Albert Otto Hirschman[1] (born Otto-Albert Hirschmann; April 7, 1915 – December 10, 2012) was a German economist and the author of several books on political economy and political ideology. His first major contribution was in the area of development economics.[2] Here he emphasized the need for unbalanced growth. He argued that disequilibria should be encouraged to stimulate growth and help mobilize resources, because developing countries are short of decision-making skills. Key to this was encouraging industries with many linkages to other firms.
His later work was in political economy and there he advanced two schemata. The first describes the three basic possible responses to decline in firms or polities (quitting, speaking up, staying quiet) in Exit, Voice, and Loyalty (1970).[3] The second describes the basic arguments made by conservatives (perversity, futility and jeopardy) in The Rhetoric of Reaction (1991).
He was chief of the Western European and British Commonwealth Section of the Federal Reserve Board from 1946 to 1952.[12] In this role, he conducted and published analyses of postwar European reconstruction and newly created international economic institutions.[12] 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.[citation needed]
His 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, because developing countries are short of decision-making skills. Key to this was encouraging industries with many linkages to other firms.[citation needed] He argued against "Big Push" approaches to development, such as those advocated by Paul Rosenstein-Rodan.[14]
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".[15] He helped develop the hiding hand principle in his 1967 essay The principle of the hiding hand,.[citation needed]
His later work was in political economy, where he advanced two schemata. In Exit, Voice, and Loyalty (1970) he described the three basic possible responses to decline in firms or polities (quitting, speaking up, staying quiet).[3] The second systematizes the basic arguments made by conservatives (perversity, futility and jeopardy) in The Rhetoric of Reaction (1991).
InThe Passions and the Interests Hirschmann recounts 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."[citation needed] Hirschman described it as the book he most enjoyed writing.[citation needed] 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."[16][page needed]
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.[17] In 1950, Orris C. Herfindahl proposed a similar index (but without the square root), apparently unaware of the prior work.[18] Thus, it is usually referred to as the Herfindahl–Hirschman Index.
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. ISBN0-815-73651-7 (paper).
1970. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, Massachusetts: Harvard University Press. ISBN0-674-27660-4 (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. ISBN0-691-01598-8.
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.
"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.
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.[22]
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.[citation needed]
Michael Laver. "Exit, Voice, and Loyalty revisited: The Strategic Production and Consumption of Public and Private Goods," British Journal of Political Science. Vol. 6. (Oct. 1976). pp. 463–482.
