Edited and written by David Gordon, senior fellow of the Mises Institute and author of four books and thousands of essays.

Tea for One

Winter 1996

Albert D. Hirschman
Harvard University Press, 1995, viii + 262 pgs.

Albert Hirschman is hard to pin down. No sooner does he offer a theory than he thinks of a qualification to it. He has achieved great fame for his portrayal of "exit" and "voice" as competing forces; but in the present work he tells us they can act together. How does one review someone with a "propensity to self- subversion"?

Fortunately, a solid anchor awaits our grasp. Hirschman, though not a Marxist, has a deep aversion to free-market capitalism. From his teenage years, his intermittently charming memoirs reveal, he has been involved with socialist parties and causes.

But in his desire to criticize the free market, he faces a dilemma. He resolutely opposes large-scale theories and has a well-deserved reputation as an institutionalist. It would go thoroughly against the grain for him to address directly, say, the socialist calculation argument of Mises and Hayek: What then is he to do?

In fairness to our author, he does not at all accept that he is anti-theoretical. He states: "I bristle a bit when I am pigeonholed as 'atheoretical' or 'antitheoretical' or even as 'institutional' and cannot wholly agree when I am portrayed . . . as someone who is primarily interested in noticing and underlining what more systematic minded (theoretical) economists or social scientists have overlooked" (p. 87, footnote number omitted). But, whatever he thinks, he is anti-theoretical and our question demands an answer: how do you attack the free market if you avoid theory?

Hirschman gives his answer in The Rhetoric of Reaction Two Years Later. Instead of a response to free market arguments, he offered in his earlier book, and here reaffirms, an elaborate classification of types of argument advanced against "progressive" measures. Conservatives claim that leftist proposals will fail to achieve the ends their proponents intend: to the contrary, they will have perverse effects. Another response claims that the leftist measures are futile: e.g., schemes aimed at helping the poor in fact principally benefit the rich and middle classes. Again, conservatives contend that new reform measures expose past gains, e.g., in liberty, to danger (the "jeopardy thesis").

It is not clear why Hirschman thinks that this classification somehow tells against the foes of "progress"; but I do not presume to plumb the depths of his capacious intellect. Suffice it to say that the main point of Hirschman's polemic is that these arguments have been used again and again. If conservatives always trot them out, must we not suspect that the arguments are not altogether advanced in the cause of truth?

Even if Hirschman's account of the "rhetoric of reaction" were entirely accurate, nothing would follow about the soundness of particular arguments advanced against the left. As he himself admits: "As critics of my book have not failed to remark, the mere finding that reform proposals have indeed been attacked with the help of one (or several) of my typical 'rhetorical' arguments by no means constitutes in and of itself a refutation of what is being argued" (p. 50). Is it not amazing that a scholar of Hirschman's eminence needed to have critics point this out to him?

But what of the rhetorical analysis, taken on its own terms? Here our verdict must without question be negative. According to the perversity thesis, reformers mean well but their proposals have opposite effects to what they want. As a prime example, Hirschman in his earlier book cited Edmund Burke's Reflections on the Revolution in France (1790).

But he completely misinterpreted the book. Burke did not claim, as the perversity thesis would have it, that the French Revolution achieved the opposite of the good ideas its founders wanted. Quite the contrary, as a glance at the book's publication date should have told Hirschman, Burke opposed the Revolution from the first. He did not condemn it for failure to achieve its initial goals: he thought those goals destructive and believed the Revolution had achieved them.

The error about Burke illustrates a more general failing of Hirschman's treatment. He ignores another "rhetorical strategy" of free-market advocates and conservatives, the contention that leftist measures are immoral. To deal with this view, Hirschman would have to engage in argument instead of classification: and this is not his style.

The whole "rhetorical analysis" is peculiar in the extreme. His three theses perversity, futility, and jeopardy are all cases in which conservatives allege that measures they oppose will not achieve their ends. But, unless you argue that the aims of a proposal are flawed, that is virtually the only way you can oppose it. Almost any argument opposed to any proposal will take this form, so long as the aims of the proposal themselves are not subject to attack. Hirschman, against his initial plan, devoted the last chapter of The Rhetoric of Reaction to an analysis of certain leftist rhetoric, leaving some of his critics confounded. But they should not have been. Hirschman has merely come up with a scheme of classification that applies everywhere.

As one roams more widely in the book, the same pattern appears: Hirschman substitutes classification and historical description for analysis. A good example occurs in the book's third part, "New Forays" (the book's first part, which includes the Rhetoric of Reaction essay, discusses modifications Hirschman has made to various of his conjectures; the second part is autobiographical).

Several of the essays in "New Forays" address economic development, one of Hirschman's main areas of concentration. He has in his long career vigorously supported state directed industrialization in various Latin American countries. How does he respond to the obvious objection that these measures interfere with the international division of labor?

In this way: "[T]he international neoclassical establishment castigated 'inward-oriented' industrial development for causing misallocation of resources, balance-of-payments problems, and 'rent-seeking'" (p. 164). A good beginning: our author has stated tersely the standard criticisms. Unless one is already familiar with Hirschman's modus operandi, one might expect him next to reply to these criticisms.

Of course he does not do so: that would demand argument. Far better a conjecture: "No one [our author is too modest] asked whether the assorted problems of import-substituting industrialization were conceivably growing pains that might be overcome in due course by adroit, incremental policy-making" (p. 164). Instead of a theory, Hirschman gives us a metaphor supported by a tendentious narrative.

One must, however, give Hirschman credit. Like J.K. Galbraith, he has shown that an economist who spurns theory can do very well for himself. Hirschman has accumulated a remarkable number of honorary degrees and awards, a fact he is ever at pains to remind us. His book might better have been called A Propensity to Self- Celebration.


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