three-and-half-stars
Bookmarks Issue: 
21-Mar-Apr-2006
By: 
Tim Harford
user_rating: 
0

Exposing Why the Rich Are Rich, the Poor Are Poor—and Why You Can Never Buy a Decent Used Car!

A-TheUndercoverEconomistIf you’re curious about why your three-dollar Starbucks coffee is a buck cheaper at the joint down the road and why you willingly pay more, it may be time for a lesson in microeconomics. Harford, writer of the "Dear Economist" column for Financial Times magazine, offers a crash course on pricing, game theory, externalities, comparative advantage, moral hazard, and other economic concepts. If Harford introduces Starbucks to initiate discussion of scarcity and David Ricardo’s theory of rents, he simplifies other complex theories by examining supermarkets, airlines, healthcare, traffic jams, Microsoft stock, Chinese sweatshops, and Third World poverty. With entertaining examples, Harford demonstrates how free-market forces shape our daily lives—and our wallets.
Oxford. 276 pages. $26. ISBN: 0195189779

Houston Chronicle 4 of 5 Stars
"Harford’s determination to keep the book on a basic level is one of its appeals, but by no means its only one. It’s an excellent study for those who have little knowledge of economics as it applies to the world around us but would like to gain some understanding without too much strain on their noggin." Steve Powers

Detroit Free Press 3.5 of 5 Stars
"It’s the economics textbook you wish you’d had in school. … Best of all, Harford can clarify how economics is a science that deals with human behavior, especially when it goes wrong." Marta Salij

Economist 3.5 of 5 Stars
"He also makes some impish forays into charged issues, such as environmentalism, which he thinks too important to be left to the moralists. But in general, as befits a covert operative, his tone is quizzical and low-key, rather than bombastic and judgmental."

Washington Times 3.5 of 5 Stars
"As he says in the introduction, he is out to convert his reader into a more savvy consumer, no matter how hard advertising puffs, and into a more savvy voter able to dig out the truth behind the tall stories that politicians may tell. … The Undercover Economist is a good starting point for the smart lay reader." William H. Peterson

Wall Street Journal 3 of 5 Stars
"If I have a quibble, it is that Mr. Harford occasionally kowtows to conventional wisdom even when he is out to skewer it. … In its last three chapters, however, The Underground Economist distinguishes itself from the pack with a lively and insightful discourse on global poverty and what can be done about it." Steven E. Landsburg

San Diego Union-Tribune 2 of 5 Stars
"Harford, like so many contemporary economists, would have us believe that economics is only about competition, choice, negotiation and calculation. … But it is the signal failure of this book, and of so much of contemporary economics, to conflate the description of these behaviors with the systematic understanding of the causes and consequences … of the structures within which such self-seeking conduct takes place." Michael A. Bernstein

Critical Summary

Harford exposes the dark underbelly of capitalism in Undercover Economist. Compared with Steven Levitt’s and Stephen J. Dubner’s popular Freakonomics ( 3 of 5 Stars July/Aug 2005), the book uses simple, playful examples (written in plain English) to elucidate complex economic theories. Critics agree that the book will grip readers interested in understanding free-market forces but disagree about Harford’s approach. Some thought the author mastered the small ideas while keeping in sight the larger context of globalization; others faulted Harford for failing to criticize certain economic theories and to ground his arguments in political, organizational structures. Either way, his case studies—some entertaining, others indicative of times to come—will make you think twice about that cup of coffee.