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“Naked Economics” by Charles Wheelan

Markets and Resource Allocation

Wheelan describes the mechanisms of the modern economic world as “mind-numbingly” complex ones (4). However, they are supposed to lead to the perfectly reasonable and profitable allocation of finite resources. It is so because economists assume that all the actions of people are directed at becoming better off, that is, maximizing utility, which eventually fuels progress and helps the average wealth of the world to increase (Wheelan 9). Wheelan explains that the utility is not always tangible and does not always appear reasonable to other people, but our preferences are applicable only to ourselves.

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This principle of individual and complex ways to maximizing utility is true for persons and companies (the interests of which are also not unlikely to clash) (Wheelan 20). It does not mean that individuals or organizations never make wrong decisions, but risks are also parts of the cost of a decision, and while for economically ignorant people, it may be a surprise, businesspeople would be expected to realize this fact. Markets are not fair (or moral) in the distribution of goods, but the attempts at controlling them have proven them to be too difficult to handle (Wheelan 20). I think that teaching people the rules of the market might improve the fairness of this game. Also, there are means of affecting markets, including incentives.


Incentives matter, as Wheelan insists. Incentives can be used to regulate a market that is not naturally self-regulated; they can help the world to preserve resources and make people do things that would not help them maximize their utility otherwise. In other words, incentives are a kind of a weight piece to be placed on the scales of a decision, and the person who has the weight affects the decision. Incentives, therefore, are a means of using the principles of economics to correct markets and achieve goals (or utility) that may include retaining an employee or saving black rhinoceros from extinction.

The Examples

Wheelan’s book is filled with examples that are logically interwoven with the rest of the narration and appear to be always to the point. I like the fact that the examples are visual. For instance, consider the scene of reading about virgin rain forest being cut: “I nearly knock over my Starbucks latte in surprise and disgust” (Wheelan 7). In this case, the author uses visual details and images to communicate the idea that is concerned with the ability to afford to be environmentally savvy. Such elements make the book more attractive and more interesting to read, but at the same time, they are still (and possibly even more) descriptive since they are emotional as well as informative.

The level of generalizability may vary for examples, and in some cases, the author provides several of them. For instance, the story of rhinoceros is viewed from different angles (the alternative “use” as a tourist attraction, the removal of the horn, and the demand control) and complemented by that of the mountain gorilla. As for the appropriateness, you do not expect satire or emotion from a scholarly book, but authors have the right to choose their expressive tools. The emotional component of the examples does not deprive them of informativeness, but it makes the book more attractive and comprehensible, which is why I think that it is appropriate.

Works Cited

Wheelan, Charles J. Naked Economics. New York, New York: W.W. Norton & Company, 2010. Print.

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