Economics: The User’s Guide Book Summary - Economics: The User’s Guide Book explained in key points
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Economics: The User’s Guide summary

Ha-Joon Chang

Everything you need to know about economics.

4.3 (151 ratings)
31 mins
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    Economics: The User’s Guide
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    Economic theory can be applied in many places, but it’s best used in the study of the economy.

    If you’ve ever read the book Freakonomics (as many millions of people have) then you’ve seen the variety of ways that economics can be applied to situations not directly related to “the economy.”

    For example, the book’s authors attempt to explain why sumo wrestlers might cheat by using the economic theory of rational choice, which assumes that each person’s decisions are calculated to produce the best possible outcome.

    But why would a sumo wrestler cheat? Imagine that two sumo wrestlers are facing each other in a match. They also happen to be best friends. However, since one has already qualified for the next tournament, it’s rational for him to lose on purpose to increase the odds that his friend advances.

    This is merely one example. In fact, economic theories have been used to describe a whole host of phenomena.

    And while interesting, we shouldn’t neglect the most important application of economics: studying the economy. Indeed, among the most important elements of economics is the way in which money makes economic systems function.

    In essence, money is the measurement of what society owes you, usually as a result of your labor.

    However, sometimes money is given away freely, through a process called money transfer. In welfare systems, for example, money is usually transferred from those who have it to those who don’t, to provide for basic needs, such as shelter or food.

    Money can be used toward the consumption of goods and services produced by organizations that have a specific combination of labor (workers) and capital (machines and tools necessary for production).

    Your mobile device, for example, came to be through this combination: its processors were invented by workers (labor) and then produced with the help of machines (capital).

    It is these types of relationships, far more than the dilemma of a sumo wrestler, which are the heart of economic theory.

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    What is Economics: The User’s Guide about?

    Economics: The User’s Guide lays out the foundational concepts of economics in an easily relatable and compelling way. Examining the history of economics as well as some critical changes to global economic institutions, this book will teach you everything you need to know about how economics works today.

    Best quote from Economics: The User’s Guide

    Few thought that there was anything wrong with hiring children.

    —Ha-Joon Chang
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    Who should read Economics: The User’s Guide?

    • Anyone interested in the history of economics
    • Anyone interested in the intersection of politics and economics
    • Anyone who dozed through Economics 101 in college

    About the Author

    Ha-Joon Chang is the author of the bestseller 23 Things They Don’t Tell You About Capitalism (also available in blinks) and writes a regular column for The Guardian. He has advised a number of national and international banks, and teaches economics at Cambridge University.

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