Book review: The Under Cover Economist

Has Tim Harford managed to make the dismissal science less dismissal? Will Hodges investigates.

Economics has rarely been what the majority of us would consider one of the cooler topics of conversation. Science has never been particularly hip and being labelled the most 'dismal' of these has done much to damage economics' street cred over the years, keeping it largely relegated within the inner pages of all but the most die-hard of news publications.

The events of the last few months have done much to change this perspective, however. The sheer speed and scale of the global economic meltdown has made economics and finance front page news. Books and television programmes such as Million Dollar Trader and The City Uncovered have quickly made their way into popular culture. Characters from the world of business and finance like Mervyn King and RBS's Sir Fred Goodwin have become pantomime heroes and villains. Popular tabloid, The Sun, dedicated its front page to coverage of the Treasury Select Committee a few weeks back.

Tim Harford - who was interviewed in issue 15 of The Gateway [thegatewayonline.com/issues/15] earlier this term - was one of the few writers to pre-date this popular fascination with economics and finance with his first book, The Undercover Economist. The book became an international best seller when published in 2007. As a young writer at the Financial Times, Harford had made his name by writing a blog for the FT's website entitled Dear Economist, a tongue-in-cheek 'agony aunt' column which aimed to provide solutions for peoples' problems using the novelty of economic theory applied to everyday life.

The idea of economics for the common man is the premise behind The Undercover Economist. To say I picked up the book with a limited understanding of what economics and finance is all about is an understatement. As a modern languages student the nearest I got to evaluating Gross Domestic Product was by occasionally checking the inside of my handkerchief.

The beauty of Harford's book is that it doesn't really require any prior knowledge and doesn't attempt to turn you into an economics buff overnight. It takes a few of the more interesting principals of economic theory and applies them to everyday scenarios. For example, have you ever wondered why poor countries can't get their act together? The explanation, which I won't attempt to go into here, is made simple. Needless to say, it's a far more fathomable explanation than any you will get from reading a World Bank research note.

You can pretty much pick and choose from any major economic story that has cropped up over the last 18 months. Why is China growing so fast? Consult chapter ten; why do traders buy and sell in packs?...chapter six. Should the US government really be throwing tens of billions at green energy projects as Obama did just the other day? I'm pretty sure the answer to that's in there too.

To label the Undercover Economist as an economics book is probably misleading. If I was writing the blurb on the back I would describe it as a whistle stop tour through the more interesting parts of micro economic theory with some macro, development economics, human psychology and financial theory thrown in for good measure; all nicely presented in layman's terms. With the amount of business and financial news circulating around the media at the moment, there are plenty of sources to turn to for a more detailed (and pessimistic explanation) of how businesses and governments interact with each other. Few of them are as entertaining and accessible as Harford's efforts, however. If watching most of the developed world self combust in a matter of months hasn't 'un-dismalled' the appeal of economics this might be the book for you.

Comments