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For more than thirty years, Albert 0. Hirschman
has been known for his innovative, lucid, and
brilliantly argued contributions to economics,
the history of ideas, and social-science theory.
This new book begins with four major retro-
spective papers: on his controversial yet
influential ideas about economic development,
on the history of the concept of “interest,” and
on ways of thinking that Hirschman himself
introduced into social science and economics—
the now widely used concepts of “linkages” and
of “exit and voice.”
In addition, this book is distinguished by two
papers exploring new territory. The title essay
offers a wide-ranging discussion of four very
different—and highly contradictory—-inter-
pretations of the essential characteristics of
capitalism. A related plea for “embracing
complexity” is made in “Against Parsimony,”
where it is argued that economics can be
enriched by taking account of various kinds of
behavior that are usually disregarded in the
“dismal science.”
In a third group of essays, Hirschman aims at
raising questions rather than at providing over-
views: these shorter papers range from a
skeptical look at alarmist views on the crisis of
the welfare state to a suggestive interpretation
of the new democratic currents in Latin
America.
Throughout, the contributions to this
memorable and characteristically cogent
volume reaffirm the powerful originality and
enduring value of Hirschman’s work.
Also by Albert O. Hirschman
NATIONAL POWER AND
THE STRUCTURE OF FOREIGN TRADE (1945)
THE STRATEGY OF ECONOMIC DEVELOPMENT (1958)
JOURNEYS TOWARD PROGRESS:
Studies of Economic Policy-Making
in Latin America (1963)
DEVELOPMENT PROJECTS OBSERVED (1967)
EXIT VOICE AND LOYALTY:
Responses to Decline in Firms,
Organizations, and States (1970)
A BIAS FOR HOPE:
Essays on Development and Latin America (1971)
THE PASSIONS AND THE INTERESTS:
Political Arguments for Capitalism
Before Its Triumph (1977)
ESSAYS IN TRESPASSING:
Economics to Politics and Beyond (1981)
SHIFTING INVOLVEMENTS:
Private Interest and Public Action (1982)
GETTING AHEAD COLLECTIVELY:
Grassroots Experiences in Latin America (1984)
RIVAL VIEWS
of
MARKET SOCIETY
and Other Recent Essays
ALBERT 0. HIRSCHMAN
ELISABETH SIFTON BOOKS
VIKING
ELISABETH SIFTON BOOKS ' VIKING
Viking Penguin Inc., 40 West 23rd Street,
New York, New York looio, U.S.A.
Penguin Books Ltd, Harmondsworth,
Middlesex, England
Penguin Books Australia Ltd, Ringwood,
Victoria, Australia
Penguin Books Canada Limited, 2801 John Street,
Markham, Ontario, Canada L3R 1B4
Penguin Books (N.Z.) Ltd, 182-190 Wairau Road,
Auckland 10, New Zealand
Copyright © Albert O. Hirschman, 1986
All rights reserved
First published in 1986 by Viking Penguin Inc.
Published simultaneously in Canada
Pages 187-188 constitute an extension of this copyright page.
LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA
Hirschman, Albert O.
Rival views of market society and other recent essays.
“Elisabeth Stfton books.”
Includes bibliographical references and index.
1. Economic development. I. Title.
HD75.H57 1986 338.9 85-41076
ISBN 0-670-81319-2
Printed in the United States of America
Set in Primer
Without limiting the rights under
copyright reserved above, no part of this publication
may be reproduced, stored in or introduced into a
retrieval system, or transmitted, in any form or by
any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written
permission of both the copyright owner and the
above publisher of this book.
Preface
Older folks tend to repeat themselves, but for the aging “academic
scribbler” this natural bent is artificially and powerfully rein-
forced nowadays by insistent demands that he embalm his past
thoughts in definitive restatements, that he conveniently sum
up, before disappearing, whatever contributions to knowledge he
is supposed to have made.
Contemporary pressures of this sort are responsible for the
four essays of Part 1 of the present volume. They originate in
requests that I write retrospective or even confessional papers
about one or another of the issues with which 1 once wrestled.
Thus the World Bank asked me in 1982 to go over the ideas in
economic development 1 had formulated in the 1950s. Subse-
quently the enterprising compilers of a new dictionary of eco-
nomic doctrine and theory invited me to return to concepts 1 had
cultivated at various times, such as interest, linkages in economic
development, and exit vs. voice.
In these papers I do summarize my earlier work, but most of
the space is devoted to carrying the argument forward and to
dealing with a number of new problems that have arisen. The
pressures toward self-embalming are, I hope, contained thereby.
The essays in Part II, on rival views of market society and on
vi Preface
needed complications in the conceptual structure of economics,
could not have been written without my two recent books, The
Passions and the Interests (1977) and Shifting Involvements
(1982), respectively. But they are in no way summings-up and,
rather, qualify as unexpected and open-ended progeny.
Finally, in Part III, I have gathered some short pieces, most
of which are quite speculative and tentative and thus call for
elaboration in future years.
All in all, I hope to have vindicated my favorite working title
for this collection: “Last Essays, Volume One.”
A.O.H.
Princeton, New Jersey
January ig86
Contents
Preface v
P A R T I
1 A Dissenter’s Confession: THE STRATEGY OF ECONOMIC
3
DEVELOPMENT REVISITED
2 The Concept of Interest: 35
FROM EUPHEMISM TO TAUTOLOGY
3 Linkages in Economic Development 56
4 Exit and Voice: 77
AN EXPANDING SPHERE OF INFLUENCE
PART II
5 Rival Views of Market Society 105
6 Against Parsimony: THREE EASY WAYS OF COMPLICATING
142
SOME CATEGORIES OF ECONOMIC DISCOURSE
PART III
7 The Welfare State in Trouble:
STRUCTURAL CRISIS OR
163
GROWING PAINS?
8 In Defense of Possibilism 171
9 Notes on Consolidating Democracy in Latin America 176
lo A Prototypical Economic Adviser: JEAN GUSTAVE
COURCELLE-SENEUIL 183
Acknowledgments 187
Index 189
vii
PART I
1. A Dissenter's Confession:
THE STRATEGY OF
ECONOMIC DEVELOPMENT
REVISITED
Ah, what happened to you, you my written and painted
thoughts! Not long ago you were so colorful, young and mali-
cious, so full of thorns and secret spices that you made me
sneeze and laugh—and now? Already you have doffed your
novelty, and some of you, I fear, are about to become truths:
so immortal do they already look, so distressingly honorable,
so boring!
—NIETZSCHE
When I received the invitation to participate in this symposium
as one of the “pioneers” of development economics alongside Raul
Prebisch, Gunnar Myrdal, Arthur Lewis, and other such lumi-
naries, my first reaction was one of surprise. Not that I doubted
my status as a luminary; but, in my own mind, 1 still saw myself
as a rebel against authority, as a second-generation dissenter from
the propositions that, while being themselves novel and hetero-
dox, were rapidly shaping up in the 1950s as a new orthodoxy
on the problems of development. Had my once daring and in-
surgent ideas then become classic, respectable, that is, “distress-
ingly honorable” and “boring” in the manner of Nietzsche’s plaint?
Perhaps. In any event, I must somewhat revise the picture 1 had
This essay was originally presented at a symposium that brought together
retrospective essays by ten economists who, in the judgment of the World Bank,
had made “pioneering” contributions to development economics in the 1940s
and 1950s. See also Acknowledgments, page 187.
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