Economics, as a discipline, has a reputation for being dry, dull, and difficult. Which is why, growing up, I kept myself at a considerable distance from it, despite being surrounded by shelves, stacked with volumes on budget, taxation, finance.
Sheer fright is what kept me away from this “inexact science,” a dread of inscrutable graphs, abstruse equations, and complex theories. At the time, I wish I’d gotten a hold of a book like Charles Wheelan’s “Naked Economics” to entice me into the field.
This slim book, a primer, of sorts, provides the uninitiated a superb grounding in the fundamentals of the subject, without the inclusion of intricate calculations and complicated charts.
Wheelan skillfully peels away the layers of abstraction from relatively arcane concepts like “gross domestic product,” opportunity cost,” “perverse selection” “productivity,” etc. and presents them in a lucid, easy to digest narrative.
His explanation of the economic reasoning behind “branding” is particularly refreshing. Interspersed among elucidations of seemingly dense topics are entertaining nuggets of curious information such as these:
Businesses routinely advertise their longevity. That sign outside the butcher proclaiming “Since 1927” is a polite way of saying, “We wouldn’t still be here if we ripped off our customers.
In what year did the air quality in London (the city for which we have the best long-term pollution data) reach its worst level ever? 1890? 1920? 1975? 2001? The answer is 1890. There is nothing particularly “clean” about cooking over an open fire.
We shouldn’t however take this material progress for granted. The phenomenon of sustained growth in living standards is only a few centuries old. Economists have concluded that the growth rate of GDP per capita in Europe between 500 and 1500 A.D. was essentially zero. They don’t call it the Dark Ages for nothing.
The state of Illinois requires barbers and manicurists to be licensed, but not electricians.
The U.S. has gone through 11 recessions since World War II. From 1929-1933, the real GDP fell by 30% while unemployment climbed from 3% to 25%.
Wheelan appears to carry his intellectual beliefs on his sleeves. He doesn’t miss a beat when it comes to singing the praises of the free-market system, all subtly sandwiched between paragraphs.
That’s why, it’s awfully hard to come away from this book, without falling in love with capitalism. But surely, every model has some flaw, even if it’s not a grievous one.