The Hedgehog Review

The Hedgehog Review: Vol. 16 No. 1 (Spring 2014)

Worldly Philosopher: The Odyssey of Albert O. Hirschman

Jeremy Adelman

Princeton, NJ: Princeton University Press, 2013.

Reprinted from The Hedgehog Review 16.1 (Spring 2014). This essay may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. Please contact The Hedgehog Review for further details.

The Hedgehog Review

The Hedgehog Review: Spring 2014

(Volume 16 | Issue 1)

Jeremy Adelman’s thorough and reliable biography of Albert O. Hirschman takes us step by step through the life of a remarkable modern thinker whose work had repercussions, and possibly greater impact, outside the economics discipline in which he was formally trained.

A Jew born in Germany, Hirschman escaped the Nazis in 1933, shortly after he turned 17. After going to France to study business, he made his way to London to take up economics. However, unable to sit by and watch the rise of fascism in Spain, he volunteered to fight alongside the Republicans in the Spanish Civil War—a harrowing experience that left him with scars on his neck and one of his legs. Ever resilient, Hirschman set off to Italy to get a doctorate in economics before returning to France to fight against fascism once again. As French resistance to the Nazi invasion quickly collapsed, he took up the challenge of helping refugees escape the country, including such well known figures as Hannah Arendt and Marcel Duchamp.

After much difficulty, Hirschman eventually made his way to the United States to pursue the study of economics at the University of California, Berkeley, before enlisting in the U.S. Army and eventually ending up in the Office of Strategic Services, the precursor to the CIA. While in the OSS, he traveled around the world, taking assignments in North Africa and Italy, and, at one point, using his fluency in German to interpret the testimony of a Nazi general on trial in Rome for committing war crimes—a trial culminating in a death sentence that had to be delivered to the general by Hirschman himself.

After World War II, he took a position with the U.S. Federal Reserve System, where he worked to export Keynesian economic theory abroad, discourage protectionism, and promote trade in postwar Europe so as to rescue the struggling French and Italian economies. Soon, however, Hirschman got caught up in McCarthy-era politics, and a report that he had communist sympathies resulted in his dismissal and a move to Colombia, where he dove into development economics.

Adelman follows Hirschman’s return to the United States, and his successive academic appointments at Yale, Columbia, Harvard, and the Institute for Advanced Study in Princeton, during which he produced most of the work that defined his career. The book closes with an uncommunicative, wheelchair-using Hirschman passing the last of his days in an assisted living home outside Princeton, New Jersey. He died on December 10, 2012.

Adelman resists imposing a conceptual arc or master narrative on Hirschman’s life, tempted as he might have been to see it in terms of his subject’s personal struggle with inner demons, his conflicted identity as a German and a Jew, his inclination to be on the left of whatever consensus he found, or the tension that came with having a significant voice (one of Hirschman’s favorite terms) in many countries without ever truly being at home in any. The closest Adelman comes to such an über-narrative is his emphasis on Hirschman’s dependence on language, rather than the usual tool of economists, mathematics, in order to avoid what he saw as the deficiencies of his discipline.

Hirschman was quick to push back against what he called the “neutral and colorless neologisms” he felt were dominating economic discourse—an impoverished semantics wherein humankind was reduced to Homo economicus, a species drained of all passions. His response to such reductivism was his 1977 book The Passions and the Interests, in which he sought to reintroduce humanist concepts into the increasingly spare dismal science. The very use of terms accessible to all readers, such as exit and voice, speaks volumes about Hirschman’s approach to economic deliberations and exposition.

Because Adelman did not set out to provide a substantive review of Hirschman’s main ideas, it would be unfair to criticize him for not producing the book I would have preferred. Nevertheless, readers should be forewarned that they will have to go elsewhere for an exploration of Hirschman’s rich intellectual trove.

Hirschman and I became friendly acquaintances when we both were professors at Columbia University between 1958 and 1964. We often discussed what I consider to be his major intellectual contribution: his criticism of the kind of neoclassical economics that dominated American academic work and public policy at the time and still does. He scoffed at the scientific pretense of most economists, as well a general fondness for libertarian principles within the field. In his 1985 paper “Against Parsimony,” he complained that “economists often propose to deal with unethical or antisocial behavior by raising the cost of the behavior rather than by proclaiming standards.… The reason is probably that they think of citizens [only] as consumers.…This view tends to neglect the possibility that people are capable of changing their values.” Hirschman, by contrast, believed that the voice of the people is what brings about changes in social and economic policies.

Hirschman made major contributions to socio-economics, a discipline that combines the findings of sociology and social psychology with those of economics. A speaker at the inaugural meeting of the Society for the Advancement of Socio-Economics (an organization that I founded), which took place at the Harvard Business School in 1989, he became one of the group’s honorary founding members—one of the very few salient details of Hirschman’s career Adelman fails to mention. In his first book, The Strategy of Economic Development (1958), Hirschman rejected the standard economic view that minimizing the cost of doing business is the best way to spur growth. Instead, he drew on historical and cultural case studies, observations drawn from psychotherapy, and the writings of Edmund Burke to argue that obstacles often spur creativity and innovation in the economic realm. He also dismissed the notion that a single theory of development could be neatly applied to any country regardless of culture and context.

Hirschman’s most famous work, Exit, Voice, and Loyalty (1970), further exemplifies his attempt to enrich the study of economics with the concepts of sociology and political science. In this book, he laid out a theory explaining the interaction between social institutions in decline—whether states, families, or schools—and the members of those institutions. His concept of “exit” refers to a member’s choice to withdraw from an institution when he no longer finds it compatible with his needs. “Exit” explains institutional change in a way most economists understand: Different institutions compete for the membership of individuals who are choosing “where to do business,” with the most responsive institutions surviving and the others withering away as members depart for greener pastures.

But Hirschman was not content to rest there. He added the notion of “voice”—a member’s choice to speak out and work to make an institution better suited to his needs. “Voice” makes institutions not merely competitors in a marketplace but political bodies whose rules and structures can be contested and reformed. To apply these concepts to the Arab Spring, Hirschman would have said there is a high consensus on “exit” but a low consensus on “voice,” particularly in determining what reforms should be introduced. He would have added that the masses are much better at wrecking the old regime (“exit”) than at laying the foundations for a new one (“voice”), an observation he might also have made about a very different people, the Tea Party.

Though Hirschman’s ideas were, and remain, influential among humanists, social and political scientists, and a small minority of economists, they have yet to be embraced by mainstream economics—a fact that says more about the discipline than it does about one of its most creative renegade thinkers.

Amitai Etzioni is University Professor at George Washington University and author of The Moral Dimension: Toward a New Economics (1990).

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