Book Review: Albert O. Hirschman's The Passions and the Interests
When did we decide greed was good?
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Suppose you're a philosopher in 17th century western Europe. Fed up with incessant war waged by capricious despots, you wonder — maybe, if tyrants only care about accumulating material wealth, this will overwhelm their lust for power and violence?
There are political arguments for capitalism, but the first that comes to mind isn’t that it marked the end of violence. Yet, as Hirschman claims throughout The Passions and the Interests: Political Arguments for Capitalism Before its Triumph, this was once the de facto justification for capitalism. Where did this argument come from, and why was it mostly abandoned?
The remarkable thing about Passions is that it doesn't explicitly say much else. Hirschman claims are modest:
I conclude that both critics and defenders of capitalism could improve upon their arguments through knowledge of the episode in intellectual history that has been recounted here. This is probably all one can ask of history, and of the history of ideas in particular: not to resolve issues, but to raise the level of the debate.
Though nominally a purely historical piece, Hirschman has a palpable frustration with our collective amnesia. Despite finding some other benefits, should it matter that the rationale that built our economic system was wrong?
2
How did commercial and financial enterprises, seen for centuries as sinful avarice, become a respectable human motivation? Hirschman's plan to figure it out is... to track at every time the terms passion or interest are mentioned by a western thinker after the 15th century.
In this context, the “passions” refer to human drives or motivations, typically in the negative sense. St. Augustine, for example, defined three: the lust for money, sex, and power. Around the 15th century, intellectuals became increasingly concerned with the societal disorder created by passions in rulers. Fed up with models of the state that "conceive men not as they are but as they would like them to be", Hobbes, Machiavelli, etc. set out to create theories of statecraft that account for the "destructive passions of men". Out of these efforts, many thinkers arrived at something like "Nothing can oppose or retard the impulse of passion but a contrary impulse". In sum, restraining a destructive passion of men with reason is futile, appealing to some other passion might be more productive.
In parallel, the notion of "interest," initially a dispassionate and reasoned pursuit of the good, developed. For a ruler, acting according to their interest means using reason to advance the overall welfare of the realm. This was useless in more than one way: there’s no commonly understood notion of good, and worse, there’s no clear way to convince a ruler to ignore their passions and act according to interests. So over time, this broad concept of interest, at both the state and individual level, shrunk; by the late 17th century, Jean de Silhon noted "the name of Interest has remained attached exclusively, I do not know how, to the Interest of wealth"1. Hirschman offers a few possible explanations, but whatever the cause, acting according to one's interests came to mean accumulating wealth.
To Locke and Hume, the inconsistent and irrational actions of men driven by passions were an obstacle to a functional society. But now there’s this one passion, greed, that can be pursued rationally. The dilemma for statecraft — how to convince rulers to act in their interests — became more tractable: how to convince rulers to act only according to greed. Greed was considered near inexhaustible, so it’s a reliable passion to depend on. And compared to the horrors of the pursuit of power and glory, "making money" appeared relatively innocuous:
There are few ways in which a man can be more innocently employed than in getting money.
This same sentiment was applied to the citizens of the state, exalting the calm greed in the merchant-trader class:
anyone who did not belong to the nobility could not, *by definition*, share in heroic virtues or violent passions. After all, such a person had only interests and not glory to pursue.
And so the calm, innocuous, and reasoned pursuit of wealth felt like a safer building block:
In a sense, the triumph of capitalism, like that of many modern tyrants, owes much to the widespread refusal to take it seriously
These ideas clustered in what Hirschman calls the "Montesquieu-Steuart doctrine": Once commerce is sufficiently expanded, rulers will not engage in the arbitrary whims of their passions out of fear of disturbing the delicate economic environment that works to their material interest. "A modern oeconomy, therefore, is the most effectual birdle ever was invented against the folly of despotism."
But this long line of ideas gets abandoned with Adam Smith, who pivots to emphasizing the economic benefits of capitalism. Other motivations aren't kept in check by greed, instead, the other passions can be similarly acted upon by calculated greed.
Hirschman offers a few reasons the countervailing passions argument falls out of favor, chief among them the increasingly clear empirical case that profit and violence were quite compatible:
[The countervailing passions argument] strikes us as a strange aberration for an age when the slave trade was at its peak and when trade in general was still a hazardous, adventurous, and often violent business
Smith himself, then, seemed resigned to a less optimistic view for the impact of commerce in the political sphere:
The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit a remedy.
To the extent that Smith admitted a tempering effect, he lamented it:
These are the disadvantages of a commercial spirit. The minds of men are contracted, and rendered incapable of elevation. Education is despised, or at least neglected, and the heroic spirit is almost utterly extinguished. To remedy these defects would be an object worthy of serious attention.
In total, this led Smith to shift focus to the pure economic benefits of self-interest, without any real hope that expanding commerce would impact "the capricious ambition of kings and ministers".
3
So Hirschman wrote an entire book not because anyone was wrong, but out of a frustration with our collective repression of this period.
When the anti-capitalist critiques that focus on alienation in a world of expanding commerce start to roll in:
[Capital] has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation.
Hirschman weeps, because that was the point of capitalism. Detractors ought to know this, and then re-focus critique on why the optimism Montesquieu et. al. held was misplaced.
Writing in 1977, Hirschman takes the countervailing passions logic to be dead. So he has even less sympathy for modern appeals to the argument by capitalist apologists. Hirschman calls Keyne's appeal to it2 "almost painful," and derides modern formulations as "identical and identically flawed" to the forgotten version. This is perhaps the least satisfying part of this analysis. Hirschman claims that the modern reader would think the classic doctrine “appears not to deserve to be taken seriously,” that it’s an” unreal” or “unfamiliar” take in current times.
But people still make this argument. It’s clearly not dead.
Hirschman only devotes a scant few pages to actually arguing against countervailing passions. He skims over some arguments of Tocqueville and Ferguson: that a despot may engage in similar repression if it threatens the economy, and that “if the citizens become absorbed by the pursuit of their private interests, it will be possible for a ‘clever and ambitious man to seize power’.” And of course, Hirschman points to continued contemporary violence, asserting without quantification: "no twentieth-century observer can assert that the hopeful Montesquieu-Steuart vision has been triumphantly borne out by the course of events."
It’s hard to blame Hirschman for this tepid rebuttal, because these capitalist peace revival arguments didn’t really start taking off again until the late 80s. Still, this leaves Hirschman’s position in a similar place to the thing he derides: a strongly held position mostly defended with “conventional wisdom”. Moreover, Hirschman’s attempt to both and have and eat his cake by criticizing both capitalists and anti-capitalists is counterproductive — defending alienation as the point of capitalism, in some way, grants that the countervailing passions argument works. I’m skeptical anyone who makes a modern capitalist peace argument would be convinced to drop it solely because it was previously dismissed in the 18th century.
Also, you get the impression that Hirschman has a pretty strong distaste for reductive behavioral assumptions of economics. The classical view of mainstream economics is that economists build models of how people act. An essential part of some of these models is that people are rationally self-interested. There's some skepticism of self-interest, but it is at least the starting point for most economic models.
At some points, Hirschman’s narrative suggests this is backwards. First philosophers invented the model, and then argued and advised state actors that they should act on it by appealing to their one controllable passion, greed. By normalizing greed, economists are left with agents that are model-able. This attributes a slightly more prescriptivist role to economic thought, reminiscent of Keynes:
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.
This isn’t technically a criticism, but at best this concept is only alluded to. But I find it one of the more interesting implications of the narrative presented and would have enjoyed a more thorough exploration.
Flaws aside, Passions makes a compelling case that tracing the lineage of ideas is crucial to well reasoned debate. More than anything else, capitalism promised certain benefits, which motivated its adoption, that more or less failed to materialize (regardless of unintentional benefits that happened to materialize). A close study is valuable both to the social state that has arisen from the capitalist turn, and for future social changes we may endeavor:
[T]he expectation of large, if unrealistic, benefits obviously serves to facilitate certain social decisions. Exploration and discovery of such expectations therefore help render social change more intelligible.
Hirschman notes corruption and fortune had a “similar semantic trajectory”, the former coming to be heavily associated with bribery, the later to material fortune.
“It is better that a man should tyrannize over his bank balance than over his fellow-citizens and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative”