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The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car!
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Sales rank 55,163
Customers rating (based on 127 reviews)
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An economist's version of The Way Things Work, this engaging volume is part field guide to economics and part expose of the economic principles lurking behind daily events, explaining everything from traffic jams to high coffee prices. The Undercover Economist is for anyone who's wondered why the gap between rich and poor nations is so great, or why they can't seem to find a decent second-hand car, or how to outwit Starbucks. This book offers the hidden story behind these and other questions, as economist Tim Harford ranges from Africa, Asia, Europe, and of course the United States to reveal how supermarkets, airlines, and coffee chains--to name just a few--are vacuuming money from our wallets. Harford punctures the myths surrounding some of today's biggest controversies, including the high cost of health-care; he reveals why certain environmental laws can put a smile on a landlord's face; and he explains why some industries can have high profits for innocent reasons, while in other industries something sinister is going on. Covering an array of economic concepts including scarce resources, market power, efficiency, price gouging, market failure, inside information, and game theory, Harford sheds light on how these forces shape our day-to-day lives, often without our knowing it. Showing us the world through the eyes of an economist, Tim Harford reveals that everyday events are intricate games of negotiations, contests of strength, and battles of wits. Written with a light touch and sly wit, The Undercover Economist turns "the dismal science" into a true delight.
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| Publisher | Oxford University Press, USA | | Release date | 11/2005 | | Availability | Usually ships in 24 hours | | Edition | Hardcover |
| | List price | $35 | | Our price | $23.1 (you save 34.00%) | | Used price | from $4.03 |
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 Very Good; Very Bad
I wanted to enjoy Mr. Harford's book, but I found his work very uneven. He says some very good, very true, things, and I commend him for that. He recognizes that the American Health Insurance system is broken (Mr. Harford is English). He says that Free Markets can be disrupted because of asymmetric information and his example of the used car market is a good one. He explains well the idea of scarcity pricing. AND he admits that much of his defense of Free Markets is a pure , see pp. 72 and 80. Along these lines Mr. Harford explains that economic theory makes certain assumptions and simplifies processes to such an extent that it loses all those thousands of messy details that would otherwise allow the theory to actually capture reality. He even says that corporate polluters lie to regulators about the costs of pollution abatement p. 92. He acknowledges that numbers like GDP tell us very little. All of this is very good.
But now let's move to the very bad. The example of the Chinese made underwear is pure foolishness. Harford says that Chinese workers selfishly (which is good to Harford) look for the best jobs, and manufacturers (selfishly) look for the best employees; somehow all of this results in goods being made only if people want them, and made by the people most appropriate to do the job, p. 77. I'm suspicious when someone tells me that the world is best served when my underwear is made for me in China. This seems to ignore the reality of millions of lead tainted toys, formaldehyde leaking sheets drywall, and baby killing cribs that have come out of China recently. Who really wants that stuff made? There is an advantage to knowing who is making your stuff and being able to trust them to do it right. Harford also ignores the benefits of the multiplier effects of local spending. Even worse is the ridiculous little chart on p. 204 entitled Does Globalization Cause Pollution? This chart purports to show how as foreign investment rose in China pollution was decreased!!! Does anyone remember the Beiing Olympics? The Chinese government temporarily shut hundreds of factories and mandated severe driving restrictions on motorists trying to reduce pollution levels which eventually were only three or four times worse than the worst days in Los Angeles. Anyone thinking that Chinese pollution is being dealt with successfully hasn't been to China or read the news. As other reviewers have remarked, it does seem that Mr. Harford wants to push a Free Market ideology, even though he sometimes admits the limits of such markets.
Finally, the use of Ad Hominem is distressing. On p. 213 Harford simply states that: If voters are well informed and fully understand economic theory, then in a democracy the protectionists will be voted down. Please don't try to argue like this. Mr. Harford has just said that if you disagree with him you can't be well informed and/or you just don't understand economics (like he does). This is an insult rather than a good argument.
So this is a frustrating book that does have something to recommend it, but overall is not worth the time to read.
 A Flawed Good Read
This book is a joy to read. The man can write.
Having said that, I give the book 3 stars because the author has an agenda and it is not my agenda. He seems to be a nice kinda guy (he has a cute sense of humor), but close reading reveals him to be a shill for the bad guys. I think.
On page 65, he says: "In a perfectly competitive market, the price of coffee would equal the marginal cost of coffee." This explanation of our economy is the centerpiece of the first half of the book, that free markets are efficient and result in prices that are close to costs and that distribute money to where it should go in market terms of supply and demand. Harford does allow for exceptions, like "externalities," but he does not offer the possibility that our "free market" is not free or efficient because it is anything but perfectly competitive. It seems, for many markets, that the inevitable result, over time, of "perfectly competitive markets" is monopolistic markets; that, in fact, the free market inevitably tends away from freedom toward market control.
On the other hand, the author parallels my agenda with his discussion of externalities, but he stops short of an interesting discussion of how he might PRICE externalities. Example: how can we price the external costs of fossil fuel consumption, such as pollution and greenhouse gas emissions? How can we PRICE these externalities? I might suggest an incremental (increased monthly) tax on fossil fuels until they are no longer bought or sold. Harford seems to have an ambiguous attitude toward governmental solutions but he is not clear on when a tax is OK and when not.
On page 132, the author argues that the best kind of health insurance would be disaster insurance, or what used to be called a major-medical policy. My father was an insurance broker all his life and he advised (ME at least) to purchase major medical policies when I was not covered by an employer. I bring this up as I have never seen anyone else make this suggestion and it is an excellent one. It's a pity he never went before Congress to suggest such a solution. I would have the major medical policy paid for by taxes (which covers everyone buying a policy).
On page 221, he says: "The question is whether any environmental catastrophe, even severe climate change, could possibly inflict the same terrible human cost as keeping three or four billion people in poverty. To ask that question is to answer it." Well, this sounds good, and humane, and compassionate. But it is wrong-headed. If a runaway greenhouse effect is a possible "environmental catastrophe," well then that is a million times worse than world-wide poverty, because it would be world-wide extinction. So I question if this economist has a grasp on environmental issues. I understand that sticking to economics without bleeding into other areas is difficult. Nevertheless, ...
I would like to see Harford admit that we are a mixed economy; and that a pure free market economy makes a great computer model, as it is easy to model, but that it will not remain free in practice, that money will inevitably flow toward the already wealthy and that wages will tend toward subsistence (until we learn how to limit population growth - hah!). Not only not fair, not desirable (except to the bad guys).
 Wonderfully Enlightening
This book is a wonderfully enlightening description of how economies work. It includes discussions about prices, poverty, wealth, and the overall reality of why the economic world works the way it does.
I've always avoided economics-related stuff, because so much of it is so dry & boring & unintelligible. But this book really breaks it down beautifully.
Especially enlightening is his well-justified description of how wealth builds in some places and why poverty festers in other places. It's a refreshing reprieve from the typical blame/shame-based "poor people are poor because rich people are evil" rhetoric that is so pervasive in our world today.
A great read Mr. President
Great introduction to economics in a way that will not put you to sleep. Every person who graduates from high school should read this book so there will not be so many confused people who end up voting for the liberal ticket on monetary issues. Mr. President, it would not hurt for you to read this book also.
Economics shouldn't be this fun
I have a soft spot for economics books, especially somewhat poppy ones. Mr Hartford strikes a perfect balance between poppy and teaching core principals. In fact I had a very hard time putting this book down.
What sets this book apart from other economics books are the examples. Mr Hartford's choices range from Starbucks (why coffee beans will always be cheap but coffee won't be) to the true cost of tariffs to health care reform. In fact his was the only argument for health saving accounts (combined with insurance) that actually makes sense to me. And while he's not in the Prof. Krugman camp, he's not far off.
The final two chapters, on globalization and China, are also extremely well written and help present the net societal benefits of globalization and also helps to explain the true costs of tariffs. These chapters are both to the point and, more importantly, don't sugar coat the problems that are inherent to the system and the dangers of doing things half way.
This was a quick, fun and enlightening read. What more can you ask for!
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