Naked Economics: Undressing the Dismal Science

I thought this was a very good introduction to economics for the layman. Wheelan purports to explain the subject without all the mind-numbing charts and economics jargon and he succeeds in doing just that. My initial reaction to the book was that Wheelan was merely an apologist for unfettered capitalism but it turned out to be a relatively objective work. He gives both sides of the story so to speak, and concludes that government is important to a healthy economy, as long as it is used judiciously. For instance, on page 51 he flatly states; "Anyone who tells you that markets left to their own devices will always lead to socially beneficial outcomes is talking utter nonsense." He points out how most developing countries would love to have the bureaucracy that we have, and this lack of effective government is what keeps many nations from prospering. Of course, this goes both ways as he also describes the damage done by excessive government regulation, as witnessed by states like North Korea. He argues against the allures of protectionism and emphasizes the importance of international trade, for rich and poor countries alike. Besides the relationship between government and economies, the author tackles all the major aspects of economics such as how the financial markets work, the difference between monetary and fiscal policy, the Federal Reserve, inflation, human capital, currency, externalities and so on. His analysis of "creative destruction" can be summed up by the following; "It would have been one thing to help displaced Pony Express workers by retraining them as telegraph operators; it would have been quite another to help them by banning the telegraph." He's actually quite humorous at times also; "Any thoughtful policy analyst knows that some individuals who wear spandex in public should be taxed, if not jailed."Wheelan makes no secret that capitalism is an amoral system that often leaves short-term damage in its wake. He insists though, that in the long-term it is the best system around, hands down. He makes some interesting points about international trade and globalization, pointing out that those who oppose it, often do more harm to the very people they intend to protect. For instance, he claims that Third World sweatshops, while deplorable by Western standards, are often the best option that some people have, and that they are a necessary step in the process toward industrialization. He claims that any attempt to boycott or otherwise oppose these conditions would simply force these places to shut down, condemning the workers to even worse prospects. My only criticism of this argument, and maybe I'm naïve, is that this seems a bit too "all or nothing." It seems hard for me to believe that any effort to enforce better working conditions would automatically put these places out of business. Isn't there a middle road here?One thing I did notice was that Wheelan states early on that capitalism is not a zero-sum game, meaning that my wealth does not depend on someone else's poverty. Then, later in the book he says that there is a finite amount of capital in the world and the more in the hands of government, the less for the rest of us. Either I'm missing something or this is a contradiction. Other than that, I enjoyed the book greatly and actually feel more knowledgeable on the subject than before I started. Economics has always frustrated me but the author explained it in a way that even a meathead like myself could understand. Wheelan also accomplished something I heretofore thought impossible; he actually made economics interesting! 4.5 stars.

First of all this is an exciting book. Yes exciting. Naked Economics presents some of the key aspects of economics by using real world situations which are frequently presented in the form of the controversies that arise over these concepts. Is government intervention in the economy a good thing? Naked Economics answers this question in two chapters; the first chapter shows how government can help the economy and the second chapter shows how government can hinder the economy. The author's conclusion, that a corruption free government is an essential component of a functioning economy but that there are a myriad of ways for the government to do harm, somewhat epitomizes the author's approach to explaining economics, rather than take the side of one type of economic theory he presents several of them, pointing out the merits of each one as he goes along. I said "somewhat" above because the author is clearly pro globalization and, I thought, did not do enough to present countering views of anti-globalization adherents. For example he makes no mention of the Fair Trade movement. I still think this is a very good book as it leaves you with the ability to follow, at a high level, layperson articles on the state of the economy. This book covers the importance of among others, incentives, human capital, information, financial markets and monetary policy. All in all I thought it was a very good read.

This has to be among the best "popular" economics books out there, if not THE best. The book has pretty much everything one could hope for:- Broad coverage of economics- Clear explanations of concepts- Abundance of practical examples to illustrate the concepts- A writing style bordering on perfection (economics made entertaining!)- Reasonably balanced treatment of controversial topicsOne of the central points illustrated by the book is that we're prone to making bad economic decisions when we oversimply matters and neglect secondary, cumulative, and long-term consequences. The examples in the book illustrate this point, though one could argue that many of the examples are themselves oversimplified to the extent that one might draw wrong conclusions. However, I think that criticism would be unfair, since it should be self-evident that the examples are illustrative, rather than attempts to be comprehensive analyses of the issues involved.Like most nonfiction books, I would have loved to have a bullet-point summary of key points at the end of each chapter, but the book still fully deserves 5 stars and my highest recommendation.

Concise yet comprehensive, well written and sometimes even a little funny. Touches not only upon the basics of economics but more importantly the affect economics has on policy making. After all, the greatest gain the average (non-economist) person can hope to obtain from learning about economics is a better understanding on public policy: what makes a good tax/successful tax, how much regulation is too much regulation, when is regulation absolutely needed, the importance of government infrastructure but the dangers of corrupt governments or "crony capitalism", and so on.The book is humbly written with opinions and life examples; the author reminds readers that not everyone's life is the same and therefore one must not be quick to fall into the attractive traps of placing complex policy issues under one umbrella solution.A must read, not only for those wishing to learn more about economics, but also any layperson wishing to intelligently engage in political discussions (in other words, the book will give you plenty of things to talk about during your next dinner party or holiday.)

Well worth reading

Highly recommended!!!

At the bottom of the book's cover, it reads: "Explains our world in a way that is (gasp!) actually entertaining." (Book)"Naked Economics" certainly does not explain the world. It does however provide an overview of the basic economics of our capitalistic world. This in fact narrows down further, as the book is very US-centric. On the good side, it is witty and full of everyday and historical examples that makes it easy and enjoyable to read, even for those lacking basic economics knowledge. Some examples are very similar to subjects that you can find at (subsequent best-seller) "Freakonomics", e.g. the estate agent conflict of interests. On the other hand, you could find yourself expecting deeper analysis, especially when it comes to the Macroeconomics chapters.In previous reviews (here and at amazon.com) there is a dispute as to whether the author is pro- or anti- government. He in fact explains why governments are essential for economies to function. On the other hand, here and there in the book it becomes apparent that he would like as less government as possible, which is normal given the infamous tradition of the Univ. of Chicago in economics, where he teaches.Chapter 11 is essentially a dithyramb to globalization; but then again you would expect that when bying such a book. While the chapter provides interesting information, as you read it becomes evident that the author's choice of the arguments of the opposite side in which he responds is biased. The anti-globalization movement is presented more or less as a bunch of naive or mindless youths. As for the environmental problem, he explains why policies should be decided locally, giving no counter-argument whatsoever.One aspect that I found annoying about this book is that in several cases the author seems to be making PR through it. The most explicit example comes from page 116: "I caddied for more than a decade (most famously for George W. Bush, long before he was the mature world leader that he is today)". Irrespectively of how inept this remark about the world's most unpopular US president is, I bought this book to gain some insight in economics, not public relations.

As Wheelan writes himself in the introduction to the book, “This book is not economics for dummies; it is economics for smart people who never studied economics (or have only a vague recollection of doing so).” By referencing work done by many Nobel-prize winning economists, Wheelan gives an intuitive yet detailed perspective on microeconomics, macroeconomics, international economics, and describes how they are all interconnected. He thoroughly explains the role that firms and consumers play in markets, the importance of incentives, and the role of the government as a “necessary evil”. He talks about human capital and how it potentially creates large gaps between the rich and the poor. He breaks down the measures used to determine a country’s economic success, and how policy makers can most effectively minimize the negative effects of recessions and capitalize on the positive effects of growth. He also acknowledges that this theory has practical limitations. “Policy is not made in theory, it is made in Congress,” (159). Finally, he insists, with evidence, that trade among nations is essential for poor and developed nations alike.Most importantly, this 2002 book makes predictions that are eerily similar to the economy today. These include the role of technology in consumer data collection for price discrimination, and the growing government objective of environmental protection.If nothing else, Wheelan’s writing is simple, funny, and light-hearted. You will not struggle through the pages of this book. On the contrary, you will derive a great deal of utility.

A diferencia de muchos otros libros que hablan sobre economía, Naked Economics tiene una visión mucho más neutral que no invita al lector a mezclarse con un sector determinado del espectro político (izquierda o derecha). Dado que Charles Wheelan aparte de escritor, periodista y orador, es un político de centro, este libro es perfecto para comprender las nociones básicas de la economía, con una pizca del contexto estadounidense que es perfecta para entender cómo el comportamiento del gobierno y la sociedad interactuan de diferentes formas con la misma. Muy recomendado para cualquiera que busque introducirse en este tema.