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American Economic Association

Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?

Author(s): Albert O. Hirschman
Source: Journal of Economic Literature, Vol. 20, No. 4 (Dec., 1982), pp. 1463-1484
Published by: American Economic Association
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of Economic Literature.
Journal of Economic Literature
Vol. XX (December 1982), pp. 1463-1484

Rival Interpretations
of Market Society:
Civilizing, Destructive, or Feeble?

The Institute for Advanced Study

This paper was originally written for presentation as the fourth

annual Marc Bloch Lecture, under the auspices of the Ecole des
Hautes Etudes en Sciences Sociales on May 27, 1982 in Paris. I am
grateful to Francois Furet, the Ecole's President, for his invitation
and hospitality, to Clifford Geertz, Mark Granovetter, Michael
McPherson, Theda Skocpol, and Michael Walzer for helpful com-
ments, and to Irwin L. Collierfor able research assistance. Transla-
tions are mine, unless otherwise noted.

Introduction became widespread only in the modern

age, particularly in the eighteenth cen-
ONCE UPON A TIME, not all that long tury. Hence Saint-Just's famous phrase:
ago, the social, political and eco- "The idea of happiness is new in Eu-
nomic order under which men and rope"-it was then novel to think that
women were living was taken for granted. happiness could be engineered by chang-
Among the people of those idyllic times ing the social order, a task he and his Jaco-
many of course were poor, sick, or op- bin companions had so confidently under-
pressed, and consequently unhappy; no taken.
doubt, others managed to feel unhappy Let us note in passing that the idea of
for seemingly less cogent reasons; but a perfectible social order arose at about
most tended to attribute their unhappi- the same time as that of the unintended
ness either to concrete and fortuitous hap- effects of human actions and decisions.
penings-ill luck, ill health, the machina- The latter idea was in principle tailor-
tions of enemies, an unjust master, lord made to neutralize the former: it permit-
or ruler-or to remote, general and un- ted one to argue that the best intentioned
changeable causes, such as human nature institutional changes might lead, via those
or the will of God. The idea that the social unforeseen consequences or "perverse ef-
order-intermediate between the fortui- fects," to all kinds of disastrous results. But
tous and the unchangeable-may be an the two ideas were not immediately
important cause of human unhappiness matched up for this purpose. In the first
1464 Journal of Economic Literature, Vol. XX (December 1982)
place, the idea of the perfectibility of the the sixteenth to the eighteenth centuries.
social order arose primarily in the course Here I must return to a principal theme
of the French Enlightenment while that of The Passions and the Interests (Hirsch-
of the unintended consequences was a man, 1977), with the hope of placating
principal contribution of the contempo- at least partially those of my readers who
rary Scottish moralists. Also, the form complained that, with the book tracing
which the latter idea took initially was to ideological developments in some detail
stress the happy and socially desirable out- only up to Adam Smith, they were left
come of self-serving individual behavior guessing what happened next, in the
that was traditionally thought to be repre- age-our own-that really mattered to
hensible, rather than to uncover the un- them. My book dwelt on the favorable side
fortunate consequences of well-inten- effects that the emerging economic sys-
tioned social reforms. In any event, the tem was imaginatively but confidently ex-
idea of a perfectible society was not to pected to have, with respect to both the
be nipped in the bud; to the contrary, it character of citizens and the characteris-
experienced a most vigorous develop- tics of statecraft. I stressed particularly the
ment, and, soon after the French Revolu- latter-the expectation, entertained by
tion, reappeared in the guise of powerful Montesquieu and Sir James Steuart, that
critiques of the social and economic the expansion of the market would re-
order-capitalism-emerging at the be- strain the arbitrary actions and excessive
ginning of the nineteenth century. power plays of the sovereign, both in do-
In the present essay I shall be concerned mestic and in international politics. Here
with several such critiques and their inter- I shall emphasize instead the expected ef-
relations. First I shall show the close rela- fects of commerce on the citizen and civil
tionship and direct contradiction between society. At mid-eighteenth century it be-
an early argument in favor of market soci- came the conventional wisdom-Rous-
ety and a subsequent principal critique of seau of course rebelled against it-that
capitalism. Next, I shall point to the con- commerce was a civilizing agent of consid-
tradictions between this critique and an- erable power and range. Let me again cite
other diagnosis of the ills from which Montesquieu's key sentence, which he
much of modern capitalist society is said placed at the very beginning of his discus-
to suffer. And finally the tables will be sion of economic matters in the Spirit of
turned on this second critique by yet an- the Laws:
other set of ideas. In all three cases, there it is almost a general rule that wherever man-
was an almost total lack of communication ners are gentle (moeurs douces) there is com-
between the conflicting theses. Intimately merce; and wherever there is commerce, man-
related intellectual formations unfolded at ners are gentle [1749, 1961, Vol. 2, p. 8].
great length, without ever taking cogni- Here the relationship between "gentle
zance of each other. Such ignoring of close manners" and commerce is presented as
kin is no doubt the price paid by ideology mutually reinforcing, but a few sentences
for the self-confidence it likes to parade. later Montesquieu leaves no doubt about
the predominant direction of the causal
I. The Doux-commerce Thesis link:
To begin, let me briefly evoke the com- Commerce . .. polishes and softens (adoucit)
barbaric ways as we can see every day [p. 81].
plex of ideas and expectations which ac-
companied the expansion of commerce This way of viewing the influence of ex-
and the development of the market from panding commerce on society was widely
Hirschman: Rival Interpretations of Market Society 1465
accepted throughout most of the eigh- moral and physical passionsare superseded by
teenth century. It is stressed in two out- interest. . . Commerce has a special character
standing histories of progress-then a pop- which distinguishes it from all other profes-
sions. It affects the feelings of men so strongly
ular genre-, William Robertson's View of that it makes him who was proud and haughty
the Progress of Society in Europe (1769) suddenly turn supple, bending and serviceable.
and Condorcet's Esquisse d'un tableau Through commerce, man learns to deliberate,
historique du progres de l'esprit humain to be honest, to acquire manners,to be prudent
and reserved in both talk and action. Sensing
(1793-1794). Robertson repeats Montes- the necessity to be wise and honest in order
quieu almost word by word: to succeed, he flees vice, or at least his de-
Commerce ... softens and polishes the man- meanor exhibits decency and seriousnessso as
ners of men [p. 67]. not to arouse any adverse judgement on the
part of present and future acquaintances;he
and Condorcet, while elsewhere critical would not dare make a spectacle of himself
of Montesquieu's political ideas (Keith M. for fear of damaging his credit standing and
thus society may well avoid a scandal which
Baker, 1975, p. 260), also followed his lead it might otherwise have to deplore [Samuel
in this area quite closely: Ricard, 1781, p. 463].
Manners (moeurs) have become more gentle
(se sont adoucies) . . . through the influence Commerce is here seen as a powerful
of the spirit of commerce and industry, those moralizing agent which brings many non-
enemies of the violence and turmoil which material improvements to society even
cause wealth to flee . . . [Condorcet, 1795, p.
238]. though a bit of hypocrisy may have to be
accepted into the bargain. Similar modifi-
One of the strongest statements comes cations of human behavior and perhaps
from Thomas Paine, in The Rights of Man even of human nature are later credited
(1792): to the spread of commerce and industry
[Commerce] is a pacific system, operating to by David Hume and Adam Smith: the vir-
cordialise mankind, by rendering Nations, as tues they specifically mention as being
well as individuals, useful to each other . . . enhanced or brought into the world by
The invention of commerce . .. is the greatest commerce and manufacturing are indus-
approachtowardsuniversalcivilization that has
yet been made by any means not immediately
triousness and assiduity (the opposite of
flowing from moral principles [p. 215]. indolence), frugality, punctuality, and,
most important perhaps for the function-
What was the concrete meaning of all ing of market society, probity (Nathan Ro-
this douceur, polish, gentleness, and even senberg, 1964, pp. 59-77).
cordiality? Through what precise mecha- There is here then the insistent thought
nisms was expanding commerce going to that a society where the market assumes
have such happy effects? The eighteenth- a central position for the satisfaction of
century literature is not very communica- human wants will produce not only con-
tive in this regard, perhaps because it all siderable new wealth because of the divi-
seemed so obvious to contemporaries. The sion of labor and consequent technical
most detailed account I have been able progress, but would generate as a by-prod-
to find appearsin a technical book on com- uct, or external economy, a more "pol-
merce first published in 1704 that must ished" human type-more honest, relia-
have been highly successful as it was reed- ble, orderly, and disciplined, as well as
ited repeatedly through the next eighty more friendly and helpful, ever ready to
years. find solutions to conflicts and a middle
Commerce attaches [men] one to another ground for opposed opinions. Such a type
throughmutualutility.Throughcommerce the will in turn greatly facilitate the smooth
1466 Journal of Economic Literature, Vol. XX (December 1982)
functioning of the market. In sum, accord- underpinnings, values that are now said
ing to this line of reasoning, capitalism to have been inherited from preceding so-
which in its early phases led a rather shaky cioeconomic regimes, such as the feudal
existence, having to contend with a host order. The idea that capitalism depletes
of pre-capitalist mentalities left behind by or "erodes" the moral foundation needed
the feudal and other "rude and barba- for its functioning is put forward in the
rous" epochs, would create, in the course following terms:
of time and through the very practice of The socialmoralitythat has served as an under-
trade and industry, a set of compatible structure for economic individualismhas been
psychological attitudes and moral disposi- a legacy of the precapitalist and preindustrial
tions, that are both desirable in them- past. This legacy has diminished with time and
with the corrosive contact of the active capital-
selves and conducive to the further expan-
ist values-and more generally with the greater
sion of the system. And at certain epochs, anonymity and greater mobility of industrial
the speed and vigor displayed by that ex- society. The system has thereby lost outside
pansion lent considerable plausibility to support that was previously taken for granted
the conjecture. by the individual. As individual behavior has
been increasinglydirected to individualadvan-
tage, habits and instincts based on communal
II. The Self-Destruction Thesis attitudes and objectives have lost out. The
weakening of traditionalsocial values has made
Whatever became of this brave eigh- predominantlycapitalist economies more diffi-
teenth-century vision? I shall reserve this cult to manage [pp. 117-18].
topic for later and turn now to a body Once again, one would like to know in
of thought which is far more familiar to more detail how the market acts on
us than the doux-commerce thesis-and values, this time in the direction of "deple-
happens to be its obverse. According to tion" or "erosion," rather than douceur.
that view which first became prominent In developing his argument Hirsch makes
in the nineteenth century, capitalist soci- the following principal points:
ety, far from fostering douceur and other 1. The emphasis on self-interest typical of capi-
fine attitudes, exhibits a pronounced pro- talism makes it more difficultto secure the col-
clivity toward undermining the moral lective goods and cooperation increasingly
foundations on which any society, includ- needed for the proper functioning of the sys-
ing the capitalist variety, must rest. I shall tem in its later stages [Chapter 11].
call this the self-destruction thesis. 2. With macromanagement, Keynesian or oth-
This thesis has a fairly numerous ances- erwise, assumingan importantrole in the func-
tioning of the system, the macromanagersmust
try, among both Marxist and conservative be motivated by 'the general interest' rather
thinkers. Moreover, a political economist than by their self-interest, and the system, be-
who was neither has just recently given ing based on self-interest, has no way of gener-
it renewed prominence and sophisticated ating the proper motivation;to the extent such
treatment. So I shall first present his point motivation does exist, it is a residue of previous
value systems that are likely to 'erode' [p. 128].
of view and then go back to the earlier
exponents. In his influential book, Social 3. Social virtues such as 'truth, trust, accep-
tance, restraint, obligation,' needed for the
Limits to Growth (1976), Fred Hirsch functioning of an 'individualistic, contractual
dealt at length with what he called "The economy' [p. 141] are grounded, to a considera-
Depleting Moral Legacy" of capitalism.' ble extent, in religious belief, but 'the indivi-
He argues that the market undermines dualistic,rationalisticbase of the marketunder-
the moral values that are its own essential mines religious support' [p. 143].
The last point stands in particularly
Ihis is the general heading of Chapters 8 to 11. stark contrast to the earlier conception of
Hirschman: Rival Interpretations of Market Society 1467
commerce and of its beneficial side effects. would eventually lead to that conception:
In the first place, thinkers of the 17th and in the Communist Manifesto and other
18th centuries took it for granted that early writings, Marx and Engels make
they have to make do with "man as he much of the way in which capitalism cor-
really is" and that meant to them with rodes all traditional values and institutions
someone who has been proven to be such as love, family, and patriotism. Ev-
largely impervious to religious and moral- erything was passing into commerce, all
istic precepts. With this realistic-pessimis- social bonds were dissolved through
tic appraisal of human nature, those think- money. This perception is by no means
ers proceeded to discover in "interest" a original with Marx. Over a century earlier
principle that could replace "love" and it was the essence of the conservative re-
"charity" as the basis for a well-ordered action to the advance of market society,
society. Secondly, and. most important in voiced during the 1730s in England by
the present context, to the extent that so- the opponents of Walpole and Whig rule,
ciety is in need of moral values such as such as Bolingbroke and his circle (Hirsch-
"truth, trust, etc." for its functioning, man, 1977, pp. 55-56). The theme was
these values were confidently expected to taken up again, from the early nineteenth
be generated, rather than eroded, by the century on, by the romantic and conserva-
market, its practices and incentives. tive critics of the Industrial Revolution.
As already noted, Hirsch is only the lat- Coleridge, for example, wrote in 1817 that
est representative of the idea that the the "true seat and sources" of the "existing
market and capitalism harbor self-destruc- distress" are to be found in the "Over-
tive proclivities. Let us now trace it back, balance of the Commercial Spirit" in rela-
if only to find out whether contact was tion to "natural counter-forces" such as
ever made between the two opposite the "ancient feelings of rank and ances-
views about the moral effects of com- try" (1972, pp. 169-70).
merce and capitalism that have been This ability of capitalism to "overbal-
spelled out. ance" all traditional and "higher" values
The idea that capitalism as a socio-eco- was not taken as a threat to capitalism it-
nomic order somehow carries within itself self, at least not right away. The opposite
"the seed of its own destruction" is of is the case: even though the world shaped
course a cornerstone of Marxian thought. by it was often thought to be spiritually
But for Marx, this familiar metaphor re- and culturally much impoverished, capi-
lated to the social and economic working talism was viewed as an all-conquering,
of the system: some of its properties, such irresistible force. Its rise was widely ex-
as the tendency to concentration of capi- pected to lead to a thorough remaking of
tal, the falling rate of profit, the periodic society: custom was to be replaced by con-
crises of overproduction, would bring tract, gemeinschaft by gesellschaft, the
about, with the help of an ever-more nu- traditional by the modern. All spheres of
merous and more class-conscious and social life, from the family to the state,
combative proletariat, the socialist revolu- from traditional hierarchy to longtime co-
tion. Thus Marx had little need to discover operative arrangements, were to be vi-
a more indirect and insidious mechanism tally affected: metaphors often used to de-
that would operate as a sort of fifth col- scribe this action of capitalism on ancient
umn, by undermining the moral founda- social forms ranged from the outright "dis-
tions of the capitalist system from within. solving" to "erosion," "corrosion," "con-
Marx did, however, help in forging one tamination," "penetration," and "intru-
key link in the chain of reasoning that sion" by the "juggernaut market."
1468 Journal of Economic Literature, Vol. XX (December 1982)
But once capitalism was thus perceived on The Protestant Ethic, reasoning along
as an unbridled force, terrifyingly success- such lines became fashionable once again:
ful in its relentless forward drive, the any evidence that the repressive ethic, al-
thought arose naturally enough that, like leged to be essential for the development
all great conquerors, it just might break of capitalism, may be faltering was then
its neck. Being a blind force (recall the interpreted as a serious threat to the sys-
expression the "blind market forces") as tem's survival. Observers as diverse as
well as a wild one, capitalism might cor- Herbert Marcuse (1965) and Daniel Bell
rode, not only traditional society and its (1976, p. 21) have written in this vein,
moral values, but even those essential to unaware, it would appear, that they
its own success and survival. In this man- were merely refurbishing a well-known,
ner, to credit capitalism with extraordi- much older morality tale: how the repub-
nary powers of expansion, penetration lican virtues of sobriety, civic pride, and
and disintegration may in fact have been bravery-in ancient Rome-led to victory
an adroit ideological maneuver for inti- and conquest which brought opulence
mating that it was headed for disaster.The and luxury, which in turn undermined
maneuver was especially effective in an those earlier virtues and destroyed the re-
age which had turned away from the idea public and eventually the empire.
of progress as a leading myth and was on While appealing in its simple dialectic,
the contrary much taken with various that tale has long been discredited as an
myths of self-destruction, from the Nibe- explanation of Rome's decline and fall.
lungen to Oedipus.2 The attempt to account for or to predict
The simplest model for the self-destruc- the present or future demise of capitalism
tion of capitalism might be called, in con- in almost identical terms richly deserves
trast to the self-reinforcingmodel of doux- a similar fate, and that for a number of
commerce, the dolce vita scenario. The reasons. Let me just point out one: the
advance of capitalism requires, so this key role in this alleged process of capital-
story begins, that capitalists save and lead ism's rise and decline is attributed first to
a frugal life so that accumulation can pro- the generation and then to the decline
ceed apace. However, at some ill-defined of personal savings so that changes in
point, increases in wealth resulting from much more strategic variables, such as
successful accumulation will tend to ener- corporate savings, technical innovation
vate the spirit of frugality. Demands will and entrepreneurial skill, not to speak of
be made for dolce vita, that is for instant, cultural and institutional factors, are to-
rather than delayed, gratification and tally left out of account.
when that happens capitalist progress will There are less mechanical, more sophis-
grind to a halt. ticated forms of the self-destruction thesis.
The idea that successful attainment of The best known is probably the one put
wealth will undermine the process of forward by Joseph Schumpeter in Capital-
wealth-generation is present throughout ism, Socialism, and Democracy (1942),
the eighteenth century from John Wesley whose second part is entitled Can Capital-
(Weber, 1958, p. 175) to Montesquieu ism Survive? Schumpeter's answer to that
(1961, Vol. 1, p. 52) and Adam Smith question was rather negative, not so
(1937, p. 578). With Max Weber's essay much, he argued, because of insuperable
economic problems encountered or gen-
2 On the important place the theme of self-destruc-
erated by capitalism as because of the
tion held in Richard Wagner's political and economic
thought, see L. J. Rather, 1979 and Erik Eugene,
growing hostility capitalism meets with
1973. on the part of many strata, particularly
Hirschman: Rival Interpretations of Market Society 1469
among the intellectuals. It is in the course weakening the foundation on which they
of arguing along these lines that Schum- themselves are sitting. This idea was de-
peter writes: veloped at about the time Schumpeter
wrote by a very different group of Euro-
. . .capitalism creates a critical frame of mind
which, after having destroyed the moral au-
pean intellectuals who had also come to
thority of so many other institutions,in the end the United States during the thirties: the
turns against its own; the bourgeois finds to Frankfurt School of critical theory which,
his amazement that the rationalistattitude does while working in the Marxist tradition,
not stop at the credentials of kings and popes paid considerable attention to ideology as
but goes on to attack private property and the
whole scheme of bourgeois values [p. 143].
a crucial factor in historical development.
In fact, a purely idealistic account of the
In comparison to the dolce vita sce- disasters through which Western civiliza-
nario, this is a much more general argu- tion was passing at the time is given by
ment on self-destruction. But is it more Max Horkheimer, a leading member of
persuasive? Capitalism is here cast in the the group, in wartime lectures subse-
role of the sorcerer-apprentice who does quently published under the title Eclipse
not know how to stop a mechanism once of Reason (1947).
set in motion-so it demolishes itself along According to Horkheimer (1947), the
with its enemies. This sort of vision may commanding position of self-interest in
have appealed to Schumpeter who, after capitalist society and the resulting agnosti-
all, came right out of the Viennese fin- cism with regard to ultimate values down-
de-siefcle culture for which self-de- graded reason to a mere instrument that
struction had become something totally would decide about the means to be used
familiar, unquestioned, selbstverstdnd- for reaching arbitrarily given ends, but
lich. Those not steeped in that tradition would have nothing to say about those
might not find the argument so compel- ends. Previously, reason and revelation
ling and might timidly raise the objection had been called upon to define the ends
that, in addition to the mechanism of self- as well as the means of human action and
destruction, elementary forces of repro- reason was credited with being able to
duction and self-preservation also ought shape such guiding concepts as liberty or
to be taken into account. Such forces have equality or justice. But with utilitarian phi-
certainly appeared repeatedly in the his- losophy and self-interest-oriented capital-
tory of capitalism, from the first enact- ist practice in the saddle, reason came to
ments of factory legislation to the intro- lose this power, and thus
duction of social security schemes and the . . .the progress of subjective reason de-
experimentation with counter-cyclical stroyed the theoretical basis of mythological,
macroeconomic policies. religious, and rationalisticideas [and yet] civi-
Schumpeter's point is made more per- lized society has up until now been living on
suasive if it can be argued that the ideolog- the residue of these ideas [p. 34].
ical currents unleashed by capitalism are And Horkheimer speaks movingly of
corroding the moral foundations of capi- "all these cherished ideas" and values,
talism inadvertently. In other words, if from freedom and humanity, to "enjoy-
the capitalist order is somehow beholden ment of a flower or of the atmosphere of
to previous social and ideological forma- a room . . . that, in addition to physical
tions to a much greater extent than is real- force and material interest, hold society
ized by the conquering bourgeoisie and together . . . but have been undermined
their ideologues, then their demolition by the formalization of reason" (1947 p.
work will have the incidental result of 36, my emphases).
1470 Journal of Economic Literature, Vol. XX (December 1982)
Here, then, are some early versions of a failure to connect them with earlier,
Hirsch's thesis on the "depleting moral more hopeful expectations of a market so-
legacy" of capitalism.It is no mystery why ciety bringing forth its own moral founda-
the idea was almost forgotten in the thirty- tion, via the generation of douceur, prob-
year interval between Schumpeter-Hork- ity, trust and so on. One reason for this
heimer and Hirsch: during that era the lack of contact is the low profile of the
Western world passed through a remark- doux-commerce thesis in the nineteenth
ably long period of sustained growth and century, after its period of self-confidence
comparative political stability. Capitalist in the preceding century. Another is the
market society, suitably modified by Key- transfiguration of that thesis into one in
nesianism, planning, and welfare state re- which it was hard to recognize. The story
forms, seemed to have escaped from its of that low profile and that transfiguration
self-destructive proclivities and to gener- must now be told.
ate, once again, if not douceur, at least
considerable confidence in its ability to
III. Eclipse of the Doux-commerce Thesis
solve the problems which it would en-
After the Eighteenth Century
counter along its way. But the sense of
pervasive crisis which had characterized The most plausible explanation for the
the thirties and forties reappeared in the eclipse of the doux-commercethesis in the
seventies, in part as an after-effect of the nineteenth-century is that it became a vic-
still poorly understood mass movements tim of the IndustrialRevolution. The com-
of the late sixties and in part as an immedi- mercial expansion of the preceding centu-
ate reaction to contemporary shocks and ries had of course often been violent and
disarray. had created a great deal of social and hu-
Moreover, the analytical exploration of man havoc, but this violence and havoc
social interaction along the logic of self- primarily affected the societies that were
interest had by then uncovered situations, the objects of European penetration in Af-
such as the prisoners' dilemma, in which rica, Asia, and America. With the Indus-
strict allegiance to self-interest was shown trial Revolution, the havoc came home.
to bring far-from-optimal results unless As traditional products were subjected to
some exogenous norms of cooperative be- competitive pressure from ever new
havior were adhered to by the actors. "trinkets and baubles," as large groups of
Now, since human behavior, allegedly laborers were displaced and as their skills
guided by self-interest, had not yet had became obsolete and as all classes of soci-
clearly disastrous effects, it was tempting ety were seized by a sudden passion for
to conclude: (a) that such norms, in effect, enrichment, it was widely felt that a new
have been adhered to tacitly; (b) that they revolutionary force had arisen in the very
must somehow predate the market society center of capitalist expansion.
in which self-interest alone rules; and (c) As already noted, that force was often
that the survival of such norms is now characterized as wild, blind, relentless,
threatened. In the circumstances, the idea unbridled-hence anything but doux
that capitalism lived on time (and morals) (gentle and soft). Only with regard to in-
borrowed from earlier ages surfaced natu- ternational trade was it still asserted from
rally enough once again. time to time, usually as an after-thought,
What is surprising, then, is not that that expanding transactionswill bring, not
these somber ideas about self-destruction only mutual material gains, but also some
arose at the more difficultand somber mo- fine by-products in the cultural and moral
ments of our century, but that there was realms, such as intellectual cross-fertiliza-
Hirschman: Rival Interpretations of Market Society 1471
tion and mutual understanding and The members [of societies with a fine division
peace.3 Within the boundaries of the na- of labor]are united by ties that go well beyond
tion, the expansion of industry and com- the ever so brief moments during which ex-
change actually takes place . . . Because we
merce was widely viewed as contributing exercise this or that domestic or socialfunction,
to the breakdown of traditional communi- we are caught in a network of obligationswhich
ties and to the loosening and disintegra- we do not have the right to forsake [p. 207].
tion of social and affective ties, rather than If the division of labor produces solidarity,this
to their consolidation. is not only because it makes of each person
To be sure, here and there one can still an exchanger (6changiste) to speak the lan-
find echoes of the older idea that civil soci- guage of the economists; it is because the divi-
sion of labor creates among men a comprehen-
ety is largely held together by the dense sive system of rights and duties which tie them
network of mutual relations and obliga- to one another in a durable fashion [pp. 402-
tions arising from the market and from 03].
its expansion which in turn is fueled by
an increasingly fine division of labor. In So Durkheim's construction is a great
fact, as soon as the matter is put this way deal more complex and roundabout than
one's thoughts travel to Emile Durkheim Montesquieu's (or Sir James Steuart's):so-
and his Division of Labor in Society ciety is not held together directly nor is
(1902). Here it was argued, at least in part, it made peaceful and doux by the network
that the advanced division of labor of of self-interested market transactions
modern society functions as a substitute alone; for that sort of doctrine Durkheim
for the "common consciousness' that so has some harsh words that contrast
effectively bonded more primitive societ- sharply with the seventeenth and eigh-
ies: "it is principally [the division of labor] teenth centuries' doctrine about interest:
which holds together social aggregates of
While interest brings people closer together,
the higher type" (p. 148). But in Durk- this is a matter of a few moments only; it can
heim's subtle thought, the transactions only create an external tie among them . . .
arising from the division of labor were not The consciences are only in superficialcontact;
by themselves capable of this substitu- they do not penetrate one another . . . every
tion. The decisive role was played by the harmony of interest contains a latent or de-
layed conflict . . . for interest is what is least
many, often unintended ties that people constant in the world [pp. 180-81].4
take on or fall into in the wake of market
transactions and contractual commit- Durkheim was thus caught between the
ments. Here are some formulations of older view that interest-oriented action
this thought which recur throughout the provides a basis for social integration and
book: the more contemporary critique of mar-
We cooperate because we wanted to do so, but ket society as atomistic and corrosive of
our voluntarycooperationcreates duties which social cohesion. He never spelled out in
we did not intend to assume [p. 192]. concrete detail how he conceived a "soli-
dary" society to emerge from the division
3For example,John StuartMillwrites in Principles of labor and eventually moved on to a
of Political Economy (1848): "It is hardly possible more activist view that no longer counted
to overrate the value, in the present low state of on this mechanism to achieve social cohe-
human improvement, of placing human beings in
contact with persons dissimilar to themselves, and
with modes of thought and action unlike those with 4 Compare this text with the exactly opposite sev-
which they are familiar . . . Such communication enteenth- and eighteenth-century statements on the
has always been, and is peculiarly in the present constancy and predictability of interest which I re-
age, one of the primary sources of progress" (1965, ported in The Passions and the Interests (1977, pp.
Vol. 3, p. 594). 48-55).
1472 Journal of Economic Literature, Vol. XX (December 1982)
sion and instead stressed moral education yielded to decentralization . . . man's effort to-
and political action (Steven Lukes, 1972, ward man, his adaptation to the other seems
p. 178). But, as shall be argued later, there possible only at the price of competition, that
is, of the simultaneousfight againsta fellowman
may be considerable virtue in his ambiva- for a third one . . . [1955, pp. 61-63].
lent stance; and the idea that social bonds
can be grafted onto economic transactions Simmel's thought here comes close to
if conditions are favorable, remains to be that of Durkheim's, in that he also uncov-
explored in depth. ers in the structure and institutionsof cap-
An ambivalence similar to that of Durk- italist society a functional equivalent for
heim characterizes the work of his Ger- the simple bonds of custom and religion
man contemporary, Georg Simmel. While that (allegedly) held traditional society to-
no one has written more powerfully on gether. Elsewhere he shows that the ad-
the alienating properties of money, Sim- vanced division of labor in modern soci-
mel stressed in other writings the integrat- ety, and the importance of credit for the
ing functions of various conflicts in mod- functioning of the economy rests on, and
ern society. In this connection he gave promotes, a high degree of truthfulness
high marks to competition as an institu- in social relations (1923, pp. 260-61). With
tion that fosters empathy and the building his effusiveness and vivid imagery, Sim-
of strong social ties, not of course among mel is perhaps more successful than the
the competitors but between them and austere Durkheim in convincing the
an important and often overlooked third reader that some features of market soci-
party-the customer: ety make for social integration rather than
the opposite.
The aim for which competition occurs within Such was, nevertheless, a minority
a society is presumablyalways the favor of one position affirmed, moreover, by eminent
or more third persons. Each of the competing and somewhat protean figures whose
parties therefore tries to come as close to that
third one as possible. Usually, the poisonous, major contribution to social thought-
divisive, destructive effects of competition are through such concepts as anomie in the
stressed and, in exchange, it is merely pointed case of Durkheim, for example-definitely
out that it improves economic welfare. But in strengthened the majorityview. For some
addition,it has, after all, this immense sociating counterpoint to the generally somber
effect. Competition compels the wooer . . . to
go out to the wooed, come close to him, estab- analysis of capitalism's social impact by
lish ties with him, find his strengths and weak- European sociologists it is tempting to
nesses and adjust to them . . . look at the American scene. Here we find
Innumerable times [competition] achieves indeed an important group of late-nine-
what usually only love can do: the divination teenth and early twentieth-century sociol-
of the innermost wishes of the other, even be- ogists-from George Herbert Mead,
fore he himself becomes aware of them. An- Charles Cooley, and Edward Ross to the
tagonistictension with his competitor sharpens
the businessman'ssensitivity to the tendencies young John Dewey-who, less haunted
of the public, even to the point of clairvoyance, than their European colleagues by the
in respect to future changes in the public's problems of social disintegration, were
tastes, fashion, interests . . . Modern competi- simply seeking to understand how and
tion is described as the fight of all against all, why society coheres as well as it does. But
but at the same time it is the fight for all . . .
in explaining what they called "socialcon-
. . .In short, [competition] is a web of a thou- trol" they attributed key roles to small-
sand sociologicalthreadsby means of conscious
concentrationon the will and feeling and think- scale, face-to-face relationships, as well as
ing of fellowmen . . . Once the narrow and to the ability of various social groups to
naive solidarity of primitive social conditions make norms and rules effective (Silver,
Hirschman: Rival Interpretations of Market Society 1473
1980). Significantly, economic relation- capitalism to search for or invoke any
ships are hardly ever mentioned as compensating positive effects which the
sources of socially integrative behavior in expansion of the market might have on
this literature. social life and ties.
This also holds true for the sociological But the principal explanation is sup-
system that was built up later by Talcott plied by yet another point. Economists
Parsons. In his thought, the rules of con- who wish the market well have been un-
duct keeping fraudulent behavior at bay able, or rather have tied their own hands
in the marketplace derive from what he and denied themselves the opportunity,
calls "collectivity-orientation" that must to exploit the argument about the integra-
somehow be present in every society; he tive effect of markets. This is so because
does not see such rules as arising in any the argument cannot be made for the
way out of the market itself. Given the ideal market with perfect competition.
rigid dichotomies within which the Parso- The economists' claims of allocative effi-
nian system is conceived there could not ciency and all-round welfare maximiza-
be much communication between market tion are strictly valid only for this market.
transactions, classified as "universalistic," Involving large numbers of price-taking
and such "particularistic"and "diffuse" anonymous buyers and sellers supplied
phenomena as friendship and social ties with perfect information, such markets
in general (Parsons,1951, pp. 98, 125-27). function without any prolonged human or
So much for sociology. What about the social contact among or between the par-
economists? After all, here was a group ties. Under perfect competition there is
of social scientists that had a tradition of no room for bargaining, negotiation, re-
either outspokenly criticizing the capital- monstration or mutual adjustment and the
ist system or of defending and praising various operators that contract together
it. Should not the praisers, at least, have need not enter into recurrent or continu-
had an interest in keeping alive the ing relationships as a result of which they
thought that the multiple acts of buying would get to know each other well.
and selling characteristic of advanced Clearly this latter tie-forming effect of
market societies forge all sorts of social markets can be important only when
ties of trust, friendliness, sociability, and there are substantial departures or
thus help hold society together? In actual "lapses" from the ideal competitive
fact, this sort of reasoning is conspicuously model. But the fact is that such lapses are
absent from the professional economics exceedingly frequent and important. In
literature. The reasons are several. First, the face of this situation pro-market econ-
economists, in their attempt to emulate, omists have either singled out ties among
in rigor and quantitative precision, the suppliers and, like Adam Smith, have cas-
natural sciences, had little use for the nec- tigated them as "conspiracies against the
essarily imprecise ("fuzzy") speculations public"; or, much more frequently, they
about the effects of economic transactions have belittled the various lapses in an at-
on social cohesion. Second, those trained tempt to present the reality of imperfect
in the tradition of classical economics had competition as coming close to the ideal.
only scorn for the concern of sociologists In this manner, they endeavored to en-
over the more disruptive and destructive dow the market system with economic le-
aspects of capitalism. They saw in such gitimacy. But, by the same token, they
phenomena a short-run cost necessary to sacrificed the sociological legitimacy that
achieve superior long-run gains and were could rightfully have been claimed for the
not impelled by that sort of critique of way, so unlike the perfect-competition
1474 Journal of Economic Literature, Vol. XX (December 1982)
model, most markets function in the real ment. It is as though the thesis, faced with
world.5 the widespread critical attitude toward
Only in recent years have a number of capitalism, managed to survive by chang-
approaches been developed by econo- ing camp.
mists that do not look at departures from So far we have become acquainted with
the competitive model as either sinful or one kind of critical analysis of capitalism's
negligible. To the contrary, with their impact on the social order. What I called
stress on transaction costs, limited infor- the self-destruction thesis views capitalism
mation and imperfect maximization, as an extraordinarily powerful force that
these approaches explain and justify the dissolves all previous social formations and
widespread existence of continuing rela- ideologies and even chips away at capital-
tionships between buyers and sellers, the ism's own moral foundations. But a very
frequent establishment of hierarchies in different, almost opposite critique has also
preference to markets partly as a result been prominently voiced: here the real
of such "relational exchange," the use of grudge against capitalism and its standard
"voice" rather than "exit" to correct mu- bearer, the bourgeoisie, is their weakness
tual dissatisfaction, and similar phenom- vis-a-vis traditional social forces, their un-
ena that make for meaningful tie-forming willingness to stage a frontal attack, and
interaction between parties to transac- often their submissiveness and "spineless"
tions. The stage could thus be set for a subservience toward the well-entrenched
partial rehabilitation of the doux-com- aristocrats of the ancien regime. As in the
merce thesis. case of the self-destruction thesis, this is
not a unified theory, but a series of contri-
butions from different authors, for differ-
IV. The Feudal-Shackles Thesis
ent purposes, and in different contexts.
With all due respect for these new de- Nevertheless, there is a common theme:
velopments, it remains a fact that the a number of societies that have been pen-
doux-commercethesis about the beneficial etrated by capitalism are criticized and
effects of expanding capitalism on social considered to be in trouble because this
relations, so popular in the eighteenth penetration has been too partial, timid,
century, all but disappeared from the and half-hearted, with substantial ele-
intellectual stage during the protracted ments of the previous social order being
subsequent period which saw the full left intact. These elements are referred
development of capitalistsociety and, con- to variously as feudal overhang, shackles,
currently, the deployment of a far more remnants, residues, ballast, or relics and
critical view about its social impact. But they turn out to retain considerable influ-
the ways of ideology are intricate: upon ence and power. Inasmuch as the societies
looking closely it appears that the optimis- in question are criticized for not having
tic doux-commerce thesis does reemerge liquidated this feudal overhang, it has also
after all in the nineteenth and twentieth often been said of them that they have
centuries, but as padt and parcel of an im- "failed to complete the bourgeois revolu-
portant critical view of capitalist develop- tion." In short, this group of ideas can be
referred to as the "feudal-shackles" or
5I have made a similar point in Exit, Voice, and
Loyalty, (1970, p. 22). In the same vein, Oliver Wil- "unfinished-bourgeois-revolution" thesis.
liamson has recently written about the "inhospitality While the feudal-shackles thesis is
tradition" of economists with regard to organiza- clearly opposed to the self-destruction
tional innovations of business enterprise: such inno-
vations were always suspected of entailing depar- thesis, it is but an inverted version of the
tures from the competitive model (1981, p. 1540). doux-commerce thesis. This is not hard to
Hirschman: Rival Interpretations of Market Society 1475
see. Things would have worked out fa- Germans suffer not only from all the mod-
mously, so the feudal-shackles thesis as- ern woes of capitalist expansion, but from
serts implicitly, if only commerce, the a "long series of inherited afflictions, re-
market, capitalism had been able to un- sulting from the persistence of antiquated
fold freely, if only they had not been modes of production that have outlived
reined in by pre-capitalistinstitutions and their usefulness, with their sequel of ad-
attitudes. The civilizing work of the mar- verse social and political relations" (1932,
ket might be done either directly, accord- p. 7).
ing to the original script of the doux-com- From this kind of observation it is not
merce thesis, or indirectly, by opening the a big jump to assert that the persistence
way to the proletarian revolution and to and unexpected strength of pre-capitalist
fraternal socialism, after the rapid sweep forms, together with the correlative weak-
of capitalism. Here the douceur brought ness of capitalist structures, could become
by the market would come at one remove. a major problem in certain societies. In
But, alas, neither one nor the other of which ones? The German example sug-
these happy outcomes were to materialize gests that it might be in those where capi-
as hostile forces of bygone social for- talist development is delayed, the delay
mations retained unexpected strength. being precisely due to the resilience of
The feudal-shackles thesis thus rests on pre-capitalist forms, to the fact that the
the doux-commerce thesis-without, of feudal "cobwebs" have not been neatly
course, acknowledging the affiliation.It is "swept away" by a thorough-going "bour-
the doux-commercethesis in negative dis- geois revolution." On the contrary, so the
guise, in critical garb, "stood on its head." story goes, the indigenous bourgeoisie in
We now have two major critiques of such countries was not only weak, but ser-
capitalism, the self-destruction and the vile, supine, craven, wishing to "make it"
feudal-shackles theses. Each points to within the old order and submissive to its
some "contradictions" of capitalism, but code and values. This results in the "dis-
it is already apparent that the two views tortion" or "stunting" of capitalist struc-
also violently contradict one another. tures. In other words, the trouble with
There is here then a contradiction be- capitalism, suddenly, is not that it is so
tween contradictions, or, to borrow a strong as to be self-destructing but that
mathematical term, a second-order con- it is too weak to play the "progressive"
tradiction of capitalism.The nature of this role history has supposedly assigned to it.
contradiction will become clearer as the The fullest development of these ideas
historical development and the various was to occur in our time with some neo-
shapes of the feudal-shacklesthesis are re- Marxist analyses of the countries of the
viewed briefly. capitalist periphery. But there are earlier
However contradictory, the two theses important applications and Schumpeter's
can both be traced-as might be expected: well-known theory of imperialism is a case
after all, they are both critiques of capital- in point. As already noted, one of the fond-
ism-to the writings of Karl Marx. That est hopes expressed in the seedtime of
he prepared the ground for the self-de- capitalist development was that world-
struction thesis because of his emphasis wide trade and investment consequent
on the all-corrosive properties of capital- upon capitalist development would make
ism has already been noted. Similarly, the war impossible and lay a solid foundation
feudal-shackles thesis is adumbrated in for peace and friendship among nations.
Marx when he writes in the Preface of When, around the beginning of the twen-
Capital that in comparison to England the tieth century, the illusory nature of this
1476 Journal of Economic Literature, Vol. XX (December 1982)
hope became only too obvious, it was at- they criticized the experience of certain
tractive to argue, along exactly opposite countries under capitalism for lack of dy-
lines, that capitalism itself inevitably leads namism they stressed structural rather
to great-power rivalry and war. This, with than ideological factors. In Italy, for exam-
some variants, was indeed affirmed by the ple, Antonio Gramsci (1949) and Emilio
economic theories of imperialism pro- Sereni (1947) analyzed the Risorgimento
posed around that time by J. A. Hobson, as an "incomplete" or "failed" bourgeois
Rosa Luxemburg, Rudolf Hilferding and revolution because political unification in
Lenin. But Schumpeter, writing during the second half of the nineteenth century
World War I, came to the rescue of the was not accompanied by agrarian reform
earlier optimistic view by arguing that or revolution. The weakness of the Italian
capitalism, in and of itself, could only lead bourgeoisie, its lack of Jacobin energies
to peace. To him, the rational, calculating were thus proclaimed as the aboriginal
spirit of capitalism was wholly incompati- flaw or vizio d'origine of modern Italian
ble with the reckless gambling character- history, as the root cause of all subsequent
istic of warmaking in the modern, or in woes, from weak economic development
any age. What had gone wrong? Precisely to the advent of Fascism.6
that capitalism had not proven vigorous Some of this analysis at least was later
enough, had not been able to alter deci- controverted by economic historians who
sively either the social structure or the pointed out that the so-called "failure to
mentality of the precapitalist age with its complete the bourgeois revolution" by
disaster-bound addiction to heroic antics land reform in the South actually permit-
(Schumpeter, 1951). ted capital accumulation to proceed in the
Strangely enough, Schumpeter there- North. So the alleged failure had its posi-
fore became an articulate spokesman-far tive side in that it made possible the vigor-
more so than Marx-both for the feudal- ous industrial push that did take place in
shackles thesis, according to which the the country's North prior to World War
trouble with capitalism was its weakness I (Rosario Romeo, 1959; Alexander Ger-
(vis-a-vis precapitalist forms), and for the schenkron, 1962, Chapter 5).
self-destruction thesis which emphasizes But to return to the failed or incom-
capitalism's corrosive strength. To explain plete-revolution thesis: In Italy, the princi-
this apparent inconsistency it must first pal objective pursued by leaders of the
be pointed out that the texts which con- Risorgimento was national unification and
tain the two theses were written over it was accomplished. To characterize that
twenty years apart from one another. Sec- movement as a failed bourgeois revolution
ond, the two theses, in spite of their con- therefore amounted to inventing a failure
tradiction, have various characteristics in by substituting some imaginary telos or
common: both underline the importance historical geist for the real intentions of
of ideology and mentality and thereby are human agents. In nineteenth-century
self-consciously critical of Marxism; and Germany, on the other hand, the failures
both take an obvious pleasure in stressing of the political movements of 1848 were
the key role of the irrational in human all too real and they did expose the politi-
affairs, once again in line with the contem- cal weakness of the German bourgeois lib-
porary intellectual climate due to such fig- erals. These events lent themselves to a
ures as Freud, Bergson, Sorel and Pareto.
In the meantime, however, the Marxists
6A collection of articles around the concept, fortu-
were also picking up the hints dropped nately critical for the most part, is in II vizio d'ori-
by the master. Naturally enough, when gine, 1980.
Hirschman: Rival Interpretations of Market Society 1477
straightforwardinterpretation, along feu- in an orderly sequence (CharlesAnderson,
dal-remnants lines. "It is the tragedy of 1967, p. 104).
the bourgeoisie that it has not yet defeated Latin American societies, it was con-
its predecessor, that is, feudalism, when cluded, somehow did not manage to extir-
its new enemy, the proletariat,has already pate superannuated relations of produc-
appeared on the stage of history." Clearly tion and this was why they were in
this elegant formulation of Georg Luk'acs trouble. Once more the culprit was the
(1968, p. 144) applied particularly to Ger- weakness of the indigenous bourgeoisie,
many and Central Europe (Walter Benja- ever ready to sell out to the old landown-
min, 1962, p. 105) where the battle with ing elites or to foreign investors and pref-
the bourgeoisie's alleged historical "pre- erably to both. Such was to be the essence
decessors," the aristocratic and military of much neo-Marxist analysis which, this
powerholders, was never really joined. Af- time, did not bother to blame the bour-
ter some skirmishes,circa 1848, the bour- geoisie for not playing its "historic role."
geoisie was ready for a compromise with Rather, it was now denied that, given the
the powerful "feudal remnants" and, ac- peripheral position of Latin American so-
cording to numerous observers, it is this cieties, their bourgeoisie could ever come
compromise which deserves much of the to play any constructive developmental
blame for the disastersof modern German role at all; this congenital incapacity was
history. meant to be conveyed by the coining of
In spite of the historical importance of insulting terms such as "compradorbour-
the Italian and German cases, the notion geoisie" (Paul Baran) and "lumpenbour-
that the bourgeois class, which emerges geoisie" (Andre Gunder Frank). Quite
with the rise of commerce and industry, consistently with this position, what indus-
does not necessarily sweep away all pre- trialization and capitalist development
capitalist formations had to be rediscov- have taken place in Latin America and
ered, with great fanfare, again and again. elsewhere in the periphery, was systemat-
This was so, for example, in Latin Amer- ically belittled and berated.
ica. During the growth years following This is not the place to discuss the truth
World War II, social scientists looking at value of these conceptions and assertions
the "periphery"generally set out with the except to state that I have my doubts
unspoken assumption that capitalism was which are expressed elsewhere (Hirsch-
(and always has been) performing fault- man, 1981, Chs. 1 and 5).7 I must go on
lessly in the center; hence, so they con- and call attention to a strange turn taken
cluded, the difficulties of the periphery quite recently by the feudal-shacklesthe-
must be due to some deviation from the sis. Until now it always served to explain
pattern the center had followed. Within why one particular backward or latecom-
this conceptual framework the feudal- ing country's economic development was
shackles thesis-or close analogues-pro- experiencing difficulties in comparison to
vided an appealing explanation once a leading country or countries where de-
again. Coining an expressive and success- velopment was thought to have pro-
ful metaphor, a political scientist de- ceeded smoothly and vigorously. Now,
scribed the Latin American social and po- suddenly, a number of voices are telling
litical scene as a "'living museum' in us that, at least in Europe, no such blessed
which all the forms of political authority
of Western historic experience continue 71 am not denying, of course, that industrialization
in Latin America had characteristicsof its own; in
to exist and operate," implying that in the fact, I have tried to set them forth in some detail
West these forms followed one another (Hirschman,1971, Chapter 3).
1478 Journal of Economic Literature, Vol. XX (December 1982)
country ever existed and that the bour- tellectuals imbued with gentry ideals
geoisie was weak, craven and spineless all (Martin J. Wiener, 1981).8 Carrying this
over. The strongest assertion of this sort genre to extremes-and becoming a suc-
is made in The Persistence of the Ancien ces de scandale in the process-is a recent
Regime by Arno Mayer (1981). According French book, L'ideologie frangaise by
to this work, the situation in all of Europe Bernard-Henri L6vy (1981). According to
was, at least until the First World War, this author, French social and political
very much like what it has been alleged thought was dominated, from mid-nine-
to be today in the Latin American periph- teenth century to World War II and from
ery: capitalist development was anything one end to the other of the ideological
but dynamic and penetrative, the bour- spectrum, by a repulsive amalgamof racist
geoisie was everywhere subservient to the and protofascist drivel!
established nobility, and the elites of the Once again I shall refrain from evaluat-
ancien r6gime retained not only economic ing these various works. My purpose at
and political power, but cultural hege- this point is to identify the Mayer type
mony as well. And, in a light variant of of proposition as an extension of the feu-
the Schumpeter thesis on imperalism, dal-shackles thesis to countries, such as
Mayer attributes the outbreak of World England and France, that had been almost
War I to the reaction of these traditional by definition immune to this sort of cri-
powerholders when they perceived for tique. The reason is of course that the most
the first time some distant rumblings of advanced capitalist countries were gener-
troubles for their hitherto uncontested do- ally thought to be suffering from contra-
minion. dictions that arose from capitalism's
This near-universalizationof the feudal- strength, rather than from its weakness.
remnants thesis represented a particularly In sum, the generalization of the feudal-
surprising and daring proposition for En- shackles thesis pulls out two rugs simulta-
gland and France, the two majorcountries neously: one from under certain widely
where, so it had long been thought, total entertained conceptions about the specific
victories had been achieved by the bour- nature and problems of capitalism in the
geoisie and capitalism as a result of politi- periphery (and among European latecom-
cal revolution in France and industrial ers); and the other from under the self-
revolution in England. Now, it must be destruction thesis whose favorite terrain
noted that this questioning of the status must surely be found, if anywhere, in the
of France and England as model countries most advanced countries.
occurred at a time when the golden
"growth years" of the fifties and sixties
V. America, or the Perils of Not Having
were definitely behind us and new ques-
a Feudal Past
tions were being asked about the health
of capitalist economy and society. In fact, To get over our puzzlement and to com-
Mayer's book, with its generalization of plete our pageant of theories it will be
the feudal-shackles thesis to countries helpful, at this point, to turn to the United
hitherto outside of its reach, does not States, a preeminent outpost of capitalism
stand alone. A related volume on England that has strangely remained unmentioned
tells us how that country's industrial spirit up to now. The reason is that this country
had only the briefest flowering circa 1850
and from then on was in constant retreat
8An early argument on the historical weakness
as a successful counterrevolution of values of the English bourgeoisie is in Perry Anderson,
was launched against it by middle-class in- 1964.
Hirschman: Rival Interpretations of Market Society 1479
alone has escaped from the generalization as abundant natural resources and size)
of the feudal remnants thesis. No one has and is therefore free from the unending
yet argued that the United States is or has internal conflicts of other Western coun-
ever been in the grip of some ancien r6- tries.
gime or that, except for the South and But now comes a surprise, even a coup
slavery, its capitalist development has de theatre. A major contributor to this lit-
been hampered and distorted by tena- erature is Louis Hartz with his classic, first
cious gentlemanly values or entrenched published in 1955, The Liberal Tradition
feudal institutions. Rather, the United in America. Hartz fully accepts the idea
States has generally been taken to be the that the United States is uniquely exempt
confirmation a contrario of the feudal from feudal relics. He duly cites Goethe's
remnants thesis: its vigorous capitalist de- poem and even uses the Tocquevillian
velopment, combined with sturdy politi- sentence as his epigraph. Yet, upon read-
cal pluralism, has often been attributed ing the book with some attention, one no-
precisely to the absence of a feudal back- tices something that he never tells you
ground. This idea that the United States outright: namely, he is in intimate dis-
is uniquely blessed because, unlike old Eu- agreement with both Goethe and Tocque-
rope, it is not weighed down by the shack- ville! His book is in effect a long lament
les of the past was expressed as early as about the many evils that have befallen
1818 by Goethe in the poem "To the the United States because of the absence
United States," whose opening lines read: of feudal remnants, relics and the like.
Throughout, this vaunted absence is
Amerika, Du hast es besser
Als unser Kontinent, der Alte, shown to be a mixed blessing at best, and
Hast keine verfallenen Schlosser ... 9 is most frequently depicted as a poisoned
gift or a curse in disguise.
Tocqueville, of course, gave this same
comparative appraisal its classic expres- Hartz' reasoning is basically very sim-
ple-this is why it is so powerful. Having
sion, with the single, oft-quoted sentence:
"The great advantage of the Americans been "born equal," without any sustained
is that they have come to democracy with- struggle against the "father," that is the
out having to endure democratic revolu- feudal past, America is deprived of what
Europe has in abundance: social and ideo-
tions;and that they are born equal, instead
of becoming so" (1961, Vol. 2, p. 108).1o logical diversity. But such diversity is one
Many American commentators have been of the prime constituents of genuine lib-
eager and happy to make these flattering erty. According to Hartz, the lack of ideo-
insights their own. Thus arose what has logical diversity in America has meant the
become known as the thesis of "American absence of an authentic conservative tra-
dition, is responsible for the often noted
exceptionalism," which holds that Amer-
ica is exceptionally fortunate among na- weaknesses of socialist movements, and
tions because of its peculiar historical has even made for the protracted sterility
background (plus a few other factors, such of liberal political thought itself (pp. 140-
42). What is still more serious, this lack
of diversity stimulates the ever-present
9America, you are better off/Than our old conti- tendencies toward a "tyranny of the ma-
nent/You have no castles in ruins . . .
10This sentence concludes a short chapter entitled jority" inspired by America's "irrational
"How it comes about that individualismis stronger Lockianism"(p. 11) or its "colossalliberal
after a democratic revolution than at other times" absolutism" (p. 285).
where Tocqueville lists the many conflicts and prob-
lems afflictingsocieties, such as the French, that have This state of affairsis shown to have nu-
had to "suffera democratic revolution." merous implications, mostly deplorable, in
1480 Journal of Economic Literature, Vol. XX (December 1982)
both domestic and international affairs. I Conversely, a recent essay on Latin Amer-
shall cite only one observation, because ica argues, very much in the spirit of Louis
of its relevance to present-day events. An- Hartz, that the lack of genuine feudal
alyzing the New Deal and its considerable structuresin that Continent's historicalex-
departures from the traditional liberal perience accounts for its "centralist tradi-
credo, Hartz notes that Roosevelt put tion" which in turn is held to be responsi-
across his innovative reforms as an exer- ble for its principal troubles (Claudio
cise in "pragmatism" and in "bold and Veliz, 1980).
persistent experimentation":
. . . the crucial thing was that, lacking the so- VI. Toward a Tableau Ideologique
cialistchallenge and of course the old corporate
challenge on the right such as the European We have been on an extended tour
conservatismsstill embodied, he did not need d'horizon of interpretations of capitalist
to spell out any real philosophy at all [p. 263]. development. The focus of my inquiry has
According to Hartz, Roosevelt owed not been on what is right or wrong with
much of his success to this manner of pre- capitalism (from the points of view of jus-
senting his policies as just a "sublimated tice, efficiency, or growth), but on what
'Americanism.'"Today, of course, we can goes right or wrong; that is, on ideas about
appreciate the high cost of the maneuver. the likely economic and non-economic
The New Deal reforms, as well as the wel- (moral, social, political) dynamics of the
fare state schemes that were added later, system. In case the reader feels bewil-
were never truly consolidated as an inte- dered by the seeming jumble of theses
gral part of a new economic order or id- that have been paraded I shall now dem-
eology. Unlike similar policies in other onstrate, by a two-by-two table, that the
economically advanced countries, these structure of my argument has really been
reforms failed to achieve full legitimacy quite simple as well as beautifully sym-
and remained vulnerable, as is currently metrical.
evident, to attack from revivalist forces I have essentially dealt with four types
adhering strictly to the aboriginal "colos- of theses or theories and they have been
sal liberal absolutism." presented in a sequence such that each
In sum, Hartz' analysisachieved or per- successive thesis is in some respect the
mitted substantial insights by reversing negation of the preceding one. According
the conventional lament about the pres- to the doux-commerce thesis of the eigh-
ence and influence of feudal remnants in teenth century, with which I started out,
capitalist societies. Other, perhaps no less the market and capitalism were going to
troublesome, kinds of difficulties can create a moral environment in which a
plague a nation, so he shows, just because good society as well as the market itself
it is in the "enviable,""exceptional"situa- were bound to flourish.But soon there was
tion of not having a feudal past. Hartz' po- to arise, in counterpoint, the self-destruc-
sition, I should add, has been strengthened tion thesis which asserts that, to the con-
and extended by recent macrosociological trary, the market, with its vehement em-
speculations which tend to view feudal so- phasis on individual self-interest, corrodes
ciety, with its complex institutional struc- all traditional values including those on
ture and built-in conflicts, as the indis- the basis of which the market itself is func-
pensable seedbed of both Western
democracy and capitalist development."1 different ideological positions: Les origines du capi-
11For converging analyses along these lines, it is talisme by Jean Baechler (1974), and Lineages of
possible to cite the works of two authors with very the Absolutist State by Perry Anderson (1974).
Hirschman: Rival Interpretations of Market Society 1481

Dominance of Market vs. InfluentialPersistence of Pre-capitalistForms:
Their Effects on Market Society


doux-commerce self-destruction
Dominance of Market thesis thesis
(DC) (SD)

feudal-blessings i
Influential Persistence ofthss
Pre-capitalistForms t theSis
(FB) (FS)

Arrows indicate flow of argument

in Sections I-V

tioning. Next, the feudal-shackles thesis tions that are in fact closely related but
demonstrates instead how capitalism is have evolved in total isolation from one
coming to grief, not because of its own another. Rather wondrously, the various
excessive energies, but because of power- ideologies, even though secreted in such
ful residues of pre-capitalist values and isolation, end up composing a complete
institutions. This thesis is in turn contra- pattern as shown in the chart; it is as
dicted by the demonstration that calami- though four blindfolded children did a
tous results follow from the absence of a perfect job coloring jointly a coloring
feudal past. This is the thesis of Louis book.
Hartz which can also be called the feudal- So far I have essentially been, or pre-
blessings thesis as it implies that a feudal tended to be, a spectator and chronicler
backgroundis afavorable factor for subse- of that considerable portion of the Human
quent democratic-capitalistdevelopment. Comedy which is involved with the pro-
Thus we end up with a position that is duction of ideologies. Faced with the
in obvious conflict with the initial doux- highly diverse views here outlined I con-
commerce thesis; for, in the latter, the fess, however, to a moderate interest in
market and self-interested behavior are the question as to which one is right. And
viewed as a benign force that is in fact here the simple tableau ideologique I
destined to emancipate civil society from have presented can also be of use. First
"feudal shackles." of all, it suggests that, however incompati-
The schematic presentation or mapping ble the various theories may be, each
of Chart 1 makes it easy to perceive the might still have its "hour of truth" and/
relationship between the various theses. or its "country of truth" as it applies in
It promotes a principal aim of this essay a given country or group of countries dur-
which has been to establish contact be- ing some stretch of time. This is actually
tween a number of ideological forma- how these theses arose, for all of them
1482 Journal of Economic Literature, Vol. XX (December 1982)
were fashioned with a specific country or As already noted, a highly irreconcilable
group of countries in mind. contradiction is that between the self-de-
But the chart is especially useful if one struction thesis and the feudal-shackles
wishes to pursue a more complex (and, I thesis. The former views capitalism as a
think, more adequate) way of giving each wild, unbridled force which, having swept
contending view its due. It is conceivable away everything in its path, finally does
that, even at one and the same point in itself in by successfully attacking its own
space and time, a simple thesis holds only foundations.The feudal-shacklesthesis, on
a portion of the full truth and needs to the other hand, sees capitalists as weak
be complemented by one or several of the and subservient and easily over-powered,
others, however incompatible they may distracted or distorted by pre-capitalist
look at first sight. The chart then invites forms and values. In the face of this clash
us to try out systematicallythe variouspos- in conceptions, a determined eclectic or
sible combinations of the four theses. In lover of reconciliations could still argue
the following, I shall limit this exercise to that capitalism has the knack of doing
the three "contradictions" (DC-SD, SD- away with all in its "legacy" that is good
FS, FS-FB) with which we are already and functional (that is, with such values
familiar.12 But now the task is to explore as truth and honesty, not to speak of
whether it is at all possible and useful to gemiitlichkeit) while leaving intact, and
combine the theses that constitute those utterly succumbing to, all in precapitalist
contradictions. society that is pernicious. But is it conceiv-
Clearly there are degrees of incompati- able that fny historical formation would
bility between points of view or doctrines have such an unerring, schlemiel-like in-
that are contradictory on the face of it. stinct for going wrong?
12 Given the four theses, there
Here then is our most genuine, most
are altogether six
such pairwise combinations and we already know irreducible "second-order contradiction."
that four of them are "full of contradictions."The It remains possible, of course, for each of
remaining two, that is, the diagonalpairs DC-FS and these accounts-the self-destruction and
SD-FB,shouldbe nicely compatible as, say, the doux-
commerce thesis is here coupled with the negation the feudal-remnants theses-to be valu-
of its negation. This is indeed the case. It was pointed able in explaining the difficulties capital-
out in Section IV that the feudal-shacklesthesis could ism is experiencing in different settings.
be understood as the doux-commercethesis in dis-
guise. To combine these two theses therefore does In other words, I do not wish to intimate
not really yield new information or interpretation. that these two theses checkmate each
If we look at the other diagonal pair, the self-de- other, so that we can happily conclude
struction and the feudal-blessings theses, a similar
conclusion follows. In Louis Hartz' argument about that capitalism is wholly exempt from
the dire consequences of the lack of a feudal past trouble on account of either of them.
there is implicit a concern that a society wholly domi- By now, however, we know that these
nated by the market would face considerable dan-
gers. The two theses are eminently compatible and two accounts are contradicted not only by
to bring them together does not add much to either each other. They must also be confronted
one or the other. with points of view that see something
Finally I shall not deal in the text with the DC-
FB pair. These two theses do add up to a real contra- positive in the very factors that are
diction, for we have here two very different accounts viewed negatively in the self-destruction
of the reasons for capitalism'shealth and strength. and feudal-shackles theses. These are the
But, in this manner, the pair is little more than the
mirror image of the pair SD-FS (the self-destruction doux-commerce and the feudal-blessings
and feudal-shacklestheses) with its two contrasting theses which will now be brought into
accounts of the difficulties encountered by market play.
society. It is this latter pair that is being discussed
in the text along with the remaining two pairs, DC- Take, first, the feudal-shackles and the
SD and FS-FB. feudal-blessings theses. As soon as we ex-
Hirschman: Rival Interpretations of Market Society 1483
amine the likelihood that both may be tory processes might actually be at work
true at the same time it becomes obvious in society. It is not just a question of diffi-
that nothing stands in the way of that sort culty of perception, but one of considera-
of amalgam which, on the contrary, seems ble psychological resistance and reluc-
immediately more probable than the tance: to accept that the doux-commerce
eventuality that just one of the theses and the self-destruction theses (or the
holds to the total exclusion of the other. feudal-shackles and the feudal-blessing
Mixing the two theses means that precapi- theses) might both be right would make
talist forms and values hamper the full de- it much more difficult for the social ob-
velopment of capitalism while also be- server, critic, or "scientist" to impress the
queathing something precious to it. A general public by proclaiming some inevi-
mature appraisalsurely needs to be aware table outcome of current processes.
of both lines of influence and the balance But after so many failed prophecies, is
is likely to be different in each concrete it not in the interest of social science to
historical situation. embrace complexity, be it at some sacri-
This conclusion applies even more to fice of its claim to predictive power?
our last remaining pair: the doux-com-
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