In his meticulously written, encyclopedic book on Hirschman's life, Princeton historian Jeremy Adelman (2013a: 172) notes: ‘The list of the saved reads like a who's who: Hannah Arendt, André Breton, Marc Chagall, Marcel Duchamp, Max Ernst, Siegfried Kracauer, Wifredo Lam, Jacques Lipchitz, Alma Mahler Gropius Werfel (the serial wife of composer Gustav Mahler, architect Walter Gropius, and novelist Franz Werfel), Heinrich Mann, Walter Mehring … it goes on’.
Albert O. Hirschman: A ‘Beamish’ Social Scientist for Our Grandchildren
Version of Record online: 27 AUG 2014
© 2014 International Institute of Social Studies
Development and Change
Volume 45, Issue 5, pages 1111–1133, September 2014
How to Cite
Özçelik, E. (2014), Albert O. Hirschman: A ‘Beamish’ Social Scientist for Our Grandchildren. Development and Change, 45: 1111–1133. doi: 10.1111/dech.12116
- Issue online: 17 SEP 2014
- Version of Record online: 27 AUG 2014
The story of Albert O. Hirschman might be read as a collective memory in the form of a personal tale, a re-encounter with a social science that finds hope in disappointment, solutions in tension, and liberty in uncertainty, a style of regarding the social world as a source of possibilities that the intellectual can help summon with a different combination of humility and daring. (Adelman, 2013a: 15)
Otto Albert Hirschmann (1915–2012) was born to well-educated Jewish parents in Berlin. His name was changed to Albert Otto Hirschman in the USA (the first and middle names switched and one of the n's in the surname dropped). Before leaving Europe for the US in early 1941, Hirschman completed his pre-career education in the most cosmopolitan way possible. His involvement in anti-fascist struggles in Europe during the 1930s provided him with a down-to-earth background, upon which he built his ground-breaking intellectual career in the US, where he became a distinguished expert in development economics, political economy and history of economic thought.
Having fought against General Franco's nationalist forces in the Spanish Civil War, Hirschman also worked for the so-called Emergency Rescue Committee in 1940. The Committee was led by Varian Fry, an American activist journalist who, as a foreign correspondent in Berlin in 1935, had witnessed the Nazi purge of the Jews. While in New York, Fry brought together many anti-fascists and collected US$ 3,000 to be used in a clandestine rescue operation. The objective of the operation was to save ‘especially the better-known intellectuals and artists who were known to be in danger’ in southern France. As Fry arrived in Marseilles to lead the rescue operation, Hirschman became his ‘right-hand man’. Impressed by Hirschman's ‘irrepressible smile and charm’, Fry nicknamed him Beamish. Indeed, Hirschman's ‘smile and can-do approach to even the thorniest problem earned him the nickname Beamish among everyone involved in the rescue operation’. Fry and Beamish worked together intimately in an adventurous rescue operation that enabled more than 2,000 refugees to escape from France, by then invaded by the Nazis (Adelman, 2013a: 171–2).1
At a certain point, Fry and Hirschman decided that the latter should also leave Europe, as the gendarmes were after him. In December of 1940, Hirschman crossed the Pyrenees on foot from Banyuls, France to Port Bou, Spain. His small travel bag contained false identity documents, a pair of socks and Montaigne's Essais. His destination was the US via Spain and Portugal. Eventually, he managed to get aboard the transatlantic ship, SS Excalibur, at the port of Lisbon. As the ship came close to the shores of New York in February 1941, he wrote a letter to his mother, which ended with the following words: ‘Examining my sentiments yesterday, I noticed that they were already somewhat Americanized. Indeed, I shall enter this country with the will of getting to something, of showing that I have merited the extraordinary chain of lucky incidents which have led me here’ (Adelman, 2013a: 180–6).
FROM FRANZÖSISCHE GYMNASIUM TO BERKELEY
- Top of page
- FROM FRANZÖSISCHE GYMNASIUM TO BERKELEY
- HIRSCHMAN'S SCHOLARLY LEGACY
- HIRSCHMAN'S LEGACY FOR FUTURE GENERATIONS
His Französische Gymnasium years in Berlin (1923–32) had a formative influence on Hirschman. He loved history and geography as well as Latin and Greek, and performed quite well in mathematics. He attended a work group, meeting in the house of one of his teachers to read and discuss Goethe's Faust. Among his favourites were novels by Tolstoy and Dostoyevsky, and Buddenbrooks by Thomas Mann. He started reading Marx at the age of fourteen. Two years later, he delved into Nietzsche, and started to ask himself: ‘How can I reconcile Marx and Nietzsche?’. Deciding to become a socialist, he joined the youth movement of the Social Democratic Party in 1931. His sister Ursula (his senior by one year) followed him in joining this left-wing group, which had other prominent members like Willy Brandt (Hirschman, 2001: 48–51).
Graduating from the Gymnasium in 1932, Hirschman enrolled at the University of Berlin, where he started to study ‘something between law and economics’. In 1933, however, came a series of terrible events: in January, Hitler was appointed as Chancellor; in February, the Nazis started their terror campaign and persecutions, utilizing the Reichstag fire as a pretext; in March, Hirschman's father died of cancer. This series of calamities led Hirschman to leave Berlin for Paris in April, encouraged by his fluency in French. His mother and younger sister, Eva, stayed in Germany until the late 1930s, whereas his politicized sister Ursula also made her way to Paris. In Paris, Hirschman gave German lessons to earn some money, and studied economics, finance and accounting at the Sorbonne. In 1935, he won a one-year fellowship to the London School of Economics (LSE), where he took some of the courses taught by Lionel Robbins and Friedrich von Hayek — two major anti-Keynesians of the time. However, Hirschman's close friends in England were Keynesians, with whom he went to Cambridge ‘to hear the master’ (Hirschman, 2001: 54–59).
His friends were wowed by Keynes, but Hirschman was sceptical of Keynesianism — ‘reflecting [his] growing distrust of anything that smacked of grand theory’. The LSE experience made Hirschman aware of some dogmatic elements in the socialist political-economy tradition, with which he had been in close contact until then. He started to distinguish between ‘economic concepts’ and ‘political positions’, and ‘took Hayek, in particular, seriously and appreciated the rigorous individualism after his previous diet of “lumpy” collective categories like social class’. In a later interview, he recalled his fellowship days in England, saying that ‘[o]nly there did I really discover what economics actually is’. However, he ‘did not simply discard Marxism and embrace Hayek, leave behind class analysis to tout Keynes’. He was ‘prepared to hear all sides’. He kept track of the Keynesian–Hayekian debate, but did not confine his interest to that dispute. At LSE, he found ‘the first opportunity to delve into the history of economic thought’, engaging with John Stuart Mill, Alfred Marshall and also David Ricardo (Adelman, 2013a: 123–5).
Economic ideas captured Hirschman's interest so profoundly that he went to Cambridge again, this time on his own, and not for Keynes. He arranged a meeting with Piero Sraffa, an eminent escapee from Italian fascism. Sraffa was one of ‘the most biting critics of Hayek's Austrian economics and his relentlessly pessimistic logic’. Hirschman visited Sraffa in his office at Trinity College at a time when the latter was immersed in the work of Ricardo. The two anti-fascists, one from Germany and the other from Italy, had ‘a long and belle conversation’, as Hirschman later remarked in an interview. No documents or records exist to reveal the details of the conversation, but one can still sense Hirschman's determination ‘to follow Sraffa's example of weaving sophisticated economic analysis together with political commitment’ (Adelman, 2013a: 125).
Sraffa was a cousin of Eugenio Colorni, an Italian anti-fascist philosopher. It was Colorni who wrote a letter of introduction for Hirschman to mediate his visit to Sraffa. Hirschman knew Colorni from his university days in Berlin, where Colorni developed an interest in his older sister, Ursula. In 1935, Ursula married Colorni and moved from Paris to Trieste, where Colorni was teaching philosophy ‘in an institute for teachers’. Some financial difficulties led Hirschman to continue his education at the University of Trieste. There, he got his doctorate in economics in 1938 just before Mussolini issued anti-Semitic decrees, completing his dissertation on a topic that he started to study while at LSE: ‘the French economic reform of 1925–26 and the history of the franc Poincaré’ (Hirschman, 2001: 59–60). In the meantime, Colorni, who was also from a Jewish family, became a close friend and a major intellectual influence on Hirschman.
A heterodox socialist, Colorni played a constitutive role in Hirschman's aversion to grand narratives and big theories, and in his drift away from the idealism of the German left. Colorni's philosophical emphasis on the importance of small ideas enabled Hirschman to acquire a habit of thought according to which great insights can be derived from small ideas. Politically, the socialist environment in which Hirschman found himself in Italy, thanks to Colorni, was ‘much less concerned with getting the ideological diagnosis “correct” than with changing history through action’. Moreover, the movement Colorni belonged to was one ‘that tried to combine the freedom-loving spirit of liberalism with the justice-seeking impulse of socialism’ (Adelman, 2013b: vii–xiv). Thus, Colorni and his circle might have paved the way for the liberal stance — in the American sense of the term — that Hirschman adopted in his later life.
Throughout his academic career in the US, Hirschman proved to be one of the last great essayist-economists, a species that is becoming rapidly extinct in today's world of mathematized economics. It was also Colorni ‘who impressed Montaigne and the beauty of the essay genre upon Hirschman’ (Adelman, 2013b: xiv). The philosophical scepticism-cum-optimism in Montaigne's Essais is too well known to be examined here. Some themes that run lucidly throughout the Essais are: the limits to human knowledge, changeability of ideas, diversity of possible consequences of human action, scepticism against dogmatic worldviews, refusal of blind obedience to canonical conventions, and doubt as a source of hopeful wisdom… Who would oppose the assertion that Montaigne had a ‘beamishly’ sceptical attitude towards life? Indeed, the Colorni–Hirschman duo shared the view that scepticism could be a fertile ground on which diverse possibilities of human action could grow to yield unforeseeable yet hopeful consequences. This view of theirs found its best expression in a frequent joke they made with each other: proving Hamlet wrong!2 Whereas the Shakespearean figure suffered from an immobilizing scepticism, the two brothers-in-law conceived of doubt as a source of and stimulus for action, from which beneficial consequences could arise.
It was with this backstory that Hirschman set foot on American soil in February 1941, thanks to a visa made possible by a Rockefeller fellowship at the University of California, Berkeley. There, he met a student, Sarah Chapiro, also an émigré from Europe, and married her in June of the same year. In March 1943, Hirschman joined the US army and became an American citizen during his military service. He served as a sergeant in the American army for about two years between 1943 and 1945, first in Algiers and then in Italy, where he also worked for the Office of Strategic Services (OSS) (Hirschman, 2001: 74–6). During his service as a sergeant in Algiers, he learned from a group of Italian anti-fascists that Colorni had been killed by the fascists in Rome in 1944. Learning of Colorni's death ‘was a terrible blow’ for Hirschman: ‘I realized that [Colorni] was the person who had counted most in my life’ (Hirschman, 2001: 76).
In October 1945, just after the war ended, Hirschman served as an interpreter in Rome at the trial of a German general, Anton Dostler, a war criminal brought before the judge in defiance of the Geneva Convention on Prisoners of War, on a charge of ordering the shooting of some OSS men. At the end of the trial, The New York Times reported, the interpreter ‘turned pale as he had to utter the death sentence’ to Dostler's face (Adelman, 2013a: 247).
HIRSCHMAN'S SCHOLARLY LEGACY
- Top of page
- FROM FRANZÖSISCHE GYMNASIUM TO BERKELEY
- HIRSCHMAN'S SCHOLARLY LEGACY
- HIRSCHMAN'S LEGACY FOR FUTURE GENERATIONS
Like most of his contemporaries who worked on development issues, Hirschman embraced the planning spirit of the post-war period. However, he was always something of a maverick in the newly emerging discipline, because ‘he saw virtue in the fact that nothing went as planned’ (Gladwell, 2013). His research programme rested on the beamish idea that developmental failures have an intrinsic tendency to breed creativity and innovativeness, eventually leading to success in unintended ways (Hirschman, 1967a). Indeed, his distinct legacy as an unconventional founding father of development economics involves a sort of motto that there is always an alternative, even under what could be seen as the most hopeless of circumstances. Hirschman's ‘was a quest to reveal how acts of intellectual imagination might unlock sweeping possibilities’ (Adelman, 2013b: vii). For him, ‘what appears as immutable, stubborn, and impervious to change could be a source of options’ (ibid.: xii). Rather than preoccupying himself with grand narratives and big theories that attempt to explain everything at once, he favoured ‘small ideas’ and ‘lesser thoughts’ that have the potential to generate ‘great insights’ of practical value. However, his ‘preference for lesser scales did not reflect a lack of ambition’, as he ‘had a project that transcended the norms of professionalized American social science and defied easy categorization’ (ibid.: vii).
In this vein, Hirschman developed several widely cited concepts and insights, such as: ‘economic relations leading to political dependence’ (1945), the ‘Herfindahl–Hirschman Index’ (1945, 1964); ‘unbalanced growth’ (1958); ‘development as a chain of disequilibria’ (1958); the ‘linkages-approach to development’ (1958, 1992a, 1992b); ‘hidden rationalities’ (1958, 1968, 1992b); ‘blessings in disguise’ (1963a); ‘fracasomania’ (failure complex) (1963b, 1975); ‘reformmongering’ (1963c, 1963d); ‘visiting-economist syndrome’ (1963e, 1992b); ‘principle of the hiding hand’ (1967a); ‘exit and voice’ (1970); ‘bias for hope’ (1971a); ‘possibilism’ (1971b, 1992c); ‘the right to a non-projected future’ (1971a); ‘obituary-improving activities’ (1973a); ‘the tunnel effect’ (1973b); ‘passions versus interests’ (1977, 1992d); ‘trespassing’ (1981c); ‘monoeconomics’ (1981b); ‘rival views of market society’ (1982a, 1992e); ‘happiness of pursuit versus free riding in public life’ (1982b); ‘shifting involvements’ (1982b); ‘getting ahead collectively’ (1984a); ‘rhetoric of reaction’ (1991); ‘propensity to self-subversion’ (1995). These ideas are essential components of his social-scientific legacy, some of which will be examined in the pages that follow.
In addition to the core concepts above, Hirschman (1981c: 305) had ‘a further, more ambitious, and probably utopian thought’, with which he closed the speech he gave upon receiving the Frank E. Seidman Distinguished Award in Political Economy in 1980. Giving an account of the ‘durable tension’ between social science and morality with reference to the ‘deep split between head and heart’, he concluded his speech with a mental exercise on the possibility of imagining ‘a kind of social science that would be very different from the one most of us have been practicing’. This science would be:
a moral-social science where moral considerations are not repressed or kept apart, but are systematically commingled with analytic argument, without guilt feelings over any lack of integration; where the transition from preaching to proving and back again is performed frequently and with ease; and where moral considerations need no longer be smuggled in surreptitiously, nor expressed unconsciously, but are displayed openly and disarmingly. Such would be, in part, my dream for a ‘social science for our grandchildren’. (ibid.: 305–6)
This visionary sketch of a social science for our grandchildren is the crowning glory of Beamish's legacy — hence the title of this article.
Hirschman as Development Economist
Hirschman's scepticism of orthodox views did not prevent him from pursuing a distinguished career after leaving Europe. He held the following positions: Research Fellow, Berkeley (1941–43); Economist, Federal Reserve Board, Washington DC (1946–52); Economic Adviser and Consultant, Bogotá, Colombia (1952–56); Visiting Research Professor, Yale University (1956–58); Professor of International Economic Relations, Columbia University (1958–64); Professor and Lucius N. Littauer Professor of Political Economy, Harvard University (1964–67; 1967–74); Fellow, Center for Advanced Study in the Behavioral Sciences, Stanford (1968–69); Visiting Member, Institute for Advanced Study, Princeton (1972–73); and Professor of Social Science, Institute for Advanced Study, Princeton (1974–85), where he was professor emeritus from 1985 to his passing in 2012. After the fall of the Wall in his native Berlin in 1989, he also attended the Wissenschaftskolleg zu Berlin as Visiting Fellow from time to time (1990–91, 1991–1994, 2000).3
At Berkeley, Hirschman participated in a research project directed by the economist Jack Condliffe, who had helped him get the Rockefeller fellowship. Alexander Gerschenkron, the eminent historian of economic development, was also part of that project. Condliffe, Gerschenkron and Hirschman worked in the same office at Berkeley (Hirschman, 2001: 74–6). While there, Hirschman completed his first book, National Power and the Structure of Foreign Trade, and sent it to the University of California Press at the end of 1942; it was published in 1945. The book focused on the effect of international economic relations on international politics. Developing and utilizing some statistical indexes,4 Hirschman examined in detail the asymmetrical nature of economic relations between developed and less-developed countries, and especially the asymmetry of ‘gains from trade’ between large and small countries. The rising political influence of Hitler's Germany on Eastern and South-eastern Europe during the 1930s appears to have been somewhere in the back of his mind. He discussed how foreign trade and foreign investment might have paved the way for political dependence of small countries on a larger one. As such, in some respects Hirschman's first book was a precursor of dependency theory which was developed in the 1960s. Indeed, a few decades later, Hirschman did not hesitate to refer to himself ‘as the frequently unacknowledged founding grandfather [of dependencia]’ (Hirschman, 1978: 45).5
In the period between 1946 and 1956 Hirschman was presented with opportunities which were to provide the foundation for his major contributions to development economics. Returning from Europe, he was invited by Gerschenkron to join the Federal Reserve in Washington DC. Hirschman was appointed as economist and was directly involved in implementing the Marshall Plan, especially reconstruction issues concerning France and Italy, and the organization of the European Payments Union. His six-year period at the Fed was followed by four years as economic advisor in Bogotá, Colombia. Hirschman's first appointment was at the Colombian government on the recommendation of the World Bank. In this time, he worked on the ground very intensively, directly observing the development issues of an underdeveloped Latin American country. His contract with the Colombian government lasted two years, after which he set up his own consulting firm and stayed for two more years in Bogotá (Hirschman, 2001: 77–81). His company provided economic and financial advisory services to ‘firms and banks and … publicly owned utilities that were trying to obtain financing and loans from the World Bank’, and also carried out ‘market studies for private firms’ (ibid.: 81–2).
In 1954, after his first two years in Colombia, Hirschman was invited to present a paper on economic development at a conference at the Massachusetts Institute of Technology (MIT).6 His presentation was thought-provoking.7 Hirschman openly criticized the so-called ‘integrated investment planning’ — the conventional development approach at the time — calling it a ‘myth’. In July 1956, Yale University invited Hirschman for a visiting research professorship, which he accepted. It was at Yale that he finished writing The Strategy of Economic Development (1958), in which he made his first major contributions to developmental thought, after a decade of applied work on the Marshall Plan and the case of Colombia.
In The Strategy, Hirschman challenged the prevailing approach to development through his alternative unbalanced-growth perspective associated with linkage effects. He opposed the established approach pioneered by Paul Rosentein-Rodan and Ragnar Nurske which conceptualizes development as ‘balanced growth’, requiring a ‘big push’ through simultaneous investments in various sectors of the economy by means of an integrated plan. If underdeveloped countries lacked sufficient resources to implement such plans, foreign aid could help, according to the conventional argument.
Hirschman, however, thought that underdeveloped countries suffered from a lack, not only of physical and financial resources, but also of decision-making and entrepreneurial capabilities to design and realize such comprehensive development plans. Instead, he proposed a more modest strategy that identifies promising sectors which could lead the economy in the development process. Such promising sectors could be selected using the ‘linkage’ criterion, that is, by focusing on the sectors that have operational connections with other sectors. For example, an investment project targeting an output industry, which initially imports its machinery and inputs from abroad, can be designed in such a way that it stimulates the domestic production of such machinery and inputs by other industries, thereby paving the way for the formation of domestic capital and input markets (backward linkage). Conversely, it is also possible to design investment projects so that enhancements in the targeted input industries stimulate existing output industries, or lead to the formation of new output industries (forward linkage). Channelling managerial and entrepreneurial capabilities (and financial resources) into a few selected industries with numerous linkages is a better developmental alternative than channelling those scarce resources into numerous industries simultaneously (Hirschman, 1958, 1992a, 1992b).
For Hirschman, overcoming developmental problems required, in the first place, identifying priority areas, rather than devising a comprehensive and mechanical blueprint that imposes an extensive array of economic and non-economic prerequisites for development. Interestingly, current debates on growth and development reflect significant aspects of Hirschman's approach. For example, Dani Rodrik8 and his colleagues have advanced the notion of ‘growth diagnostics’ which seeks to uncover ‘binding constraints’ on growth and development (Hausmann et al., 2008; Rodrik, 2007a, 2008, 2010). In opposition to the comprehensive neoliberal recipes for growth and development, which found their expression both in earlier and augmented versions of the so-called Washington Consensus (Rodrik, 2006, 2007b), the ‘binding-constraints’ approach emphasizes identifying and combating the most serious bottlenecks within the economy (such as singling out supply- or demand-side priorities in physical, financial or human capital formation).
Hirschman's priority-oriented philosophy of development contained further refinements and more dimensions. He conceptualized development ‘as a chain of disequilibria’ (1958: 65–70). In quite a Schumpeterian and anti-neoclassical parlance, Hirschman described the policy implication of his development philosophy as follows:
[O]ur aim must be to keep alive rather than to eliminate the disequilibria of which profits and losses are symptoms in a competitive economy. If the economy is to be kept moving ahead, the task of development policy is to maintain tensions, disproportions, and disequilibria. That nightmare of equilibrium economics, the endlessly spinning cobweb, is the kind of mechanism we must assiduously look for as an invaluable help in the development process. (Hirschman, 1958: 66)
For Hirschman, development required deliberate distortions of equilibria, implying that underdeveloped countries did not have to strive for making rational choices (in the neoclassical sense of optimization) that would yield equilibria as efficient outcomes. Beneath the equilibrium-distorting development efforts, which would be considered irrational and inefficient by conventional economists, Hirschman saw ‘hidden rationalities’ (1958: 1–7; 1992b: 9–14). For him, ‘development depends not so much on finding optimal combinations for given resources and factors of production as on calling forth and enlisting for development purposes resources and abilities that are hidden, scattered, or badly utilized’ (1958: 5). Finding out the hidden, scattered, or badly utilized resources and abilities requires a kind of learning-by-doing, which in turn involves a process of trial-and-error that defies neoclassical rationality.9
Believing in what may be called the ‘rationality of irrationality’ in the case of underdeveloped countries, Hirschman also opposed the Rostovian universality of stages-of-growth:10
Following Gerschenkron, I saw originality and creativity in deviating from the path followed by the older industrial countries, in skipping stages, and inventing sequences that had a ‘wrong way around’ look. It was surely this attitude that permitted me to ferret out the backward and forward linkage dynamic and to acclaim as a dialectical-paradoxical feat what was later called … import-substituting industrialization: in its course, a country would acquire a comparative advantage in the goods it imports.… (Hirschman, 1992b: 15–16)
In a systematic search for hidden rationalities in the development experiences of Brazil, Colombia and Chile (Hirschman, 1963e: Chs. 1–3), Hirschman focused upon ‘conditions and attitudes that are widely considered as inimical to change’ but which also ‘have a hidden positive dimension and can therefore unexpectedly come to serve and nurture progress’ (1963a: 6). His approach, in his own words, was ‘unduly tolerant of existing flaws and failings, and frequently even bestows creative virtues on them’, because he saw such flaws and failings as ‘possible blessings in disguise’ (ibid.: 6–7). Indicating ‘strength to be drawn from alleged weaknesses’, the concept of ‘blessings in disguise’ is not a case of ‘infatuation with paradox’, but it is ‘dictated by the essence of the process of change’ (ibid.: 7).
Hirschman believed that if ‘blessings in disguise’ were demonstrated and acknowledged as inherent elements of the development process, the exaggerated pessimism with which underdeveloped countries, and especially Latin American ones, were typically regarded could to some extent be overcome. One source of such pessimism was the unworldly prescriptions of foreign experts (1963e). Hirschman referred to it as the ‘visiting-economist syndrome’, that is, ‘the habit’ of foreign development experts to dictate ‘peremptory advice and prescription by calling on universally valid economic principles and remedies — be they old or brand new — after a strictly minimal acquaintance with the “patient”’ (1992b: 11). Related to this syndrome,11 Hirschman diagnosed an even more severe pitfall in development issues: ‘the tendency of many Colombians and Latin Americans to work hand in glove with the visiting economist by their own self-deprecatory attitudes’ (ibid.). It was in this context that the idea of ‘blessings in disguise’ could help the Latin Americans transcend their ‘self-deprecatory attitudes’: ‘Some of my main contentions could serve to reconcile the Latin Americans with their reality, to assure them that certain ubiquitous phenomena such as bottlenecks and imbalances in which they see the constantly renewed proof of their ineptness and inferiority are on the contrary inevitable concomitants and sometimes even useful stimulants of development’ (1961: 41).
Providing detailed examples of the difficulties of regional imbalances in Brazil, land reform in Colombia and inflation in Chile (1963e: Chs. 1–3), Hirschman explained further how categorical disappointment about the outcomes of previous developmental efforts and reforms usually resulted in a ‘failure complex’. This complex was a socio-psychological obstacle to problem solving and policy making in regard to developmental matters, especially in Latin America (1963b: 240–46). Hirschman coined a Spanish-Portuguese term to refer to that complex, that is, fracasomania. This mania could be self-fulfilling, as it might cause genuine fracasos (failures), Hirschman warned (1975, 1992b: 11).
The frequent difficulties which arose from such factors as the visiting-economist syndrome and fracasomania led Hirschman to reflect on ways to approach developmental reforms. Pondering the complexity of reforms, he realized that ‘Latin Americans appear to have been placed squarely before the familiar, if stark, alternative: change through violent revolution or through peaceful reform?’ (1963c: 251). Thus he turned his attention to the conventional dichotomy between revolution and reform. Were they really the only alternatives? Searching for an answer to this question, he first identified some simple commonalities. The objective of both revolution and reform was ‘change’, even though the targeted degrees of change and the methods utilized were obviously different. In any case, both revolution and reform entailed ‘a shift in power and wealth from one group to another’ (ibid.). Therefore, both revolution and reform were bound to engender reaction and resistance.
Hirschman meant to say that reform was also quite a difficult, complex and risky task to accomplish. Reform ‘was hardly the smooth orderly process that could be managed with expertise and foreign aid’. This message was for the ‘American intellectuals and policy makers’. Reform ‘required shaky alliances and “wily and complex tactics”’ (Adelman, 2013a: 379). Indeed, reform was so formidable a task that it was something to be ‘mongered’ — hence another neologism by Hirschman: ‘reformmongering’ (1963d). Hirschman had yet another message for the ‘Latin American intellectuals and policy makers’, some of whom ‘saw reforms as petty bourgeois soup’, while ‘others felt that the obstacles and hurdles were so great that reform would stop in its tracks’ (Adelman, 2013a: 379). It was in such a divided milieu that Hirschman considered Journeys Toward Progress (1963a) as a sort of ‘reformmonger's manual’:
He imagined Journeys, not just jokingly, as a counterpoint to Che Guevara's best-selling manual, Guerilla Warfare. His purpose was ‘to break down the rigid dichotomy between reform and revolution and to show that the changes that occur in the real world are often something wholly outside these two stereotypes’. Americans had to accept that revolutionary forces were not a threat to progress; Latin Americans had to see that revolution was not the only way to realize it. (Adelman, 2013: 379–80)
Eventually, Hirschman's ideas evolved into a philosophical inference at a higher level. Thus, he came with ‘the principle of the hiding hand’ (1967a), an inference that is not merely a play of words on Adam Smith's ‘invisible hand’. The principle Hirschman discovered was that there existed ‘some sort of invisible or hidden hand that beneficially hides difficulties from us’ (1967a: 13) at the initial stages of development plans. It was thanks to this ‘hiding hand’ that many development projects were embarked upon in the conviction that they were feasible and unchallenging. This, however, was due to a lack of awareness of the difficulties that were encountered in the course of the project. In most cases, if those undertaking the project had advance insight into the troubles that lay ahead, they wouldn't start the project in the first place. ‘The hiding hand does its work essentially through ignorance of ignorance, of uncertainties, and of difficulties’ (Hirschman, 1967c: 35). However, it is not simply a question of the hiding hand being misleading. It has the beneficial side effect of generating unexpected challenges, by way of which project planners and executors are forced to be creative and innovative problem-solvers throughout the development process (1967a). The hiding hand serves as a sort of teacher who experimentally teaches how to become a true entrepreneur, unafraid of possible challenges and risks:
The Hiding Hand is essentially a mechanism that makes the risk-averter take risks and in the process turns him into a less of a risk-averter. In this manner, it opens an escape from one of those formidable ‘prerequisites’ or ‘preconditions’ to development; it permits the so-called prerequisite to come into existence after the event to which it is supposed to be the prerequisite. (Hirschman, 1967a: 26)
Hirschman's conception of the hiding hand thus involved a learning-by-doing message to the anti-plan, invisible-hand thinkers. If the invisible hand was supposed to yield individually unintended yet socially beneficial outcomes through free entrepreneurship in a competitive market economy, the hiding hand, which essentially pertained to the domain of planning, had the important function of developing entrepreneurial habits of thought and action (i.e. creativity, innovativeness, problem-solving and risk-taking, etc.), without which the invisible hand couldn't begin to operate.
Later on, ‘the hiding hand’ served as the ideational basis of Hirschman's ‘bias for hope’ (1971a) and ‘possibilism’ (1971b). His possibilist approach12 to development and change involved a philosophical goal. In his own words: ‘the fundamental bent of my writings has been to widen the limits of what is or is perceived to be possible…’ (1971b: 28). In this regard, Hirschman's possibilism was a systematic critique against two different prejudgements. First, possibilism was an alternative way of thinking vis-à-vis the attitudes of ‘rich and powerful countries’ towards development. Secondly, it was also an alternative to the revolution-oriented idea that genuine development and progress are impossible ‘in the absence of prior total political change’:
I propose fundamental changes in institutions such as international aid and investment, but I am not willing to prejudge categorically the extent, much less the modality, of the wider social and political transformations that may or may not be a prerequisite for such proposals ever being adopted…. The essence of the possibilist approach consists in figuring out avenues of escape from such straightjacketing constructs in any individual case that comes up. (Hirschman, 1971b: 29)
Possibilism thus implied ‘avenues of escape’ from ‘straightjacketing constructs’, such as the relative smoothness of development or its impossibility under capitalism. However, even if possibilism, as an alternative to such constructs, could prove to be conducive to growth, the question of how the benefits would be shared remains. That is, income inequality couldn't be ignored. Long-lasting inequality may have led to frustrations that would de-link large segments of society from the conviction that a better life is possible. Furthermore, especially in Latin America, the relationship between economic growth and political development was complicated. ‘While the economic growth record has been from fair to excellent…the political record must be called from barely tolerable to disastrous’ (Hirschman, 1981a: 37), as authoritarian regimes mushroomed in the 1960s and 1970s. The complex relationship between growth and political development is linked with inequality. Thus Hirschman felt the need to focus on the limits of ‘tolerance for income inequality’, and came up with one of his now-classic articles that introduced his simple yet insightful analogy, the ‘tunnel effect’:
Suppose that I drive through a two-lane tunnel, both lanes going in the same direction, and run into a serious traffic jam. No car moves in either lane as far as I can see (which is not very far). I am in the left lane and feel dejected. After a while the cars in the right lane begin to move. Naturally, my spirits lift considerably, for I know that the jam has been broken and that my lane's turn to move will surely come any moment now. Even though I still sit still, I feel much better off than before because of the expectation that I shall soon be on the move. But suppose that the expectation is disappointed and only the right lane keeps moving: in that case I, along with my left lane cosufferers, shall suspect foul play, and many of us will at some point become quite furious and ready to correct manifest injustice by taking direct action (such as illegally crossing the double line separating the two lanes). (Hirschman, 1973b: 545)
The tunnel effect here corresponded to the ‘gratification over advances of others’, when the others (in the right lane) re-started to move. However, such gratification would last only for a limited period of time if the left lane remained stuck. The analogy was that social tolerance for inequality at the earlier stages of development would be high enough not to cause serious problems thanks to ‘the expectation that eventually the disparities [would] narrow again’. However, if disparities persist, reactions to inequality are inevitable, and ‘trouble and, perhaps, disaster’ bound to follow (Hirschman, 1973b: 545–46). That is, initial gratification could turn into ‘indignation’. Whether the tunnel effect is strong enough to avoid or significantly retard indignation depends on certain ‘social, historical, cultural, and institutional’ factors. For example, while fluidity of class lines would add to the effectiveness of the tunnel effect, rigidity would work against it. Another point is that a high degree of social segmentation along ethnic or religious lines would render the tunnel effect impotent. Yet another example pertained to capitalism and socialism: in the case of highly segmented societies, capitalism would ‘require a far greater degree of coercion than it did in the fairly unitary countries’; while socialism wouldn't be ‘a ready proven alternative’ because ‘centralized decision making’ would be ‘unlikely to function at all well in segmented societies’. In this manner Hirschman delved into the institutional and socio-psychological foundations of the complex relationships between growth, inequality and political development (ibid.: 552–59).
Recently, Ray (2010) has drawn attention to the contemporary relevance of Hirschman's ‘tunnel effect’, pointing out the advantages of a re-think around ‘unbalanced growth’,13 especially in terms of the possible ‘psychological reactions to economic change’:
The fact that uneven growth can both raise our ambitions and unleash our frustrations should be fundamental to our understanding of economic development. The aspirations of an individual are typically generated and conditioned by the experiences of others in that individual's ‘cognitive neighborhood’. Such conditioning will affect a plethora of socioeconomic outcomes: the rate of savings, the decision to migrate, fertility choices, technology adoption, the adherence to norms, the choice of ethnic or religious identity, the work ethic, the strength of mutual insurance motives, or the collective decision to engage in conflict. Yet the models that economists write down and apply are blissfully devoid of such social influences on behavior. (Ray, 2010: 57).
Hirschman as Political Economist and Historian of Thought
From the early 1970s onwards, Hirschman felt the need for trespassing into non-economic areas to gain a better understanding of societal reality. His endeavours culminated in a plea for the development of a multi-disciplinary, or perhaps trans-disciplinary, approach in the social sciences. He did not hesitate to admonish mainstream economists for their penchant for reductionism and uncompromising eschewal of other disciplines in defiance of the historical, political, cultural, psychological, institutional and moral complexities of real life. In an essay written in response to being awarded the Talcott Parsons Prize for Excellence in the Social Sciences, Hirschman warned his mainstream colleagues: ‘But let us beware of excessive parsimony!’ (Hirschman, 1984b: 95). Relying on Amartya Sen's (1977) biting critique of standard economic theory,14 Hirschman concluded by drawing attention to a ‘basic tension man must live with’ that arises from ‘the fact that [man] lives in society’:
It is the tension between self and others, between self-interest, on the one hand, and public morality, service to community, or even self-sacrifice, on the other, or between ‘interest’ and ‘benevolence’ as Adam Smith put it. Here again economics has concentrated overwhelmingly on one term of the dichotomy, while putting forward simplistic and contradictory propositions on how to deal with the other. The contradiction can be resolved by closer attention to the special nature of public morality as an ‘input’. (Hirschman, 1984b: 95)
Hirschman's first ‘trespassing’ work had come as early as 1970: Exit, Voice, and Loyalty. He dedicated the book to his brother-in-law: ‘To Eugenio Colorni (1909–1944), who taught me about small ideas and how they may grow’ (Hirschman, 1970: dedication page). The book's starting point was that a decline in the quality of goods or services provided by firms, organizations or states was almost inevitable at some point in their lifetimes. Hirschman's main concern was how customers of firms or citizens of states responded to such a decline in quality, and the type of response that would reverse the decline by conveying useful information to the decision makers in firms or policy makers in states. Hirschman focused upon ‘exit’ and ‘voice’ as the two available alternatives to express dissent in the face of declining quality. For example, early on, Milton Friedman of Chicago University had argued for the efficiency of the ‘exit’ option in the case of declining quality in public schools — parents should simply choose the ‘exit’ option by withdrawing their children as a direct expression of their complaints, rather than the ‘cumbrous political channels’ involved in the ‘voice’ option. Hirschman considered Friedman's argument ‘as a near perfect example of the economist's bias in favor of exit and against voice’, further arguing that: ‘In a whole gamut of human institutions, from the state to the family, voice, however “cumbrous”, is all their members normally have to work with’ (Hirschman, 1970: 16–17).
This theme turned out to be an interesting attempt on Hirschman's part to think about economics and politics together. It also yielded a truly original political-economy contribution that went far beyond a mere critique of Friedman-like economists’ tendency to unconditionally favour ‘exit’ (implied by the competition-orientation of economics) over ‘voice’ (as a non-economic, political possibility). As such, Hirschman (1970) analysed in detail the circumstances under which voice might be a better option than exit for reversing a decline in quality; the potential of voice and exit functioning as complementary mechanisms rather than being mere substitutes; and the trade-offs between the two. Eventually, the book turned out to be one of his most influential monographs. Its reception ‘was unlike anything Hirschman had experienced’. The reviews of the book, ‘coming from all quarters’, were ‘almost uniformly rapturous’ (Adelman, 2013a: 446).
Even so, Hirschman was bored with teaching responsibilities and ‘departmental and disciplinary politics’ at Harvard in the early 1970s. He once told Sarah, his wife, that the Institute for Advanced Study (IAS) in Princeton, a research institution with no teaching obligations, was ‘a place where he dreamed of being’. His application in 1971 for a one-year visiting fellowship at the IAS was successful, supported by the eminent anthropologist Clifford Geertz who later became a close friend and colleague of Hirschman's. Following the visit in 1972–3, he transferred from Harvard to the IAS in 1974 (Adelman, 2013a: 461–2). He wrote the first draft of his book on the history of ideas, The Passions and the Interests, during his visiting period at the IAS, and also completed the final manuscript there (Hirschman, 1977: vii).
Unsatisfied with the major explanations (of Marx and Weber) about the emergence of capitalism out of feudalism, Hirschman, in The Passions and the Interests, focused upon why certain prominent thinkers had advocated giving up feudal habits of thought and action, and how advocacy of new values and attitudes had given rise to capitalism, as reflected in the sub-title of the book: Political Arguments for Capitalism before Its Triumph. The book was a lively and original tour de force in the history of political-economic ideas, with a special focus on Montesquieu and James Steuart, along with almost all relevant figures including Machiavelli, Hobbes, Tocqueville, Mandeville, Hutcheson, Hume, Smith and others. In Hirschman's scheme of analysis, the history of the dawn of capitalism was characterized by a long-term process of legitimization of economic interests over monarchical and feudal passions. Such interests were increasingly conceptualized and understood as ‘tamers of the passions’ by the philosophers of the times, eventually yielding ‘interest as a new paradigm’. Throughout this long process of thought, previously disreputable activities like money-making and commerce were normalized as harmless, soft and calm passions (1977: 31–66). In this way, Hirschman drew attention to the decisive role of ideas in bringing about the historically major change from feudalism to capitalism. The Passions and the Interests contributed further to Hirschman's recognition and generally turned out to be an object of praise. As Adelman (2013a: 520) notes: ‘Hirschman's version of the intellectual origins of capitalism was greeted by a volley of rhapsodic reviews from quarters in which Hirschman was hitherto unknown’.
Hirschman (1982a) published one of his now-classic articles, ‘Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?’, in an effort to shed light on how ‘market society’ had been conceived throughout history by a variety of thinkers. Hirschman's research revealed that, during the eighteenth century, market society was conceived to be ‘civilizing’, as it was thought to contribute to peace and harmony through the development of commercial relations. This was the ‘doux-commerce’ thesis. Yet the nineteenth-century experience of market society paved the way for critical thinkers to make their appearance. Arguments against market society focused mainly on its ‘self-destructive’ tendency, according to which there were historical disharmonies between the material and self-interest oriented organization of capitalism on the one hand, and its cultural and moral pillars on the other. Advocates of market society responded by arguing that the problem was not with the material dynamism and self-interest orientation of market society, but with its ‘feeble’ nature. According to these apologists, it was the lingering feudal features (in the form of persisting old values and attitudes) that functioned as ‘shackles’, and prevented market society from generating peace and harmony. Yet Hirschman came across another line of thought according to which a feudal past functioned, not as a ‘shackle’, but as a ‘blessing’ that facilitated democratic-capitalist development. In a detailed review, Hirschman demonstrated that the history of ideas was full of contradictory analyses of and failed prophecies about market society, leaving us with a huge historical complexity. By way of conclusion, he pointed out the implication of such complexity for social science:
It is now becoming clear why, in spite of our lip service to the dialectic, we find it so hard to acknowledge that contradictory processes might actually be at work in society. It is not just a difficulty of perception, but one of considerable psychological resistance and reluctance: to accept that the doux-commerce and self-destruction theses (or the feudal-shackles and the feudal-blessing theses) might both be right would make it much more difficult for the social observer, critic, or ‘scientist’ to impress the general public by proclaiming some inevitable outcome of current processes. But after so many failed prophecies, is it not in the interest of social science to embrace complexity, be it at some sacrifice of its claim to predictive power? (Hirschman, 1982a: 1483)
These sentences could be read as a call for open-mindedness in social-scientific thinking. However, the neoconservative–neoliberal milieu of the 1980s stifled the possibility of such an open-minded re-think, to the disappointment of Hirschman. As a matter of fact, Hirschman's political-economy approach to development and change, which he started to build up from the 1940s onwards, involved a kind of prophetic critique against the neoconservative arguments circulated widely during the Thatcher–Reagan era. In that context, Hirschman (1991) wrote an anti-conservative book, The Rhetoric of Reaction, in which he revealed and criticized the historical injudiciousness of conservatism, along with that of radical leftism.
HIRSCHMAN'S LEGACY FOR FUTURE GENERATIONS
- Top of page
- FROM FRANZÖSISCHE GYMNASIUM TO BERKELEY
- HIRSCHMAN'S SCHOLARLY LEGACY
- HIRSCHMAN'S LEGACY FOR FUTURE GENERATIONS
All in all, Hirschman was a pragmatic pluralist, as his research programme involved the premise that there is no such thing as a universal approach towards political-economic reality. At times, his pragmatic pluralism may seem to have overshadowed his creativity due to the apparently inconsistent stances he adopted. For example, his sympathies lay with Hayek's liberal approach when he endeavoured to learn from an anti-Hayekian figure like Sraffa; he thought that ‘nothing went as planned’ despite the fact that his unbalanced-growth strategy involved planning par excellence; he criticized not only the experts who saw development as a relatively easy process within the capitalist system, but also the anti-systemic views that considered development an impossible task under capitalism. Such seeming contradictions, however, can be attributed to his open-mindedness, possibilism and sceptical optimism. His simultaneous appreciation of Hayek's individualism and willingness to learn from Sraffa can be considered a sign of his open-mindedness, which turned out to be a distinctive trait of his intellectual stance throughout his life. His nuanced attitude towards planning arose from his conviction in the possibility of learning from developmental failures. His scepticism of the black-and-white picture drawn by revolutionaries and reformers was the consequence of his optimistic view that social reality was mostly characterized by grey areas. In any event, it seems that we and future generations can derive some significant insights from Hirschman's pragmatic pluralism.
As for developmental issues, Hirschman's anti-Rostovian approach seems to be reflected by some unorthodox views in the current debates about how now-developed countries (NDCs) developed at their earlier stages of industrialization a few centuries ago, and how today's less-developed countries can succeed in their developmental efforts to catch up with the NDCs. For example, a good deal of research has shown that NDCs, at earlier stages of their development, did not subscribe to ‘economic rationality’, which is supposed to result in efficient allocation of resources through the free-market logic. NDCs became developed thanks to some state-led market distortions, such as active industrial and technology policies, as well as government interventions in foreign trade and investment. Moreover, success stories of late industrialization in the twentieth century usually involved ‘getting prices wrong’ in particular, and having a ‘wrong-way-around look’ (to use Hirschman's phrase) in general.15 Such heterodox approaches may be further developed both theoretically and practically by a careful reconsideration of Hirschman's innovative yet less-travelled paths, such as ‘development as a chain of disequilibria’, ‘hidden rationalities’, ‘blessings in disguise’, ‘fracasomania’, ‘the principle of the hiding hand’, etc.
Whereas Hirschman favoured putting priority on determining and supporting sectors with various ‘linkages’, Dani Rodrik and his colleagues recently argued for putting priority on determining and getting rid of ‘binding constraints’, as discussed above. Instead of running after first-best yet usually unfeasible solutions that characterize the targeting of all problems simultaneously, understanding development as a matter of sequencing priorities is a sort of developmental philosophy shared by Hirschman and the more recent binding-constraints approach. This approach can be considered a variation on a theme originally developed by Hirschman, whose legacy in this respect is likely to endure in the coming decades.
Inequality between and within countries remains an important subject of debate of our times. It is generally agreed by critics of neoliberalism that inequality has increased significantly during the last three decades. The debate has heated up, especially with the eruption of the global financial crisis in 2008,16 and with the ensuing waves of social resistance in the developed countries (such as the ‘Occupy movements’), the less-developed ones (such as the ‘Arab Spring’) as well as in the European Union (such as the mass protests in Greece, Spain, etc.). In this respect, Hirschman's ‘tunnel effect’, along with his unbalanced-growth approach, can serve as a functional starting point to incorporate non-economic dimensions of growth and inequality into economic analysis (see Ray, 2010).
Perhaps, in the course of the twenty-first century, there are still some lessons to be drawn from Hirschman's struggle with the dichotomy between revolution and reform. At a time when many persistent global and national difficulties wait for corrective reforms at institutional and economic levels, and just a few years after the apparently temporary but somewhat revolutionary spectres of the Arab Spring and Occupy movements, who can be sure that we will not need such lessons anymore? In this regard, Hirschman's analysis of ‘reformmongering’ can be useful in finding peaceful solutions to global and national problems. Indeed, Hirschman's possibilist approach was ‘meant to help defend the right to a non-projected future as one of the truly inalienable rights of every person and nation; and to set the stage for conceptions of change to which the inventiveness of history and a “passion for the possible” are admitted as vital actors’ (Hirschman, 1971b: 37).
Hirschman's legacy thus involves momentous sources of inspiration for our times. A Hirschmanesque tool-box may well be utilized in the reconfiguration of the experimental, behavioural and moral foundations of development economics in particular, and of economics in general. In the dust and heat of the recent debates, Hirschman's explorations of the history of ideas along with his insistence on trespassing into non-economic fields in order to understand the complexity of reality, and his aversion to excessive parsimony are all crucial points to which contemporary economists and social scientists had better pay more attention. Isn't it high time for us to seriously re-think the right of our grandchildren to a ‘beamish’ future?
‘Proving Hamlet Wrong’ is the title of Chap. 3 in Hirschman's biography by Adelman (2013a: 85–118).
See Hirschman's curriculum vitae at: http://www.sss.ias.edu/files/pdfs/aohcv.pdf
One of those various indexes turned out to be the so-called Herfindahl–Hirschman index, variants of which are still widely used to measure the degree of competition in industries. Interestingly, in the mid-1960s, Hirschman had to publish a one-page reminder for his colleagues who referred to it either as the ‘Gini index’ or the ‘Herfindahl index’. Hirschman explained that the index was originally developed in National Power and the Structure of Foreign Trade (1945). His concluding sentences in that reminder are noteworthy: ‘The net result is that my index is named either after Gini who did not invent it at all or after Herfindahl who reinvented it. Well, it's a cruel world’ (Hirschman, 1964: 761).
In his 1978 article, Hirschman also criticizes his own approach of 1945, along with dependency theory, arguing that portraying dependency as an unavoidable consequence of the existing world order was not a good idea. The dependency-generating system might contain a built-in anti-dependency mechanism in the form of ‘disparity of attention’, which favours underdeveloped countries. That is, small and dependent countries might encounter systemic opportunities to escape relations of dependency while the attention of large and dominant countries is focused on the rivalry among themselves. The animosity between the US and Soviet Union formed the backdrop to this insight (Hirschman, 1978).
This conference paper was the first essay Hirschman wrote specifically on economic development (Hirschman, 1954 : note on p. 41). He developed some of these arguments to incorporate them into The Strategy of Economic Development (1958).
In fact, Hirschman proved to be what may be called a thought provoker throughout his later career, as evidenced by the sub-title of a collection of essays published in the mid-1990s: Rethinking Development Experience: Essays Provoked by the Work of Albert O. Hirschman (Rodwin and Schön, 1994). Interestingly, the seminar leading to this 1994 publication was also organized and dominated by MIT faculty.
Dani Rodrik became the first recipient of the Albert O. Hirschman Prize (of the Social Science Research Council) in 2007. In his ‘Albert O. Hirschman Prize Lecture’, Rodrik (2007/2008: 6–7) explains succinctly how his work is associated with Hirschman's legacy. Like Hirschman in 1974, Rodrik in July 2013 also moved from Harvard to the Institute of Advanced Studies in Princeton, where he is (at the time of writing in mid-2014) the Albert O. Hirschman Professor of Social Science. Interestingly, Rodrik was the 2002 recipient (jointly with Alice Amsden) of the Leontief Prize for Advancing the Frontiers of Economic Thought (from Tufts University), which Hirschman was awarded posthumously in 2013 (jointly with Frances Stewart, development economist at Oxford and daughter of Nicholas Kaldor).
Hirschman's hidden-rationalities perspective (against the rationality-oriented and equilibrium-obsessed approaches) was also one of his main points in his now-classic article on import substitution (1968). For example, he argued that ‘we can supply a concrete justification for the view of a Brazilian sociologist [Fernando H. Cardoso] according to which the traditional Western, Puritan-ethnic-imbued, rational, profit-maximizing businessman is not really the type that is most needed in the situation of Latin America; what is required, he feels, are entrepreneurs who can identify themselves with the general developmental aspirations of their society, be it even at the expense of some rationality in their everyday business operations’ (ibid.: 19–20).
Variants of the ‘visiting-economist syndrome’ have been the subject of heated debate on various occasions since the 1960s, especially in the case of the IMF's standard recipes and the lack of nuance in the World Bank's approach to development. Hirschman's Development Projects Observed (1967b) was the product of extensive fieldwork on eleven World Bank projects in a variety of countries. The book disappointed the World Bank, as Hirschman came up with some critical observations and undesirable policy implications. For a recent study on this incongruity between Hirschman and the World Bank in the 1960s, see Alacevich (2012).
For a relatively recent and detailed analysis of Hirschman's possibilist approach within the context of his life and intellectual evolution, see Lepenies (2008) who highlights Hirschman's legacy by arguing that possibilism ‘remains a valid and useful multidisciplinary tool for unorthodox contemporary social science’ (ibid.: 437).
Another example of the usefulness of Hirschman's unbalanced-growth perspective is Ellerman (2004) who focuses on how this perspective brings about a different understanding of development assistance in particular.
As is well known, Amartya Sen cared about moral issues in his work and won the Nobel Prize in 1998. An interesting tidbit for readers: Hirschman's sister Ursula and Eugenio Colorni had three daughters, one of whom was called Eva Colorni (1941–1985). Eva became an economist like her uncle, and in the 1970s she married Amartya Sen (Adelman, 2013a: 550). In this way, Hirschman came to have a Nobel prize-winning nephew-in-law, even though he was never awarded the prize himself.
For example, at the time of finalizing this article, a very lively debate among economists of various persuasions has started around Thomas Piketty's best-selling book on income and wealth inequality (Piketty, 2014).
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- FROM FRANZÖSISCHE GYMNASIUM TO BERKELEY
- HIRSCHMAN'S SCHOLARLY LEGACY
- HIRSCHMAN'S LEGACY FOR FUTURE GENERATIONS
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- 2012) ‘Visualizing Uncertainties, or How Albert Hirschman and the World Bank Disagreed on Project Appraisal and Development Approaches’. Policy Research Working Paper 6260. Washington, DC: The World Bank. (
- 1989) Asia's Next Giant: South Korea and Late Industrialization. New York: Oxford University Press. (
- 2003) Kicking Away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press. (
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- 1945) National Power and the Structure of Foreign Trade. Berkeley, CA: University of California Press. (
- 1954)  ‘Economics and Investment Planning: Reflections Based on Experience in Colombia’, in Albert O. Hirschman A Bias for Hope: Essays on Development and Latin America, pp. 41–62. New Haven, CT: Yale University Press. (
- 1958) The Strategy of Economic Development. New Haven, CT: Yale University Press. (
- 1961) ‘Ideologies of Economic Development in Latin America’, in Albert O. Hirschman (ed.) Latin American Issues: Essays and Comments, pp. 3–42. New York: The Twentieth Century Fund. (
- 1963a) ‘Introduction’, in A.O. Hirschman Journeys Toward Progress: Studies of Economic Policy-Making in Latin America, pp. 1–7. New York: The Twentieth Century Fund. (
- 1963b) ‘Problem-Solving and Policy-Making: A Latin American Style?’, in A. O. Hirschman Journeys Toward Progress: Studies of Economic Policy-Making in Latin America, pp. 227–49. New York: The Twentieth Century Fund. (
- 1963c) ‘The Contriving of Reform’, in A.O. Hirschman Journeys Toward Progress: Studies of Economic Policy-Making in Latin America, pp. 251–75. New York: The Twentieth Century Fund. (
- 1963d) ‘Models of Reformmongering’, The Quarterly Journal of Economics 77(2): 236–57. (
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- 1964) ‘The Paternity of an Index’, American Economic Review 54(5): 761–62. (
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- 1968) ‘The Political Economy of Import-Substituting Industrialization in Latin America’, The Quarterly Journal of Economics 82(February): 2–32. (
- 1970) Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press. (
- 1971a) A Bias for Hope: Essays on Development and Latin America. New Haven, CT: Yale University Press. (
- 1971b) ‘Introduction: Political Economics and Possibilism’, in A.O. Hirschman A Bias for Hope: Essays on Development and Latin America, pp. 1–37. New Haven, CT: Yale University Press. (
- 1973a) ‘An Alternative Explanation of Contemporary Harriedness’, The Quarterly Journal of Economics 87 (November): 634–37. (
- 1973b) ‘The Changing Tolerance for Income Inequality in the Course of Development’, The Quarterly Journal of Economics 87 (November): 544–65. (
- 1975) ‘Policymaking and Policy Analysis in Latin America: A Return Journey’, Policy Sciences 6: 385–402. (
- 1977) The Passions and the Interests: Political Arguments for Capitalism before its Triumph. Princeton, NJ: Princeton University Press. (
- 1978) ‘Beyond Asymmetry: Critical Notes on Myself as a Young Man and on Some Other Old Friends’, International Organization 32(1): 45–50. (
- 1981a) Essays in Trespassing: Economics to Politics and Beyond. Cambridge: Cambridge University Press. (
- 1981b) ‘The Rise and Decline of Development Economics’, in A.O. Hirschman Essays in Trespassing: Economics to Politics and Beyond, pp. 1–24. Cambridge: Cambridge University Press. (
- 1981c) ‘Morality and the Social Sciences: A Durable Tension’, in A.O. Hirschman Essays in Trespassing: Economics to Politics and Beyond, pp. 294–306. Cambridge: Cambridge University Press. (
- 1982a) ‘Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?’, Journal of Economic Literature 20(4): 1463–84. (
- 1982b) Shifting Involvements: Private Interests and Public Action. Princeton, NJ: Princeton University Press. (
- 1984a) Getting Ahead Collectively: Grassroots Experiences in Latin America. New York: Pergamon Press. (
- 1984b) ‘Against Parsimony: Three Easy Ways of Complicating Some Categories of Economic Discourse’, American Economic Review 74(2): 89–96. (
- 1991) The Rhetoric of Reaction: Perversity, Futility, Jeopardy. Cambridge, MA and London: The Belknap Press of Harvard University Press. (
- 1992a)  ‘Linkages in Economic Development’, in A.O. Hirschman Rival Views of Market Society and Other Essays, pp. 56–76. Cambridge, MA: Harvard University Press. (
- 1992b)  ‘A Dissenter's Confession: The Strategy of Economic Development Revisited’, in A.O. Hirschman Rival Views of Market Society and Other Essays, pp. 3–34. Cambridge, MA: Harvard University Press. Originally published in G.M. Meyer and D. Seers (eds) Pioneers in Development (1984). New York: Oxford University Press. (
- 1992c)  ‘In Defense of Possibilism’, in A.O. Hirschman Rival Views of Market Society and Other Essays, pp. 171–75. Cambridge, MA: Harvard University Press. (
- 1992d)  ‘The Concept of Interest: From Euphemism to Tautology’, in Albert O. Hirschman Rival Views of Market Society and Other Essays, pp. 35–55. Cambridge, MA: Harvard University Press. (
- 1992e)  Rival Views of Market Society and Other Essays. Cambridge, MA: Harvard University Press. (
- 1995) A Propensity to Self-Subversion. Cambridge, MA: Harvard University Press. (
- 2001)  ‘Trespassing: Places and Ideas in the Course of a Life’ (An Interview by Carmine Donzelli, Marta Petrusewicz and Claudia Rusconi), in A.O. Hirschman Crossing Boundaries: Selected Writings, pp. 45–110. New York: Zone Books. (
- 2008) ‘Possibilism: An Approach to Problem-Solving Derived from the Life and Work of Albert O. Hirschman’, Development and Change 39(3): 437–59. (
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- 2010) ‘Uneven Growth: A Framework for Research in Development Economics’, Journal of Economic Perspectives 24(3): 45–60. (
- 2007) How Rich Countries Got Rich and Why Poor Countries Stay Poor. London: Constable and Robinson. (
- 2006) ‘Goodbye Washington Consensus, Hello Washington Confusion?’, Journal of Economic Literature XLIV(December): 969–83. (
- 2007a) One Economics, Many Recipes: Globalization, Institutions, and Economic Growth. Princeton, NJ: Princeton University Press. (
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