Legend has it that once a famous physicist (NF thinks it was Stanislaw Ulam) challenged Paul Samuelson to name even one discovery in economics that was counterintuitive yet indubitably true. After reflecting upon it for a while, Samuelson is said to have cited Ricardo's 19th century idea of comparative advantage.
Upon updating Ulam's challenge in contemporary terms, one can cast the following challenge: "While there are several more deep ideas in theoretical economics (the Nash equilibrium, Arrow's impossibility theorem, the Gibbard-Satterthwaite theorem are some top contenders), has there been any empirical economic exposition of a real world, social phenomenon that is counterintuitive but indubitably true?"
The short answer is that there are many. But none of them pack a more powerful punch than the following story on crime rates in America.
The broad contours of the debate are well known - empirically, there was a long build up in the '60s onwards, leading to a peak in crime in US cities around the '90s after which rates receded and continue to do so even now. A massive academic, as well as public debate has followed this issue from several different points of view - ranging from sociological and criminological, to religious, political and economic. NF has been aware of this debate since his undergraduate days when he chanced upon the funny and clever Freakonomics, where the (co)author Steven Levitt from U Chicago described his research in which he displayed evidence that legalized abortion, with the attendant termination of several unwanted pregnancies, was perhaps the most important factor; and not the tough policing or other such more intuitive explanations. Needless to say, the paper invited controversy, though economists characteristically ignored criticism, accustomed as they've been (cf Gary Becker) to allegations of economic imperialism from decades past.
Rudy Giuliani espoused the "broken windows" theory of crime - you let one broken window unrepaired and soon the whole building will sport them - the moral being, no tolerance for small crimes will automatically stop big crimes. However, there were problems:
...political scientist John DiIulio warned that the echo of the baby boom would soon produce a demographic bulge of millions of young males that he famously dubbed "juvenile super-predators." Other criminologists nodded along. But even though the demographic bulge came right on schedule, crime continued to drop. And drop. And drop. By 2010, violent crime rates in New York City had plunged 75 percent from their peak in the early '90s.
There were several explanations based on drugs, policing, gun control (or lack thereof), family, prisons and of course, race. One Rick Nevin, however, observed something curious.
Lead emissions from tailpipes rose steadily from the early '40s through the early '70s, nearly quadrupling over that period. Then, as unleaded gasoline began to replace leaded gasoline, emissions plummeted. Intriguingly, violent crime rates followed the same upside-down U pattern. The only thing different was the time period: Crime rates rose dramatically in the '60s through the '80s, and then began dropping steadily starting in the early '90s. The two curves looked eerily identical, but were offset by about 20 years...
...In a 2000 paper (PDF) he concluded that if you add a lag time of 23 years, lead emissions from automobiles explain 90 percent of the variation in violent crime in America. Toddlers who ingested high levels of lead in the '40s and '50s really were more likely to become violent criminals in the '60s, '70s, and '80s.
Elsewhere, a graduate student Jessica Wolpaw Reyes was conducting her own investigation:
During the '70s and '80s, the introduction of the catalytic converter, combined with increasingly stringent Environmental Protection Agency rules, steadily reduced the amount of leaded gasoline used in America, but Reyes discovered that this reduction wasn't uniform. In fact, use of leaded gasoline varied widely among states, and this gave Reyes the opening she needed. If childhood lead exposure really did produce criminal behavior in adults, you'd expect that in states where consumption of leaded gasoline declined slowly, crime would decline slowly too. Conversely, in states where it declined quickly, crime would decline quickly. And that's exactly what she found.
Meanwhile Nevin kept writing:
Nevin collected lead data and crime data for Australia and found a close match. Ditto for Canada. And Great Britain and Finland and France and Italy and New Zealand and West Germany. Every time, the two curves fit each other astonishingly well. When I spoke to Nevin about this, I asked him if he had ever found a country that didn't fit the theory. "No," he replied. "Not one."
Further, others began noticing this observation.
We now have studies at the international level, the national level, the state level, the city level, and even the individual level. Groups of children have been followed from the womb to adulthood, and higher childhood blood lead levels are consistently associated with higher adult arrest rates for violent crimes. All of these studies tell the same story: Gasoline lead is responsible for a good share of the rise and fall of violent crime over the past half century.
Several neurological studies confirm such effects of lead on the human brain.
In other words, as Reyes summarized the evidence in her paper, even moderately high levels of lead exposure are associated with aggressivity, impulsivity, ADHD, and lower IQ. And right there, you've practically defined the profile of a violent young offender.
Needless to say, not every child exposed to lead is destined for a life of crime. Everyone over the age of 40 was probably exposed to too much lead during childhood, and most of us suffered nothing more than a few points of IQ loss. But there were plenty of kids already on the margin, and millions of those kids were pushed over the edge from being merely slow or disruptive to becoming part of a nationwide epidemic of violent crime. Once you understand that, it all becomes blindingly obvious.
The new results remain ignored however among leading criminology experts:
Mark Kleiman, a public policy professor at the University of California-Los Angeles who has studied promising methods of controlling crime, suggests that because criminologists are basically sociologists, they look for sociological explanations, not medical ones. My own sense is that interest groups probably play a crucial role: Political conservatives want to blame the social upheaval of the '60s for the rise in crime that followed. Police unions have reasons for crediting its decline to an increase in the number of cops. Prison guards like the idea that increased incarceration is the answer. Drug warriors want the story to be about drug policy. If the actual answer turns out to be lead poisoning, they all lose a big pillar of support for their pet issue. And while lead abatement could be big business for contractors and builders, for some reason their trade groups have never taken it seriously.
The article grimly goes on to outline how massive amounts of leftover zombie lead continues to flourish in the soil and pose a threat to human society, especially children.
NF believes this to be an exemplary, current answer to Ulam's updated challenge. The phenomenon of crime rate dynamics was a puzzle for several social sciences. Everyone had partial explanations and dogged beliefs but the main culprit remained at large for several decades and was unearthed only gradually, over years of painstaking empirical verification.
Counterintuitive yet indubitably true.
Do read the whole thing! Highly, highly recommended.