On The Wealth of Nations (Books That Changed the World) (Hardcover)

~ (Author) "The Wealth of Nations is, without doubt, a book that changed the world..." (more)
Key Phrases: Adam Smith, The Theory of Moral Sentiments, United States (more...)

Editorial Reviews

From Publishers Weekly

The famous satirist headlines a new series of Books That Changed the World," in which well-known authors read great books "so you don't have to." While irreverently dissecting Adam Smith's 18th-century antimercantilist classic, The Wealth of Nations, O'Rourke continues the dogged advocacy of free-market economics of his own books, such as Eat the Rich. His analysis renders Smith's opus more accessible, while providing the perfect launching pad for O'Rourke's opinions on contemporary subjects like the World Bank, defense spending and Bill Moyers's intelligence (or lack thereof, according to O'Rourke). Readers only vaguely familiar with Smith's tenets may be surprised to learn how little he continues to be understood today. As O'Rourke observes, "there are many theories in [The Wealth of Nations], but no theoretical system that Smith wanted to put in place, except 'the obvious and simple system of natural liberty [that] establishes itself of its own accord." Libertarian that he is, O'Rourke would probably agree that one shouldn't take only his word on Smith. Still, the book reads like a witty Cliffs Notes, with plenty of challenges for the armchair economist to wrap his head around. (Jan.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From The Washington Post

Reviewed by Daniel Gross

Back in 1776, a subject of the British Empire published a remarkably durable statement about the desires and striving of mankind and the deep human yearning for freedom. This document, whose verities echo and resonate throughout the generations, is regarded with something close to adoration.

Oh, and the Declaration of Independence was published that year, too.

An Inquiry Into the Nature and Causes of the Wealth of Nations, the lengthy tome penned by Adam Smith, then a 53-year-old Scottish logician and economist, has had nearly as great an impact on mankind as the much shorter document inked by Thomas Jefferson. A staple of Great Books courses, The Wealth of Nations is a sort of Bible for free-market devotees. Like the Bible, however, it is more cited than read -- and frequently least read by those who cite it most. And so having a well-known, highly accessible writer introduce Smith's great work to contemporary audiences is a great idea. The guide for the perplexed is P.J. O'Rourke -- satirist, libertarian, author, wit.

It's an incongruous pairing. Smith embarked on a systematic, lengthy, earnest examination of the economic world. "My job is to make quips, jests, and waggish comments," O'Rourke states. But like chocolate and salt, this unlikely combination works well together. In this book, O'Rourke is a charming, highly literate blogger -- one who thinks before actually writing -- elucidating Smith's arguments and making insightful comments along the way. It's a safe bet the words "Talmud" and "P.J. O'Rourke" have never been used in the same sentence. Yet there is something slightly Talmudic to the approach.

O'Rourke nicely lays out Smith's chief contributions to our understanding of economic relationships and of the ways in which government policies can help or hinder trade. "Adam Smith cannot be said to have constructed the capitalist system," explains O'Rourke. "What he did was provide the logic of a level ground of economic rights upon which free enterprise could be built more easily." To a large degree, Smith was light years ahead of his time -- in arguing aggressively for free trade, in proclaiming the dignity of labor at a time when much labor was unfree, and in making the now obvious connections between the pursuit of sustenance and riches and the pursuit of life, liberty and happiness. "Smith saw the moral potential in both our interest in others and our self-interest," O'Rourke writes.

O'Rourke neatly highlights the inconsistencies and occasional contradictions inherent in Smith's view of capitalism. For instance, "the arguments for freedom in The Wealth of Nations are almost uncomfortably pragmatic." The Smith who comes through here is more aware of the limitations of free markets than many of the Financial Times-reading, regulation-loathing acolytes who swear by Smith today. Smith warned against greed. He favored progressive taxation. He was suspicious. ("People of the same trade seldom meet together . . . but the conversation ends in a conspiracy against the public.") At times, he sounds more like Eliot Spitzer than Milton Friedman.

While the Smith that emerges in these pages is frequently timeless, the same can't always be said for O'Rourke. Many of the targets of his quips are so obvious, the punch lines can be seen from across the Firth of Forth. There are entirely predictable smacks at Bill Moyers, PBS, Paris Hilton, Berkeley, conservationists, the United Nations, teachers' unions, liberal Democrats and the poor. On occasion, one wishes the Invisible Hand would smack O'Rourke upside the head, as when he argues that Smith wouldn't have proposed "rebuilding slums below sea level so college kids have a place to get drunk during Mardi Gras." Occasionally, this wag's a dog.

But O'Rourke does manage to tease out an interesting contradiction in Smith's work. Today, free market devotees tend to regard the free market and the attendant competition it spawns as a great leveler, as a guarantee that advantages earned in one generation don't automatically get passed on to successive ones. But such views are perhaps better associated with the 20th-century economist Joseph Schumpeter, who coined the term "creative destruction." O'Rourke points out that, forward-looking as Smith was, he was still a man of the 18th century. He was concerned with order, respectful of tradition and rank (he worked as a tutor for a duke for several years) and not particularly hostile to class. "The peace and order of society is more important than even the relief of the miserable," he wrote. Unlike the French philosophes across the channel who were seeking to reinvent the world, Smith sought merely to improve it.

Smith was clearly comfortable with some of the contradictions in his life and work. In 1778, he was named commissioner of customs for Scotland, following in the path of his father and other relatives in holding public positions charged with maintaining one of the great barriers to free trade -- taxes on imports. "Between book sales and the commissionership, Smith was making money with efforts to eliminate customs duties and with efforts to collect them," O'Rourke notes. "He wouldn't have thought it was as funny as we do. It was the family business."

Copyright 2007, The Washington Post. All Rights Reserved.

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Product Details

• Hardcover: 256 pages
• Publisher: Atlantic Monthly Press (December 4, 2006)
• Language: English
• ISBN-10: 0871139499
• ISBN-13: 978-0871139498
• Product Dimensions: 8 x 5.2 x 1.1 inches
• Shipping Weight: 10.4 ounces
• Average Customer Review: 3.5 out of 5 stars  See all reviews (47 customer reviews)
• Amazon.com Sales Rank: #136,972 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

131 of 138 people found the following review helpful:

4.0 out of 5 stars Age and Guile pay a call on the Enlightenment, December 18, 2006

By	Well Read (Twin Cities, MN USA) - See all my reviews

There may be a puzzle here for some: P.J. O'rourke is a humorist, why is he taking on such an...academic task? Looking for "the lighter side" of the darkest slice of current events has been his shtick for some time but writing a gloss on one of the most-glossed works in the library would seem out of character, at first.
Those familiar with O'rourke's work will know that humor is but a tool he uses to get at the real nub of an issue. In the end, he finds the blithering idiocy at the heart of the world's worst injustices; and those injustices always, always involve wonton disregard for the provable laws of economics.
Smith's "On the Wealth of Nations" is often cited but rarely understood and even more rarely actually read. It takes a fellow with a good sense of humor (and an army of research assistants) to dive into this musty tome and tell us what it has to say for the modern world. And what it has to say can still surprise us.
It is a universal truth that each generation assumes it is smarter than the one before. By extension, the mall-rat with the lip-ring has several thousand self-awarded IQ points on poor, simple Adam Smith. The fact that Smith has been misquoted and taken out of context by a dozen generations has clouded the perceived relevance of his works still further. Smith's most enduring observation is that free trade leads to prosperity and restraint of trade leads to misery. History offers ample proofs before Smith's time and since and still the tired debates go on.
Humanity will place the study of economics alongside the study of spelling and mathematics or humanity will die. Any work that makes this more likely to happen for even a small slice of humanity is worth reading. O'rourke adds the allure of his devious wit. A fun and enlightening read.

36 of 41 people found the following review helpful:

4.0 out of 5 stars Can Economics Be Funny?, January 23, 2007

By	Publius (Utopia) - See all my reviews

It is not often that someone reading a book about Smithian economics ends up laughing out loud every page. This fantastic book offers just that. Not only does it humor the reader, but the humor serves to illuminate Smith's salient points, without doing damage to the original text. O'Rourke summarizes Smith's points quite cohesively: "wealth depends on division of labor, division of labor depends upon trade, trade depends upon natural liberty, so freedom = wealth." This simple point rings with as much clarity today as it did in 1776. Unfortunately, very few people, especially 'intellectuals', fail to understand Smith's essential libertarian philosophy. These are the same people that do not understand that the words 'trade imbalance' are essentially a contradiction in terms. They are also the people that still contend, despite being disproved for the last 50 years, that government is the best solution to achieve individual happiness. Smith has been called the first true prophet of the market economy, but as O'Rourke points out, he was by no means in the mold of a Tony Robbins. He is, in essence, again in P.J.'s words, the UN-motivational speaker. Instead, Smith emphasized the transient nature of money, or as O'Rourke's writes, 'money doesn't buy happiness...it merely rents it.'

Smith wrote that 'the person who either acquires, or succeed to any political power, either civil or military...his fortune may, perhaps, afford him the means of acquiring both, but...does not necessarily convey to him either.' That's why Joe Kennedy, despite having all the money in the world, could never win an elected office. It also explains why his son, Jack Kennedy won the presidency. Money is important, but you need a small amount of charisma to go the next step. So, can economics by funny, entertaining and enlightening at the same time? Well, with P.J. O'Rourke doing the writing, the answer is an unequivocal yes.

16 of 19 people found the following review helpful:

4.0 out of 5 stars Fine, funny introduction to free enterprise's most important thinker, February 11, 2007

By	The Sanity Inspector (USA) - See all my reviews (TOP 1000 REVIEWER)

The last I read of P. J. O'Rourke, he seemed to be pretty well washed up. His last book was yet another collection of current events essays, which this time barely managed to elicit an occasional wry grin from me. The idea of a hippie turned conservative satirist simply wasn't so novel anymore, and it seemed like P.J. was at a loss as to where to turn next.

This little tome is a delightful place-holder, while he's still deciding. So far as current events satire is concerned, he's been gradually going the way of Tom Wolfe, using current celebrities and brand names for punch lines, to disguise his growing disconnect from the zeitgeist. And that's no sin--the world passes everyone by sooner or later. So taking up a 230 year old book to jest over is inspired, and the results do not disappoint.

Oh, the collaborative nature of the book is fairly obvious at times. P. J. thanks his researchers in the acknowledgements, after all. And their presence is too obvious in places, such as when an off-hand mention of Thorstein Veblen is made--as if P. J. had any idea who Veblen was before he started this book. But P. J.'s distinctive wit is sharp and plentiful throughout, much to the pleasure of old fans like me.

The charge that the book does not plumb the depths of Smith's thought is misguided. We are living in a unique period of biography nowadays, with the return of the "brief life" type books. It may not be science, but it isn't dismal, either! If P. J. O'Rourke's On The Wealth of Nations leaves you entertained AND curious to learn more, then there's nothing else to call it but a success.

Some fair use passages:

****

A good head for business is a middle-class invention. The ancient Greeks and Romans, for all their genius, didn't have it. Otherwise they would have abandoned slave labor with its health benefit and pension plan burdens. They would have free the slaves, turned them into customers, and outsourced the unskilled jobs to Sogdiana and Gaul. The medieval burghers, besides becoming really free, became really smart in our present sense of the word. "The habits," Smith wrote, "of order, aeconomy and attention, to which mercantile business naturally forms a merchant, render him much fitter to execute, with profit and success, any project of improvement."

*****

Later economists, such as, in the early nineteenth century, J. B. Say, felt that Smith undervalued the economic contributions of service. And he did. The eighteenth century had servants, not a service economy. It was hard for a man of that era to believe that the semi-inebriated footman and the blowsy scullery maid would evolve into, well, the stoned pizza delivery boy and the girl behind the checkout counter with an earring in her tongue.

******

Even in the heady days leading up to the Declaration of Independence there was a prosaic and businesslike aspect to the American Revolution. The French Revolution did not get its start in a tiff over custom duties. The sans-culottes were not middle-class entrepreneurs like Paul Revere and Sam Adams, and running around without pants they weren't likely to become so. The Jacobins didn't put on feather bonnets to stage a commercial protest. If there ever had been a Paris Tea Party, the revolutionaries would not have been dumping oolong, they would have been scalping everyone in sight and then each other. No beer is named after Dr. Guillotin.

*****

The boggling complexity of tax law and the ceaseless fiddling with taxes, even by legislators who would lower them, violate Smith's principle that "a very considerable degree of inequality...is not near so great an evil as a very small degree of uncertainty." It's a principle that applies to practically everything, as anyone who is in love or waiting for a check in the mail knows.

*****

Smith came very close to stumbling on marginal utility when he noted that "Nothing is more useful than water, but it will purchase scare any thing." With an additional eight ounces of water all we get is a trip to the bathroom in the middle of the night. With an additional eight ounces of gold we get the upfront payment to lease a Lexus. Marginal utility explains why gold, vital to the life of no one except hip-hop performers and fiances, is so high-priced.

*****

Leftist critics of free markets assume that there is a fraudulent aspect to capitalism. They're right. We tricked the feudal powers into setting us free, and we remained free by continuing to bamboozle them. We used chicanery and sharp dealing to found our cities, become rich bourgeoisie, and supply ourselves with creature comforts. We left the barbarian aristocrats in their drafty castles throwing chicken bones on the floor.