Executive Times






2007 Book Reviews


On the Wealth of Nations by P.J. O’Rourke








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I confess to not having read Adam Smith’s The Wealth of Nations. I suspect that I’m not alone. The folks at Atlantic Monthly Press have figured that out and started a new series of Books That Changed the World. They commissioned familiar writers to read those works and tell the rest of us what they say. P.J. O’Rourke’s contribution, On the Wealth of Nations, does just that. In typical O’Rourke style, he does it with a light and humorous touch, while never losing clarity on the key points he’s trying to convey. Here’s an excerpt, from the beginning of Chapter 4, “The Wealth of Nations, Book 1 How the High Price of Freedom Makes the Best Things in Life Free,” pp. 38-43:


Considering the immense orb of Adam Smith’s thinking and his tendency to go off on tangents, The Wealth of Nations is surpris­ingly well organized. Smith divided Wealth into five books. He presents his economic ideas in books 1 and 2. Book 1 addresses production and distribution, and book 2 concerns capital and profit. Book 3 is an economic history of western Europe show­ing how various aspects of production, distribution, capital, and profit evolved and how their evolution caused a, so to speak, global warming in the climate of ordinary life. Book 4 is a refu­tation of economic ideas other than those of Adam Smith. It includes a particularly—too particularly—detailed attack on the mercantilists. And Book 5 is Smith’s attempt to apply his ideas to solving problems of government. But since problems are the only excuse for government, solving them is out of the question. For this and other reasons, Book 5 is surprisingly disorganized.

It should be noted that Adam Smith did not create the disci­pline he founded. What we call economics was invented by Francois Quesnay and the French physiocrats, whom Smith knew. The physiocrats, however, badly overthought the subject. Quesnay, who was Louis XV’s physician, drew an elaborate Tableau Economique, a minutely labeled, densely zigzagging chart—part cat’s cradle, part crossword puzzle, part backgam­mon board. It may have put Smith off the whole idea of graphic representation. The tableau supposedly showed how agricul­ture is the source of all economic progress, how trade and manu­facture do no good for anyone, and how everything—from wagon wheels to Meissen chamber pots—grows, in effect, on farms. Food is the entire basis of living, therefore agriculture must be the entire basis for getting a life. So went the physiocrat reasoning, more or less.

To Quesnay and his fellow courtiers the motive for investi­gating economics was something between Pour la France! and finding a way to kill time while waiting to put leeches on roy­als. What Adam Smith did was give economics a reason to exist. Smith’s inquiry had a sensible aim, to materially benefit mankind, himself by no means excluded.


The Wealth of Nations, Book 1



Smith called book 1, “Of the Causes of Improvement in the productive Powers of Labour, and of the Order according to which its Produce is naturally distributed among the different Ranks of the People,” one of those people not being a modern­type book editor, who would have punched-up the title.

Smith began by asking two very large questions: How is wealth produced, and how is it distributed? Over the course of the 250-some pages in book 1 the answers—”division of labor” and “mind your own business”—are explained. But in the meantime Smith answered two even larger questions: Why is everyone equal, and why do we have property rights?

All men are created equal. We hold this truth to be self-evident, which on the face of it is so wildly untrue. Equality is the foundation of liberal democracy, rule of law, a free soci­ety, and everything that the reader, if he or she is sane, cher­ishes. But are we all equal because we all showed up? It does not work that way at weddings or funerals. Are we all equal because it says so in the American Declaration of Indepen­dence, the French Declaration of the Rights of Man, and the UN Universal Declaration of Human Rights? Each of these documents contains plenty of half-truths and nontruths as well. The UN proclaims, “Everyone has the right to rest and leisure, including reasonable limitation of working hours.” I’ll have my wife inform the baby.

High-minded screeds cobbled together by unrepresentative and, in some cases, slightly deranged members of the intelli­gentsia are not scripture. Anyway, to see what a scripture-based polity gets for a social system we have only to look at the Taliban in Afghanistan or the Puritans in Massachusetts. Everyone has an immortal soul and every soul is of identical value to God, maybe, but that doesn’t take us far as a matter of practical political philosophy. And Adam Smith was prac­tical. His footnote to Moral Sentiments about how his theory was “not concerning a matter of right.. . but concerning a matter of fact” is suitable to all of his philosophy.

When Smith considered how division of labor developed, he briefly—for Smith—directed our attention to an interesting and characteristic quality of man. The most powerful creature to ever stride the earth is the most pitifully helpless. We are born incapable of caring for ourselves and remain so—to judge by today’s youth—until we’re forty. At the age of two when any other mammal is in its peak earning years, hunting, gath­ering, and procreating, the human toddler cannot find its ass with both hands, at least not well enough to use the potty. The creativity of a Daniel Defoe couldn’t get Robinson Crusoe through the workweek without a supply of manufactured goods from the shipwreck’s hold and the services of a canni­bal executive assistant.

We must treat other people with the respect due to equals not because we are inspired by principle or filled with frater­nal affection but because we’re pathetic and useless.

Smith wrote that an individual “stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.”1 This nearly left-wing statement was the prologue to Adam Smith’s most quoted passage: “It is not from the be­nevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”2 Smith wasn’t urging us to selfishly pursue wealth in the free enterprise system. He was urging us to give thanks that the butcher, the brewer, and the baker do. It is our good fortune that they are endowed by their Creator with certain unalien­able rights, that among these are steak, beer, and hoagie rolls.

Smith’s answer to why we have property rights was equally straightforward: “The property which every man has in his own labour, as it is the original foundation of all other prop­erty, so it is the most sacred and inviolable.”3 Property rights are not an invention of the rich to keep poor people off their property. Property rights are the deed we have to ownership of ourselves. The property may be modest, but it is inherent. “The patrimony of a poor man,” Smith wrote, “lies in the strength and dexterity of his hands.”4 From this humble grasp of ham­mer and, ahem, sickle, comes all free enterprise: “and to hinder him from employing this strength and dexterity in what man­ner he thinks proper without injury to his neighbour, is a plain violation of this most sacred property.”5

Any definition of liberty that is not based on a right to prop­erty and a right to the same rights as all other people have is meaningless. What we have is ours, and nobody can push us around. This is practically all we mean when we say we are free. Other rights derive from these, when we even bother with those other rights.

Freedom of speech is wonderful, if you have anything to say. A search of the “blogosphere” reveals that hardly anyone does. Freedom of religion is more wonderful, but you can, when you pray, “enter into thy closet, and when thou hast shut thy door, pray to thy Father which is in secret” (Matt. 6:6). Jesus Christ himself said so. Freedom is mostly a workaday experience, taking place in he material, economic world. Before Adam Smith­ was even well under way with The Wealth of Nations he had proved that we require and deserve an equitable society where we’re free from the exercise of arbitrary power and can go to the mall and swipe our Visa cards until the magnetic strips are toasted crisp, if that’s what we want.


The Divisibility of Labor


However, the main purpose of Book 1 of Wealth, as Smith con­ceived it, was to show the importance of the division of labor. The purpose of division of labor, wrote Smith, is “to make a smaller quantity of labour produce a greater quantity of work.”6 Smith perceived that the division of labor—specialization—is the original source of economic growth.

Specialization increases economic value. As an example Smith famously used the “trifling manufacture” of a pin. With­out specialization and specialists’ machinery it would take us all day to make one pin. In an early draft of Wealth, Smith noted that if we went so far as to dig in the iron mines, smelt our own ore, and so forth, we could “scarce make a pin in a year.”7 And somewhere a group of hobbyists—contactable via the Internet— is doing just that, to the irritated mystification of their wives.


Busy readers will learn more about The Wealth of Nations from reading O’Rourke’s On The Wealth of Nations, than is likely to happen by picking up the original. While I never found Cliff’s Notes to be satisfying (although necessary on a few academic deadline occasions), On the Wealth of Nations was a joy to read.


Steve Hopkins, March 23, 2007



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The recommendation rating for this book appeared

 in the April 2007 issue of Executive Times


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