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Why Albert Hirschman Remains So Popular in Latin America

Latin America has the dubious honor of being a testing ground for many economic experiments. In the 1970s Milton Friedman convinced Chilean dictator Augusto Pinochet to “cut the tail of the dog” and undertake painful reforms to curb hyperinflation. In the 1980s Harvard wunderkind Jeff Sachs helped the Bolivian government introduce a variety of market reforms; emboldened by that success Sachs went on to implement his “shock therapy” to Poland and Russia. Jeff Williamson’s precepts on how Latin American policymakers could put their economies took shape as the “Washington Consensus” in the 1990s. But while each man became famous for his prescriptions, in Latin America they are infamous figures, seen as wrong-headed, or callous, or both.

By contrast, Albert O. Hirschman remains beloved. Hirschman’s early adulthood was a colorful mix of grad school and combat. Living in Paris in the months after he finished up at LSE, Hirschman jumped at the chance to fight against Franco’s forces in Spain. Then, during the Second World War, he did a tour with the OSS in North Africa. Secret until recently, Princeton historian Jeremy Adelman details the economist’s wartime exploits in Worldly Philosopher: The Odyssey of Albert O. Hirschman.

After the war, Hirschman moved to the United States, where he worked on the Marshall Plan. But a failed security clearance review kept him from transferring back to Europe.  Fed up and perhaps a bit bored, he moved his family to civil war-ravaged Colombia. In the employ of the World Bank, he inspected irrigation projects, oversaw road construction, and (re)negotiated terms of farm loans between bankers and granjeros for four years. As a result of all this, Hirschman came to embrace anxiety as a productive feature of economic development.

Instead of lavishing foreign aid on countries from on high, Hirschman thought economist jetsetters would have a better track record if they spent some time on the ground. And most decisions on development should be left to locals, who not only know the terrain and customs better than outsiders, but who need to make their own mistakes so they can learn what works and what doesn’t. As Malcolm Gladwell put it in a June New Yorker article on Hirschman: “He was a planner who didn’t believe in planning.”

Hirschman’s refusal to stake out a universal theory of development accounts to a large degree for his enduring popularity in Latin America.



Sean Goforth
Sean Goforth

Sean H. Goforth is a graduate of the University of North Carolina-Chapel Hill and the School of Foreign Service at Georgetown University. His research focuses on Latin American political economy and international trade. Sean is the author of Axis of Unity: Venezuela, Iran & the Threat to America.

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