FREAKONOMICS: A Rogue Economist Explores the Hidden Side of Everything

The fear created by commercial experts may not quite rival the fear created by terrorists like the Ku Klux Klan, but the principle is the same.

Armed with information, experts can exert a gigantic, if unspoken, leverage: fear.

The Theory of Moral Sentiments

1987: seven million American children suddenly disappeared.

There are three basic flavors of incentive: economic, social, and moral.

An incentive is simply a means of urging people to do more of a good thing and less of a bad thing.

It was the human effect, the fact that economic forces were vastly changing the way a person thought and behaved in a given situation.

We have evolved with a tendency to link causality to things we can touch or feel, not to some distant or difficult phenomenon. We believe especially in near-term causes: a snake bites your friend, he screams with pain, and he dies. The snakebite, you conclude, must have killed him. Most of the time, such a reckoning is correct.

The most compelling new idea that Bratton brought to life stemmed from the broken window theory, which was conceived by the criminologists James Q. Wilson and George Kelling. The broken window theory argues that minor nuisances, if left unchecked, turn into major nuisances: that is, if someone breaks a window and sees it isn’t fixed immediately, he gets the signal that it’s all right to break the rest of the windows and maybe set the building afire too.

Even among prisoners on death row, the annual execution rate is only 2 percent—compared with the 7 percent annual chance of dying faced by a member of the Black Gangster Disciple Nation crack gang. If life on death row is safer than life on the streets, it’s hard to believe that the fear of execution is a driving force in a criminal’s calculus. Like the $3 fine for late arriving parents at the Israeli day-care centers, the negative incentive of capital punishment simply isn’t serious enough for a criminal to change his behavior.