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Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't Hardcover – May 15, 2007
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From the Inside Flap
How free-market economies really work
(and why they work so well)
Are free market economies really based on fleecing the consumer? Is the U.S. economy truly just a giant free-for-all that encourages duplicity in our everyday transactions? Is everyone from corporate CEOs to your local car salesman really looking to make a buck at your expense?
In Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't,
economist and bestselling author John R. Lott, Jr., answers these and other common economic questions, bravely confronting the profound distrust of the market that the bestselling book Freakonomics has helped to popularize. Using clear and hard-hitting examples, Lott shows how free markets liberate the best, most creative, and most generous aspects of our society--while efforts to constrain economic liberty, no matter
how well-intentioned, invariably lead to increased poverty and injustice. Extending
its rigorous economic analysis even further to our political and criminal justice
systems, Freedomnomics reveals:
● How the free market creates incentives for people to behave honestly
● How political campaign restrictions keep incumbents in power
● Why legalized abortion leads to family breakdown, which creates more crime
● Why affirmative action in police departments leads to higher crime rates
● How women's suffrage led to a massive increase in the size of government
· Why women become more conservative when they get married and more
liberal when they get divorced
● How secret ballots reduce voter participation
● Why state-owned companies and government agencies are much more likely to engage in unfair predation than are private firms
● Why the controversial assertions made in the trendy book Freakonomics are almost entirely wrong
Entertaining, persuasive, and based on dozens of economic studies spanning decades, Freedomnomics not only shows how free markets really work--but proves that, when it comes to promoting prosperity and economic justice, nothing works better.
About the Author
Economist JOHN R. LOTT, JR., is the author of The Bias Against Guns and More Guns, Less Crime. Having held positions at the University of Chicago , Yale University , Stanford University , UCLA, Wharton Business School , and Rice University , Lott was also the chief economist at the United States Sentencing Commission during 1988 and 1989. He has published over ninety articles in academic journals and his opinion pieces have run in such publications as the Wall Street Journal, the New York Times, the Los Angeles Times, USA Today, and the Chicago Tribune. During the 2007-08 academic year, Lott will be a senior research scientist at the University of Maryland Foundation . He received his Ph.D. in economics from UCLA in 1984.
Top customer reviews
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Lott demonstrates through allegory and solid examples on the purpose behind free markets. Would companies want their customers to die? Would they want to inflict harm? Not if they want more customers. Adam Smith's "invisible hand of competition" does work if people would trust the market instead of pleading for government inetervention.
While government uses its power to stop monopolistic practices, it often excludes itself from setting a monopoly itself. It has also hindered the market of professionals by creating licensing and schooling requirements to keep out qualified applicants (although government has conspired with those professionals).
The premises work well as a introductory treatise that will hopefully point to more free market economic theorists like Milton Freidman, Thomas Sowell, and the father of free-market ideology, Adam Smith.
He also does not stop there. He looks at social issues, revealing how well-intentioned government policies have led to more abuse and larger government. Why did crime fall in the 1990's? Instead of looking to the simplitic notion of Roe w. Wade allowing abortion, he shows other possible explanations.
He also shows how Women's Suffrage and other voting rights has possibly led to more voter fraud and an exponential growth of government. While some might lable his endeavors as sexist, he merely chronicles two factors that could possbily be related.
This leads to my only criticism of his book. He points to FDR as the leader who started the immense growth of government when it really got started during the Progressive Era under Teddy Roosevelt's watch. FDR took it to the next level, and Johnson to the nth degree.
Still, this is good for an introduction for those who really do not understand the free markets.
Will there be deception and abuse of power in the free market? Yes. But just as William Buckley said, "The problem with Capitalism is Capitalists. The problem with Communism is Communism."
Perhaps an example best illustrates the approach of this book: In Freakonomics, Steve Levitt argues that realtors do not look out for the best interests of their clients because the benefit-cost ratio to them favors securing a sale at a lower price, as opposed to holding out for a higher price that might jeopardize the sale.
In response, John Lott argues that the preceding example leaves out an important argument in the benefit-cost analysis: Realtors also have to be concerned about their reputations. Those realtors who are able to secure top dollar for their clients will attract more business. Those who sell out too quickly, at too low a price will lose business. These reputational costs can be quite substantial and may well swamp the narrow benefit-cost analysis put forth in Freakonomics. This is not to say that the analysis in Freakonomics is wrong. Just that it lacks an appreciation of how markets respond to the kinds of problems highlighted by Levitt.
This market-based approach is followed consistently throughout Freedomnomics, and it does so by applying this thinking to a lot of controversial, seemingly non-economic subject areas (e.g. crime, politics). Whether one ends up agreeing with John Lott's analysis is not the point. The point is that one will have their mind stretched by Lott's original and insightful analysis of how markets work.
Whatever the impetus for this book, it's a good one. Lott does a very nice job of explaining in layman's terms why the free market is a powerful and important force for good in the world. And despite my introduction and Lott's own statement that he was bothered by some of Freakonomic's implications, he doesn't get obsessed with discrediting that book or go off on tangents and rants. I've seen that happen before and it usually doesn't lead to a good book.
Instead of chasing after a white whale, Lott stays on task, making a positive case for the free market system and only occasionally referring back to Freakonomics to counter a point or for context. I applaud his point and his discipline in staying on course when it would have been easy to get lured away.
I don't think liking this book precludes you from liking Freakonomics or vis-versa. For my part, I really liked them both and found them both possessing penetrating insights. (Although I thought Freakonomics should have been called Freakatistics, but that's a topic for another time.)
Highly recommended for fans of economics or for anyone who wants to understand how well a social/economic system can work.
Most recent customer reviews
I struggled with whether to vote this a one- or...Read more
* Easy to read
* Consistent philosophy
* Some valid points
* Stupid title
* The provided "facts" are ideological opinions more than...Read more