49 pages • 1 hour read
SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance
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Chapter 5-EpilogueChapter Summaries & Analyses
Chapter 5 Summary: “What Do Al Gore and Mount Pinatubo Have in Common?”
The chapter begins by referencing the “harrowing” media coverage of the threat of global warming in 2009. However, in the 1970s, equally harrowing headlines covered the effects of global cooling. The global temperature dropped between 1945 and 1968, and experts feared that the drop could result in global crop shortages that could destroy humanity. While there is now a consensus that human activities contribute significantly to climate change, the specific sources are often misunderstood. A striking example presented is the significant impact of ruminant animals such as cows on greenhouse gas emissions. The authors highlight that livestock, and especially cows, are substantial contributors to emissions of methane, a potent greenhouse gas. This piece of information challenges the more common focus on cars and transportation as the primary culprit of greenhouse gas emissions. The authors therefore suggest that human dietary changes—such as substituting beef with less methane-intensive meats like kangaroo—could have a more substantial environmental benefit than the widespread adoption of hybrid vehicles.
Next, Levitt and Dubner introduce the economic concept of externalities—costs or benefits incurred by third parties due to the actions of an individual or group. Environmental pollution is a classic negative externality in which the broader population bears the costs of environmental degradation caused by certain activities. The authors argue that, in theory, assigning a monetary value to these externalities and implementing corresponding taxes could mitigate environmental harm. However, they contend that the complexity of the global climate system renders it nearly impossible to accurately calculate and assign such costs, complicating efforts to address climate change through traditional economic policies. The chapter critiques the notion that combating global warming requires significant personal or economic sacrifices, such as reducing consumption or foregoing certain conveniences. The authors express skepticism about the effectiveness of such approaches, citing human nature’s resistance to making substantial sacrifices without immediate, tangible benefits. They reference discussions in Chapter 3 on the limitations of relying on altruism to drive large-scale behavioral change, suggesting that expecting mass voluntary sacrifices for the sake of the environment may be unrealistic.
Instead of sacrificial measures, Levitt and Dubner advocate for technological innovation as a more viable solution to environmental challenges. They argue that throughout history, technological advancements have effectively addressed various societal issues, and climate change should be no exception. The authors explore geoengineering proposals, such as stratospheric aerosol injection, inspired by the seismic activity of Mount Pinatubo, which involves releasing sulfur dioxide into the stratosphere to reflect sunlight and cool the planet. This answers the question posed by the chapter title, showing that Mount Pinatubo and Al Gore both suggest a way to cool off the planet, though the first is entirely physical and neutral, while the second requires significant changes in how human beings interact with the world and see themselves in relation to it. The authors posit that the former is much more likely to start solving the problem, while the second would require too much effort. They present the aerosol injection as a potentially simple and cost-effective method to counteract global warming, though they acknowledge the controversies and risks associated with such interventions.
Epilogue Summary: “Monkeys Are People Too”
The epilogue begins by defining the difference between macroeconomists—economists who deal with broad societal strokes like “inflation, recessions, and financial shocks” (210)—and microeconomists like the authors, who are more concerned with understanding the decisions made by individuals. One such microeconomist is Keith Chen, an associate professor of economics at Yale. Chen sought to find out whether the use of money was uniquely human, or if animals could be trained to use it among themselves.
He set up an experiment at the Yale-New Haven monkey lab with seven capuchin monkeys. Capuchins are known for their relatively small brains, and their social interactions mainly revolve around food and sex. Chen initially taught the monkeys to trade tokens for treats like grapes. Later, he taught them that different treats cost different amounts of tokens, and then changed the prices for particular treats, making them cost more or less than they did during the previous session. The monkeys responded rationally, buying more of the cheaper treats and fewer of the costly ones. Later, Chen introduced gambling. One researcher would offer two grapes, then take one away if a coin flip dictated it, and another researcher would offer one grape, adding another if the coin flip dictated that. The monkeys strongly preferred the one-grape researcher, showing that like humans, they experienced “loss aversion” (when the pain of losing a bet is greater than the pleasure of winning one). This experiment highlighted the idea of irrational emotion-driven decision making, but Chen noted that stock-market investors made irrational decisions all the time.
One of the monkeys, Felix, disrupted the system during a session by running in, grabbing all the tokens available to him, and throwing them back into the communal cage with the six other monkeys. The other monkeys grabbed the tokens and refused to give them back. The researchers had to bribe them with treats to get the tokens. However, one male monkey approached a female and handed her a token. Chen initially interpreted this action as altruism, but then the two monkeys began to have sex. After they were finished, the female monkey brought the token over to Chen to purchase a treat. Chen realized that he had just witnessed sex work among monkeys for the first time in recorded history. The lab supervisors shut down the experiment soon afterward, fearing that the continuing use of money would irreparably harm the monkeys’ social bonds.
The authors point out that the introduction of money to capuchin society led very quickly to the distinctly human behavior of sex work. They posit that if the experiment had continued, the monkeys would have resorted to murder, terrorism, pollution, and other social ills. There would, therefore, have to be monkey economists to solve those problems.
Chapter 5-Epilogue Analysis
In the final chapter and epilogue, Levitt and Dubner drive home the complex interplay of incentives, data, and human behavior in societal issues, offering unconventional perspectives on global issues. To this end, the example of cows and methane emissions challenges common perceptions about climate change. By focusing on ruminant livestock as a major source of greenhouse gases, the authors reveal how traditional narratives, such as those emphasizing automobile emissions, can obscure less obvious contributors to global problems. This insight aligns with the broader observation that many issues are complicated by The Hidden Incentives Behind Human Behavior, especially when people and industries respond to incentives in ways that are not always intuitive. To further challenge mainstream thinking, the authors suggest that dietary changes, such as consuming kangaroo meat instead of beef, could reduce methane emissions more effectively than switching to hybrid cars.
In the epilogue, the experiment with capuchin monkeys acts as an eloquent microcosm of human behavior, adding emphasis to the authors’ examination of hidden motivations. When the researchers’ introduction of money into monkey society leads to outcomes similar to those characterizing human economic activity, the experiment underscores the idea that incentives, even in their simplest forms, can drive complex social behaviors. Likewise, Felix’s chaotic disruption of the token system also demonstrates the destabilizing potential of unchecked resource redistribution, paralleling real-world scenarios in which poorly managed economic systems result in unintended consequences.
It is also important to note that the capuchin monkey experiment provides an elegant demonstration of economic principles in action. Specifically, the monkeys’ rational responses to price changes and their preference for avoiding losses over pursuing gains reflect behaviors observed in human markets. By comparing these behaviors to stock market dynamics, the authors illustrate that fundamental economic principles transcend species, reinforcing the universality of these concepts.
Throughout the text, Levitt and Dubner repeatedly emphasize The Role of Data and Economic Principles in Understanding Societal Issues, and their discussion of climate change is no exception. In this section, they introduce the concept of externalities—costs or benefits incurred by third parties due to others’ actions. Environmental pollution is a textbook negative externality, with the costs of degradation borne by the broader population. By framing pollution and climate change as issues of externalities, the authors highlight the potential of economic tools—such as taxes on carbon emissions—to mitigate harm. However, they caution that the complexity of global systems and the difficulty in accurately pricing externalities complicate these solutions.
The authors also critique the broad reliance on altruism or personal sacrifice to combat climate change. Drawing on earlier discussions in the book, they argue that expecting widespread voluntary behavioral changes is unrealistic given human nature. This skepticism is rooted in an understanding of economic behavior—particularly the idea that people prioritize immediate, tangible benefits over abstract, long-term gains. The authors’ examples, including the discussion of ruminant emissions, demonstrate the ways in which data-driven analysis can identify overlooked solutions that align with existing incentives, such as promoting dietary shifts rather than imposing lifestyle restrictions.
By advocating for The Application of Unconventional Solutions to Global Challenges, Levitt and Dubner challenge the assumption that significant personal or economic sacrifices are necessary to enact effective solutions. In the context of climate change, they argue that technological advancements, rather than behavioral restrictions, offer the most viable path forward. The geoengineering proposal of stratospheric aerosol injection, inspired by Mount Pinatubo’s volcanic eruption, exemplifies this approach. By mimicking the cooling effects of volcanic activity through sulfur dioxide release, this method presents a potentially cost-effective solution to global warming. However, the authors acknowledge the risks and controversies surrounding such interventions, including the potential for unintended environmental side effects.
This emphasis on technological innovation reflects a broader theme of pragmatism. Rather than expecting societies to undergo radical behavioral transformations, Levitt and Dubner advocate for leveraging human ingenuity in order to develop solutions that work within existing systems and incentives. Their critique of traditional approaches to climate change underscores the importance of considering practicality and feasibility when designing interventions.
The epilogue further underscores the complexity of problem-solving in societal systems. The capuchin experiment demonstrates how the introduction of even a simple tool like money can lead to a cascade of unforeseen consequences. The rapid emergence of behaviors like resource hoarding among the monkeys serves as a cautionary tale about the ripple effects of economic innovation. It also highlights the necessity of thoughtful regulation and oversight to mitigate negative outcomes—a lesson that applies equally to human societies.
In both Chapter 5 and the epilogue, Levitt and Dubner explore the intricate dynamics of incentives, data, and human (or animal) behavior in addressing societal challenges. They reveal how hidden incentives shape actions, often leading to unexpected outcomes, as seen in the methane emissions from cows and the capuchin monkeys’ behavior. The authors underscore the value of economic principles in diagnosing and addressing social issues, from externalities in climate change to rational decision-making in monkeys. Most importantly, they champion the role of unconventional, data-driven solutions, such as geoengineering, in tackling global challenges.
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