Who Remembers That Book Freakonomics? Yeah, That Aged Well...

Remember Freakonomics? That quirky little book from 2005 that made us think economics wasn’t all about boring spreadsheets and charts, but about human behavior and hidden incentives? It was full of fun ideas, like the correlation between a child’s name and their future success, or how drug dealers apparently live with their mums. It definitely got people talking, and for some, it seemed like the go-to guide to understanding economics in a simple, non-intimidating way.

But the last 15 years have really aged the book - like milk, not wine. A lot of the economic assumptions that Freakonomics relied on look pretty misguided today. And in the aftermath of the 2008 financial crash, the rise of China, and the ongoing economic struggles of the West, Freakonomics now seems a little... well, naive.

The book's central theme is that markets are rational, driven by self-interested individuals responding to incentives. In a perfect world, this makes sense: if people are acting in their best interest, the economy should naturally balance itself out.

But the 2008 financial crisis showed us the exact opposite. We learned that markets don’t just rationally self-correct—they’re manipulated by powerful elites. Financial institutions, big banks, and governments were all involved in creating a system that was anything but rational. Markets were full of risky behavior, speculative bubbles, and greed-driven crashes. Suddenly, the idea that we could "let the market decide" was debunked as smart economic advice and became more like a dangerous fantasy.

One of the major flaws in Freakonomics is its conplete disregard for power dynamics. It focuses on the idea that individual actions and incentives drive economies, but it mostly ignores how corporate monopolies, political lobbying, and wealth inequality shape outcomes. It’s the classic mistake of assuming everyone starts from the same playing field. Look at what’s happened over the past decade. The rise of corporate giants—Amazon, Google, Facebook—has shown us that some players in the economy can wield unfathomable power, controlling markets, influencing politics, and growing wealth at an unprecedented rate. Meanwhile, ordinary people are seeing their wages stagnate, jobs disappear, and social mobility shrink. In other words, Freakonomics forgot to tell us that the real economy is controlled by a tiny group of elites who have the power to rig the system in their favor.

Another big takeaway from Freakonomics is the idea that government intervention is bad and that economies function best when left to their own devices. The book places a lot of faith in neoliberalism, the belief that deregulating markets, cutting taxes, and reducing state control will lead to growth and prosperity for all. Fast forward to 2025 and it's become painfully clear that neoliberalism hasn't delivered. While the West has been stuck in a rut of austerity, inequality, and stagnation, China has been growing rapidly by embracing state-driven capitalism. The Chinese government isn’t shy about its role in guiding its economy, with massive infrastructure projects, technological advancements, and even tackling poverty head-on. Meanwhile, Western governments, relying on the ideas in Freakonomics, have cut services and left many people behind. It turns out, a strong government that invests in its people and economy might just work better than relying on corporate-driven market forces that benefit the wealthy.

And let’s not forget about automation—the so-called "future of work." Freakonomics suggests that people’s choices drive economic trends, but automation is decimating jobs across industries. In the West, corporations are automating everything from retail to manufacturing, with little thought for how those displaced workers will survive. Meanwhile, China’s state-planned economy is strategising to manage this shift and ensure that its people don’t get left behind.

If automation decimates Western jobs without creating new ones, purchasing power will plummet, and consumption—the lifebalood of the capitalist economy—will grind to a halt. Without the income to fuel demand, the economy can’t function. The "market forces" that Freakonomics celebrates can’t just be relied on to solve everything.

Freakonomics had its moment—it was a fun, thought-provoking book that got people to look at economics in a new way. But the reality of the past 15 years has debunked many of its central ideas.

The 2008 crash, the failure of neoliberalism, the rise of corporate power, and the success of state-driven economies like China have shown us that markets aren’t rational, power matters more than incentives, and government intervention is necessary to balance the scales.

In short, if you’re still clinging to the ideas in Freakonomics, maybe it’s time for a new read. One that’s a little more in tune with how the world really works in 2025.