Jon Hartley has a wonderful interview with Steven Levitt at the “Capitalism and Freedom in the 21st Century” podcast (“Steven D. Levitt (Freakonomics co-author and University of Chicago Economics Professor) on His Career And Decision To Retire From Academic Economics,” March 7, 2024). Among a number of other topics, there’s a lot of good dishing about the University of Chicago economics department and prominent economists there, along with the future of economics and academics. Here, I’ll just offer some snippets that particularly caught my eye. One caution: the transcript is unedited, so read it with caution. As one example of many, there are places where “U of C” as a reference to the University of Chicago is spelled “UFC.”
On how Levitt ended up as an economics major:
But let me tell you how I did get into economics. It was not in a thoughtful and well-organized way. I was the worst kind of undergraduate student. I only tried to take easy courses. I just tried to get good grades. I didn’t care at all about anything intellectual, but I did already believe in markets, even though I had no economic training. And I went to Harvard and my view was if a thousand people are taking a class, that must be a good class and an easy class. And so, I took all the thousand person classes that they offered at Harvard. And first and foremost, among those was Ec 10. And I took it only because a thousand people were taking it. And I remember not too long into the class, maybe five or six lectures in the class and we were doing comparative advantage. And as the teacher went through it, I thought, “What a joke. How can they be teaching this?” Everyone knows, everyone understands comparative advantage. It’s the most obvious thing in the world. It’s five-year-old know that. And as I walked out of class, my best friend, who was also in the class, with me, said, “My God, that was the most confusing lecture I’ve ever heard in my life.” And I said, “What are you talking about?” He said, “It makes no sense to me. What is it you’ve been talking about?” And that was the first inkling I had that maybe I thought like an economist. And honestly, I only did economics because it came naturally to me. And I never liked it, per se. I never had this sense that economics was powerful. It’s just the only thing I was good at. And so… I just backed into it and I never had any intention, so I majored in economics, but I never had any intention of going further. I wanted to go into business.
On how a paper Levitt wrote as a graduate student about more police reducing crime entered the policy realm:
I wrote a paper on the effective police on crime, and I found, unlike other people before me, that looked like more police reduced crime. Perhaps not surprising, but it was very surprising to the criminologists. … And I think, if I remember correctly, and I might be confusing my stories, I think Alan Krueger put together a binder of papers for Bill Clinton every week. And Alan said that Bill was an amazing thinker, and he would really look at these papers. And he said, in particular, because they’re trying to get this crime bill passed that would add 100,000 police officers, Bill Clinton had gone over my paper, and he said you could see all the notes in the margin and had lots of questions and then Janet Reno apparently carried my paper around in a briefcase dozens of copies and gave it to anyone she could because she was trying to influence the senators and the representatives to vote on behalf of the Bill Clinton’s crime bill and I say I got completely the wrong idea. I had this idea that like you said wow the power of research and anyone can do it and you do good research and people recognize and it effects policy, I mean, I was so confused. It took me years and years to understand that, number one, usually nobody cares at all about your research. No matter how much you love it, it never gets any attention. Number two, the quality of my research had nothing to do with it being passed around. It was being passed around Washington because it was the only paper that supported the position that they had already chosen. Right, the policy outcome they want chosen first and then they went for papers. And I’m sure they were disappointed that the only article they could find that it all supported them was by some grad student, but they took what they could. And what I read, the real lesson I learned over time is that I don’t actually think that my research or even my writing, more popular writing, has ever really fundamentally changed the way any politician thought about anything and that it’s just, I’ve come to a different conclusion which is that it is incredibly hard to influence any policy or anyone’s beliefs by doing research.
On the negotiation between Levitt and Stephen Dubner on how to divide up the advance and royalties for Freakonomics:
[T]he publishers were interested in me doing a book, but I categorically said no. And eventually, Stephen Dubner’s agent called me up and said, hey, why don’t you write a book with Steven Dubner?” And I said, “Number one, I have no interest in writing a popular book. Number two, I’m sure Dubner doesn’t want to write a book with me because we honestly didn’t get along that well when he came out to interview me the first time.” But we agreed to talk and we shared, and we had a real commonality, which is that neither of us really wanted to write this book. Neither of us thought anybody would read a book if we did write it. But we both were kind of, prostitutes in some sense. And so, for the right amount of money, we were willing to write this book. And interestingly, the right amount of money turned out to be similar for both of us. And so much to our surprise, we got offered, I don’t know, three times that amount of money to write the book. And then the only thing that stood in the way of us writing the book is we had to figure out how to divide the profits, the payments. And Dubner, I don’t remember the exact numbers, but Dubner came to me and he said, “Hey, I know it’s uncomfortable to talk about this, but we need to decide to split.” And he said, “I was thinking 60 /40.” And I said, “I was actually thinking 2 /3, 1 /3.” And he said, “Oh, I’m just not willing to write this book for 1 /3.” And I said, “No, no, I was thinking 2 /3 for you and 1 /3 for me.” And he said, I was thinking 60 % for you and 40 % for me. So, it’s the easiest negotiation ever. We settled on 50 /50, we both felt like we got a lot of surplus and we’ve had a great relationship ever since.
Why retire and become an emeritus professor at age 57?
I think two different forces at work here. The first one is that maybe between five and 10 years ago, I worked on three or four projects that I was just incredibly excited about that I felt were some of the best research that I’d ever done … [T]hese were four papers that I was really excited about and collectively they had zero impact. They didn’t publish well by and large, nobody cared about them and I remember looking at one point at the citations and seeing that collectively they had six citations. I thought, my god, what am I doing? I just spent the last two years of my life and nobody cares about it. And I really think it’s true that the way I approached economic problems, without a fashion, without a vogue, and for better or worse, probably the profession is better for having a different set of standards than I was used to meeting up with. And that was really discouraging to me. And you combine that with the idea, with the fact that along with Stephen Dubner, we’ve got this media franchise where Dubner’s podcast Freakonomics Radio gets a couple million downloads a month. And if I want to get a message out, I can get millions of people through a different medium. It just didn’t make sense to me to keep on puttering around, doing all this work, spending years to write papers that no one cared about when I had other ways of getting my ideas out. And really my interests were elsewhere. I didn’t get any thrill. … The question I should ask myself is why didn’t I retire a long time ago? It made no sense. I’ve just been, I’ve thought, I’ve known for years, it’s the wrong place for me to be. And it just took me a long time to figure out how to extricate myself from academics. And I’m so glad I’m doing it. It’s good for everyone. It doesn’t make any sense to, it feels to me awful to be in a place where I’m not excited and where I’m not contributing materially. So, for me, it feels like a breath of fresh air to be saying, “Hey, I’m not going to be an academic anymore. I’m going to be doing what I really love to do.”
