International Writers Magazine: Review
UNDERCOVER ECONOMIST by Tim Harford
Oxford University Press, 2006, 276 pp. ISBN: 0-19-518977-9
Charlie Dickinson review
UNDERCOVER ECONOMIST: Exposing Why the Rich are Rich, the Poor
Are Poor--and Why You Can Never Buy a Decent Used Car! is an all-too-rare
introduction to the arcana of economics written for the lay person
and enlivened with engaging anecdotes from everyday life.
If you liked FREAKONOMICS
(Steven D. Levitt & Stephen J. Dubner), Tim Harford's explorations
of why poor countries are poor, how amazon.com used cookies to charge
people different prices for the identical book, and why only landlords
are getting rich off Starbucks--among other topics--makes for an absorbing
As an economist,
Mr. Harford brings an especially appropriate background to this book:
He writes the "Dear Economist" column for the FINANCIAL TIMES
MAGAZINE, he works at the World Bank in Washington, DC, and he's been
an economist for Shell Oil and also taught economics at Oxford University.
Harford doesn't quite have Levitt & Dubner's breezy writing style,
but that misgiving aside, Harford makes up for it by not shying away
from bold (and mostly successful) efforts to acquaint the lay reader
with such challenging economic concepts as Ricardo's Law of Rents, "asymmetric
information," and game theory applied to auctions. One reads THE
UNDERCOVER ECONOMIST knowing Harford has not sacrificed intellectual
rigor for "dumbed-down" explanation.
Indeed, one of the
strengths of Harford's economic forays is that he gives the lie to many
"dumbed-down" assertions about modern economics, too easily
accepted as true in our age of rapid change. One common, unproven assertion
about globalization is that it damages the environment by "outsourcing"
(a loaded verb, of course) industry from nations with strict environmental
regulation to nations with lax or no regulation. Anti-globalism activists
say this all the time. Harford not only gives evidence this assertion
is false, he goes further to ask one of the book's most heart-felt questions:
"The question is whether any environmental catastrophe, even severe
climate change, could possible inflict the same terrible human cost
as keeping three or four billion people in poverty. To ask that question
is to answer it."
Harford, like most economists, champions fair and open trade as giving
the poor of the world chances to advance economically. But he also knows
economic competition doesn't solve all problems of the world's poor.
He recounts a visit to one of the world's poorest countries: Cameroon.
Why is that country seemingly condemned to poverty? In a word, kleptocracy--corruption
from the top down. The same consequence goes for North Korea and Myanmar,
among other long-suffering dictatorships.
One of THE UNDERCOVER
ECONOMIST's chapters, "The Inside Story," is an especially
insightful analysis of the health insurance crisis in the United States.
No country spends as much on medical care, yet for many Americans the
system of private insurance is prohibitively expensive. Is government
insurance, such as the National Health Service in the UK, the answer?
Well, socialized medicine has its own rationing problems, too, and little
patient choice of treatment. Among the various health care approaches
Harford surveyed, the one he liked best was Singapore's. Compulsory
coverage for everyone, but as large deductible, catastrophe insurance
(not first dollar, "sniffle" coverage). The power of patient
choice is kept and the government pays for those poor and aged who can't
fund their mandatory medical savings accounts.
THE UNDERCOVER ECONOMIST
exposes much more. Why the dot.com mania had to end. How retailers get
you as customer to reveal your price insensitivity (that is, turkeys
voting for Thanksgiving). Why buying a used car is fraught with risk.
The list goes on. Read Tim Harford's entertaining THE UNDERCOVER ECONOMIST
for insights well worth the price of the book.
© Charlie Dickinson September 5th 2006
read "stories & more" @ http://charlied.freeshell.org
in Essence by Dana Standbridge
A Charlie Dickinson review
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