Why Freakonomics is Such Fun

A Freakonomics podcast about family-owned businesses reports that passing on control of the business to the next generation–what Freakonomics calls “Scionology”–generally diminishes value.  It makes sense that passing control into a talent pool of limited size, whose members are determined by what Warren Buffet calls the “ovarian lottery,” would tend to yield less favorable results than merit-based succession to a larger and more diverse pool.  This is true in all developed countries–except Japan. Why? Because “Japanese families often adopt an adult to take over.”  98%–98%!!!!–of Japanese adoptees are males between the ages of 25 and 30.  Only 2% of Japanese adoptees are children.