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Wednesday, January 16, 2019


Public schools are known for many things, but teaching economics is not one of them. Whether by design or default, it is no less a debacle. Little wonder that public discussion of economics, if it takes place at all, is trite and inane. Here comes a flashback. Writer and satirist P. J. O’Rourke helps remedy economic ignorance in his book designed for the layman.

Consider the on-going lurch to the left in American politics. Rep. Alexandria Ocasio-Cortez, Sens. Bernie Sanders, Kamala Harris, Mazie Hirono, Gov. Gavin Newsom, Mayor Bill de Blasio, and other elected leftists illustrate the profound ignorance of economics found at the highest level of government decision-making. Each foists their fruitcake economic proposals of “free stuff” on an economics-illiterate public unprepared to defend themselves at the ballot box. Alexandria Ocasio-Cortez, the photogenic darling of the left newly elected to Congress, holds an economics degree from Boston University. All she knows is the radical socialist drivel drummed into her. Moderate Democrat leadership will not let her anywhere near the powerful tax-writing House Ways and Means Committee.

In his best-selling book “Eat the Rich: A Treatise on Economics,” (Atlantic Monthly Press, 1998) PJ addresses economics through a subject alluring to most people -- wealth. What is wealth and how do we get it? Or, as O’Rourke puts it, “Why do some places prosper and thrive, while others just suck?”

O’Rourke holds a graduate degree from John Hopkins University. In 1973 he joined the “National Lampoon” as managing editor. Later he became the foreign-affairs desk chief for “Rolling Stone” magazine where he remained until 2001. It was “Rolling Stone” that subsidized his travel resulting in “Eat the Rich.” He is currently the H. L. Mencken Research fellow at the Cato Institute.

PJ remains immensely indebted to several individuals for his economic education, not the least of which was Luke Froeb of the Owens School of Management at Vanderbilt University. He cites Froeb’s succinct statement on wealth creation. “The chief virtue of the capitalist mode of production is the ability to create wealth. Wealth is created when assets are moved from lower to higher-valued uses.” He is also indebted to Milton and Rose Friedman’s book “Free to Choose.” They argue there are only four ways to spend money: 1) spend your own money on yourself, 2) spend your money on other people, 3) spend other people’s money on yourself, or 4) spend other people’s money on other people. Option one results in the best value for the best price. All government spending falls into option 4. He says, sarcastically, that is how grateful Ukrainians got Chernobyl.

PJ offers no bibliography, but he does list in his acknowledgments ten books indispensable to the neophyte. He also identifies books to avoid such as anything by John Kenneth Galbraith!

PJ’s wry sense of humor enlivens what is known as the “dismal science.” He is irreverent and occasionally off-color. His wit and hilarity, however, earn him the reader’s forgiveness. He holds the dubious distinction as the most quoted living man in “The Penguin Dictionary of Modern Humorous Quotations.” (“Giving power and money to government is like giving whiskey and car keys to teenage boys.” “You can’t get rid of poverty by giving people money.” “When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.”)

PJ is inevitably drawn toward Adam Smith’s “Wealth of Nations” (1776). Smith argued that a free market was good for everyone. Smith saw, and PJ reiterates, that a person’s self-concern and well-being is a good thing. Voluntary exchange created wealth and increased prosperity for all. As Smith says, “[H]e intends only his own gain and he is in this...led by an invisible hand to promote an end which was no part of his intention” (which results in the betterment of others). This is the thesis of PJ’s book.

PJ claims that the hardest thing to understand about economics is that it doesn’t need to be understood. Economics is simply the measurement of how human nature affects the material world. Furthermore, economics is not a zero-sum game and, therefore, there is no fixed amount of wealth. Wealth is based on productivity and productivity is expandable. My accumulation of wealth does not cause your poverty. Not grasping this principle results in considerable bad economic thinking.

PJ goes on to summarize the alleged “heartlessness” inherent in the free market and the supposed need for “fairness.” Fairness implies that people have a “right” to (fill in the blank). From an economist’s perspective, “rights” to material things involve making finite goods available to infinite wants. That can only happen if the “fair” society generates unprecedented growth (not going to happen in a controlled economy) or that goods and services are denied to some in favor of redistribution to others (Obamacare). Who gets to decide and enforce the “fairness?”

The point is, you can’t fiddle with freedom by allowing a little here and a little there while retaining your favorite restrictions. Likewise, you can’t fiddle with the free market by skipping the costs while reaping the benefits.

PJ concludes with his typically concise insight designed to inspire a chuckle. “The free market is ugly and stupid, like going to the mall; the unfree market is just as ugly and just as stupid, except there’s nothing in the mall and if you don’t go there they shoot you.”

Watch carefully the approaching encroachment of socialism and the demise of capitalism – along with freedom. In the meantime, pick up a copy of “Eat the Rich” and mourn the good ol’ days.


Dennis M. Patrick can be contacted at (JavaScript must be enabled to view this email address).

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