Sunday, August 13, 2006

Albert O. Hirschman III

Sorry it's taken so long to get back to the series on Albert O. Hirschman's works, one of the handful of economists who actually thinks about the real world and manages to explain it well without "let's assume we have a can opener." Even the ones on "my side" fall into their theological training on the sacred "market" at too many key moments to ultimately have much of value to say to the vital issues facing us. (Don't get me wrong. Some of my best friends know people who are economists.)

But Hirschman speaks across time and context because he understands time and context instead of bending them to his holy theories. He worked in developmental economics for a long time and saw the harsh effect of reality on comfortable academic theory. He even knows markets for what they are, as proven by another of his books, The Passions and the Interests: Political Arguments for Capitalism before Its Triumph.

Those of us in this historical period have grown up with capitalism and all its justifying dogma. We're like fish who don't realize they're in water. But it has not ever been thus. For most of human history, the idea that human greed and acquisitiveness were good things was abhorrent. Remember the prohibitions against lending money with interest? Shylock and all that? It took a full metal assault on that prior dogma to overcome the cultural restraints on implementing capitalism broadly and successfully. Which is what Hirschman, with his mastery of intellectual history and enjoyable writing matched only by Isaiah Berlin, does in this book.

He wrote the book in part to show why present-day social science was so bad at understanding and predicting the political correlates to economic development in newly developing nations. To do so, he looked at the understandings of the prior transition of the West. Where some see a sharp break between the earlier feudal systems and their rationales, Hirschman sees more continuity and an evolution of ideas that reworked the past into more attractive current containers. The main battle was over turning "passions," the fundamental energy of human nature (think Rousseau's "natives"), into "interests" by countering destructive passions with constructive ones, by structuring relations to allow the beneficial "interests" in bettering one's self economically to improve the overall community's health and wealth. There are obvious problems with reality here, which he notes with his customary thoroughness, but the point is success in tailoring a worldview that allowed society to back off of some of the prior cultural restraints on the "passions" in the name of furthering social as well as individual interests.

The book is amazingly packed with thinkers and their ideas, swimming together and apart, for its short and very readable length, and this quick hit doesn't do it justice. I bring it up now, though, to note that, once again, Hirschman wrote something of lasting relevance even to our current period. We are clearly going to need a similar change of worldview to deal with the civilization-threatening (at the very least, democracy-threatening) world changes that face us. My wearying litany of "weather, water, and energy" as the overriding concerns that should be driving our discourse over the smaller issues that actually could be subsumed within them is not driving the discourse. It will take a drastic rearrangement of our cultural vocabulary and stories to get us to address them and/or to deal with them effectively as their reality sinks in more and more. One might assume that, given our current failures and shortened time span to wake up, the cause is basically lost already, that the means to effect this change in perspective and thought will not appear.

Hirschman, however, shows us that this is not necessarily the case. Readjusting cultural memes to accommodate new ways of adapting to a changing world has happened, as his story of the triumph of capitalistic thought after its early restriction shows. He also shows, though, that it is not automatic and wrong paths can be taken, with success being lucky as much as rational. The first step to both luck and rationality is understanding how the process could work, why the proliferation of needed ideas and interactionsat this similarly historic moment is vital. The Passions and the Interests should be everyone's first step.