"Naked Economics: Understanding the Dismal Science"

Charles Wheelan,

• Capitalism can be a brutal, cruel process.
• Creative destruction is a tremendous positive force in the long run.
• "No pain, no gain"
• There is an old aphorism in advertising: "I know I'm wasting half my money; I just with I know which half."
• That is the symptom, not the illness. The underlying problem is a lack of skills, or human capital.
• Remember, human capital embodies not only classroom training but also perseverance, honesty, creativity---virtues that lend themselves to finding work.
• our total stock of human capital---everything we know as a people---defines how well off we are as a society.
• Not diamonds, buildings, oil, or fancy purses---but things that we carry around in our heads.
• Even small differences among children in the preparation provided by their families are frequently multiplied over time into large differences when they are teenager.
• As John Maynard Keynes once noted, "In the long run, productivity is everything."
• The democratic process will always favor small, well-organized groups at the expense of large, diffuse groups. It's not just how many people care one way or the other; it's how much they care. Two percent who care deeply about something are a more potent political force than the 98 percent who feel the opposite but aren't motivated enough to do anything about it.
• An occasional crisis may be a price worth paying for faster growth.
• Paul Krugman has noted, "You could say---and I would---that globalization, driven not by human goodness but by the profit motive, has done far more good for far more people than all the foreign aid and soft loans ever provided by well-intentioned governments and international agencies." Then he adds wistfully, "But in saying this, I know experience that I have guaranteed myself a barrage of hate mail."
• Displaced workers often have a skills problem. (Far more workers are made redundant by new technology than by trade.)
• International trade makes markets bigger, more competitive, and more disruptive. Mark Twain anticipated the fundamental dilemma: "I'm all for progress; it's change I don't like."
• Anyone who is not a socialist before he is thirty has no heart; anyone who is still a socialist after he is thirty has no head.
• If you buy a product made in a third-world country, it was produced by workers who are paid incredibly little by Western standards and probably work under awful conditions. Anyone who is not bothered by those facts, at least some of the time, has no heart. But that doesn't mean the demonstrators are right. On the contrary, anyone who thinks that the answer to world poverty is simple outrage against global trade has no head---or chooses not to use it.
• If a nation starts out skilled, it gets more skilled. If it starts out unskilled, it stays unskilled.
• life is about maximizing utility, not income.