Worldly Philosopher: The Odyssey of Albert O. Hirschman

by Jeremy Adelman

  Hirschman was taking on big figures, though the full extent of this challenge was not so clear, in part because the author rushed his final product without expanding on its conceptual ambitions. He may not even have been fully aware of them. Adam Smith wanted new coordinates for thinking about wealth—not as the purview of states, but rather as the product of societies. Ridding the old doctrine would free the world of “power temptations.” In a sense, Hirschman was restating the Smithian formula with data and an eye to a concern about peace. So long as state power depended on control over trade, economics would serve despots. But what Smith missed, Hirschman felt, was the recognition that there would always be temptation so long as there were small and big countries, rich and poor. Hirschman, who pored over the Doe Library’s edition of The Wealth of Nations, felt that Smith ascribed the problem to a failure to see wealth differently—not to basic inducements and incentives. So long as there was an underlying disparity in scale and income around the world, states—mercantilist, capitalist, or communist—would be vulnerable to the kind of predatory activity that careened the world into war. It would not help just to preach a different conceptual gospel, even though it had more virtues. In this sense, the world economy was always subject to a basic “power disequilibrium.”

  But there was more to Hirschman’s argument. Greater global integration did not check predation by making countries more interdependent and, therefore, more cooperative. There was an equal risk that unmanaged, interdependence could aggravate relations and yield to tit-for-tat bullying by the wealthy and the big. Hirschman’s endless tables illustrated how countries became more dependent on one or fewer markets and more dependent on one or a few commodities as they specialized and reaped the gains from trade—countries would be prone to dependence with power temptations.

  The only way out, to achieve peace with welfare, was a wholesale break from the formula that had governed global trade since Machiavelli: “This can be done only by a frontal attack upon the institution which is at the root of the possible use of international economic relations for national power aims—the institution of national economic sovereignty.” For its time, this was an audacious argument. But he went further, arguing that “the exclusive power to organize, regulate, and interfere with trade must be taken away from the bonds of single nations” and turned over to “consular services,” “chambers of commerce,” “export-import banks,” international transportation companies, and a list of civic and private agents involved in global commerce, rescuing trade from states whose leaders could not resist the temptations to empower themselves at the expense of others. He threw the whole model of national sovereignty into the air, advocating “the internationalization of power” by giving real teeth to Article 16 of the Covenant of the League of Nations, which gave it direct control of state trade policies. Roosevelt’s “freedom from fear” and “freedom from want” could be reconciled only with a dramatic change in the way we think about the international political economy (p. 81). Hirschman’s prescriptions grew increasingly unmoored from his analysis and went from the audacious to the Utopian, a move that would lose the sympathy of some of his reviewers and would prove an exception to his preference for small, close-to-the-ground, analysis.

  By the time Hirschman reached his final pages, he was boiling down all his convictions about how policy makers might think about their place in history. He reminded readers that they should not presume that any global division of labor was ordained. Many outcomes—good and bad—were possible. The search for covering laws was destined to take explanations from particular times and places and universalize them. One can see a grain of his Hegelian past, and his bow to the cunning of reason, through the lacquer of his economics: it is “highly improbable that any particular pattern of the international division of labor will last forever.” His readers needed to be reminded that they were living in just one of History’s moments. This did not lead him, however, to more meta-laws. Rather, one hears the echoes of Eugenio Colorni. It was how people chose to perceive the world that guided their choices—though it did not determine their options. All transitions in history, therefore, create challenges, but these challenges can be aggravated by the illusion that they are permanent conditions. His final words were reserved for the pessimists. While the nineteenth-century “free trade” moment had passed, and the classical political economy which derived to explain it was now frayed, there was no need to fall prey to “flights of the imagination at the start of which we find a real lack of imagination” (p. 151) Colorni could not have been far from his thoughts when he accented a practical, Utopian turn, a centerpiece of his reformist principles; when he emphasized the role of the imagination in history; and when he cast his eyes beyond the present to formulate policies for the future; the lack of imagination was simply “an incapacity to conceive of a state of affairs radically different from that with which we have been acquainted” (p. 151).

  The final, moving, pages anticipated much of what would later flow from Hirschman’s pen.

  But they also created a problem. It was not always clear with whom Hirschman was jousting. By then, trade pessimists were in the retreat, and the sentiment was swinging—as he no doubt knew from his conversations and work with Condliffe—to thoughts about a global regulatory framework. And while its postwar incarnation fell far short for many idealists, the basic norms—especially in the United States, which would play a decisive and leading role in restoring a multilateral trading system—had shifted decisively. Most of the citations to pessimists were to German writers, starting with Werner Sombart, who worried that German industrialization would lead to self-sufficiency, and commentators on the First World War. There is certainly a way in which he anticipated later criticisms of world trade, from later antiimperialist critics of the 1960s to globalization pessimists of the 1990s. But at the time, it was an odd note to strike and suggested that he was shadow boxing with an already vanquished opponent, and thus driven to advocate a concept of “the internationalization of power” that seemed, if not excessively idealistic, blind to the fact that a transition to thinking about a new global order was already beginning.

  If Hirschman harbored any hopes for a cascade of enthusiastic reviews, they were dashed. By the time the book came out, it was read as being out of step with the times. Seeing the defeat of the Axis powers on the horizon, many economists were less concerned with empire and dictatorship, having moved forward to think about elaborate global trading regulations; it was a hot topic at the Allies’ financial moguls’ discussions at Bretton Woods, New Hampshire, where the postwar economic architecture was designed. National Power was almost instantly forgotten. Philip Buck of Stanford University praised the book’s “originality in devising a new method of analysis” and for illuminating a central puzzle of the twentieth century. He agreed with the general principle that world trade not be left to the governance of sovereign nation states. Another reviewer also lauded the technicalities of Hirschman’s indices. Indeed, in general, reviewers found the measuring devices impressive, but the applications less so. Michael Florinski of Columbia University appreciated the “provocative” nature of the “compact study” and nodded to the “erudition, thoroughness and imagination.” The core of the volume on foreign trade as an instrument of national power was “penetrating” but “somewhat abstruse.”32

  There was a more fundamental problem. It got little attention because it was—to many—already obsolete, and the final ruminative passage seemed, to some, downright obscure. If Hirschman advocated a “frontal attack” on “the institutions of national economic sovereignty” with a whole new architecture for managing global trade, one reviewer could not bite his lip: “This proposal, needless to say, has not the slightest chance of being acted upon within any predictable future, if ever.” Many years later, Hirschman himself conceded that the book carried the burden of “infinitely naïve proposals” whose ability to solve the world’s troubles rested on a deus ex machina of an entirely new order to wish away a
n “unpleasant reality” he’d uncovered instead—as would become a hallmark of later writings—of “scrutinizing it further for inner modifiers or remedies.” But this is the voice of the mature theorist of reform, looking back on the less ironic, youthful, idealist who had not yet developed his antennae for the dialectic of forces and their counterforces whose interstices were the spawning ground for “possibilities rather than certainties.”33 The result was that, as the few reviewers who dealt with it noted, the book’s recommendations were, at best, vague, too general, and had “nothing to offer” to those concerned with how to manage postwar commerce. The economic problems of the postwar years turned economists’ attention away from the war’s causes to its consequences. The book got pigeonholed as a study of “international relations” and was largely ignored by economists. It soon dropped from sight and went out of print as being prewar vintage; its relevance was already past.

  This was not the work that Condliffe hoped would make the young German economist’s career; far from it. The deeper messages about the underlying dynamics of inherent tensions, disequilibria, and conflict were at odds with an age that clung to hopes that the world’s problems had been temporary and were reducible to bad management, poor leadership, and venal tyrants. If Hirschman was drawing on the well of Marxism to say that there was something more fundamental at work in political economy, his tone was at odds with the struggle to anchor the coordinates of a new, liberal, postwar consensus.

  One effect of the book’s poor reception was that the index over which he labored so hard disappeared with it. In itself, this might not have gotten under Hirschman’s skin. But it was when it got picked up and branded as someone else’s index that his frustration came to the surface. In 1950, O. C. Herfindahl published a study of the American steel industry that adapted Hirschman’s index, albeit footnoting him, to offer measures of concentration in this one business. It was soon picked up by statisticians and regulators concerned with an objective measure of market concentration for their trustbusting work and named the Herfindahl Index. This misnomer was recognized by no one—but it irritated Hirschman to such a point that he felt compelled to set the record straight in 1964 in a small entry to the American Economic Review called “The Paternity of an Index.” There he laid out the forgotten history of this technical exercise explaining that the measure was being mistakenly named after Corrado Gini, who did not invent it, or Herfindahl, who had simply reinvented it. But rather than lay claim personally, he ended with a laconic and imperfectly disguised index of his feelings about the years as a forgotten figure: “Well, it’s a cruel world.”34

  We have gotten slightly ahead of the story. Whether Hirschman was aware of the risks he was running as he frantically wrote, we do not know. What we do know is that the book was a calling, the result of many years of reflection and a determination to prove himself in a new setting. By the time he was applying the final touches, however, an older calling resurfaced. One must remember that he was trying to explain the structural origins of Hitler’s empire. The political reality of its extent eventually reached the shores of California’s Bay Area. By early 1942, while Hirschman was presenting his initial draft to his officemates, Roosevelt and Hitler were enemies. In the ensuing months, the war dissolved Condliffe’s little fraternity in the Doe Library. One by one the fellowships ran out. Gerschenkron went to work as a stevedore in the shipyards. Stevenson followed Condliffe to New York to work at the Carnegie Endowment for International Peace. Ellis went to Washington to work for the Federal Reserve Board.

  Albert O. Hirschman enlisted in the US Army.

  CHAPTER 7

  The Last Battle

  A stair that has not been deeply hollowed by footsteps is, from its own point of view, merely something that has been bleakly put together with wood.

  FRANZ KAFKA

  Though it was less than a year after his escape from Europe, the bombing of Pearl Harbor hurried National Power. There was competition now for Hirschman’s attention, another fork in the road. One way pointed the way to a vita contemplativa, a road he yearned for after his itinerant and militant years in Europe. Another pointed the way to a vita activa dedicated to the struggle against fascism, a cause he’d rallied to like a reflex since 1931. Here was a new opportunity to enlist. He did so, almost immediately—less than two months after Pearl Harbor. A serious bout of pneumonia and then a tonsillectomy laid him up for weeks, delaying him. Still motivated by the urge to prove Hamlet wrong, to preserve within himself an idea of an integrated fighter and thinker, there was another reason for volunteering for a regimented life: having spent so many years with a dubious legal status, and with internment camps for enemy aliens filling up around California, he wanted his citizenship resolved. Necessity and conviction thus prompted him to volunteer for his third war, fighting under a third flag, for the same cause.

  The pendulum, it seems, had swung back to action. But Hirschman did have a preference for how—not whether—to serve. There was one way to integrate “theory” and “practice,” to deploy his knowledge about the enemy as an “economic intelligence” agent. Here was an opportunity to make an old personal ideal real. Once he had recovered from his maladies, he wrote to Kittredge at the Rockefeller Foundation in New York seeking advice and support. He did not think, according to Kittredge’s notes, “that he could serve most effectively by becoming a private for the 3rd time.”1 The program officer heard him out and agreed to send a letter to the adjutant general of the US Army testifying to Hirschman’s background and abilities. Kittredge did, adding emphatically, that “Hirschman states he is not a Communist” to calm the alarms about his service in the Spanish Civil War.2 Accordingly, Hirschman himself wrote to the adjutant general following Kittredge, explaining that he was Lithuanian (this was still his passport, which no doubt augmented his anxieties about his legal status) but born in Germany, with the hope that “my linguistic knowledge or my professional training in statistic [sic] or economics or both, can put me to some use.” He added his expertise in the French and Italian economies, and included, for good measure, that he had worked for the Allies while in Marseilles helping “English and other Allied soldiers trying to escape from France and that the British Embassy in Washington has a record on my activities during this period.” He closed his offer on a note of principle: “I fervently hope that you will consider that my record as an active opponent to the Totalitarian countries may compensate to some degree the lack of American citizenship.” He prepared to take his medical exam in mid-February and asked the Rockefeller Foundation to defer his fellowship, fully expecting to be called for service in April or May.3

  A year passed before Hirschman fulfilled his quest. The delay remains a mystery (in part because a fire consumed a section of the National Personnel Records Center in July 1973). The delay did allow him to finish his book, however. In the meantime, the local draft board reclassified married men, which accounts for some of the delay. Then he was reclassified for “occupational reasons,” which struck the Rockefeller Foundation as odd because no one had “taken the initiative to obtain this change of status.” Because the overture to the adjutant general was going nowhere, he asked Rockefeller to cover a trip east—to the University of Chicago, Harvard, and Princeton—“to discuss his completed manuscript with prominent readers.” Mostly, he was keen to meet Jacob Viner. He also wanted to use the trip to make a personal show of interest at the doorstep of the men he thought could most use his skills.4

  Other than Kittredge, Hirschman had no strings to pull when the American intelligence apparatus was being assembled out of the old boys’ networks of Ivy League faculty and graduate students. Hirschman was an outsider. He appeared at the Office of Strategic Services in Washington and the Board of Economic Warfare. Nothing came of his calling cards. Then he took matters into his own hands and enlisted in the infantry as a private.

  On April 30, 1943, he was finally called to the Army’s San Francisco Reception Center. As he went, he could not put his anxietie
s about his citizenship aside: to the last minute sending corrections to his dossier lodged at the Alien Registration Division of the Justice Department. And yet, he remained obscure about some crucial details. For one, he left his German citizenship in the dark and preferred to introduce himself as a Lithuanian. We can only speculate on his reasons. Some might see him reversing his father’s denial of his Ostjuden roots. Most likely, with Germany being the enemy, he wanted to avoid detention. Either way, none of this appears to have dampened his induction into the army. He took his basic training just outside Berkeley for three months, where marching drills and shooting practice made up for the lack of proper training in the Spanish Republican militias or the French army. Then he was transferred south to Camp Roberts, just north of San Luis Obispo.

  The barracks were what Berkeley had not been: an American immersion. The Condliffe group had been an international hodgepodge. Hirschman had married a Russian who had grown up in Paris. He had studiously avoided the classroom and the residence halls where Americans might have invited him into the melting pot. The barracks rectified this isolation. The other soldiers were mainly from California, “ordinary Americans” as he recalled. He liked them, though he could never get used to the food. If Hirschman was supposed to become a soldier, there was one habit the army trainers could never drill out of him: he kept forgetting to tie his boots properly. For this he would be denied passes to visit Sarah, and so she had to come to Camp Roberts to see him. There are two revealing photos of him taken at Camp Roberts. The first, with his company, reveals the disparity between the American army and the French one of several years earlier. Here the troops are all dressed alike, stand in neat formations, and look prepared to march into battle—a sharp contrast to the crew that was sent to repair rail lines in the Loire Valley. The other is of Albert Hirschman alone, tanned from training in the California sun, with his rucksack, rifle, and helmet, looking every bit the soldier. Sure enough, he confided to Kittredge that “I cannot help making all the time comparisons with the French army as to food, clothing, equipment, and treatment and as in every single respect the comparison is overwhelmingly in favor of the American army, my morale is exceptionally high.”5