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What the Hell is an Economy?
eric johnson, author
Describes the elements of the U.S. economy (banking, markets, corporations, government, etc.), and how they interact with each other.
Reviews
Johnson characterizes his painstaking economic debut as “the journey of an engineer’s self-education in finance and economics.” In the tradition of Physics for Poets, Johnson’s investigation and explanation of an often misunderstood science is targeted toward non-majors, in this case the show-your-work stalwarts of the STEM world. With dispassionate rigor, Johnson explains the fundamental rules that have shaped global economies, with the goal of ascertaining how the U.S. government could prevent future humanitarian crises like that surrounding Covid-19: by creating societal wealth, not just wealth for individuals but also well-maintained infrastructure, high-quality education, minimal debt, low unemployment, and fully funded pensions.

Engineers are trained to build models that work, and Johnson continues in this vein by testing established economic principles with his own examples and hypotheticals, followed by showing his work and revealing the reasons behind his presented solutions. In one example, he determines that short-term treasury debt is the optimal mode for banks’ repurchase agreements. Johnson’s prose is often straightforward—a just-the-facts presentation only occasionally leavened by humor—though he does amusingly use the root word “corpus” to compare corporations to zombies and draws some economic conclusions from the board game Settlers of Catan. Energetic, cartoonlike illustrations by Cormac Power add interest, too, beginning each chapter with depictions of such things as Blind Justice weighing Medusa’s detached head, helicopters dropping cash, and Darth Vader.

Johnson spares few words in his considerations of centralized versus decentralized economic management (he suggests a balance) and the fascinating role that faith plays in economies. His approach offers readers little hand-holding: he introduces a topic, analyzes it in the space of a few lines or with some math, and then presents his conclusions before moving on. This book is less a primer than it is an extended, sometimes dazzling proof, making the persuasive case that our economy could do more for us all while simultaneously warning against excessive centralization.

Takeaway: An engineer argues that economies can serve their participants better in this dense introduction to economics.

Great for fans of: Roger E. A. Farmer’s How the Economy Works, Niall M. Fraser and Elizabeth M. Jewkes’s Engineering Economics: Financial Decision Making For Engineers.

Production grades
Cover: A-
Design and typography: B+
Illustrations: A
Editing: B
Marketing copy: B+

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