Eat the Rich

EAT THE RICH

ALSO BY P. J. O’ROURKE Modern Manners The Bachelor Home Companion Republican Party Reptile Holidays in Hell Parliament of Whores Give War a Chance All the Trouble in the World Age and Guile Beat Youth, Innocence and a Bad Haircut The CEO of the Sofa Peace Kills On The Wealth of Nations Driving Like Crazy Don’t Vote—It Just Encourages the Bastards

Holidays in Heck The Baby Boom Thrown Under the Omnibus How the Hell Did This Happen? None of My Business A Cry from the Far Middle

P. J. O’ROURKE EAT THE RICH

ATLANTIC MONTHLY PRESS NEW YORK

Copyright © 1998 by P. J. O’Rourke Introduction copyright © 2021 by P. J. O’Rourke

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, or the facilitation thereof, including information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer, who may quote brief passages in a review. Any members of educational institutions wishing to photocopy part or all of the work for classroom use, or publishers who would like to obtain permission to include the work in an anthology, should send their inquiries to Grove Atlantic, 154 West 14th Street, New York, NY 10011. Published simultaneously in Canada Library of Congress Cataloging-in-Publication Data O’Rourke, P. J. Eat the rich / P. J. O’Rourke. p. cm.

eISBN: 978-1-55584-710-4 ISBN: 978-0-87113-760-9 1. Economics—Humor. 2. Money—Humor. I. Title. PN6231.E295076 1998 330’ .02’07—dc21 98-27100 Design by Laura Hammond Hough

Atlantic Monthly Press an imprint of Grove Atlantic

154 West 14th Street New York, NY 10011 Distributed by Publishers Group West groveatlantic.com

For Tina and Elizabeth and (having come along since) for Olivia and Clifford

Contents

INTRODUCTION TO THE NEW EDITION 1 : LOVE, DEATH, AND MONEY 2 : GOOD CAPITALISM: Wall Street

3: BAD CAPITALISM: Albania 4 : GOOD SOCIALISM: Sweden 5 : BAD SOCIALISM: Cuba 6 : FROM BEATNIK TO BUSINESS MAJOR: Taking Econ 101 for Kicks 7 : HOW (OR HOW NOT) TO REFORM (MAYBE) AN ECONOMY (IF THERE IS ONE): Russia

8 : HOW TO MAKE NOTHING FROM EVERYTHING: Tanzania 9 : HOW TO MAKE EVERYTHING FROM NOTHING: Hong Kong 10 : HOW TO HAVE THE WORST OF BOTH WORLDS: Shanghai 11 : EAT THE RICH

ACKNOWLEDGMENTS: First Edition ACKNOWLEDGMENTS: Second Edition

“In this state of imbecility, I had, for amusement, turned my attention to political economy.” —Thomas De Quincey Confessions of an English Opium Eater

Introduction to the New Edition

This book was first published in 1998, but it was researched and written in 1996 and 1997. Thus it’s a quarter of a century old. And everything about economics seems to have changed since then. The “digital revolution” had not yet spun out of control. We thought we could steer our way down the “information superhighway” and not collide head-on with QAnon. Or with a UPS truck packed to the roof with boxes of shoes ordered by our teenage daughter on Amazon. In the mid-1990s the Internet—often still quaintly called the “World Wide Web”—was regarded as a tool to be used to extend connections and expand communications. No one was paying much attention to the tangled weaving of the creepier types of arachnids. Nobody noticed Mark Zuckerberg (although, in fairness, he was only a disturbing child of twelve or thirteen at the time). Twenty-five years ago economics was thought of in terms of gathering physical resources to produce physical goods and services. That the signal economic activity of the twenty-first century would be gathering ethereal data to produce ephemeral crap came as a surprise. According to the U.S. Census Bureau, only slightly more than a third of U.S. families had a home computer in 1997. And only 18 percent of those computers were connected to the Internet. The computers just sat there like bad, fat portable televisions that you couldn’t get television on. Email was novel enough to be a plot device in a hit 1998 rom-com. Today Meg Ryan would tell Tom Hanks to jam it up his spam blocker if her social media kept blurting, “You’ve got mail.” Google was barely even a novelty. You had to look things up in a . . . How to even explain a library? Let’s start by saying you couldn’t pull one out of your pocket unless you were wearing very big pants indeed. And it didn’t come with you, you went to it. Then you strolled, rather than scrolled, until you found the subject you were looking for. Just tapping on it wouldn’t work. In fact, if you tapped too hard it might fall on your head. A late-twentieth-century version of a Wikipedia entry could weigh as much as five pounds.

Cell phones existed but were not yet a body appendage. You generally tried to phone someone first on his or her (social media had yet to inform us that there were more than two genders) phone. This phone was what we would now call a “landline” (if we ever had occasion to use that word anymore). Only after trying the landline would we say to ourselves, “Maybe they’ve got their mobile phone with them.” Amazing as it may seem today—it would be like leaving your house without one leg—people sometimes left their mobile phones at home. These phones were anything but smart. They often couldn’t figure out how to connect themselves with another phone, or, having made the connection, would silently “drop” it, leaving you to realize that for the past three minutes you’d been talking to a handful of inert plastic with a flip lid. Apple’s iPhone wasn’t introduced until 2007. What was it that we used to raise over our head when something dramatic was taking place? Our hand? “Me, teacher, me! I saw the plane crash!” And trying to “post” our hand would have meant getting it stuck in the slot of a mailbox. (These were large and blue and rounded on the top. They used to stand on most busy street corners. Today we would assume they were some kind of primitive surveillance device—perhaps containing a government informant.) Anyway “social media” didn’t exist yet. There was nothing very social about watching TV, listening to the radio, or reading newspapers. In fact, being antisocial was often the point. Traditional media was the merciful opposite of social media—an excuse not to talk to other people. And hardly anyone used the word “media” in normal conversation. “Media” was a college professor, Marshall McLuhan, highfalutin sort of word. If you said you were “in media,” most people would have thought you meant you were somewhere between “middling” and “mediocre.” And if you were in media, they’d be right. Everything has changed—or looks like it has. For someone old enough to remember such a thing as a downtown department store (or, for that matter, a “downtown” that was more Petula Clark than repurposed-by-millennials), it’s astonishing that the suburban shopping mall now evokes so much nostalgia that we might as well have those that remain painted by Norman Rockwell. What is more economically basic than shopping? Certainly, if the fundamental principles of shopping have changed, then the fundamental principles of economics have changed. There is a classic definition of economics given by Paul Samuelson, the classic (well, anyway, old—he died in 2009 at age ninety-four) economist, in his

classic textbook, Economics: “The study of how societies use scarce resources to produce valuable commodities and distribute them among different people.” These days that looks all wrong. What we study now is how societies use infinitely abundant resources of electrons to produce utterly worthless “content” and distribute humongous moola among the same people: Elon Musk, Jeff Bezos, and Bill Gates. However, both of the above definitions of economics are nonsense. Economics is simpler than that. Economics is feeding, clothing, and sheltering ourselves. How we do it may alter out of all recognition. Why we do it is as immutable as human nature. There may be people who have a strong desire to be hungry, naked, and homeless. Medications can be helpful. The rest of us would prefer to sit down to a hearty meal in a warm, dry place, and unless we’ve been spending a lot of time at the gym, we should put our clothes back on. Simpler-than-that is the kind of economics this book is about. It asks two questions that do not fade to gray or go lame with age. The first and most important question is, “Why are some countries rich and other countries poor?” The second and lesser, but not insignificant, question is, “How can an ordinary person of no great acuity, educated only in the most liberally scattered fields of the liberal arts, lacking in mathematical talents, and possessed of a tendency to be easily bored, figure out what the fuck economists are talking about?” How well I answered the second question is not for me to judge. But I think I did manage to find some answers to the first question, even if there is a certain “No shit, Sherlock” aspect to my conclusions. Therefore I’ve decided to leave the text of this book as it was in 1998, with its descriptions of transitory conditions making points that are permanent. Although I’ve provided a few footnotes to explain references so ancient that they’ve been consigned to the memory care unit of popular culture. Another thing I’d like to provide is an expansion on one of the points I made. Rereading the book, I find myself making a strong case for free markets. But I wish I had been making a somewhat stronger case for freedom in general. The problem was (and is) that freedom in general is difficult to quantify. I wasn’t smart enough to do that kind of math in 1998, and I’m not getting any smarter. But there’s an institution that’s been struggling with this quantification

problem for more than sixty years. Freedom House is a bipartisan, non-profit, non-government organization devoted to promoting global freedom and democracy. Freedom House is so bipartisan that it was founded in 1941 by Eleanor Roosevelt and Wendell Willkie, the Republican who’d just run for president against her husband. Try to think of something that Jill Biden and Donald Trump agree on. That’s how amazingly agreed upon Freedom House is about freedom. I was serving on the Freedom House Board of Trustees in the 1990s, when I was writing this book. But I neglected to use the “quantification of freedom” numbers Freedom House produces. Partly this was because I felt that I—a person who has to remove a sock to count to eleven—was already dealing with more numbers than I could handle. And partly this was because I disagreed somewhat with my fellow trustees about Freedom House’s methodology. Freedom House began issuing ratings of freedom in countries around the world during the 1950s. In 1978 the ratings were formalized in a detailed annual report called Freedom in the World , covering every independent and semi- independent nation and territory on earth. How it works is that a staff of more than 125 analysts and forty advisors sets out to find the answer to ten principle questions about each country’s political rights and sixteen principle questions about its civil liberties. Each principle question entails as many as a dozen sub-queries. What the analysts are asking ranges in scope from the broad and general . . . Was the current head of government or other chief national authority elected through free and fair elections? To the personal and specific . . . Do individuals enjoy equal rights in divorce proceedings and child custody matters? I wouldn’t be surprised if somewhere in all those questions there’s a “Who’s your nation’s favorite Beatle?” Anyway, the report is really thorough. Each country is given a Political Rights score from 0 to 40 (e.g. China -2, Australia 40) and a Civil Liberties score from 0 to 60 (Syria 4, Canada 58). Then the numbers are added together for a Total Score from 0 to 100 (North Korea 3, Norway 100; game, set, match). And countries are given a rating of “Free,” “Partly Free,” or “Not Free.” Freedom House admits that, “an element of subjectivity is unavoidable in such an enterprise.”

Subjectively, the enterprise favors the small, tidy, homogeneous, socially conformist freedom of the Scandinavian type. Only Norway, Sweden, and Finland score 100. (The guy in the Viking hat seated in Mike Pence’s chair during the invasion of the Capitol Building wasn’t really a Viking.) The enterprise does not favor the kind of rancorous, raucous “Hold my beer an’ watch this!” freedom that America has. The U.S., although rated “Free”—damn right!—receives a Freedom in the World Total Score of just 83. That’s the same score as Romania. I visited Romania when I was on the Freedom House Board of Trustees. I interviewed the Minister of the Interior. I asked him, “What is the most serious problem you face in Romania?” He thought for a moment and said, “Packs of wild dogs.” And let me tell you—as I learned while getting back to my hotel from the Ministry of the Interior in Bucharest after dark—he wasn’t kidding. The Freedom House quantification process obviously isn’t perfect. But processes aren’t. And now, looking back on it, I realize that Freedom House at least gives us some numbers to work with—numbers that are arrived at using a consistent method and that are useful for broadly comparative purposes. Another imperfect process giving us some numbers to work with is the International Monetary Fund’s calculations of per capita gross domestic product. GDP itself can be hard to figure out, governments being the fibbers that they are. And simply dividing a country’s GDP by the number of people who live there doesn’t tell us how the swag is split. For example, the U.S. 2020 GDP was about $21 trillion. What if (and I think MSNBC would like you to believe this) Donald Trump and his wives, his children, and his in-laws were taking $20,999,999,999,000, leaving only $1,000 to be divvied up by the rest of us? This would make us a poor country even though we had a rich-looking per capita GDP of $63,051. But, again, per capita GDP is useful for broadly comparative purposes. Freedom House’s Freedom in the World Total Scores tell us—sort of—how free a country is. And the IMF’s per capita GDP figures tell us—sort of—how rich a country is. But when we put the two sets of numbers together they tell us —for sure—what the value of freedom is. Compare two large, frozen, thinly populated nations with economies driven by resource extraction: Canada – Freedom Score 98, p/c GDP $47,569

Russia – Freedom Score 20, p/c GDP $27,392

Compare two nations with the same people, language, and culture—two nations so much the same that one of those nations claims that both of those nations are the same nation:

Taiwan – Freedom Score 93, p/c GDP $54,620 China – Freedom Score 10, p/c GDP $17,206

Or even more like/like:

South Korea – Freedom Score 83, p/c GDP $44,292 North Korea – Freedom Score 3, p/c GDP $1,700 (And the IMF didn’t even try to pry that info out of Pyongyang; this is a 2017 CIA estimate) Compare Israel and Egypt:

Israel – Freedom Score 76, p/c GDP $39,126 Egypt – Freedom Score 21, p/c GDP $12,719 (Moses probably parted the Red Sea with the income gap.)

Venezuela has some of the world’s largest oil reserves. Uruguay has . . . According to Wikipedia, Uruguay is among the world’s largest producers of “greasy wool, horse meat, beeswax, and quinces.” Uruguay – Freedom Score 98, p/c GDP $21,338 Venezuela – Freedom Score 16, p/c GDP $7,344 Saudi Arabia does a better job of putting its oil wealth to work. But compare Saudi Arabia to equally oil-wealthy Norway:

Saudi Arabia – Freedom Score 7, p/c GDP $46,273 Norway – Freedom Score 100, p/c GDP $64,856

Freedom makes us rich. Or, if we happen to be rich already, it makes us much richer. There are statistical outliers, of course, some tiny island nations with excellent Freedom Scores and “life’s a beach” economies: Samoa – Freedom Score 81, p/c GDP $5,547 Federated States of Micronesia – Freedom Score 92, p/c GDP $3,447 Tuvalu – Freedom Score 93, p/c GDP $4,480 There are some little petro-chemical despotisms that are rolling in it:

Bahrain – Freedom Score 12, p/c GDP $49,057 UAE – Freedom Score 17, p/c GDP $58,466 Qatar – Freedom Score 25, p/c GDP $91,897

And there’s the outright anomaly of Singapore, with a sorry Freedom Score of 48, a rating of “Partly Free,” and a whooping per capita GDP of $95,603. But how can you be even “Partly Free” when you’re a speck on the map with big, nasty neighbors and the only way you can defend yourself is with the canes you use on litterbugs? Nonetheless, in most of the world . . . Freedom = Wealth For those of us who care about freedom (and everyone cares about his or her own), freedom is an end in itself. But it’s nice knowing that freedom provides us with not just the ends but the means. That’s what I wanted to add to this book. But there’s also something I want to subtract. Which is money, or, rather, the loss in value of the money we have now compared to the money we had when I wrote this book. All the U.S. dollar amounts cited in the following chapters are, unless otherwise specified, given in late 1990s dollars. One U.S. dollar circa 1996 equals about $1.69 in 2021 currency. Or, to put it the other way around, if you were so unfortunate as to have a 2021 dollar in 1996 it would have bought you only 59 cents worth of stuff. The cumulative rate of inflation over the past quarter century has been 63 percent. We may live in an “era of low inflation,” but inflation is an unhurried predator, an attack snail. The U.S. Bureau of Labor Statistics projects that the 2021 rate of inflation will be 2.4 percent. Trim your nails at a rate of 2.4 percent a year and twenty-five years from now you’ll be up past your elbow with your nail clippers. What remains to be done, introducing (or re-introducing) the reader to this book, is to give a sort of “Where are they now?” section. I went to a number of places to make my inquiries. How have those places fared? Are their economic situations better or worse? Have the betterments or worsenings occurred in the way I’d expected? Did I perceive these places

accurately? Or was my reporting a version of the ancient Buddhist parable about blind men describing an elephant? “An elephant is like a spear,” said the blind man who felt the elephant’s tusk. “An elephant is like a snake,” said the blind man who felt the elephant’s trunk. “An elephant is like a tree,” said the blind man who felt the elephant’s leg. “An elephant is like a wall,” said the blind man who felt the elephant’s hide. “An elephant is like . . . OMG!” said the blind man who felt the elephant’s ____. (A joke I stole from my old friend cartoonist Sam Gross.) Let us take these times and places place-by-place and time-by-time. WALL STREET (NOVEMBER 1997) I visited the floor of the New York Stock Exchange, as in the Keats poem, “Like stout Cortez when with eagle eyes / He stared at the Pacific . . . Silent, upon a peak in Darien.” Meaning—in terms of portfolio life spans—it was that long ago. Plus Balboa, not Cortez, was the first European to lay eyes on the Pacific, and the NYSE is located in Manhattan not Darien, Connecticut. In other words, I had no idea what I was talking about back then. And I have less now. Any pajama-clad day trader clicking a keyboard in his mom’s basement and still holding onto Studebaker stock in hope of a short squeeze can tell you about the dramatic modifications in the way shares are bought and sold. I cannot. I consulted C. Scott Garliss who spent twenty years trading for top investment banks before becoming the editor of Stansberry NewsWire and Stansberry NewsWire Premium. Scott knows everything about stock markets. He’s like the stock market opposite of Cortez looking for the Pacific from a Connecticut suburb. I asked Scott, “What’s the difference between how trading was done then and how it’s done now?” Scott sent me a long and detailed memo. I interviewed him, taking long and detailed notes. The result was . . . long and detailed. I wished I had asked him, “What’s the same?” Thankfully Scott told me that too. The traders’ motive is as it always was: to make money. And no matter how a share of stock changes hands somebody makes money when it does so. This is true if the market is soaring in the manner of that eagle that Cortez had eyes like. And it’s true if the market is plunging the way Cortez would have if he’d leaned out too far gawking from that peak. The benefit that the economy derives from the traders’ activity is also as it always was: liquidity. The traders don’t mean to benefit the economy, they mean

only to benefit themselves. They may even intend to destroy the part of the economy that holds short positions in Studebaker. But we can’t have a good economy—where everyone gets stout like Cortez—unless capital is able to move from places where it’s less productive (the abandoned Studebaker factory) to places where it is more productive (the Darien, Connecticut, housing market). Moving capital is what traders do. Fortunately C. Scott Garliss gave me a coda to his long and detailed list of information that (sorry, Scott) I have not attempted to reproduce here. He noted that, when it comes to financial markets: “ Plus ça change, plus c’est la même chose. ” Which—putting it in a way that Keats, Cortez, the day trader, and I can understand—is French for, “Same old shit.” ALBANIA (JULY 1997) In 2011 Lonely Planet named Albania “a top travel destination,” and in 2014 the New York Times put Albania at #4 on a list of places you should travel to. So we can forget about Albania. When tourists arrive, reasons to go depart. Now Albania is just another quaint little country with dramatic mountains and pretty beaches. It’s poor enough to be a bargain (per capita GDP $13,651), but not so poor that it causes middle-class visitors to be embarrassed—or robbed as often as they are in the wrong parts of Jamaica (per capita GDP $10,221). And it’s more exotic than the Caribbean. Albania’s national dish is “tavë kosi” (soured milk casserole). Bring one home for the neighbors! Albania has a stable government, as governments go in the Balkans. It is a member of NATO and a candidate for inclusion in the European Union, and its economy has been growing at a rate of about 4 percent in recent years. The pyramid scheme frenzy and the frenetic aftermath that I described have disappeared like the thief in the night that they were. Speaking of such, I owe Albanians an apology. I upbraided them for their tolerance of shyster greed resulting in the loss of some $1.2 billion dollars. Meanwhile, back in my own country at exactly the same time, a much bigger fraud was being perpetrated—a fraud so large that it would make an Albanian pyramid of Cheops look like a Bernie Madoff mole hill. Bernie’s pyramid scheme was $65 billion wide. Bernie’s victims were investors of supposed sophistication, and he victimized them under a regulatory system of supposed rigor. So what kind of pot was I smoking to be telling the Albanians what color

their kettle was?

SWEDEN (FEBRUARY 1996) The Scandinavian countries have a system of generous social benefits in which the government takes money away from the rich to provide social benefits so generous that everyone becomes rich and gets their money taken away by the government to provide generous social benefits. This is seriously impossible, and probably only people as impossibly serious as the Scandinavians could make it work. Twenty-five years ago I predicted that they couldn’t keep it working. They went ahead and did. Maybe it’s something to do with the climate. Maybe it’s something to do with social customs. Maybe it’s something to do with how silly, banal, stupid, and boring ABBA is, and then you go to a stage performance of Mamma Mia! and find yourself dancing in the aisles. The “Scandinavian System” leaves everyone who adheres to libertarian economic principles feeling like the backwoods hick at the traveling circus who, seeing a giraffe for the first time, firmly declares, “There ain’t no such animal.” CUBA (MARCH 1996) If you go to Cuba ignore the fun. Yes, the rum is cheap, the cigars are good, the men are charming, the women are pretty, and the “Guantanamera” sing-alongs are very much the kind of thing you’ll like if you like that kind of thing. But it’s solipsistic fun—only existing or real to you in your own head. The Cubans are having no fun at all. Freedom House gives Cuba a miserable Freedom Score of 13—far worse than Afghanistan’s 27 and hardly better than the Gaza Strip’s 11. The conservative Heritage Foundation’s less human-rights-righteous and more business-like “Index of Economic Freedom” rates Cuba’s economy as “Repressed” and grades it at 28.1 out of 100. This puts Cuba, as a great place to start a new business, in between South Sudan and Venezuela. Cuba was in particularly bad economic shape when I went there. It had recently lost its subsidies from the defunct U.S.S.R. and had yet to fully exploit the solipsism of tourists taking sun-and-fun mind trips, never mind what was happening to actual Cubans. Estimates of Cuba’s mid-1990s per capita GDP, adjusted for inflation, ranged from $2,058 to $3,652. Current estimates range from $3,783 to $6,895. So it’s

possible that economic conditions in Cuba have gone up all the way to lousy. The reason for these dismal numbers is ideology. Cuba now has the second oldest purely Marxist economy left in the world, surpassed in longevity only by North Korea’s. (China claims to be Marxist, but Xi Jinping keeps Karl in a box and only opens the lid to scare occasional political opponents.) Which raises a question. What is Marxist ideology for ? What’s the use of the thing? Marxism is an economic ideology, but obviously its purpose is not to foster a vibrant economy. The idea of the ideology must lie elsewhere. Marxism is a way to control people. And since its basis is economics (rather than religion or nationalism or whatever), and since there’s an economic aspect to everything, Marxism is a way to absolutely, totally, and completely control people. Which raises another question. A question about something dark, disturbing, and icky in human nature. Why is it that when people have absolute, total, and complete control over other people, it never turns out to be a good thing for the other people? It’s like having parents who do nothing but spank you, ground you, dock your allowance, forbid you from watching TV, take away your phone and your laptop, and send you to bed without dinner. And they’re not your real parents. You were stolen at birth from your real parents by the Marxist state acting like evil fairies in a bad fairytale except that—so far as I know—evil fairies don’t have scruffy beards, wear greasy berets, and go by stupid names like “Che.” But Cuba is worse than a bad childhood. Children grow up. Cubans just get older. They’re not treated like humans. They’re not even treated like dogs. They aren’t petted or scratched behind the ears or—ever—given a juicy bone. Sometimes they aren’t fed anything nearly as tasty and nutritious as dog food. Sometimes they aren’t fed at all. And when they’re told to “roll over and play dead” they aren’t given a treat—they are dead. RUSSIA (JUNE-JULY 1996) Of course, you don’t need an ideology to be dark, disturbing, and icky. You can let a Bond villain run your country. And Vladimir Putin (you can almost hear Sean Connery saying, “Putin on a little weight, Miss Moneypenny?”) doesn’t have to go through a lot of complicated Ian Fleming plot rigmarole to get ahold of a nuclear warhead. He already has at least 6,400 of the things. Russia was a mess twenty-five years ago but was possessed of a certain

gleeful chaotic mania now replaced by the word’s close etymological cousin: a maniac. The standard of living is somewhat better, but that hardly makes up for every other standard having collapsed into a pile of international villainy. Freedom House says the status of freedom is back to where it was in 1989 before the collapse of communism. According to Credit Suisse the 110 richest individuals in Russia own 35 percent of all Russian assets. (And Putin owns the 110 richest individuals.) Putin seems determined on world domination. Personally, Chechnya, South Ossetia, Ukraine, and Syria aren’t the parts of the world I’d care to dominate, but I suppose you have to start somewhere. This probably won’t end well. Bond villain plots rarely do. Economically, Russia is nothing but an oil puddle and a natural gas bag. Name other goods or services produced by Russia that you’d pay a kopeck for. (Value, at current exchange rate, .00013 cents U.S.) Okay, okay, if you’re a Republican presidential candidate there’s Internet trolling. And I forgot the caviar. But not the vodka, even Seagram’s is better. Russia’s oil and gas reserves are subject to depletion, and petrochemical energy sources probably face a long-term decline in value. My advice to a world with Russia in it is what might be called “Green + Gunmetal Blue”—erect wind turbines, install solar panels, and tell 007 to load his Walther PPK. TANZANIA (FEBRUARY 1997) Tanzania is not quite as poor as it used to be. Per capita GDP is now $2,851 compared to a mid-1990s inflation-adjusted figure of $1,768—a 62 percent improvement. Tanzania is no longer one of the poorest countries on earth without war or civil strife to excuse its poverty. It’s not, as it was when I wrote about it, poorer than Haiti, Chad, or Burundi. But it’s still damn poor. Tanzania is full of decent people, has ample natural resources, and no insurmountable social problems. This is more than can be said for the O’Rourke family. So why isn’t Tanzania richer than the O’Rourkes? One problem is that Tanzania remains effectively a one-party state. The country has been ruled by the Chama Cha Mapinduzi (“Party of the Revolution”) since independence in 1961. As the CCM’s name implies, a lefty-thefty socialistic property appropriation and capitalism exorcism ideology is espoused. The symbol of the CCM is a crossed hammer and hoe. But being effectively a one-party state is a weak excuse. China is a one-party

state (much more than just “effectively”). The ideology that China—officially— espouses is worse by at least one Great Leap Forward than anything the CCM concocted. And since 1997 China’s economy has grown by 795 percent. In recent years the political elite of Tanzania claims to have been allowing more free-market liberties. But I suspect, when no one’s looking, that elite is still giving the weeds of freedom a power-hungry whack with its hoe and hitting markets with its corruption hammer. HONG KONG AND SHANGHAI (JUNE-JULY 1997) I was right about how China would treat Hong Kong. But I was right too soon, which is another way of being wrong. For a couple of decades China interfered very little in the Special Administrative Region’s affairs. Then, when Hong Kong began to display the unorderliness upon which freedom is based, the dragon did what dragons do. Especially now that St. George, patron saint of England and presumably of the people England ruled, has retired from slaying dragons and taken up less arduous pursuits such as tying square knots and rubbing sticks together to start campfires. (St. George is also the patron saint of Boy Scouts. And will all you global Boy Scouts please quit helping China cross busy intersections such as those intersections of international spheres of influence known as the Spratly Islands, the Strait of Taiwan, and the Sea of Japan?) I don’t know what Hong Kong’s fate will be. Probably something in the rich and miserable department. Perhaps the people of Hong Kong will come to resemble a sort of King Midas. Everything they touch will turn to gold—and the gold will be the gold fillings and gold crowns of Xi Jinping’s sharp teeth. China is a bad country, and it wants to be worse—the baddest country on earth. China thinks it’s got something better than freedom—the “Chinese way.” And we’re way impressed because of China’s fast economic growth and the huge scale of the Chinese economy. But China’s economic growth was, of course, fast. China is one of the oldest and most sophisticated civilizations on the planet. The Chinese knew how to do everything, but the Communists had given them nothing to do (1980 per capita GDP $313). An increase from nothing to anything at all is an infinite growth in percentage terms. And China’s economy is big because China is big—1.4 billion people. But those people don’t have much. China is poor. As noted earlier, China’s

current per capita GDP is $17,206. China is poorer than Equatorial Guinea, poorer than Guyana, poorer than Belarus. By comparison (with a per capita GDP of $23,741) Bulgaria is a rich country. I’ve been there. It isn’t. The “Chinese Way” is nothing more than another form of the “command economy” that dictatorships are always imposing on their countries. China has been wiser than most dictatorships in keeping its commands very vague—“make money and don’t make trouble.” Command economies often seem to work well at first because dictators can command that they do so. But in the long run those who control command economies always seem to ask for too much—and to get more than they bargained for. Mussolini made the trains run on time and ended up hanging by his feet from a train trestle. —P. J. O’Rourke, March 2021

1 Love, Death, and Money

I had one fundamental question about economics: Why do some places prosper and thrive while others just suck? It’s not a matter of brains. No part of the earth (with the possible exception of Brentwood) is dumber than Beverly Hills, and the residents are wading in gravy. In Russia, meanwhile, where chess is a spectator sport, they’re boiling stones for soup. Nor can education be the reason. Fourth graders in the American school system know what a condom is but aren’t sure about 9 × 7. Natural resources aren’t the answer. Africa has diamonds, gold, uranium, you name it. Scandinavia has little and is frozen besides. Maybe culture is the key, but wealthy regions such as the local mall are famous for lacking it. Perhaps the good life’s secret lies in civilization. The Chinese had an ancient and sophisticated civilization when my relatives were hunkering naked in trees. (Admittedly that was last week, but they’d been drinking.) In 1000 B . C ., when Europeans were barely using metal to hit each other over the head, the Zhou dynasty Chinese were casting ornate wine vessels big enough to take a bath in— something else no contemporary European had done. Yet, today, China stinks. Government does not cause affluence. Citizens of totalitarian countries have plenty of government and nothing of anything else. And absence of government doesn’t work, either. For a million years mankind had no government at all, and everyone’s relatives were naked in trees. Plain hard work is not the source of plenty. The poorer people are, the plainer and harder is the work that they do. The better-off play golf. And technology provides no guarantee of creature comforts. The most wretched locales in the world are well-supplied with complex and up-to-date technology—in the form of weapons. Why are some places wealthy and other places poor? It occurred to me, at last, that this might have something to do with money. But I didn’t know anything about money. I didn’t know anything about money as a practical matter—did I have enough to pay the mortgage? And I

didn’t know anything about money in a broad or abstract sense. I certainly didn’t know anything about economic theory. And I wasn’t alone in this.

I couldn’t answer the central question of this book because I was an economic idiot. I got to be an economic idiot by the simple and natural method of being human. Humans have trouble with economics, as you may have noticed, and not just because economic circumstances sometimes cause them to starve. Humans seem to have an innate inability to pay attention to economic principles. Love, death, and money—these are the three main human concerns. We’re all keen students of love. We are fascinated by every aspect of the matter, in theory and in practice—from precise biological observations of thrusting this and gaping that to ethereal sentimentalities marketed in miles of aisles at Hallmark stores. No variety of love is too trivial for exegesis. No aspect of love is so ridiculous that it hasn’t been exhaustively reviewed by the great thinkers, the great artists, and the great hosts of daytime talk shows. As for death, such is the public appetite for investigation of the subject that the highest-rated television program in America is about an emergency room. The most hardheaded and unspeculative of persons has his notions of eschatology. The dullest mind can reason extensively about what causes kicking the bucket. Dying sparks our intellectual curiosity. But money does not. All we care about is the thing itself, preferably in large amounts. We care a very great deal about that. But here our brain work stops. We don’t seem to mind where our money comes from. And, in an affluent society, we don’t even seem to mind where our money goes. As for larger questions about money, we shrug our shoulders and say, “I wish I had more.” Why is it that we are earnest scholars of amorosity and necrosis but turn as vague and fidgety as a study hall in June when the topic is economics? I have several hypotheses, none of them very good. Love and death are limited and personal. Even when free love was in vogue, only a certain number of people would allow us to practice that freedom upon them. A pious man in the throes of Christian agape may love every creature in the world, but he’s unlikely to meet them all. And death is as finite as it gets. It has closure. Plus the death ratio is low, only 1:1 in occurrences per person. Economics happens a lot more often and involves multitudes of people and uncountable goods and services. Economics is just too complicated. It makes our

heads ache. So when anything economic goes awry, we respond in a limited and personal way by searching our suit-coat pockets to see if there are any wadded up fives inside. Then we either pray or vote for Democrats, depending on our personal convictions of faith. Or maybe economics is so ever present, so pervasive in every aspect of our lives that we don’t really perceive it. We fail to identify economics as a distinct entity. We can watch a man slip and fall and almost never hear him say, “God- damned gravity!” And we can watch a man fall ten times and not see him become interested in how gravity works. Almost never does he arise from the eleventh tumble saying, “I went down at a rate of 32ft./sec. 2 —the force being directly proportional to the product of the earth’s mass times my weight and inversely proportional to the square of the distance between that patch of ice on the front steps and my butt.” And so it is with economics. No amount of losing our jobs or our nest eggs sends us to the library for a copy of John Maynard Keynes’s The General Theory of Employment, Interest, and Money. The very pervasiveness of economics keeps us from getting intellectual distance on the subject. We can view death from afar for an average of 72.7 years if we’re a male American, and 79.5 years if we’re a female. Although love is notorious for fuddling the brain, there is matrimony to cool the passions or, failing that, sexual climax will work in the short term. But there is no such thing as a dollargasm. Money is always with us. What am I going to do to take my mind off money? Go shopping? Drink and drugs will cost me. I suppose I can play with the kids. They need new shoes. Constant money worries have a bad effect on human psychology. I’d argue that there is more unbalanced thinking about finance than about anything else. Death and sex may be the mainstays of psychoanalysis, but note that few shrinks ask to be paid in murders or marriages. People will do some odd things for political or religious reasons, but that’s nothing compared to what people will do for a buck. And if you consider how people spend their dough, insane hardly covers it. Our reactions to cash are nutty even when the cash is half a world away and belongs to perfect strangers. We don’t ridicule people for dying. Or, in our hearts, despise them for fooling around. But let a man get rich—especially if it happens quickly and we don’t understand how he did it—and we can work ourselves into a fit of psychotic rage. We aren’t rational and intelligent about economics because thinking about money has driven us crazy.

I’m as much of a mooncalf as anyone. I certainly had no interest in economics as a kid, as kids don’t. Children—lucky children at least—live in that ideal state postulated by Marx, where the rule is, “From each according to his abilities, to each according to his needs.” Getting grounded equals being sent to a gulag. Dad in high dudgeon is confused with Joseph Stalin. Then we wonder why so many young people are leftists. I had no interest in economics at college, either. I belonged to that great tradition of academic bohemia which stretches from the fifteenth- century riots of François Villon’s to the Phish tours of the present day. For university hipsters, there is (no doubt Villon mentions this in his Petit Testament ) nothing more pathetic than taking business courses. My friends and I were above that. In our classes we studied literature, anthropology, and how to make ceramics. We were seeking, questing, growing. Specifically, we were growing sideburns and leg hair, according to gender. It did not occur to us that the frat-pack dolts and Tri-Delt tweeties, hurrying to get to Econ 101 on time (in their square fashion), were the real intellectuals. We never realized that grappling with the concept of aggregate supply and demand was more challenging than writing a paper about “The Effects of Cool Jazz on the Poetry of Edgar Allan Poe.” What the L-7’s were being quizzed on was not only harder to understand than Margaret Mead’s theories about necking in Samoa, it was also more important. The engine of existence is fueled by just a few things. Unglazed pottery is not among them. If the Rah-Rah Bobs and Pin-Me Sallys had been taking Love or Death courses, we would have been right there with them. But money was a different matter. We weren’t interested in money. Actually—what we weren’t interested in was work. Maybe we guessed that it would be a lot of work to b.s. our way out of memorizing such formulae as: Not that we weren’t up to the task: “Like, price—that equals wasting natural resources and the pollution thing, if you’re into the whole capitalist, monopoly rip-off, man.” And, of course, we were interested in money. I remember we’d get excited whenever we had any. It’s just that we were determined not to earn it. We would never go in search of money. Money was something that would come looking

for us after we’d choreographed our world-shattering modern-dance recital or mounted our famous empty-gallery show of preconceptual post-objectivist paintings or when our folk-rock group, Exiles of Dayton, learned to play “Kum Ba Ya.” And we weren’t going to “sell out” no matter how much money was lavished upon us. Business majors intended to (it was a loaded phrase in those days) “make money,” and they were going to do this even if it involved some activity that wasn’t a bit artistic, such as running IBM. We artsy types would have been shocked if anyone had told us (and no one 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. “Putting money first” was crass. It was as if you’d gone to a party with dozens of wild, swinging chicks and, instead of drinking Mateus and making small talk about Jean-Paul Sartre, you just whipped out your unit. Except we would have thought that was a blast. But go into business? Never. If you don’t count selling drugs. Which we were all doing. We knew everything about price elasticity when it came to pot, not to mention aggregate supply and demand. In point of fact, we hirsute weirdos probably had more real business experience than any business major on campus. And one more thing— we all fancied ourselves to be marxists. As a philosophic recipe, marxism is a cannelloni of the economical, stuffed with economics, and cooked in economic sauce. Still, we were not interested in economic ideas. And, to be fair, the business majors weren’t, either. Econ was not something they took because they were fascinated by the elegant complexities of economic relationships or because mankind cannot survive without economic activity. They took Econ and forgot everything in the text so they could get a job from somebody else who took Econ and forgot everything in the text. I turned into a square myself, of course, as everyone who lives long enough does. I got a job as a journalist—but without ever considering that journalism was a business. (Although I would have been unpleasantly surprised to get a hug instead of a paycheck at the end of the week.) And I continued to ignore

economic issues even though I had a press pass to the most spectacular extravaganza of economics in this century. It was the 1970s, and the economy was changing almost as often as bed partners. The Great Depression may have been more dramatic, but it was a one- trick pony. In the ’70s, globalization suddenly included the other three-quarters of the globe. The places that used to make our windup toys were making our automobiles. Everything was being imported—except oil, which had hitherto been given away free with a windshield wash and a set of highball glasses at most brand-name gas stations. Then, one day, you couldn’t buy oil for money. Not that there wasn’t plenty of money around in the ’70s. It just didn’t happen to be worth anything. We had a previously unimaginable combination of fever inflation and hypothermia business slump. You could make more money buying Treasury bills than you could make breaking into the Treasury. The gold standard disappeared from the scene. Maybe it joined a cult. International currency-exchange rates were determined with mood rings. The most powerful nations in the world had, at their helms, an amazing collection of economic nincompoops—Nixon, Carter, Mao, Harold Wilson, Georges Pompidou, Leonid Brezhnev. And the electronic-media revolution was under way so that bad ideas about economics were spreading around the world at neural speed. I dozed through it. And I was covering politics, too. Even I realized that money was to politicians what the eucalyptus tree is to koala bears: food, water, shelter, and something to crap on. I made a few of the normal journalistic squeaks about greed and self-interest, and let the thing slide. It wasn’t until the 1990s, when I’d been a foreign correspondent for ten years, that I finally noticed economics. I noticed that in a lot of places I went, there wasn’t anything you’d call an economy. And I didn’t know why. Many of these countries seemed to have everything—except food, water, shelter, and something to crap on. I decided to go back to the Econ texts I’d finessed in college and figure things out. And my beatnik loathing returned full-blown. Except this time it wasn’t the business majors I despised; it was the authors of the books they’d had to study. It turns out that the Econ professors were economic idiots, too. Looking into a college textbook as an adult is a shock (and a vivid reminder of why we were so glad to get out of school). The prose style is at once puerile

and impenetrable, Goodnight Moon rewritten by Henry James. The tone varies from condescension worthy of a presidential press conference to sly chumminess worthy of the current president. The professorial wit is duller than the professorial dicta, and these are dulled to unbearable numbness by the need to exhibit professorial self-importance. No idea, however simple—“When there’s more of something, it costs less”—can be expressed without rendering it onto a madras sport coat of a graph and translating it into a rebus puzzle full of peculiar signs and notations. Otherwise the science of economics wouldn’t seem as profound to outsiders as organic chemistry does. And then, speaking of matters economical, there’s the price of these things—$49.95 for a copy of Economics, fifteenth edition, by Paul A. Samuelson and William D. Nordhaus. Economics has been, as its edition number indicates, in use as an Econ text forever—that is, since 1948, which counts as forever to the baby-boom generation. The book is considered a fossil by many economists, but it has been translated into forty-six languages, and more than 4 million copies have been sold. Economics was what the current leaders of international business and industry were afflicted with in school. And here was another shock. Professor Samuelson, who wrote the early editions by himself, turns out to be almost as much of a goof as my friends and I were in the 1960s. “Marx was the most influential and perceptive critic of the market economy ever,” he says on page seven. Influential, yes. Marx nearly caused World War III. But perceptive? Samuelson 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? Samuelson’s foreword to the fifteenth edition says, “In the reactionary days of Senator Joseph McCarthy . . . my book got its share of condemnation.” I should think so. Economics is full of passages indicating that Samuelson (if not William-come-lately Nordhaus) disagrees with that reactionary idea, the free market. The chapter titled “Applications of Supply and Demand” states, “. . . crop restrictions not only raise the price of corn and other crops but also tend to raise farmers’ total revenues and earnings.” Increase your corn profit by not growing corn? Here’s a wonderful kind of business where everybody can get rich if they’ll just do nothing. In the chapter “Supply and Allocation in Competitive Markets,” the book seems to be confused about the very nature of buying and selling. “Is society satisfied with outcomes where the maximal amount of bread is produced,” it

asks, “or will modern democracies take loaves from the wealthy and pass them out to the poor?” Are the rich people just going to keep those loaves to grow mold? Why would they produce “the maximal amount of bread” to do that? Or are we talking about charity here? If so, let us note that Jesus did not perform the miracle of the loaves and taxes. 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. It was not reassuring to learn that the men who run the companies where our 401(k)s are invested have minds filled with junk from the attic of Paul A. Samuelson’s Economics. There were newer texts than Economics for me to look at, and what they said wasn’t so obviously wrong. But then again, what they said wasn’t so obvious, period. Here are the first three sentences of Macroeconomics by David C. Colander (donated by Eric Owens,* who lives next door to me and is taking Econ at the University of New Hampshire): “When an artist looks at the world, he sees color. When a musician looks at the world, she hears music. When an economist looks at the world, she sees a symphony of costs and benefits.” Somebody change the CD, please. The textbooks weren’t good. This sent me to the original source material, the classics of economic thought. But here I had to admit, as I was tacitly admitting thirty years ago, that I don’t have the brains to be a Tri-Delt. The Wealth of Nations, Das Kapital, The General Theory of Whatchmacallit were impressive works and looked swell on my bookshelf, but they put me to sleep faster than the economic news of the ’70s had. There were, of course, popular books on economics, but the really popular books were about extraordinary people doing extraordinary things and getting fabulously wealthy or going to jail—preferably both. I was interested in ordinary people doing ordinary things and getting by. And the less popular but more worthwhile books on economics all seemed to presume that I’d made it through something like Economics without blowing a fuse. So I gave up trying to be smart about economics. I decided that if I wanted to know why some places were rich and other places were poor, I should go to those places. I would visit different economic systems: free market, socialist, and systems nobody could figure out. I’d look at economically successful societies:

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