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Ryerson University
BUS 100
Louis Pike

FREAKONOMICS – PART 1 Freakonomics is best described by the title of its introductory chapter “The Hidden Side of Everything”. It puts a spin on conventional wisdom by looking at it through very different and unusual perspectives. This book was written by Steven D. Levitt and Stephen J. Dubner and was published by HarperCollins Publishers Inc. A very unusual trait of this book is that, unlike most books, it honestly has no theme. In fact, it is often stated within the book that there is no theme. In the introductory chapter Stephen Levitt explained that when he and Stephen Dubner were asked by their colleagues what the book’s theme is, they would just reply that they didn’t know and when the colleagues tried to connect a theme to the book they would just smile and say “you’re right, that’s the theme”. The authors’ main concern was to make people challenge conventional wisdom and so the idea that if two things correlate with one another, it doesn’t necessarily mean that one is the cause, and the other is the effect. What do Sumo Wrestlers and Teachers have in common? One of the questions Levitt asks is: Who cheats and why? Well, his studies show that even those who seem most honorable, or who seem to have the least opportunity to do so, often cheat, because of incentives. This is what sumo wrestlers and schoolteachers have in common. In a study of the Chicago public school system, Levitt found that a significant percentage of teachers helped their students pass the annual standardized tests. Why? Because the system provides incentives to schools and teachers whose students get high scores? Under the No Child Left Behind policy in American education, schoolchildren who get low scores on the standardized tests get held back a year. For a school that gets low scores can get its funding cut or face closure and a schoolteacher whose students get low scores can get demoted or fired. Conversely, schools which do well on the tests get more funding while teachers whose students get good scores can get promoted or receive cash bonuses. But how to measure if teachers are cheating? Levitt and Dubner looked at a database of test answers by students from the third to seventh grade from 1993 to 2000. This amounted to roughly 30,000 students per grade per year, more than 700,000 sets of answers, and nearly 100 million individual answers. Then they looked for unusual answer patterns in a given classroom, such as blocks of identical answers, especially for harder questions, or a student giving right answers for hard questions, while missing the easy ones. The study found such unusual answer patterns and theorized that some teachers may have changed students' answers after they took the test. To test the theory, students of teachers suspected of cheating were asked to take a retest, with a control group of students who did well in the test but were not suspected of having their answers changed. The result was: the students who were not suspected of cheating did the same or better on the retest, while the students whose teachers were suspected of cheating did much worse on the second test. As a result, several of the suspected teachers were fired and those who weren’t got a powerful incentive against cheating again. Sumo wrestling is another field that is found to be prone to cheating. Sumo is the premier sport in Japan, one that is considered to be sacred and honorable. But the incentives scheme in sumo makes it highly prone to cheating. Each sumo wrestler needs to maintain a ranking that affects how much he earns, what privileges and reputation he enjoys. To maintain his ranking, he needs to win at least 8 victories out of 17 every year. On the final day of tournament, some wrestlers will have 7-7 cards, meaning they have 7 wins and 7 loses, and need to win their final bout to maintain their ranking. Interestingly, wrestlers with 7-7 cards often win by 80% against wrestlers who have 8-6 or 9-6 cards, even though odds often put their chances at less than 50%. This indicates that some match rigging may be going on. Of course, one can argue that wrestlers with 7-7 cards try harder to win because they have more at stake. However, if one looks at the win -loss percentage of the same wrestlers the next time they fight, the data shows that the 7-7 wrestlers win only 40% of the time against the same opponents. The most logical explanation is that some quid pro quo had been reached between the players, something like: you let me win today, and I'll let you win the next time. This theory, however, has always been denied by sumo officials in Japan and no wrestler has ever been punished for cheating. What do a group of Real Estate Agents and the Ku Klux Clan have in common? As the result of civil war, which freed the Blacks from slavery period, the White skin races feared the domination of the blacks and that they will turn the white to slavery, as revenge. During this period of time, The Ku Klux Klan emerged and gained popularity among the whites, who shared the same fear. The Ku Klux Klan was established in 1865, it was formed by 6 confederate general armies. The Ku Klux Klan itself was originally a harmless midnight prank, riding horses through the country side while draped in white sheets and pillowcase hoods. But soon, it grew to a multistate terrorist organization. What did they do? The Ku Klux Klan’s mission was to promote white supremacy, against blacks, Jews and others. Some examples of their activities is to overpower the blacks by preventing them from obtaining the right of armed, right to elect, and reduce the activities of any school that has blacks in it. Most of all the worst the KKK tried to make them return to the slavery by reducing their populations. The Klan significantly claimed about 8 million members in the late 1920s. They claimed the Southern, Catholics, Jews, communists, unionists, immigrants, agitators, and other disrupters as their enemies. The society began to worry about the Ku Klux Klan wild activities. Then, there was a 30 year old man named John B. Stetson Kennedy. The founder of the famed hat company and the man for whom Stetson University was named. He first got exposed to the KKK was when his family's maid, who pretty much played the role of his mother by raising him up got raped by a gang of Klansmen. She got tied to a tree, beaten and raped because she talked back to a white trolley driver who had shortchanged her. Kennedy had hatred towards small mind ness, ignorance, and intimidation which in his view the KKK perfectly fit into the category. So, Kennedy decided to go undercover and join the KKk. In Atlanta he started hanging around a pool hall where he met a man who called himself Slim, a taxi driver. Kennedy introduced himself as Perkins. He told Slim, truthfully, that his uncle back in Florida had once been a great Titan with Klan. Slim then offers Perkins a membership for $10. ONCE Kennedy joined the Klan, he started attending weekly meetings and learned the identities of the Klan's local and regional leaders, rituals, and language. HE learned the secret handshake, codes for example "Mr-Ayak" which meet "re you a Klansman?" and the answer to this code would be" yes, I also know a Klansman" which meant "A Klansman am I" Before he could join the Klavaliers, the Klan's secret police squad, his wrist was slit with a jack knife so that he could take a blood oath: Klansman, do you solemnly swear by god and the devil never to betray secret entrusted to you as a Klavalier of the Klan?" "I swear" Kennedy" So now that he was able to join the Klan’s secret police he then learned that the members of the klan were a bunch of poorly educated men and with poor prospect, who needed a place to vent. He also found that the Klan to be slick money making operation .Klan leaders had any number of revenue sources: thousands of dues- pay rank and file members, business owners who hired the klan to scare off the unions or who paid the klan protection money. After few of bring a member of the klan, Kennedy was eager to hurt them. HE one day has noticed a group of young boys playing some kind of spy game in which they exchanged silly secret passwords. It reminded him of the Klan. He thought, to get the klan's passwords and the rest of its secrets into the hands of the kids all across the country. He thought of the ideal outlet for this mission which was, the adventures of superman radio show, broadcast to millions of
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