Worldly Philosopher: The Odyssey of Albert O. Hirschman

by Jeremy Adelman

  A nuance beyond her reach, what Ursula did not understand was her brother’s increasing seclusion. The ECA was losing steam and purpose. European reconstruction and integration showed signs of self-sustenance after 1950. The project was never meant to last; doing so would have defeated the purpose. But there were also local administrative problems. The State Department always resented ECA influence. Treasury, by then, was also hostile because it wanted a global free market—and thus scorned regional blocs. The National Advisory Council on Monetary Policy, which watched the Fed’s International Section with hawkeyes, was the bastion of worldwide multilateralism and attacked ECA policy vociferously. With the passage of the EPU, Hoffman felt his work was done, could stand no more of Congressional belligerence, and left for the Ford Foundation; in early 1952, Bissell would follow suit. Ted Geiger, one of Hirschman’s closest associates in the brain trust, defected to the National Planning Association. The Miatico Building offices were put to another use.

  To the outer world, Hirschman appeared the picture of professional success. The outer world might have surmised the same for home life. The Hirschmans finally settled down in Chevy Chase, Maryland. A comfortable suburban, wood two-story cottage near the end of a leafy street, it had the added benefit of not being far from Helen and George Jaszi, Albert’s old friend from the LSE who had landed his first job in Washington.

  Living in the American suburbs brought its share of pleasures and challenges. Albert was itching to have a larger family—more so than Sarah, for whom suburban housewifedom offered Spartan amenities. He “was the one who wanted right away another child,” recalled Sarah. “I wasn’t keen on it.” “The only argument against it,” he confided to Ursula, “was that it will delay a bit the point when we are able to travel, but there are many in favor of it.” Lisa was born on October 17, 1946, almost exactly two years after Katia.44 When Lisa was born, he had brought Katia to the hospital to await the baby’s delivery. There were no complications with the birth, so the family drove back to Maryland in their Ford with baby Lisa; when Albert returned to work shortly thereafter, he fretted over whether he should be handing out cigars, which he had heard was the American custom. In the end, he did not, but he was left with doubts about whether he had committed a faux pas. This was the most stressful aspect of becoming a new father.45 In general, Albert loved to return to his two-story home from work, to be greeted by happy, smart, and energetic daughters. On weekends, he took them on excursions. Washington’s famous zoo was a favorite destination; so was the Jaszi’s house nearby, where there were children of similar ages. For “Papa,” the backyard was a setting for endless inventing of games. For one of her birthdays, Katia remembers her father having to be away. While she was romping with her friends in the leaves, she looked up to see an old man walking down the street toward the house with a bulky package. The kids paused, wondering who the strange intruder was. When the old man entered the yard he peeled off the beard and shabby clothes to reveal a father loaded with gifts and goodies for delighted squealing girls.46

  Still, there was a monochromatic aspect of their lives that was harder on Sarah than Albert—who had his daily escapes to the capital. Compared to life in Berkeley, and even more to memories of Paris, Washington was boring and became ever more so. The suburbs depressed Sarah. While she had help around the house, and there were also some friendly neighbors, it was the environment beyond the front door that she found stultifying. When the weather was good, she would let the girls undress and run around in the yard. Passing cars would slow down, its drivers and passengers frowning at the spectacle. Sarah asked a neighbor why cars would stop in front of her house? “But of course! You have your children stark naked, playing!” Sarah went crimson.47 Albert had his colleagues and a career. When they, such as George Jaszi and Hans Landsberg, or Paul Baran, the Russian-born economist and friend at the Fed before leaving for Stanford in 1949, came to the house, the talk was over her head. “I couldn’t understand a blessed word of what was going on.” Even Helen Jaszi, truly Sarah’s friend in the United States, was an economist. One day, Albert introduced Sarah to the wife of one of his carpool mates. She was a Russian, a war bride, also at a loss for what to do in the Washington suburbs. She would spend her days at home. “I am so lonely, Sarah, in this house by myself. In Moscow, I …” The desperation prompted Sarah to find excursions with her. Then one day the news came that the war-bride had committed suicide in her bungalow, alone.48 Anxious to find something for herself, Sarah did eventually find a part-time job teaching languages to foreign service officers needed for the diplomatic expansion of a budding empire. It got her out of the house and introduced her to some friends. After a half day’s work, she would return to the suburbs when the girls got back from school.

  Sarah’s difficulties mirrored Washington’s problems. In the summer of 1948, the House Committee on Un-American Activities (HUAC) took the Red Scare to new heights. On August 13, Harry Dexter White, who had since left Treasury to become the US director of the IMF (International Monetary Fund), appeared before the HUAC to defend himself from McCarthy’s charges. Three days later a heart attack killed him. Rumors of suicide flooded Washington. Things went from bad to worse the next year with Mao’s triumph. McCarthy stood up before the Ohio County Women’s Republican Club and fulminated that the United States was losing the Cold War and pointed to Dean Acheson’s State Department and the legion of traitors in Washington as the culprits. In the fall of 1950, Congress passed the Internal Security (McCarran) Act, which widened the scope for the attorney general to investigate people suspected of subversion; the accused could be prevented from leaving or entering the country, and guilty citizens could be denaturalized. It converted the fear of anyone who felt suspected—as Hirschman by then did—into a panic.49

  This was the setting in which Albert decided to escape suburbia and the trap in which he was quickly finding himself at the Fed. In the back of his mind, the return to Europe had always been an aspiration, and Albert and Sarah had discussed it on and off. The spoken language at home was French, and they did their best to remain au courant with intellectual developments on the Left Bank. But Hirschman wanted to return with some cachet. “I continue to keep an eye on more permanent European options,” he told his sister in early 1948, “such as, for instance, observer for the International Bank or something within the context of ERP. The most important thing is to acquire a small name and then seize a good opportunity.” This was one of the motivations for his frenetic work and determination to build up a list of publications. While he received overtures to help set up the ECA office in Paris or join the new Economic Commission for Europe in Geneva, he felt that work in Washington was still very rewarding and promised him the best opportunities for advancement.50

  The mood was altogether different a few years later. The red-baiting intensified, the interagency working groups dissolved, and Fed superiors curbed Hirschman’s autonomy. In July 1950, the ECA underwent an overhaul and the Board of Governors of the Federal Reserve System announced a staff shakeup and the creation of the Division of International Finance. The new director was Arthur W. Marget, the Harvard-educated monetary theorist, vociferous critic of Keynesian doctrines, and apostle for the return to what he called “orthodox” principles of macroeconomics. The Fed, as far as Marget was concerned, was to get out of the business of endorsing unsavory unorthodoxy. The moment of interagency collaboration and pooling of talent was coming to a close. Hirschman became despondent. Returning from work, he would enter the front door, greet Sarah and the girls, and climb the stairs to close himself in his study. Sarah worried but did not know how to intervene. She wanted to respect his right to privacy—but she knew there was something deeply wrong when her otherwise buoyant husband spent hours locked away in solitude.

  His reports to the Fed became more and more technical. They were also becoming scarcer. After the EPU, Bissell’s group began to dissolve and its members were reclaimed to their departments. After the summer of 1950, almost
a year went by before he submitted another report to the board, a short one on the effects of currency appreciations. His memorandum about new criteria for economic lending to Europe in light of the need for rearmament with the outbreak of the Korean War did not circulate.51 In September 1951, he wrote an analysis of Belgium’s surplus with the EPU, shorn of the sweeping advocacy that characterized his language in the lead-up to the creation of the union.52 This was his last. He apologized to Ursula for not having written in so long and conceded that her intuitions that his silence meant that something was amiss were entirely right. “A series of events have depressed me in such a way that I can only pull myself together to do immediate and routine tasks.” Ursula surely recognized veiled allusions to their shared past: “Is this again the start of a period when to live and to create doesn’t count for anything, when only survival matters? I assume that the decision is largely that of the individual, but I need time to react, time to adjust.” However, ever seeking the silver lining, he found solace by turning inward. His family and his books—he read more Kafka—received attention that had earlier been sidelined by the heady excitement of the Marshall Plan. “It is great that I am on such good terms with Sarah and the children, at least there is no doubt that making them happy is something meaningful, something that makes me happy. I have recently taken to working less at night and on weekends and to spending more time with the family and friends and even books.”53

  What decision was he referring to when he wrote Ursula? He wanted out, desperately. The idea of returning to Paris now became urgent. Hirschman contacted Tommy Tomlinson, who began to explore the possibility of a transfer to the rue de Rivoli offices in Paris, possibly under the aegis of Treasury. In July, Hirschman sent Tomlinson a lengthy letter outlining his thoughts about how the ECA might be reformulated to deal with Cold War realities and the pressure for rearmament. With Hoffman on his way out, Washington, he confessed, was adrift, not least because his closest partner, Bissell, was suffering from the complications of appendicitis, and there were rumors about how long he would last in this climate. “We are beginning to feel,” Hirschman told Tomlinson, “that we may miss a historic opportunity for generating a great new momentum for our old goal: a united Continent.” He surveyed the landscape in Europe, and especially France, which he felt had to be the leader, and made a pitch to Tomlinson for the idea of creating an integrated European army (Hirschman was not beyond grandiose thinking as a way to change course), hoping that this would open some doors for a transfer.54

  He must have known this was a long shot, for Hirschman was exploring fallbacks. “Everything seems to be so difficult at the moment. Maybe it is the lethargy before the storm—I am thinking about radically changing my life,” he confessed. “But that is of course not so easy anymore, everything needs to be thought through and prepared well in advance.” One option was to find a project in Italy. This piqued his interests, and soon Hirschman’s imagination went to work. A research trip to Italy “and then look for something more permanent there? It would be of particular interest to me somehow to collaborate on the agrarian reform,” and so he considered investing in “a couple of agricultural machines here and in Europe and then put them for lease in an Italian province.” As ideas went, this was one of Hirschman’s least sensible; he had never liked his engineering courses at HEC in Paris. But at this stage he knew he was groping—“maybe this is all hopelessly romantic, but you have any idea please let me know,” he pleaded to Ursula.55 He also confided to his mother and Eva that “the desire to return to Europe, and especially Italy, becomes stronger.”56

  Then came disturbing news. As Albert prepared a lecture for the American Economic Association meeting in Boston after Christmas, he received word that Tomlinson’s application for Hirschman’s transfer to the ECA bureau in Paris occasioned a security review. He bundled Sarah and the girls on an airplane for Los Angeles, where they would spend the holidays with Sarah’s parents in Beverly Hills. Albert, meanwhile, had to follow up on a telephone call he had received from an acquaintance in another agency. George Willis, a middling figure in Treasury, was given the thankless task of meeting with Hirschman to explain to him that the Loyalty Review Board of the Civil Service Commission would not approve his transfer; he insinuated, moreover, that in this climate, Hirschman would be better off seeking employment outside the federal government. “There are difficulties with your appointment,” Hirschman learned. He grasped for potential reasons. His Sozialistische Arbeiter-Juden years? The Spanish Civil War? Working with Fry? Then he grew alarmed. There would be no more pay checks.57

  The Christmas of 1951 must have been a depressing one. He did not go to California. Instead, he called his old friend Sandy Stevenson, who had moved to the International Bank for Reconstruction and Development (the World Bank), and asked for a meeting. Albert did not fully reveal his difficulties to Stevenson, but he made it clear that he wanted out of the Fed. Stevenson, the head man for Europe-Africa-Australasia, was one of the figures on the inside discussing the internationalization of the World Bank. He mentioned to Hirschman that they were opening a new initiative in Latin America, in particular in Colombia, where the bank had sent a “mission” and was about to embark on its first “development” project in the region. Maybe there would be prospects? He suggested that Hirschman visit the Colombian ambassador, since that country’s government was going to staff and run the project out of the Central Bank in Bogotá.58 Hirschman immediately set up an appointment with Cipriano Restrepo Jaramillo. A somewhat dour and formal man, Restrepo was impressed that such an accomplished economist would be interested in working in the Colombian capital. He offered Hirschman the position on the spot. They agreed that the details could be sorted out later. Hirschman gladly accepted.59

  He returned to Chevy Chase and called Sarah in Los Angeles to report the news. We are leaving Washington, he told her. But not for Paris—for Bogotá, Colombia. Shocked, Sarah dropped the phone and ran for her parents’ Encyclopedia Britannica to find the place on the map.60 Nor was Sarah the only surprised person. Robert Triffin, one of Hirschman’s closest colleagues in the Marshall Plan and one of the increasing numbers fleeing Washington (Triffin left for Yale), was also taken aback. Hirschman had long shared his ideas with Triffin about moving to Paris, so when he found out about Bogotá, he wrote, “I was rather surprised to hear of your decision. You seemed so inclined to go to Paris, especially during the pleasant evening I spent at your home, that news was very unexpected.” His old Berkeley advisor, Howard Ellis, was equally flabbergasted and also saddened to see the board of governors lose such a talent. But to Ellis the cloud was also silver-lined. He and Norman Buchanan, a colleague in the economics department at Berkeley, were interested in this adventure. “He and I will probably want to exploit your first-hand acquaintance with this highly dynamic under developed area.” Stay in touch, urged Ellis. It was this prospect of new discovery that no doubt motivated Hirschman to take the leap; he pocketed this invitation for the future.61

  In early March, Hirschman flew to Bogotá for two weeks to finalize the deal with the finance minister, Antonio Alvarez Restrepo. When they met, the minister, who would later become one of Hirschman’s good friends, was in a cheerful mood, and with a smile produced a copy of National Power for him to sign; Hirschman looked down to see that the copy was in Spanish, La Potencia Nacional. With this, Hirschman’s adventure in Latin America was off to a good start. He especially liked surprises when they were friendly. He returned to Washington, by which time Sarah was reconciled to the big move; she was bored of the Washington suburbs and wanted an adventure. What made it easy was Hirschman’s sublime confidence that it would all work out. For a “planner,” this was a highly improvised move. Still, as he had come to appreciate in the 1930s and would come to advocate in the years to come, it was not necessary to know everything in advance before making big decisions.

  An undated entry in his diary, likely from Washington, reveals a Hirschman still thinking about Hamlet. Thi
s time his petite idée was about Hamlet’s agony of how “to let be.” This was different from the French laissez faire, or “letting things go.” The Italian wording was especially compelling: lascia perdere, which he took to denote “to leave beings alone when they are likely to inflict damage.” Is this kind of letting-go “more difficult and therefore more attractive?”62 A partial answer can be found not in words, but actions. The Hirschmans let America go. They packed, said goodbye to friends, and set off for the unknown.

  CHAPTER 9

  The Biography of a File

  Someone must have been telling tales about Josef K.…

  FRANZ KAFKA

  From 1943 to 1966, a shadow trailed Albert Hirschman. But unlike most shadows, this was one he never saw. Hirschman did suspect that some invisible force was at work; some things in his life were too unfathomable. He could not understand why the OSS did not make more of his intelligence skills and preferred to deploy him as a mere interpreter; he tended to explain this away as the bureaucratic ineptitude of armies or large organizations, in part because he had less and less affection for them. But there were times when his career ran into inexplicable roadblocks. The Office of Strategic Services had been an exercise in vexation. His job hunting in Washington appeared to be going nowhere until Shura Gershenkron waved away procedures and hired him on the spot. But by 1951, these invisible forces were back.