February 17, 2006

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Book review: The Undercover Economist

The Undercover Economist by Tim Harford

This book is simply great economic journalism extended into book form. Unlike Freakonomics, which demonstrates economics is a social science, this book start with a basic introduction to some key economic concepts, starting with Ricardo, the value of scarcity and the margin rather than the average.

The genius of the book is the introduction of economic reasoning in a very understandable and easy to read manner, using real world examples. The final chapter on China is worth the price of the book alone, being the most consise and clear outlining of the modern Chinese economic "miracle" out of the depths of Mao's economic destruction. So is the chapter on globalisation, where Harford gives a truly impressive smackdown of all the hogwash that often passes for "debate" in this topic. Today's example is Greenpeace's glee at stopping the stripping of a French aircraft carrier in India, even though it will now place thousands of Indians out of work. The problem for those with an economics background is so much of this stuff is so obvious that it becomes difficult to even acknowledge there are counter-opinions. Another example is the beautiful job Harford does of explaining how protectionism hurts most people but helps a noisy few.

So who should buy this book? Everyone because economics affects us all. If you enjoy Starbucks coffee, think French farmers deserve their subsidies, want to know how to solve traffic congestion, want to understand the stock markets, the best way to run an auction or why poor countries are poor and rich countries are rich, this is the book for you. It is particularly relevant for Hong Kong's civil servants and politicians. Try this from page 78:

...economists believe there's an important difference between being in favor of markets and being in favor of business, especially particular business. A politician who is in favor of markets believes in the importance of competition and wants to prevent businesses from getting too much scarcity power. A politician who's too influenced by corporate lobbyists will do exactly the reverse.
Can someone give me Donald Tsang's mailing address please?

posted by Simon on 02.17.06 at 01:35 PM in the Reviews category.


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Tracked: March 7, 2006 07:01 PM


You DID read it! So, instead of getting stressed out and reading it myself, I'll simply relax in the knowledge that you've read it instead :)

posted by: Helen on 02.21.06 at 12:52 AM [permalink]

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