(Full title: "The Hidden order: Economics of everyday life")

The goal of this book is to explain everyday life in economic terms. More specifically, in terms of "economic equilibrium", proving that the society has organized itself into an efficient economic state. This subject interests me a lot, so I decided to buy and read the book.

Generally, I was not dissapointed. Friedman (a physics Ph.D. turned into an economist) uses deductive, yet entertaining and readable approach to explain how various things in life can be explained economically. Mostly finance-related stuff like prices, taxes, tariffs, rent, currency rates, trade balances etc. but also things like military tactics (based on game theory), organized crime, children's behavior and even marriage.

The approach the book takes is a very nice one from an educational point of view, in my opinion. The author first starts with trivial examples - a simplyfied economic system. He explains how things work under these restricted conditions, and then starts to expand the scope to more complicated economies.

The treating of game theory is especially good, as it touches a compelling subject in a very readable manner.

One fact about the book I don't like, though. Friedman doesn't spend enough time explaining the basics of economics he relies on. It's as if he assumes some initial acquintance with economics - supply/demand curves, for example. I think I understand more economics than the average Joe, but I never learned it officially. Even if I have an intuitive comprehension of what supply/demand curves are, it still doesn't mean that I will immediately grasp why these curves "shift", how their slopes are related, and what do the areas between them (on the graph) mean. Maybe I just hoped for an easy book, one that wouldn't require thorough analysis of the material. I think that the author could, in any case, make the problem go away with a 10-20 page explanation of the economics basics he uses, especially the various tricks with supply/demand curves. In my opinion, it would make it a far better book.

To summarize, "The hidden order" is indeed recommended, but more for people who already have some understanding of economics - ideally who took some basic economics courses in Uni. Maybe I'll reread it some day after I'll have a better grasp of the subject.


Comments

comments powered by Disqus