Early Writings

“Asked in a questionnaire of which achievement in his life he was most proud, Hirschman listed his work with the Italian anti-Fascists and with Varian Fry first, before his academic work on development in Latin America, and his books and articles.”

—Lewis Coser (1984, p. 163).

“In 1944 I heard about Eugenio’s death. I was then in Algiers and learned the news from a group of Italian antifascists I had met. For me it was a terrible blow. I realized that he was the person who had counted most in my life.”

—Albert O. Hirschman (1998, p. 76).

The essays collected here were given to me personally by their author at the end of the 1980s.¹ Together they constitute the first phase of Albert Hirschman’s² intellectual development—in 1937–1939.

As we shall see, young Albert was effectively able to make a virtue of necessity during his unstable and diverse experience as a university student. For the 1932–1933 academic year he had enrolled in the law school at the University of Berlin with the intention of becoming an economist.³ But soon, after his father’s death in April 1933, perhaps due in part to the influence of Eugenio Colorni,⁴ he took refuge in France, where he spent two years at the École des Hautes Études Commerciales (HEC). Then, thanks to a scholarship, he spent the 1935–1936 academic year at the London School of Economics (LSE). Finally, after a brief involvement in the Spanish Civil War,⁵ he moved to Trieste in the fall of 1936. There he resumed his studies and graduated on June 27, 1938.⁶

At the same time, his social-political education had also been progressing. We see this in his first commitments as a young social-democrat in Berlin, linked to the Neu Beginnen group,⁷ and in his work with the (mainly Triestine) Italian anti-fascists⁸ and with Varian Fry in Marseilles in 1940 which, as Lewis Coser informs us in this introduction’s first epigraph, he was particularly proud of.

In the summer of 1935, Albert had vacationed at Forte dei Marmi as Eugenio Colorni’s guest, and then also returned to Italy on the occasion of Colorni’s marriage to his sister Ursula. Thus in 1936, after the interlude of the Spanish war, he planned to settle in Trieste. And it was here, in almost daily contact with Ursula and (above all) with her brother-in-law Eugenio, that his extraordinary creativity first blossomed.

Beyond his antifascist, federalist and socialist political activity, Albert above all admired Colorni’s ability to be “a constant critic, questioner, stimulator.”⁹ “By 1937, at age twenty-two,” Hirschman later recalled, “I had myself lost some of my earlier certainties, but, with my German upbringing, I still sensed it as a real defect not to have a full-fledged Weltanschauung. Colorni, who was six years older than I, seemed on the contrary to cultivate and relish an intellectual style that took nothing for granted except his doubts. At the same time, he and his friends held fast to one certainty: they were firmly committed to opposing the Fascist regime. What was fascinating to me was that there was an intimate connection between the intellectual posture emphasizing the lack of firm ideological commitment and the commitment to perilous political action.”¹⁰

There was, therefore, a close relationship between great freedom of thought and risky political action experienced as the “almost joyful counterpart” of such intellectual openness, without boundaries.¹¹ Under the Fascist regime this meant learning to discipline one’s own life, rigorously separating its official and clandestine aspects.¹² That this was no simple matter is shown, among other things, by Albert’s first paper, “Fertility of Italian Women by Age and Number of Children Born” (mimeo, March 1937), which implicitly criticized the policy of the regime¹³ and was for this reason not published by the Giornale degli Economisti.

Hirschman learned quickly.¹⁴ Even so, we must not lose sight of the fact that the Trieste papers were written while Albert was doing “his work with the Italian anti-Fascists.” He had not taken a position favoring any particular antifascist current. He had simply “made himself available” as a friend of the movement against the regime. He was accordingly entrusted with the delicate (and risky) task of serving as liaison¹⁵ with certain Italian antifascist exiles in Paris, which included importing to Trieste some of the underground antifascist literature. This was then channeled into working-class circles according to a novel logic, elucidated simply and persuasively by Eugenio Colorni in a now-famous essay.¹⁶ For Hirschman it amounted to a continuous back-and-forth¹⁷ that made use of his pristine German passport.¹⁸ In addition, instead of double-bottomed suitcases, which Italian inspectors sometimes checked, he made use—as he told me personally—of double lids that had been specially crafted for the purpose. It was the first instance of the ingenuity in clandestine activity that would become proverbial in Marseille.¹⁹

In enrolling at the University of Trieste, Hirschman had of course presented ample documentation of his previous studies: attendance at a number of courses at the University of Berlin, his diploma from the École des Hautes Études Commerciales (HEC), and the courses he had taken at the London School of Economics (LSE).²⁰ He was thus permitted to enroll in the fourth year in the department of business and economics, but with the stipulation that in order to graduate he had to take five law exams²¹ (as well as a “recommended” complementary exam—corporate law, of course).²²

At the same time, Hirschman was thinking of his future profession.²³ In Paris he had attended, among others, the Institute de Statistique of the Université de Paris, which had issued him a “Certificat d’Aptitude.” With this background, he was introduced in Trieste by Colorni to Pierpaolo Luzzatto-Fegiz, director of the Institute of Statistics at the local university, and began to do some volunteer work of a sort²⁴ at that Institute as an internal student.

This experience—as already mentioned—soon gave rise to a genuine contribution in statistics concerning Italian demography; and with it Hirschman glimpsed a first, possible, professional horizon. “My work at the time,” he later maintained, “was mostly centered on demography, one of my real passions.” And he added: “because the Fascist regime, to promote the natalist policy, helped to publish many statistical data and studies in this field which have never been published before: for example, on the fecundity of the Italian woman according to the number of children that have been conceived or have survived and so on. This was quite interesting data. I based an article on it in which I demonstrated that the official policy could have counterproductive results: for example, when you had six children there would be four survivors, but when you had seven children there might only be three survivors. Therefore, I asserted in the article that even from the point of view of a natalist policy it was absurd to give prizes to women who give birth to all these children! I thought it was a good argument and still think it is, but I did not succeed in getting it published. Perhaps I shall publish it posthumously.”²⁵ This is, indeed, a significant aspect of our “Hirschman’s Legacy”—in fact, publisher Peter Lang and I are finally able to publish the essay—more than eight decades after it was written!²⁶

This brings us to a second horizon. “More important,” Hirschman maintained retrospectively,²⁷ “I acquired a nicely limited area of competence: the Italian economy. I had come to Italy from France and had been asked by a Paris publication to send in, on a trial basis, some reports on the Italian economic situation. At the time, the Mussolini regime began increasingly to restrict the publication of official economic statistics, so that it took some attentive reading of what did get published and of the daily financial press (Il Sole, Ventiquattro Ore) to figure out what was going on […]. I enjoyed the detective work involved, and whatever success I could claim in outwitting the Fascist authorities.”²⁸

Albert came out of all this—I observed—by means of “an accurate reconstruction of public finance (the budget, deficit financing, capital taxation of corporations), monetary policy, consumption, production and foreign trade. The overall picture that emerged [to be read in France of course, not in Italy] was of an economy well managed technically, but strangled by policy of economic autarky which, in conjunction with policies of war mobilization, resulted in a bloated public sector, an impoverished population, and suffocated productive and financial sectors.”²⁹

The essay, “Les finances et l’économie italienne. Situation actuelle et perspectives,” published anonymously in Paris on 1 June 1938 in the Supplément au bulletin quotidien of the Société d’études et d’informations économiques,³⁰ demonstrates without a shadow of a doubt that the “trial period” under which Hirschman had been commissioned by the Société had been passed brilliantly. It was the (hoped-for) start of a possible profession as an economic journalist specializing in the Italian economy—a prospect that was instead brutally interrupted by the enactment of the Fascist racial laws and then by the outbreak of the war.

Moreover, “Les finances et l’économie italienne” is a quite different kind of paper, much more lively and instructive than what might ex ante have been expected—not only for its intelligent and careful reconstruction of such a “Situation actuelle et perspectives,” but also because it clearly shows the extraordinary continuity of the author’s multidisciplinary inspiration (first and foremost psychological and social, as well as statistical, economic and financial)—in its developmental process.³¹ It is as if, by focusing each time on a different aspect of his work, Hirschman was implicitly drawing together (or perhaps allowing to emerge in his mind spontaneously) the many acquisitions (at first glance disparate, but in reality highly relevant to his specific purpose), which he had “stored up,” perhaps even unconsciously, during the course of his intellectual and political wanderings through some of the major European countries.

In this essay, in fact, Hirschman lists in rapid succession the three essential factors that had permeated Italian economic life in recent years (the war in Abyssinia, rearmament, and repeated strivings for autarky), along with their economic and financial consequences (which increased government spending from one-third to one-half of national income), and the main types of measures that were used to cover the deficit in the state budget (long-term loans, short-term loans, inflation, and miscellaneous means)—to then address in detail the tax on the capital of Joint Stock Companies.³²

This last element in particular shows (unexpectedly) a distinctive technical virtuosity that leads Hirschman to the following conclusion: “L’opération, il faut bien le dire, est magistrale. L’actionnaire en réalité paie l’impôt pour la société, mais non seulement il ne s’en aperçoit presque pas puisqu’il reçoit une action en échange, mais il croit même réaliser un bénéfice car on lui fait cadeau de deux actions gratuites par action souscrite. Et, en effet, il peut vendre ses droits de souscription et peut se procurer ainsi un gain immédiat, ne s’apercevant pas trop de la diminution de valeur en capital que ses actions ont subie ou subiront en conséquence de l’impôt.”³³

To conclude his studies, Hirschman had to present (and discuss in a public graduation session) a thesis and two additional papers.³⁴ The first of these latter, in economic geography³⁵ (under Prof. Giorgio Roletto), was entitled “Whether and in what way the economic element was a determining factor in the Philippine Islands’ independence.” The second, in statistical science (under Prof. Pierpaolo Luzzatto-Fegiz), had the title “Two methods for constructing marriage-rate tables,” and clearly echoed the “Note” that Hirschman had published six months earlier in the Giornale degli Economisti.³⁶

The “centerpiece” of Albert’s degree, however, was of course his thesis, supervised by Jewish-born Prof. Renzo Fubini (later tragically killed at Auschwitz). The title was The Poincaré Franc and its Devaluation.³⁷ It is through this work, finally, that I will approach a third and more important professional horizon that appeared to open up for Hirschman during his time in Trieste.

To get an idea of this, however, it is necessary to take a step back; and almost to go back over the reasoning ab ovo. It is first of all necessary to take into account—as I have already mentioned—that Hirschman’s early cultural and political development had taken place within a German cultural context (including, of course, the influence of a labor movement which, in its various components, claimed to be the beating heart of a great process of social emancipation on an international scale).³⁸ It is true, moreover, that contemporary political events had pushed Ursula and Albert onto a path of rapid politicization—such that Albert later recalled that “in my last year in Germany I was mostly occupied with political activity.”³⁹

On the other hand, Albert had from a very early age shown a notable attraction for French culture, and had even in a sense experienced a premonitory “friction” between the two cultures. In 1931–1932, in fact, while attending the Fronzösische Gymnasyum in Berlin, he took part in a group working on “Hegel’s Phenomenology of the Spirit and spent a summer writing an interpretation of a passage that Hirschman admits today is incomprehensible. ‘Perhaps,’ he observed⁴⁰ ‘the torment of having to make sense of Hegel had an unintended side effect later in France: to make me fall in love with the French moralists of the 17^th century, such as Pascal and La Rochefoucauld; they seemed to me just as deep, but in a marvelously easygoing manner.’”⁴¹

In Paris, this early philosophical attraction for French culture began to “expand” to literature, poetry and the arts, and especially to statistics and economics, which Albert was engaged with at the time. Inevitably, in fact, he had again encountered the effects of the Great Depression (less severe in France than in Germany, but getting worse). Understandably, therefore, Hirschman’s wish was (probably) to become a public economist, engaged in government activities, and his first choice for training would therefore have been the École libre des sciences politiques (SciencesPo).

Instead, he was authoritatively dissuaded,⁴² and ended up enrolling at the HEC, a sort of ante litteram business school devoted mainly to accounting and the rudiments of engineering. His disappointment was very great.⁴³ And yet, viewed retrospectively, this two-year experience had the double advantage of opening Albert’s eyes to the world of private business (which would later stand him in good stead, above all in the second part of his postwar adventure in Colombia), and at the same time not preventing him from pursuing his goal of becoming an economist dealing with public policy.

Actually, “it was during his years at HEC that Hirschman developed an interest in statistics and applied economics—a certain kind of inductive applied economics (intelligently presented factual reconstruction) that was nurtured by the Parisian ambience. It is important to remember,” I observed on this point,⁴⁴ “that several features, for a series of reasons generally left aside, were peculiar to French economics at the time. These include an inclination toward practical descriptions of economic facts, a fair degree of tolerance for various schools of thought (liberal, historical, social, mathematical, sociological etc.), and a marked interest in the political aspects of economics […]. This, together with HEC courses on money and banking […], probably made up the breeding ground of Hirschman’s research projects on French monetary policy from the 1920s to the 1930s, conceived in London and completed as a graduation thesis in Trieste.”

“I had some excellent teachers in economic geography, and in money and banking such as Albert Demageon and Henry Pomméry,” said Albert Hirschman while receiving an honorary degree in economics in Nanterre. Moreover, as he added later on, “from the point of view of my intellectual formation, it was very important to understand what was then happening in modern economics. For me this [1935–1936] was a decisive year, even though the London School was not at all Keynesian. It was rather anti-Keynesian—in fact Lionel Robbins and Friedrich von Hayek were among its principal teachers. I took some of their courses. But there were also some younger people, about my age, who had fled from Germany or Hungary. […] They were all Keynesians and had been to Cambridge to hear the master. Among them there was a brilliant young economist, already well-known, by the name of Abba Lerner, and some excellent teachers of international trade.”⁴⁵