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Wednesday, June 21, 2017


Last week I “reviewed” a book about economics by P. J. O’Rourke (hereafter known as PJ) titled “Eat the Rich.” I concluded with a promise to talk about his follow-on book also about economics.

PJ’s “On the Wealth of Nations,” published by Atlantic Monthly Press, 2007, combines his wit and wisdom in this revealing exposé of Adam Smith’s classic work “An Inquiry into The Nature and Causes of the Wealth of Nations.” Along the way he received help and understanding from a bevy of erudite scholars some of whom specialize in the work of Adam Smith. PJ demonstrates that economics can be funny, entertaining and enlightening all at the same time.

PJ delivers his exposition of Smith’s classic in the same amusing manner in which he wrote his other books. This time, however, he tackles a yeoman’s task. Unlike PJ, Smith is neither humorous nor particularly entertaining to a twenty-first-century reader. Writing lightly of Smith’s book, and often citing his companion work “The Theory of Moral Sentiments,” PJ stretches his talent. That is good because in doing so PJ exhibits a maturity not previously seen. Whereas his earlier books treat various subjects in an almost comic manner, “Wealth” expresses a ripeness and sophistication in his levity. His talent is one of seeing the lighter side of serious events. In doing so, he is able to cut to the chase to reveal the heart of an issue.

PJ is quick to point out that Adam Smith does not talk about wealth without addressing morality. That’s the gist of his first book, “The Theory of Moral Sentiments.” The nub of Smith’s observations is that free trade leads to prosperity and curtailment of the same leads to desolation. PJ shows how Smith aptly illustrates that government is not the solution to people’s problems. Government is the problem. For extra credit, name the US president who said the same thing two hundred years after Smith wrote. Lord knows we’ve had better than three-quarters of a century of experience since then replete with failures which confirms that president’s assertion.

As early as 1776 when “Wealth” was first published, Smith knew and others understood, that by and large government involvement in the affairs of people has been and is a problem, not a solution. America’s Founding Fathers did not have a corner on the idea of limited government when they wrote the US Constitution.

PJ examined Book 2 of “Wealth” and synthesized “The 13 Habits of Highly Ineffective Government Economic Planners.” Among them:

--Presumably, the point of government planning is to better the condition of those governed. The rub comes when planners start thinking about what the better conditionshould be. Smith declared the governed already knew the answer: “An augmentation of fortune is the means by which the greater part of men propose and wish to better their condition.”

--Keep government spending in check. Smith: “Great nations are never impoverished by private, though they sometimes are by public, prodigality and misconduct.” And further, “...the man who borrows in order to spend will soon be ruined, and he who lends to him will generally have occasion to repent of his folly.” Mortgage crisis anyone?

--Governments do not produce wealth. They consume that which is taken from the people. Government is a service and should never be confused with the tangible means of production that ultimately produces wealth. Smith: “...the whole army and navy are unproductive laborers....The protection, security, and defence of the commonwealth, the effect of their labor this year, will not purchase its protection, security, and defence for the year to come.”

PJ summarizes Adam Smith’s thesis best. Wealth depends on division of labor, division of labor depends on trade, trade depends upon natural liberty, so freedom = wealth. All was predicated on the pursuit of self-interest, not at all a bad thing. In a sense, Adam Smith was a libertarian thinker before there were libertarians.

PJ concludes with a finale seldom seen. In his Appendix titled “An Adam Smith Philosophical Dictionary,” PJ collects passages from “Wealth” as they might define certain terms and phrases in today’s world. In a way, the Appendix resembles Ambrose Bierce’s “The Devil’s Dictionary.” Some examples:

--Government regulation of business: “To be merely useless is perhaps the highest eulogy which can ever justly be bestowed upon a regulated company.” -Wealth, Book 5.

--Thoughts on popular culture: “Drowsy stupidity, in a civilized society, seems to benumb the understanding of almost all the inferior ranks of people.” -Wealth, Book 5.

--Legislative veracity: “The printed debates of the House of Commons [or Congress] are not always the most authentic records of truth.” -Wealth, Book 5.

--Government statistics: “I have no great faith in political arithmetic.” -Wealth, Book 4.

To use PJ’s turn of phrase, “Nature made its last call [on Adam Smith] on July 17, 1790.” The last revision of “Moral Sentiments” contained words fit for his eulogy. “...thanks be to...God, who...opened the safe and quiet harbour of death, at all times ready to receive us from the stormy ocean of human life.” If only Smith had lived to realize his impact on Western thinking.


Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).


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