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Stringy's Reviews > The Undercover Economist
The Undercover Economist
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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.
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
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Finished Reading
July 29, 2009
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Felix
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rated it 5 stars
Jun 02, 2017 10:52AM
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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I was going to rant at your review, however, after rereading your review I can see your point. I disagree with your opinion but you argued it well. He really did use anecdotes as evidence a lot which is poor form.
Regarding the Great Recession, economists had been clamoring about the deregulation of the 90s for some time, only nobody listened... and look where that got us. It's almost like people are willfully deaf to economists and then use them as a scapegoat when things go awry!
Rationality doesn’t mean that at all for Economists, it should best be understood as people having preferences that are “complete� and “transitive�; complete meaning people can chose A over B or both, transitive in the sense that if A > B that means A > C. More simplistically, people weigh their options and, explicitly or implicitly, think about the margins. Rationality often is used outside of strict monetary units, hell it was theorized outside of fiat analysis to begin with. It’s not perfect, and Economists should only use it when appropriate.Assumptions are on a per model / theory basis. People who often critique an academic discipline for underlying assumptions seldomly even understand what those theories are, because they—extremely bluntly and rudely—don’t exist. Some ideas join the consensus, typically through empirical observation; a select few theories also become widely believed or utilized, more of than not because there is no other alternative. Economics like the social science it is, doesn’t really have those universal assumptions you’ll find elsewhere. The art of all sciences is to minimize your assumptions.
I agree that this really is just a 101 course that doesn’t really argue or market it’s points as well as it could’ve. Sans that, yes this book is a gluttony for punishment.
I agree. Many of the points that the author makes is naive and over-generalized. It touches on topics that are informative but sometimes I don't understand how he comes to his conclusion at the end of the chapters.
where were you all these time? I was wondering if I feel the same and now its clear to me
Thanks for your review. It confirmed my choice not to read this book.If you're interested in a book critically acclaimed also by Tim Harford, but still a book that encourages a fact based and less dramatic world view instead, I really recommend "Factfulness" by Hans Rosling to you: /book/show/3... . I guess you might enjoy reading this one much more even if you also regard "Factfulness" as being naive to some extend.
Here's my review of "Factfulness": /review/show...
