Book review: Hidden Order

I just finished reading David Friedman's 1997 book Hidden Order: The Economics of Everyday Life. The Foreword by Steven Landsburg (author of, among many other books, Can You Outsmart an Economist?, which I reviewed earlier this year) notes that the book "can serve simultaneously as an introduction to mainstream economic theory and an introduction to the extraordinary mind of David Friedman". I can't speak to the second of these, but the book certainly is an introduction to economics.

What was most interesting to me about this book was the sheer number of examples and theoretical explanations that were part of the teaching of ECON100 since before I was involved in the paper (which goes back to 2003). To be honest, I wouldn't be at all surprised to learn that this book, or at least the writings of David Friedman, were the inspiration for many of the explanations and examples that we continue to use in ECONS101 today.

However, the book is beginning to show its age. The inclusion of numerous graphs is not out of place in a textbook, and the explanations are clear enough, but they would be unlikely to be seen on the pages of more recently published pop economics books. That makes this book less of a layman's introduction to economics, but more of an easy-reading textbook. However, even textbooks have come far since the 1990s, and this book no longer has an edge over the textbook market either.

Having said all of that, it was still a good read, and had many interesting bits, and I made a lot of notes on things that I can build into my ECONS101 and ECONS102 classes. Take this bit about burglar alarms:

Defensive expenditures by the victims are rent seeking as well - the function of a burglar alarm is to make sure that the property remains in the hands of its original owner.

Rent seeking occurs when a party undertakes some expenditure that is socially wasteful and is undertaken to protect a monopoly position or some other source of market power. In this case, it is expenditure to protect property ownership. That sort of slightly surprising insight - linking an everyday observation to economic theory, in this case rent seeking - is the real value of this book, and there are many instances of it. However, they don't all work. For example, I don't buy that an effect of price controls is to shift the demand curve, and I suspect that adopting that approach would be incredibly confusing for students.

I'm glad I read this book, and there is much for an economics student to gain by reading it. However, I wouldn't recommend it to a general audience, particularly when there are many other options available. They should try Tim Harford's The Undercover Economist instead.