Albert O. Hirschman I--Exit, Voice and Loyalty

As a group, I don't have much use for economists that they would find pleasant. At their worst, they are intellectual empire-mongers as self-deluded as the worst President from Texas, taking the truths of a small part of reality and blowing them into self-justifying claims of wisdom. Even at their best, they almost all invariably fall back at key moments needing intellectual breakthroughs onto the constricted dogma learned in their divinity schools, the Chicagos, Stanfords, and their cross-fertilized offspring. It's like relying on your plumber to guide your life because s/he fixed that clog.

Most of the delusion that pervades the profession is the result of its overreliance on modeling the world on its pre-ordained assumptions rather than reality. While this isn't as bad today as say 10-20 years ago, it's still the dominant modus of their operation. They have tools that let them describe and predict the bark on the trees with remarkable precision, and then proceed to use those findings to describe not only everything about the tree but also the forest and the surrounding countryside. You may get the point here. I'm not impressed with them, or those entranced with them in other social sciences, including my own political science.

That's not to say, though, that there are no economists whom I do admire. Robert Heilbroner, Charles Lindblom, Galbraith all come to mind immediately. These are the guys, of course, who couldn't get a job teaching econ if they were starting today. They were big picture guys, reality guys, the same way, ironically, Adam Smith was, trying to understand the totality of economy and society. One such economist worthy of the name but not as well known probably as the others is Albert O. Hirschman. Over the next few posts, I want to highlight his work and its continued applicability, particularly to problems that befuddle the Dems and other Americans who wonder how to stop the lunatic spiral downward that we're so giddly riding. And foremost among his work, in my opinion, is his Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States.

The problem he addresses in this very short but quality-enriched essay is well presented in its complexity but at its basic (the details are worth the time) is this: In a market, if you get bad service, treatment, product, recognition, whatever, you are to drop interaction with that person and go to a competitor who offers better. The original provider will see that the bad et al. is costing him/her and will adjust the value of what is offered to attract you back. But why should you come back? What if everyone does the same to this guy? Goes out of business, you say, loses job? That's just the tough love of the market. Okay. But you've lost someone who might really be productive aside from the momentary lapse that lost you. That’s good? Maybe if you just stuck with him a little longer, let him know the problem and give him the time, which he takes, to fix it . . . . Improved service, etc., retained value. In other words, rather than using “exit,” as the market gurus advocate, a little “loyalty” coupled with the exercise of “voice” would lead to a better outcome. The best of all worlds is a good mix of “exiters” who can get attention and “voicing” “loyalists” who will hang around to ensure continuity after the changes are made.

But what if all the folks you’re buying from, say, are bad, and they get enough business from each others’ “exiters” to keep going? Or, what if the competitors aren’t there and you have no way of “exiting” except doing without? Why should they care about your “loyalty” or your “voice” if you have nowhere else to go? Dems? Starting to sound familiar? Turns out that “voice” effectiveness depends on a willingness of its recipients to listen as well as the possible and credible reality of “exit,” even if it means doing without, rather than “loyalty.” One of the determinants of the effectiveness, Hirschman says, is “the general readiness of a population to complain and on the invention of such institutions and mechanisms as can communicate complaints cheaply and effectively” (emphasis in original). Can you say “blogs”? However, these new mechanisms must offer greater hope for change than simply exiting, or the exiters will hollow out the organization, community, etc., leaving a shell of the former enterprise. Uh, . . . hello, Dems? So, again, the best of all worlds is finding the appropriate mix of “exiters” and “loyalists.” Hirschman doesn’t give us the magic answer to the finding, but he captures so well the intricacies of the phenomenon that you feel smarter after reading him and are able to understand so much of our current politics and economics so much better that you’re richer just for that.

You get this all the time in all the “America—Love it or leave it” or “If you don’t vote, you have no right to complain” bumper-stickers that truncate the complexities for easing the pressure on actual thought. For now, let’s just reiterate the obvious application of Hirschman to the current dilemma facing the Dems. For decades, as their enterprise has come to rely more and more on dollar contributions in the face of the Supreme Court’s frankly evil equation of “voice” and MONEY, the Dems have traded principle for cash in order to maintain their competitive viability. Without the Internet, it was just much easier to go after the few big donors than the many little ones. In pursuing the dollars, they increasingly offered a product that found fewer and fewer customers. Individual Dems were left with the option of “loyalty” through unheard “voice” or of “exit.” Look at the polls on party identification and see what happened.

But, with blogs as the new “invention” allowing “complaints cheaply and effectively,” the party is finding itself faced with new “voices.” The old, weakened and lessened equilibrium has had a large jolt. Dissatisfied Dems have a means of making clear the “exit” rather than “loyalty” option. Watch what happens if the existing leadership supports Lieberman or fails to support Lamont if Lieberman loses the primary. Look at all the folks already threatening to sit this out, not buying the argument that “loyalty” should be retained even if “voice” is being crapped on. The whole “not voting is a vote for ______” retort is better seen as a symptom of what Hirschman describes, even if it is mentally handicapped, as Hirschman also shows. The key is finding the optimum between the threat of “exit” and the need for “loyalty” to heard “voices,” not opting for one or the other. Dominance of either, including loyalty above all, hurts the organization, in this case a political party and, because of our circumstances as a nation, the entire country.

I’ve written frequently how frustrating it is to us oldtimers to have the young people dominating our blog discourse (the regal Digby and Billmon, the always insightful Mannion and Blankenhorn nonwithstanding) either reinventing long-invented wheels or having to gain through wasteful experience the knowledge that the Hirschmans have already given us years ago. Anyone wanting to save this country and to make the Dems the kind of party that has a chance of doing it will save everyone a lot of time if they read Hirschman and figure out what to say and how to respond to opponents’ rebuttals. Actually, it turns out that Hirschman has a lot to say about those rebuttals, too.

That’s for the next post.