Naked Economics in His Book

Naked Economics

In his book Naked Economics, Charles Wheelan attempts to explain economics in terms more approachable to the lay audience. He eschews the typical barrage of equations and graphs. Rather, Wheelan seeks to show how economics works by providing examples, and by explaining with text, the mechanisms by which economic thinking is undertaken.

This is a laudable goal. While those of us engaged in the study of economics may not find it "the dismal science," others often do. In the world today, you can see that understanding of economics among members of the general public is, to be generous, limited. Yet economics is essentially the study of the way the world works. Almost all of the decisions we make can be distilled down to fundamental economic principles such as utility and opportunity cost. Supply and demand drive our own decisions. When extrapolated to a larger stage, such as the state, the nation or the world, these same basic principles still apply. Thus, Wheelan's approach to the issue is laudable. The world does need to have a better understanding of economics and its approaches.

Overall, Whelan is effective with his approach. Right from the beginning, he uses easy-to-understand language and examples drawn from the real world to lay out economics' basic concepts.

This continues throughout the book. In later chapters, Wheelan applies his approach to more complex and esoteric issues.

One of the admirable qualities of this book is Wheelan's ability to distill complex issues to their base essences. He freely admits when situations or decisions are complex, but he also is able to clarify that complexity can be removed in order to provide insight and understanding. He is success at applying these concepts to a large number of different scenarios. He also recognizes that economic trade-offs are not simply a decision made by the primary actor. This is a key point - that sometimes economic decisions made by one person have an impact on another person.

Another strong suit is the explanation of the role of government. Wheelan's view that government is an externality rather than a central part of the economy is highly useful because many people see government as part of the economy. He outlines at the beginning of the book that the government is a central part of the economy in Cuba, but that is specifically because in a command economy there is no role for the free market. This leads to a later discussion of the role of government with respect to the economy - as a source of guidance and influence but ultimately not immune from basic market forces.

One are where Wheelan is successful is in not sounding as though he is dumbing down the subject. It would be easy, given that he dismissed equations and charts, to resort to cheap slogans and unhelpful metaphors, but instead he successfully takes the lessons those charts and equations provide and applies them to the world. This element is missing from many economics texts. Yet, the entire concept of economics is simply a reflection of how the real world functions. Thus, everyday examples of economic principles at work are everywhere. It seems almost strange that these examples are not woven into the traditional economics education when real world usage of economic principles demands that economic principles be applied to everyday situations.

There is an aspect to this book I cannot evaluate, however. It is easy for an economics student to understand the points that Wheelan is making, because those are basic points that relate to economic study. It is less clear whether or not his approach would be successful on an audience without an economic background. That is his intended audience, but not being a part of that audience I sometimes felt looking at this book as though the choir was being preached to. I wondered what the response will be from his target audience.

Some of the analogies he makes may only make sense when you understand the underlying concepts. If one does not understand the underlying concepts, they may not understand, for example, why the International Monetary Fund is likened to a fire department and the World Bank to a welfare agency. The use of such examples may backfire when the reader is not overly familiar with the analogy, or if the analogy is less perfect than Wheelan implies. There were a few that made less sense because of an inherent lack of familiarity with the analogy, but this was countered by the extensive use of easily understood analogies.