Reacting to the way the free market was misrepresented and disrespected in the best-seller "Freakonomics" -- as a place where trickery, deceit and predatory behavior rules -- economist John Lott has given us "Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't."
Lott, a prolific op-ed writer, is perhaps best known for his books "The Bias Against Guns: Why Almost Everything You've Heard About Gun Control Is Wrong" and "More Guns, Less Crime: Understanding Crime and Gun-Control Laws." He was at his office near Washington, D.C., when I talked to him Thursday, Aug. 16.
Q: There are lots of good economics books that extol the virtues of free markets -- why did you think we needed another one?
A: I’d like to think I have a lot of interesting applications and ideas other people haven’t thought of. A lot of this is based upon 25 years of academic research that I’ve done. I’d also like to think I have some advantage in maybe writing things and explaining things that other people have, too. To me, the basic notion of economics is that if something becomes more costly, people do less of it. Of course, the converse is that “incentives matter” -- the greater the incentive you get from something, the more that you do.
I really think that simple idea, over and over again, can explain so much of the world, whether it’s explaining why crime rates fall because it becomes riskier for criminals to commit a crime with higher arrest rates or higher conviction rates, to why out-of-wedlock births and single-parent families soared during the 1970s because premarital sex became less risky for people to engage in (there was a lower cost of engaging in it), to the impact that campaign-finance regulation has on getting incumbents re-elected, because it makes it relatively more costly for challengers to run relative to incumbents.
Q: What is the main point or theme of your book?
A: The main point is just to show how that simple idea in economics -- that if something is more costly you do less of it and that incentives matter -- can explain so much of the world around us. The other point is the fact that one of the benefits of the market is how it concentrates the costs and benefits of making decisions on the people who are making them.
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