The Undercover Economist - Tim Harford

...study a subject known as the dismal science and then in later years decide on a career switch which will see you teaching the dismal science to the impressionable minds of some of Bedford 16 to 18 population then you are not really setting yourself up for a life of glamour with people asking pertinent questions at dinner parties about the future of the EU in a world global economy. Over the years Economics has been given a rough ride, in part because ...
...tends to frustrate the pragmatic politician who really only wants to hear "It will gain you 3 million votes".

However there is hope on the horizon, not for the politicians they are screwed, but for the economist as there has been a trend for economics writers to put together engaging informative books on their subject matter which will hold appeal both to the student of economics and the casual reader alike, both of whom ... more

When you opt at University to study a subject known as the dismal science and then in later years decide on a career switch which will see you teaching the dismal science to the impressionable minds of some of Bedford 16 to 18 population then you are not really setting yourself up for a life of glamour with people asking pertinent questions at dinner parties about the future of the EU in a world global economy. Over the years Economics has been given a rough ride, in part because most economists start any answer with "It depends on" which tends to frustrate the pragmatic politician who really only wants to hear "It will gain you 3 million votes".

However there is hope on the horizon, not for the politicians they are screwed, but for the economist as there has been a trend for economics writers to put together engaging informative books on their subject matter which will hold appeal both to the student of economics and the casual reader alike, both of whom must have an enquiring mind and a desire to understand why certain things happen.

Tim Harford has an impressive CV, he presented the excellent "Trust Me, I'm an Economist" which aired on BBC2 and also writes for the Financial Times under his moniker "The Undercover Economist" as well as a problem style column called "Dear Economist" which is very amusing and insightful. The nearest comparison to his work I have come across is contained in the book Freakonomics by the American economist Stephen Levitt and indeed both tackle some tough propositions however for me Harford book is less superficial and less reliant on endless statistical analysis or rather the explanation of it.

What you do get with this book is a light hearted slightly humorous style of writing that uses economic theory to take a look at the world and explain some every day concepts and provide the answers to a few diverse questions. For example Harford explains why there can never be a reliable market for second hand cars and also why you pay so much for your coffee on the high street. At the heart of his early chapters is the economic concept of scarcity power and hence, the reason why it is not the coffee growers who benefit from high prices in Starbucks, indeed to some extent it is not Starbucks themselves, instead it is the landlords as it is they who have the scarcity power in the form of prime commercial locations. Quite interestingly Harford breaks down the cost of your Frothy Skinny half milk cinnamon latte or whatever poison you drink and he then goes on to explain why there are so many different ranges at different prices again using economic theory.

In two areas I think that Harford excels in this book, he provides an easy to understand explanation of comparative advantage when exploring the idea of trade and specialisation and also provides a really great example of Game Theory in operation. This for me is a real strength of the book as it uses a very recent example in the form of the G3 phone auctions which raised a staggering £29bn in the UK while in other countries they raised a fraction of this amount. The explanation of how and why is fascinating as it shows both the positive and negative contribution different economists can make and is something that Mr Brown should be applauded for even if you do not agree with the way he then spent this windfall.
I like the way that Harford takes the reader by the hand as he explores these various areas, he is quite happy to provide simplistic explanations where appropriate however there is a huge amount of economic theory in his book and I did find myself having to read again some sections to make sure that I fully understood it. The book also raises some quite controversial claims however he always backs these up with a rationale and also acknowledges where one action alone will not provide a resolution but is only part of a combined sequence of actions.

What does help to make this book about economics engaging is the fact that much of current economics is about studying human behaviours and responses within economic theory and models. Some of the contentious assertions he makes is that so called "sweatshops" in the developing countries are not a bad thing, they are certainly not an optimum solution, no one would argue that but clearly their very existence means that they must provide a better option than the one that was on offer previously to the people who work in them.

Also of interest is how Harford explains the recent growth of China and compares it with India and Cameroon and to do this he draws upon some political analysis as well as the economic, for any one interested in really understanding the reasons and the history behind China growth then it provides an insightful read.

I certainly have no hesitation in recommending this book, it is not something you have to plough through to get to the end instead it is a book made to be consumed in small doses and then reflected upon before progressing. It should at the very least make you question some things that are often stated about the benefits and disadvantages of trade and globalisation as well as making you view your supermarket shopping experience in a very different light. It is not an overly heavy read but it is a long way from the soft pulp of a Jackie Collins novel, his book will not turn your brain to mush it will open up new ideas and insights which cannot be a bad thing.

Published by Abacus the rrp is £7.99 although copies area available on Amazon for £5.54 new or from £3.00 in the new and used section. The ISBN is 978-0-349-11985-4.

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