Economic Superfreak

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Well read: Freakonomics catapulted Steve Levitt onto the international stage, and to the top of the bestseller lists worldwide.

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Rio De Janeiro.

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Hong Kong.

Steven Levitt, the best-selling author of Freakonomics, will give the inaugural DIFCweek Lecture, on Saturday November 17, 2007, the opening day of DIFCweek, www.difcweek.ae. He speaks exclusively ArabianBusiness.com about the dazzle of Dubai and what hot topics he will be covering in his latest project, SuperFreakonomics.

The American Economic Association every two years awards the John Bates Clark Medal to "that American economist under the age of 40 who is adjudged to have made a significant contribution to economic thought and knowledge." The Medal is considered one of the two most prestigious awards in the field of economics along with the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel - or Nobel Prize in Economics, as it is more commonly known. Around 40% of past Medal winners have, with an average wait of two decades, usually progressed to win the Nobel. With slightly less than a 50-50 chance, could the founder of the new genre of economics - exploring everything and anything - one day seize the Nobel?

Statistically speaking, it's certainly plausible for Steven Levitt, the 40-year old University of Chicago Professor of Economics, to win the Nobel having been awarded the Medal in 2003. It was his 2005 best-selling co-written book called Freakonomics - A Rogue Economist Explores the Hidden Side of Everything which propelled Levitt into the global spotlight. He was the innovative force behind Freakonomics, the presentation of economics as the study of incentives and how people get what they want, or need, especially when other people want or need the very same thing.

Melding pop culture with astute social science, Freakonomics aimed to turn conventional wisdom on its head, by trying to understand how the world really works.

With Levitt as the economist and Stephen Dubner as the journalist, the book surveyed a number of interesting and some admittedly freakish issues, affecting both social policy and comment. When the authors delved into the inner workings of a crack cocaine gang in the USA, readers soon learned how many drug dealers have surprisingly low earnings, abject working conditions and still live at home with their mothers.

They also looked at the methods that schoolteachers tend to use when cheating - and found that in multiple choice exams, culprits will answer easy questions at the beginning wrong and more difficult questions at the end correct. Reasons behind collusion in cheating among sumo wrestlers, backed up by the solid data of match results, is also featured. The result was a pop culture phenomenon, with the book spending the last two years in the New York Times bestseller list, being translated into 30 languages and selling more than 3 million copies. Levitt, who also was featured in TIME Magazine's 100 People Who Shape Our World in 2006, has already began work on the sequel, tentatively titled SuperFreakonomics.

Levitt, visiting Dubai for the first time as part of the inaugural Dubai International Financial Centre (DIFC) week, has spoken to Arabian Business about his new brand of economics, the dazzle of Dubai and offered an exclusive sneak preview of SuperFreakonomics.

"I've always been someone who loved the tools of economics - the statistics and the ideas about incentives," the spot-on 40-year-old economist says when asked about his drive to study the social science behind Wall Street, Canary Wharf and now Sheikh Zayed Road. "But I've never been that interested in business and finance and the only things I've really known about were crime and corruption, and so that's what I studied." Admittedly, the entry of his work into the global popular culture has been, barring the use of other synonyms, freakish. "I didn't study because I had some profound idea that it was important or was going to change the world. I was just doing it because I thought it was fun." One abnormal occurrence then led to another. "It was an accident that that research turned into Freakonomics, and it was an accident that people bought the book and read it."

And so, we find Levitt headlining a week-long event at one of the world's newest financial centre in the Middle East, where he aims to bring his brand of economics. "One of the things I've been doing over the last couple of years is actually working with business to bring a Freakonomics sort of public view of the word to try to help businesses to operate better." Even here, Levitt remains the maverick, preferring to concentrate on discussing his failures with businesses, rather than successes, with the effects on Dubai yet to be seen.

And what to make of the dazzle of Dubai? "What Dubai is trying to do is be the biggest and best, and in my view, that's a pretty good strategy! To be a destination protects you from fluctuations." Levitt compares Dubai to two cities in the East and West - Las Vegas and Hong Kong - but for two distinct reasons.

"A lot of people predicted what when gambling became a lot more widespread in the United States - Indian casinos, lotteries, and online - that would be the end of Las Vegas. But it isn't: in fact, it's been great for Las Vegas because Las Vegas has got the biggest and best of everything; go there for the experience." A worthy citation here would be the recent news that Abu Dhabi developer Mubadala has teamed up with the Las Vegas-based MGM Grand to build a new non-gambling resort, the MGM Grand Abu Dhabi, in a project worth US$3bn.

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