Albert O. Hirschman

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Albert Otto Hirschman
Hirschman (left) interpreting for the accused German Anton Dostler in Italy 1945
Born(1915-04-07)April 7, 1915
DiedDecember 10, 2012(2012-12-10) (aged 97)
Field Political economy
Alma mater University of Trieste

London School of Economics

University of Paris
Contributions Hiding hand principle
Information at IDEAS / RePEc

Albert Otto Hirschman [1] (born Otto-Albert Hirschmann; April 7, 1915 – December 10, 2012) was an economist and the author of several books on political economy and political ideology. His first major contribution was in the area of development economics. [2] Here he emphasized the need for unbalanced growth. He argued that disequilibria should be encouraged to stimulate growth and help mobilize resources, because developing countries are short of decision making skills. Key to this was encouraging industries with many linkages to other firms.


His later work was in political economy and there he advanced two schemata. The first describes the three basic possible responses to decline in firms or polities (quitting, speaking up, staying quiet) in Exit, Voice, and Loyalty (1970). [3] The second describes the basic arguments made by conservatives (perversity, futility and jeopardy) in The Rhetoric of Reaction (1991).

In World War II, he played a key role in rescuing refugees in occupied France.

Early life and education

Otto Albert Hirschman was born in 1915 into an affluent Jewish family in Berlin, Germany, the son of Carl Hirschmann, a surgeon [4] and Hedwig Marcuse Hirschmann. He had a sister, Ursula Hirschmann. [5] In 1932, he started studying at Friedrich-Wilhelms-Universität, was active in the anti-fascist resistance and emigrated to Paris, [6] continued at HEC Paris, the Sorbonne, the London School of Economics and the University of Trieste, where he received his doctorate in economics in 1938. [5]

In the summer of 1936, Hirschman spent three months as a volunteer fighting on behalf of the Spanish Republic in the Spanish Civil War. [4] [5] After France surrendered to the Nazis, he worked with Varian Fry from the Emergency Rescue Committee to help many of Europe's leading artists and intellectuals to escape to the United States; [4] Hirschman helped to lead them from occupied France to Spain through paths in the Pyrenees Mountains and then to Portugal. [4] [7] Those rescued included Marc Chagall, Hannah Arendt and Marcel Duchamp. [7]


From 1941–1943 he was a Rockefeller Fellow at the University of California, Berkeley. He served in the United States Army (1943–1946) where he worked in the Office of Strategic Services, and served as the interpreter for the German general Anton Dostler at the first Allied war crimes trial. [8] [9]

From 1946–1952 he was appointed Chief of the Western European and British Commonwealth Section of the Federal Reserve Board.[ citation needed ] From 1952–1954 he was a financial advisor to the National Planning Board of Colombia and the next 2 years made a living as a private economic counselor in Bogotá.[ citation needed ]

Thereafter he held a succession of academic appointments in economics; from 1956–1958 at Yale University, from 1958–1964 at Columbia University, and for 10 years at Harvard University (1964–1974). He worked for the Institute for Advanced Study from 1974–2012 until his death. [3]

He died at the age of 97 on December 10, 2012, some months after the passing of his wife of over seventy years, Sarah Hirschman (née Chapiro). [10]


His first major contribution was in the area of development economics with the 1958 book The Strategy of Economic Development . Here he emphasized the need for unbalanced growth. He argued that disequilibria should be encouraged to stimulate growth and help mobilize resources, because developing countries are short of decision making skills. Key to this was encouraging industries with many linkages to other firms.[ citation needed ] He argued against "Big Push" approaches to development, such as those advocated by Paul Rosenstein-Rodan. [11]

In his 1967 essay The principle of the hiding hand, Hirschman helped develop the hiding hand principle.[ citation needed ]

His later work was in political economy, where he advanced two schemata. In Exit, Voice, and Loyalty (1970) he described the three basic possible responses to decline in firms or polities (quitting, speaking up, staying quiet). [3] The second describes the basic arguments made by conservatives (perversity, futility and jeopardy) in The Rhetoric of Reaction (1991).

In The Passions and the Interests Hirschmann recounts a history of the ideas laying the intellectual groundwork for capitalism. He describes how thinkers in the seventeenth and eighteenth centuries embraced the sin of avarice as an important counterweight to humankind's destructive passions. Capitalism was promoted by thinkers including Montesquieu, Sir James Steuart, and Adam Smith as repressing the passions for "harmless" commercial activities. Hirschman noted that terms including "vice" and "passion" gave way to "such bland terms" as "advantage" and "interest."[ citation needed ] Hirschman described it as the book he most enjoyed writing.[ citation needed ] According to Hirschman biographer Jeremy Adelman, it reflected Hirschman's political moderation, a challenge to reductive accounts of human nature by economists as a "utility-maximizing machine" as well as Marxian or communitarian "nostalgia for a world that was lost to consumer avarice." [12] [ page needed ]

Herfindahl–Hirschman Index

In 1945, Hirschman proposed a market concentration index which was the square root of the sum of the squares of the market share of each participant in the market. [13] In 1950, Orris C. Herfindahl proposed a similar index (but without the square root), apparently unaware of the prior work. [14] Thus, it is usually referred to as the Herfindahl–Hirschman Index.


Selected articles


In 2001, Hirschman was named among the top 100 American intellectuals, as measured by academic citations, in Richard Posner's book, Public Intellectuals: A Study of Decline. [15]

In 2003, he won the Benjamin E. Lippincott Award from the American Political Science Association to recognize a work of exceptional quality by a living political theorist for his book The Passions and the Interests: Political Arguments for Capitalism before Its Triumph.[ citation needed ]

In 2007, the Social Science Research Council established an annual prize in honor of Hirschman. [16]

See also

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  1. or Hirshman.
  2. Hirschman, A. O. (1958) The Strategy of Economic Development. Yale University Press
  3. 1 2 3 Dowding, Keith (2015-03-26). Lodge, Martin; Page, Edward C; Balla, Steven J (eds.). "Albert O. Hirschman, Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States". The Oxford Handbook of Classics in Public Policy and Administration. doi:10.1093/oxfordhb/9780199646135.013.30. ISBN   978-0-19-964613-5.
  4. 1 2 3 4 Book review of “Worldly Philosopher: The Odyssey of Albert O. Hirschman” (Princeton), by Jeremy Adelman : The Gift of Doubt: Albert O. Hirschman and the power of failure by Malcolm Gladwell The New Yorker, 2013
  5. 1 2 3 (in German) Honorary degree awarded to Albert O. Hirschman by Free University of Berlin
  6. Löhr, Isabella (2014-01-15). "Jeremy Adelman, Worldly Philosopher. The Odyssey of Albert O. Hirschman. Princeton/Oxford, Princeton University Press 2013". Historische Zeitschrift. 299 (2): 573–576. doi:10.1515/hzhz-2014-0531. ISSN   2196-680X.
  7. 1 2 Yardley, William (2012-12-23). "Albert Hirschman, Optimistic Economist, Dies at 97". The New York Times. ISSN   0362-4331 . Retrieved 2021-06-06.
  8. Yardley, William (December 23, 2012). "Albert Hirschman, Optimistic Economist, Dies at 97". The New York Times. Retrieved July 23, 2013.
  9. Adelman, Jeremy. (2013). Worldly philosopher : the odyssey of Albert O. Hirschman. Princeton, NJ. ISBN   978-0-691-15567-8. OCLC   820123478.
  10. Green, David (October 12, 2014). "Economist who studied progress and fought fascism dies". Ha’aretz . Retrieved January 6, 2015.
  11. Paul., Krugman (1999). Development, geography, and economic theory. MIT Press. ISBN   0-262-61135-X. OCLC   742205196.
  12. Adelman, Jeremy (April 7, 2013). Worldly Philosopher: The Odyssey of Albert O. Hirschman. Princeton University Press. ISBN   978-0691155678.
  13. 1 2 Albert O. Hirschman (1980-01-01). National Power and the Structure of Foreign Trade . University of California Press. p.  19. ISBN   978-0-520-04082-3. ...there was a posterior inventor, O. C. Herfindahl, who proposed the same index, except for the square root...
  14. Orris C Herfindahl (1950). Concentration in the steel industry. Dissertation: Columbia University. OCLC   5732189.
  15. Posner, Richard (2001). Public Intellectuals: A Study of Decline. Harvard University Press. ISBN   978-0-674-00633-1.
  16. "Albert O. Hirschman Prize of the Social Science Research Council". Social Science Research Council. Retrieved July 23, 2013.

Further reading