This day in Jewish history

2012: Economist Who Studied Progress and Fought Fascism Dies

Albert Hirschman went to war in several countries, and developed the startling big-development economic theory that big-development economic theories are wrong.

David Green
David B. Green
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Hirschman interpreting for Nazi officer Anton Dostler at latter's 1945 war crimes trial in Italy.Credit: Sgt. Charles James
David Green
David B. Green

On December 10, 2012, the economist, philosopher and wartime hero Albert O. Hirschman died at the age of 97. Though far from a household name, Hirschman is revered within his profession for his subtle and unorthodox views on economic development, and for his early and original insight into the role of human psychology on economic behavior. He also is remembered for the role he played during World War II in the network organized by Varian Fry to smuggle artists and thinkers out of occupied Europe.

Otto Albert Hirschmann (he dropped an “n” from his surname and reversed the order of his given names after immigrating to the United States) was born on April 7, 1915 in Berlin. His father, Carl Hirschman, was a surgeon; his mother was the former Hedwig Marcuse. The secular Jewish family was well off, and Otto grew up surrounded by books and music, and developed a love of the outdoors.

Hirschman had completed only one semester of legal studies at Friedrich-Wilhelm University in Berlin, in 1932, before the Nazis rose to power and Jewish students were expelled from institutions of higher education. The day of his father’s funeral, April 1, 1933, was also the day of a nationwide strike against Jewish businesses in Germany. According to his biographer, Jeremy Adelman, that same night a stoical Otto Albert “emerged from the bedroom to inform the guests and his mother that he would be leaving very soon for Paris. On April 2, he was gone.”

Interrupted by war

In the years that followed, Hirschman attended Paris’ Ecole des Hautes Etudes Commerciales, the London School of Economics, and the University of Trieste, from which he received his doctorate in economics in 1938.

In 1936, however, he had interrupted his studies to join Italian volunteers in fighting with Loyalist forces in the Spanish Civil War – but abandoned Italy after the passage of anti-Jewish legislation and returned to France. There he volunteered for the French army, and after its defeat in 1940, he moved south and became involved in the resistance.

In Marseille, Hirschman hooked up with American journalist Varian Fry. Endlessly creative, as well as optimistic (Fry dubbed him “Beamish”), Hirschman bought up demobilization papers from French veterans, and forged fake identities for many of the 2,000-plus artists and intellectuals – including Marc Chagall, Hannah Arendt, Marcel Duchamp and Jacques Lipschitz – they aided in escaping Nazi-occupied Europe. The escape route passed over the Pyrenees into neutral Spain and then to Portugal, from where the refugees sailed for America.

Hirschman himself ended up taking the same route when he fled from Vichy French police in 1941.

In the United States, Hirschman enlisted in the army, and also served in the CIA precursor, the Office of Strategic Services. Among other things, he was an interpreter for the German general Anton Dostler at his war-crime trial in Italy in October 1945.

Back to academia

Following his military activities, Hirschman became, in succession, a member of the faculties of Yale, Columbia, Harvard and the Institute for Advanced Study at Princeton, where he had an appointment from 1974 until his death. He also spent the years 1952-1956 in Colombia, advising at the micro level on the country’s economic development, partly on behalf of the World Bank.

If Hirschman isn’t famous, it may be because he was anything but doctrinaire, and was simultaneously radical and conservative, and thus hard to peg. His most well-known book is “Exit, Voice, and Loyalty” (1970), in which he suggests that progress comes in spurts, and that citizens and consumers can respond to institutions that fail them – be they governments or businesses – by either fleeing or by engaging and offering feedback, both of which are necessary.

In a review in The New York Times last year of Adelman’s biography, “Worldly Philosopher,” Justin Fox wrote that Hirschman’s “big development theory was that big development theories tend to be wrong. His view of the relationship between free markets and collective action was that a good society needs both.” It may be hard to build a cult around that sort of thinking.

Albert Hirschman was married for 70 years to Sarah Chapro, a Lithuanian-born teacher and writer. She predeceased him by less than a year, dying in January 2012.