Freakonomics Page #4

If you can think like a teacher who cheats, and look again at the sea of data

These patterns come to light

Patterns, which are suttle. Burried under mounts and mounts of data

When looked at through the varied length, suddenly

It just as clear as day. And when you know what to look for

You can't help but say it has to be cheating

What he's really good at, is pretend he's a cheater

a criminal, a thief, a cheat, all these things because

cuz really he's not far from it; I mean if you really think about what an economist is

the line between an economist and criminal is terribly thin

-And what about journalists? -Um, no line

Because he can put himself in the shoes of someone

who would behave criminally or who's a cheater

then you can back up the process and reverse engineer it

And that's what you have to do.

Because unless you are in the room with cheaters, it's really hard to catch them

It's not that some people cheat at every second or some people never cheat

We all cheat sometimes and others

Everyone got their own moral encompass

to determine what they'll do and what they won't do

Economic tries to be a pure science in an impure world

Economists imagine men and women are rational actors

In a market place that hides nothing from buyers and sellers

But what happens to market when people cheat?

and I was in Washington DC

I remember just seeing a little blur in the Washington Post

that said there have been allegations of cheatings in Sumo Wrestling

My view has always been,

if some insiders come forward and say there's cheating,

probably there's something to it

If you had said, where is a sport where you would not find cheating

I'd have said Sumo Wrestling, one's that got 2,000 years of history

it's all about purification, ritual and honor

It's located in a culture,

which on all of the rankings of corruption across the country is really really low

The ancient sport of Sumo Wrestling, is the essence of pure competition

Two naked men, fighting in a sandpit

Under the watchful eyes of a referee, dressed as a Shinto priest

Shinto, means ways of the Gods

A religion that celebrates the purity and harmony of men and nature

In Sumo, you do your ceremonial stuff

One is the clapping of the hands

as to awake the Gods

Two is when we show our hands and flip our hands over and

stuff to show that we have no conceal weapons

You come here and you want to fight fair with your bare hands

and to tell the Gods you're coming in with

a fresh and clean might and heart vessel.

The stomping of the feet in the Shinto religion is to stomp out evil spirits

and throwing of the salt is purify

I think purity is a good mask,

for corruption, perhaps most so it discourages inquiry.

It's true that Sumo might seem to be immune from corruption

because of its purity, history, and so on

On the other hands, the stakes are high

When stakes are high, and when there's an incentive to cheat

A small percentage of people always will

Just as in medieval Japan

The wrestlers, known as Rikshi or strong man

spent years in apprenticeship

Living together around the clock and training in stables or Biar

Subject to strict moral and physical displine

If you're a Sumo Wrestler in the top ranks

Your life is very very good

and you can live like a king

Once you fall belows those ranks or never attained those ranks,

your life is not very good at all

So, it's a very steep pyramid, at the top life is great,

and there's lots of people down below life is not so great

But there are so many of them,

because they're all aspired to get to the top obviously

It's a battle 24/7, being a Sumo Wrestler

It's not just two big fat guy trying to ...

... to kill each other but it's a lot of work to be big

and at the same time active

you have to wrestle with injuries

they throw you in a jungle and see how you can come out alive

The objective of the game is to push your opponent outside of the ring

or pushing him into the ring

But how can you tell if a Sumo Wrestler is cheating?

Is it a slip on purpose?

Is the fall rigged?

It's hard to tell unless you look at patterns over time

People who are actively corrupted always try to cover their trails

So corruption, by its nature is hard to identify, hard to prove

Murders are really great,

cuz almost always when someone is murdered, there's always a corsp

You might say "How would you know someone's cheating?"

and the answer is - look in the data

I don't have to ever seen a sumo match

I can look into data, I can look at it

And I can tell you, with almost complete certainty,

that there's rampage cheating going

In professional Sumo touraments, the wrestler

fights one bout per day for 15 days

If you win 8 out of the 15 matches, you can move up in rank - half a slot

The difference of half a rank can be maybe 5,000 dollars in paychecque a month

The respects you get in the Sumo Association

So when you talk about stuff like that, that 8 win is real critical

A Rikshi entering a tourament final 15 match

with a 7 and 7 record, has far more to gain from a victory

than an opponent, say 8 and 6 has to loose

If a wrestler has 8 wins under his belts, he's guaranteed to advance

Even if he looses that last match

So he could afford to take a fall

In Japan, there's a term for match rigging - YAOCHO

Many suspected that Sumo matches might be rigged

But it's nearly impossible to prove, unless you look closely at the numbers

When 1 of them needs the eigth win and the other doesn't

The one who needs it wins 75% at a time

Rather than 50% a time

That's a huge deviation

I (8-6 wrestler) let you (7-7 wrestler)

let you win this deciding match cuz you my friend

gonna fall down the pyramid if you don't

In return, the next time those 2 guys meet

Lo and Behold, the 8-6 wrestler almost always wins those matches

"Honne" is Real Truth and "Tatemae" will be the surface of things, the faced

They are unusually important in Japanese culture

That's why the Japanese have given them names

But being human, living in any society, I think we can all understand

the concepts themselves

That Tatemae's going to be a great spectacle of honest competition

but in the surface of creating that pleasing faced

the actual players are engaging in a form of corruption

To have the "Honne" exposed produces discomfort

When you think of the financial scandals

That have racked America recently

A lot of people who were supposedly to be not just incredibly wise

but incredibly honest, has been exposed as neither

Those of us who have looked looked to the self-interest of lending institutions

to protect shareholder's equity, myself especially,

are in the state of shocked disbelief.

That produces a kind of dissolution, in any society that formerly looked

to those people or those institutions ...

... are somehow representatives of what's best in our society

Sumo would be an example of that in Japan

While I would not put the Bernie Madoff pre-arrest reputation,

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