Adonis Diaries

How Albert O. Hirschman progressed into adopting basic projects that allow the underdeveloped people to overcome difficulties on their own.

How many conflicts each colonial projects generated in underdeveloped nations?

The pertinent question is: How many conflicts has the project brought in its wake?

Hiding Hand principle?

When people from organizations like the World Bank descended on Third World countries, they always tried to remove obstacles to development, to reduce economic anxiety and uncertainty.

They wanted to build bridges and roads and airports and dams to insure that businesses and entrepreneurs encountered as few impediments as possible to growth.

Obstacles led to frustration, and frustration to anxiety. No one wanted to be anxious. But wasn’t anxiety the most powerful motivator—the emotion capable of driving even the most reluctant party toward some kind of solution? In the field of developmental economics, this was heretical.

As Albert O.Hirschman thought about case studies like the Karnaphuli Paper Mills and the Troy-Greenfield folly, he became convinced that his profession had it backward. His profession ought to embrace anxiety, and not seek to remove it.

As he wrote in a follow-up essay to “The Strategy of Economic Development”:

“Law and order and the absence of civil strife seem to be obvious preconditions for the gradual and patient accumulation of skills, capital and investors’ confidence that must be the foundation for economic progress. We are now told, however, that the presence of war-like Indians in North America and the permanent conflict between them and the Anglo-Saxon settlers was a great advantage, because it made necessary methodical, well-planned, and gradual advances toward an interior which always remained in close logistic and cultural contact with the established communities to the East.

In Brazil, on the contrary, the back-lands were open and virtually uncontested; the result was that once an excessively vast area had been occupied in an incredibly brief time span, the pioneers became isolated and regressed economically and culturally.

The entrepreneur takes risks but does not see himself as a risk-taker, because he operates under the useful delusion that what he’s attempting is not risky.

Trapped in mid-mountain, people discover the truth—and, because it is too late to turn back, they’re forced to finish the job.

“We have ended up here with an economic argument strikingly paralleling Christianity’s oft expressed preference for the repentant sinner over the righteous man who never strays from the path,” Hirschman wrote in this essay from 1967.

Success grew from failure:

And essentially the same idea, even though formulated, as one might expect, in a vastly different spirit, is found in Nietzsche’s famous maxim, “That which does not destroy me, makes me stronger.” This sentence admirably epitomizes several of the histories of economic development projects in recent decades.

As was nearly always the case with Hirschman’s writing, he made his argument without mathematical formulas or complex models. His subject was economics, but his spirit was literary.

He drew on Brecht, Kafka, Freud, Flaubert, La Rochefoucauld, Montesquieu, Montaigne, and Machiavelli, not to mention Homer—he had committed huge sections of the Odyssey to memory.

The pleasure of reading Hirschman comes not only from the originality of his conclusions but also from the delightfully idiosyncratic path he took to them.

Consider this, from the same essay (and, remember, this is an economist who’s writing):

“While we are rather willing and even eager and relieved to agree with a historian’s finding that we stumbled into the more shameful events of history, such as war, we are correspondingly unwilling to concede—we find it intolerable to imagine—that our more lofty achievements, such as economic, social or political progress, could have come about by stumbling rather than through careful planning. . . . Language itself conspires toward this sort of asymmetry: we fall into error, but do not usually speak of falling into truth.

“Worldly Philosopher: The Odyssey of Albert O. Hirschman” (Princeton), by the Princeton historian Jeremy Adelman, is a biography worthy of the man. Adelman brilliantly and beautifully brings Hirschman to life, giving us an unforgettable portrait of one of the twentieth century’s most extraordinary intellectuals.

The great influence on Hirschman’s life was his brother-in-law, the Italian intellectual Eugenio Colorni. Colorni and Hirschman were as close as siblings, and when Colorni was killed by Fascist thugs in Rome, during the Second World War, Hirschman was inconsolable. Adelman writes:

“Colorni believed that doubt was creative because it allowed for alternative ways to see the world, and seeing alternatives could steer people out of intractable circles and self-feeding despondency. Doubt, in fact, could motivate: freedom from ideological constraints opened up political strategies, and accepting the limits of what one could know liberated agents from their dependence on the belief that one had to know everything before acting, that conviction was a precondition for action.

The phrase that Hirschman and Colorni would repeat to each other was that they hoped to “prove Hamlet wrong.” Hamlet shouldn’t have been frozen by his doubts; he should have been freed by them.

Hamlet took himself too seriously. He thought he needed to be perfect. Colorni and Hirschman didn’t. “Courage required the willingness “to always be on guard against oneself. Colorni wrote,

Doubt didn’t mean disengagement.

In the summer of 1936, Hirschman volunteered to fight in Spain on the side of the Loyalists, against General Franco’s German-backed Fascists. He was twenty-one and living in Paris, having just got back from studying at the London School of Economics. He was among the first wave of German and Italian volunteers to take the train to Barcelona. “When I heard that there was even a possibility to do something,” Hirschman said, “I went.”

Hirschman rarely spoke about what happened in Spain.

Decades later, Adelman recounts, Albert and his wife, Sarah, went to see a film about the Spanish Civil War. Afterward, Sarah asked Albert, “Was it like that?” His response was a deft non-response: “Yeah, that was a pretty good film.” On this subject, as on a few others, Sarah felt a certain reticence in her husband. Still, as Adelman remarks, “the scars on his neck and leg made it impossible for her to forget.”

Adelman interprets Hirschman’s silence as disenchantment: “The endless debate rehearsed in Berlin and Paris over left-wing tactics was more than a farce, it was a tragedy of epic proportions.”

Hirschman saw the Communists move in and, in his mind, the spirit of the cause became contaminated. It broke his heart.

But Hirschman would come to recognize that action fueled by doubt allows for failures to be left behind. Spain was a tragedy, but it was also, for him, an experiment, and experiments go awry.

Hirschman liked to say that he had “a propensity to self-subversion.” He even gave one of his books that title.

He qualified and questioned and hedged as a matter of habit. He never trusted himself enough to indulge in grand theorizing. He pursued the “petite idée” to come to an understanding of reality in portions, admitting that the angle may be subjective.”

Once, when a World Bank director sent him a paper that referred to the “Hirschman Doctrine,” Hirschman replied, “Fortunately, there is no Hirschman school of economic development and I cannot point to a large pool of disciples where one might fish out someone to work with you along those lines.”

Hirschman spent his career in constant motion.

After doing graduate training in London and Italy, fighting in Spain, and spending the first part of the war in France, he left for the United States, by which point he had begun to lose track of his own movements.

“This makes my fifth emigration,” he wrote to his mother. He accepted a fellowship at Berkeley (where he met the woman he would marry, Sarah Chapiro, another émigré), did a tour of duty for the O.S.S. in North Africa and Europe, and, with the war concluded, served a stint at the Federal Reserve Board, where he grew so unhappy that he would return home to his wife and two daughters in Chevy Chase, shut the door to his study, and bury himself in Kafka.

He worked for the Marshall Plan in Washington, providing “the thinking behind the thinking,” only to be turned down for a transfer to Paris because of a failed national-security review. He was in his mid-thirties. On a whim, he packed up the family and moved to Bogotá, Colombia, where he worked on a project for the World Bank.

He crisscrossed Colombia with “pen in hand and paper handy, examining irrigation projects, talking to local bankers about their farm loans, and scribbling calculations about the costs of road building.”

Writing to her parents about the family’s decision to move to Colombia, which was then in the midst of a civil war, Sarah explained, “We both realize that you should think of the future—make plans for the children etc. But I think we both somehow feel that it is impossible to know what is best and that the present is so much more important—because if the present is solid and good it will be a surer basis for a good future than any plans that you can make.”

Most people would not have left a home in Chevy Chase and the security of a job in Washington to go to a Third World country where armed gangsters roamed the streets, because they would feel certain that Colombia was a mistake. Hirschman believed, as a matter of principle, that it was impossible to know whether Colombia would be a mistake.

As it happened, the 4 years the family spent in Bogotá were among its happiest.

Hirschman returned to Latin America again and again during his career, and what he learned there provided the raw material for his most brilliant work. His doubt was a gift, not a curse.

Hirschman published his first important book, “The Strategy of Economic Development,” in 1958. He had returned from Colombia by then and was at Yale, and the book was an attempt to make sense of his experience of watching a country try to lift itself out of poverty.

At the time, he was reading deeply in the literature of psychology and psychoanalysis, and he became fascinated with the functional uses of negative emotions: frustration, aggression, and, in particular, anxiety.

The impulse of the developmental economist in those days would have been to remove the “impediments” to growth—to swoop in and have some powerful third party deal with the “war-like Indians.” But that would have turned North America into Brazil, and the pioneers would never have been forced to develop methodical, well-planned advances in logistical contact with the East.

Developing countries required more than capital. They needed practice in making difficult economic decisions.

Economic progress was the product of successful habits—and there is no better teacher, Hirschman felt, than a little adversity.

Hirschman would rather encourage settlers and entrepreneurs at the grass-roots level—and make them learn how to cope with those impediments themselves—than run the risk that aid might infantilize its recipient.

He loved to tell the story of how, at a dinner party in a Latin American country, he struggled to track down the telephone number of a fellow-academic: “I asked whether there might be a chance that X would be listed in the telephone directory; this suggestion was shrugged off with the remark that the directory makes a point of listing only people who have either emigrated or died. . . . The economist said that X must be both much in demand and hard to reach, as several people had inquired about how to get in touch with him within the past few days. The subject was dropped as hopeless, and everybody spent a pleasant evening.”

Back in his hotel room, Hirschman looked in the phone book, found his friend’s number, and got him on the line immediately.

A few years after publishing “The Strategy of Economic Development,” Hirschman was invited by the World Bank to conduct a survey of some of its projects. He drew up his own itinerary, which, typically, involved almost an entire circuit of the globe: a power plant in El Salvador, roads in Ecuador, an irrigation project in Peru, pasture improvement in Uruguay, telecommunication in Ethiopia, power transmission in Uganda, an irrigation project in Sudan, railway modernization in Nigeria, the Damodar Valley Corporation in India, the Karnaphuli Paper Mills, an irrigation project in Thailand and another in the south of Italy.

Adelman is struck by the tone of optimism in Hirschman’s notes on his journey. The economist was interested in all the ways in which projects managed to succeed, both in spite of and because of the difficulties:

Instead of asking: what benefits has this project yielded, it would almost be more pertinent to ask: how many conflicts has it brought in its wake?

How many crises has it occasioned and passed through? And these conflicts and crises should appear both on the benefit and the cost side, or sometimes on one—sometimes on the other, depending on the outcome (which cannot be known with precision for a long time, if ever).

Only Hirschman would circle the globe and be content to conclude that he couldn’t reach a conclusion—for a long time, if ever.

He was a planner who really didn’t believe in planning. He wanted to remind other economists that a lot of the problems they tried to fix were either better off not being fixed or weren’t problems to begin with.

Late in life, Hirschman underwent surgery in Germany. When he emerged from anesthesia, he asked his surgeon, “Why are bananas bent?” The doctor shrugged. Hirschman, even then, could not resist a poke at his fellow economic planners: “Because nobody went to the jungle to adjust it and make it straight.”

While fighting for France during the Second World War, Hirschman persuaded his commander to give him false French papers and he became Albert Hermant. After the country fell to the Germans, Hirschman ended up in Marseilles, along with thousands of other refugees. There he learned that an American named Varian Fry was coming to France as part of the Emergency Rescue Committee—an American group that sought to get as many Jewish refugees out of France as possible. Hirschman met Fry at the train station and took him back to the Hotel Splendide. They hit it off instantly.

Fry had access to U.S. visas. But he needed Hirschman’s help in figuring out escape routes into Spain, procuring false passports and identity papers, and smuggling in money to fund the operation. Hirschman was invaluable. He spoke Italian like an Italian and German like a German and French like a Frenchman, and had so many fake documents—including a card attesting to membership in the “Club for People Without Clubs”—that Fry joked he was “like a criminal who has too many alibis.”

Fry nicknamed Hirschman Beamish, on account of his irrepressible charm. Beginning in 1940, the Emergency Rescue Committee helped save thousands of people from the clutches of Fascism, among them Hannah Arendt, André Breton, Marc Chagall, Marcel Duchamp, Max Ernst, and Alma Mahler.

Hirschman was as reluctant to talk about his time in Marseilles as he was to talk about the battles he fought in the Spanish Civil War.

As a fellow at Berkeley, in the early forties, he was placed in the International House, and the other graduate students urged him to speak about what had happened to him in Europe. “The newcomer sat there,” Adelman writes, “with his handkerchief twisted in his fingers, nervously waiting for the calls to pass.”

Hirschman moved out of the International House as soon as he could. “I couldn’t stand being considered as sort of a wonder of the world or something like that,” he later recalled. “I just wanted to be myself.”

The closest Hirschman ever came to explaining his motives was in his most famous work, “Exit, Voice, and Loyalty,” and even then it was only by implication.

Hirschman was interested in contrasting the two strategies that people have for dealing with badly performing organizations and institutions. “Exit” is voting with your feet, expressing your displeasure by taking your business elsewhere. “Voice” is staying put and speaking up, choosing to fight for reform from within. There is no denying where his heart lay.

Early in the book, Hirschman quoted the conservative economist Milton Friedman, who argued that school vouchers should replace the current public-school system. “Parents could express their views about schools directly, by withdrawing their children from one school and sending them to another, to a much greater extent than is now possible,” Friedman wrote. “In general they can now take this step only by changing their place of residence. For the rest, they can express their views only through cumbrous political channels.”

This was, Hirschman wrote, a “near perfect example of the economist’s bias in favor of exit and against voice”:

In the first place, Friedman considers withdrawal or exit as the “direct” way of expressing one’s unfavorable views of an organization. A person less well trained in economics might naively suggest that the direct way of expressing views is to express them!

Secondly, the decision to voice one’s views and efforts to make them prevail are contemptuously referred to by Friedman as a resort to “cumbrous political channels.” But what else is the political, and indeed the democratic, process than the digging, the use, and hopefully the slow improvement of these very channels?

Hirschman pointed out the ways in which “exit” failed to send a useful message to underperformers. Weren’t there cases where monopolists were relieved when their critics left?

“Those who hold power in the lazy monopoly may actually have an interest in creating some limited opportunities for exit on the part of those whose voice might be uncomfortable,” he wrote. The worst thing that ever happened to incompetent public-school districts was the growth of private schools: they siphoned off the kind of parents who would otherwise have agitated more strongly for reform.

Exit is passive. It is silent protest. And silent protest, for him, is too easy. “Proving Hamlet wrong” was about the importance of acting in the face of doubt—but also of acting in the face of fear.

Voice was courage. He went to fight Fascism in Spain. It ended in failure. When the Nazis came hunting for the Jews, he tried again. “Expanding the operation meant, increasingly, that Beamish’s work was in the streets, bars, and brothels of Marseilles, expanding the tentacles of the operation,” Adelman writes. “If the operation had a fixer, it was Beamish. It was a role he relished.”

Beamish screened the refugees, weeding out potential informers. He cajoled first the Czech, then the Polish, and, finally, the Lithuanian consuls into providing fake passports. He made deals with Marseilles mobsters and a shadowy Russian émigré to get money into France. He held secret meetings in brothels. Several times, he was nearly caught, but he charmed his way out of trouble.

When the authorities finally caught onto Hirschman, he escaped across the Pyrenees to Spain on foot, equipped with false Lithuanian papers.

On the ship to America, he played Ping-Pong and chess, and romanced a young Czech woman. As Adelman’s magnificent biography makes plain, it was hard not to fall for Albert Hirschman.

A colleague from his Marseilles days remembered him, years later, as “a handsome fellow with rather soulful eyes . . . taking everything in, his head cocked slightly to one side. One of those German intellectuals, I thought, always trying to figure everything out.” ♦

Note 1: Malcolm Gladwell published in The New Yorker this June 24, 2013

Note 2: Hirschman was born in Berlin in 1915, into a prosperous family of Jewish origin. His father was a surgeon, and the family lived in the embassy district, near the Tiergarten. Hirschman was slender and handsome, in the mold of Albert Camus. He dressed elegantly, danced skillfully, spoke half a dozen languages, and had a special affection for palindromes.

He was absent-minded and distracted. While lecturing, Adelman writes, “He rambled. He mumbled. Mid-sentence, he would pause, his right hand supporting his chin, his eyes drifting upward to fasten on a spot on the ceiling.” He would call his wife upon taking his car somewhere because—as he once said—“I do not know how to put it among two other cars on the sidewalk.”

“When you spoke to him,” a friend said, “it was sometimes five or ten seconds before he would show any sign of having heard you.” He was also deeply charming when he put his mind to it.