Albert Hirschman, R.I.P.

On December 10, the great economist and all-round intellectual polymath Albert Hirschman died, at the age of 97. Given Hirschman’s stature, it’s downright bizarre that his death hasn’t a received an obituary in the New York Times, but the workings of that newspaper are a mystery to me.

Quite aside from his work, which I’ll get to in a minute, Hirschman lived an extraordinary life. This brief recap from an obituary of Hirschman in the current edition of The Economist will give you a sense of how astoundingly eventful and remarkable it was:

Born in Berlin in 1915, he fled the Nazis in 1933, studied in Paris, London and Trieste, joined the anti-Mussolini resistance, fought on the Republican side in the Spanish civil war, served in the French army until France’s collapse in 1940, helped to organise an “underground railway” for refugees, emigrated to America, joined the army and was a translator at Nuremberg.

You can see from that one sentence alone why the forthcoming biography of Hirschman, to be published by Princeton University Press, will reportedly run to 768 pages!

By training, Hirschman was an economist, but as an intellectual, he was so much more than that. His work encompassed not only economics but political science, moral philosophy, sociology, psychology, and history. There is a certain kind of thinker whose strength lies in her ability to transcend narrow specialization and brilliantly and creatively combine ideas, methodologies, and bodies of knowledge from several disciplines. Often these kinds of thinkers can come up with the kinds of fresh insights and innovative approaches that more specialized, tradition-bound scholars cannot. Hirschman was an exemplar of this interdisciplinary, nontraditional type of scholar. In a lovely appreciation of the man he wrote for The American Prospect, Robert Kuttner notes that Hirschman’s “favorite self-description was Tresspasser.”

Hirschman’s approach to economics differed from the dominant strain of today’s neoclassical economics in several important respects. In contrast to modern neoclassicists, Hirschman thought it was a mistake to reduce human beings to consumers, and societies to markets. Kuttner explains:

Hirschman writes: “Economists often propose to deal with unethical or anti-social behavior by raising the cost of that behavior rather than by proclaiming standards … They think of citizens [only] as consumers …. This view tends to neglect the possibility that people are capable of changing their values.” Laws, Hirschman contends, are often superior to such utilitarian contrivances as anti-pollution “effluent charges,” because they can signal and reinforce “a general change in the civil climate.”

The book for which Hirschman is best known, and the one I am most familiar with, is his classic work of political economy, Exit, Voice, and Loyalty. The Economist piece gives a good summary of its basic argument:

Mr Hirschman argued that people have two different ways of responding to disappointment. They can vote with their feet (exit) or stay put and complain (voice). Exit has always been the default position in the United States: Americans are known as being quick to up sticks and move. It is also the default position in the economics profession. Indeed, when his book appeared, Milton Friedman and his colleagues in the Chicago School were busy extending the empire of exit to new areas. If public schools or public housing were rotten, they argued, people should be encouraged to escape them.

Mr Hirschman raised some problems with the cult of exit. Sometimes, it entrenches the status quo. Dictators may rule longer if their bravest critics flee abroad (indeed, Cuba uses emigration as a safety valve). Monopolies may have an easier life if their stroppiest customers find an alternative. Mr Hirschman got the idea for his book during a ghastly train journey in Nigeria: he concluded that the country’s railways were getting worse because the most vocal customers were shifting to the roads.

Exit may also reinforce the cycle of decline. State schools may get worse if the pushiest parents take their custom elsewhere. Mr Hirschman worried that a moderate amount of exit might produce the worst of all worlds: “an oppression of the weak by the incompetent and an exploitation of the poor by the lazy which is the more durable and stifling as it is both unambitious and escapable.” (Mr Hirschman wrote better in his third language than most economists do in their first.) . . .

[Snip]

But Mr Hirschman’s overall point was not that exit is bad but that exit and “voice” work best together. Reformers are more likely to be able to fix an organisation if there is a danger that their clients will leave. The problem with Friedman et al was that they focused only on exit and not on how exit and voice could be used to reinforce each other.

Kuttner discusses another of Hirschman’s books, which I confess I was not aware of, and which sounds fascinating:

In Rhetoric of Reaction, Hirschman goes back several hundred years and identifies three basic strands of conservative argument against social reform that keep recurring. He calls them Perversity, Futility and Jeopardy. These reactionary forms of sophistry are as old as the Middle Ages and as current as the Heritage Foundation and Charles Murray: Reform will actually harm the people it as intended to help (Perversity); it will incur high costs only to fail (Futility) and it will imperil other dearly held values (Jeopardy).

Does that nail today’s right, or what? That monotonous three-note melody of “perversity, futility, jeopardy” is the right’s tried-and-true response to any and every change in the status quo. “Perversity” is the all-time favorite excuse of economists. They love to claim that any economic policy that helps workers rather than the rich creates “perverse incentives.” They allege, for example, that raising the minimum wage inevitably increases unemployment, but this is not the case.

The “jeopardy,” argument, on the other hand, tends to be the favorite of social conservatives. As in: “Oh noes! Those gays are jeopardizing our sacred institution of marriage, which for centuries we straights with our 50% divorce rate have treated with such unceasing reverence and tender loving care!” Finally, the “futility” dodge is what they roll out when they’re desperate and they don’t have anything else.

I strongly urge you to check out the Hirschman appreciations in The Prospect and The Economist that I’ve linked to above, and to explore any of the man’s writings that sound interesting to you. I plan to order a copy of Rhetoric of Reaction, myself. It sounds like it might have some valuable insights into the thought processes of wingnuts past, present, and (sadly, alas) future.

UPDATE: It’s now one day after I wrote this, and the Times has finally published an obituary. From my keyboard to God’s ear!

Kathleen Geier

Kathleen Geier is a writer and public policy researcher who lives in Chicago. She blogs at Inequality Matters. Find her on Twitter: @Kathy_Gee