Eat The Rich: A Treatise On Economics (1999) - Plot & Excerpts
They don't call economics the dismal science for nothing. As P.J. O'Rourke puts it in his latest book, "Economics is just too complicated. It makes our heads ache." And no wonder. The economics profs turn simple ideas like people buy less of something as it gets more expensive into something arcane and incomprehensible likeY = [1] [C+I+G+(X-M)]/1-mpcBut for those of us who invest in the capitalist system, it behooves us to know something about how our system generates wealth. What better way than to take it with a spoonful of sugar, P.J. O'Rourke style!O'Rourke, the conservative-libertarian raconteur, sets out in Eat the Rich, subtitled A Treatise on Economics, to answer a simple question, "Why do some places prosper and thrive while others just suck?" He does it by his favorite method, visiting various places around the world and observing how they work.If you haven't met O'Rourke before, you are in for a treat. Possibly America's funniest writer, the Mencken Research Fellow at the Cato Institute and regular contributor to Rolling Stone is a brilliant observer of the passing scene wherever he is and loves to poke fun at humanity's foibles and fads. Eat the Rich is his ninth book and joins such classics as Parliament of Whores (where he tries to explain the entire U.S. government) and All the Trouble in the World (where he looks at the lighter side of overpopulation, famine, ecological disaster, ethnic hatred, plague and poverty).In this new "treatise" he visits such varied places as Wall Street (good capitalism), Albania (bad capitalism), Sweden (good socialism) and Cuba (bad socialism). He also takes a stab at actually explaining some economic concepts such as the law of comparative advantage (using John Grisham and Courtney Love as his guinea pig examples).Okay! Okay! You gotta know, right? You see, he hypothesizes that John Grisham is a better novel writer and a better composer than Courtney Love. But Courtney is relatively better at song writing than she is at writing novels. So it pays for Courtney to concentrate on "caterwauling" and Grisham on "bashing the laptop". Society as a whole benefits from this. O'Rourke draws up the usual comparative advantage chart to prove that we get more "benefit to society" units or BS from the duo's specialization.O'Rourke's trip to Wall Street is a must read for fans of the stock market. He notes that the stock market has become the darling of the media. It is in, it is hip, "the New York Stock Exchange has achieved celebrity status".O'Rourke spent his first hour at the exchange "fascinated by the littering". "Stockbrokers," he notes, "are the last nonpsychotic people in the U.S. throwing garbage over their shoulders" while the rest of us fret about the environment. Over four thousand pounds of canceled buy and sell orders and other detritus is swept from the exchange floor every day.O'Rourke explains, in his wry way, the inner workings of the exchange - the floor brokers, the competitive traders, the specialist brokers and the two-dollar brokers. The language of the exchange - upticks, downticks, the trading crowd, fill or kill, limit orders and such oddities as trading in sixteenths of a dollar - called teenies. And, oh yes, "one of the old-fashioned charms of the NYSE, besides the littering," the constant use of the F word!But despite the humor, O'Rourke's observations are quite intriguing. "When we own any financial instrument," he says, "what we basically own is an opinion." For example, if the British pound declines, "the number of pence in a pound doesn't change. We just don't feel the same way about pounds anymore." Our collective opinions on a stock constitutes its price. So when we buy a stock, we are of the opinion that someone later on will think the stock is worth more than we think it's worth now. As O'Rourke observes, "Economists call this - in a rare example of comprehensible economist terminology - the Greater Fool Theory."And as with most working stiffs, ask whether stockbrokers are of the classical school, Keynesians or a monetarists, the reply will be, as one broker put it, "I don't think they give two shits!"But as we learn, economics is important. What makes our free market economies strong, vibrant and productive, is a combination of freedom in an environment of the rule of law.Albania went from communist hell hole to anarchist hellhole in short order. From total control to no control. A country ruined by Ponzi schemes. Freedom, but no rule of law. "The Albanian concept of freedom," observes O'Rourke, "approaches my own ideas on the subject, circa late adolescence." When communism was overthrown, the best people "ran like hell" escaping to Greece, Italy or western embassies. Looting became endemic, finally stopping when they ran out of stuff to loot.Sweden - good socialism - is contrasted with Cuba - bad socialism, though O'Rourke clearly doesn't care for either. "Socialism," he says, "is inherently totalitarian in philosophy." Every aspect of your private life can become public property. "Witness Sweden's Minister for Consumer, Religious, Youth and Sports Affairs." Gee! Don't we have one of those in Canada! No! Actually we have several!Cuba is worse. "There is one vibrant, exciting, and highly efficient sector of the official Cuban economy," he writes. "The police!" When he made an errant left turn with his rented car, O'Rourke was pulled over a mile away in a different part of town for the transgression.He visits a dissident couple, though "they hadn't actually dissented about anything. They just wanted to leave Cuba." They had visited Sweden and applied for asylum, but the egalitarian, progressive Swedes with their generous refugee policy had sent them back! "Now they were in permanent hot water."O'Rourke writes about the history of Cuba - the concentration camps, the executions. Cuba, according to the Americas Watch human rights group, holds "more political prisoners as a percentage of population than any other country in the world." And he writes in detail about the economic mess. The American embargo on trade with Cuba, he notes, is stupid. "It gives Castro an excuse for everything that's wrong with his rat-bag society. And free enterprise is supposed to be the antidote for socialism. We shouldn't forbid American companies from doing business in Cuba, we should force them to do so."But Cubans, he argues, are also stupid for rising to Castro's propaganda bait. Another little island country embargoed by her large neighbour and threatened with invasion has done quite all right for itself. That, of course, is Taiwan.After an interlude with economics proper, including his "Ten Less-Basic Principles of Economics", O'Rourke takes us on the best part of the journey - trips to Russia, Tanzania, Hong Kong and China. The Tanzanian and Hong Kong experiences are a study in contrasts. Tanzania has everything - beautiful landscapes, verdant forests, rich agricultural land - and extreme poverty. Hong Kong has nothing - little land, no natural resources - and fabulous wealth. Why? Appropriately the chapters are titled "How to make nothing from everything" and How to make everything from nothing".Tanzania was a victim of the egalitarian Julius Nyrere and his ujamaa vijijini or villagization program. It didn't work. But the worst thing about it is that we, meaning the western democracies, paid for it. "There's a certain kind of gullible and self-serious person who's put in charge of foreign aid," writes O'Rourke, and "this type was entranced by the modest, articulate Julius Nyrere and the wonderful things he was going to do." Aid amounted to $20 a head and O'Rourke speculates that that is how much it cost "to build a vijijini hovel, catch a Tanzanian, and stick him inside."Although O'Rourke is a humorist, it is clear that he writes with great passion for the people he visits (from whatever country) and a great empathy for the hardships they suffer at the hands of professional do-gooders like Nyrere. He genuinely likes the people he meets and we feel his pain and anger as he describes how his guide's five year old daughter died a few months before his visit from the gross incompetence and backwardness of the country.At the same time, he is fascinated by the beauty, customs and uniqueness of each place he visits. Besides exploring the economies of Sweden, Russia, Tanzania and Shanghai, he takes us on visits to some of the interesting sights like a jungle safari, or a trip to an exotic Chinese restaurant serving Cobra blood as an appetizer. They keep live cobras for that purpose in glass aquariums just like western restaurants keep live crabs and lobsters. He has an eye for the intriguing and unusual and gives us descriptions that put Fodor's travelogues to shame.O'Rourke becomes particularly incensed when he visits Hong Kong during the British surrender of "the best contemporary example of laissez-faire" to "the biggest remaining example of socialist totalitarianism," an act he sees as craven and cowardly, "a shameful moment." And yet, the people of Hong Kong celebrated. Why? Because they hate the English. O'Rourke asked why that should be. The Vietnamese have forgiven the Americans, surely Hong Kongers could forgive "the odd opium war.""It's different," his Hong Kong friend told him, "You just killed the Vietnamese; you never snubbed them." Canadians take note! Understand the significance of that remark and you understand Quebec separatism.He explores Hong Kong's history and economy. The hero of this economic miracle is John Cowperthwaite, the young colonial officer sent to oversee the colony in 1945. He found it recovering nicely from the war without him and so "took the lesson to heart, and while he was in charge, strictly limited bureaucratic interference in the economy." The result? "A stewing pandemonium: crowded, striving, ugly, and the most fabulous city on earth."In a 1961 budget speech, Cowperthwaite spoke words that O'Rourke says should be "engraved over the portals of every legislature worldwide" or better still "tattooed on the legislators' faces:"... in the long run the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralized decisions of a government; and certainly the harm is likely to be counteracted faster.O'Rourke's last stop is Shanghai, China, where the government is trying to impose a free market using totalitarian means. It can't be done and he calls this chapter "How to have the worst of both worlds". Yet in spite of the horror of the home of Tiannenmen Square, he keeps his sense of humor. "Omnipresent amid all the frenzy of Shanghai," he writes, "is that famous portrait, that modern icon. The faintly smiling, bland, yet somehow threatening visage appears in brilliant hues on placards and posters, and is painted huge on the sides of buildings. Some call him a genius. Others blame him for the deaths of millions. There are those who say his military reputation is inflated, yet he conquered the mainland in short order. Yes, it's Colonel Sanders."O'Rourke is a very funny writer. At the same time, he writes with passion and conviction. His travelogues are filled with facts and figures (though not in a stuffy way). The book is short on what professional economists would consider economics. But it is full of the stuff of life - the real story that gets you an understanding of economics on a gut level. And that is that "poverty is hard, wretched and humiliating. Poverty is John (his guide) driving around in the Tanzanian night looking for the doctor while his daughter dies."On the other hand, "Making money through hard work and wise investment is a fine thing to do." And so it is. "Economic liberty makes wealth," concludes O'Rourke. "Economic repression makes poverty."So have a laugh or two, be enthralled by exotic and fascinating places, and learn a few lessons about life and the blessings we gain from liberty. This is a superb book. Read it. (This and other reviews can be found on my personal website, marcodenouden.com)
Just before starting this book I read through an issue of MAD magazine. Remember MAD? Well, our library has a few copies, they are in the basement in the 'teen' section...yes, I'll admit it, I was wandering through the teen section, but, I like to make full use of all areas of the library. Funny though, I should read MAD and then start Eat the Rich. They are strikingly similar. Both are satires to the extreme...and in fact, I wouldn't be surprised in the least if O'Rourke was a writer for MAD.Back to the world of economics in Eat the Rich. O'Rourke dishes out a very tongue-in-cheek summary on the basic theories of economics. You may be familiar with a few; supply & demand etc. Being a business major in university I had the joy of taking the required micro/macro economics for years so I found this sarcastic view of economics very funny. As for the non-business minded people - you won't understand a thing. When he starts into the theory of comparative advantages I'm sure all you'll get is that he is insulting John Grisham and Courtney Love through a chart somehow! Actually, this is only one small section that is laid out like a textbook with graphs and charts (this is the part that made me think of MAD the most) which look almost exactly like my first year econ book. O'rourke's charts end up making funny jokes like point B and point S make BS (haha). This is funny, but, I have a real world example that made this even funnier. In my first year econ we had a 'cool' prof. She let us have cheat sheets, told us exactly what was going to be on the exam, and get this : she made charts with the supply/demand curves for funny things likes smokes and booze! How cool was she!?PJ also takes us on a trip through the world looking at different economies to try and figure out which one is the best. Being an American seems to have tainted his vision a bit, er a lot. His travels consist of criticizing the country he is visiting and slyly comparing it to the overwhelming success (his opinion) of the US. The only positive visit he had was to Wall Street! He thought those screaming/rushing/greedy stockbrokers were just wonderful guys. The polite reasonable citizens of Sweden did nothing for him. In fact, their generous 'welfare' state benefits (like maternity leave) were almost criminal in his mind. How can a country just pay people to 'not work'? Then he berates their high taxes and their word/philosophy 'lagom' (which means something similar to 'just enough', as in not greedy not impoverished just good...er just click the link). From the ol' capitalist point of view I can see his argument that money in the US may make more profit than that in Sweden...but, strangely he completely left out any of those surveys/rankings that put quality of life in Sweden in the top few countries, while his precious US always hovers around the double digits. There is a lot more to life than money O'Rourke! Ok, enough with my soap box speech back to the book.There were a few good points to the book. The wide range of vocabulary PJ uses is astounding. He sent me searching through my dictionary a couple of times - per page! Unfortunately, many times the word did not show up. I guess many of his words were quasi-fictitious words, as in understandable but not dictionary-worthy (see I can make up words too!). Even with all these rarely used words, in a veiled attempt to confuse the reader, the writing was clear.Now onto the 'bad' parts. How about we start with O'Rourke's remarks about Canadians? The only mention about Canadians in this book is when PJ is visiting Cuba strangely enough. While explaining the tourist industry in Cuba he throws some off-colour remark about the only visitors seem to be Canadians who's idea of a good time is visiting the all-you-can-eat salad bar for seconds. How insulting! Even before this hurtful comment I noticed the book had a very negative tone. Most of the 'witty' comments/jokes were just blatant insults of other countries.Warning to readers: Only read if you have run out of MAD magazines and want to hear more American-centric world views...and it helps if you have a degree in Economics and can catch the subtle econ-jokes. http://bookwormsfeastofbooks.blogspot...
What do You think about Eat The Rich: A Treatise On Economics (1999)?
P.J. O'Rourke attempts to explain the success of those nations which have embraced the Free Market system as contrasted with those nations which have imposed government controls.He contrasts the fabulous wealth of Hong Kong, a tiny island with virtually zero resources and a less than friendly neighbor thousands of times larger right next door, to the pathetic poverty of Tanzania, a relatively large nation with abundant resources but a totally corrupt and inefficient government.Some of P.J.'s chapter headings include:Good Capitalism: Wall Street; Bad Capitalism: AlbaniaGood Socialism: Sweden; Bad Socialism: CubaHow (or How Not) to Reform (Maybe) an Economy (if there is one): RussiaHow to Make Nothing from Everything: TanzaniaHow to Make Everything from Nothing: Hong KongHow to Have the Worst of Both Worlds: Shanghai
—Curtiss
I re-read this book about once every two years because it so amuses me. It's admitedly a bit out of date now. A lot changes in ten years. For one, it was written at the height of the stock market in the late 90's, but nevertheless his reflections remain basically true. (It was fun to read in the chapter on "Good Capitalism: Wall Street" his caveat "An investigation of money might as well begin where lots of money is being made -- for the moment, anyway...") This is a very funny book, but it's also an excellent layman's introduction to basic economics and basic economic systems. In Eat the Rich, O'Rourke explores the one fundamental question of economics: "Why do some places prosper and thrive while others just suck?" He dismisses many of the typical explanations given for economic prosperity: brains (nope, "In Russia, where chess is a spectator sport, they're boiling stones for soup"); civilization (nope, the Chinese had civilization when O'Rourke's relatives were "hunkering naked in trees"); government (nope, "citizens of totalitarian countries have plenty of government and nothing of anything else" and with "no government at all" everyone's "naked in the trees."). So "why are some places wealthy and some places poor"? To find out, O'Rourke travels to Wall Street, Albania, Sweden, Cuba, Russia, Tanzania, Hong Kong, and Shanghai. His observations are sometimes enlightening and always amusing.As I'm re-reading it now, I'll note a few of my favorite observations:"We all know how 'modern democracies take loaves from the wealthy.' It's the slipups in the 'pass them out to the poor' department that inspire a study of Econ." "We artsy types would have been shocked if anyone had told us (and none had the nerve) that making money was creative. And we would have been truly shocked to learn that a fundamental principle of economics--'Wealth is created when assets are moved from lower- to higher-valued uses'--is the root of all creativity, be it artsy, IBMsy, or whatever." "[The textbook:] continues: 'Marx was wrong about many things...but that does not diminish his stature as an important economist.' Well, what would? If Marx was wrong about many things AND screwed the baby-sitter?""Think of the stock market as an endless Gallup poll with 207 billion things that people can't make up their minds about."
—Skylar Burris
I first looked into this book because of a post I saw on Facebook which quoted a piece of its text. The quote was very amusing and intrigued me partly because the idea put forward seemed to contradict the title of the book, so I got a copy of the book and began reading. Happily the book was as good as the quote made it seem, if not better thanks largely to the author's particular style of writing.Mr. O'Rourke has done plenty of writing in his day, most notably for Rolling Stone, and has been known for his sense of humor in his writing; if I had to describe this sense of humor from what I saw in the book (this being the first time I have ever read any of his works) I would have to say that it is a blend of Anthony Bourdain's (sometimes) caustic and straightforward (while good-natured) mockery and Jeremy Clarkson's love of absurd metaphor. This being a treatise on economics that sense of humor was of special value as most of anything dealing with economics tends to be so complicated that most of the time you can't really understand what's going on unless you are an economist yourself. What O'Rourke has done here, however, is an excellent way to look into economics as a whole, provided that you don't already know a great deal about economics. But, if you do, read on anyways because you will enjoy the laughs.That is not to say that this book is intended to solely be a work of humor, far from it. What O'Rourke wants to do here is make economics make sense to everyone on the basic and practical levels, while answering a question that he himself puts forward early on: Why do some places prosper and others just suck? And to do this Mr. O'Rourke visited several different countries, each with a different economic system that either worked or did not work with the view of seeing what made the country tick (or not tick, as the case may be). After a brief introductory chapter this travelogue, backed with statistics from several sources (which he lists in the prologue) he begins to related his travels, naming them after the system and the place; you see chapters like "Good Capitalism: Wall Street", "Bad Capitalism: Albania", "Good Socialism: Sweden", and "Bad Socialism: Cuba" in the beginning with other areas to come, mostly teaching about the particular success or failure of the area regardless of what system they used.At the end of the book you might not know much more about economics as you did before, at least not in terms of formulas and other academic aspects. You will, however, get to see just how much economics is tied up with human action and human beliefs. You see how no two nations are at all alike but how they are similar at the same time; you see how the good intentions of some are not always answered according to their economic ideas; you get an idea of what some people are willing to do, and even required to do, just to survive. And when that gets to be too much to bear, Mr. O'Rourke's sense of humor will help bring back the good mood. (Tactfully, of course; throughout the course of the book he mocks the areas that are successful and himself, while bemoaning the areas that are going through difficulties.)This book was written over a decade ago, but do not let that change your mind about reading it. Just bear in mind that O'Rourke tends to use profanity and innuendo (i.e. this is not a book for children; persons in their late teens could start if their parents allowed it) and that there is a good chance that he will poke fun at you, even if only indirectly. The insights to be gained are just as valid today as ever, and if I were to recommend any book to help anyone understand economics it would be this one.
—Kevin Pace
