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Shooting From the Hip, or Taking Careful Aim: How Should People Make Decisions?


A Review of Malcolm Gladwell's Blink and Steven Levitt and Stephen Dubner's Freakonomics

By NEIL BUCHANAN


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Friday, Oct. 07, 2005
Malcolm Gladwell, Blink: The Power of Thinking Without Thinking (Little, Brown, 2005)

Steven Levitt and Stephen Dubner, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (William Morrow, 2005)

On an episode of the television show "Seinfeld," George Costanza asks Cosmo Kramer whether he should call his ex-girlfriend. Kramer replies: "Now what does the Little Man inside you say? See, you gotta listen to the Little Man. The Little Man knows all." George retorts: "My Little Man's an idiot!!"

On the surface, this exchange would seem to encapsulate the differences between Malcolm Gladwell's argument in Blink and Steven Levitt's argument in Freakonomics. (Though Levitt had a co-author on his book, Stephen Dubner, I will refer only to Levitt throughout this review, because he is clearly identified as the intellectual force behind the book.)

Gladwell appears to be arguing for quick, shoot-from-the-hip thinking: trusting one's Little Man or Woman. Levitt, by contrast, seems to say that we must proceed systematically, analyzing the numbers to strip away the nonsense in everyday thinking.

This difference dissolves upon closer analysis, as I discuss below. Yet this classic opposition of thinking versus doing should not be dismissed lightly. Our culture seems to embrace both sides of the divide.

Countless teachers have advised students who are about to take a test: "Go with your first answer." Those same students, however, at other times and from other sources (or, indeed, sometimes from the same sources), are advised to "rule out systematically all wrong answers to converge on a right answer."

We are exhorted to "act now, or you'll be left behind," but warned that "you'll regret it if you act rashly." Which is it? Should you "trust your gut" or "look before you leap"?

As it happens, these two books offer surprisingly similar answers to that question. (The first hint of this, visible in the blink of an eye, is that Gladwell is quoted on the front dust cover of Freakonomics saying: "Prepare to be dazzled.")

Trusting Your Gut, Versus Looking Before You Leap: The Authors' Answers

Gladwell is not arguing for uninformed leaps of faith, and Levitt is not merely a number-cruncher. Both argue, quite convincingly and in different ways, that genuine understanding of social phenomena, large and small, requires creative thinking by well-trained people who are at least willing to question conventional wisdom -- because conventional wisdom is far too often formed by prejudices and unexamined assumptions that are unsupported by the facts.

Levitt, though he presents himself as the number-cruncher, actually ends up being an outstanding example of a truly innovative thinker, using his formidable creativity to address questions with a quick wit and to go in directions that strike his fancy.

If there were not something unique about Levitt's intellect, after all, he would not have a bestseller on his hands. People are dazzled by his book precisely because he can put ideas and evidence together in ways no one else had thought of before.

Another mathematical economist, John Nash (portrayed by Russell Crowe in the film "A Beautiful Mind"), is famous because his quick insights into strategic relationships were path-breaking--yet they also were his undoing. In the book on which the film is based, the author describes a meeting between Nash and one of his colleagues while Nash was institutionalized for his delusional behavior. Nash's colleague scolds him, asking why anyone as intelligent as Nash could allow himself to believe such bizarre delusions. Nash replies that his delusions came to him in exactly the same way that his mathematical insights came to him: as bolts from the blue, not as the result of some laborious process of logical progression. If he could invent the concept of Nash equilibrium essentially from thin air, why should he not also trust his instincts when they told him to be paranoid?

Fortunately, of course, creative minds do not all suffer as Nash's did. (And happily, Nash appears to have recovered well from his illness.) It is worth remembering, though, that our very notions of insight and creativity are based on some borderline-mystical ideas about human intelligence: "It just came to me."

Levitt is a very clever man; and it might well be that his ability to compare, say, realtors to Klansmen in truly illuminating ways is proof of his own exceptionalism, rather than of the power of economic reasoning. He might be less a "rogue economist" and more simply a fun-loving rogue.

Gladwell, meanwhile, argues that the real-life necessity for rapid decision-making actually demands that we train ourselves to incorporate as much real-world data into our decisions as possible, and to think quickly -- in just the way that Levitt does, as evidenced by his book. Not every decision can wait for careful vetting by a committee of experts; but we at least want someone in a decision-making position whose background and training will allow her to make sound decisions quickly, and to set aside any ideological blinders that might lead to a bad decision.

(Recent events surrounding the patently unqualified former director of the Federal Emergency Management Agency provide a stark reminder that basic competence in the relevant field is a necessary starting point for decision-making in an emergency--especially for a decision-maker whose agency's title includes the word "emergency.")

Ultimately, both authors argue for less ideology and more clear thinking. Levitt argues, "when moral posturing is replaced by an honest assessment of the data, the result is often a new, surprising insight." Gladwell argues, that "there can be as much value in the blink of an eye as in months of rational analysis."

On closer examination, though, this capsule summary does not really represent Gladwell's thesis: The true core of his argument is much subtler: It's that months of rational analysis--if done poorly or, more importantly, if done without an open mind--can be worse than quick thinking by a well-trained person proceeding in good faith.

Indeed, Gladwell identifies his major tasks in Blink as, first, to prove to his readers that quick thinking is sometimes better than cautious and deliberate thinking, but also - and even more importantly -- to show that our decisions go awry for the very predictable reason that we (sometimes innocently and sometimes not) are not open-minded. Gladwell urges--and here is the crux of the matter--that "our snap judgments and first impressions can be educated and controlled."

The bottom line: If your Little Man (or Woman) is an idiot, as George Costanza's was, you can and should do something about it.

Levitt's Notorious Roe v. Wade Example and the Distortions It Spawned

Both authors make wonderful use of vivid examples to make their points. Levitt, for instance, gives many examples of how incentives affect behavior - focusing on drug dealers living with their mothers, similarities between sumo wrestlers and school teachers, and other unexpected inquiries. But what is certainly the most famous (or infamous) part of Levitt's book is his analysis of the effects of Roe v. Wade, the 1973 Supreme Court decision that effectively legalized abortion nationwide.

Levitt's headline-grabbing assertion is that Roe was an extremely important cause of the decline in crime rates nationwide in the 1990s. His reasoning is that aborted fetuses (the first of which, had they been born, would have been in their most crime-prone years in the late nineties) would, if born, have been more likely than others to grow up in dysfunctional homes, and to experience all of the usual preconditions for a life of crime. Put another way, children who would have been born only because abortion was unavailable to their mothers, would have been more likely to turn to crime.

With Freakonomics a bestseller, this argument seems to have been distorted far more often that it has been accurately captured.

Last week, for example, the conservative social commentator William Bennett made headlines by arguing, apparently with reference to Freakonomics, that if "you wanted to reduce crime ... if that were your sole purpose, you could abort every black baby in this country, and your crime rate would go down." Even President Bush deemed his remarks "not appropriate," and others had far harsher things to say about Mr. Bennett.

Readers can draw their own conclusions about the force and sincerity of Bennett's subsequent clarifications. But for the purposes of this review, this seems to be a good example of Gladwell's point: a poorly-informed, ideologically motivated speaker uses a snippet of "data" (in this case, apparently a bullet-point summary of Freakonomics) to draw an undue--and immoral--conclusion.

Whether done in the blink of an eye or not, relying on Freakonomics for the proposition that aborting every black baby in the country will bring down the crime rate is simply bad reasoning.

Blink, by the way, has already suffered a similar fate, with readers missing Gladwell's real point. For example, on Al Franken's radio show earlier this week, Franken (portraying a comic character) told his co-host that she had probably made a good decision to leave the show, because she had made "a snap decision, instead of agonizing about it," which "is what Blink is about." That this is precisely the opposite of Gladwell's point has already been lost--and even if Franken was kidding, it is easy to imagine others making that mistake seriously. Once in the popular culture's maw, all bets are off.

Gladwell, moreover, deserves much of the blame for such misunderstandings, because he subtitled his book "the power of thinking without thinking." This all but begs casual readers to miss his point and say, "Hey, this guy says it's OK to think without thinking! I guess I can do whatever I want."

Gladwell's Examples: More Time Doesn't Always Mean Greater Accuracy

Nonetheless, Gladwell's examples are quite fascinating. He starts the book with a story about how the Getty Museum dealt with a possibly fraudulent statue that was presented as a sixth-century B.C. antiquity. After fourteen months of painstaking (and expensive) research using all kinds of high-tech gadgetry, the museum concluded triumphantly that the statue was genuine.

It was not.

For Gladwell, the interesting story is not the final, definitive proof of forgery--it is about the "first two seconds" when some of the best-trained art historians in the world looked at the statue and knew instantly that it was a fake.

Notably, they had to be experts; George Costanza's Little Man would be useless here, not because he is an idiot, but because he simply has no basis on which to make a snap judgment about the subject. But the art historians' expertise bubbled forth with such force that it took only a moment for them to reach their (ultimately verified) conclusions.

This example is especially compelling because it is an instance where the decision did not even have to be made in an instant. Indeed, the data collection and analysis that the Getty undertook was impressive and time-consuming. The seat-of-the-pants art experts were right, and the computers were wrong. Does this contradict Levitt? It might seem so, but again, closer examination suggests that Gladwell and Levitt's views are far closer than a cursory look might indicate.

Levitt's Method: Data-Based, But Also Creative and Intuitive As Well

Levitt begins with a strong call for data analysis, calling economics "above all a science of measurement." This does not, however, mean what it seems to suggest. That is, his is not always a method that sorts through mountains of data using advanced econometric techniques. Sometimes, data analysis simply means looking at a few numbers.

For example, in his analysis of the causes of the decline in crime in the United States after 1995, Levitt briefly addresses whether the increased use of capital punishment might deserve credit for the falling murder rate. His arguments, while highly persuasive in debunking any connection between executions and decreased crime, are hardly the stuff of advanced statistics seminars.

Indeed, much of Levitt's argument appeals to intuition. He offers "two important facts" about capital punishment. The first "fact" is, however, an argument: given the low probability of being executed for a murder, Levitt argues that "no reasonable criminal should be deterred by the threat of execution"; that threat is so unlikely to be realized that it can be reasonably discounted.

Here, Levitt analogizes to the frustration of dealing with a child who calls a parent's bluff, arguing that potential murderers are not likely to view the threat of execution as a credible reason to alter their behavior. He points out that the death rate for some gang members on the street is higher than it is on death row.

Cobbling together these few bits of data, Levitt concludes (again, quite convincingly to my mind) that there is simply no logic to support the deterrence argument. But he bases the argument on much more than data alone - his interpretations rely on human psychology: the ability to contrast alternatives (risks of gang life versus risks of punishment) and to choose among (bad) alternatives.

Second, Levitt argues, the number of executions is simply too small to account for the decline in the number of murders in this country. Using one of the highest estimates available of the number of murders deterred by each execution (seven fewer murders for each person executed), Levitt concludes that even this "best-case scenario" for the deterrence argument could explain "only one twenty-fifth of the drop in homicides in the 1990's."

In fact, of course, the statistical literature on capital punishment has reached a stage where virtually every serious researcher concedes that no overall deterrent effect is apparent at all in the data (much less a 7-to-1 ratio).

Only one issue remains: Might particular sub-categories of murderers - say those who murder in a calculated way, for money, or those who murder casually, in the course of other crimes -- be somewhat responsive to the threat of execution? Even here, the results to date are not encouraging to supporters of deterrence.

Still, Levitt's point is well made, relying on only the occasional datum and no fancy econometrics.

Balancing Formal Analysis with Quick Reality Checks

Levitt's method, which one might call "reality-informed" more than "data-driven," is in fact an all too rare feature of modern economics. Eminent economists such as Benjamin Friedman and Paul Krugman both make a habit of subjecting economic theories and econometric estimates to simple reality checks.

Levitt is thus in good company. So to the extent that he is actually saying something revolutionary, it is not because he is alone in his thinking. It is because too many highly-trained economists don't follow his path, and continue to miss the forest for the trees.

Of course, questions can also be addressed profitably through more formal data analysis. Though Levitt wisely chooses not to discuss the details, he dismisses the widely-reported claims by the economist John R. Lott Jr. that crime decreases when citizens are allowed to carry concealed weapons, saying that other scholars have "found that right-to-carry laws simply don't bring down crime." In his Notes section, Levitt cites two articles whose authors have failed to replicate Lott's statistical results.

Those articles did, indeed, rely on formal econometric testing. But does Levitt really think that is all there is to it? Lott's book is wrong because two academic articles say so? Why hasn't Lott publicly announced that he has seen the light? And why do people still argue that the death penalty is a deterrent?

The Various Motivations for Argument: Sadly, Truth-Seeking Is Only One Among Them

One possible answer that both Levitt and Gladwell would offer, is that people are often driven by something other than truth-seeking.

Gladwell, in particular, uses examples effectively to show that people can be unmasked by their own Blink-thinking, describing how a German orchestra's leaders blatantly discriminated against a woman whom they themselves had chosen as the best in a blind audition. They were so invested in their fantasies of male superiority that they were willing to ignore the proof of their own ears.

If people were not pre-committed to a given answer, Gladwell and Levitt both suggest, they might look at issues more carefully.

Would that it were that simple. In one of the classic articles on statistical inference, wonderfully titled "Let's Take the 'Con' Out of Econometrics," the economist Edward E. Leamer used the death penalty debate to show that one could set up a number of differing econometric tests of deterrence--each reasonable on its own terms--and find statistical "proof" either that deterrence exists, or that it does not. True, more of the tests found no deterrence than found any deterrence, but the results were at least mixed.

While ideology can play a role in the choices one makes in setting up the tests in the first place, the "let's be honest" answer does not always lead to a definitive conclusion. This led Leamer to suggest exactly what Levitt and (too few) other economists have called for: thinking creatively and carefully about real data, and drawing conclusions only where warranted by the concordance of the results of a variety of approaches to analyzing the data.

Economics as Science? That's a Matter of Debate

A further word of skepticism is also required. Levitt is an advocate for economics as a profession. As mentioned earlier, he describes economics as "a science of measurement." He begins and ends the book by saying that "if morality represents an ideal world, then economics represents the actual world." Non-economists have heard this from economists before: "We are the keepers of objective truth. Be like us or descend into unscientific relativism."

There is, in fact, a spirited debate among economists about whether economics is a science at all. And there are, quite unfortunately, plenty of economists whose work is infected by just the kind of results-based thinking that Levitt and Gladwell lament.

Thus, Levitt's assertion that "Freakonomics-style thinking simply doesn't traffic in morality" is, at best, about Freakonomics and not economics; it should not lead readers to believe that the standard economic advice that they read in the paper (or in a textbook) is not deeply imbued with an economist's morality.

In sum, Levitt's statements about economics in general are best seen as aspirational, with reality falling well short of his assertions.

For lawyers and other non-economists, it is also important to realize that what Levitt refers to as the power of economics is not unique to economics at all. Levitt describes the common thread of the book as "thinking sensibly about how people behave in the real world." That does not require economics but simply the ability to draw logical inferences from arguments and facts--which is, after all, a large component of legal method.

Gladwell and Levitt both write in the honorable tradition of the idealistic skeptic. Their idealism sometimes causes them to overstate the virtues of their skepticism. We would do well, however, to use these fine books as reminders that reality-based thinking is the best place to start in addressing any problem.


Neil H. Buchanan, J.D., Ph. D. (Economics), taught economics most recently at the University of Michigan and now teaches law at the Rutgers School of Law - Newark.

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