Economics is not intuitive at all times. It can be an interesting topic if economic books are written in layman terms not on the basis economic perspective only. Economic theory is brought out in a perspective that can enhance interest towards the complex theory of economics (Friedman, 1997). Insights into macroeconomics and microeconomics are acquired from this book. As depicted by critics, economists always come up with abstract theories that may never be achieved in future. This book however changes this perception. Rationality and reason are notions invoked in this book in that people prefer the most cogent strategies irrespective of who they are. Economics is defined in terms of measuring value based on people choices not on money basis in his book. The assumption that people use their freewill to accept society fetters thus making suitable economic preferences.
The book contains an introduction and four sections. The introduction comprises of two theories, which are the Rush-hour blues, and rational babies as well as actions speak louder than words. The second sections comprise of methods to be used to solve a simple economy. The third section comprises of ways that one can adopt to the real world. It deals with oligopoly, monopoly, game theory, strategic behavior and it introduces people to the world of workers bosses and different complications experienced in work places (Friedman, 1997). The fourth section deals with how an economist can become a judge. It explains the reasons why people are neither happy nor wealthy and what can be termed to be efficient. It deals with the gumming up the works. The fourth section deals with the political market, the economics of marriage and love as well as the economics of crime. The book initially illustrates and explains the supply and demand curves, revenue and marginal cost curves as well as utility functions using both theory and graphs.
The most relevant chapter in the book is chapter 15 which is named ‘Summing people up’ in which economics is viewed as a descriptive science. In this chapter after explaining how market fairly distributes income he asserts, “Fortunately determining what is just is one of the problems that is not part of economics.”(Pg.199). it deals with such issues as whether minimum wages are god or bad. It deals with the reactions of the government under depression, which is relevant in this stage because the world has been undergoing economic depression in the current period (Friedman, 1997). During depression, the income for the poor decreased thus is it more logical to redistribute income to them. In this chapter, the problem of what ought not or what ought to be the case are covered because most economists cannot explain them, as value contains no precise answers.
In this chapter, the economic concept of efficiency is described according to people meaning in which the concept depicts what is good. The author says, “That is an important part of what I suspect most of you mean by good” (Pg.217).Efficiency is thus vital for a rational approach to ethics. The chapter brings out the failure of potential-pareto approach, which was the argument for modifications that would not be followed with any side expenses leading to non-existence of Pareto improvements. The best way to go in this case is not to give up a concept based on producer and consumer surplus (Friedman, 1997). This chapter tries to show how an economist can become a judge of whether the society is better of or not. Utility cannot be measured using gains and loses of the dollar because it is measured differently by different people. The chapter propounds that a certain policy might not profit the world economy it might only profit a certain country thus this explains why tariff policies benefit United States but do not benefit the world economy. It also explains the effects of increase in population on total surplus. Intuition on whether something or bad is tackled in this chapter.
The most interesting chapter of the book is the 20th chapter that deals with the ‘Rational criminals and intentional accidents’. Part one of the chapter deals with the economics of crime. Which explains how thieves like most businesspersons seek to acquire there income under the least costs thus formulating the theory that criminals are rational beings. The first subtopic in this part is economics of space ways, which deals solutions of economic problems in space (Friedman, 1997). The next subtopic is super thief, which gives ways in which to catch a thief based on the theory of a super thief. The next subtopic is illegal markets, which explains how trade is regulated in illegal markets. Drugs, law enforcement and violence is the next topic that deals with the effects on violence when law enforcement against drugs is increased. Part two of the chapter deals with the cost of crime. The main question asked in this part is what is wrong with robbery any way.
This explains the different forms of theft though some are seen as innocent action such as the donations made to candidates who are campaigning and promising to provide exceptional payback due to your donations. Part three of the chapter deals with efficient crimes and the efficient level of crime. The question asked in this part is why not hang them all: the efficiency of inefficient punishment (Friedman, 1997). The forth part of this chapter deals with private or public enforcement of law, which brings out the fact that the dissection linking private to public enforcement matches up to the dissection linking civil to criminal law. The fifth part of the chapter deals with accident law, which propounds the fact that accidents may not be accidental in nature. This chapter leaves people to choose between public and private, civil and criminal as well as imperfect solutions.
Economic theory is brought out in a perspective that can enhance interest towards the complex theory of economics in this book. The book is written in layman terms thus can be read by any person. It does not combine economics with politics thus reducing the complexity of economic theory (Friedman, 1997). The most relevant chapter of the book is chapter fifteen and the most interesting chapter is the 20th chapter. Theories in the book are formulated from the theories propounded by such founders of economics as Adam Smith and David Ricardo. Economics is thus defined in terms of measuring value based on people choices not on money basis
Friedman, David D. Hidden Order: The Economics of Everyday Life. Farmington: San Val, Incorporated, 1997. Print.