Albert O. Hirschman's Early Institute Years

Albert O. Hirschman became a permanent Faculty member of the Institute in 1974, moving from Harvard’s economics department to join Clifford Geertz in the creation of the School of Social Science. By then, Hirschman was not just famous for his writings about economic development and his analyses of Latin American political economies. His Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States (Harvard University Press, 1970) had made him one of the country’s renowned social scientists.

Behind the scenes, however, his concerns were shifting; he was, he said, “retreating” into history and the study of the intellectual foundations of political economy. Retreat did not sever his interest in the present. If anything, it was the present that gnawed at him, especially in Latin America. In late summer 1973, Hirschman became the Chair of the Social Science Research Council Joint Committee for Latin American Studies. Ten days later, he learned of the violent overthrow of Chile’s socialist President, Salvador Allende, whom Hirschman had met and admired as an example of a “reformmonger,” a type he celebrated in Journeys Toward Progress (Twentieth Century Fund, 1963), his epic of Latin America’s hopeful 1960s. Allende’s death and the disappearance of friends and former students, indeed the wave of authoritarian regimes sweeping the region, shattered the optimism that had buoyed his thinking.

If, by 1976, Hirschman’s bias for hope was fraying, it was hard for the outer world to see. As Hirschman was planning a trip to Latin America, McGeorge Bundy, President of the Ford Foundation, asked Hirschman and Geertz to sit down and converse about the theme “the hungry, crowded, competitive world.” The idea was to raise some critical perspectives that would guide the foundation’s thinking about their funding priorities for the future. The very topic of the gathering conveyed the prevailing mood. Hirschman was determined to challenge it by, as he told Bundy, showing “that I am less of a mindless optimist than people (and sometimes my closest colleagues and friends) tend to think.” The conversation began with its dark tone; Hirschman immediately resisted it with a reminder to put social scientific analysis into a broader historic context. The naive 1950s believed “all good things go together”: increase GDP and get democracy; free people, and they will invest. “It was a simplistic model,” he recalled. “But now we have come in a sense to the inverse idea, that all bad things go together”: growth is bunk; human rights exist to be trampled on. But this “dismal diagnosis,” according to Hirschman, was “probably just as wrong as the earlier one, and I’m also a little bit suspicious of where it leads us.” Geertz, who knew Hirschman as well as anyone, and was one of the friends who poked fun at his resilient hopefulness, chimed in: “Albert always wants to look on the bright side.” Geertz was not the first to point out that for Hirschman “truth lies not at the extremes but in the middle.”

Hirschman believed that the divide between hope and hopelessness, optimism and pessimism, was a false one. It was not a matter of whether the overall story was bleak or uplifting, but how it was told, for the epic passage of social change was riddled with chance and choice. He wanted to get at social scientists’ mindsets, why they persisted “in thinking of having only one thing happen, and everything else will coalesce around it, and we’ll come out all right.” Why, asked Hirschman, do “we only have one ‘new key’ at a time?”

His solution was not, however, to exhort or to “voice,” but rather a kind of “exit,” a “withdrawal to history”—“to dwell for a while among the political philosophers and political economists of the seventeenth and eighteenth centuries” in search of early patterns of thinking about capitalism and democracy.

A phrase from Montesquieu’s Spirit of the Laws was filed away in his archive of favorite quotes: “It is fortunate for men to be in a situation where, though their passions may prompt them to be wicked, they have nevertheless an interest in not being so.” The phrase would, fittingly, be the epigraph for the manuscript The Passions and the Interests: Political Arguments for Capitalism Before its Triumph (Princeton University Press, 1977). In it was nestled the foundational paradox that motivated Hirschman. Marxists and romantics alike criticized capitalism for its lack of moral compass, for having narrowed individual drives to base motives, and they denounced the system for realizing precisely what it was originally hoped would happen, presenting a choice to men between the “wicked” and an “interest in not being so.” Hirschman discovered that a war was being waged over the very concept of human nature; for several centuries, Hirschman noted, “man was widely viewed as the stage on which fierce and unpredictable battles were fought between reason and passion or, later, among the various passions.”

Hirschman believed that the divide between hope and hopelessness, optimism and pessimism, was a false one. It was not a matter of whether the overall story was bleak or uplifting, but how it was told, for the epic passage of social change was riddled with chance and choice.

Moving to the Institute brought Hirschman face to face with new currents in intellectual history. The history of ideas was, in some respects, a polar extreme to development studies and its concerns with roads, inflation, and agrarian reform. For Hirschman, however, it was not such a stretch to see the links between these universes; as we know from his conversations with Latin American colleagues, he was always alert to the ways in which ideologies and intellectuals shaped the thinking of policymakers who fashioned the spectrum of peoples’ choices. Now it was Machiavelli, Montesquieu, and Adam Smith who were conversing with him about the same themes. Mediating his retreat into early ideological formulae was a shift in intellectual history from the study of the inherent significance of classic thought to the meaning of a treatise derived from a reconstruction of the political idiom of when and where it was written. A key figure was Quentin Skinner, who himself had moved from England to take up a sojourn at the Institute, first in the School of Historical Studies, and then in Social Science until his return to Cambridge.

Notes of conversations and readings shared with Skinner and others were scribbled on Hirschman’s ubiquitous yellow pads. When the first draft of The Passions and the Interests was complete, he shared it with friends at the Institute. To Skinner, Hirschman’s arrival at Adam Smith and economics was less a concern than a departure with Machiavelli and politics, the beginnings of an intellectual arc to which the manuscript was devoted. Skinner spent more time teasing apart nuances that Hirschman—in his brevity— glossed over (for instance, the difference between honor and glory in The Prince, which Hirschman lumped together, but which Skinner felt represented quite different ideals in the Renaissance; perhaps Calvin would be a better example than Hobbes as an illustration of someone who imagined the state as a repressor of man’s passions?). Skinner also directed Hirschman to an alternative fount for thinking about the ideal of active citizenship and commerce in Machiavelli, not of The Prince, which is where Hirschman had started out, but in the Discorsi, where Hirschman went after Skinner pointed it out.

In the examination of discourses about market life and behavior by seventeenth- and eighteenth-century political economists, Hirschman focused on passions-oriented anxiety and the use of language to control and channel socially useful pursuits. At the core of The Passions and the Interests was an observation about how verbal messages became absorbed or “imposed themselves”––how words themselves had agency. To be effective, interest-propelled activity by governments and individuals required a light hand, invisible or not. This is a reason why, as Skinner pointed out to Hirschman, the verb “to meddle” acquired a derogatory currency over the course of the eighteenth century.

The Passions and the Interests was itself an argument for a historic middle ground between nostalgia for lost passions and a celebration of “the love of lucre.” Hirschman did not want to celebrate a model of acquisitive citizens; nor did he think restoring the passions was an especially good idea either. He was a modernist. His was a vision, projected through the prism of earlier discourses, of polite, civic-minded people going about their business in ways that enabled self-interest and the common good to coexist in the same sentence, a harmonielehren that could be both realistic and hopeful. It was a delicate balancing act, one that Hirschman claimed had served a normative purpose of restraining impassioned rulers and the ruled, a purpose that had been degraded by what would subsequently happen to the language of capitalism—and at its extremes, by despots like Pinochet who claimed to be its last defense.

While the book was greeted with rave reviews, and the reception and attention delighted Hirschman, at a deeper level the book only magnified the gap between his understanding of the economy and prevailing trends in the economy. To make matters worse, though he had retreated to earlier centuries, the crisis of the 1970s was hard upon him. Geertz and Hirschman redirected the concerns of the School of Social Science away from the strong focus on developing societies to address, starting in 1977, advanced industrial societies. For the first time, European social scientists like Alessandro Pizzorono and Claus Offe came to the School. Also, America’s leading liberal philosopher, John Rawls, joined the assembly for one semester. The group decided to meet Monday evenings in people’s homes for informal discussions that soon swelled, nurtured by the growing crisis of the welfare state, spreading strikes, and the meltdown of New York City’s finances to address the hot topic of the “governability of modern democracy.” Rawls and Offe led an evening’s discussion of Habermas’s Legitimation Crisis; another evening Hirschman and Pizzorno led the discussion of Mancur Olson’s The Logic of Collective Action.

Having diagrammed his views of original arguments for capitalism before its triumph, Hirschman sat down to settle scores with Olson’s highly influential 1965 work, a near-biblical argument for a model of capitalism after its triumph. More than any other, Olson’s book nurtured the emerging field of institutional economics and popularized coinages like “collective action problems” and “free-riders.” At the heart of Olson’s work was an argument that modern societies create incentive systems that induce individuals to invest their energies in private goods, but thwart the pooling of these efforts collectively to create public goods. Moreover, these propensities were bound by an immutable “logic.” Hirschman felt compelled to position himself before triumphal discourses of the 1970s, and he took advantage of one evening’s discussion at Geertz’s house to take Olson as Exhibit A for what he would spend the next fifteen years trying to expose: the rhetoric and politics of the ideological underpinnings of the Right.

It was a heated evening discussion. Geertz found the whole Olsonian proposition absurd and huffed in objection to free-riding. Hirschman labored to explain principles he disavowed. Rawls retreated into silence. And Herbert Gintis, a visitor from the University of Massachusetts, insisted that there had to be “an answer” to the Olsonian formula. In the end, Hirschman managed to conclude with one of his favorite quotes from Rousseau: “What makes for human misery is the contradiction between man and citizen; make him one and you will make him as happy as he can be; give him wholly to the state or leave him wholly to himself; but if you divide his heart you will tear it apart.” The discussion that evening opened a thickening file, a quest for an “answer” to the vexing question: Was there a way to imagine modern societies consisting of citizens and consumers who were not forced, or asked, to divide their hearts?

Hirschman’s concern to reconcile the widening gulf between public citizenry and private consumers was also the result of his irritation with “singular” ways of thinking and the pernicious ways in which singular thinking was shaping world events. In the autumn of 1979, American television screens were flooded with scenes from Tehran, where radical students had seized the U.S. embassy. That Thanksgiving, Albert and his wife Sarah invited some friends over, Roberto Schwarz and Carlos Fuentes and their wives, for goose (the Hirschmans’ favorite fowl). They were riveted to the television and worried about the government’s response with the elections looming. The images of crowds “seemingly so full of hatred against the United States,” was utterly depressing from Hirschman’s perspective. It was not just the hatred on display in Iran, it was the sense of “unity” in America, and portents of a “turn inward,” that prompted him to observe, “This may well be the end of public interest in development in the Third World—so, from the point of view of my interests, I also see it as the end of an epoch.”

Several weeks later, he walked before the podium in Dodds Auditorium at Princeton University to deliver the Janeway Lectures to large crowds of students and faculty on the theme of “Private and Public Happiness: Pursuits and Disappointments.” For Hirschman there was no basic choice between the two types of happiness; it was not “or” that conjoined public to private. If there was a choice, the point of the lectures was to argue that people were always choosing depending on their moods and inclinations, and it was this activity that Hirschman wanted to draw out. Hirschman’s Janeway Lectures addressed experiences and emotional responses to them— anger at educational institutions, self-incrimination for buying a large house and regretting it (“buyer’s remorse”), and the ever disappointing “driving experience,” which, far from yielding to the lyrical joy ride, more often plunged the BMW-driving pleasure-seeker into traffic jams and car payments. Pursuits of happiness wherever it was being dispensed left trails of disappointment.

In contrast to Olson’s “logic,” Hirschman presented a “dialectic” that unfolds within the self, a self comprised of a complex amalgam of drives. Hirschman’s pendular dialectic was the theme of Shifting Involvements: Private Interest and Public Action (Princeton University Press, 1982), in which he stuck his neck out to formulate an alternative to the gathering political and intellectual orthodoxy. “I have rarely felt so uncertain about a product of mine,” he told his daughter Katia. “Perhaps this is because, as I say in the preface, what I have written is less a work of social science, than the conceptual outline of one or several novels.” Indeed, the preface suggests that there is much more of Hirschman’s personal philosophy and life story stirred into the prose. It threatened to become a bildungsroman “with, as always in novels, a number of autobiographical touches mixed in here and there.”

If there were autobiographical touches, they were not so easy to see. Certainly, no reviewer picked them out, though many did pick on the book as a disappointing one. Compared to earlier books this one was a flop. Nowadays, it is often overshadowed. But one might read Shifting Involvements as a resistance against ideas of triumphalism of any one side and defeatism of any other. To both he insisted there was always more choice, there were always more possibilities, always hope.

Jeremy Adelman, a Member (2001–02) in the School of Historical Studies, is the Walter Samuel Carpenter III Professor in Spanish Civilization and Culture at Princeton University,where heiscurrently the Director of the Council for International Teaching and Research. At present, he is completing a biography of Albert O. Hirschman, Professor Emeritus in the School of Social Science.