The Interview: Tim Harford

Will Hodges sips coffee with the Undercover Economist.

I meet Tim Harford in a coffee shop a short walk from the Financial Times' London office, where Tim is the lead economics writer. It is quite fitting, therefore, that our encounter takes place before two cups of coffee: his first book The Undercover Economist uses coffee shops in its explanation of market competitivness and is instantly recognisable by the spilt stylophone coffee cup on the front cover. "People generally associate me with coffee" he admits, though I can't help noticing that he orders a Cappuccino - the book questions the logic of our readiness to pay top dollar to have fancy coffee based drinks.

Tim doesn't strike me as a typical economist (not that I have encountered too many in my lifetime), having made fairly good effort of avoiding them whilst at university. He admittedly fell into economics at Oxford where he studied PPE - "the classic subject for people who have no idea what they want to do" - with the intention of dropping economics after his first year and pursuing his interest in philosophy. As it turns out, he had a natural vocation for the subject to the point where his philosophy tutors were suggesting he abandon his desire to become a philosophical great as he clearly had a greater interest in the dismal science.

As we squeeze into our seats, I ask Tim where his inspiration for writing his first book had come from. Had he sought to 'sex up' the notoriously dismal world of economics? In fact, the idea behind it was not to dumb down economics but to illustrate how economics, like any science, far from being the preserve of academics with PHDs, is a subject matter that impacts upon everyone in their daily lives. "The idea was to maintain that anybody could take an interest in this area", he explains. "Like any scientific discipline, it is just a question of how you convey the subject matter. I remember stumbling upon a book on game theory in my first year of university and found it fascinating. Before that I had the same view of economics as many people do, namely that it's kind of high-brow and unapproachable."

The idea for The Undercover Economist developed from an idea Harford had whilst out food shopping and noticing the significance of the discrepancies in prices between goods in different stores: "Here I was, an ordinary guy doing ordinary, everyday things like my weekly shop yet I was looking at the world from an economist's perspective. I was effectively 'undercover'" When developing the idea for the book, Harford returned to the supermarkets, clipboard in hand, noting down fluctuations in prices of everyday goods from bananas to inkjet printers, provoking some strange looks from the staff.

Having found his calling as an economics writer, I take the opportunity to quiz Harford on his view as to what degree the media has been rightfully accused of propelling the UK's slip into recession, the argument being that its sensationalist stance has had an incremental effect on the current downturn. The Financial Times is one of several business publications which have seen noticeable increases in their circulation over the last 18 months off the back of the financial crisis. Harford admits to being generally positive about more people showing an interest in his subject matter and is sceptical that reporting on the crisis can have an adverse effect on the way people behave: "Undoubtedly, the prominence of business journalism has increased over the past few months but can newspapers really go as far as talking people into a recession? I don't think so.

There is no proof that the media can claim to have a direct impact on consumer confidence and even less so that consumerconfidence directly reflects what people are spending. To imply there is a direct correlation between what Robert Peston [the Chief Business editor at the BBC] is saying and what the average consumer is doing with his money is pretty tenuous."

As he goes onto explain, much of the hype surrounding the current downturn is due to the fact that our generation of under-forties is too young to remember what it's like to experience going through a real recession. The writer was still at school during the last downturn at the start of the '90s and by the time he had left university the economy had started growing again.

Besides the recession, a longer-term issue facing generation Y is the shifting of power from western nations to so-called developing economies. One of the recurring themes of The Undercover Economist is precisely this, in particular, the remarkable rise of the Chinese economy over the last thirty years. Does he see the rise of the Asian Tiger as a threat to the West? "China will undoubtedly be a dominant force in the future, but people exaggerate the extent to which it will be a rival to the US", he replies. "The Economic wealth of the country is often overestimated - it is still a very poor country and much of its population is still living on very little income. I expect it will take several decades for China to find itself on an equal footing to the United States."

Unfortunately, as far as the lifespan of our coffees (and thus this interview) are concerned, we don't have several decades left. With only the dregs of our coffees in our cups, I throw one last question at the writer sitting opposite me. Having undertaken a slightly unusual path to the position he now finds himself in at The Financial Times, I prod him for the advice he would give to the current generation of university leavers. He reveals that he had in fact joined a consultancy firm straight from university but left after just six months: "It just wasn't for me." He explains "There was no actual ability required for the job besides being able to put on a suit and get on the tube everyday." He admits that he probably wasn't right for the position and found himself under the pressure most university leavers heap on themselves to find a career and stick with it: "What I have discovered from my career so far is that this needn't be the case. Whilst you are in your twenties there is a reasonable degree of freedom to change course more than once, to find out what you really want to do and then go for it. Most of the time the pressure we are under to follow a straightforward career path is of our own making and doesn't come from our parents or anyone else." This strikes me as a valuable piece of advice for any graduate who finds the decision making process after university somewhat daunting.

It has been an interesting, if brief, chat. Indeed, interesting is perhaps what Tim Harford does best. As someone who has succeeded where many others have failed in making economics appealing to the masses, it may be time for the Undercover Economist to blow his cover and accept his plaudits.

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