Book review: The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor–and Why You Can Never Buy a Decent Used Car! by Tim Harford
This book does an excellent job of describing economics in a way that laymen can understand, although experts won’t find much that is new in it.
Harford’s description of price discrimination is the best I’ve seen, and the first to describe how to tell the extent to which an instance of price discrimination has good effects (the extent to which it expands the number of sales).
His arguments that globalization reduces pollution are impressive for most types of pollution, but for carbon dioxide emissions I’m very disappointed. He hopes that energy use has peaked in the richest countries because he’s failed to imagine what will cause enough increased demand to offset increases in efficiency. For those of modest imagination, I suggest thinking about more realistic virtual reality (I want my Holodeck), personal robots, and increased air conditioning due to people moving to bigger houses in warmer climates. For those with more imagination, add in spacecraft and utility fog.
Some small complaints:
He refers to Howard Schultz as the owner of Starbucks, but he only owns about 2 percent of Starbucks’ stock.
His comment that Amazon stock price dropped below its IPO price fails to adjust for stock splits – a share bought at $18 in 1997 would have become 12 shares worth $8 each in the summer of 2001.
His claim that “Google is the living proof that moving first counts for nothing on the Internet” is a big exaggeration. It’s quite possible that Google success was primarily due to being the first to reach some key threshold of quality, and that many small competitors have matched its quality without taking measurable business away from it.