Bankrate: You show how a crack gang applied the lessons of corporate finance to managing their business. Were there any lessons you saw from that enterprise, or other unconventional enterprises, that might go the other way, that the traditional business world can learn from a renegade operation?
Stephen J. Dubner: Well, the great thing about the crack gang is that it represents unfettered capitalism: no regulation, no taxes, no minimum wage. And what you see is a business that is quite remarkably similar to American corporations, though a little bit more so. The one thing the crack gang does that American businesses have been moving away from is fully employing the tournament model, the same model evident in Hollywood, in pro sports, etc. In the crack gang, a street-level dealer earns only $3.30 an hour and has a huge chance of getting killed or arrested, but he's willing to do so in order to move up the ranks and grab a top spot. The problem is, those spots are very, very precious, and there are thousands of people just like him who want a shot. So they're willing to work long and hard just for an opportunity, kind of like playing the lottery. It's super cutthroat. While some legitimate American businesses still work like this, most companies have been conditioned or shamed into discouraging this kind of competition.
Bankrate: The book mentions that many corporations and scientific and government institutions reach out to Levitt for his assistance. What are some of the ways he has worked, or is working with, corporations, and can you name some work he has done that we might see the effects of in our everyday lives?
Stephen J. Dubner: Well, he's trying to address traffic jams. That would be nice. Terrorism, too. That would be even nicer. The great thing about Levitt is that his brain is a great tool that, while steeped in economics, is very good at applying economics to any real-world dilemma. We're also working with a great medical database that, after a few years' work, may reveal some fascinating and really useful ideas about modern medicine. What we're essentially trying to do is tell good doctors from bad ones, in a way that will be helpful to any patient in the future.
Bankrate: When a book has the word "economics" on it, I think people expect lots of numbers, complex theories and equations. This almost reads more like what I would consider a sociology book. Do you think most people misunderstand what economics really is, or is Levitt just approaching the field it in a really unique way?
Stephen J. Dubner: Both: People do misunderstand economics, and Levitt also approaches the field in a unique way. As he puts it, most people consider economics a subject matter, one that covers interest rates, inflation, the stock market, currency, etc. But in fact it's a social science, a toolbox really, which when married with some creative thinking, can measure things that otherwise might appear immeasurable. It's also worth remembering that Adam Smith, the founder of classical economics, was foremost a philosopher. Economics really is a good lens if you want to look at the world in a critical, clear-eyed way.
Bankrate: How has the process of writing this book changed the way you look at the world and your own everyday life?
Stephen J. Dubner: For one thing, I'm a tiny bit better at being unswayed by ill-formed conventional wisdom. I also tend to ask slightly better questions now. But the biggest difference is a great liberation from dogma. There's a sense in polite society that there are certain boundaries you cannot cross, certain ideas you cannot mention -- the fact that people cheat and lie and act in dogged self-interest, etc. But once you acknowledge that, you can shrug off the unease and get to the core of an issue. I have a much worse tolerance now for double-talk and know-nothing chatter, because I know that beneath all that chatter lies some interesting stuff, and I'm in a hurry to get to it.