Did you know that a prostitute in Chicago is more likely to have sex with a cop than be arrested by one? Did you think that it was dangerous to drink and drive? Well, you’re not wrong, but did you ever think about the fact that walking drunk is eight times more likely to get you killed than driving drunk?

It is these interesting twists of perception and everyday occurrences that Steven Levitt, an economics professor at the University of Chicago, and Stephen Dubner, the author of several books, have packed into“SuperFreakonomics.”

Freakonomics, the name of the first book that caused a global sensation, is the simple idea of “marrying the economic approach to a rogue freakish curiosity.” According to the authors, the essential message of all the varied and, well freakish, facts and figures, is that microeconomics can reveal a fundamental truth about human beings: “people respond to initiatives.”

Take the example of seat belts for instance. Seat belts reduce the risk of death by as much as 70 percent; but even after 15 years from when seat belts were introduced in the United States, just 11 percent of people wore them. It took a range of ‘nudges’ such as advertising campaigns and annoying beeping sounds in cars — which became the real incentive for a change in behavior, as opposed to the reduction in the death rate — over a 30-year period to achieve the current day rate of 80 percent of Americans wearing seat belts.

This book is packed with fascinating insights. But the essential problem with the concept of “Freakonomics” is that it makes great assumptions on very specific points, based upon data that is often more varied. This is most obvious when the pair tackle terrorism.

Levitt and Dubner based their argument for the type of person that commits terrorism on the research of Alan Krueger, an economist at Princeton University. Krueger used a Hezbollah newsletter Al-Ahd to collect bibliographical data for 129 shahids, or martyrs. From this data Krueger concluded: “terrorists tend to be drawn from well educated, middle-class or high-income families.”

This holds true around the world from Latin American rebels to the 9/11 attackers, Krueger claims. 

It is easy to see that Krueger’s data input is highly flawed. Going back to the original piece of

research, Krueger himself admits as much. “The deceased Hezbollah fighters were involved in a mix of activities, not all of which might be classified as terrorist attacks. An attack on a military post was the most common type of activity… Three died in suicide bombing attacks.”

 So categorizing the attacks carried out by those listed in Al-Ahd very much depends on your definition of terrorism, which is admittedly its own minefield. Trying then to boil down all these different military tactics to a single concept of terrorism and to then discover whether “terrorists” are from ‘good’ or ‘bad’ backgrounds is evidently a lot more complicated than Levitt and Dubner, or Krueger for that matter, would like to admit. 

How useful is it, even if you were able to confirm that all the 129 shahids were terrorists, to make a general assumption about the social background of terrorists in general? Hezbollah, an organization that is very well integrated into the social political fabric of its own Shiite community, has little in common, even if you agreed they are both terrorist organizations, with the highly fractured and cell-like structure of Al-Qaeda. 

Making sweeping generalizations can be useful in some cases and completely misleading in others. This is a warning that Levitt and Dubner do not always heed, and appropriate caution should be used when reading their book. But in removing this caution and taking risks, Levitt and Dubner have created fascinating insights. 

In effect, “SuperFreakonomics” asks more questions than it answers. Like good students, Levitt and Dubner challenge conventional wisdom throughout the book, from issues of terrorism to global warming to prostitutes. Even when they don’t get it right they do make you think again.

Levitt and Dubner challenge conventional wisdom, from terrorism to global warming to prostitutes

Turkish Prime Minister Tayyip Erdogan makes no secret of how much he dislikes Aydin Dogan, chairman of the powerful Turkish media group Dogan Yayin Holding (DYH), which owns more than half of Turkey’s print and broadcast media, including CNN-Turk. 

In a recent interview, Erdogan lashed out at the media baron, likening him to the infamous Italian-American gangster boss Al Capone.

For more than a year, the two have been engaged in a high-level public battle over critical news coverage aired by Dogan’s media group about the Erdogan administration. Dogan has emerged as one of the most vocal critics of Erdogan’s ruling Justice and Development Party (AKP), constantly ruffling the premier’s feathers, with his media organization publishing a watershed of reports on corruption scandals involving public figures and claims that the Erdogan administration is a threat to Turkey’s secular order.

When the Turkish Parliament voted to lift the ban on headscarves in Turkish universities in 2008, Dogan’s flagship Hurriyet newspaper splashed the headline “411 hands up for chaos” on its front page, referring to the number of parliamentarians who had voted in favor of rescinding the ban.

The flurry reached new heights in the fall of 2009 when the Turkish authorities handed Dogan a record $3.2 billion fine for an alleged tax delinquency. Some believed the media mogul and the Turkish tax authorities would sooner or later reach an agreement, but negotiations in November failed to settle the gigantic fine, resulting in Dogan ringing in the New Year with a fierce court battle ahead of him.

Dogan’s media empire already appears to be smarting from the row, with the group’s foreign investors said to be fleeing the field now that the drama has turned ugly. Most recently, German publisher Axel Springer AG, who already owns a 25 percent stake in Dogan TV, announced that plans to buy a further 29 percent stake in the Dogan group were “postponed” until the feud with the Turkish tax office was resolved — a signal that Dogan’s powerful friends abroad are not planning to rush to the rescue.

Dogan, however, seems determined to stay afloat and sell off assets. DYH announced in a company statement issued early December that it was pursuing a partial or complete sale of subsidiaries, but that a deal had yet to be finalized.

Silencing free speech?

The high stakes drama between the Turkish premier and the country’s media monolith has gripped the nation and become a top news item in print, radio and television. The case has also raised concerns about the state of press freedom in Turkey among some groups, including the European Commission, which described the fine as disproportionate and a constraint on press freedom.

Critics argue the enormous tax bill is a means for Erdogan to try and square the political vendetta by taxing his foe to death. Dogan himself appears to share this view, and has fiercely accused the authorities of singling him out for politically motivated retribution. Erdogan, meanwhile, remains defiant and dismisses allegations that the case bears any political connotations.

A wolf in publisher’s clothes

The 73-year old Dogan has not curried sympathy from all quarters as a martyr of free speech. Critics contend Dogan is a businessman who “ruthlessly destroyed his rivals” and went into the media business, not because he necessarily cared about good journalism, but because he wanted to gain influence and political ground.

Some even go as far as likening him to Italy’s eccentric Prime Minister Silvio Berlusconi, with the only difference being that Dogan has yet to seek a political mandate.

Yavuz Baydar, a columnist at the Turkish newspaper Zaman, a competitor to those of the Dogan group, warns against branding the Dogan case a straight forward attack on press freedom in Turkey, stressing that there are “no innocents” in the case.

One version of events that has made the rounds in both Turkish and international press is that the Dogan media group uncovered information linking the AKP to embezzlement in Germany, involving a Turkish-run charity there called Deniz Feneri. The media baron sat on this information for more than three months, however, to blackmail concessions from the government for his many business interests. Among the favors Dogan allegedly wanted was for the Istanbul Municipality to change zoning laws and issue building permits allowing luxury residences to be built as extensions to the Hilton Hotel in Istanbul, but the government didn’t budge.

After Dogan failed to get the concessions he wanted from the authorities, Baydar says he noticed an “overwhelming” number of Dogan’s media outlets started to report aggressively on the AKP and Erdogan’s family, distorting the news at times.

“A corrupt media cannot uncover corruption in a democracy,” he told Executive. “It has to be transparent and accountable. This rule is almost always forgotten by those who want to minimize the case to [an issue concerning] press freedom.”

The row between the pair has “[snowballed] to a point of unbearable confrontation,” said Baydar.

Whether a crooked businessman or not, the Turkish tax authorities slamming Dogan with a $3.2 billion fine is still an excessive punishment in Baydar’s view. He said the Dogan case highlights the need to rid the Turkish tax authorities of its governmental straightjacket.

“There is a serious problem with tax inspection. It’s vertically directed by the government while it should be autonomous,” said Baydar.

Reshuffling the cards

With some circles believing Dogan’s empire will come tumbling down sooner or later, there are hopes rising that this would give the Turkish media industry a much-needed facelift, allowing it to become more diversified.

“We are expecting a reshuffling of cards in the Turkish media with the dissolution of Dogan,” Sahin Alpay, a columnist and senior lecturer at the department of political science at Bahcesehir University in Istanbul, told Executive. “Some people worry about it, especially…journalists.”

Alpay believes change is needed. Dogan’s media empire, he says, is a threat to media pluralism in Turkey and polarizes Turkish journalists.

He hopes the authorities will introduce legislation that limits crossover ownership, which he believes enables people like Dogan to build “media aristocracies” by controlling broad swaths of both the print and broadcast media markets.

Baydar also believes it is time the Turkish media game was given a shake-up, however, he warned that, “If you don’t change the rules, someone else will take his place.”

“We are expecting a reshuffling of cards in the Turkish media with the dissolution of Dogan”

It is hard now to recall that 2009 began with such optimism over engagement between Iran and the newly-elected United States President Barack Obama. The year ended with the Washington-Tehran dialogue ruptured without truly starting, a domestic Iranian political situation drawing Obama into critical pronouncements that Tehran saw as interference, and the prospect of more economic sanctions for Iran.

With two fifths of the world’s oil passing through the narrow Strait of Hormuz on Iran’s southern coast, a vast US regional military presence and Israel anxious to shift Washington’s attention from the Palestinians, 2010 will see Iran at the center of a web of geopolitics and energy needs.

Many who were hopeful about Obama’s promise of a fresh start are now disappointed. The US president’s recorded video message for Iranians, timed for the Iranian new year in March, is remembered as “opening a genuine window of opportunity” by Marsha Cohen, fellow at the Middle East Center of the  Florida International University.

Trumped by domestic demands

Cohen, a seasoned Iran analyst, believes the US administration has since retreated into old ways. “The window was soon shuttered,” she told Executive, “by the retreat to Bush-era talk of ‘carrots and sticks,’ the mistaken conflation and confusion of ‘sanctions’ with ‘diplomacy,’ and the administration’s apparent acquiescence to Israeli pressure for a deadline for Iranian compliance.”

This drift came through the summer and autumn. When in June Iran informed the International Atomic Energy Agency (IAEA), the United Nations regulatory body, that its supply of uranium from Argentina for medical purposes would run out in 2010, the Obama administration adopted a new tactic.

As Iran lacked the capacity to enrich uranium to the required 20 percent level, Washington suggested a swap: it would agree to Iran importing the medical fuel in return for Tehran exporting the bulk of its existing stocks of domestically produced low-enriched uranium (LEU).

The proposal — which quickly won the support of Washington’s allies — was presented to Iran at a meeting in September with the “P5+1,” the permanent members of the UN Security Council and Germany. Even that level of engagement drew criticism from within the US and Israel. And the proposal was quickly criticized in Iran itself, first by conservatives but also by reformists.

Wary officials in Tehran began to talk of a phased swap and “100 percent guarantees,” while prominent parliamentary deputies rejected the whole idea of exporting Iran’s  LEU.

When the two sides met in mid-October in Vienna, the IAEA chief Mohamed el-Baradei was unable to bridge the gaps. Gareth Porter, an investigative journalist and analyst of US foreign and military policy, told Executive that the Geneva process therefore failed to tackle the wider issues that the US and Iran must confront to address their differences.

“This was an opportunity to craft a much more difficult agreement that would establish incentives for Iran to remain a non-nuclear weapons state power in return for its agreement to allow a more intrusive IAEA system of surveillance,” Porter said. “That would have meant being willing to talk about reducing or eliminating the elements of US policy that are inherently hostile to Iran, including the threat of military aggression or the tolerance of it by Israel, the economic and financial sanctions against Iran, and the refusal to give Iran a seat at the table in regional consultations.”

Porter believes that Obama avoided such talks because “the pressure on him at home was simply too great,” and that “the level of dissidence within Iran after the election clearly played a major role in making it all the harder for him to give serious consideration to anything but a zero enrichment demand.”

Tough times for dissidents

Events in Iran after June’s disputed presidential election indirectly undermined engagement.

“The manipulation of the presidential election and the brutal crackdown on political dissent undercut the position of advocates of rapprochement and normalization in the US and Europe,” said Florida International University’s Cohen.

The Obama administration has headed back toward a policy of imposing further sanctions, aiming to undermine the Iranian authorities by hitting the economy. Longstanding US sanctions have deterred the major Western energy companies from the lucrative Iranian market, a trend that continued in 2009.

Resources are limited in Iran, but those with access to oil revenue or political influence have an advantage — hence a privatized 51 percent plus one share in the Telecommunications Company of Iran in September was won at an auction by a consortium including retirement funds for members of Iran’s Islamic Revolutionary Guards Corps (IRGC).

Turkish and Asian companies have also moved in. The most recent agreement, in November, saw China’s Sinopec sign a memorandum of understanding for $6.5 billion worth of oil refineries, adding to Sinopec’s existing interests, which include a 51 percent stake in the huge Yadavaran oilfield and daily imports of between 150,000 to 160,000 barrels of Iranian crude. Two Korean companies, GS Engineering & Construction and Daelim, in October announced multi-billion deals tied to Iran’s vast South Pars gas field.

Sanctions, and the repeated talk of military strikes on Iran’s nuclear facilities, have also shaped Iranian domestic politics.

“Threats of military action against Iran by Israel, with or without the assent and/or assistance of the US, as well as the instability and violence on Iran’s borders with Iraq, Pakistan and Afghanistan, are being used to justify unprecedented levels of domestic securitization,” said Cohen.

The most visible signs came with the violent dispersal of demonstrators who contested Mahmoud Ahmadinejad’s presidential victory. Arrests and show trials — including leading opposition figures like Saeed Hajjarian, the “brain of the reformists,” and Mohammad Ali Abtahi, a vice president under Mohammad Khatami — undermined but did not silence an opposition led by defeated presidential candidates, Mir-Hossein Mousavi and Mehdi Karroubi.

Iran’s critics argued the country had become a military dictatorship under the IRGC, who deployed the Basiji militia to break up demonstrations. But many experts dispute such an analysis.

Chilling the investment environment

“While there has been a qualitative elevation of the position of the Revolutionary Guards, there does not yet appear to be a single military strongman or junta with absolute dictatorial powers who is making all of the country’s decisions and displacing the supreme leader, Ali Khamenei,” said Cohen. “Nor is Khamenei himself an autocrat who can act without accountability… Ironically, the ‘Islamic’ aspect of Iran’s governing institutions may actually be serving as a bulwark against a takeover by a secular, militaristic cabal.”

Farideh Farhi, an Iran specialist at the University of Hawaii, agrees. “The decision to identify the current situation as ‘crisis’ and give the command to IRGC was a decision taken by Iran’s civilian leadership,” she told Executive. “The Iranian state is relying more on dictatorial means to control or address the deep challenge that it is facing.”

This challenge includes the pressing economic issues highlighted by the June election campaign. Rather than run on traditional reformist slogans about political freedom, Mousavi challenged Ahmadinejad on his cherished ground of “social justice,” creating jobs and improving the lot of the less well off.

The fall in oil price from around $150 a barrel in the summer of 2008 to around $65 at the end of May 2009 (albeit a recovery from lower levels earlier in 2009) made it hard for presidential candidates to ignore the need to reduce Iran’s $100 billion annual bill for universal subsidies, which cover basic items including bread, electricity and gasoline.

Since his disputed election win, Ahmadinejad has pressed ahead in parliament with a plan to phase out subsidies, recognizing that reform is needed urgently to reduce consumption, increase investment and so stimulate economic growth.

The International Monetary Fund projected growth of just 1.5 percent in 2009, after 2.5 percent in 2008, 7.8 percent in 2007 and an average 5.4 percent from 1996 to 2006. Yet, in January 2009, Ayatollah Ali Khamenei announced a five-year plan for 2010 to 2015 with an 8 percent target for annual growth.

“Iran’s economy was not able to reach this rate in the best years of the Fourth plan [2005-10], which had the same target,” said Djavad Salehi-Isfahani, an economics professor at Virginia Polytechnic currently visiting Tehran. “The Iranian year 2008 to 2009 was bad, and there is no reason to think 2009 to 2010 will be better.”

Salehi-Isfahani has calculated that 7 percent growth is needed to reduce unemployment to 8 percent over time, from the current level of 12.5 percent.

“If [Ahmadinejad’s] plan is implemented and prices on energy products are raised while preventing adverse impact on income distribution, it will help growth in the long run,” he said. “But the plan faces serious obstacles in implementation and is yet to be approved by the Guardian Council [the constitutional watchdog].”

Skeptics also fear Ahmadinejad sees savings from reducing subsidies more as a means to buy political favors than to generate investment.

 “Iran’s parliament is challenging Ahmadinejad for the right to decide how the savings from the subsidies will be put to use,” said Cohen. “There’s suspicion that Ahmadinejad might use the proceeds of the subsidy cuts as a political tool, rewarding [his] political base, targetting his opponents and contributing to a climate of corruption”.

Farhi is equally doubtful. “Ahmadinejad is on record stating that more than 70 percent of the population will continue to get some sort of subsidy and his policies have not been very investment-friendly,” she said.

As oil prices decline, Iran needs to reduce its $100 billion annual bill for universal subsidies