Naked Economics by Wheelan, Charles (best books to read .TXT) 📗

More praise for

naked economics

by Charles Wheelan

“I recommend this book to anyone who wants to gain an understanding of basic economics with little pain and much pleasure.”

—Gary Becker, 1992 Nobel Prize winner in Economics

“I devoured Naked Economics whole, start to finish. Finally an economist was speaking my language! Finally I could grasp not only the meanings of all those acronyms I only pretended to understand, but how the institutions and concepts for which they stand might—and do—impact my life. Bravo, Charles Wheelan, for doing the impossible: making the study of economics fascinating, comprehensible, and laugh-out-loud funny.”

—Deborah Copaken Kogan, author of Shutterbabe: Adventures in Love and War

“From simple supply and demand to the much more frightening subject of monetary policy, this book manages to explain our global economy in a way that is (gasp!) actually entertaining.”

—Book Magazine

“Translates the arcane and often inscrutable jargon of the professional economist into language accessible to the inquiring but frustrated layman…. Clear, concise, informative, [and] witty.”

—Chicago Tribune

“In just a few easy lessons,…Wheelan can teach the most innocent reader to think like an economist.”

—Kirkus Reviews

“Makes economics accessible, comprehensible and appealing…. Wheelan’s simplicity does not mask the detailed encapsulation of complicated issues, such as relative wealth, globalization and the importance of human capital. He smartly shows that while economic consequences can be global, they are also a part of everyday life.”

—Publishers Weekly

naked economics

Undressing the Dismal Science

fully revised and updated

CHARLES WHEELAN

Foreword by Burton G. Malkiel

W. W. Norton & Company

New York • London

Copyright © 2010, 2002 by Charles Wheelan

Foreword copyright © 2002 by Burton G. Malkiel

All rights reserved

“Mum’s the Word” reprinted with permission. Further reproduction prohibited. © 1998 The Economist Newspaper Group, Inc. www.economist.com.

“Two Cheers for Sweatshops,” Hearts and Heads,” and “I Love D.C.” reprinted with permission of the New York Times.

For information about permission to reproduce selections from this book, write to Permissions, W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110

Library of Congress has catalogued an earlier edition as follows:

Wheelan, Charles J.

Naked economics: undressing the dismal science/Charles Wheelan; foreword by Burton G. Malkiel.—Fully rev. and updated.

p. cm.

Includes bibliographical references.

ISBN: 978-0-393-07975-3

1. Economics. I. Title.

HB171.W54 2010

330—dc22

2009052148

W. W. Norton & Company, Inc.

500 Fifth Avenue, New York, N.Y. 10110

www.wwnorton.com

W. W. Norton & Company Ltd.

Castle House, 75/76 Wells Street, London W1T 3QT

For Leah

Contents

Foreword by Burton G. Malkiel

Introduction

Acknowledgments

1

The Power of Markets: Who feeds Paris?

2

Incentives Matter: Why you might be able to save your face by cutting off your nose (if you are a black rhinoceros)

3

Government and the Economy: Government is your friend (and a round of applause for all those lawyers)

4

Government and the Economy II: The army was lucky to get that screwdriver for $500

5

Economics of Information: McDonald’s didn’t create a better hamburger

6

Productivity and Human Capital: Why is Bill Gates so much richer than you are?

7

Financial Markets: What economics can tell us about getting rich quick (and losing weight, too!)

8

The Power of Organized Interests: What economics can tell us about politics

9

Keeping Score: Is my economy bigger than your economy?

10

The Federal Reserve: Why that dollar in your pocket is more than just a piece of paper

11

International Economics: How did a nice country like Iceland go bust?

12

Trade and Globalization: The good news about Asian sweatshops

13

Development Economics: The wealth and poverty of nations

Epilogue

Life in 2050: Seven Questions

Notes

Foreword

by Burton G. Malkiel

It is widely believed that Scotsman Thomas Carlyle labeled economics the “dismal science” well over one hundred years ago because it seemed boring, uninteresting, unclear, and full of “on the one hand, on the other hand.” Indeed, Harry Truman is reported to have said that to avoid ambiguity, he wanted to have “one-armed economists.” In fact, Carlyle had something very different in mind. What Carlyle reminded us was that scarcity was pervasive—that we have to make choices between competing satisfactions, between jam today and jam tomorrow, and between conflicting values and goals. Above all, the dour Scot emphasized that everything has a cost and nothing can be produced without work and sacrifice.

To be sure, many people do believe that economics and economists are dismal in the popular sense, that is, extraordinarily dull. As one definition goes: “An economist is someone who is good with numbers but does not have the personality to be an accountant.” The tarnished image of economists is in large part earned by their tendency to opaque writing, their use of often inscrutable diagrams, and their excessive use of mathematics. Moreover, they often fail to admit what they don’t know.

Why is economics the butt of so many jokes, and why do students often become glassy-eyed when confronted with the study of economics as a discipline? The reasons, I think, are that economists generally do not write well and that most economics texts rely far too much on algebraic manipulation and complex diagrams. Moreover, few economists are able to transmit the considerable excitement of economic analysis or to show its relevance to everyday life. This book by Charles Wheelan changes all that. Wheelan has an anti-Midas touch. If he touched gold he would turn it to life.

This is a truly unique book. It contains no equations, no inaccessible jargon, and no inscrutable diagrams. While equations and diagrams may well be behind many of the ideas in