Thursday, January 31, 2008

Did Adam Smith 'Realise' What P. J. O'Rourke Claims He Did?

P. J. O’Rourke is reported (here) to have made a statement about Adam Smith that I am unable to source.

Perhaps a reader may help?

A Daily Show host Jon Stewart recently interviewed P.J. O’Rourke, author of a book about Adam Smith’s The Wealth of Nations. O’Rourke summed up economics in a single sentence for me when he said that “Adam Smith realized that free markets forever vibrate between fear and greed.


what is the source for the reported statement by P. J. O’Rourke that “Adam Smith realized that free markets forever vibrate between fear and greed.”

It is not a statement in Adam Smith's Works that I recognize, but it may be an amalgam of several things Adam Smith said in Wealth Of Nations or it may be a (poor) paraphrase of somethings he wrote, or, possibly, an opinion of P. J. O'Rourke's.


Blogger Michael Kruse said...

Here is a link to the clip with the statement.

I'm curious about your take.

4:06 pm  
Blogger Gavin Kennedy said...

Hi Michael

Thanks so much for the reference.

I watched the short programme and I have no comments on P. J. O'Rourke's role playing (it's how he makes a living entertaining and there ain't nothing against that).

I noticed one response that caught him out. He told Jon Stewart (his surname is spelt in the Scottish manner; in English it's 'Stuart') that Wealth Of Nations was 900 pages (true, approximately) and in response to his claim that he had read the 'doorstopper' Moral Sentiments, Jon Stewart asked if that was 900 pages and he answered 'yes'.

It's nearly a third as long at 342 pages (nearer 400 if the technical appendices and the index are included). Not a good sign of his accuracy.

The exchange that produced the allegation that Adam Smith 'realised' the extremes of markets being 'greed' and 'fear', I am not convinced, P J. O'Rourke is doing other than making it up or he copied/ 'paraphrased' it from some other source.

It does not read like Adam Smith at all.

Markets are what happens when people exchange in transactions. Each deal concludes a market and each party trying to transact starts another market.

In Adam Smith's time there were street markets (one was opposite where he worked at the Customs House (1788-90) and others were in the High Street, to down past where he lived in Panmure Close.

'Greed' and 'fear' sounds like a take on modern financial markets (which form and reform several times a minute).

If I ever have cause to speak or mail P. J. O'Rourke, I'll ask him for his source.

It might be something he noted during 'bubbles' like the South Sea Company...

Overall, I am not impressed.

9:00 pm  
Blogger Michael Kruse said...

Thanks Gavin. I've read some of O'Rourke's stuff in the past. Entertaining, but I won't be using him as source for anything with substance. :)

I agree with your take on the fear/greed thing. It would be interesting to know how he formed that perspcetive.

Thanks for sharing your so many great insights here at your blog.

11:41 pm  

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