Book Review: Naked Ecomoics

Book: Naked Economics by Charles Wheelan
Five stars out of five.

A few months ago, I wrote a post on how game theory has led to a variety of counterintuitive results. People apparently find that kind of thing extremely interesting—that post accounts for about a quarter of all traffic in this website’s six year history. At some point, I am going to write a book on the subject. I’m still probably a couple years away from actually doing that. But to prepare, I’ve made a list of pop-economics books to read through to get an understanding of what makes them tick and why they were so successful. Naked Economics is the first of my list.

Why Naked Economics? Purely by chance, I saw a thread on Reddit a couple months ago about the nefarious reason that stores often offer you a free meal if you do not receive a receipt with your purchase. Do you think the store owner is being generous and trying to make sure you receive the best possible service? Hell no. They are worried that the cashier is going to pocket the cash. The offer effectively employs the customer as an extra pair of watchful eyes. This deters the cashier from stealing. The owner has successfully retained his rightful share of the money, and it didn’t cost him a dime.

And that Reddit post? It was a picture of the page from Naked Economics explaining this. I immediately put the book in my queue.

Yes, my queue. I borrowed the book from the University of Rochester’s library. Someone already had it on loan, so I had to recall it. Soon after I checked it out, it was recalled again. It’s apparently that popular. I’m now stuck writing this review without actually having the book on me, but I digress.

Anyway, Naked Economics is a layman’s introduction to micro and macroeconomics. There is no math. That’s a good thing to promote a greater understanding from a wider audience. It’s a bad thing because it will lead people who don’t understand economics to falsely believe they do. To wit, one of the top reviewer comment on Amazon as I write this says that the reviewer uses it as his textbook for his economics class. That’s pure silliness. This is not not NOT a textbook. At all.

Rather, Naked Economics is an infomercial for why people should study economics. It contains insightful analysis of critical social, political, and economic phenomenon from recent times. Why is mackerel used as currency in some prisons? In the book. Why did our economy melt down in 2008? In the book. Why are insurance markets such a problem? In the book. Why is dirty money (that is, physically unclean money) not worth anything in India? In the book. Why is it hard for developing countries to retain intelligent workers? In the book.

So if you like understanding why the social world works the way it does, you can’t ask for a better start than Naked Economics. That’s why I’m giving it five stars. But please don’t read this book and think that you know economics as a result.