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P.J. O’Rourke “On the Wealth of Nations”
February 9, 2007
P. J. O’Rourke

Contents

David Theroux, President, The Independent Institute

Good evening ladies and gentlemen. My name is David Theroux, and I’m the president of the Independent Institute. I want to welcome you all to our program this evening. I’m delighted that you would join with us. This is one of a series of events that we hold called the Independent Policy Forum. I see some familiar faces, and we’re delighted to be able to host our event this evening.

P. J.’s book is part of a new series entitled “Books that Changed the World For Good or Ill.” (laughter) In so doing, he has read the pioneering economist Adam Smith’s book, which the short name is The Wealth of Nations. It was first published in 1776, and he read it “so we don’t have to.”

But there is a larger point here, which is to say that, as moderns and post-moderns, many people tend to believe that we have today sort of reached the pinnacle of learning and refinement. And that the only thing that’s important is what is “new” and the things that are “old” are well, old and less important. But, I think, as P. J. will be discussing, this is a profound fallacy. Because not only is our knowledge built upon our the experiences and insights of many generations, but I think we would all find that the insights of the many generations that went before us also probed the most meaningful questions that every man has to face, and that every women has to face, going back hundreds, and yes, even thousands of years. And I think Smith’s book The Wealth of Nations is one good example of this truth.

Before I begin I wanted to quickly note a couple preliminary points, very briefly that P. J., I think, very astutely mentions in his book, and which pertain to something called political economy. Political economy is a term that most people are not familiar with. Our journal is subtitled “A Journal of Political Economy.” And the question is, what does this really mean? And the first point I want to note is to read for you the dedication to his son that P. J. has placed in his book: “In hope that he will grow up in a world that enjoys the morality, as well as the materiality of the wealth of the nations, this book is dedicated to Edward Clifford Kelly O’Rourke.”

The second point is to note P. J.’s special acclamation for another book by Adam Smith, which is entitled The Theory of Moral Sentiments. A book which he actually discusses in chapter three of his new book. As a scholar Smith was not known as an economist, there really was no such thing at the time. He was a moral philosopher, a theologian, someone interested in moral ethics and trying to get to understand the world as it was, to understand the principles of how the world worked.

The third point is that P. J. also makes a special reference to a 13th-century scholar who’s name is Albertus Magnus, who most people have probably not heard of. He is actually widely regarded as one of the most important German scientists, philosophers and theologians of the Middle Ages. P. J. properly notes that the understanding of free-market principles actually has been known since at least the time of Albertus, which is 500 years before Adam Smith.

Albertus was also known as Saint Albert the Great, or Albert of Cologne, he was from Cologne. Albertus was actually a Dominican Friar who became renown for his knowledge of the interdependency of metaphysics, essentially religion and belief systems, and economic science.

What Albertus did was that he was an expert on Aristotle, and he essentially did some of the pioneering work integrating Aristotle’s writing with theological writing. And one of his most important students was Thomas Aquinas. And Aquinas, as some of you may know, went on to really advance the field of so-called natural law and natural rights. And that led to many generations of scholars who are called the Scholastics in Italy and Spain. And they, in turn, developed, really the first understanding of the theories of prices, money, competition, utility in value and so forth. And that, in turn, led to the establishment of what was then called the Austrian School of Economics. Some of you may be familiar wit the Austrians who came out of Vienna, the most famous of which is the Nobel laureate F. A. Hayek. And others, such as Carl Menger and Israel Kirzner.

Anyway, the point here is that these, I think, preliminary points from the beginning of P. J.’s book are really key, not just because they reflect the topic of economic principles, but that the development of these principles stem from moral philosophy. And so I think that’s a key insight that Smith had, and I think that many of us can learn from that.

So, anyway, with that little diversion out of the way, we can now all relax and, I think, enjoy P. J.’s insightful and, yes, humorous look at Adam Smith. P. J. is the best-selling author of eleven books. He graduated from Miami University. He attended Graduate School at Johns Hopkins. He began his career skewering people and views on the left and the right. He wrote for The National Lampoon, where he was Editor-in-Chief. He’s also written for such magazines as Automobile, American Spectator, Playboy, Esquire, Vanity Fair, and Harper’s. He was the foreign affairs desk chief for Rolling Stone magazine. Most recently he’s been a regular correspondent for The Atlantic Monthly. And it’s a real privilege to welcome back P. J., who’s one of our Advisory Board members.

Audience Members

(applause)

P. J. O’Rourke
Author, On the Wealth of Nations

Got to bring this microphone down to my level. In several different ways.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

As David mentioned, this is part of book this part of a series that we’re doing at Grove Atlantic. We do commentaries on books that change the world: the Bible, the Koran, Origin of Species, Das Kapital. We, in the future, may sometime do a series on books that didn’t change the world.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

Report of the Iraq Study Group, etc.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

That really hasn’t gelled yet.

But in the meantime we have these books that changed the world, and they’re kind of like the “For Dummies” series, except not for dummies. It’s for smarties. Like all of us. But as smart as are we have to sort of face it that we’re never going to get through all of these great books, not the whole way through, unless somebody pays us to do it, the way they paid me to do The Wealth of Nations.

TV ushered in the age of post-literacy, and we have gone so far beyond that.

What with the Internet, and Google, and Wikipedia, we’ve pretty much entered the age of post-intelligence. I fear we’ll live to see the day when a person of learning and cultivation is spoken of as being well blogged.

So, books that changed the world to tell us what we would have read in the great books if we’d read them. And what we would have thought about what we would have read if we did any thinking.

And, the others at Grove Atlantic, what where they thinking when they asked me, of all people, to tackle the Wealth of Nations? I have no idea. I guess they were thinking, well, we’re looking for a way to present important ideas to an age that is obsessed with trivialities, and nobody can make things as trivial as P. J. can, so we’ll turn his loose on this.

So, I was under the impression that what, with a little bit of college, and a little bit of writing about economics in the past, I’d read a fair amount of The Wealth of Nations. And I was wrong. I picked the thing up. It’s 900 pages long. I cracked this open, and I’m immediately faced with a major philosophical concern. A pretty important intellectual question, which I called the quantity query, which basically is, why are all the great books so damn long?

And I think we’ve all wrestled with the quantity query, often late at night before a college exam. And I’m thinking even a devout Biblical literalist at a Conservative Baptist Seminary—this has got to cross his mind as we wades through the begats in 1 Chronicles. You know what I’m saying? Well, one good thing about middle age is that I’ve gotten to be old enough that I’m no longer embarrassed to ask the question of why these things are so damn long. I would not have been able to get up the nerve to do this when I was in college. Taking a course on George Eliot, I would never have been able to get up the nerve to ask the professor, why is Middlemarch so damn long?

But now I can do that, and aptly enough, with a book about economics, there’s an economic reason for Wealth of Nations being so long. When it was published it sold for one pound, 16 shillings. And that as at time when the average wage was 10 shillings a week. So that was a lot of money.

Now your serious-minded book buyer demands good weight. For example, just lift Bill Clinton’s autobiography, which could have been summed in a few choice words as far as I’m concerned. So, economics makes the Wealth of Nations long. And not just the book-selling aspect of economics. I mean, economics is obviously a complicated subject. If economics were simple we’d all be a lot richer than we are. But what made Adam Smith a genius was that he did simplify economics. He turned economics into a precise scientific discipline. He separated it from the unruly jumble of the mental and physical world that we encounter in the actual economy.

The problem, of course, is the minute that we step back into the actual economy, all that mental and physical jumble comes jumbling back down on our heads. For instance, when I discover that my five-year old has walked out of Wal-Mart with an unpaid for My Little Pony, all of a sudden I’m dealing not just with the science of economics, but with the science of psychology. Indeed, with sociology, political science, and for that matter with mechanical engineering, trying to pry her loose from the stupid purple plastic horse.

And the thing about Adam Smith was that he was every bit as willing as my crying child and I to stray from strictly economic points. I mean, here, for example, is Adam Smith 231 years ahead of himself, holding forth on the subject of Anna Nicole Smith’s probate battles. Smith said—no relation, I don’t believe between the two. Smith said of Anna Nicole Smith, he said, without, of course, knowing it, he said, “There are some very agreeable and beautiful talents of which the exercise for the sake of gain is considered as a sort of public prostitution.”

Now, it’s that kind of stuff that makes the rest of Adam Smith, all 900 pages, worth reading—or more or less. I don’t particularly recommend the 25,000-word digression concerning the variations of the value of silver during the course of the past four centuries. That particular section of Wealth of Nations, that was like reading Modern Maturity in Urdu, but –

One more thing that makes The Wealth of Nations so long is that it is very much a product of the Enlightenment era. Now Enlightenment thinkers, they just love to explain things. There was a kind of “expla-mania” going on in the Enlightenment. The Enlightenment takes its name from what, if you think about it, is kind of a cartoon moment in intellectual history. Light bulbs suddenly appeared over the heads—except they didn’t have light bulbs—over the heads of people like Adam Smith. I mean, these guys suddenly realized that the world is not a divine obscurity comprehensible only through prayer and monkish meditation. In other words, they realized that not looking at things is not the best way of looking at things. That if you illuminated the machinery of nature with a little observation and thought, you could see how things work. The universe was explicable. And Enlightenment thinkers were prime-movers, damn it, going to explain.

Now as anyone who’s been married knows all explanations start out brief.

But, pretty soon Smith gets tangled up in clarifications. He gets intellectually caught out kind of 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 slipper tapping on the second floor landing of comprehension. For example, in book one of Wealth, Smith is trying to explain how we determine price or value. And he 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’m going, wait a minute. Can killing a beaver really be twice as hard as killing a deer? Deer can run like hell.

And we know where the beaver lives. It built the beaver dam. We have the beaver’s home address. And even if it does take twice as long to kill a beaver, wading around in the beaver pond, smacking at Bucky’s head with the flat side of the canoe paddle, who wants a beaver? It’s not like this nation of hunters is wearing a lot of top hats. And after a long day of being a nation of hunters, take your pick, juicy tenderloin of venison, or beaver soup?

Yet 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 plentiful examples, he proves them. Even intellectuals should have no trouble understanding Smith’s ideas. Economic progress depends upon three individual liberties. The pursuit of self-interest, the division of labor, and the freedom of trade.

Now Smith’s first, and in many ways, most brilliant insight was that there was nothing inherently wrong with the person pursuing his or her self interest. Now this, of course, doesn’t sound like news to us. Or rather, it sounds like everything that’s in the news, because these days, altruism itself has a press agent. Because it certainly is somebody’s self interest to be a celebrity, and Bob Geldoff has figured out a way to stay one. And so Al Gore. But the pursuit of self-interest didn’t used to be regarded in that way.

Religious leaders, philosophers, people in political control, used to tell everybody to just suck it up. Subjugate your ego, bridle your ambition, sacrifice yourself to the Church, to the feudal structure, to the principles of philosophy. And we bought that. We bought that because we didn’t really have any control over our self-interest anyway. And if we were slaves, or serfs, and most of us were, we didn’t really even have a self to call our own that we could be self-interested in. In a doghouse of ancient and medieval life, asceticism made us feel less like dogs.

But by Adam Smith’s time, in 18th-century Britain, ordinary people were beginning to get some control over their own destinies. And this didn’t please a lot of philosophers. It didn’t please a lot of religious authorities. It didn’t please political authorities. And the fact that it didn’t please these people angered Adam Smith. And we think of irony as being a modern tone. But Adam Smith was perfectly capable of using irony, and did so in The Wealth of Nations. He said, “This is improvement in the circumstances of the lower ranks of the people. Is this to be regarded as an advantage or as an inconveniency to society?”

See, in the 18th century, prosperity for poor people was not yet considered a self-evidently good thing. For the simple reason that nobody had bothered to ask the poor people. You know? And in many parts of the world nobody has bothered to ask them yet.

Smith was pointing out that it is never a question of religious sacrilege, or philosophical folly, or political treason to better our material circumstance. The question is how to do it. And the answer is the division of labor, what we would call specialization.

Of course, Smith was not the first person to notice specialization. But nobody before Adam Smith seems to have realized how truly central to economic progress division of labor is. In fact, Smith seems to have invented the term. It’s been around, of course, since cavemen times. I mean, the little wily fellow with the big ideas, he chips the spear points. The courageous oaf spears the mammoth. And the artistic type does a lovely cave painting of it all.

And this leads inexorably to trade. One person makes one thing, another person makes another thing, and people being people, everybody wants everything. And that was Smith’s third insight, which was that all trades, when freely conducted, are mutually beneficial by definition. A person with this got that, which he wanted more from a person who wanted this more than that. Now, it may have been a stupid trade. Viewing a cave painting cannot possible be worth 300 pounds of mammoth ham. I mean, it may have been a lopsided trade. A starving cave artist gorges himself for months while a courageous oaf of a new art patron stands scratching his head a in a Paleolithic grotto, you know? And what about that wily spear point chipper? He doubtless took his mammoth cut, right?

But these participants in free trade, they didn’t ask us. It’s none of our business. Unless, of course, we make it our business by introducing trade regulation. And regulation can’t be effective unless there is coercion to enforce the regulation.

So, suddenly, instead of free trade, we have coercive trade. And let me define coercive trade. A coercive trade is where I get the spear points and the mammoth meat, and the cave painting, and the cave. And what you get in return is killed.

Coercion is very simply the lack of individual liberty. Coercion destroys the mutually beneficial nature of trade, which destroys the trading, which destroys the division of labor, which destroys progress. You can have pursuit of self-interest, division of labor, and freedom of trade, or you can have North Korea. It’s really that simple.

Now, in The Wealth of Nations, Smith’s logic, based upon these principles—his logic does a number of interesting things. By showing how productivity is increased, and how it can be increased, the mechanism by which it can be increased, he disproves the idea that bettering the condition of one person necessarily worsens the condition of somebody else. And idea that is still dearly held by Marxists, and by, I may say, by everybody’s little brother.

Wealth is not a pizza where if I have too many slices, you have to eat the Domino’s box. Wealth is not zero-sum. That is probably the single most important, most central message of The Wealth of Nations.

Now, Hillary Clinton and Barack Obama should get this through their heads. They keep harping on how there is this huge income disparity gap between very rich Americans and just ordinarily prosperous Americans. And how we’ve got to close that gap, because it is so unfair. Well, Adam Smith is right there in The Wealth of Nations to speak in favor of unfairness. It is a position that I myself take around my house.

Because I’ve got a nine year old daughter, and so I hear that all the time, that’s not fair. And when she says that, I say, honey, you’re cute. That’s not fair.

“Your family’s pretty well off. That’s not fair. You were born in America, that’s not fair,” I said. “Darling, you had better pray to God that things don’t start getting fair for you.”

The hell with the income disparity gap. What we need is more income. Even if it means a bigger gap.

And another thing that he showed that Hillary and Barack and a lot of their people—a lot of Republicans, too–should get through their heads, is that there’s no such thing as trade imbalance. All trades are balanced the moment that they’re completed. That is the definition of a trade.

Now, remember in the 1980s when everybody was panicked because of the trade imbalance with Japan. Remember that? Japan was sending us all these cars, and stereos, and TVs, and all they were getting for these little green pieces of paper with dead presidents on it. But a lot of people didn’t.

So the Japanese wound up with all these little green pieces of paper that they didn’t know what to do with, so they started buying—they bought Pebble Beach, you remember that? They bought Rockefeller Center. And everybody was freaking out, like they were going to take Pebble Beach home with them.

And Japanese kept buying up real estate in the United States, and they bought it until they inflated the real estate market into a huge bubble, and the bubble did what bubbles do. And at the end of the 1980s, we had all the cars, and all the stereos and TVs. And we had Pebble Beach and Rockefeller Center, and we had all the little pieces of green paper with the dead presidents on them.

So, I don’t mind American politicians worrying about the current trade imbalance. But if they’re going to worry, they should be worrying about China, is what they should be worrying about, not about us.

There are a lot of lessons in The Wealth of Nations that American politicians could stand to learn. Especially, I may say, the new Democratic majority that’s in Congress. I mean, for example, the Democrats have passed the House Energy Security Bill. It decreases dependence on foreign oil by making domestic oil more expensive so that Americans will buy more foreign oil, which will leave us with more oil here in America because no one will buy it.

I think I understand. And we’re going to produce more ethanol. Although, in the back hills of Kentucky, they have been making high-octane stuff out of corn mash for years, and I cannot see that it’s done their economy much good.

And another piece of legislation the government can now negotiate for those Medicare drug prices. And I’m sure the government will show the same hard-headed, tight-fisted brilliance in negotiating for drug prices that it shows negotiating for defense contracts right now. I mean, Preparation H is going to cost $400 by the time these people get done.

And best of all, there’s Ethics Reform. A Congressmen will no longer be able to get a free meal from the lobbyist unless the Congressmen brings a note from his doctor showing that he is bulimic and the meal will be returned.

Of course, the Republicans could stand to learn a few things about economics, too. I mean, such as with Bush’s immigration program. Fence the border, and give a huge boost to the Mexican ladder industry. Put the Army on the Rio Grande and know that U.S, troops are standing between you and yard care.

But, back to The Wealth of Nations itself. You see, by showing that there was no set amount of wealth, what Smith did was he disproved the idea that a nation has a certain sort of fixed hoard of treasure, a King’s ransom, if you will, of gold, and silver, and jewels locked up in the royal castle vault. No, no, no, said Smith. The wealth of a nation has to be measured by the volume in trades and services within that nation over a given time span. In other words, it has to be measured by what goes on in the royal castles, kitchens, and stables, not by what’s locked in the royal castle vaults.

And that is to say that Smith invented the concept of gross domestic product. And that was a good thing. It was good that he did that, because without GDP, modern economists would have nothing to say. They’d be standing around mute in ugly neckties waiting for MSNBC to ask them to be silent on the air.

So, if wealth is all ebb and flow, then so is its measure: money. Money has no intrinsic value. Now any baby who has eaten a nickel could tell you that.

And those of us who are old enough to have heard of the Weimar Republic, or to have lived through the Carter administration—we’re not surprised by the information that money has no intrinsic value. But people in the 18th century were surprised by this, because money in those days was still precious metals.

And it was—this idea of Smith’s that money had no intrinsic value, it bugged his contemporaries. Smith was saying that gold is worth—well, it’s worth its weight in gold, certainly. But, I mean, you know, it’s not necessarily worth anything else. And people were creeped out by this. Even though they could see, they could look at 18th century Spain, which was covered with bling, and completely impoverished, and realize that Smith was be right. But still, it bothered them. It was as if Smith, having just proved that everybody could have more money, had just gone on then to prove that money doesn’t buy happiness. And of course, it doesn’t: it rents it.

What Smith had to say in The Wealth of Nations, it disturbed people at a visceral level, and it still does. I have to say it disturbed me. I’m reading The Wealth of Nations and I’m reading about pursuit of self-interest, and I’m thinking to myself, well, gee, I’m not self-interested. I’m not selfish. I’m not greedy. I think about the environment and others less fortunate than me. And especially those unfortunates who don’t care about the environment. I think about them, and I think they’ll lose the next election. And then we can get some people in office who aren’t selfish and greedy and who do care about the environment, because if we elect environmentalists, then that subdivision full of McMansions that’s going to block my view of the view of the ocean won’t get built. So, I’m not self-interested. Right?

And let’s face it. The lower ranks of the people, they do have too much money. Look at Britney Spears, or those moneybags buying the chateaus-to-go on my beachfront. I mean, them with their four barge garage and the Martha bitchin’ Stewart Kitchen that they cook in about as often as Martha does the dishes. They may think they’re not the lower ranks, because they make a lot of dough, but their lifestyle is an inconveniency to this society, big time, as they will find out when I key their Hummer that’s taking up three parking spots.

These types, all they do is work all day, 80, 100 hours a week in some specialized division of labor that none of the rest of us understand, on Wall Street or in fancy corporate law firms, or in expensive hospital operating rooms.

And this is no way to live. And this is why my wife and I, we are planning to grow all our own food. Turnips can be stored for a year. And we’re going to use only fair-traded Internet services with open-code programming. We’re going to heat the house by means of clean energy, renewable resources, such as wind power from the draft under the front door. And we’re going to knit our children’s clothes with organic wool from sheep raised under humane farming conditions in our yard. And this will keep the kids warm and cozy, if somewhat itchy, and it will build their characters, because they will get teased on the street.

Yeah, sure, total removal of all trade restraints, yeah that would be good for the economy. But think of the danger and the damage to society. I mean, we have to have government regulations. We have to have it. I mean, if it weren’t for government regulation of big corporations, why executives of companies like Enron, WorldCom, Tyco, they could have cheated investors out of millions.

I mean, without restrictions on the sale of hazardous substances, why young people might smoke, they might drink, they might even use drugs. Without strict government licensing of medical practitioners, the way would be clear for chiropractors, osteopaths, purveyors of aroma therapy.

If we didn’t have labor unions, 40,000 people would still be wage slaves at Ford Motor Company, their daily lives filled with mindless drudgery. And if it weren’t for retail collusion in the petroleum industry, filling stations could just charge as little as they liked, and I’d have to drive all over town looking for the best price, and that would waste gas.

So, we have to have government regulations. And consider the harm to the developing world. I mean, cheap pop music MP3 downloads from the US, this is going to put every nose flute band in Peru out of business.

Plus, some jobs just require protection. They require protection to ensure that they’re performed locally in their own communities.

My job, just for instance. My job is to make quips and jests and waggish comments. And somewhere in Mumbai there is a younger, funnier person willing to work for a lot less.

My job could be outsourced to him. But, Mumbai-me is thousands of miles away. He can make any joke he wanted without thought of the consequences. He could let his sense of humor run wild. He could start making Jerry Ford funeral jokes about how the funeral lasted longer than Ford’s administration, and had better economic policy outcomes.

But who would my in-laws be offended by? Who would my wife scold? Who would my friends shun?

And then, there’s the matter of that wealth of nations ebb and flow of goods and services: Smith’s gross domestic product.

Now, I’m as grossly domestic as the next person. Where is the product? How come all the goods and services ebb out of my income instead of flow into it? And, of course, I understand that money isn’t what’s valuable, love is what’s valuable. And my back account, it’s full of love, or something similar to it, sex. That is there’s F-all in my bank account.

You see, 231 years after The Wealth of Nations was published, it is still very hard for us to believe in, at a gut level, to believe in what Adam Smith had to say. It’s hard for me to believe it in and I’m a right-wing Republican pig.

So it’s really important to understand The Wealth of Nations, not so that we can understand economics, not so much that, but so that we can understand the moral lesson that Adam Smith was trying to convey in The Wealth of Nations. And the moral lesson is the necessity of freedom and equality.

The Wealth of Nations—now, it seems to be about economics. But really it’s about economics only because freedom and equality are so morally necessary that without them we cannot even perform the humble, but morally necessary, tasks of feeding, and clothing, and sheltering those whom we love. Or even feeding and clothing and sheltering ourselves, which is very morally important, because a naked, starving, homeless us is not an asset to society.

Wealth of Nations espouses free enterprise, not because free enterprise will make us rich, although we all hope it will. But because free enterprise is based upon property rights. And not property rights in the Donald Trump sense of property rights, but a far more important property right than that. It is based on the property right that we all have to ourselves, the deed we have to ourselves. It is based upon our self-possession as free individuals.

Adam Smith said the property, which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred. And Smith said that no matter how poor we are, we all have a fortune, we have an estate, we have an investment portfolio in what he called the strength and dexterity of our hands. And this grasp of free enterprise—it comes from this grasp of, shall we call it, a hammer and a sickle. That is really the real source of free enterprise. And Smith said that to hinder a person from employing that strength and dexterity, in whatever manner that person thinks proper, without injury to his neighbor, is a violation of the most sacred property, the property that you call you, and that I call me.

Now this property that we have in freedom, it would be meaningless if there were not a kind of equality among us.

Now there’s a very well known document that was published the same year as The Wealth of Nations, 1776. And in that document it says we hold this truth to be self-evident, that all men are created equal. But why do we hold that truth to be self-evident? Because it really isn’t particularly self-evident. Are we all equal because we all showed up? It doesn’t work that way at weddings and funerals. Are we all equal because the UN Universal Declaration of Human Rights says so? Well, the UN Universal Declaration of Human Rights also says, and I quote, “everyone has the right to rest and leisure, including reasonable limitations of working hours.” And I will have my wife tell the baby. No.

No, it was Adam Smith writing about mere economics who explained why we are all equal. It is because man, the most powerful creature ever to bestride the earth, is also the most pitifully helpless. We are born incapable of caring for ourselves, and we remain so, to judge by kids today, until we’re about 40.

At the age of two, when any other mammal is in its peak earning years, the human toddler cannot find its ass with both hands. At least not well enough to use the potty. The entire creativity of Daniel Defoe could not get Robinson Crusoe through the workweek without a supply of manufactured goods from the shipwreck and the services of the cannibal executive assistant. You know?

We must treat other people with the respect due to equals, not because we are inspired with noble principle, or filled with fraternal affection, but because we are pathetic and useless. And I quote from Adam Smith, “an individual stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.”

Now, you think about that statement, that is a left-wing statement. That is very nearly a heartfelt plea for socialism. And yet, that sentence is a sentence that appears right before the most quoted sentence in all of The Wealth of Nations, which is, “it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from the regard to their own self interest.”

And that second sentence is usually quoted as though it meant greed is good. And that is not the meaning that Adam Smith had. Adam Smith does not urge us to selfishly pursue wealth in the free enterprise system. He urges us to give thanks that the butcher, the brewer and the baker do. The butcher, the brewer, the baker, they may be wonderful people. They may be horrible people. It doesn’t matter. The point that The Wealth of Nations is making, is that the butcher, the brewer, and the baker are endowed by their creator with certain unalienable rights, and among these are steak, beer, and hoagie rolls.

Now, that’s everything I know about The Wealth of Nations in even less space than my book. However, if anybody’s got any questions, I’ll make up some other stuff.

Audience Members

(applause)

Audience Member

CEO salaries and benefits are out of control, and they’re paying entrepreneurial rewards to mere managerial, or often merely custodial efforts with obvious negative effects on us, the stockholders. What’s the Smithian solution?

P. J. O’Rourke
Author, On the Wealth of Nations

Well, interestingly enough, Smith distrusted corporate structure. He didn’t like the corporate structure. It’s interesting that the supposed avatar of modern capitalism would have looked at what we would consider normal corporate structure, and said, uh-uh-uh, that is a bad idea, the way you’ve spread ownership so thinly, and left these people in management in control of this corporation. They’re going to run the corporation for their benefit, because most of the people who are invested in this don’t know enough about the business and don’t have enough control over the business to have anything really to say about this. And I think one of the miracles of modern capitalism is that the corporate structure that we are accustomed to works as well as it does. That it works at all.

Yeah, I mean, I think that CEO compensation is probably out of control. I mean, how hard can it be? You’re the head of Proctor & Gamble, right? Population’s getting older. You go, okay, let’s see. Population’s getting older. More Gelusel, less shampoo. Less hair conditioner—I mean, that’s what they do all day. It’s not like they lift stuff. And especially the way a lot of them have behaved, say at our American automobile companies, you tell me you can’t snatch somebody at random from an MBA program that couldn’t do that badly for a lot less money? I don’t see it.

The problem, of course, is as it often is, with any kind of problem, is the minute you announce this problem to political powers, they say, oh, well, we can fix this, we’ll just pass a law. And you know the cure is going to be worse than the disease. We don’t have very good corporate management right now, but it could get a lot worse if the government gets to a point that people who manage corporations.

So, I think it’s one of those things that the best answer is shareholder activism—the best answer is through civil society. And whatever sort of action you can take as an investor. And of course, we all are investors, because almost everybody in this room is of an age where we’ve got some pension investment of some kind. So, we’re all investors. And we’re not living up to our responsibilities when we let these people do this. And we’ve got to take the whip hand here. If we turn it over to Hillary and Barack Obama, it’s going to be a lot worse.

Here is a question from the mysterious people in the other room. If Smith had written The Wealth today, wouldn’t he have had added rule of law as a necessity for economic progress?

Well, in point of fact he did. I didn’t talk about it tonight, but that was a central tenant of Smith. Smith was a firm believer in rule of law. And to the extent that he went so far as to say that it’s better to have a set of imperfect set of laws, even a fairly bad set of laws, as long as those laws are applied equally to everyone in society, and as long as the members of society have some input and influence over what those laws are. It’s better to have those laws than to have no law.

And I think we can see that. I mean, it isn’t hard to get an example of that. Burma would be a lousy place to live. We certainly wouldn’t want to live there. But we’d probably want to live in Burma before we’d want to live in Somalia. It’s better to have bad laws than no laws. No, he was a huge believer.

One of the things that keeps Smith from being a libertarian in certain ways, even though he inspired libertarianism, is that Smith lived in an era where lawlessness was very—in western Europe, and in our civilization, was in recent memory and very close at hand. He was a college student at Oxford when the last Highland rising happened. And those people of his era had enormous fear of lawlessness. Were willing to give up some considerable amount of what we would consider civil liberties in order to ensure that they didn’t live in a lawless society.

Another question? Right next to you. Right in front of you. Look to your right. Right there, the guy in the blue shirt. (laughter) There you go.

Audience Member

Do you believe that capitalism leads naturally to greater political and social freedom? And if so, how do you explain Singapore?

P. J. O’Rourke
Author, On the Wealth of Nations

Do I think that capitalism leads naturally to—? No, no, no. I don’t think capitalism does. Capitalism has existed forever. There were capitalists in ancient Rome. And property rights. Probably a tremendous, wonderful book by Richard Pipes, the Russian historian called Property and Freedom, where he basically proves the case, I think, or just comes as close you can, is that property rights are the necessary foundation for political freedom. And certainly a free market can’t exist very well without property rights.

So, you know, property rights don’t necessarily mean that you will have political freedoms. But they’re necessary in order for you to get. So it’s certainly possible to have a capitalistic system. And it’s possible even to have a free-market system that doesn’t have political rights. But if you don’t get that free-market system, then you will never get the political rights. Because a free-market system is fundamentally the reason here is that you have to create a large enough base of people who have material influence over a society to counterweight those people who have the weight of force, the weight of tradition, the weight of political or religious fanaticism. So the only way to create a counterweight for freedom against the traditional forces of tyranny is for there to be a broad section of society with a lot of economic throwaway.

And this is basically how Europe went from the feudal era to an era of reasonable freedom. And it is our big hope for China. We don’t know if it will work, but without that free-market step that the Chinese have taken, we can be pretty sure that they would have slid right back into acting like Russia.

In your opinion, which is the most Smithian country in the modern world? In other words, which country is the closest to Smith’s model?

Well, up until the reunion of Hong Kong with China, I would have said Hong Kong. Even though it wasn’t a democracy—you got to remember, Smith was not a democrat. I don’t mean a capital D Democrat; of course he wasn’t a capital D Democrat—that would have been ridiculous.

He wasn’t a small D democrat.

And, of course, there was a reason. There really weren’t many small D democrats—and there was a reason for that in the 18th century: democracy had not been tried on a broad scale. All that people in the 18th century knew about democracy was a couple thousand years old. It was Athens, Peloponnesian war. They all knew the history of the Peloponnesian war. A long complicated war, it can be easy summarized. democratic Athens screwed up. And tyrannical Sparta won.

And so all down for 2,000 years of history, people are going, “Woo, a wonderful idea, but it didn’t seem to work out very well in Athens.” Then the other examples of democracy that a person of Smith’s era would be familiar with would be the cantons of Switzerland, where Calvin had burned people at the stake for saying there wasn’t a trinity and that kind of thing. The little republics city-state republics of Italy, where everybody was poisoning everybody else.

So far, what experiments there had been in democracy didn’t look too promising. Smith believed in democratic principles, there is no doubt. But he thought that about as best you could do would be a limited monarchy with a serious counterweight having to do with people of property in a parliament. And, of course, he knew about the United States, but he was very dubious about our prospects. You know, there’re 13 little quarrelsome mini-countries, nation-ettes, all at each other’s throats, with a bunch of ridiculous paper money that wasn’t worth anything. And it didn’t look good.

And, of course, in certain ways, it didn’t look good over here as a democracy until we sort of settled up certain scores in the Civil War. It wasn’t really until we got to the Civil War that we proved that democracy could work on a broad basis.

Oh, right here in the front. Let’s make the microphone person earn her keep.

Audience Member

Why are American newspapers and broadcast journalism so liberal?

P. J. O’Rourke
Author, On the Wealth of Nations

Okay, where it comes, the left-wing bias, or the liberal bias in the media. And it exists. It exists. I mean, all you have to do is move from the business to the arts pages in the Wall Street Journal to see that it exists.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

It exists because of the kind of people who go into newspaper work. Now, I’m old enough to remember the kind of people who used to go into newspaper work. A newspaper used to be a trade. It was basically a semi-skilled trade. Newspaper people weren’t drawn from fancy backgrounds. They mostly grew up in blue-collar neighborhoods, they were mostly Catholic. They grew up Catholic. A lot of them were Irish. They grew up in these neighborhoods, and if you liked books, and you didn’t like lifting things for a living, and you didn’t want to get up real early in the morning, you basically had two choices in life. You could either become a newspaper reporter, or you could go into the church.

So, it’s all these young guys who liked to read, and didn’t like to lift things, going, women/booze. Women/booze. Women or booze. Which is it—church or newspaper?

And so when you met the old-fashioned newspaper guys, they were guys—and they were guys, of course. They were just regular guys. They didn’t have a big sense of their job. They were paid professional gawkers. They were the guys who got to go on the other side of the yellow police tape. There’d be a terrible car wreck, and their job was to go in on the other side of the police tape and look in there, and go, “oh, man, that was a terrible car wreck. A head was smashed like a pumpkin.” And then come out and tell us about it.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

It was a great job. You got free hockey tickets. There were poker games. You got to smoke and drink and all this. It was great.

Then came the professionalization of journalism. And pretty soon you got a college degree in journalism. A lot of the older fashioned reports never finished high school. And all of a sudden you got a college degree, and you start getting sort of a different type in there. And they start thinking they’ve got a mission. Now they’re not just laying bricks, they’ve got a mission to make the world better. And that trend had started already in the 1950s, and in the 1960s. But then something awful happened. It was Watergate. And not really that Watergate was so awful, it was the movie that was made about Watergate.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

And all of a sudden, every little drip who should have joined the Peace Corp goes to J-School. Because they’re going to be played by Robert Redford. They’re always going to be played by Robert Redford, never Dustin Hoffman for some reason. They’re always going to be played by Robert Redford. And they’re going to change the world. And they’re going to speak truth to power.

And now you go into a city room at a newspaper—when I was kid starting out in the business, you went into the city room of the newspaper, it was blue with smoke, and everybody’s beating on typewriters, and they’re yelling for the copy boys, and they got the bottle down in the bottom right-hand desk drawer. You go in now, it’s all carpeted, and everybody’s tippy, tippy, tippy tapping, making little phone calls. And the air is fresh as a daisy, and everybody’s busy speaking truth to power.

It just got taken over by wimps is what happened.

Audience Members

(laughter and applause)

P. J. O’Rourke
Author, On the Wealth of Nations

Did Smith get anything wrong about the economy? Really wrong?

Well, yeah, he did. The beaver thing that I was talking about. It’s all wrong about beavers.

He had obviously never been outdoors in his life. He’s a scholarly guy. He didn’t know what he was talking about.

It was actually Tom Palmer at the Cato Institute that pointed that out to me. Because I asked Palmer the same question, when I started this project. Because Palmer really is a scholar of Smith. And I said, Tom, was he really wrong about anything? He said, oh, yeah. (laughter) Seriously wrong.

But even more so, there are five books through The Wealth of Nations, and the fifth book is particularly interesting in some ways, because it’s the worst of the five books. The second book has some problems with value and price, and it has some problems with the nature of capital accumulation and so on. Some things that we might well disagree with.

But the fifth book is when Smith takes his basic principles and he tries to apply them to policy questions of the British government, in the 18th century, and he just goes haywire. He’s internally inconsistent, he contradicts himself and argues with himself. He violates his own principles with his suggestions. Some of these suggestions make no sense whatsoever.

It is a great reminder that politics can turn anyone into an idiot.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

And here is provably one of the smartest to have ever lived. And when he takes on practical politics, he turns into a jerk in certain ways. And you know, Smith had originally planned three books. He had this big project he was going to do. He was going to deal with our moral existence, that’s The Theory of Moral Sentiments, an absolutely brilliant book that is about—using just a tool basically, of some natural sympathy that we seem to be able to feel—we use that and build upon that to build moral structures. And it talks about how we build moral structures, and how we can judge whether our moral judgments are indeed valid, and how we can make better moral judgments, and how those judgments are corrupted by fashion, and corrupted by circumstances. It’s an absolutely brilliant book. In many ways definitely an easier read than The Wealth of Nations, and in many ways less dated, because it’s about human nature, and that, of course, doesn’t change whatsoever.

Then he was going to do a book about our material circumstances, and that’s The Wealth of Nations. And his idea was to do a third book about our political circumstances, our law and politics, what he called jurisprudence. And that book he never did. And we don’t know quite why he didn’t do that. We do know that not too long before he died, when he knew he was dying, he had all his notes, and drafts, and work that he did on the book about jurisprudence burned. And so we have no idea what was going to be in that book.

But I think there’s a clue. I think there was something else going on. And Smith didn’t live terribly long. His health was not great. He was busy doing other things. But there are many reasons that the book might not have gotten written. But I think that there is a clue to one other possible reason in the last book of The Wealth of Nations: that Smith realized the futility of trying to deal with politics. He’s a moral philosopher. There’s not much room for philosophy, and there’s no room for morals.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

We are changing tapes. Or that’s not really a tape, it’s some mysterious electronic thing? Some thing I don’t understand. Certainly not film, is my inclination.

David Theroux
President, The Independent Institute

It’s the division of labor.

P. J. O’Rourke
Author, On the Wealth of Nations

That’s right, division of labor and rational ignorance. I don’t have to know what he’s doing back there. It’s great. It’s cool. You tell me when we’re live again.

Okay, in the back. Where’s our microphone? Yeah, now I’m going to make you run all the way to the back. All the way to the back on the aisle there. A rational decision would have to ask him first, then you, but never mind.

Audience Member

Did Adam Smith deal with taxation?

P. J. O’Rourke
Author, On the Wealth of Nations

Oh, yeah, Adam Smith deals extensively with taxation. That’s one of the areas where he goes quite badly wrong in the fifth book. Not wrong, but, I mean, he starts thinking about taxation and he starts coming up with suggestions for taxation. He just can’t help himself. He’s one of those guys that has to analyze everything. And so after The Wealth of Nations is published, the government of Britain looks at this book, and what do they take away from this book? And he makes all these amazing, important suggestions about how to improve trade, and how the country can get richer. And all they fix on are the couple of suggestions that he made about taxes. And he wasn’t even suggesting that taxes should be raised. He believed in low taxes. But he mentioned taxes. And this is like telling the dogs to stay out of the garbage.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

What will they hear? Garbage. All right.

So, the first effect that The Wealth of Nations has politically is that a number of these sort of things he tossed off about, he said, when it comes to taxing, you can’t tax transitions you don’t know about. But some transitions are public and notorious, and so those could be taxed. For instance, things sold at auction are sold publicly, so we know when they were sold, and how much for. So the government goes, oh, tax auctions, and on it went.

And this was one of the reasons that Smith was given a job by the government, and he was given a job as a customs commissioner. He would spend his whole life arguing down trade barriers, was given a job, at the end of his life, as a customs commissioner. That’s politics for you. Politics always rewards us for our sins. And of course, Smith’s family had been in that business. His father had been a customs agent, and one of his cousins, and an uncle and stuff. So he probably didn’t think it was quite as amusing as we think it is. But nonetheless.

Did Smith believe fiat concurrency—. I was thinking of little cars full of Italian Lira driving around.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

Did Smith believe that fiat currency could be used successfully in a free market? Well, yeah, he believed in paper money. He thought that paper money would be—if properly controlled by an independent central bank, so that you didn’t have inflation or credit collapses—he thought that that could be very valuable in an economic situation, because use of precious metals as money has a lot of inefficiencies. The stuff is heavy and clumsy, and gets lost and it’s easily stolen, and so on and so forth. And, plus, precious metals have actually, practical industrial uses, which using them as money is where we’re diverting them from.

So, he was in favor of paper money. But fiat money was just a little bit beyond him. He assumed that money would always have some sort of exchangeable basis. He even went so far as to posit a sort of market basket basis for the value of currency. The idea that currency would just be a government IOU just sort of hanging out there was like too much for an 18th-century mind to wrap itself around. And I got to say it’s a little too much for my mind to wrap itself around down to this day.

Audience Member

I wanted to ask you about what Adam Smith’s views would be of 80% of the wealth in Guatemala being held by 10% of the population, mainly because of land grants given by the Spanish. Would Smith consider this property to be a sacred right?

P. J. O’Rourke
Author, On the Wealth of Nations

Smith would probably consider that Guatemalan property situation to be not worth fixing. He would consider the property rights to be more important than the inequitable distribution of property. His message to the Guatemalans would be, wake up and smell the coffee. Go to school, learn how to do something, and you’re not going to make a living as a farmer anyway. It’s Guatemala, what are you going to grow? You got a little bit of coffee, and a couple of bananas, and get out here. Go to high school and learn to count and stuff. This is not the way to the future.

And that’s the problem with a lot of the Third World, they think, oh, my gosh, things are so terribly unequal here, we have to split up this stuff and make it equal. Well, that doesn’t work. What makes these countries rich is people acquiring skills and building businesses, not taking the patron’s banana plantation and dividing into 250 different little parcels where each person gets to grow one banana. That’s not going to make people rich.

Audience Members

(laughter)

P. J. O’Rourke
Author, On the Wealth of Nations

So, yeah, it’s a lousy situation, and it’s terribly unfair, but fixing it—and then consider what it would take to fix that problem. It would take some sort of Guatemalan dictatorship. They’re pretty familiar with that down there. It would take concentrated government power to take that private property away from people and redistributed fairly.

Do you think it would get redistributed fairly? Well, no of course not. It would go to the political cronies of the political people in charge. Plus, you would have to create this sort of Hugo Chavez centralized political power, which would be, even if not abused by the people who created it, and believe me that would be unlikely, would be definitely abused by the people who inherited it, or worked within it, and so on.

And so, again, it would be one of those cures worse than the disease. He wouldn’t approve, but the way to fix that is for the Guatemalans to become a modern society, and to give up on being an agrarian society. That’s the only answer.

Adam Smith believed in self-interest, but he gave away lots of money. Where? What type of charities did he favor?

Smith lived quite modestly. He was never married. He had no children. He did help raise an orphaned cousin. He supported his mother and a maiden aunt. But he had a modest establishment. He entertained modestly. And he made a good deal of money in his life. And when he died, there wasn’t much of an estate left. And his friends suspected that he had given a lot of it way. But we didn’t really get proof until some letters came up for auction in the 1930s. And that’s a letter that was sent essentially to Smith’s business manager, where he was writing to say there was a cousin of his from Wales who was in the Army that needed—it was a huge amount of money. It was like two-thirds of his pension for the year. That he needed that so he wouldn’t have to give up his Army commission, and so on, and so forth.

So we really don’t know where a lot of the money went. But it seems as though Smith gave away a great deal, and very secretly and very privately. There’s a Talmudic saying that who gives in secret gives twice. And Smith was definitely up on that.

Self interest. Smith points in The Theory of Moral Sentiments that the thing which motivates people most, which is most important to people, is to be beloved. And even if the people who don’t know who to belove, exactly, they know that some nice guy somewhere fixed something for them.

And so self-interest in Smith is not monetary. Self-interest is very, very broadly defined. Self-interest is more what we call self-actualization, I guess is what they would call it on the Oprah show. Live the best life. Live your best life, or something like that. That’s much more what he’s talking about than simply accumulating cash.

Right over there. Sir.

Audience Member

Our two major political parties, are they moving away from Smith with equal speed, or is one still better than the other?

P. J. O’Rourke
Author, On the Wealth of Nations

(laughter) I think the Democrats are quicker on their feet than the Republicans in a general sort of way.

I think that the Republicans, bad as they are, and they’ve been extraordinarily bad over the course of this president’s administration, do not subscribe to the zero-sum fallacy. And I do think, in their heart of hearts, the Democrats do.

See, this is what keeps me, at least, nominally, or notionally, a Republican. I find it very, very difficult to support a Democratic candidate. Because I do think that the root of the Democratic party is a belief in the zero-sum. And they certainly talk as though everything is zero-sum. And I think that they really feel that way in their hearts.

And, of course, it is a piece of human psychology to feel that way. Anybody who’s got kids has seen this with kids. Kids regard everything as zero-sum. And so, yeah, I do think the Democrats are little worse. But it’s a low bar in that contest.

David Theroux
President, The Independent Institute

What was your quote again about politicians remaining teenagers?

P. J. O’Rourke
Author, On the Wealth of Nations

Oh, yeah, that was something I said years ago in Parliament of Whores, giving money and power to politicians is like giving whiskey and car keys to teenage boys. I’ll hold with that.

Audience Member

You talked about free markets, but I see that same hundred corporations are now, more or less, taking over America. Every shopping mall looks the same. Every neighborhood little mall has the same store, same chain, everything. America is becoming extremely uniform partly because of the few corporations taking over everything. And although it might be efficient, it’s kind of aesthetically and morally somewhat disconcerting.

P. J. O’Rourke
Author, On the Wealth of Nations

Well, I agree that it’s disconcerting, it’s unpleasant looking, and so on. But I don’t agree that it’s just a couple corporations. Some of the biggest corporations that exist right now didn’t exist at all 10 or 15 years ago. And some of those—it’s easy to say, oh, The Gap is taking over all of America. Except that The Gap is falling flat on its face. These things change. We go through periods of consolidation where we get large, big block stores, like Target, and Wal-Mart, and K-Mart. And we think, oh, they’ll never be another small store. And then we walk down the street and we see 200 boutiques, because there are obviously things that Wal-Mart doesn’t do.

The important thing is here is freedom. And the important thing is, are you free to start another corporation to compete with these people or are you not? And you say, oh, I can’t do it. They’ve got too much money. Well, they don’t have too much. I mean, Michael Dell didn’t think that they had too much money. Bill Gates didn’t think that they had too much money. Toyota didn’t think that GM and Ford and Chrysler had too much money for them to go into the American market.

You guys are from California. Do you remember the first Toyota cars that came over here? They were just hilarious. I mean, they were really like tin cans. They made Volkswagen Beetles look substantial.

And they had names like the Go-Baby Butterfly and the Little Purple Bird. The Japanese had no idea what they were doing when they came over here. But it didn’t stop them from trying.

The important thing there is the freedom. And yeah, I mean, Smith wasn’t under the impression that corporations are good, or that businesses are good. Quite the contrary. He said people in the same trade never get together, even socially, except that it turns into a conspiracy against the public. He was very clear-eyed about this. The important thing is the freedom. You have the freedom to start another, better-looking mall that serves people who want the kind of things that you want.

And if you’re right about that, if it is discouraging the way every mall looks alike and every store seems to be some sort—then you’ll get rich. And if you’re wrong, you won’t. The important thing is that you’ve got that freedom.

Let’s see. If Smith is right, and trade is mutually beneficial, why should U.S. policymakers worry about China? Well, they shouldn’t I don’t think. Don’t the Chinese, and the ’80s Japanese, and the Americans benefit from international trade? And then something about his deficit—or whether there’s a deficit or surplus.

Well, as I said with trade, there never is a deficit or a surplus. A trade is a trade. A trade is balance. A trade is a trade is a trade. And so, the fact that what we’ve traded the Chinese is a lot of debt instruments and they hold those debt instruments, and we can say, “Oh, my gosh, what if they get rid of all those bucks? Our dollar that’s been so strong could suddenly become very weak, and all the important stuff would get very expensive.” Yes, that’s true.

However, as I read through all the op-ed page stuff in the New York Times, and in the other broadsheet papers and so on, everybody is panicking about all this stuff that we’ve got because the dollar’s too strong. They’re saying the dollar is too strong. We’re importing all this cheap stuff. It’s destroying our jobs here. But the main reason we’re worried about the dollar being too strong is that it might suddenly get too weak.

I’m going, make up your mind! What is it you want? Do you want strong dollar or weak dollar? Well, how about just staying out of it, and letting the marketplace figure this out. I mean, if the dollar goes down in value, it will cause serious dislocations. But that’s creative destruction. That’s the nature of capitalism. If you want to live in a stable society, go to North Korea. Stably miserable.

One more question. Do we have one more question in here? Or if not, we’ll take—there. There’s one back there.

Audience Members

I think this current administration is such an odious disaster at so many levels. But I’m actually interested from a property-rights standpoint, with the Republican administration that’s so explicitly against having rights for gay and lesbian people, where property rights are conferred in this society. I’m not asking what Adam Smith’s view would be on homosexuality but with regard to property rights that are conferred on this policy level, how do you think he would respond to the irrationality of this administration in that regard?

P. J. O’Rourke
Author, On the Wealth of Nations

Well, yeah, this administration is very bad about this. I mean, say, for instance, the issue of gay marriage. Now marriage has got entirely two entirely separate aspects to it. One of them is religious, if indeed, you believe in a religion. It is the spiritual bonding of two souls into one, etc. And I’m a Catholic, I go along with that.

But the other side, on a political side, marriage is a contract. And why any two people shouldn’t have equal contract rights, I can’t imagine. Now, of course, part of the problem is prejudice, it’s bigotry, it’s short-sightedness on the part of political conservatives. But part of the problem is also the activists. Because activists have not, in general, been satisfied with getting just the contractual rights. They say, no, no, we won’t be fully equal in this society unless it is called and regarded as a marriage.

Well, it isn’t actually within the capability of political society to make that change in people’s minds. That is a social, a religious, an extra-governmental decision, whether two gay people, who intend to stay together forever, whether they are, in fact, married, is something that people have to decide for themselves. It’s not something the government can decide. The government only covers contractual law.

Now, I would say most of the fault here is on the part of the body of people are political conservatives, not all of whom are social conservatives. But the social conservatives within that body of political conservatives bear most of the blame for the situation. But there is some blame in the insistence common to activists in any field that, no, we don’t want a reasonable solution to this that people can accept. We will not be satisfied with anything short of perfection.

And so we see the same thing on the right-to-life issue. Both sides seem to be locked into, if we can’t have it completely our way, we refuse to. And of course, democracy just doesn’t work like that.

Thank you.

Audience Members

(applause)

David Theroux
President, The Independent Institute

For those of you who don’t have copies of P. J.’s book, we have copies upstairs. P. J. would be delighted to sign copies for those of you who don’t already have signed copies.

Also, one of the questions was raised about Guatemala. I might mention that we have a book called Liberty for Latin America by one of our senior fellows, Alvaro Vargas Llosa, that deals directly with that question. And I think you’ll find that of use. You’ll find other of our books here. This is one by one of our senior fellows, Bob Higgs, who spoke here last time. It’s called Against Leviathan. And others. And I want to thank you all for joining with us in making our event so successful. And I want to thank P. J. again for his work. P. J. is a witty, and funny guy, but he’s speaking some serious issues. So, would you join me again for another.

Audience Members

(applause)

David Theroux
President, The Independent Institute

So thank you all for joining with us, and we look forward to seeing you next time. Good night.

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