Albert O. Hirschman by Alacevich Michele

Author:Alacevich, Michele
Language: eng
Format: epub
Tags: BIO021000, Biography & Autobiography/Social Scientists & Psychologists, HIS037070, History/Modern/20th Century
Publisher: Columbia University Press
Published: 2021-04-06T00:00:00+00:00

Chapter Six

THE HISTORY AND THEORY OF MARKET SOCIETIES

In A Contribution to the Critique of Political Economy, Karl Marx wrote, “Mankind always takes up only such problems as it can solve,” because, upon reflection, “the problem itself arises only when the material conditions necessary for its solution already exist or are at least in the process of formation.”1 This famous quote, Hirschman noted in the late 1970s, perfectly encapsulates the birth of development economics in the early postwar years.2 Decolonization and the Cold War had made the conditions of Third World countries a central issue in both American and Soviet foreign relations with other nations, and, especially in the West, the powerful economic expansion of the United States and the improvement in the material well-being of its citizens seemed to show that escape from poverty and backwardness was a universally achievable goal. The postwar period, in other words, presented for the first time both a compelling reason for rich countries to intervene in foreign economies and a template on which to model action. As another pioneer of development put it in a very influential book, the most important item on the Western agenda was to “demonstrate that the underdeveloped nations—now the main focus of Communist hopes—can move successfully … into a well-established take-off within the orbit of the democratic world.”3

During the 1970s, however, that early confidence was utterly shattered. Not only had the new field of development economics not delivered what it had promised, but the economic record was checkered at best, with some successes and many failures. More worrisome was that, irrespective of whether economic growth had occurred, many less developed countries were experiencing a series of military coups. Latin America, which Hirschman knew well, was undergoing a deep crisis. To mention only a few cases, Brazil and Bolivia in 1964, Argentina in 1966, Peru in 1968, Ecuador in 1972, Chile and Uruguay in 1973, and Argentina again in 1976 all witnessed democratic governments overthrown by military juntas.

Development economists were forced to face the crisis of their earlier convictions, according to which economic growth would have brought with it, almost as a by-product, improvements in the social and political life of developing countries. More generally, this wave of dictatorial regimes impugned the very nature of the political dimension of capitalism. A long tradition of Western thought had celebrated the civilizing virtues of trade and economic development. Even Marx, who had waged the strongest critique of the alienating effects of factory work and the exploitation of the working class, had conceded the progressive nature of the bourgeois era as opposed to the archaic feudal system.

Hirschman, deeply affected by the crisis that was unfolding before his eyes, began to pose searching questions about the relationship between economic growth and political developments. This led him to explore the debates of Western European political philosophers in the modern era, distant in time and yet so close in their relevance to contemporary issues.

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