“Fight scarcity power and corruption; correct externalities; try to maximise information; get the incentives right; engage with other countries; and most of all embrace markets, which do most of these jobs at the same time.” - Tim Harford
This book by Tim Harford is the third economics book I read as I prepare for year 12. It is also the first I found that has introduced me to more technical terms and topics. I read about scarcity, externalities, “perfect” markets and inefficiencies which I can only presume I will hear a lot more on in the next few years when I do my A levels. I also enjoyed the fact that Tim Harford mentions examples from the UK, so I could identify more than with Freakonomics (Dubner & Levitt, 2015) and Predictably Irrational (Ariely, 2009) that are more USA based. It made it feel homey thinking about Waitrose and the NHS.
The book starts with a topic many of us can relate to. Why does Costa or Starbucks in a London train station charge so much money for a cup of coffee? As a young person who likes going out to cafes with my friends, I am always amazed how people can spend £3.30 on a grande white chocolate mocha frappuccino or £3.75 on a vanilla spiced latte. I’m intrigued at how Costa and Starbucks have such loyal customers with the rates they charge. Tim Harford broke down the costs and explained how businesses can maintain such high-profit margins. Sometimes even walking outside the station is enough to bring down the cost of a cup of coffee. Tim Harford mentioned this is to do with scarcity and sophisticated price targeting.
As you continue reading, I found more interest in some chapters than others. I took great interest in Chapter 6: Rational Insanity! Here I was introduced to stock market investments and shares. It also glanced through the outstanding growth story of Amazon and its evolution. The challenge of buying shares is attempting to predict the future profits of a company. The chapter is jam-packed with real-life examples and brought up points on scarcity and thinking sensibly. At this point, I still don’t have a great understanding of scarcity and found it challenging to jump from example to example, making me think it would be more useful to a year 13 student.
The final chapter talks about how China became the global superpower it is today. I learnt about China’s history from the 1950s to the present day, something that is not often taught in school and was insightful to read as I could see how it progressed.
I found the Undercover Economist challenging at times to engage because there are too many links and jumps between points so as a new Year 12, I don’t think I have the knowledge required. It also has healthy competition from the previous two books. Tim Harford includes examples seen in history, companies and governments such as free health care, poverty in Cameroon and David Ricardo. Nevertheless, I missed having experiments and samples carried out to illustrate a point or answer a question.
With so much going on in the world now with COVID 19, natural disasters, unemployment, international politics and so on; I wonder how Tim Harford will update his book to reflect on the impending recession we are heading onto. Overall, I’d recommend this book potentially to Year 13 students that are looking to expand their existing knowledge.
I also noticed that Tim Harford has his own personal website. Here he publishes podcasts, TED talks and articles. I actually found this more useful for me personally as a beginner as I could pick the topics I wanted to read, and they were written in a more approachable way. Here is the link to an article I found interesting which was about the Economics of COVID-19.
http://timharford.com/2020/03/how-not-to-lose-your-mind-in-the-covid-19-age/
Here is a TED video I also found on youtube. This is an excellent bite-sized video to learn more about Tim Harford and his work.
Tim Harford: Trial, error and the God complex TED talk