Albert Hirschman

I’ve enjoyed a new book about this subtle, inter-disciplinary and creative economist, Albert O Hirschman: An Intellectual Biography by Michele A Alacevich. As the subtitle indicates, this is not an attempt to compete with Jeremy Adelman’s wonderful recent biography, Worldy Philosopher. (In that you get the full, astonishing, early life story of the man.) Rather, it is intended as a complement, focusing on Hirschman’s contribution to economics – mainly development economics – in the context of contemporary debates.

Like many economists trained in the mainstream and never having done development economics, I’ve caught up to Hirschman relatively late. I suspect this is a good thing, as I might have found myself less in sympathy with his views when I was a youngster who had internalised the standard econ of the 1970s and 80s. Now that I’m … not a youngster, his perspective is intuiitively appealing: the emphasis on the importance of political economy, the role of specifics of context (time, place, political happenstance), the dangers of technocratic approaches to policy backfiring.

From this book, I took away Hirschman’s early emphasis on the role of decision-making abilities – and their absence – in development. Not the role of specific factors (the typical list of ingredients for growth), but “the deficiency in the combining process itself.” Moreover, the ‘ability to make decisions cannot be economized’. Thinking about knowledge capital in the context of the UK’s leveling up debate (as part of my research for The Productivity Institute) this seems so relevant to the national/sub-national governance issues.

Another aspect that seems important and also intuitive is the need for significant social capital to operate the more social technologies – network industries such as electricity and rail. Again, this seems relevant to developed economies, thinking about the inability of Texas to maintain power supplies or the mess the UK has made of its rail network.

A third section I *really* liked (yes, this is weird) was about the 1970s debate on the use of cost benefit analysis, and Hirschman’s objection to the idea that this could be a technical, almost mechanical exercise. I’m mid-way through drafting a paper about appraisal of big projects so found this super-interesting.

All in all, I highly recommend this book, along with the Adelman volume (which is the one to start with if you haven’t read it – surprisingly expensive new but there are 2nd hand ones around). I not only learned more about Hirschman’s work and how his ideas evolved but also got some new insights into the history of thought in development economics.