Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)

Per capita income in the United States is higher than per capita income in France; the United States also has a higher proportion of children living in poverty.

Thankfully there is a broader point: One crucial role for government in a market economy is dealing with externalities—those cases in which individuals or firms engage in private behavior that has broader social consequences.

Economics starts with one very important assumption: Individuals act to make themselves as well off as possible.

The more productive we are, the richer we are.

Self-interest makes the world go around, a point that seems so obvious as to be silly.

the private costs of my behavior are different from the social costs.

Good policy uses incentives to channel behavior toward some desired outcome. Bad policy either ignores incentives, or fails to anticipate how rational individuals might change their behavior to avoid being penalized.

In the years of communism, there were roughly two abortions for every single live birth. Since the collapse of the Soviet Union, Western contraceptives have become widely available and the abortion rate has fallen by half.

In America, there is no central authority that tells stores what items to stock, as there was in the Soviet Union. Stores sell the products that people want to buy, and, in turn, companies produce items that stores want to stock. The Soviet economy failed in large part because government bureaucrats directed everything, from the number of bars of s