A book presentation at Cato on O’Rourke’s book, On the Wealth of Nations;
“So the thing about Adam Smith that makes The Wealth of Nations so long was that Smith was every bit as willing as my crying child and I are to stray from strictly economic points. Now, for instance, here is Smith, 231 years ahead of himself, holding forth on why Angelina Jolie makes a discreditable, a discreditable, amount of money.
"There are, said Smith, "some very agreeable and beautiful talents of which the exercise for the sake of gain is considered a sort of public prostitution. The exorbitant rewards of players, opera singers, opera dancers, et cetera, are founded upon the rarity and the beauty of the talents and the discredit of employing them."
Now, that is the kind of stuff that makes the rest of the 900 pages of The Wealth of Nations worth reading, or at least some of them...
Anyway, all explanations start out brief. But pretty soon Smith gets tangled up in clarifications and gets intellectually kind of caught out, Dagwood style, carrying his shoes up the stairs of exegesis at 3:00 a.m., expounding his head off, while that vexed and crabby spouse, the reader, stands with arms crossed and slippered, tapping on the second floor landing of comprehension.
For example, in Book One of The Wealth of Nations, Smith is trying to explain how we determine value or price. And Smith says, "If, among a nation of hunters, it usually costs twice the labor to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer."
And I am going, wait a minute. Can killing a beaver really be twice as hard as killing a deer? Deer can run like hell. We know where the beaver lives. It built the beaver dam. We have got the beaver's home address. And even if it does take twice as long to kill the beaver, you know, wading around in the beaver pond, smacking at Bucky's head with the flat side of the canoe paddle, who wants a beaver? It is not like this nation of hunters is wearing a lot of top hats. And after a long day of hunting, take your pick -- a juicy venison tenderloin or beaver stew.
And yet, there is this core of simple clarity to The Wealth of Nations. Smith argues three basic principles. And by plain reasoning and plentiful examples -- very, very plentiful examples -- he proves them. I mean, even intellectuals should have no trouble understanding Smith's ideas….
But by the time that Adam Smith was alive in the 18th century, ordinary people were beginning to have some control over their own destinies. And this did not please philosophers and priests and feudal big shots. And the fact that it did not please them pissed Adam Smith off. We think of irony as being this kind of modern tone. But I will tell you, Adam Smith was pretty good at irony himself. He said, "Is this improvement in the circumstances of the lower ranks of people, is it to be regarded as an advantage or as an inconveniency to society?" …
On the other hand, yes, it took years and years before any of the principles in The Wealth of Nations sunk in. And when the principles in The Wealth of Nations did sink in, it was mostly the wrong ones. Smith made the mistake -- if you do read the book, it is very interesting to turn to Book Five. There are five books in The Wealth of Nations. And Book Five is where Smith tries to take his economic principles and turn them into practical policy advice for the British Government of his time. And he is wrong about practically everything.
It is amazing. I mean, here is the smartest guy in the world, and he is wrong. And he is often wrong in several different ways, or he will be right and then argue against himself. And in there, he starts babbling about taxes. And he goes on to give the government all sorts of -- not advice really about taxes, but he just starts talking about taxes. And it is living proof, if ever anything were, that politics will turn anyone into an idiot. You can take the brightest person in the world. And if you get them to start speaking politically, they will turn into morons. And it happened to Adam Smith.
And the government looked at this. And no matter what advice you give to government, the result is always the same -- more government. It is like telling the dog to stay out of the garbage. All the dog hears is "garbage."
Download and listen to the podcast.
Another discussion with O'Rourke on the book.
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