[2008-08-28] “The Undercover Economist”

“The Undercover Economist” by Tim Harford attempts to explain some of the basic principles of economics using a jargon-free language that is easy to understand for the lay person. He provides several examples of these principles at work in our day-to-day life. Peppered with his great sense of humour, this book is an extremely interesting and insightful read.

The examples chosen in this book range from the pricing of coffee to the sales of used cars and from the problems of health insurance to the continuing poverty of some poor nations. It is hard to read through the first part of this book without cringing from time to time at the thought of having been taken advantage of by the pricing strategies of, say, a coffee shop or a supermarket.

The second part of the book is much more serious and dismal than the first part, though no less insightful. His analysis of why Cameroon is not able to pull itself out of poverty resonated in some parts with the endemic problems that impede India's growth. The author comes across as a strong supporter of free markets and of putting a cost on externalities as a way of controlling pollution.

The economic principles explained here range from comparative advantage to externalities. The author also makes the works of some Nobel laureates accessible with his prose. This is a great book to get a gentle introduction to some of the less widely known, but important, principles of economics. More importantly, it teaches you to look at the world around you the way an economist would.

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