Naked Economics Chapter 2 Summary

Author Wheelan writes, "Life is about trade-offs, and so is economics." Indeed, so is Naked Economics. This book promises to be a good introduction to economics for the layman. Throughout the book, the author uses easy-to-understand language and vivid examples to illustrate his points in strategic places maintaining a sense of lightness with the readers in reading the material. Here is a summary of each of the 12 Chapters of the book Naked Economics: Undressing the Dismal Science by Charles Wheelan.

Charles states as his number one point that economics is really unpredictable. He uses the Coca-Cola Company as a fine example for this. That company starts of turning out to be loss and failure but within 10 years since it started it turned out to be very profitable. Charles also states that markets are extreme powerhouses over individual’s daily lives. Markets are also self-correcting because they use prices to allocate their resources. Individuals all work for their own self-interest so they can be better off in the society. One very good example the author provides is the Soviet’s socialist economy and how it failed because the bureaucracy controlled the economy, or basically he’s saying that

The economy of Brazil is in the top ten largest economies along with the United States. It is the biggest in Latin America. Actually it is the seventh largest in the world. Brazil has used its newly found economic mechanism to syndicate its outcome in South America and show more of a role in the Global Businesses. The Obama Administration’s National Security Strategy recognizes Brazil as a developing center of effect, and greets the management of the country’s joint and global issues. The United States and Brazil associations mostly have been good in the recent years. But Brazil has other strengthening relations with neighboring countries and expanding ties with nontraditional partners in the South that’s developing.

Imagine that you have decided to open a small ice cream stand on campus called "Ice-Campusades." You are very excited because you love ice cream (delicious!) and this is a fun way for you to apply your business and economics skills! Here is the first month's scenario--you order the same number (and the same variety) of ice creams each day from the ice cream suppliers, and your ice creams are always marked at $1.50 each. However, you notice that there are days when ice creams remain unsold but other days when there are not enough ice creams for the number of customers.

Chapter 8: A question that has stuck with Wheelan for years, asked by one of his peers was, “If people know so much about public policy, then why is everything so messed up” (175)? The reason for that is because it leads to something far more significant: Even when economists reach consensus on policies that would be to our advantage, they frequently run into political opposition. And when it comes to interest groups in politics, it pays to be small because the tail can wag the dog. This can have a huge impact on the economy. They are usually the most successful because the consequence of requests they receive are spread over a large, disunified group of people. Wheelan states that small problems begin to distort the simplest jobs of a market

When I first looked into finding this book I didn’t think much of it as I just thought it was just another type of text book or some sort. I was thinking that this would be some kind of auto biography or something I would not be interested in. In fact after reading this book I was stunned by the different views and aspects of economics that was explain and I would had never thought about them in that sort of way. This book covers a lot about we discussed in class. This book explains different examples of economic concepts that may be used in our daily lives. They

The book, Common Sense Economics written by James D. Gwartney, Ricahrd L.Stroup, Dwight R. Lee, and Tawni Ferrarini, gives a simple insight for reader into the inner workings economics in a common sense terms. The main point of the book is that to have economic success comes from low interference from the government, the motivation of individuals, and competitive markets.

The book begins by saying that economics has more incorrect arguments than any other study. The two critical reasons for this are: People don’t care about the long term health of the public, as much as the care about the short term gain in their private lives. Special interest groups create or reuse correct-sounding fallacies to promote their viewpoint. Economics consists in looking at more than the immediate policy; It includes seeing the problems of the policy for not just one group but for all groups. The misconception that government spending boosts the Economy, is a result of a system of misconceptions. The fact that, we don’t address deficit spending and inflation and assume that public spending will be covered in taxes, is a delusional dream.

Michael J. Sandel starts his article “What Isn’t for Sale?” by listing examples of items and perks we are given the option to buy. Even though you can buy almost everything, Sandel also lists options you can sell if you need some money. He addresses the main problem we face in a society where everything can be purchased and that markets have dictated our lives. However, since almost everything is for sale, capitalism is successful and the market is doing well. The downside to this is that people are beginning to put a price on everything. Towards the end of the Cold War, buying and selling became more of a constant need that consumers unconsciously accepted.

In “Swollen Expectations”, the authors describe their theory that the population of the United States has become more and more greedy since the simpler times of the late 1950’s. They claim that houses, vehicles, and even food have been victims of our “virus”. While agreeing that our expectations have been swollen, especially when compared to life in the late 1950’s, we think we “need” more things, but we really only want the convenience.

READ: Naked Economics: Undressing the Dismal Science, Charles Wheeland, W.W. Norton, 2003. Completely- cover to cover.

12. What advice about investing in the stock market did you find most interesting and/or useful?

Before reading the excerpts from “The Overspent American” I was not familiar with Juliet Schor’s work. While reading however, I saw that her views were different from many of the other authors that we have read so far. When I had finished the reading I found the reading enjoyable and fascinating. The reason that her writing intrigued me was because of her multiple perspectives while writing. Not only does she concentrate on the economics of American people, but she also uses a sociologist lens to show the purchasing habits of our culture. “The Overspent American” focuses on how we as a society have changed our spending patterns from the past. During the 1950s the phrase “keeping up with the Jones’” was coined and it represented Americans trying to outspend their neighbors and friends. For example, my friend buys a boat and I also need to buy a boat to make sure my friends saw me as being wealthy. Today our society as changed in many ways but Schor finds that our spending habits have altered the most since the 1950s. By analyzing and evaluating her work, one can see how Americans spending habits have changed over time and how our economics have been overtaken by television and broadcast media.

As Austrian writer Marie Von Ebner-Eschenbach wrote,“To be content with little is difficult; to be content with much, impossible.” History and literature have established that the ideal goal every American has wanted is for his thirst for material possessions to be reached, but even then, the individual isn’t truly happy. Money, and the things it can get you, have long been a part of American culture and the materialist culture of society have been examined in numerous ways from novels to the art of those like Andy Warhol. A life free from the economic woes that plague almost everyone seems like the quintessential existence, but material wealth is not a way to mend issues.

In layman’s terms, the cornerstone of communism is equality for the citizens of the country based upon a system controlled by the State; whereas capitalism and free markets thrive on the ability of individual producers and consumers to influence the economy. Although the stability that is associated with a communist system serves as a safeguard against economic struggles, it also hinders the nation from advancing in the marketplace. As demonstrated in the Gross Domestic Product (GDP) of the two German states before reunification, East Germany was drastically behind the West in the terms of economic growth; the GDP of East Germany was €9,500 in 1990 compared to the West German GDP of €23,000. Communism is centered around efficiency which eliminates the artificial need for growth, but also cripples the economies of these states when removed from the context of a state run financial