A Secret Meeting with The Undercover Economist

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Tim Hartford, author of The Undercover Economist series, columnist at The Financial Times and broadcaster with the BBC, is one of the UK’s leading economic writers. Michael Scott caught up with him at The Turl Street Kitchen:

 

Your books so far have dealt with microeconomics, but with ‘The Undercover Economist Strikes Back’ you’ve moved on to writing about macro. How did you find that switch?

It was a very interesting challenge. I’d never really concentrated on macroeconomics as a student and yet I was supposed to be this guy who explains economics and we’re in the middle of this massive macroeconomic crisis. It was time for me to actually do my job. Talking about is fascinating too. My approach in the other book was to say ‘Look, here’s a thing’ and that thing exemplified what I wanted to talk about. It’s really hard to do that in macro because in macro we’re talking about the system and you can’t look at a system. You can look at a particular part of the system, but that tends to be misleading, because there is always something else going on behind your back.

 

What was your approach then?

I started the book by talking about Bill Phillips, an amazing inventor. One of the things he did was he built this hydraulic computer which modeled the British economy. This thing looks like a hamster cage for goldfish, with interlocking perspex tanks. That was a great way to start the book, because there was a system and you could see it. Later in the book I looked at much smaller systems that could tell us something about Macro. There are two famous examples: the prisoner of war camp and the babysitting co-op going into recession, they both malfunction in different ways. It’s that malfunction that allowed me to start exploring the bigger issues behind macroeconomics. It was good fun to try and write.

 

What kept you away from macro for so long?

Well I just love game theory really. That was what drew me into microeconomics, that way of thinking about behaviour. It hasn’t quite lived up to it’s promise but it’s still useful stuff. Behavioral economics has broken in now and that’s taking micro forward in really interesting ways and that’s exciting too.

 

Do you think behavioral economics will break into macro in the same way?

I think it’s got to. The key issues in macroeconomics are about how attitudes to risk change, what drives investment and causes booms and busts. These are fundamentally behavioral question. Look at the question ‘Why don’t I have a job?’ Is it just because of minimum-wage? Surely not! Most of the explanations of unemployment end up being mostly behavioral. The micro economists have argued with the behavioral economists. The macro people aren’t showing up. Robert Schiller (Nobel Prize winner in 2012) told me that they set up a conference for macro behavioral economists at Yale. Nobody came.

 

Do you think other media outlets, such as the BBC, failing to present economics in an accessible format?

I don’t think the BBC does a bad job although it’s a shame Stephanie Flanders left, she was a brilliant economist. People don’t want mounds of technical information. Clearly there is some superficiality in all media report, but that’s not specific in economics. If you don’t want superficiality then read a book.

 

Is economics as a subject underestimated by the general public?

Relative to most subjects, probably not! We’re really privileged as social scientists. When’s the last time your saw a political scientist get interviewed? We should take that seriously and be grateful.

 

How easy is it to avoid being political?

It’s easy as long as you want to be. My writings have never being particularly partisan. Obviously the level of impartiality you need at the BBC is more difficult; you don’t want false balance but you are constantly trying to present things in the round. I remember I was going a piece on Osborne and Miliband for More or Less (on Radio 4) and my editors said it would be unfair to give Miliband air time and not give Osborne airtime. In the end we got rid of the clip from Miliband in order to be very impartial. That same week, in the Financial Times, I wrote a column piece saying that I thought Osborne’s financial policies were a complete disaster. I got hate mail for that, accusing me of representing BBC bias. It was hilarious because I’d never say anything like that on the BBC.

 

What does the future look like for Tim Hartford?

Well I’m really happy writing my books and presenting on radio. There is no shortage of fantastic ideas in economics and statistics. But there’s obviously an interesting challenge for all of us journalists; in the future, who is going to pay for us to write to broadcast and podcast and write? The answer’s not obvious. But there’s an interesting push back against constantly looking for the short, easy-to-write pieces, the ‘Ten reasons why GDP is overrated’ type pieces. What’s getting squeezed is the middle ground, neither the timely nor the timeless. That’s the stuff that’s nobody is interested in. It’s depressing really, but at least there’s still hope for the longer stuff.

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