Duncan Williamson: Book Review The Undercover Economist harf.html

The Undercover Economist has some ringing endorsements: Steven Levitt says it is 'Required reading' (cunningly he doesn't say for whom it is required!); and David Bodanis says that 'Harford writes like a dream - and is also one of the leading economic thinkers of his generation ... reading The Undercover Economist is like spending an ordinary day wearing X-ray goggles.'

I have to say at the very outset that those two reviews have grossly oversold this book. The Undercover Economist is riddled with inconsistencies, with amateur analyses and with things that are just not true. As for Harford being a leading economic thinker, I don't think so.

I should also say that there are passages in the book that are reasonable and one or two that are good. Harford is a dreadful name dropper too: never a good sign in an author I would say.

The language in which this book was written got on my nerves and there is a section on this at the end of this review.

The basic idea behind the book is that an economist, Harford, wanders through life on our behalf looking at things from an economist's point of view. Since we mere mortals are not blessed with the insights of the economist, Harford feels that we will then bow down in awe and wonderment at what he uncovers.

Take chapter one: Who pays for your coffee? A passably interesting opening chapter; but in his haste to begin the name dropping very early on, he says this, when talking about the mark up (profit) that a coffee shop might make on a cup of coffee:

"According to economics professor Brian McManus, mark ups on coffee are around 150% ... "

Harford needed a professor of economics to do that kind of calculation? We can all do that Tim: I remember at school, the metalwork teacher giving me the self same lesson on the cost of the bag of crisps I had bought and that he was tucking into, uninvited.

To be fair, Brian McManus is listed in the notes at the end of the book: he's an assistant professor at the Olin School of Business in Washington Missouri and he has written an extensive, albeit theoretical, paper on coffee shop pricing. The url for that paper is given in those notes. Still, we could all have had a stab along the lines of my metalwork teacher!

The rest of chapter one takes us into the realms of economic rent and David Ricardo: a topic that I studied many years ago and I didn't think that Harford dealt with very convincingly.

Chapter one could have been much better with much more under cover information in it: how about the Starbucks ambiance and their penchant for providing WiFi Hotspots and how they are shuffled into the pricing/profit mix?

Chapter two: what supermarkets don't want you to know. I have to say that I found very little economics in this chapter; but there was a lot of marketing. Maybe economics has borrowed a lot of marketing jargon in the years since I last studied economics. This chapter starts with, erm, talk of coffee bars ... wasn't that in chapter one? Ah, well, yes! Then there's a lot of talk about scarcity that I found passibly useful but passingly interesting!

By the time I got to chapter five I had the distinct feeling that very little of what Hartford had done was anything other than theoretical. Much talk about statistics and economic theory but I don't think he'd get a job in many organisations as a practical economist on the strength of this. If he does, then there's hope for us all.

Chapter four: crosstown traffic has two points that caught my eye. Now I know that we can't all know everything but I would have thought that every economist would have learned that there had been a window tax in the 17th to 19th centuries here in England. I'm sure Harford has seen a building like this on his travels around England:

http://dspace.dial.pipex.com/town/parade/hq69/Pages/newbig.html

Why is the centre top windown of the house above not a real window? It's painted to look like a window in order to minimise the occupants' window tax levy; but to maintain the symmetry of the Georgian design.

Read the point he makes about the London congestion charge on page 98: has he reported the truth or is it the case that since the charge was introduced, the counting of vehicles has improved? Just asking.

Chapter five: the inside story, starts with a quote from one of my favourite authors, Jermoe K Jerome. That's fine! Then he says something crass about picking up a phone and buying some insurance. I think Harford would tell you that it's a joke; but I' sure some people might beleive it. Read it and see! About half way through this chapter, page 120 to be precise, Harford discusses the obtaining of a degree in philosophy and, being an economist, he makes a sweeping assumption: that in order to obtain such a degree one must be smart and diligent since such a degree is difficult to obtain. He dropped three names on the previous page, by the way: Akerlof, Spence and Stiglitz.

Harford mentions that it's not possible to insure against being sacked ... not true any more.

I will make just a couple of other points now since I think I have set the tenor of my opinion of this book: could do much better.

I thought the chapter that is largely set in Cameroon was a waste of print: Harford spent three weeks in the country and then wrote such a glib chapter that doesn't do anyone any favours. My understanding of the situation in Cameroon is limited to what Harford has written. I am still not very well informed. Let me throw in the point, though, that experts are often found wanting. I once discussed the agricultural situation in Malawi with someone from the FAO: we were both at a party in Blantyre Malawi at the time and he had jetted in from Rome for the weekend, I was living and working there. Having observed local smallholders in Malawi for a while, I suggested that they could profitably be taught how to use a plough, meaning a hand driven plough. This FAO chappie responded by talking about the problems of supplying and looking after sufficient numbers of Oxen. I didn't feel it was worth continuing the conversation with him.

I haven't followed up on this one but I did make a note to ask how Abba Lerner had "proved in 1936 that a tax on imports is exactly equivalent to a tax on exports". See page 210 where it says this.

I have to confess that although the chapter on China, chapter ten, was put together in a similar way to the one on Cameroon, I thought this one was much better. I genuinely felt better informed after this one. I also learned the word autarkic, which I hadn't come across before.

I would also like to share a similar experience to the one in chapter ten, page 253. Harford writes about an outraged letter in the Guardian Weekly newspaper following the review of Martin Wolf's book Why Globalisation Works. I took part in a discussion on an internet based discussion board populated largely by A level students and a few teachers. As part of the discussion on socialism or some such I wrote that I had met a number of people in the former Soviet Union who hankered after the Stalinist regime because at least in those times, they remembered, everyone had a job and everything worked.

You will not believe the torrent of abuse that I unwittingly unleashed. Why didn't I go back to live with the communists then? I was reviled as scum ... all I did was to report what had actually happened, that some people who lived through some or all of Stalin's period in power, told me face to face that they had enjoyed their time during it. Killing the messenger isn't in it.

That discussion became distasteful and one young gentlemen who was a first year student at Oxford University at the time wrote and told me that if ever he saw me walking around Oxford he and his friends would beat the living **** out of me. His precise words. I replied and said that as I live near Oxford and am frequently to be found walking the streets, I was genuinely now in fear of my safety and that if he didn't withdraw that threat then under common law I could pursue him though the courts for the tort of assault. I knew which College he was at so I said I might also involve his College Master as well as his parents. I told him I wanted a full, written and unconditional apology or I would follow up on my intention.

He apologised in full.

Another young man wrote to tell the discussion that he had spent the previous summer working in an office in Washington DC on foreign aid project documentation so he KNEW that I wasn't telling the truth!

These people were all at really good universities: Oxford, Durham and the LSE but their thought processes were astonishing. I found the private email address of the Durham University wallah and asked him what on earth he was objecting to and he told me that what I'd said didn't make any sense. He was reading English!

The book finishes with a section of notes if ever you felt like following up on some or al of the points that Harford has to make.

The Language of the Book

I am a member of the breed of people who finds the modern trend towards using what I call TV talk less than helpful and so now I turn to this aspect of Harford's book: his language.

I appreciate that this book has been written in a semi informal style to make it easier for the non professional economist to read. However, in the very early part of the book Harford thanks the editors of the American edition of the book: to me, this looks like the American edition.

In fact, there might be an economist sitting near you right now.
... and some of them are after the money in your pocket right now.
In the end economics is about people ... what does that mean?
Economics is all about Yang Li's choice: what a meaningless sentence.
'My God,' I said
My God,' said Fran
Estimates of the death toll from the famine range from 10 million to 60 million, roughly the entire population of England, or of California and Texas combined: what does that mean?

This book cost me £12.99 but I reckon it was around £6 too much; and you clearly need to read it with a very critical eye.