Book Review: Naked Economics: Undressing the Dismal Science

I recently finished reading Charles Wheelan’s Naked Economics, an engaging primer on the discipline. Economics is everywhere, and we’re made to feel out of touch if we don’t understand the signficance of the latest unemployment report, the gross domestic product, why people hang on Alan Greenspan’s every word, etc. etc.

This book introduces you to the fundamental concepts underlying the field of economics, and it would make Chevy Chase-as-Gerald Ford proud — there’s no math. Well, no equations. There are the equivalent of word problems, I suppose, but they’re very easy to grasp.

As a bleeding heart liberal, it can be difficult coming to terms with what seems to be agreed upon as sensible economics. Not that Wheelan stumps for total libertarian laissez-faire-ism. He recognizes that markets are amoral, and, well, humans aren’t, and we need systems to bridge that (like, say, government). But he’s awfully convincing on the need for pretty much unrestricted free trade. Or rather, that free trade should not be restricted by issues of job displacement — the pain in the short run of having people out of work is more than made up for the fruits of a worldwide increase in economic standings that free trade provides. (Though we still need to keep a watchful eye on the externalities of unbridled trade, things like environmental degradation, and make sure that we’re not letting things get out of hand.)

And I found it interesting that Wheelan, who definitely promotes freer trade and less restricted markets than we have now, pretty much comes down on the side of universal health care as the only way to manage what is otherwise an unholy mess.

I also found myself wondering just what economics is. To a certain degree, there seems to be no such thing as economics — it’s simply what you get when you overlay business, political science, and sociology. This was brought home when Wheelan relates a study wherein researchers showed that a woman who auditions for a position with a symphony is something like 50% more likely to get the position if she is hidden during the audition, then if she auditions in full view. Showing, of course, sexism. This strikes me as straight-up sociology, but since the research deals with getting a job, all of a sudden it’s economics. Okay.