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 (2005)

The author applies David Ricardo's theory around "marginal" value to various aspects of our life, explaining why the coffee sold to commuters in the morning is so expensive (and how little of that money really goes to the growers, even when you are buying "Fair Trade" coffee), how high rent (real-estate or other kind) is caused by legislative or other scarcities, how the behaviour of consumers is used for price targeting (and here we are not only talking about Amazon.com's strategies) and why supermarket prices flip-flop between "full" price and a 30-50% sale for certain items (instead of lowering the price by 5% across the board, this is a tool to lure bargain shoppers into the store), how globalization and "sweatshops" are benefiting both trading sites (as "sweatshops" are still offering better wages and working conditions than other local enterprises), how P/E is still the king in the markets (and it will not work for you to buy the hype), showing a great number of examples why non-market principles fail (like the very expensive and underdelivering US healthcare system, and the confused price targeting of the pharmaceutical companies), and how market principles succeed (like externalizing London traffic congestion costs directly to the vehicles causing them, and the health and retirement system of Singapore, and China's recent economical rise). This book is a good read for a general readership, exploring some new issues in addition to the ones already presented in earlier books, in particular an interesting description of the failed US and New Zealand and successful UK auctions of cell phone spectrums, and great details on why Cameroon is slipping into into deeper poverty (despite the various foreign help given, and suggest that maybe better management could help?? and indeed I would argue that stopping all foreign help could bring positive changes to this and many other countries). It is always interesting to see how quickly questions arise on established under a rational light.

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