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December 23, 2012 2:19 PM Albert Hirschman, R.I.P.

By Kathleen Geier

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

Comments

  • c u n d gulag on December 23, 2012 3:02 PM:

    Kathleen,
    What a GREAT post!

    He seems like quite the character!

    And, no obit in the NY Times.
    What? Was Krugman on vacation, or out-voted?

    You are a terrific fill-in for Ed, Kathleen. Thank you so much. I learned a lot!

    Oh, and, if you don't post again in the next few days, HAPPY HOLIDAYS! (Just to piss-off Bill Orally, and FUX Noise!).
    And, a very Happy New Year.

  • c u n d gulag on December 23, 2012 3:28 PM:

    Also too - this fascinating, hyper-intelligent SOB can't even get an obit - but the NY Times gives the most valuable Op-ed real estate in the country, if not the world, to people like Brooks, Douthat, Friedman, Kristoff, and Dowd - AND THEY PAY THEM FOR THE FECKIN' PRIVILEGE!!!

    OY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • Keith M Ellis on December 23, 2012 3:32 PM:

    I don't think you're being entirely fair to economists with regard to the "perversity" argument. I agree that this is a trope on the right, generally — it's really just a manifestation of the "futility" argument that they use to sort of twist the knife ("Not only is your do-gooder instinct naive and futile, but you end up making things worse! You're the problem, not the solution! Hahaha!" It sort of encapsulates many of the ugliest characteristics of the conservative temperament.)

    But with regard to economics in particular, this is an essential, deeply important and far-reaching foundational principle. That complicated systems can react to an input change in the opposite direction than expected is really a general principle in the largest sense. It's certainly true in social science; but it's deeply important in economics because in some respects economics is the toy problem of the social sciences — more constrained and (comparatively) well-defined problem-space, quantitative and so very amenable to mathematical analysis. Because of this, simply intuitive quantified solutions to problems are often intuitively obvious in the economic context — and such solutions often turn out to have perverse effects. This was learned early on and it's a lesson that all economists learn very well, and rightly so.

    But it's arguably a lesson that they learn too well. Being overly concerned with this creates, well, some perverse incentives. It produces a lot of too-clever-by-half crap like Steven D. Levitt specializes in. It encourages economists toward the "futility" conservative camp.

    And it serves as intellectual cover for conservatives making such arguments.

    Hirschman would have, no doubt, agreed with you (and me) that there's an important synergy between economists being concerned about perversity and conservatives utilizing perversity as an argument against progressive policies. But I suspect that Hirschman would not have endorsed your implicit claim that an awareness of perversity effects within economics exists exclusively or even mostly for the purpose of serving conservativism.

    Again, I don't deny that there's a whole lot of political ideology deeply bound up in economics. (Though that's true with all of the social sciences.) But it's important to not fully equivocate ideology with the valid ideas and tools used to further it. This is hard to see as applied to one's own views, but it's easier to see in the opposition. For example, in the contemporary conservative mind, keynesianism is synonymous with "big government" or even socialism. Which is, frankly, ignorant and stupid. But because they are sure that because keynesianism exists solely as a rationalization for how the government should tax and spend and run the economy, then they consequently refuse to even attempt to understand it either in its historical context, or as an analytical tool that is not inherently ideological (at least not in the way that they believe it is). An acute awareness of perversity effects in economics is similar. It serves ideological functions, both pro and con, but that does not necessarily invalidate it inherently.

  • Russell Sadler on December 23, 2012 4:40 PM:

    Thank you Kathleen. What a wonderful appreciation of Hirschman!

    My introduction to the man was his 1991 book, The Rhetoric of Reaction. I was in the middle of a 35 year career of a daily radio broadcast and weekly newspaper column. Hisrchman's book gave shape to a theory I had that there was an enduring pattern to conservative arguments. No matter what you wanted to try to improve your standard of living, it would never work out the way you thought it would. Hirschman have concrete names to this time-honored drivel -- Perversity, Futility and Jeopardy. The books has an honored place among the reference books by my desk. One of the most influential books of my life.

  • Jeff on December 23, 2012 4:40 PM:

    And yet military Keynesianism is fine and dandy.

    Ditto gulag: Great post.

    Note to self: learn more about Hirschman.

  • Prof B in LA on December 23, 2012 5:31 PM:

    I cited Hirschman in my dissertation and was told to take the citation and that -- quite important -- bit of my argument out. "Real" social scientists don't do interdisciplinary work. Yup. Pretty much tells you everything you need to know about the state of the American academy.

  • Anonymous on December 23, 2012 5:45 PM:

    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.

    And as you're stating that a specific person -- Hirschmann -- is just such a thinker, you should use the appropriate pronoun to that person's gender.

  • KK on December 23, 2012 6:58 PM:

    Thank KG and thanks everyone, a great thread all round. I will be sure to check out AH
    Merry Christmas, Happy Holidays and a very Happy New Year to all!

  • FlipYrWhig on December 23, 2012 8:59 PM:

    No one mentioned the excellent short book _The Passions and the Interests_. Check it out!

  • Anonymous on December 23, 2012 11:00 PM:

    Great post. I wasn't aware of this guy, and I really appreciate being informed about his work.

    From the post:
    "There is a certain kind of thinker whose strength lies in her ability to transcend...."

    Excuse me, but its this some kind of political correctnness run amuck? He is not a her. Instead of the laboriuous "he or she" or "him or her", or inncaccurately characterising gender, it is now OK to use (IMHO) "their" even when not neccesarily referring to an idividual person or class of people.