Nov

26

I am reading the excellent book P.J O'Rourke's On The Wealth of Nations. He gives a general introduction to the wealth and then goes chapter by chapter illuminating the relevance for today of Smith's ideas. Four of the fundamental insights that I find helpful in looking at the present are.

1. Consumption is the sole end and purpose of production. This is a nice thing to keep in mind with all the rebuilding after floods and natural disasters.

2. Self interest is good and natural. Incentives matter. People work harder when pursuing their own interests. In the old days, people had to subject their egos and aspirations but in modern times the breakdown of feudalism has allowed people to pursue happiness.

3. The way to increase wealth is through specialization and division of labor. Eveyone has a comparative advantage at some trade or fancy.

4. Trade creates mutual benefit. Bettering the position of one person in a trade invariably tends to better the position of the other person in the trade. Wealth is not a pizza.

If only those who wish to take from one class like the rich and give to another like the middle class would understand these 4 principles, the world would be a much better place.


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5 Comments so far

  1. astro the family dog on November 26, 2012 1:09 pm

    Quite common read, and in fact will suggest most the same in the last 3 or decades on the subject. This is in no way a poke at the read, but more so I find interesting…!

    As,, I have and still suggest the last 2 generations have such a firm belief system that the system of government and the system money itself can ‘withstand’ every thing throw at it.

    I think that is the real horror show, few see or even try to observe.

    The unraveling of such a belief system is and will be as powerful on the way downward as it was on the way upward.

  2. jeff watson on November 26, 2012 7:57 pm

    That is why Fergusson’s book, “When Money Dies” is so important for everyone to read. Full pdf here http://thirdparadigm.org/doc/45060880-When-Money-Dies.pdf

  3. Ed on November 26, 2012 9:12 pm

    I guess I am a bit more cynical. I don’t think it would matter if the redistributionists understood the 4 principles. It is more of a frog-scorpion situation, not a rational calculation or misunderstanding.

  4. Todd Meier on November 27, 2012 12:08 am

    What a throwaway line:

    “If only those who wish to take from one class like the rich and give to another like the middle class would understand these 4 principles, the world would be a much better place.

  5. Andre Wallin on November 27, 2012 11:27 am

    my speculation is that drugs and sex will become less taboo and some legalized thereby passifying the public.

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