tier of worldwide compliance rates."

"Anecdotes often represent the lowest form of persuasion."

"Anecdotes often represent the lowest form of persuasion. A story, meanwhile, fills out the picture. It uses data, statistical or otherwise, to portray a sense of magnitude; without data, we have no idea how a story fits into the larger scheme of things. A good story also includes the passage of time, to show the degree of constancy or change; without a time frame, we can?t judge whether we?re looking at something truly noteworthy or just an anomalous blip. And a story lays out a daisy chain of events, to show the causes that lead up to a particular situation and the consequences that result from it."

"Are people innately altruistic? is the wrong kind of question to ask. People are people, and they respond to incentives. They can nearly always be manipulated--for good or ill--if only you find the right levers."

"Another cardinal rule of thinking like a child: don?t be afraid of the obvious."

"As I see it, most major philanthropists have been bullied into giving. They feel social pressure to give. It has become a cost of doing business."

"As Albert Einstein liked to say, everything should be made as simple as possible, but not simpler."

"As scientists like to say: The plural of anecdote is not data."

"But a mountain of recent evidence suggests that teacher skill has less influence on a student's performance than a completely different set of factors: namely, how much kids have learned from their parents, how hard they work at home, and whether the parents have instilled an appetite for education."

"As the behavioral sage Daniel Kahneman has written: [W]e can be blind to the obvious, and we are also blind to our blindness."

"As W.C. Fields once said: a thing worth having is a thing worth cheating for."

"But as incentives go, commissions are tricky. First of all, a 6 percent real-estate commission is typically split between the seller?s agent and the buyer?s. Each agent then kicks back roughly half of her take to the agency. Which means that only 1.5 percent of the purchase price goes directly into your agent?s pocket. So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was actually worth more than $300,000? What if, with a little more effort and patience and a few more newspaper ads, she could have sold it for $310,000? After the commission, that puts an additional $9,400 in your pocket. But the agent?s additional share?her personal 1.5 percent of the extra $10,000?is a mere $150. If you earn $9,400 while she earns only $150, maybe your incentives aren?t aligned after all."

"But as history clearly shows, most people, whether because of nature or nurture, generally put their own interests ahead of others?."

"Being confident you are right is not the same as being right."

"As we suggested near the beginning of this book, if morality represents an ideal world, then economics represents the actual world."

"But in both instances, the dissemination of the information diluted its power. As Supreme Court Justice Louis D. Brandeis once wrote, Sunlight is said to be the best of disinfectants."

"But if there is one thing we?ve learned from a lifetime of designing and analyzing incentives, the best way to get what you want is to treat other people with decency. Decency can push almost any interaction into the cooperative frame. It is most powerful when least expected, like when things have gone wrong. Some of the most loyal customers any company has are the ones who had a big problem but got treated incredibly well as it was being resolved. So while designing the right incentive scheme certainly isn?t easy, here?s a simple set of rules that usually point us in the right direction: 1. Figure out what people really care about, not what they say they care about. 2. Incentivize them on the dimensions that are valuable to them but cheap for you to provide. 3. Pay attention to how people respond; if their response surprises or frustrates you, learn from it and try something different. 4. Whenever possible, create incentives that switch the frame from adversarial to cooperative. 5. Never, ever think that people will do something just because it is the right thing to do. 6. Know that some people will do everything they can to game the system, finding ways to win that you never could have imagined. If only to keep yourself sane, try to applaud their ingenuity rather than curse their greed."

"But if you are hell-bent on persuading someone, or if your back is truly against the wall, you might as well give it your best shot."

"But one need not oppose abortion on moral or religious grounds to feel shaken by the notion of a private sadness being converted into a public good."

"Colleges and universities, meanwhile, have no such qualms about torturing their applicants. Think about how much work a high-school student must do to even be considered for a spot at a decent college. The difference in college and job applications is especially striking when you consider that a job applicant will be getting paid upon acceptance while a college applicant will be paying for the privilege to attend."

"Cheating is a primitive economic act. Get more for less."

"Come up with a terrible idea? No problem?just don?t act on it."

"Congress passed legislation requiring a five-year mandatory sentence for selling just five grams of crack; you would have to sell 500 grams of powder cocaine to get an equivalent sentence. This disparity has often been called racist, since it disproportionately imprisons blacks."

"Consider the Iraq War. It was executed primarily on U.S. claims that Saddam Hussein had weapons of mass destruction and was in league with al Qaeda. To be sure, there was more to it than that?politics, oil, and perhaps revenge?but it was the al Qaeda and weapons claims that sealed the deal. Eight years, $800 billion, and nearly 4,500 American deaths later?along with at least 100,000 Iraqi fatalities?it was tempting to consider what might have happened had the purveyors of those claims admitted that they did not in fact know them to be true."

"Children read books, not reviews, he wrote. They don?t give a hoot about the critics. And: When a book is boring, they yawn openly, without any shame or fear of authority. Best of all?and to the relief of authors everywhere?children don?t expect their beloved writer to redeem humanity."

"Daniel Kahneman has written: [W]e can be blind to the obvious, and we are also blind to our blindness."

"Consider the kind of questions that kids ask. Sure, they may be silly or simplistic or out of bounds. But kids are also relentlessly curious and relatively unbiased. Because they know so little, they don?t carry around the preconceptions that often stop people from seeing things as they are. When it comes to solving problems, this is a big advantage."

"Data, I think, is one of the most powerful mechanisms for telling stories. I take a huge pile of data and I try to get it to tell stories."

"Economists have had many difficulties to explain the past, so let's not predict the future."

"Despite spending more time with themselves than with any other person, people often have surprisingly poor insight into their skills and abilities."

"Deliberate practice has three key components: setting specific goals; obtaining immediate feedback; and concentrating as much on technique as on outcome."

"David Lester, a psychology professor at Richard Stockton College in New Jersey, has likely thought about suicide longer, harder, and from more angles than any other human. In more than twenty-five-hundred academic publications, he has explored the relationship between suicide and, among other things, alcohol, anger, antidepressants, astrological signs, biochemistry, blood type, body type, depression, drug abuse, gun control, happiness, holidays, Internet use, IQ, mental illness, migraines, the moon, music, national-anthem lyrics, personality type, sexuality, smoking, spirituality, TV watching, and wide-open spaces. Has all this study led Lester to some grand unified theory of suicide? Hardly. So far he has one compelling notion. It?s what might be called the no one left to blame theory of suicide. While one might expect that suicide is highest among people whose lives are the hardest, research by Lester and others suggests the opposite: suicide is more common among people with a higher quality of life. If you?re unhappy and you have something to blame your unhappiness on?if it?s the government, or the economy, or something?then that kind of immunizes you against committing suicide, he says. It?s when you have no external cause to blame for your unhappiness that suicide becomes more likely. I?ve used this idea to explain why African-Americans have lower suicide rates, why blind people whose sight is restored often become suicidal, and why adolescent suicide rates often rise as their quality of life gets better."

"Don?t listen to what people say; watch what they do."

"Few people think more than two or three times a year, Shaw reportedly said. I have made an international reputation for myself by thinking once or twice a week."

"Every time we pretend to know something, we are doing the same: protecting our own reputation rather than promoting the collective good."

"every big problem has been thought about endlessly by people much smarter than we are. The fact that it remains a problem means it is too damned hard to be cracked in full."

"For every clever person who goes to the trouble of creating an incentive scheme, there is an army of people, clever and otherwise, who will inevitably spend even more time trying to beat it."

"Everyone?s entitled to their own opinion but not to their own facts."

"For every intelligent person who bothers to create an incentive scheme, there is an army of intelligent or not people will inevitably spend even more time trying to outwit them."