The economy has suddenly become a water-cooler topic. Even those of us who have remained blissfully ignorant of indexes and indicators are trying to figure out what the heck is going on and why those financial geniuses didn’t see it coming. Thank goodness for Randy Charles Epping, who has produced The 21st Century Economy: A Beginner's Guide. This relatively short book is an excellent introduction to the gears and gizmos that control the world economy, with a clear explanation for everything from GDP to the connection between financial meltdown and glacial melting.
Why should we care? Because the world-wide events propelled by market changes actually affect us on an individual level. Consider: we’ve all seen the news stories about billionaire ‘going broke’ in today’s economic turmoil, and we tend to think of financial upheaval as something that hurts only the very wealthy. After all, when you’re already poor, you don’t have that much to lose. Epping makes it clear that this seemingly logical reasoning is flawed. “Most of those fat cats who lost money in the stock market suffered, but many still had some in reserve…. It was the poor, however, who were devastated by the depression.
The virtual economy, or e-commerce, is a relatively new but immensely powerful factor in the equation, largely because of long-tail consumers. As Epping explains,
“The long-tail theory of commerce describes the ability of online businesses to use low distribution and inventory costs to make a profit out of selling small volumes of hard-to-find items to many customers.” The ‘long-tail’ represents that long line of consumers all over the world who will buy niche merchandise or services. Before the Internet made global marketing and sales as easy as clicking on a graphic, such businesses were hard-pressed to find enough customers to keep them solvent. Suddenly the click-and-mortar merchants have tilted the balance and now play a heavy role in the world’s economy.
Not every reader will care about the bigger picture; many just want to understand what they hear on the evening news, and Epping is there for them. What is market volatility? Why do poverty rates and corporate bankruptcies rise and fall together? What’s so bad about a hedge fund? These questions and dozens of others are fully explained and connected to the larger topic.
In the end, there is no escaping the global nature of it all: “The world economy has become so interconnected that no one can remain impassive when the financial world is imploding.” Inequality of wealth distribution, immigration, climate change, corporate mismanagement, drugs, slavery – every one of us is affected by all these things, and understanding the connection makes today’s financial madness a little more bearable, a little less terrifying.
Scattered throughout the book are ‘Informational Tools.’ These are short, easy-to-digest sections that fully explain a term or concept before moving on the next related term: the Big Mac index, the OECD, and white knights, for example. Block by block, Epping builds his explanation so that nothing comes flying at us out of the blue. By reading closely and taking time to assimilate each section, readers will find that the chaos and babble really make sense. The 21st Century Economy is more than a dictionary, however; Epping fits the puzzle pieces together so neatly that the plethora of information becomes a cohesive and understandable picture for even the most economically-oblivious among us.
Randy Charles Epping has over a quarter of a century’s experience in international finance. His real world knowledge of economic movement gives him the background and credibility to write a book like The 21st Century Economy. Fortunately for readers, he also has the talent to write it in a charming, concise, and understandable way so that anyone can follow along. This beginner’s guide is perfect for the individual who wants to know more about the influence of world events on the price of bread. It’s also a recommended supplement to economics textbooks.