Albert O. Hirschman

Albert Otto Hirschman
Hirschman in 1945
Born	(1915-04-07)April 7, 1915 Berlin, German Empire
Died	December 10, 2012(2012-12-10) (aged 97) Ewing Township, New Jersey, United States
Academic background
Alma mater	University of Trieste London School of Economics HEC Paris University of Berlin
Academic work
Discipline	Political economy
Institutions	University of California, Berkeley Federal Reserve Board World Bank Yale University Columbia University Harvard University Institute for Advanced Study
Website	Information at IDEAS / RePEc

Albert Otto Hirschman (born Otto Albert Hirschmann; April 7, 1915 – December 10, 2012) was an American economist. He was the author of several influential books on political economy and political ideology including The Strategy of Economic Development (1958), Exit, Voice, and Loyalty (1970), The Passions and the Interests (1977), and The Rhetoric of Reaction (1991). In World War II, he played a key role in rescuing refugees in occupied France.

Early life and education

Otto Albert Hirschman was born on April 7, 1915 into a middle-class Jewish family in Berlin, Germany, the son of Carl Hirschmann, a surgeon, and Hedwig Marcuse Hirschmann. He had one elder sister, Ursula Hirschmann, and one younger, Eva. The family was "distant from Jewish tradition and religion," in his own words, and he was baptized as Lutheran though never confirmed. The family rented an apartment on Berlin's Hohenzollernstrasse and paid for personal tutors in music and French through the early 1930s. Hirschman attended the Französiches Gymnasium Berlin, graduating in 1932. In 1931, he joined the Social Democratic Party's youth movement, the Workers Socialist Youth, where he became interested in economics through the lectures and pamphlets of the Austro-Marxist Otto Bauer, particularly a lecture on Kondratiev cycles.

In 1932, he started studying economics at the law faculty of the University of Berlin, where he remained active in the anti-fascist resistance. His studies "appear to have focused on deep background readings in classical political economy and on the pamphlets he was studying in [Workers Socialist Youth] study groups."

In 1933, after Hitler's rise to power in Germany and his father's death from cancer on March 31, Hirschman emigrated to Paris on April 2 at the invitation of his former French tutor. He continued his studies at HEC Paris, where he was introduced to interregional commerce by Albert Demangeon. In Paris, he and his sister Ursula grew close to Raphael Abramovitch Rein and his children Lia and Mark Rein, and to the Italian antifascist activist Eugenio Colorni, who would marry Ursula in December of 1935. Hirschman completed his studies at the HEC in the summer of 1935.

Next he took a fellowship at the London School of Economics (LSE), where he was particularly influenced by economist Piero Sraffa (Colorni's cousin) and the international trade economist Philip Barrett Whale. Whale introduced him to empirical work and recommended a career in economic intelligence.

Hirschman returned to Paris in June 1936 and reached out to Neu Beginnen contacts from his time in the Workers Socialist Youth to become involved in antifascist fighting on behalf of the Spanish Republic in the Spanish Civil War from July to the end of October. He fought under the banner of POUM, most likely at the Battle of Monte Pelado.

After his time in Spain, he returned to Trieste to join Ursula and Eugenio Colorni. In Trieste, he began to work on Italian demographic statistics with Pierpaolo Luzzatto-Fegiz, applying the ideas of British demographer George Knibbs. Soon after, he also began doing economic intelligence work to counter Fascist economic propaganda. At the same time, he worked as an illegal newspaper and document smuggler between Trieste and Paris for Colorni's antifascist resistance. He received his laurea, later translated to a doctorate in economics, from the University of Trieste in 1938 for a thesis on the franc Poincaré begun with Whale at the LSE.

Hirschman returned to Paris in the summer of 1938 and began to work under Robert Marjolin and Charles Rist producing a quarterly bulletin for the Institut de recherches économiques et sociales of the Sorbonne, backed by the Rockefeller Foundation. He enlisted in the French army in the spring of 1939 and served briefly on a work gang in the Loire Valley.

After France's 1940 surrender to the Nazis during World War II, Hirschman worked with Varian Fry from the Emergency Rescue Committee to help many of Europe's leading artists and intellectuals escape from occupied France to Spain through paths in the Pyrenees Mountains and then to Portugal, with their exodus to end in the United States. Those rescued included Marc Chagall, Hannah Arendt, and Marcel Duchamp. Hirschman's participation in these rescues is one aspect of the 2023 Netflix series Transatlantic, in which a fictionalized version of him is played by Lucas Englander. His own escape was arranged by economist John Bell Condliffe and the Rockefeller Foundation; he left Europe at the end of 1940 and arrived in the US on January 14, 1941, taking the name Albert Otto Hirschman on his arrival.

Life and career

From 1941 to 1943 Hirschman was a Rockefeller Fellow at the University of California, Berkeley. At Berkeley, he worked in an open-ended fellowship with John Bell Condliffe on matters of "autarchy, bilateralism, and the formation of trading blocs" in international trade. This work included work on indices of market concentration that would lead him to what is now called the Herfindahl–Hirschman index. He shared an office with Alexander Gerschenkron, who would remain an important colleague and foil for many years later. Also at Berkeley, he met Sarah Chapiro and proposed to her within eight weeks of meeting. They married in June of 1941 and would remain married until her death. The final product of this fellowship was his first book, National Power and the Structure of Foreign Trade; the manuscript was rushed to completion by the end of 1942 to allow Hirschman to join the Army after the Pearl Harbor attack.

From 1943 to 1946 he served in the United States Army, where he initially enlisted in the infantry as a private in April and then was assigned to the Office of Strategic Services (the forerunner of the CIA) in the autumn, on the basis of his language skills. He shipped out to Europe in February 1944. He spent seven months in Algiers, working as a French instructor. He was next assigned to follow the front up from Italy in September 1944, beginning in Monte Casserta, then to Florence, and finally to Udine. After the end of the war, he served as the interpreter for German general Anton Dostler at the first Allied war crimes trial, concluding with Dostler's execution December 1, 1945. While away, his wife gave birth to their first daughter, Katia, in October 1944.

He was chief of the Western European and British Commonwealth Section of the Federal Reserve Board from 1946 to 1952. In this role, he conducted and published analyses of postwar European reconstruction and newly created international economic institutions. From 1952 to 1954 he was a financial advisor to the National Planning Board of Colombia; he stayed in Bogotá for another 2 years and worked as a private economic counselor.

Thereafter he held a succession of academic appointments in the economics departments of Yale University (1956–58), Columbia University (1958–64), and Harvard University (1964–74). He was on the Faculty of Social Science of the Institute for Advanced Study at Princeton from 1974 to his death, in 2012.

He died at the age of 97 on December 10, 2012, just months after the death of his wife of over 70 years, Sarah Hirschman (née Chapiro).

Work

Hirschman's first major contribution was in the area of development economics with the 1958 book The Strategy of Economic Development. Here he emphasized the need for unbalanced growth. He argued that disequilibria should be encouraged to stimulate growth and help mobilize resources and that developing countries are short of decision-making skills. Key to this was encouraging industries with many linkages to other firms. He argued against "Big Push" approaches to development, such as those advocated by Paul Rosenstein-Rodan.

In the 1960s, Hirschman praised the works of Peruvian intellectuals José Carlos Mariátegui and Víctor Raúl Haya de la Torre, stating "paradoxically, the most ambitious attempt to theorize the revolution of Latin American society arose in a country that to date has experienced very little social change: I am talking about Peru and the writings of Haya de la Torre and Mariátegui". He helped develop the hiding hand principle in his 1967 essay The principle of the hiding hand.

His later work was in political economy. In Exit, Voice, and Loyalty (1970) he described the three basic possible responses to decline in firms or polities: quitting, speaking up, and staying quiet. He characterized three types of arguments typically made by conservatives, arguments from perversity, futility, and jeopardy, in The Rhetoric of Reaction (1991).

In The Passions and the Interests (1977) Hirschman recounted a history of the ideas laying the intellectual groundwork for capitalism. He describes how thinkers in the seventeenth and eighteenth centuries embraced the sin of avarice as an important counterweight to humankind's destructive passions. Capitalism was promoted by thinkers including Montesquieu, Sir James Steuart, and Adam Smith as repressing the passions for "harmless" commercial activities. Hirschman noted that terms including "vice" and "passion" gave way to "such bland terms" as "advantage" and "interest." Hirschman described it as the book he most enjoyed writing. According to Hirschman biographer Jeremy Adelman, it reflected Hirschman's political moderation, a challenge to reductive accounts of human nature by economists as a "utility-maximizing machine" as well as Marxian or communitarian "nostalgia for a world that was lost to consumer avarice."

Herfindahl–Hirschman Index

In 1945, Hirschman proposed a market concentration index which was the square root of the sum of the squares of the market share of each participant in the market. In 1950, Orris C. Herfindahl proposed a similar index (but without the square root), apparently unaware of the prior work. Thus, it is usually referred to as the Herfindahl–Hirschman index.

Awards

Hirschman was a member of the American Academy of Arts and Sciences (1965), the American Philosophical Society (1979), and the United States National Academy of Sciences (1987).

In 2001, Hirschman was named among the top 100 American intellectuals, as measured by academic citations, in Richard Posner's book, Public Intellectuals: A Study of Decline.

In 2002, Hirschman was awarded Doctor Honoris Causa by the European University Institute, Florence, Italy.

In 2003, he won the Benjamin E. Lippincott Award from the American Political Science Association to recognize a work of exceptional quality by a living political theorist for his book The Passions and the Interests: Political Arguments for Capitalism before Its Triumph.

In 2007, the Social Science Research Council established an annual prize in honor of Hirschman.

Selected works

Books

• 1945. National Power and the Structure of Foreign Trade 1980 expanded ed., Berkeley : University of California Press
• 1955. Colombia; highlights of a developing economy. Bogotá: Banco de la Republica Press.
• 1958. The Strategy of Economic Development. New Haven, Conn.: Yale University Press. ISBN 0-300-00559-8
• 1961. Latin American issues; essays and comments New York: Twentieth Century Fund.
• 1963. Journeys toward Progress: Studies of Economic Policy-Making in Latin America. New York: Twentieth Century Fund
• 1967. Development Projects Observed. Washington, D.C.: The Brookings Institution. ISBN 0-815-73651-7 (paper).
• 1970. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, Massachusetts: Harvard University Press. ISBN 0-674-27660-4 (paper).
• 1971. A Bias for Hope: Essays on Development and Latin America. New Haven: Yale University Press.
• 1977. The Passions and the Interests: Political Arguments For Capitalism Before Its Triumph. Princeton, NJ: Princeton University Press. ISBN 0-691-01598-8.
• 1980. National Power and the Structure of Foreign Trade. Berkeley: University of California Press.

• 1981. Essays in trespassing: economics to politics and beyond. Cambridge (Eng.); New York: Cambridge University Press.
• 1982. Shifting involvements: private interest and public action. Princeton, N.J.: Princeton University Press.
• 1984. Getting ahead collectively: grassroots experiences in Latin America (with photographs by Mitchell Denburg). New York: Pergamon Press
• 1985. A bias for hope: essays on development and Latin America. Boulder: Westview Press.
• 1986. Rival views of market society and other recent essays. New York: Viking.
• 1991. The Rhetoric of Reaction: Perversity, Futility, Jeopardy. Cambridge, Massachusetts: The Belknap Press of Harvard University Press. ISBN 0-674-76867-1 (cloth) and ISBN 0-674-76868-X (paper).
• 1995. A propensity to self-subversion. Cambridge, Massachusetts: Harvard University Press.
• 1998. Crossing boundaries: selected writings. New York: Zone Books; Cambridge, Massachusetts: Distributed by the MIT Press.
• 2013. The Essential Hirschman edited by Jeremy Adelman (Princeton University Press) 384 pages; 16 essays

Articles

• "On Measures of Dispersion for a Finite Distribution." Journal of the American Statistical Association 38, no. 223 (September 1943): 346–352.
• "The Commodity Structure of World Trade." The Quarterly Journal of Economics 57, no. 4 (August 1943): 565–595.
• "Devaluation and the Trade Balance: A Note." The Review of Economics and Statistics 31, no. 1 (February 1949): 50–53.
• "Negotiations and the Issues." The Review of Economics and Statistics, 33, no. 1 (February 1951): 49–55.
• "Types of Convertibility." The Review of Economics and Statistics, 33, no. 1 (February 1951): 60–62.
• "Currency Appreciation as an Anti-Inflationary Device: Further Comment." The Quarterly Journal of Economics, 66, no. 1 (February 1952): 117–120.
• "Economic Policy in Underdeveloped Countries." Economic Development and Cultural Change, 5, no. 4 (July 1957): 362–370.
• "Investment Policies and 'Dualism' in Underdeveloped Countries." The American Economic Review 47, no. 5 (September 1957): 550–570.
• "Invitation to Theorizing about the Dollar Glut." The Review of Economics and Statistics 42, no. 1 (February 1960): 100–102.
• "The Commodity Structure of World Trade: Reply." The Quarterly Journal of Economics 75, no. 1 (February 1961): 165–166.
• "Models of Reformmongering." The Quarterly Journal of Economics 77, no. 2 (May 1963): 236–257.
• "Obstacles to Development: A Classification and a Quasi-Vanishing Act." Economic Development and Cultural Change 13, no. 4 (July 1965): 385–393.
• "The Political Economy of Import-Substituting Industrialization in Latin America." The Quarterly Journal of Economics 82, no. 1 (February 1968): 1–32.
• "Underdevelopment, Obstacles to the Perception of Change, and Leadership." Daedalus 97, no. 3 (Summer 1968): 925–937.
• "An Alternative Explanation of Contemporary Harriednes." The Quarterly Journal of Economics 87, no. 4 (November 1973): 634–637.
• "The Changing Tolerance for Income Inequality in the Course of Economic Development", World Development, Vol. 1, No. 12, (December 1973).
• "On Hegel, Imperialism, and Structural Stagnation", Journal of Development Economics 3 (1976): 1–8. doi:10.1016/0304-3878(76)90037-7
• "Beyond Asymmetry: Critical Notes on Myself as a Young Man and on Some Other Old Friends." International Organization 32, no. 1 (Winter 1978): 45–50.
• "Exit, Voice, and the State." World Politics 31, no. 1 (October 1978): 90–107.
• "The Rise and Decline of Development Economics." International Symposium on Latin America, Bar-Ilan University, Israel, 1980.
• "'Exit, Voice, and Loyalty': Further Reflections and a Survey of Recent Contributions." The Milbank Memorial Fund Quarterly. Health and Society 58, no. 3 (Summer 1980): 430–453.
• "Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?." Journal of Economic Literature 20, no. 4 (December 1982): 1463–1484.
• "Against Parsimony: Three Easy Ways of Complicating Some Categories of Economic Discourse." Bulletin of the American Academy of Arts and Sciences 37, no. 8 (May 1984): 11–28.
• "Against Parsimony: Three Easy Ways of Complicating Some Categories of Economic Discourse." American Economic Review 72, no. 2 (1984): 89–96
• "University Activities Abroad and Human Rights Violations: Exit, Voice, or Business as Usual." Human Rights Quarterly 6, no. 1 (February 1984): 21–26.
• "The Political Economy of Latin American Development: Seven Exercises in Retrospection." Latin American Research Review 22, no. 3 (1987): 7–36.
• "Exit, Voice, and the Fate of the German Democratic Republic: An Essay in Conceptual History." World Politics 45, no. 2 (January 1993): 173–202.
• "Social Conflicts as Pillars of Democratic Market Society." Political Theory 22, no. 2 (May 1994): 203–218.

See also

• Economic development
• Hirschman cycle
• Exit, Voice, and Loyalty Model
• Latin American studies
• Fernando Henrique Cardoso
• Guillermo O'Donnell
• Philippe C. Schmitter

References

Bibliography

Adelman, Jeremy (2013). Worldly Philosopher: The Odyssey of Albert O. Hirschman. Princeton, NJ: Princeton University Press. ISBN 978-0691155678. OCLC 820123478.

Further reading

• Jeremy Adelman. 2013. Worldly Philosopher: The Odyssey of Albert O. Hirschman. Princeton University Press
• Michele Alacevich. 2021. Albert O. Hirschman: An Intellectual Biography. Columbia University Press.
• Sleeman, Elizabeth, ed. (2003). The International Who's Who 2004: Volume 67. London: Europa Publications. ISBN 978-1857432176. OCLC 949667806.

External links

• Albert O. Hirschman Papers at the Princeton University Library
• New York Review of Books bibliography of Hirschman's articles
• Amherst Commencement Recognition
• Albert O. Hirschman Prize and Lecture
• Works by or about Albert O. Hirschman at the Internet Archive