On the Wealth of Nations
Atlantic Monthly Press / 242 pages / $21.95
Getting burned in effigy, P.J. O'Rourke acknowledges, is "a fate not always undeserved by amateurs who write about economics." Apparently, he's willing to take the risk. In the inaugural volume of an Atlantic Monthly Press series on "books that changed the world," O'Rourke brings the 21-century sensibility of a political satirist and unabashed booster of free-market capitalism to Adam Smith's canonical text, The Wealth of Nations, published in 1776.
O'Rourke provides an accessible, accurate and charming summary of Smith's life and economic philosophy. Now that the Democrats control the Congress, O'Rourke can't bring Mr. Smith to Washington. But he can weigh in, with the Scotsman as his authority, on globalization, government spending, "preservationist kooks" and "back-to-nature dopes."
Prosperity, Smith declared, depends on the unfettered pursuit of self-interest, divisions of labor and free trade. Restrain any of them, "however modestly," O'Rourke adds, tipping his own not at all invisible hand, "and you've made a hop and a skip toward a Maoist Great Leap Forward."
Following Smith, O'Rourke opposes tariffs, inheritance taxes, most public works projects and virtually all government regulation of the economy. "Every law concerning commerce," he asserts, "even the most beneficent, such as the Pure Food and Drug Act," narrows competition. But there's no need to worry: when the people who guide the world's economies "get lost," the benefits of the free market "do not trickle down, they pour." And if Americans "go to the mall and sweep our Visa cards until the magnetic strips are toasted crisp," it's A-O.K. with P.J., "if that's what they want."
On The Wealth of Nations is very funny. O'Rourke is especially adept at enlivening the "dismal science" of economics with references to contemporary popular culture. The "stagflation" of the 1970s, he writes, was really bad if you were annoyed by "double knits, disco and Henry Kissinger." O'Rourke's response to the "quantity query" about the length of Smith's tome - nearly 900 pages - is vintage vaudeville shtick. In the 18th century, he opines, when ordinary wages were 10 shillings a week, consumers demanded "good weight" before forking over one pound 16 shillings. A preference for brevity, moreover, is a recent phenomenon. Even now, "semiliterate and subliterate types still enjoy a good stem-winder on AM radio or in Hugo Chavez' Venezuela." And, finally, "when Adam Smith was being incomprehensible he didn't have the luxury of brief, snappy, technical terms as a shorthand for incoherence."
O'Rourke's jokes are always polemical. The public schools, he suggests, now teach students little more than how to play Kumbaya on the recorder and scold their mothers for not recycling. But all too often they're misleading and mean-spirited. With its emphasis on sympathy as a check on selfishness, The Theory of Moral Sentiments, Adam Smith's other great book, he writes, would make a good daytime PBS TV show, with "a host who is like Bill Moyers, except intelligent." In Smith's time, O'Rourke indicates, "the poor had not yet been elevated to their present status as a valuable source of fads, fashions and illegal drugs." Asserting, incorrectly, that the "cold calculation" that slavery was unprofitable did more to end "the peculiar institution" than the abolitionists, O'Rourke claims that the Greeks and Romans should have divested themselves of "health benefit and pension plan burdens," turned the slaves into consumers, "and outsourced the unskilled jobs to Sogdiana and Gaul."
When he's serious, O'Rourke can get muddled. He appears to endorse Smith's judgment that the concept of trade imbalances is absurd. The Chinese, he emphasizes, are confident that the United States is making good use of capital - or they wouldn't be willing to hold American dollars. And he pooh-poohs the dangers of an "undervalued" yuan: "In free trade, the other country's currency can't be too low." A few pages later, he worries that the trade deficit "has destroyed our industrial infrastructure" - only to assure himself we do "have the factories and skilled workers to fight a major war." And toward the end of the book, he declares that Smith "cleared the fog" about the national debt: Far from a Keynesian stimulus to the economy, it is "a moral outrage," enriching "the idle and profuse debtor" and leading the once "industrious and frugal creditor" to resort to trickery, larceny, counterfeiting and inflation.
O'Rourke's book is a peculiar kind of satire. By turns smart-alecky and oracular, it gives readers something to do instead of thinking. O'Rourke professes to share Smith's skepticism about all-encompassing systems, but he applies the economic theories of The Wealth of Nations indiscriminately, indifferent to the changing realities of a post-industrial age of information. Laughs aside, O'Rourke's "Cliff's Notes" to Adam Smith are an abridgement to nowhere.
Glenn C. Altschuler is the Thomas and Dorothy Litwin Professor of American Studies at Cornell University.