Albert Hirschman, an economist who became one of the greatest of the 20th century’s moral philosophers, died Tuesday at age 97. Hirschman’s intellectual odyssey took him from the study of eastern European economies under Hitler to work as a development economist for the Federal Reserve Board, then in Latin America in the 1950s and 1960s, as an adviser to the Colombian Planning Ministry, and then to engagement with the enduring questions of economy and society from the 1970s until illness suspended his active life. Along the way he taught at Yale, Columbia, Harvard, and the Institute for Advanced Study.
To the extent that Hirschman is widely known today, it is mainly though a small book with a puzzling title, Exit, Voice, and Loyalty, written in 1970. The book has a huge following among social scientists, mainly outside of Hirschman’s own profession of economics. His basic insight is elegant, simple, and original. Citizens and consumers have two basic ways of responding when they find anything from a product, politician, neighbor, or nation unsatisfactory. They can vote with their feet (exit) or stick around and provide constructive feedback (voice).
Though orthodox economics emphasizes exit—consumers shopping around, shareholders selling stocks, workers pursuing different jobs, emigrants seeking new shores, Hirschman was partial to Voice. It was Voice that made possible civil society, Voice that made business enterprises more than a collection of spot transactions, Voice that offered useful information. And to complete the trilogy of his title, it was voice that engendered reciprocity and Loyalty.
The small book virtually revived the field of political economy. It reintegrated economics, sociology, psychology, history, and philosophy, which had been sundered by the conceits of mathematical neo-classical economics. Political economy had been left to Marxists. Hirschman rescued it for liberals. Exit, Voice and Loyalty not only won Hirschman a devoted following; it shifted him onto the path of a modern philosophe. Since publication of that book, Hirschman wrote several others, delving deeper into the issue of how markets interacted with society and how great thinkers since the Enlightenment grappled with that question.
His life’s work was a plea for social scientists to appreciate complexity. In his wonderful essay "Against Parsimony,” a riposte to Occam's Razor, 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 standard economic view, of man optimizing choices in a social vacuum, offers "too simpleminded an account of even such fundamental economic processes as consumption and production,” much less human psychology and organization.
Two of his finest books as economic philosopher are The Rhetoric of Reaction, written in 1991 when Hirschman was 76, and Rival Views of Market Society, published in 1987. 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). On display is Hirschman’s brilliant capacity for synthesis, good humor, and originality as a thinker, and energetic debunking of right-wingers throughout history.
In Rival Views, Hirschman notes that radicals and conservatives, at different times, have viewed markets as supportive—or corrosive—of the glue that holds society together. But oddly, they often switch camps. In the 18th century, conservatives such as Edmund Burke worried that the market forces celebrated by Adam Smith would undermine traditional society. Radicals of the era hoped markets would do just that. But other conservatives such as Montesquieu saw markets as taming aggressive impulses because people who were doing business with each other the were less likely to go to war. By 19th and 20th century, however, it was conservatives who had embraced markets, while Karl Marx warned that as society is marketized “all that is solid melts into air” (Marx actually borrowed the insight from conservatives) and liberals such as Karl Polanyi (and Hirschman) saw markets as destroying social norms.
In reading a variety of literatures, Hirschman’s greatest joy was delving deeply into fields that were not his own. His favorite self-description was Trespasser, a style of inquiry that he commended to his students. He was even better known outside the U.S. than at home, and he was stunningly generous. When I first visited him at his office at Princeton’s Institute for Advanced Studies, Hirschman was already in his seventies. He gestured to piles and piles of letters, papers, manuscripts and books that had been sent by students, colleagues and admirers. “I could spend the rest of my life,” he said plaintively, “administering my past life.” But he found time both to engage with his public and to keep producing new, important work.
Hirschman was of the generation that Lewis Coser called “refugee scholars,” and he lived a life that reads like a screenplay that was possible only for the Greatest Generation. Born in 1915 to a middle class, assimilated Jewish family in Berlin where his father was a doctor, Hirschman attended the French Lycée. His fluent French later saved his life.
As the Nazis steadily infested Europe, Hirschman had to keep moving in order to finish his education. He began at the University of Berlin. When Hitler took power in 1933 Hirschman relocated to the Sorbonne, then to the London School of Economics, and finally to Trieste to pursue his doctorate. Expelled from Italy when Mussolini turned on the Jews, Hirschman joined the free French army. Taking on a nom de guerre of Albert Hernant, his blond complexion and accent allowed him to pass for Alsatian. Soon he was in Marseilles, as the European contact man for a remarkable intellectual Dunkirk. The scene was reminiscent of Rick's Casablanca bar: Huddled in Marseilles was Europe's anti-fascist intelligentsia, waiting to be rescued or arrested—Hannah Arendt, Andre Breton, Marc Chagall, Marcel Duchamp, Max Ernst, Jacques Lipschitz, and Heinrich Mann—as well as scores of exiled leaders of Europe's socialist and liberal parties.
Working with Varian Fry, a New York-based journalist who had raised money in 1940 to create an Emergency Rescue Committee, Hirschman, already a first-class document forger and black marketeer, helped smuggle refugees over the Pyrenees into neutral Spain, thence to allied Portugal. Eventually, thanks to Fry, Hirschman and others, over 2,000 were saved. With the Gestapo on his trail, Hirschman followed the same path to Lisbon and America, and in 1941 resumed academic life at Berkeley as a graduate student, having accumulated more real world experience in politics, economics and society than most people do in a lifetime. He was 26.
The unique, tragic circumstances of the 20th century created the context for thinkers and actors such as Hirschman to synthesize scholarship and life experience. Hirschman was not just a consummate scholar and humanist, but a lovely man. His work belongs on the same small shelf with the greatest of heterodox twentieth century economists—Keynes, Polanyi, Galbraith, to name three, who like Hirschman, were magnificent Trespassers.
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