Goodreads Review of Tim Harford's 'The Undercover Economist'

Undercover Economist by Tim Harford

My rating: 5 of 5 stars


Do taxes on city center traffic work? Why is it so expensive to buy coffee near the London Eye? Why is it so easy to get relatively cheap Belgian beer in Washington, DC but not in Cameroon? What decisions of international governance have caused Colombian farmers to stop producing sugar and start producing cocaine? 'Financial Times' columnist Tim Harford investigates these and a bundle of other economic conundrums in this enthralling book.

Forget your conventional Microeconomic Theory or Stats textbook: all you need to achieve a solid foundational understanding of our beloved and most brutal social science is this handy volume right here. In little time, Harford's book about the use of economics in everyday life quickly became one of my favorites of all time. In allegorical but intuitive illustrations, Harford explains economic concepts like substitution and complementarity effects, scarcity, price setting, efficiency, perfect competition, marginal cost and marginal product, and rent theory--which might otherwise seem dry. But even to the unfamiliar, Harford's witty command over storytelling makes this book an exciting breeze to read. His elaborations are rich and colorful; his prose, piercingly sharp. Harford is able to illuminate in readily discernable terms how economic preferences and markets really work and affect us all. In turn, this book will help instruct one to make common decisions in a way that helps markets to better allocate resources, leading to outcomes that are better for one's pocketbook and better for the world.

This book is a more sophisticated permutation of Dubner & Levitt's 'Freakonomics,' but one that is no less engaging and fun to read. But I will point out one of Harford's flaws: he's a tad eurocentric, focusing too much on first-world examples, suggesting an IMF-office-worker-top-down approach to development, without giving much sense of how grassroots-driven development initiatives can work in the poor world. Nonetheless, any reader who wants to get a sense of how to sensibly respond to price signals and price targeting, how to rationally conceptualize swings in the stock market, how to apply game theory to one's advantage in betting of all sorts, and how to reasonably perceive the benefits of free trade should blaze through this book. But anyone who wants to see why understanding economics is critical to living well in the 21st century, all while being entertained, must also pick up this book ASAP.

-SE



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