Saturday, August 21, 2021

Albert Hirschman on uncertainty

Albert Hirschman was a particularly important non-conformist in 20th-century social science. (Here is an earlier discussion of Jeremy Adelman's biography of Hirschman (link).) Two of the things I admire most about him are his unwillingness to be bound by disciplinary divisions and his deep understanding of the uncertainty of virtually all social-science predictions. The social world is too complex, there are too many competing causal and agential factors influencing outcomes, to permit us to have confidence in the precise outcomes of social interventions in the future. The pristine mathematical theories of economics and the rational-choice models of political science alike provide a semblance of predictive precision; but upon examination, we discover that we can have little confidence in those predictions. The social world is orderly but contingent, and local differences in circumstances matter. (Here is an earlier post on social contingency (link), and another on path-dependence (link).)

Michele Alacevich's brilliant intellectual biography of Hirschman (Albert O. Hirschman: An Intellectual Biography) provides new focus on these important insights from Hirschman's intellectual itinerary. Alacevich is an expert on the history of World Bank policies and practices, and this leaves him well situated to assess Hirschman's evolving views of the nature of economic development policy and large strategies of social and political reform. Simon Torracinta provides an outstanding and extensive review of the biography in Boston Review (link). As both Alacevich and Torracinta point out, Hirschman's insights are in danger of being lost in the forest of ideas we have about the power and limitations of the social sciences, so it is worthwhile highlighting several of those ideas. Both Alacevich's book and Torracinta's review essay reward a close reading, but here I will pull out several central ideas that they highlight.

Alacevich places particular importance on Hirschman's own experience in the field in projects aimed at stimulating economic development in Latin America (Columbia in particular). Hirschman witnessed the mismatch that so often developed between the goals and predictions associated with the grand strategies of development, and the actual experience as a particular project played out. Hirschman developed a deep skepticism about comprehensive blueprints of change, to be applied uniformly to the circumstances of various regions or countries. Rather, Torracinta emphasizes the aspects of pragmatism and piecemeal adjustment that underlay Hirschman's view of how social progress could occur. "Try this, adjust, then try that." Here is how Torracinta paraphrases Hirschman's approach:

“A priori deductions,” Hirschman wrote in an assessment of Italian reconstruction in 1947, “while instructive, can only yield extremely rough guesses and are not able to replace as yet the method of trial and error.” He added, in a sentence that could just as well have been written by heterodox analysts of post-pandemic recovery, that looking for the “correct” aggregate volume of investments in reconstruction was a “futile search.” Instead, “one should concentrate upon locating those investments which permit the breaking of important bottlenecks and will thereby lead to increases of output and improvements of performances out of proportion to the investment itself.”

This is "pragmatic", in the sense that it involves a process of informed trial-and-error, followed by assessment of the consequences; and it is piecemeal, in that it advises the reformer to engage in an extended step-by-step process involving adjustment and course-correction along the way. This involves an extensive reliance on decentralized decision-making, with -- once again -- the emergence of deep uncertainties about the consequences of various choices. Social change always involves uncertainty.

Here is how Torracinta sums up Hirschman's intellectual legacy:

What are we to make of this complex legacy? There remain a few Hirschmanian figures still scattered across the academy (the probing economist Dani Rodrik comes to mind). But in retrospect, ambitious balanced and unbalanced growth programs had more in common with each other than with the ideas that succeeded them: consider the socially devastating “reforms” imposed on developing countries by the IMF’s structural adjustment programs in the 1980s. Ironically, given the abeyance into which they fell in that period, many foundational insights of high development theory have now been reincorporated since then—in appropriate mathematical form—into the models of development economics in recent decades. The great inflation debate of 2021 makes it clear, however, that no matter how sophisticated or powerful they may be, models remain a highly contested feature of contemporary economics. Given the theoretical rigidity, mathematical formalism, and fierce professional hierarchy of the mainstream discipline today, Hirschman’s early skepticism of these trends looks more prescient than tragic.

So Torracinta believes that much of the valuable insight offered by Hirschman about the policy process and the possibilities of guided reform has been lost -- once again, deferring to the false confidence offered by formal economic models and rational-choice formalizations of political processes.

Alacevich offers a penetrating account of Hirschman's legacy that emphasizes the degree of contingency, creativity, and uncertainty that exists in the social world:

Hirschman’s emphasis on the concept of possibilism is arguably the most explicit statement of what he thought was his contribution to the deliberative process as reformist activism, and to the study of it as social science. Most social scientists, Hirschman noted, focus on explaining the regularities of social dynamics, and this is obviously an important task. But Hirschman emphasized the opposite type of endeavour: “to underline the multiplicity and creative disorder of the human adventure, to bring out the uniqueness of a certain occurrence, and to perceive an entirely new way of turning a historical corner.” This was particularly promising in seeking to explain the process of social change, for, he added, unless “novelty, creativity, and uniqueness” take place, large-scale social change cannot occur. In the first place, if all elements of social dynamics were already known, reactionary forces could easily foresee and preempt them. Second, he wrote, “radical reformers are unlikely to generate the extraordinary social energy they need to achieve change unless they are exhilaratingly conscious of writing an entirely new page of human history.” (250-251)

Hirschman’s attention to the possible over the probable, to the conjunctural over the structural, is the basis of yet another of his deep-rooted predilections and a fundamental element of his cognitive style—that is, the importance of history. In diametric opposition to the standards of social analysis that took shape after World War II, Hirschman considered the study of history an enormously rich and ineluctable source for understanding social change. (252)

There are several especially powerful ideas embedded here: "attention to the possible over the probable, to the conjunctural over the structural" and "unless 'novelty, creativity, and uniqueness' take place, large-scale social change cannot occur." Both ideas emphasize key aspects of the social world and of social change: heterogeneity, contingency, and the importance of agency. To this we might add the importance of a pragmatic approach to social change that recognizes the limitations of abstract utopian theories of the future. (Ironically, in another recent issue of Boston Review Martin O'Neill reviews Ed Miliband's GO BIG: How To Fix Our World, under the title "Against Incrementalism: Center-left parties should learn that small-bore solutions are a waste of time" (link). It is interesting to consider whether the impatience that many have with "incrementalism" is consistent with the valid insights and critiques offered by Hirschman of the ability of theory to guide comprehensive processes of change.) 

Hirschman was a singular contributor to the social sciences, and his work rewards close reading. Alacevich's biography is an important contribution to understanding Hirschman's legacy and his continuing importance for our understanding of the nature of the social sciences and social change.

(I took particular pleasure in meeting Albert Hirschman while presenting a seminar at the Center for International Studies at Princeton in the 1990s. I presented an early version of my research on what became The Paradox Of Wealth And Poverty: Mapping The Ethical Dilemmas Of Global Development. Hirschman was enormously generous and stimulating with his comments, and he was especially supportive of the goal of bringing normative thinking back into the field of development economics. It was a memorable intellectual pleasure to have spent half an hour discussing these ideas with him.)

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