Remembering Albert Hirschman

Albert Hirschman, among the greatest of social scientists, has died. He was truly one of a kind: always trespassing, relentlessly self-subversive, and never constrained by disciplinary boundaries.

Hirschman's life was as extraordinary as his work. Born in Berlin in 1915, he was educated in French and German. He would later gain fluency in Italian, then Spanish and English. He fled Berlin for Paris in 1933, and joined the French resistance in 1939. Fearful of being shot as a traitor by advancing German forces, he took on a new identity as a Frenchman, Albert Hermant. In 1941 he migrated to the United States, met and married Sarah Hirschman, joined the US Army, and soon found himself back in Europe as part of the war effort. After the end of hostilities he was involved in the development of the Marshall Plan, and subsequently spent four years in Bogotá where many of his ideas on economic development took shape. He and Sarah were married for more than seven decades; she died in January of this year.

Not only did Hirschman write several brilliant books in what was his fourth or fifth language, he also entertained himself with the invention of palindromes. Many of these were collected together in a book, Senile Lines by Dr. Awkward, which he presented to his daughter Katya. Forms of expression mattered to him as much as the ideas themselves. In opposition to Mancur Olson, he believed that collective action was an activity that came naturally to us humans, and was thrilled to find that one could invert a phrase in the declaration of independence to express this inclination as "the happiness of pursuit."

Hirschman's intellectual contributions were varied and many but the jewel in the crown is his masterpiece Exit, Voice and Loyalty. In this one slim volume, he managed to overturn conventional wisdom on one issue after another, and chart several new directions for research. The book is concerned with the mechanisms that can arrest and reverse declines in the performance of firms, organizations, and states. It was the interplay of two such mechanisms - desertion and articulation, or exit and voice - which Hirschman considered to be of central importance.

Exit, for instance through the departure of customers or employees or citizens in favor of a rival, can alert an organization to its own decline and set in motion corrective measures. But so can voice, or the articulation of discontent. Too rapid a rate of exit can undermine voice and result in organizational collapse instead of recovery. But a complete inability to exit can make voice futile, and poor performance can continue indefinitely.

Poorly functioning organizations prefer that an exit option be available to their most strident critics, so that they are left with less demanding customers or members or citizens. Hence a moderate amount of exit can result in the worst of all worlds, "an oppression of the weak by the incompetent and an exploitation of the poor by the lazy which is the more durable and stifling as it is both unambitious and escapable." Near-monopolies with exit options for the most severely discontented can therefore function more poorly than complete monopolies. It is not surprising that many dysfunctional states welcome the voluntary exile of their fiercest internal critics.

The propensity to exit is itself determined by the extent of loyalty to a firm or state. Loyalty slows down the rate of exit and can allow an organization time to recover from lapses in performance. But blind loyalty, which stifles voice even as it prevents exit, can allow poor performance to persist. It is in the interest of organizations to promote loyalty and raise the "price of exit", but the short term gains from doing so can lead to eventual collapse as both mechanisms for recuperation are weakened.

Among Hirschman's many targets were the Downsian model of political competition and the Median Voter Theorem. Since he considered collective action to be an expression of voice, readily adopted in response to dissatisfaction, there was no such thing as a "captive voter." Those on the fringes of a political party could not be taken for granted simply because they had no exit option: the inability to exit just strengthened their inclination to exercise voice. This they would do with relish, driving parties away from the median voter, as political leaders trade-off the fear of exit by moderates against the threat of voice by extremists.

Albert Hirschman lived a long and eventful life and was a joyfully iconoclastic thinker. His books will be read by generations to come. But he will always remain something of an outsider in the profession; his ideas are just too broad and interdisciplinary to find neat expression in models and textbooks. He was an intellectual rebel throughout his life, and it is only fitting that he remain so in perpetuity.