Book Review of "The Undercover Economist"

When you read “The Undercover Economist”, the first thing you should know is that it was published in 2005 - before the 2008 financial meltdown, before the 12 years of unparalleled stock market growth seen from 2009 to 2021, before the 2020 pandemic and of course before the current market turmoil of 2022. So do not be alarmed by the unbridled optimism in the free market and the overall vibe of “this music will last forever”.

Once you are able to look past this, the Undercover Economist is actually an engaging and thought-provoking read. It explains various economic concepts like power of scarcity, externalities, comparative advantage, and price sensitivity in simplistic and sometimes elegant ways. Each chapter starts with an everyday question like why all restaurants in Times Square are highly likely to be bad, why Starbucks always optimizes for location, why WholeFoods appears more expensive than Safeway, and so on. The two chapters that were simply mind-boggling to me were the ones about US Health Care and about the economic growth of China.

That being said, the book does tend to meander in some parts and becomes somewhat repetitive in places. A major beef I have is the handwavy way they have talked about immigration and its positive and negative impact.

All in all, give it a go if you are ok to get your hands dirty a bit. Stay away if you looking for a Freakonomics kind of a read. 4 out of 5 from me.