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Hoodwinked? (STEPHEN J. DUBNER and STEVEN D. LEVITT, 1/08/06, NY Times)

Our book "Freakonomics" includes a chapter titled "How Is the Ku Klux Klan Like a Group of Real-Estate Agents?" This chapter was our effort to bring to life the economic concept known as information asymmetry, a state wherein one party to a transaction has better information than another party. It is probably obvious that real-estate agents typically have better information than their clients. The Klan story was perhaps less obvious. We argued that the Klan's secrecy - its rituals, made-up language, passwords and so on - formed an information asymmetry that furthered its aim of terrorizing blacks and others.

But the Klan was not the hero of our story. The hero was a man named Stetson Kennedy, a white Floridian from an old-line family who from an early age sought to assail racial and social injustices. Out of all of his crusades - for unionism, voting rights and numberless other causes - Kennedy is best known for taking on the Klan in the 1940's. In his book "The Klan Unmasked" (originally published in 1954 as "I Rode With the Ku Klux Klan"), Kennedy describes how he adopted a false identity to infiltrate the Klan's main chapter in Atlanta, was chosen to serve as a "klavalier" (a Klan strong-arm man) and repeatedly found himself at the center of astonishing events, all the while courting great personal risk.

What did Kennedy do with all the secret Klan information he gathered? He disseminated it like mad: to state prosecutors, to human rights groups and even to broadcasters like Drew Pearson and the producers of the "Superman" radio show, who publicly aired the Klan's heretofore hidden workings. Kennedy took an information asymmetry and dumped it on its head. And in doing so, we wrote, he played a significant role in quashing the renaissance of the Klan in postwar America.

Kennedy has been duly celebrated for his activism: his friend Woody Guthrie once wrote a song about him, and a Stetson Kennedy Day was recently declared in St. John's County, Fla., where Kennedy, 89, still lives. That is where we interviewed him nearly two years ago; our account of his amazing true story was based on those interviews, "The Klan Unmasked" and a small mountain of history books and newspaper articles.

But is Kennedy's story as true as it is amazing?