john hartley is amazing Interview with Stephen Levitt on the podcast “Capitalism and Freedom in the 21st Century” (“Steven D. Levitt’s (co-author of Freakonomics and professor of economics at the University of Chicago) career and decision to retire from academic economics about“)” March 7, 2024). There are lots of good articles about the University of Chicago's economics department and its prominent economists, and the future of economics and academia, among many other topics. Here are a few that particularly caught my eye. There is one caveat. Please read carefully as the transcript has not been edited. A number of examples include where „U of C,“ referring to the University of Chicago, is spelled „UFC.“
On how Levitt ended up majoring in economics:
But let me tell you how I got interested in economics. It wasn't in a thoughtful, well-organized way. I was the worst undergrad. I tried to take only easy courses. I just tried to get good grades. I had no interest in anything intellectual, but I already believed in markets, even though I had no training in economics. I went to Harvard University, and my view was that if there were 1,000 people in a class, it must be a good class, and it must be an easy class. So I took all the 1,000 class classes that Harvard University had to offer. And first and foremost, it included EC 10. I took it simply because he had 1,000 people take it. And I remember that not too long into the class, there was probably five or six lectures in class and we learned about comparative advantage. As the teacher explained this, I thought: How can they teach this? ” Everyone knows and understands comparative advantage. It's the most obvious thing in the world. I know that because I'm 5 years old. And as I was walking out of the classroom, my best friend who was in the class with me said, „Oh my god, that was the most confusing lecture I've ever heard.“ And I said, „What are you talking about?“ What on earth were you talking about? ” And that was my first realization that maybe I was thinking like an economist. To be honest, I just learned economics naturally. And as such, I never liked it. I never had the feeling that economics was powerful. That was the only thing I was good at. So…I just went back and didn't really have any intentions, so I majored in economics, but I had no intention of going any further. I wanted to go into business.
As for how Levitt's dissertation on police crime reduction, which he wrote as a graduate student, entered the policy realm:
I wrote a paper on effective policing against crime, and unlike others before me, I found that more police seemed to reduce crime. This may not be surprising, but it was quite surprising to criminologists. …And if I remember correctly, and I may be confusing my story, I think Alan Krueger was putting together a binder of documents for Bill Clinton every week. And Alan said that Bill is a great thinker and that he would take a serious look at these papers. And he's especially trying to get this crime bill passed that increases the number of police officers by 100,000, so when Bill Clinton is looking through my paper and he sees all the notes in the margins and he has a lot of questions. Told. Then Janet Reno apparently carried around dozens of copies of my paper in her briefcase and distributed them to everyone she could. Because she was trying to influence senators and representatives to vote in favor of Bill Clinton's crime bill. Wrong idea. As you said, I had the idea that the power of research is great, that anyone can do it, that if you do good research, people will recognize it, and that it will influence policy. I mean, I was so confused. First, it took me years to realize that no one usually cares about your research. No matter how much you love them, they will never get attention. Second, the quality of my research had nothing to do with its dissemination. It was being circulated throughout Washington because it was the only newspaper that supported the position they had already chosen. That's right, the policy outcomes they wanted were selected first and then they asked for documentation. And I think they were disappointed that the only paper that supported them was by a graduate student, but they took what they could. And what I've read, the real lessons I've learned over time, is that my research and my writing, and even my writing in general, really fundamentally changes the way politicians think about something. I mean I don't actually think I've changed. Another conclusion I came to was that it is incredibly difficult to influence policy or people's beliefs through research.
Regarding negotiations between Mr. Levitt and Stephen Dubner regarding how to divide Freakonomics' upfront payments and royalties:
The publisher was interested in me publishing the book, but I flatly said no. And eventually Stephen Dubner's agent called me and said, „Would you like to write a book with Stephen Dubner?“ And I said, „First of all, I'm not interested in writing a popular book. Second, I'm sure Dubner doesn't want to write a book with me. When you came to interview me, to be honest, we weren't that close.'' But we agreed to talk and shared. And we really had something in common. It's just that neither of us really wanted to write this book. Neither of us thought that if we wrote a book, no one would read it. But we were both, in a way, like prostitutes. So we decided to write this book if we paid the right amount. And interestingly, the appropriate amount for both of us turned out to be similar. And to our great surprise, we were offered, I don't know, three times as much as he was to write the book. And the only obstacle in writing this book was that I had to figure out how to divide the profits and payments. And Dubner, I don't remember the exact number, but Dubner came to me and said, „I know it's uncomfortable to talk about this, but we need to make the decision to separate.“ And he said, „I thought it was 60/40.“ And I said, „I was actually thinking 2/3, 1/3.“ And he said, „Oh, he's not going to write 1/3 of this book.“ . And I said, „No, no, I was thinking two-thirds for you and one-third for me.'' And he said, „I was thinking 60 for you. %, you were thinking about me 40% of the time.” So it's the easiest negotiation ever. We settled on a 50/50 deal, felt we both had a lot left over, and have had a great relationship ever since.
Why did he retire at the age of 57 and become professor emeritus?
I think there are two different forces at work here. The first is that for probably five to ten years ago, I worked on three or four projects that I was incredibly excited about, and some of the best research I've ever done. I felt like it was a club. (These were 4 papers) I was really excited about, but taken together they had zero impact. They generally didn't do well in publication and no one paid any attention to them, but looking at the citations at one point, he remembers that in total he had six citations. I thought, God, what am I doing? I just spent the last two years of my life and no one cares about it. And the truth is that my way of approaching financial matters was without fads or fads, and for better or worse, perhaps this profession was better suited to have different standards than I was used to. I think. And that was really discouraging to me. And combine that with that idea and the fact that, along with Stephen Dubner, Dubner's podcast Freakonomics Radio has a media franchise that gets millions of downloads a month. And if you want to get your message across, you can reach millions of people through another medium. It doesn't make sense to me to spend years doing this kind of work, wandering around and writing papers that no one cares about, when there are other ways to get my ideas out there. did. And actually, my interests were elsewhere. I didn't get any thrills. …The question I have to ask myself is, why didn't I retire a long time ago? It didn't make any sense. I had known for years that this was the wrong place for me, but I thought I had just gotten here. And it took me a long time to find a way out of school. And I'm so glad I'm doing it. That's good for everyone. It feels so bad to be in a place that doesn't have meaning, isn't exciting, and isn't contributing materially. So for me, it feels like a breath of fresh air to say, „Hey, I'm not going to be an academic anymore.“ I will do what I really want to do. ”