Freedomnomics

infobox Book |
name = Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't
orig title =
translator =


author = John Lott
cover_artist =
country = United States
language = English
series =
genre = Economics
publisher = Regnery Publishing
release_date = June 25, 2007
media_type = Hardcover
pages =
isbn = ISBN 1-596-98506-2
ISBN 978-1-596-98506-3
preceded_by = The Bias Against Guns
followed_by =

"Freedomnomics: Why the Free Market Works and Other Half-Baked Theories Don't" is a book by John R. Lott, Jr., author of "More Guns, Less Crime" and "The Bias Against Guns". "Freedomnomics" takes an economic look at the effects of the free market, and presents some arguments against those found in "Freakonomics" by Steven D. Levitt and Stephen J. Dubner.

Topics

Lott makes an incentive based assessment of academia, abortion, taxes, government, crime, illegal immigration, and the economy.

Academia

As an example of incentives, Lott describes an experience at Montana State University when the state proposed to remove property taxes. He claims that university professors knew that removing the tax was a good economic decision, but opposed the law because it had the potential to reduce government funding to their university. ["Freedomnomics", pp. 6–11]

Gas prices

Lott argues that oil and gas companies have incentives to stabilize the prices of gas, which benefit the consumer in the long run. He asserts that the increases in gas prices during Hurricane Katrina actually helped mitigate the damage done by the hurricane, and how government price controls, like those of the 1970s, would have made life much harder for the victims. ["Freedomnomics", pp. 15–22]

Drug prices

Lott makes an argument as to why he believes Americans pay more for medications than other countries. The high prices that Americans pay for drugs allegedly pays for the research that was done to invent those drugs. If Americans did not pay high prices for drugs, he claims, then no new drugs could be created.

Lott asserts that price controls on drugs would destroy medical innovation, not only for the United States, but also those countries who are dependent on it for new drugs, such as Canada. ["Freedomnomics", pp. 20–22]

Used car vs. new car prices

Lott argues that it is only a common myth that a new car loses 15% - 25% of its value when it first leaves the lot. He backs up this argument through analysis of new and certified used car prices [cite news | author=New, Michael J | title=Whole Lott of Freedom | publisher= National Review Online | date=2007-07-16 | url=http://article.nationalreview.com/?q=NWZjMzMzMzI2NTIwYjk3ZTkwMTI1ZGJmMWUzN2E5Yjg | accessdate=2008-03-29 ] using manufacturer MSRP; Kelley Blue Book New, Used, Excellent Condition Trade-in, and Private Party prices; and Yahoo! Auto Certified Used prices for 55 certified used cars (15 with less than 5,000 miles and 40 with about 15,000 miles). Lott demonstrates that the cars with 15,000 miles on them (about a year's worth of driving) are substantially less valuable than the relatively new cars with less than 5,000 miles. A few of the cars with less than 5,000 miles were actually worth more than MSRP. ["Freedomnomics", pp. 35–39]

Campaign finance reform

Lott claims that laws which limit money donated to politicians gives an advantage to incumbents. He also asserts that these laws redirect money from politicians to political action committees, thereby increasing the occurrence of negative campaigning. ["Freedomnomics", pp. 40–82]

Reputation

Lott makes an argument that reputations are an important, and often overlooked, asset in the economy. He gives examples of how hurt reputations can be more damaging than penalties imposed by law. ["Freedomnomics", pp. 40–82 ]

Professional licensing

Lott asserts that professional licensing prevents the highest quality entrants from entering professions from barbering to practicing law. He points out that even though he has been a university professor for many years, he is not legally able to teach at public high schools in most states because of government regulations. ["Freedomnomics", Ch. 3]

Crime

Lott explains the economics behind the changing levels of crime across the United States. He asserts that abortion and affirmative action hiring in the police force increased crime, and argues that the death penalty, law enforcement, and allowing citizens to carry concealed weapons worked to decrease crime. He also argues that age, race, and gun control had little effect on the crime rate. [ Freedomnomics, Ch 4. ]

Voting

Lott explains what he believes to be the economic factors within the United States voting system that affect voting turnout, voter fraud, and the size of the government. This includes looking at older examples such as the poll tax, secret ballots, and literacy tests as well as new examples such as voting machines, felony voting, the 2000 Florida vote, public schools and alleged bias in the media. [ Freedomnomics, Ch. 5]

References