Albert Hirschmann Essays In Trespassing Signs

  • Essays in Trespassing: Economics to Politics and Beyond by Albert Hirschman
    Cambridge, 310 pp, £20.00, September 1981, ISBN 0 521 23826 9
  • Shifting Involvements by Albert Hirschman
    Martin Robertson, 138 pp, £9.95, September 1982, ISBN 0 85520 487 7

In Anglo-American social science Albert Hirschman occupies a position at once central and peripheral, or at least anomalous. Of his centrality there can be no doubt. As one of three permanent members of the School of Social Science at the Institute for Advanced Study in Princeton, he has a unique vantage-point for gathering and influencing scholars from all over the world. His Strategy for Economic Development (1958) had an immense impact on development economics, by introducing the notions of backward and forward linkages, and by preaching the virtues of unbalanced growth. The short and incisive Exit, Voice and Loyalty (1970) was an instant classic of political science no less than of economics. In that book he looked at ‘exit’, i.e. taking one’s business elsewhere, and ‘voice’, i.e. protest against the leadership, as alternative ‘responses to decline in firms, organisations and states’. This way of rephrasing the distinction between economic and political behaviour proved very useful, although the main virtue of the book lay elsewhere. Drawing on an extremely broad range of empirical knowledge, sifted, purified and rearranged by an acute and imaginative analytical mind, it generated a state of almost intolerable intellectual excitement in the reader. For many of us it provided a durable model of what a work in the social sciences should be like: free of jargon, devoid of abstract theorising, wide-ranging in application, yet with an intense analytical focus. Among current practitioners of the social sciences only Thomas Schelling and Amos Tversky come to mind as demonstrating to the same extent Hirschman’s quality of controlled imagination.

Yet Hirschman is not a part of the social-science establishment. This has nothing to do with his European origins. Many of the other scholars who left Europe in the late Thirties or the early Forties went on to become pillars of the American academic community. Rather his outsider status – as I perceive it – is due to the faint aura of the amateurish surrounding his work. To achieve power in the social sciences, one must have something teachable to impart, be it a formal theoretical approach or techniques for collecting and analysing data. Hirschman can have no pupils, only kindred spirits. It would be incorrect to say that he is a jack of many trades, but master of none, for in his ‘trespassing’ from one discipline to another he is indeed a master of the inventive analogy. He is a professional all-round amateur: his task is that of perceiving connections, and connections between connections, rather than that of grinding out theorems and correlations. Writers of his ilk are at the pinnacle of the profession, in the triple sense of being supremely gifted, having the ability to survey a variety of disciplines and being parasitic on what goes on at the lower levels. It is good that there are some people like him, and good that not everybody is like that.

Sadly, the two books under review do not come up to the high standards to which we had become accustomed. To those of us who want him to be perfect, they come as a disappointment. To put it bluntly, but in a friendly spirit, Hirschman appears to have been spoilt by success. There is an element of self-indulgence, sometimes of self-congratulation, that prevents him from achieving the same rigour and clarity that characterised his earlier work. The self-indulgence shows itself in a predilection for unsubstantiated speculation. The self-congratulation crops up on the numerous occasions when he feels obliged to tell the reader that some observation or other is novel, that a certain connection ‘has not been duly noticed’, ‘has remained invisible’, is ‘unfamiliar’, ‘surprising’, ‘overlooked’, ‘has hardly been noted’. These are mere irritants, and it might appear needlessly uncharitable to mention them. The matter is more serious when Hirschman, in the opening chapter of his Essays in Trespassing, states that his earlier work on unbalanced growth was a forerunner of Herbert Simon’s work on ‘satisficing’, when the chronology tells us that Simon’s famous article preceded Hirschman’s book by four years. I also think it detracts from his achievements when he goes out of his way to pat himself on the back, as in the following, not uncharacteristic passage from an essay on policy-making in Latin America: ‘the fact that I was led right into [these speculations] from seemingly innocuous and abstract reasoning about the characteristics of policy-making sequences shows how studies in the field can serve to illuminate not just how tax or education policy is made – an important enough endeavour in itself, of course – but can contribute something to the understanding of the most important, baffling and tragic events in recent Latin American history.’ Yes, perhaps, but why not leave such reflections to the reader?

In Hirschman’s recent work, the substantive analysis of social phenomena is increasingly embedded in, and at times almost submerged by, a variety of meta-inquiries. There is, first, the taxonomy of social theories with an eye to showing how his own approach relates to others. This is of course a legitimate procedure, but Hirschman sometimes is too carried away by the delights of pigeonholing. There are too many phrases like the following: ‘It is at this point, among others, that the linkage approach and the staple thesis make contact with the development-of-underdevelopment thesis.’ Secondly, there are numerous excursions into intellectual history. In his previous work on The Passions and the Interests (1977), subtitled ‘Political Arguments for Capitalism before its Triumph’, Hirschman explored at some length, and with great success, the 18th-century idea that le doux commerce had a beneficial impact on political stability, over and above the consequences for economic growth. In Shifting Involvements the historical perspective is also important, and generally very illuminating. The historical sketches offered in the various Essays in Trespassing are less interesting, and, more often than not, only preliminaries to the construction of typologies. Some inaccuracies occur. Thus Marx is said to have denied ‘any claim of mutual benefit from trade between capitalist and “backward” countries’ – Marx in the Theories of Surplus-Value makes the point that the former exploit the latter even though both parties gain from exchange. Also, the reference to John Rawls is misleading. His statement in A Theory of Justice that ‘a departure from the institutions of equal liberty ... cannot be justified or compensated for by greater social or economic advantage,’ was explicitly made within the context of ideal theory, neglecting the problem of how to get from here to there. Hence Rawls is prepared to accept, as are those accused by Hirschman of ignoring him, that second-best considerations might justify sacrifice of liberty in an imperfect society. Yet Hirschman’s slightly cavalier attitude to the classics is not overly disturbing. Even those who know little of the history of ideas would not take Hirschman for an authority, and even those who know much can profit greatly from some of his insights.

Thirdly, and less acceptably, he engages constantly in a highly speculative sociology of knowledge. Not content with comparing his views to those of others, and tracing the genesis of the latter, he also tries to explain the emergence – and non-emergence – of theories in terms of social or intellectual ‘needs’. These explanations in some cases have a good deal of intuitive plausibility. It may well be true that the doctrine of the Invisible Hand ‘assured those who had been brought up with the permanent injunction to serve the public weal, yet somehow found themselves absorbed by money-making activities, that they had by no means betrayed their calling,’ and that this, in fact, explains the extraordinary success of Adam Smith’s theory. Yet some kind of specific evidence would be needed before this explanation could be seriously entertained. If the doctrine succeeded because it relieved the guilt feelings of the conquering bourgeois, then presumably these feelings could be identified in their unrelieved state, and their ‘relief’ observed as an event rather than as a mere absence. Hirschman might well reply that in the intellectual division of labour, his is the task of devising hypotheses, not of testing them. The problem, however, is that in the sociology of knowledge it is all too easy to invent plausible-sounding explanations of theories in terms of the needs they serve.

The full text of this book review is only available to subscribers of the London Review of Books.

ALBERT HIRSCHMAN knew what he was talking about when he called one of his books “Essays in Trespassing”. He was an extraordinarily peripatetic practitioner of the dismal science. 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. He applied the cosmopolitan spirit that he had acquired in these years to everything he wrote.

He made his reputation as a development economist, focusing on Latin America, but he soon found himself trespassing obsessively—not only into other sub-disciplines such as the theory of the firm but also into other disciplines entirely such as political science and the history of thought. Mr Hirschman was never awarded the Nobel prize in economics he so richly deserved, perhaps because his writing was hard to classify. However, as if by way of recompense, Princeton University Press is about to publish a 768-page biography by Jeremy Adelman.

Mr Hirschman’s most famous book, “Exit, Voice and Loyalty: Responses to Decline in Firms, Organisations and States”, remains as suggestive today as it was when it first appeared in 1970, for managers and policymakers as well as intellectuals. 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.) Exit may also entail costs. If you have invested heavily in a company that starts performing badly, then you may be better off agitating for a change in management rather than selling your shares at a loss.

Mr Hirschman overstated his case. Plenty of evidence suggests that choice can act as an energiser, not a soporific. The most comprehensive study of school choice, in Sweden in 1988-2009, by Anders Bohlmark and Mikael Lindahl, found that “free schools” (private schools that are paid for by the state) were not only good for their own pupils but also forced ordinary state schools to shape up. 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.

Modern technology is adding to the power of both exit and voice. Consumers can abandon expensive middlemen for electronic commerce. They can also organise online armies to protest against poor service. But companies are also fighting back—making exit more difficult by persuading people to sign long-term contracts (particularly with teaser rates) and encouraging loyalty by offering rewards such as air miles. They are also adding their own voices to the hubbub via social media.

Squawk or go

Mr Hirschman wrote so much about so many different subjects that it is easy to see why his biography stretches to 768 pages. He challenged the conventional wisdom among his fellow development economists that poor countries need “balanced growth”; he argued instead that the “disequilibria” generated by unbalanced growth might do a better job of mobilising resources. He also challenged the conventional wisdom among sociologists and historians that the Protestant ethic prepared the way for capitalism. He suggested, rather, that the starring role should be given to a group of thinkers, such as Montesquieu, who argued that the best way to prevent social disorder was to channel people’s passions into moneymaking.

The Economist claims to engage in a “severe contest” with “an unworthy, timid ignorance obstructing our progress”. Mr Hirschman was an eloquent ally. In “The Rhetoric of Reaction” he wrote that purveyors of “timid ignorance” rely on three types of argument: jeopardy (reforms will cost a lot and endanger previous gains); perversity (reforms will harm the people they are intended to help); and futility (problems are so huge that nothing can be done about them). That certainly describes the current debates about global warming, illegal drugs and countless other topics. With luck, Mr Hirschman’s exit will not silence his voice.

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