In Charles’ Wheelan’s “Naked Economics”, he discussed the relationship between consumers, who try to satisfy all their wants and needs, and firms who try to maximize profits. In the first section of page 18, Wheelan states that “the market economy is a powerful force for making our lives better”. He explains that if firms know what consumers want, and produce or make better only what consumers want to buy, they can benefit from the profit. The next point he makes is about market systems being amoral, rather than immoral. It does not care for what is right or wrong; it simply does what brings people the maximum profit. Instead of producing and selling goods and services that people need, it sells what people want to buy. Wheelan provides examples that clearly distinguishes the the “right” and “wrong” of this idea; he says that the medical system does not provide the poor with health insurance, because they cannot pay for it. Instead, the would only provide it to those who are able to pay the required expenses. On the other hand, there are the “wrong” sides in terms of morality, of this idea. Another example that he provides is that European mobs kidnap young girls in Eastern Europe and sell them into for prostitution in wealthier countries, because that is what they can make the most profit from. Basically, the idea of markets being amoral is that people will go to any extent to make the most profit, whether it’d be through making wise decisions, or nasty ones.
On page 19, Wheelan makes another point: “If we fix prices in a market system, private firms will find some other way to complete”. He deduces this idea by providing an example prior to 1978. The price of airline tickets was initally set by the government; every flight from Denver to Chicago costed the same amount. Despite this, other airlines such as American and United acted as competing forces, distinguishing themselves through improvements in the factor of quality. As soon as there was government exemption, there was competition between airlines as per price because that is what mattered most to consumers.
On page 21, Wheelan argues a market economy over capitalism. He explains that a market force is the driving force of liberty. A government can tell its people what to do only up to a certain extent, but telling them “where to live, what to do for a living, or how to spend our money” is irrational. A market system on the other hand, forces people to reach their potential. There is no “oppression” from the government and all people are free to benefit from what they like to do.
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