On the Wealth of Nations
By P. J. O'Rourke
Douglas & McIntyre,
242 pages, $24.95
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Iconoclast and right-wing wise guy P. J. O'Rourke has written a guide to the first great systematic work of economics, Adam Smith's The Wealth of Nations. Unfortunately, O'Rourke often seems to prefer glib to correct.
There is a case for being cute. Often cited but seldom read in its entirely, the 976 pages of the 1937 Modern Library edition of The Wealth of Nations is tough going. Smith's arguments are often bathed in sentences of breathtaking length. The point of his inquiry -- why some countries prosper -- gets lost in rambles about British imperial trade policy with India and the export of cattle to Holland.
O'Rourke says the book is worth the trouble: "Smith's genius was to establish economics as a scientific discipline, distinct from the unruly jumble of the mental and material worlds that we encounter in the actual economy." Perhaps more to the point of why anyone should read this old book is its influence on how we think today. Smith said that it is not empires that build wealth, but productivity. And that is how the problem of building wealth is still analyzed today. Smith showed that specialization raises productivity. He explained much about what things are worth, railed against government interference in markets and kept the whole thing humane with his concern for what people do to others.
Smith, who died in 1790, was the last man to know everything. A philosopher, he wrote Theory of Moral Sentiments, arguing that man's innate ability to identify with others was stronger than selfishness. In Wealth of Nations, he used self-interest as the key to explaining why people seek profit and why the process of seeking is good for everybody. Work and payment had to be voluntary. This was to be the basis for laissez-faire economics, the concept that markets, left to themselves, would make the most of everyone's talents and resources.
Smith used the pursuit of self-interest to argue for an end to slavery, still a big international business in the late 18th century. O'Rourke quotes Smith: "a person who can acquire no property can have no other interest but to eat as much and to labour as little as possible." Cold calculation, O'Rourke adds, "has done more for mankind than William Wilberforce, Harriet Beecher Stowe or John Brown."
O'Rourke's capsule summaries of Smith's ideas are often on the money, so to speak, but many are not. "Thinking about China seems to induce intellectual Chinese fire drills," he writes. "It seems the Chinese are selling everything to us. And we are selling hardly anything to the Chinese." Hardly anything evidently includes nickel, copper and other materials from Canada, Boeings from the United States and a vast flow of energy from Russia.
The Wealth of Nations remains quoted and even loved. It has been 231 years since its publication, in 1776. It is still read in patches, still marvelled at for its insights, its lovely if florid language and its author's learning. It is venerated much as Karl Marx's Das Kapital used to be in certain circles. However, readers who really want to understand Smith should read the chapter on him in Robert Heilbroner's classic, The Worldly Philosophers. Or visit Wikipedia for the nuggets without the yuks.
O'Rourke's work is a blend of interpretation and misunderstanding wrapped in some soon-to-be-dated jokes. "Economists cannot predict the future any better than Jennifer Aniston and Donald Rumsfeld could predict Brad Pitt and Iraq." P. J. O'Rourke on Smith is headed for obscurity. Its references to soon-to-be-forgotten personalities will leave it cherished by fans of O'Rourke's wisecracks and ignored by everybody else.
Andrew Allentuck's Bonds for Canadians: How To Build Wealth and Lower Risk in Your Portfolio was published last year.
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