Author of The Undercover Economist, Tim Harford, strikes once again with his book on The Next Fifty Things that Made the Modern Economy. For those who have read the first 50, this will be an interesting continuation. Harford’s first book as the ‘undercover economist’ took the reader through a lot of psychology and mind reading that goes into how the market works and how we react to it.
It hence became a kind of trademark with the author where one expects him to talk of the quirks that go with economic behaviour. His investigative mind took a different turn after Logic of Life and Adapt, with Fifty Things. The quirks that go with these inventions are still the highlights.
The author explores some very common things in life, which can be a sewing machine or a mail order, and then explains in a couple of pages how these inventions evolved. The tulip auction and their pricing are well known and a rudimentary factor like seasonality explained why prices increased very sharply and the product became valuable because of scarcity.
Harford excels in explaining these inventions or products because he is a very good storyteller, and his conversational style gets the reader involved with the plot. The writing does not stretch or get technical which is a big plus point or else the common person can be put off. By using only four or five pages to explain the importance of each of these 50 things, the book becomes very readable.
The book is in eight parts, with several subjects under each of these headings. There is a section called ‘Moving Money’, which has a few essays on different aspects of the sophistication which evolved in our financial system. SWIFT, for example, is what all of us use for transferring funds across the world where there is acceptance of such payments, as it is within the system of banks that are members. A rudimentary concept like SWIFT took its time to evolve but has eased the flow of money.
Simultaneously, it is possible for the USA, for example, to block funds that go to a rogue nation by using this channel. Another subject that he takes on is blockchain, which has become quite revolutionary with the introduction of bitcoin and other cryptocurrencies that use a different technology that is superior to even central bank money. There is also a chapter on credit cards which is again a very well evolved product, but the stories that go into the creation of these products make for good reading.
In the section on ‘Invisible Systems’, the reader will find the GPS story very interesting as all of us use this for moving around, but have probably never thought of stopping to find out the how and why of it. Similarly, in the section on ‘No Planet B’, Harford talks of some very ordinary things like fire and oil, and their discoveries and use. Interestingly, the search for a substitute for whale oil which was used for heating and lighting led to the discovery of crude oil.
There are these little tales on cellophane used for packing which came about when it was observed that wine that spilled in a restaurant messed the tablecloth, which gave direction to the thought of creating a substitute in plastic form. What we see today as cling film used for packing food is obviously a very evolved form of the same thing.
Included also is the miracle man for countries like India, Norman Borlaug, who was responsible for the Green Revolution.
The concept of recycling which started with discarded bottles and waste being sent to China for recycling is revealing. It germinated from the rather innovative practice of reaping economies in shipping. Ships which carried goods to the USA would have to come back empty to China. Hence bringing back waste made a lot of economic sense, though it created problems of damaging the local ecology.
The CCTV camera we use extensively in our residences and shopping complexes were an offshoot of the World War machinations where they were used to spot enemy camps on television screens. Pornography evolved from classical sculptures and architectural marvels dating back centuries to photographs, video tapes and now to the Internet, which gives the viewer the highest level of privacy.
Prohibition was a post-World War phenomenon and interestingly economists were all for this act as it was believed that drinking slows down human activity and Monday morning blues were due to hangovers. The well-known economist, Irving Fisher was an advocate for prohibition. Even the QWERTY keyboard on the typewriter has a story and there was rationale for making the display tougher. The keyboard could not take the load of multitude hits as experts crossed the 60 words a minute mark. To slow down the typing process, the QWERTY concept came in and worked, and remains with us today.
Harford hence narrates these stories to keep the reader engaged all through and whether it is Singer’s machine easing the strains on the fingers of women who could sew straight, to the origin of auctions which started in ancient times where girls would be auctioned to the highest bidder in communities and the proceeds spent on the poorer people—they make for revealing reading.
There was disbelief when Aaron Montgomery Ward offered utopian prices for various goods but never had a shop where the goods were displayed. People believed it to be a fraud, but the goods were delivered, and cash was paid only on delivery. Yes, this mail order system of 1873 is what we know as e-commerce today.
This book is not just interesting and educative, but could also be used in schools where children must navigate inventions in a rather mundane way. Clearly there are better ways of conveying these stories, and Harford excels at it.
Madan Sabnavis is chief economist, CARE Ratings
The Next Fifty Things that Made the Modern Economy
Pp 344, Rs 699