P.J. O'Rourke -- On the wealth of nations =========================================== Oh grow up. Read Hedrick Smith: "Who stole the American dream?". Read George Packer: "The unwinding". Yes, Adam Smith was right. So what? Adam Smith wrote about a different time and place. Applying what he said to our time, to our economy without some understanding of how and why it might be applicable and of see where it might not be. Those ideas, which were incredible insights when Adam Smith wrote them, are being used to justify policies and the lack of policies in Washington, D.C. that keep the status quo, that reinforce a government that privileges business and the rich over workers and the middle class, and that is driving us toward a society of very, very rich on the one hand and the economically struggling on the other. P.J. O'Rourke is at his best when he does two things concurrently: (1) use his wit and sense of humor and facility with the English language (which is incredible) and (2) describe and argue for something outside the conventional wisdom, something that we did not already *think* we know. This book does the first but not the second. OK. So, I'm trying to calm down a bit and trying to look at this book at least a little dispassionately. Other reviewers are right and their advice should be taken: read this book by P.J. O'Rourke because it can be a very valuable help in understanding Adam Smith and his ideas. You may still end up believing in Keynesianism and siding with writers like Paul Krugman and Robert Kuttner, but doing so without understanding the basics of Adam Smith's ideas and of how we arrived at modern economics would be childish. And, of course, if you are already a right-wing ideologue who believes in cowboy capitalism and you feel no need to learn anything that might threaten those beliefs, then you can just come along for the ride and enjoy P.J. O'Rourke's wit and style. Mixed economy -- Apparently the U.S. government has still not learned that lesson. The governments of other developed nations have. They understand, or at least act as if they do, that the nation as a whole can grow and prosper only if wealth is distributed broadly and evenly enough to enable a broad section of the populace to purchase and consume the products that the nation and its businesses produce. As P.J. O'Rourke himself might say: It's that simple. But, applying Adam Smith's ideas and Keynesian ideas to our current economy in our current situation is not simple. And until and unless the U.S. government starts taking the advice of intelligent economists instead of listening the richest members of the Tea Party and the lobbyists of the rich and business connected, we are not going to be able to consume what we produce. We will increasingly become a nation in which businesses can only maintain profit margins by reducing costs (and production) and by refusing to allow workers to share in those profits. P.J. O'Rourke acknowledges this up front (2nd paragraph, Chapter 1), when he quotes Adam Smith: "Consumption is the sole end and purpose of all production." But, P.J. O'Rourke's prescription (at the end of his "Acknowledgments" that government has no role to play in economics and that our economy will do best if left alone is driving us toward a society in which we will not be able to afford to consume what we produce. Recent stories in the news about workers at fast food outlets in the U.S. striking for living wages are a reflection of this. Those jobs, which formerly were occupied by the young, by students, and by the unmarried, and which were *once* an entry way to a "real" job, to a job that could support a family, are now increasingly being held by workers with families for whom minimum wage is not a living wage. And, we ask why an increasing percentage of working age Americans live at home and can only afford to live there. Productivity, prosperity, and distribution of wealth -- Productivity brings a nation prosperity, usually. But, that does not mean that it is or will be a prosperity that is enjoyed by any broad section of that nation's citizens. The clamber about "tax the rich", "wealth redistribution", etc is all about how to encourage more productivity *and* prosperity, and how to distribute that prosperity (and the wealth it produces) broadly enough to be equitable. P.J. O'Rourke (and perhaps Adam Smith, too) does not worry about that problem. I do. I worry that a very skewed distribution of wealth enables the rich to capture the political system. I worry that such an uneven distribution of wealth does not leave enough buying power in the hands of a large enough set of consumers so that our economy can do well. It's fine with me if the rich have plenty of money. But, I do worry that they will use some of that money to buy our politicians, and I worry that a broad base of our citizens will not have enough money to enable them to enjoy life, to educate their kids, and consume (purchase) the results of our production. There is, in this book and Adam Smith's a bit of a willingness to believe that things will work out for the best, or maybe a willingness to believe that the system is self-correcting. P.J. O'Rourke, himself says that Adam Smith was an idealist without being an ideologue. It does seem to me that Adam Smith is too often quoted to preserve a system that disproportionately benefits the rich. Adam Smith himself would not have wanted that. One problem is that so much of Adam Smith's body of ideas has now been accepted as obvious, that it has become conventional wisdom and it does not reveal anything of interest that helps us deal with the problems of our particular, current economic conditions. One of P.J. O'Rourke's outstanding and unintended consequences is that he is witty enough to aggravate his readers enough to think critically about ideas that have become seemingly obvious, that are now part of conventional wisdom, and that are having disastrous effects on our economy and society when they are applied without questioning and analysis and modification. Another of O'Rourke's valuable contributions is to state and explain these ideas (Smith's ideas) clearly enough so that we all are capable of thinking them through before assuming they can be applied without adjustments. I think that if the recent financial debacle (which happened after P.J. O'Rourke wrote this book, by the way) should have taught us anything, it is that our financial system is *not* self regulating and that it *does* need control and regulation. If you'd like to think and read about that, two books to start with are (1) "Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself" by Sheila Bair and (2) "Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon" by Gretchen Morgenson. P.J. O'Rourke explains Adam Smith's thoughts about moral sentiment and about how our imagination should help us empathize with and do good for our fellows. But, it would be foolish to rely completely on that sentiment in everyone. There are people, after all, who are not as generous and virtuous as the Adam Smith that P.J. O'Rourke describes. Self-interest, the invisible hand, small government, moral sentiment -- Implicit in all these is the belief (hope, wish, or dream actually) that most things will take care of themselves. Capitalism as envisioned (dreamed about, actually) by Adam Smith is a self-correcting system; reality is not. Possibly Adam Smith's ideas (as described by P.J. O'Rourke) are a good way to start, but there is nothing about them to suggest that they form a perfect or self-correcting or self-regulating system, nor one that does not need correction and re-alignment or one that does not need to be wound up (or sped up or slowed down) from time to time, nor even that it does not need to be protected from pernicious forces. It is all too easy to criticize P.J. O'Rourke and Adam Smith as justifying an existing system that benefits those who are already rich and those with entrenched interests. That, however, would be misguided: there is plenty to be gained from reading and thinking though this book. So, my suggestion is that you should certainly read this book by P.J. O'Rourke, but be critical when you do. O'Rourke gives you clearly explained ideas to work with. And, his prose and wit is really a joy. 08/13/2013 .. vim:ft=rst:fo+=a: