Bill Steigerwald Bill Steigerwald, 1/5/2007 [Archive]

PJ O'Rourke's Adam Smith for Dummies

Adam Smith for Dummies

"On The Wealth of Nations' by P.J. O'Rourke (Atlantic Monthly Press)

Adam Smith's seminal 1776 masterpiece explaining the magical workings of free markets is riddled with economic and social truths that still hold up today. But trying to read 'The Wealth of Nations' ' 900 dense pages is an endurance test for even the most serious modern reader -- or prison lifer, for that matter. Atlantic Monthly Press has solved that problem by hiring satirist P.J. O'Rourke to dig into Smith's opus and tell the rest of us what it's about. O'Rourke's wit, journalism skills and economics acumen make him a good choice for Atlantic's new series of"Books That Changed the World," which kicks off Jan. 10 with the publication of his lively exegesis "On The Wealth of Nations.'I recently talked to O'Rourke by phone from Washington, D.C.

Q: What's the sound-bite synopsis of Adam Smith's epic?

A: Well, that it's really about freedom and morality and not actually about economics is really the one sentence summary. So when one is sent to read it as an economics thing, it's like, 'Dude, this is like 200-and-some years old. What did he know? He didn't have an iPod--." But his book is really about why we put up with a free market.

Q: You actually read 'The Wealth of Nations' and its predecessor, 'A Theory of Moral Sentiments.' But let's stick to 'Wealth of Nations.' Does it hold up?

A: No let's go back one book, because 'The Theory of Moral Sentiments,' being somewhat more abstract, holds up brilliantly. I mean, there's not a word wrong with that thing today. You can read that today with the same number of 'ah-ha' moments, because it's about the fundamentals of human nature. It's a brilliant work of ethics and psychology and philosophy, but not the kind of philosophy you have to use numbers to understand. It's a damn good book. It's a sort of self-help book, too. Clean up the language -- you could hit the best-seller list with this one. I probably wrote about the wrong book.

The 'Wealth of Nations,' of course, is fighting some battles like the intellectual battle about whether gold and silver have intrinsic value, as opposed to notional value, that are long-gone stuff. So there are sections of 'Wealth of Nations' that are moot -- though it's not that they don't hold up.

Q: Is there any single most enduring truth from 'The Wealth of Nations'?

A: Oh, totally. When Smith starts out right at the beginning about how you have to allow for the human desire for self-betterment or self-interest. And how you have to have freedom of exchange between people. That is so fundamental, not only to making an economy work right, but just to any decent democracy or society. Yeah, it blows you away how clearly he puts this.

Q: I've tried to read 'The Wealth of Nations.'

A: It's a slog, there's no doubt about it. I don't really recommend it.

Q: But you can find chunks of it and quotes from it referred to by other famous people. It's like, 'Who needs Hayek? Adam Smith said everything back in 1776, just in different words.' It seems like everyone has stolen from Smith -- who apparently stole from others before him too, right?

A: Oh, definitely. He owes a huge debt and he makes no claim for tremendous originality. Friedrich Hayek would be the first to tell you that. If Hayek were around, and you said that to Hayek, he would agree completely. As would Milton Friedman. Not about certain academic work that Friedman did -- and ditto for Hayek. These guys did all sorts of stuff we don't understand -- about price curves, Phillips Curves, Phillips screw drivers and heavens knows what. But as far their stuff that any of us understand -- 'The Road to Serfdom' or 'The Free to Be You and Me' or whatever, they would be the first to say 'Yes, we see so far. But we're not even midgets standing on somebody's shoulders. We're head lice looking out from Adam Smith's wig.'

Q: Who should be forced to read the original today -- which politicians or East Coast editorial boards?

A: All of them. All of them. Right, left and middle of the road. It'd be easy for me to pick on the leftists, particularly about protectionism. But any understanding of the fundamental philosophical and moral and ethical groundwork beneath free markets seems to be just absent. The world these days has a Clintonian view. It's not that they disagree with market freedoms, but they regard it as teleological -- as a means to an end. 'Why do we want free markets? Because they make ordinary people more prosperous.' That isn't the point. The point is, either we are free and equal or we are not.

Q: Is there anything Smith wrote that you think he would be ashamed of today?

A: Well, not ashamed of, but there is stuff he is wrong about. Especially when he gets into specific policy recommendations. Essentially the whole last book of 'The Wealth of Nations' is nuts-and-bolts policy recommendations. He is self-contradictory in there. He is often wrong. It shows the problem that no matter how good your ethical and moral foundations may be, when it comes to making those recommendations on the sewer board about whether or not to build a new aeration plant, they are viciously tricky. No amount of brilliance as an economist, a philosopher, a moralist, an ethicist or prose stylist necessarily grants you the right view. At the moment that he wrote this book, you could have taken him to task for some of his stuff and he probably would have agreed.

Q: Is there anything Smith wrote about that you completely disagree with?

A: Well, as I say, there are specific policy recommendations about taxation and education. He's very confusing about state support in terms of religion. But it would be tactical disagreements rather than strategic -- it'd be detail stuff. But no, there is no whole side of his thinking that gives one pause. It's not like Hume. Hume is this incredibly admirable and sensible man, but he insists that he is an atheist. Smith doubted him a bit on this -- they were great friends. But Hume maintained that he was an atheist and so you go, 'No. I just can't agree with that.' But there's nothing like in Smith, who is, incidentally, very coy about his religious ideas.

Q: Is there anything funny in 'The Wealth of Nations'?

A: Oh, yeah. Yeah. Smith has a kind of dry, slightly academic sense of humor. But there is this wonderful passage about refuting the idea that we should always try to get more gold and silver and always try to export consumable properties so as to increase our hoard of gold and silver, which is our real measure of wealth. He said, you know, you could say the same thing about pots and pans. They are real durable too. So why don't we manufacture and keep more pots and pans? Yeah, he can be quite funny and quite cutting.

A pull quote from O'Rourke's book:


'Unfortunately, Adam Smith didn't have graphs. Hundreds of pages of The Wealth of Nations that readers skim might have been condensed into several pages that readers skip entirely. Another thing Smith didn't have, besides graphs, was jargon. Economics was too new to have developed its thieves' cant. When Adam Smith was being incomprehensible he didn't have the luxury of brief, snappy technical terms as a shorthand for incoherence. He had to go on talking through his hat until the subject was (and the reader would be) exhausted.'

"On The Wealth of Nations," by P.J. O'Rourke

Bill Steigerwald is a columnist at the Pittsburgh Tribune-Review. E-mail Bill at© Pittsburgh Tribune-Review, All Rights Reserved.

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