Albert Hirschman

Henry at CrookedTimber asks:

What do libertarians think about Hirschman’s arguments? Do they read him? Do they have a sophisticated response?

My take: Albert Hirschman deserves a Nobel Prize in economics.  His early work on the unbalanced nature of economic development was pathbreaking.  The Rhetoric of Reaction is a brilliant study in intellectual self-deception.  As a historian of thought he integrates wonderfully, such as in his study of how commerce shapes mores

But he would win the Prize for focusing the attention of economists and political scientists on the phenomenon of voice: the ability of consumer or voter complaints to induce improvements in supply.  Hirschman was the first modern social scientist to think about this mechanism systematically.

Hirschman first suggested voice gets stronger and more effective when exit is limited.  In his (earlier) vision, if you can leave you won’t complain.  Fidel Castro understood this and let many Cubans go, although of course they complained from Florida.  It is sometimes suggested that in a world of school vouchers fewer parents would show up at the school board meeting.  Don’t yap, just yank your kid.

In reality voice often works best when competitive pressures are strong.  HBO is more responsive than was East Germany.  You are not wasting your time to complain at Wegman’s, or for that matter at this blog.  Competition and voice are more likely complements than substitutes.  Hirschman admitted and indeed emphasized this point in his later writings.

As far as I know, no one has solved for the proper conditions for when voice is effective.  Here is one recent model.  The general problem is that the motives for voice are poorly understood.

Here is Paul Krugman on Hirschman.  Here is a paper on Hirschman and evolution.  Here is a book on Hirschman.

Addendum: Here is Alex on the topic of voice.  Sadly he and I will not be having a little spat over this one…