Then there was the voice from the other side. A retrospective history of the World Bank recorded Development Projects Observed as the most extensive evaluation of the bank’s techniques of project appraisal. The authors—one of whom was Bob Asher, and not therefore unsympathetic to the project he had helped sire—concluded that the book “does not lend itself to use as a manual for the instruction of the would-be project appraisers, but the insights it provides could be neglected by such appraisers only at considerable cost.” Written in 1973, just as a firestorm over World Bank activities was gathering strength, Asher didn’t connect the book to the growing chorus of complaints about the bank’s practices in part because, by then, Development Projects Observed was all but forgotten beyond a few staffers.32 It was ironic that 1973 saw the smallish Programming and Budgeting Department finally upgraded into the fully fledged Operation Evaluation Division to monitor projects independently from those who managed them. The men behind this quiet but significant shift cited Development Projects Observed as the inciter; by then, many on the outside saw this as too little, too late.33
Needless to say, Hirschman was disappointed. He thought that he’d captured some of the mysteries of development, had sung their epic, and had made the case for the World Bank at a time in which doubts and disaffection were spreading fast. Some years later, a young political scientist, Theodore Moran, shared his outrage that the World Bank president, Robert McNamara, declared his intention to focus on income redistribution programs while pumping more money into authoritarian Brazil than into socialist and democratic Chile, whose loan requests were slammed shut. A jaded Hirschman replied that “I am somewhat less excited than you about the inner contradictions of the current World Bank position because I have been through it all before. It’s really a replay (in comedy form, to prove Marx right) of all the naïveté and muddle of the Alliance for Progress.” Having made constructive criticisms before, he was not convinced that speaking out to McNamara was going to have any effect. Any declaration in favor of reformism is less than pointless, “especially,” added Hirschman, by now becoming more embittered, “when it is well known that he [McNamara] is tied up in all sorts of ways with the pro-status-quo forces in the to-be-reformed country and has a deadly terror of revolution.”34
This was not the first time he had authored a work that missed its mark. Nor would it be the last; Hirschman’s oeuvre would accumulate big hits and minor disappointments.
But there was not much time to worry. In a sense, by the time the book appeared in 1967, Hirschman was moving on, literally. The academic year 1964–65 had been the time “off” to do the field work. The following year, Sarah and Albert rented a place in Cambridge but were still based in New York, and Albert did most of his writing from Central Park West. They finally moved to Cambridge in fall of 1966 and bought a house, 45 Holden St., in the thick of a community of colleagues, “very close to the University,” he told Ursula, “which is very nice—but very expensive.” Moving away from New York also meant leaving behind the girls. Missing them terribly, Albert and Sarah accepted any pretext to take the train to New York. Meanwhile, in late 1966, Katia was engaged to marry a student of architecture from France, Alain Salomon. Sarah and Albert were concerned. While “he seems very nice, intelligent, and has talent for what he does,” he had not yet finished his studies. Alain himself was no less worried. During Sarah and Albert’s peregrinations, he frequently stayed at the Central Park West and was daunted by the art, the books, and the aura of the home of a “great man.” One day he traveled up to Cambridge to meet his future parents-in-law; by the time he emerged from the subway station at Harvard Square to walk to the Hirschman’s temporary abode in Quincy House, he was in a fit of anxiety, and by the time he rang to doorbell he could barely speak. To break the silence, Albert proposed a game of chess—after all you are a European, thought Hirschman. Albert’s friendly gesture only worsened things for Alain, who played miserably and in misery. It did not take too much time for Albert to find a hook, a recent book by Christopher Alexander, Notes on the Synthesis of Form, which had recently laid out an agenda for revolutionizing architecture. Alain’s eyes widened; an economist au courant with the ur-text for the rebellious, young designers! What he did not yet know was that Hirschman had antennae for clarion calls for the inventive imagination. Alain’s intimidation soon passed—and a genuine fondness took its place.35
With Development Projects Observed off to the printers, Latin America summoned Hirschman back. Part of the motivation was to live up to his Harvard profile as a Latin American specialist: “Je suis accusé être specialiste.” But he was also concerned to stay in touch with colleagues and to follow up on the fate of reform. If the World Bank was not a hospitable place for out-of-the-box thinking, Latin America was becoming more so, and Hirschman was anxious to be there at the creation. “I have decided that it is time for me to return to this Latin America,” he explained to Ursula. With his classes done, he hit the road once more—a month in Brazil, a week in Chile, a few days in Lima—principally to visit Lisa, who was on a Fulbright scholarship in the Peruvian capital—and then back to his old haunt, Colombia, for three more weeks, where Sarah was going to catch up with him. These were months dedicated to catching up after five years focused elsewhere. A great deal had happened—not least was the 1964 coup in Brazil, which had so disheartened him. Midway through the trip, he was already imagining a book of essays on the political economy of the region. “I am always very happy to be plunged again into these countries—where one lives more intensely, but perhaps it’s not the ideal to pursue? But the truth is, it is difficult to resist.”36
Chile drew his attention in particular. It was an increasingly solitary holdout for development through democratic reform. Whereas Brazilian and Argentine civilian governments had fallen under the heels of the military, Chileans embarked on audacious reform under the Christian Democratic president, Eduardo Frei, whom Hirschman had met during the research for Journeys. In addition, the Economic Commission for Latin America (CEPAL) was based in Santiago, as was the Latin American Faculty of Social Science (FLACSO), a UN-chartered graduate school. This turned Santiago into a Mecca for progressive social scientists from the region, such as Osvaldo Sunkel, Aníbal Pinto, and Fernando Henrique Cardoso—a future close colleague and eventual Brazilian president. Cardoso, recently exiled from Brazil, was laboring on an essay about employment patterns in Latin America, Europe, and the United States. At the time, there was growing concern about the deep, ingrained—and apparently insurmountable—obstacles to development in Latin America. A growing hypothesis was that Latin America was stuck in an economic cul-de-sac, unable to break out of trap of dependency on primary exports and weak industry. One manifestation of the trouble was the growing “marginalization” of the urban poor, who were pushed to the outskirts of the labor market and chances for upward mobility. None of this convinced Cardoso, who sought to disrupt the emerging consensus by pointing to more historical openings and multiple pathways. He passed a draft of his essay to Hirschman—who read it upon his return to the United States and wrote a quick note to the young Brazilian sociologist. “We have similar minds,” he observed to a delighted Cardoso.37
Sunkel, Pinto, Cardoso, and others each in their own way caught Hirschman’s eye because they were poised to challenge the view of ineluctable dependency of Latin American economies and unavoidable marginalization of the poor, what he coined as a “structuralist fallacy.” Faced with an ailment, some people convince themselves that there is nothing fundamentally wrong and treat themselves with aspirin to deal with pain. Then there was the opposite—people who prescribe radical cures when only mild treatments will do; this was the mood in Latin America, where many social scientists were concluding that the older growth model of industrialization for the domestic market was exhausted, its populist political pillars of Perón and Vargas likewise spent. The preference for this kind of fundamental diagnosis was especially current in Latin America, where “crisis” was
treated as endemic; hence the fallacy that all problems had some deep-rooted cause. It was so pervasive that even Hirschman found himself read as a “structuralist”champion. On a trip to Argentina, at the time under the thumb of a junta, a high-ranking official gleefully told Hirschman that “all we are doing is applying your ideas of unbalanced growth. In Argentina we cannot achieve all our political, social, and economic objectives at once; therefore we have decided to proceed by stages, as though in an unbalanced growth sequence.” Hirschman blanched. Here was imbalance and disequilibrium in the service of breaking up what the generals considered entrenched hindrances to Argentine progress.38
If this came from the Right, it was the Latin American Left that was especially partial to the “unthinking structuralist reflex.” Potential “non-fundamental” forces were dismissed as trivial or boring, even if addressing them increased and broadened the paths forward. A sign of this was the way that progressive intellectuals had swung from believing that industrialization was the miracle solution to underdevelopment, to the malefactor. The dream of car plants and steel mills teeming with modern workers went from being a source of enchantment to disenchantment. The setbacks and problems of the 1960s changed the tune; now the factory became the symbol of all that was off course, hopeless. Social scientists were beginning to conclude that industrialists were as feudal and patrimonial as the old landed classes they were once meant to dislodge; they were just one more member of the ageless, venal oligarchy.
This style of thinking struck Hirschman as doommongering. The only way out of the impasse, for the Right, was a forced capitalist demarche, such as Brazil under its generals. For the left, the same structuralist bent pointed to revolution as the only remedy. There was something déjà vu about this. As Hirschman wandered through the region, he scratched out some notes that would lead to an essay reviving the case for industrialization by giving it a different spin, an epic of its own—one that might salvage the cause for a road somewhere between the extremes. The essay, “The Political Economy of Import-Substituting Industrialization in Latin America,” would become a classic in Latin American economic history. Far from being “wrong,” the industrial adventure carried certain properties that obtain in countries launching “late-late” industry—in contrast to the portrait of the “late” cases of Japan, Russia, and Germany depicted by Shura Gerschenkron. Far too much was expected from the start; it was practically foregone that industry was condemned to disappoint. Late-latecomers built up light-consumer-goods manufacturing, in contrast to the muscular producer goods of the latecomers. Industrialization was therefore smoother, less disruptive—and yielded less instruction or a “convulsive élan” that dominated the Japanese and German eagerness to catch up to the leaders. But to give up now and throw in the towel, argued Hirschman, was naïve and self-defeating. One option, Hirschman suggested prophetically, was to start exporting manufactures, an insight he had probed long before the Asian miracle became a “model.”39
The nub of Hirschman’s analysis was to show that not all histories had to conform to a single normative account that identified industry with an industrial revolution in order to work out. In fact, the sooner Latin Americans could free themselves from finger-wagging histories of their failure as compared to first-world “success” stories, the better. They could free themselves of expecting industry to change the social order when instead all it did was pump out manufactures. The first ideas were unveiled to an audience of social scientists in Santiago to become a touchstone of an alternative economic history of the region, a history less driven by an obsession with what went wrong. The younger generation of social scientists like Cardoso took note; he would partner with another sociologist, Enzo Faletto, to author one of the classics of social sciences in the region called Dependency and Development in Latin America, which bore a perceptible Hirschmanian imprint of trying to reveal the multiple trajectories of the history of capitalism.40
Thinking about a different narrative of the history of development—how to sing the epic of what was accomplished—sharpened the focus on the idea that what was going on in peoples’ minds was important in shaping possibilities. At the time, social scientists tended to dwell on the external limits to what people could do—their place in social structures and the institutions that governed them. No work exemplified this more than Barrington Moore’s Social Origins of Dictatorship and Democracy, published in 1966. Moore and Hirschman were colleagues and had a cordial relationship, but Moore’s book left Hirschman shaking his head. The quest for deep, antecedent determinants of large, encompassing outcomes, like dictatorship or democracy or capitalism, stripped history of politics and the possibilities for thinking about alternative, surprising tracks. When Dan Rustow was putting together a special issue of Daedalus, the journal of the American Academy of Arts and Sciences, he asked Albert to say something new about leadership. Hirschman agreed and used the occasion to cycle back to his concern that leaders in Latin America fettered themselves with their own perceptions. Prompted by a well-known anthology of essays edited by the Chilean sociologist Claudio Véliz called The Obstacles to Change in Latin America, Hirschman gently chided his Latin American colleagues for leaving themselves—as intellectuals—out of the inventory of fetters. They were as much obstacles as any deep structure. One evening he went to a dinner party in Santiago. Wishing to catch up with Véliz, who’d recently returned to Chile, Hirschman asked his hosts for Véliz’s phone number. The host didn’t have it and dismissed the telephone book as a list of numbers for people who had died or left the country. Everyone laughed and enjoyed the meal. The next morning, in his hotel, Hirschman spied the phone directory in his room. Curious, he looked up Véliz, dialed the number, and quickly found the voice of his friend at the other end of the line. The tale was an example of the ways in which Latin American intellectuals had a habit of overperceiving the ways in which things remained the same and tended to wave off changes as unoriginal or copied from someone else (preferring to fetishize the “original” version of the breakthrough). Indeed, in some cases intellectuals could not even see that innovations occurred in their own backyards because they presumed that these sorts of things only happened in “advanced” countries.
By shifting the debate about dependency from the familiar problems—with feudal elites, capital flight, and reliance on exports—to the mind, he was breaking new ground. In the 1960s, with the gathering consensus on the Left that change could only be effected through a violent, cathartic explosion, Hirschman was trying to sound a different key—already a shift from his celebration of the “reformmongers” to highlight a “revolution by stealth.” More gradual, unspectacular, and not easy to see if one looks obsessively for the original, change was threatened with being throttled by intellectuals looking for—and increasingly advocating—the “loud” style. The perception of hindrances could thereby become its most pernicious obstacle: “The obstacles to the perception of change thus turn into an important obstacle to change itself,” he observed.41
Latin Americans were not the only prisoners of paradigms and perceptions. There was little that was furtive about the thinking that governed social scientists and policy makers north of the border. One who was increasingly alarmed was Sandy Stevenson, now the deputy director of the Economics Department at the World Bank. He was increasingly concerned about the development decade’s increasing noise about foreign “aid” as panacea or poison. Sandy wanted fresh thinking. Evidently unfazed by the disappointments of Development Projects Observed, he appealed to Albert. Albert in turn went to a young colleague at Harvard, Richard Bird, whom he had known when Richard was a graduate student at Columbia and who had recently returned from field work in Colombia. They were both interested in how economic transfers affected growth. Sandy offered the opportunity to address the ways in which Americans thought about their charity to the Third World.42 Aid was so fraught with generosity and resentment on all sides that it could not help but cause friction. Hirschman and Bird made a strong case for
project lending over program support; program funding was bound to create friction between donor and recipient because it all too often implied that donors’ “own judgment is superior to that of the recipient” and overrides local knowledge in areas where projects are more likely to have beneficial impacts. Pay attention to the grammar of aid relationships—and the inequities built into them—between givers and takers. When Albert and Richard were done with an initial draft, it went to Sandy in late autumn 1967. The World Bankers, some of them still twitching from the last Hirschman installment, were not exactly pleased by the suggestion that they might be no less blinded by their way of thinking than their Latin American counterparts. In fact, they were incensed. Sandy wrote to Albert just before New Year’s, including several long memoranda from his staff. “As you will see,” he warned, “they are somewhat explosive.… But I think they are interesting and I hope you will find them useful.”43
Hirschman found them neither useful nor interesting—except as an index of social scientists’ resistance to thinking of themselves as part of the problem. If he was dismayed, he never let on. By the time World Bankers were typing up their reactions, Hirschman was moving on to other frontiers.
CHAPTER 14
The God Who Helped
If it had been possible to build the Tower of Babel without climbing up it, it would have been permitted.
Worldly Philosopher: The Odyssey of Albert O. Hirschman Page 48