Why the Free Market Works, with John Lott

Ask why the free market works and most popular economics hands you a clever story about how it doesn't. Insurance companies are greedy. Real estate agents run a racket. Used car buyers are being fleeced. The stories sell books, and they rarely survive a phone call to the people being accused.

John Lott has spent a career making those phone calls. Economist, former chief economist at the U.S. Sentencing Commission, author of More Guns, Less Crime, he wrote Freedomnomics: Why the Free Market Works and Other Half-Baked Theories That Don't as a direct answer to the Freakonomics school of counterintuitive economics. The claim is not that markets are magic. It is that when a pattern holds for decades among people with their own money on the line, the odds favor a reason over a mistake. What follows is the method and the evidence: how to tell a finding that holds from one that merely sounds good, why the most famous claim in Freakonomics runs backward, and what actually explains the growth of government.

Chapters:

0:22 Intro and Freedomnomics Overview

3:35 Guns Research by Accident

8:40 Debating the Gun Evidence

17:30 Carry Laws and Crime Patterns

23:04 Freakonomics and Hidden Assumptions

31:51 Abortion, Family Change, and Crime

35:57 Challenging LoJack and Incentives

41:55 Real Estate, Cars, and Markets

49:13 Why Government Grew