Stringy's Reviews > The Undercover Economist

The Undercover Economist by Tim Harford
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's review
Jul 29, 2009

it was ok

Harford says he's going to tell you how the world really works, how economics provides insight into our activity. What he really tells you is how awesome the world would be if it was run by economists and everybody always acted rationally, if by 'rationally' you mean the economics jargon of 'assigning a monetary value to every single action/object in life' and not the common usage of 'according to the rules of logic'.

You can also find out how poverty is easy to fix (you just move the starting blocks, dummy!), sweatshops are not evil (because workers there earn more money than if they'd stayed on the farm, silly!) and fair trade is useless (because it only solves a problem for the people who participate in it, not for the whole world).

It's not that he's wrong about these things, because in a limited sort of way he's entirely correct. It's that he's completely blind to the underlying assumptions that economic theory makes. He provides anecdotes to prove his point, instead of data. And he never acknowledges the difficulties involved in implementing his 'solutions'.

It's not a bad book, it's just naive. And given the recent global financial crisis, the bragging and smugness of his worldview are particularly galling - financiers acted exactly as 'rationally' as economists predicted, and look what that got us.

Why did I keep reading this annoying book? Because I'm a glutton for punishment, apparently.
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Reading Progress

Started Reading
June 1, 2009 – Finished Reading
July 29, 2009 – Shelved

Comments (showing 1-1 of 1) (1 new)

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Physiokrat You didn't understand the book at all, I assume. Especially your remarks about the financial crisis are precicesly a point for Tim Harford's book, since he devoted a significant part of it about bad incentives, which where clearly the main reason for the creation of the crisis in the first place.

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