Naked Economics: Undressing the Dismal Science

“I offer only one promise in this book: There will be no graphs, no charts, and no equations. These tools have their place in economics. Indeed, mathematics can offer a simple, even elegant way of representing the world—not unlike telling someone that it is seventy-two degrees outside rather than having to describe how warm or cool it feels. But at bottom, the most important ideas in economics are intuitive. They derive their power from bringing logic and rigor to bear on everyday problems.”

This is Wheelan’s overview of the book and his “naked” approach to economics. Graphs and equations are standard fare in introductory economics textbooks, but he thinks they put people off the subject, being too abstract and complicated. Instead, he believes a focus on critical thinking makes the field more accessible and interesting.

“Economists sometimes ask, ‘Who feeds Paris?’—a rhetorical way of drawing attention to the mind-numbing array of things happening every moment of every day to make a modern economy work. Somehow the right amount of fresh tuna makes its way from a fishing fleet in the South Pacific to a restaurant on the Rue de Rivoli. A neighborhood fruit vendor has exactly what his customers want every morning—from coffee to fresh papayas—even though those products may come from ten or fifteen different countries. In short, a complex economy involves billions of transactions every day, the vast majority of which happen without any direct government involvement. And it is not just that things get done; our lives grow steadily better in the process. It is remarkable enough that we can now shop for a television twenty-four hours a day from the comfort of our own homes; it is equally amazing that in 1971 a twenty-five-inch color television set cost an average worker 174 hours of wages. Today, a twenty-five-inch color television set—one that is more dependable, gets more channels, and has better reception—costs the average worker less than ten hours of pay.”

Wheelan writes this at the beginning of the book as a way to introduce the complexities of a modern economy. As shoppers, we may pay little attention to the goods on a store’s shelves, such as how they got there and where they’re from. This book is an attempt to explain this, as well as how our lives have improved over the years. The latter is not only about purchasing cheaper TVs, but about improvements in medicine, living longer, and having more leisure time outside of work. The author pulls back the curtain, so to speak, on things we take for granted, to explain through economics how we arrived at them.

“I will argue that a market economy is to economics what democracy is to government: a decent, if flawed, choice among many bad alternatives. Markets are consistent with our views of individual liberty. We may disagree over whether or not the government should compel us to wear motorcycle helmets, but most of us agree that the state should not tell us where to live, what to do for a living, or how to spend our money. True, there is no way to rationalize spending money on a birthday cake for my dog when the same money could have vaccinated several African children. But any system that forces me to spend money on vaccines instead of doggy birthday cakes can only be held together by oppression.

Markets are consistent with human nature and therefore wildly successful at motivating us to reach our potential. I am writing this book because I love to write. I am writing this book because I believe that economics will be interesting to lay readers. And I am writing this book because I will soon have two children in college. We work harder when we benefit directly from our work, and that hard work often yields significant social gains.”

This passage boils down the author’s take on the market system: the best among alternatives, if still imperfect. It’s the best because it aligns with our values and with human nature. Personal freedom and free will are a part of both this economic system and a democratic society.