Book Review: The Undercover Economist

I fondly remember this book because of how spooky the introduction section was to me. Tim Harford begins the book by thanking the reader for buying the book, but then goes on to say that if the reader is anything like him, they’re probably sampling the book in a bookstore while sipping a coffee, judging whether to buy it or not. As it turns out, that is exactly what I was doing.

But the book (which I did buy later) was appealing to me for much more than that. I have written extensively elsewhere about how I hate textbooks. One reason I despise them so is because they introduce concepts in economics first: verbally, diagrammatically and worst of all, mathematically, and only then provide an application of the concept in a dry, mealy-mouthed little “box”. It’s like a chef teaching you how to cook by spending a week telling you how to hold a knife and then, almost as an after-thought saying “Oh, here’s a tomato.”

But right from the first chapter onward, Harford dives right into the real world, shows us a problem we can all identify with, and then asks: how might thinking like an economist help you understand this problem better? That’s the whole point of learning economics! It’s the tool that should be in the “box”, and the world outside of it.

In any case, the book is great because of a secondary reason as well: Harford understands, emphasizes and makes relatable the concept of domain independence. Domain independence essentially say that understanding an idea in one domain shouldn’t preclude you from applying that idea in other domains (I read about this particular phrasing of the idea in Anti-fragile, another book I’d heavily recommend). So while the book is about coffee bars, supermarkets, stock markets and so on, you really should keep in mind the fact that these concepts are applicable in many other areas.

My favorite chapter is the last one, which is on China. Harford explains (some might say far too succinctly) how modern China came to be, but keep in mind that this is meant to be an introductory book. Will people learning economics for the first time, especially Indians, wonder how China is the way it is and why India isn’t? Of course they will: and this chapter is a good first pass at tackling this problem.

Which is not to say that the other chapters are not worth your time, of course – each of them are worth a read, and the book’s purpose is served if it whets your appetite. This is not meant to satiate your curiosity about economics – the exact opposite, in fact. It is meant to make you want to read much, much more – while at the same time making all of what you read much more relatable.

Tim Harford has written many other books, and he used to write a magnificent agony aunt column devoted to economics, and also runs some interesting podcasts – about all of which much more in later posts. But for the moment, suffice it to say¬† that you’d hardly go wrong if you read this book for starters.

Links for 14th August, 2018

  1. Google will launch in China. I think this is mostly bad news.
  2. On the relationship between a central bank and people who frame fiscal policy.
  3. As they say on Twitter, RT’s aren’t endorsements. That being said, there is much to ponder.
  4. John Le Carre would have had to read Stratechery on a daily basis today. (You should too, by the way)
  5. A World Trade Historical Database.