Worldly Philosopher: The Odyssey of Albert O. Hirschman

by Jeremy Adelman

  It would take years for this amalgamation of ideas and influences to form the new chemical balance of Hirschmann’s thinking. For the moment, while he was moved and inspired by his conversations with Eugenio and drifted into giellisti, Rossellian socialist-liberal circles, with Renzo, he was also nearing the end of his studies at HEC. By the spring of 1935, as Ursula was reaching out to Eugenio, Otto Albert began to make plans for the next uprooting; in early April, he wrote to Mutti asking for her to send him original certifications from the Collège Français and notarized documents confirming her own nationality and status. He was applying for a fellowship to go to the London School of Economics (LSE). HEC had been a disappointment. This made Hirschmann all the more determined to make the next step the right one. If Paris had not satisfied his curiosity to learn economics, Hirschmann hoped that London would. The letter of support from the Entr’aide Universitaire Internationale must have helped clinch the opportunity to open new intellectual vistas; he was accepted to the LSE and given one year’s scholarship. In early summer, he finished his final exams at HEC, reading Brothers Karamazov to the last, and escaped to Forte dei Marmi for a vacation with Ursula and Eugenio. Then he was back in Paris, packing his bags, getting ready for London.

  CHAPTER 4

  The Hour of Courage

  From the true antagonist boundless courage flows from you.

  FRANZ KAFKA

  Over the course of the next three years, Hirschmann shuffled between four countries, enlisted to fight in a civil war, joined an underground resistance, and got a doctoral degree. The languages changed—from French to English to Spanish to Italian and back to French—but his commitment to fight fascism remained the same, no matter the language or land. Uprooted from country yet loyal to cause, Hirschmann found a way to make this an intellectually fertile period, especially after the disappointments of HEC. It was in these years that Hirschmann got his first exposure to real economics at the London School of Economics, which he had long been seeking. His relationship with Eugenio Colorni and the influence of his style of thinking came into full bloom in Trieste. Between the books of London and Trieste was a searing political and military experience in the Spanish Civil War.1

  These were pendular years. Hirschmann swung between countries and languages, as well as from esoteric reading to self-sacrificing struggle, from homme de lettres to man of action, suggesting an erratic, reactive, or unpremeditated quality to his moves. No doubt, in the volatile years from 1935 to 1938, the highly fluid settings in each country clearly affected his choices; there was a great deal of restlessness to his decisions, as his former girlfriend, Inge Franck, had noted presciently, and the volatility of European popular fronts and their right-wing foes account for part of Hirschmann’s swings as he moved around the continent searching for new coordinates.

  But he was not just reacting to external shifts. His personal will was at stake as well. The difficulty is, it is not easy to figure out what was going on in his mind as his road forward kept forking. This is largely because keeping these two Hirschmanns, the combatant and the thinker, in the same frame runs up against the dearth of sources. He did not leave the trails of this chapter of his life littered with paper—letters, diaries, journals, or manuscripts—precisely the materials that biographers hoard to make sense of their subjects’ choices. For some people the proliferation of personal choices is what sparks the flurry of letters and personal confessions. But this is not the case with Hirschmann, who has kept his thoughts to himself to this day. What is remarkable is how tight-lipped he remained about these years of searching, of hope, and of terrible loss. They summoned some of his best and worst memories, which go to the heart of his reluctance to imagine himself in any heroic register. After all, proving Hamlet wrong implied an open flow between thoughts and acts, theory and practice; self-doubt should motivate hazardous political involvements, almost as a counterheroic stance in the world. And yet, one cannot help but see Hirschmann’s efforts to live simultaneously as a man of action and a man of letters, a part of a long tradition of heroic volunteers in other peoples’ struggles; true to his divided but untorn self, Hirschmann did both.

  Another way to see these apparent schisms as parts of a piece is to observe his quest for a certain independence of mind. Quitting Berlin distanced him from earlier faiths. Moving around Europe exposed him to more—and cued him increasingly to the need to forge his own style out of these compound influences. Some kind of inner drive was at work, one that helped him embrace some influences and shrug off others, but a drive that is sometimes easier to see in his deeds and movements than in his scarce words. Only later does it become evident that he had been summoning writerly aspirations and professional ambitions for himself; it is dangerous to push this back in time too hastily. It was by no means clear in 1936 that intellectual passions would gain the upper hand. Even less clear is what kind of intellectual he would become.

  Still, a drive appears to be at work from the very start of his sojourn in London. According to his fellowship, he was not required to follow a program of study, because he already had a degree. He was free to do as he wished—take more courses, enlist in a degree program, join a research team. He did none of these. Instead, “I decided to study for my own account.”2 This decision, in retrospect, seems a strange one—especially given the meager learning he had gleaned at HEC. Hirschmann could certainly have benefited from more rigorous instruction. It would not be the last time he passed up the opportunity to be “trained.” There were a few exceptions at the LSE, people he did search out for their influence. For instance, he discovered the young Russian-born East Ender, Abba Lerner, who had left rabbinical school to place himself in the hands of the LSE’s formidable Lionel Robbins. Lerner was a brilliant, original thinker and was at work on a series of pioneering papers on concepts of international trade and the factor price equalization theorem. He had also spent six months in Cambridge and was one of the few from outside the circle surrounding John Maynard Keynes that grasped the implications of what was happening to economics. Hirschmann could spot an opportunity. He attended Lerner’s course on economic theory, which was the foundation for his knowledge of economic principles. He also had an empirical nose, so he registered for a course in international economics with Professor P. Barrett Whale, who would take Hirschmann under his wing. Throughout his time at the LSE, what is revealing was his decision not to be forged by the heated debates going on around him; the dominant tones of the intellectual milieu in which he came of age were not necessarily those that most influenced him. If we tend to think of the 1930s as the age in which the great debates over Keynesian economics were being hashed out, for someone of OA’s age and ilk it is remarkable that he pursued his interests elsewhere, intrigued more by the quieter undertones of economic controversies that were drowned out by the noise surrounding Keynes and his critics.

  By the time Otto Albert Hirschmann arrived at the doorsteps of the LSE’s crowded buildings off Aldwych Circle, it had long since given up its mantle as the training ground for social scientists committed to Fabian socialism or to a social-engineering approach to modern problems and was well on its way to being one of the world’s great intellectual capitals, full of scholars from a plethora of persuasions. The founding anthropologist Bronislaw Malinowski, the sociologists T. H. Marshall and Karl Mannheim, and political scientists like Harold Laski and economic historians like R. H. Tawney towered over their fields and taught their courses in cramped lecture halls.

  Best known at the time as the intellectual counterpoint to the teaching at Cambridge University, where Keynes held forth, the LSE, under the leadership of Lionel Robbins and Friedrich von Hayek, boasted a more free-market approach to economics. Robbins gave the gateway course for all economics students, The General Principles of Economic Analysis; he was determined to combine the rigors of the Austrian school of precise hypothesis testing within “the science which studies human behaviour as a relationship between scarce means with alternative uses” into a B
ritish classical tradition.3 This set the stage for Robbins and Hayek to join forces in Economic Theory, for all students preparing for their second-year final exams. To graduate in economics from the LSE meant running these gauntlets. Both courses were also highly recommended for graduate students. There is no evidence that Hirschmann attended, though they certainly dominated the air of the school. There was also a younger generation of iconoclastic economists coming up through the ranks—such as John Hicks, Nicholas Kaldor, Tibor Scitovsky, R.H. Coase, and Abba Lerner—who cut their teeth on the masters to become “continentals” (a term meant to distinguish them from Cambridge-style economics) and original thinkers in their own right.

  In early February 1936, a long queue began to form outside the LSE bookshop. Hirschmann joined the line. It was the day that Keynes’s The General Theory of Employment, Interest, and Money was hitting the shelves. Most of the buyers were students. They plunged into the book—though Hirschmann could not help but notice that most of it passed over their heads “because it was a very difficult book.”4 The General Theory intensified an increasingly bitter contest between Cambridge Keynesians and LSE free marketers, led by Robbins and Hayek, who were already on record for disputing Keynes’s theories of money and advocacy of state intervention. Some Keynes defenders included younger faculty and students, who were less inclined to dig in their heels, and some like Lerner, were receptive to the revolution. All of this was eye-opening for Hirschmann. Keynes was, for all intents and purposes, unknown in France. Some left-wing economists, such as Charles Spinasse and Georges Boris (Léon Blum’s economic advisor), were Keynes admirers. But the notion that deliberate public deficits could reverse a business cycle was far from having any influence on Paris’s ministers. The General Theory was itself only published in French under the Occupation in 1942.5

  It was not just what economists were arguing about that intrigued Hirschmann, it was the fact that they were arguing about ideas. At first blush, this may seem odd. After all, he was coming to the LSE from a Marxist political economy tradition, so laissez-faire economics was subversive. Moreover, books were to be read like the New Testament, to imbibe as doctrine and recite as dogma, not as a set of propositions that functioned as hypotheses that might be tested in the real world; there were no real alternatives to consider or wrestle with. To Hirschmann, his old debates were not about economic concepts, but about political positions. In this new hotbed in London, he was prepared to hear all sides; it was all new. The result is that he did not necessarily see the Robbins-Hayek position as “old hat” in the same way many of their students did. Indeed, Hirschmann took Hayek, in particular, seriously and appreciated the rigorous individualism after his previous diet of “lumpy” collective categories like social class. The accent on what would become known as methodological individualism (a term that came from the Austrian Joseph Schumpeter)—which Robbins and Hayek argued was at the core of the discipline’s approach and which premised that social choices were the aggregation of individual choices—blew away old verities. Society was just a composite of individuals, a sum of atomized parts: any self-respecting theory had to reckon with personal preferences and psychology to ground its explanation; societies or classes (not to mention the inferences about their consciousness) are not enclosed, self-sustaining decision-makers. In this setting, the arriviste would pick and choose; that he would treat the setting as an opportunity to try amalgamating parts in new ways was a sign that his eclecticism began early. But it would also sow enduring tensions. The injunction to pay attention to individuals’ psychologies and preferences was a lasting influence, but Hirschmann was not so keen to depose the idea of a composite society larger than a mere sum of parts capable of bearing its own ontological weight. He thrived on the “lively” atmosphere: economics was the subject of the debate, empirical methods in dispute, ideas impassioning. “The scales fell from my eyes when I came to England.… Only there did I really discover what economics actually is.”6

  The LSE, certainly by contrast to the milieus of Berlin and HEC, where nationalism and nativism ran rampant, was also extremely international and cosmopolitan. Of the 3,000 students at the LSE, 721 were foreign, and of these, 353 were considered “occasional” (that is, not registered for a degree) including Hirschmann. Germany accounted for 84 students, a large cohort, just behind China, India, and the United States in numbers. It was a world in which Hirschmann found it much easier to find friends, some of whom had similar backgrounds as involuntary émigrés and exiles. Two fellow economics students became life-long intimates. One was Hans Landsberg, whom he knew vaguely from Berlin. The other was George Jaszi, the son of Oskar Jaszi and scion of a family of well-known Hungarian émigré artists, who would become one of Hirschmann’s closest friends. Both Landsberg and Jaszi were, however, full-time students enrolled for degrees and thus on a different track than Hirschmann the newcomer. Still, they formed a tight bond. With the ruckus around Keynes’s revolution, the three trekked up to Cambridge together to hear Keynes lecture; Jaszi and Landsberg were smitten; Hirschmann walked away with his doubts—some of them by now reflecting a growing distrust of anything that smacked of grand theory.7

  Hirschmann did not follow an intellectual trail that saw him abandoning old ideas and picking up new ones, reinventing himself on a dime. His transitions were more complex and faltering. He did not simply discard Marxism and embrace Hayek, leave behind class analysis to tout Keynes. There was much more processing, inner deliberation, selection, and adaptation than a standard “conversion” story. While reading up on the Keynesian-Austrian debate, he never gave up his interest in an older heritage of political economy; indeed, the sojourn at the LSE afforded him the first opportunity to delve into the history of economic thought, having left David Ricardo behind in Berlin. It was in London that he was able to pick up currents that did not reduce themselves to the labor theory of value. Most important were John Stuart Mill’s Principles of Political Economy and Alfred Marshall’s Principles of Economics. Nor did he forget his interest in David Ricardo, and found a way to rekindle it by making a pilgrimage to Cambridge on his own, not to see Keynes, but to visit Eugenio Colorni’s cousin Piero Sraffa, who had also fled Italy, leaving behind his own Marxist antecedents. With a letter of introduction from Eugenio, Hirschmann boarded the train from Liverpool Street Station to visit Sraffa, who was then consumed in his editing of the complete works of David Ricardo at the behest of the Royal Economic Society. Sraffa ranked among the most biting critics of Hayek’s Austrian economics and his relentlessly pessimistic logic. But behind the scenes, he was hard at work on the origins of political economy. Ricardo’s theory of ground rent was the pretext for what became an afternoon spent in “a long and belle conversation” with the shy, bookish, Italian economist in his office at Trinity College. There are no records of the meeting. We can of course speculate on the topics: catching up on family gossip, perhaps thoughts about the duel between Keynes and his critics. It is also possible that they talked about the Italian scene, for Sraffa had been the purveyor of pens and paper for the incarcerated Antonio Gramsci and had authored a little-known study of inflation in Italy during the First World War. He was also a fierce critic of banking practices under Mussolini. These topics fascinated Hirschmann, who was determined to follow Sraffa’s example of weaving sophisticated economic analysis together with political commitment. In his retrospective on intellectual life in London in 1935–36, the private afternoon with Sraffa looms as large as the much noisier public clashing over Keynes’s General Theory.8

  While there was plenty of economic theory and history of economic thought to go around, it was empirical work in international economics that summoned most of Hirschmann’s attention and brought him under the caring fold of Barrett Whale. It was with Whale that Hirschmann got his bearings in basic concepts and empirical sensibilities in international economics—and one has to marvel at how much he must have taken in this abbreviated exchange; what Whale offered buoyed Hirschmann through many years of
research and analysis. His course International Trade and Foreign Exchanges laid the basic theory of comparative advantage, factor movements, and the functioning of the gold standard; it ended with considerations on contemporary problems. The reading list was compilations of classics, from David Ricardo and John Stuart Mill to Bertil Ohlin’s and Gottfried Haberler’s recent books on international trade.9 Whale, a scholar of German banking systems, was best known for his text International Trade, which would go through multiple editions, and he would later become a great figure in the building of economics at the University of Liverpool after World War II. At the time that Hirschmann was working with him, Whale was writing a long essay on the prewar gold standard, which was published in Economica in 1937. One can only conjecture about how much of Whale’s preoccupations with international trade and finance, and concern with central banking, rubbed off on his pupil.

  Whale was also instrumental in a second way: he encouraged his German student to use some of his new skills on a subject that was close to home and to take his first stab at writing. One of his assignments involved a set of readings and a research paper on the franc Poincaré, an emblem of the Third Republic’s economic anemia. Created in the 1920s as a unit of account convertible to gold, it was used as the anchor for the convertibility of the French franc, and thus the stabilization of the French economy after the postwar upheavals. Fearing resurgent instability, government after government struggled to defend the franc Poincaré, even at the cost of worsening the Depression by deflating prices and sticking to balanced budgets at a time in which many western governments ushered in deficit spending and counter-cyclical policies—until finally, in September 1936, the Popular Front government ushered in a belated, and tumultuous, devaluation. It says something of the HEC of those days that Hirschmann was present during the heated debate about whether to let the overvalued franc fall and abandon the gold standard, but he understood little. That changed under Whale, with whom discussions veered toward the idea of writing a research paper—Hirschmann’s first—on the topic. We do not have a record of what Hirschmann wrote at this time for Whale’s course, though an elaborated version would materialize a few years later. But Whale must have been impressed by the result: he concluded his advising of Hirschmann in the form of a letter of recommendation in late May 1936—which is all the evidence we have of Hirschmann’s sojourn at the LSE (it issued him no transcripts)—praising Hirschmann’s “engagement in writing a memorandum on French monetary problems in which he has shown considerable capacity in marshaling evidence and both soundness and independence of judgment. Altogether, he has impressed me as being a highly intelligent and capable student.” Whale clearly saw in Hirschmann a knack for research, for the letter especially “recommends him for employment—for any employment, but more especially for ‘economic intelligence’ work.” Whether Hirschmann had spoken to Whale of this interest, or whether Whale’s words sparked an idea in Hirschmann’s head, we cannot know. But this is precisely where Hirschmann would try to make his first mark in the field.10