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Keywords: Economics, development, globalisation

Title: Naked Economics

Author: Charles Wheelan

Publisher: Norton

ISBN: 0393324869

 

With the cute subtitle 'undressing the dismal science', this slim volume is certain to infuriate just as much as it entertains and provokes. It may be difficult to imagine that a book on economics can be entertaining, but it is, and it's well-written too. The aim of the book is to provide a basic introduction to economics for the lay-person and as such there are no preconceptions and previous knowledge is not assumed.

Starting with the most basic premise - that people seek to maximise their utility (which need not equate to wealth or power) - the book sweeps widely across the economic, social and political landscape. There are chapters on markets, incentives, governments, human capital and so on, finishing with two highly contentious chapters on globalisation and developmental economics. If, at the end of this, you are not spitting mad about something then you haven't been paying attention or you're a hardcore free-marketeer.

Charles Wheelan presents, cleanly and concisely, a very neo-liberal view of the world. There is little room for doubt here, and he presents his view-point in such an 'objective' manner that he gives the impression that to disagree is to misunderstand economics (and hence human nature), or else to be some kind of hopeless idealist or dogmatist. While he rightly laughs the state planning model of the economy off the page, he fails to mention developments in chaos theory, evolutionary economics or in participatory economics at all. But then that isn't the point of the book, which is to provide a broad view of free market economics.

In the chapter on globalisation, for example, he writes that Asian sweatshops are a good thing because they pump money into a local economy, because the jobs are better than what's available locally and because they provide skills and training which have spin-offs that ripple wider through society. He cheerfully admits that the workers are exploited compared to workers in Western societies, but that the alternative - by which he means no jobs at all - ultimately keeps people poorer. The message is very clear - if you really care about lifting people from poverty and oppression then you should be supporting capitalism not opposing it.

While charging anti-capitalists with being na´ve idealists, it is also clear that Wheelan himself suffers a little from viewing the world through rose-tinted bifocals. When he claims that local economies are boosted by sweatshops, and that wealth flowing into an economy ultimately benefits all, he downplays the fact that large chunks of this wealth disappear into the pockets of state officials, armed militias and corrupt bureaucracies. And that some of it is re-exported back to the West in the form of debt-repayment.

In the final chapter, on the economics of development, he makes a point that is worth emphasising - that corrupt local elites are one of the key factors in the continued under-development of many Third World countries. In many respects he pushes a very Chomskian line on the rule of law and the need for independent institutions. He's right of course, and blaming everything on the West while ignoring local elites, corruption and oppression is an easy trap that many on the left fall into. However, here again Wheelan fails to point out the role of many corporations and Western governments in installing, supporting and arming the corrupt local elites that he rightly attacks for keeping their people poor and uneducated.

Despite the ideological position that the author adopts, this is still a book worth reading. You need not swallow the free market view of the world to gain some insight into the kinds of questions that economics attempts to handle. If nothing else, it serves as a reminder that economics is all around us and that economic questions cannot be wished away, no matter how fervently we want them to be.

Contents © London Book Review 2006. Published April 3 2006