In the latest installment of our partnership with the Center for Advanced Study in the Behavioral Sciences, Jeremy Adelman revisits Albert O. Hirschman’s Exit, Voice, and Loyalty on the occasion of the book’s 50th anniversary. Hirschman wrote the book during his year as a CASBS fellow.
For two turbulent years, General James Mattis was President Donald Trump’s defense secretary. It was little secret that Mattis had profound disagreements with the president’s foreign policy decisions and strongly disapproved of his character, which ultimately led to the general’s resignation, in late 2018. But after leaving the DOD, Mattis went silent and refrained from publicly critiquing Trump. Until June 3. In the midst of a pandemic, and after days of watching the militarized suppression of legal and peaceful protests in cities across America, Mattis finally spoke out. “I have just watched this week’s unfolding events, angry and appalled,” he wrote in a statement published by The Atlantic, alluding to the dispersal of peaceful protesters in Lafayette Square with tear gas and rubber bullets. “Never did I dream that troops … would be ordered under any circumstance to violate the Constitutional rights of their fellow citizens—much less to provide a bizarre photo op for the elected commander-in-chief, with military leadership standing alongside.”
Mattis’s outrage spurred many other establishment figures and organizations to denounce the repression and side with America’s homegrown, Black-led democracy movement. In what will surely go down as a critical moment in recent times, Mattis exhibited the power of voice—in this case the voice of a decorated, hard-to-dislike onetime loyalist—in shaping history.
Voice is to modern politics what DNA is to genetics. The strength of a democracy—and the measure of autocracy—can be gauged by the extent to which citizens are able to express themselves. One work that has deeply influenced how we think about voice is Albert O. Hirschman’s Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Now enjoying its 50th anniversary, it is a classic in the history of human sciences. But can a classic book of the fevered 1960s speak to us in our modern fevered times?
As Facebook and Amazon partition the attentional marketplace and politics turns tribal, the institutions governing modern life appear deaf to the clamor. What is so agonizing about the global street protests today is that there is a sinking feeling that the police will not change their ways, that gun lobbies will continue to pump the marketplace with ammunition, and that carbon-based fuels will dominate our energy options. When the Trump presidency ends, and the toll of years of toxicity and mismanagement becomes clear, we are going to need guidance on how to move forward. Can Exit, Voice, and Loyalty help us?
Exit, Voice, and Loyalty was conceived when the United States was at the height of its global power. It was the 1960s; civil rights, feminism, and consumer movements were on the march. Hirschman was optimistic about what lay ahead. He assumed that governments and firms would take heed of what they were hearing from the citizens who were agitating for change.
But by the late 1960s, as Hirschman traveled to Stanford for his fellowship at the Center for Advanced Study in the Behavioral Sciences (CASBS), there were early warning signs that all was not well. He had recently published a study of the World Bank. One of the case studies was a project in Nigeria. His field notes were full of jottings about farmers complaining about freight rates, merchants grousing about cheating tax collectors; the air in Nigeria in 1966 was thick with tension. Yet Hirschman’s observations made little difference in his hopeful analysis. Soon after, a horrible civil war erupted in Biafra. Hirschman was shocked and dismayed. What was the value of social science if it failed to heed its own evidence of a looming crisis? He went to CASBS in search of understanding. During his stay, the great French psychologist Serge Moscovici delivered a paper on the role of small groups (including early Christians, suffragists, and the first Nazis) in swaying majorities. How did people who were marginal, disenchanted, and persecuted convince others of the value of their perspective? And what about the opposite: cases where people remained loyal to institutions (such as governments waging unpopular wars in the Mekong Delta) that had stopped listening to their constituents?
At the time, one example of how small groups could influence larger ones was the rising consumer movement. Hirschman struck up a correspondence with the crusading consumer activist Ralph Nader; they formed a mini mutual-adoration club. Nader became famous for his campaign against Chevrolet and its Corvair model, which had been implicated in a series of deadly accidents. Nader used testimonies from lawsuits against Chevrolet to mount a public campaign to indict the model and its maker. His work led to the 1966 National Traffic and Motor Vehicle Safety Act, a milestone in government commitment to consumer safety and the creation of the (now disarrayed) protectionist state. Later, “Nader Raiders” mobilized successfully to reform the Federal Trade Commission and get it to pay more attention to consumer safety. Hirschman took note. This expression of consumer citizenship struck him as a model for reforming capitalism.
When the Trump presidency ends, and the toll of years of toxicity and mismanagement becomes clear, we are going to need guidance on how to move forward. Can “Exit, Voice, and Loyalty” help us?
Exit, Voice, and Loyalty was influenced by all of these inputs: Hirschman’s misjudgment in Nigeria; Moscovici’s analysis of the power of small groups that speak loudly; and Nader and the consumer movement. The book is like a road map through the intricacies of disappointment. What to do when your government stops listening, your car dealer sells you lemons, or the local public school cuts after-school music to save some money? For Hirschman, there were three options. One was exit. You could leave your country. (Hirschman was familiar with this option. He had fled tyranny, war, and intolerance on many occasions, starting in the spring of 1933, when he fled the Nazi takeover in Germany at age 17.) You could give up on Chevy and buy a Ford. You could withdraw from the public school and opt for a private one. In our day, examples of exit include General Mattis’s resignation from Trump’s cabinet, the decision by the majority of Britons to part ways with the European Union, and the flight of 70 million refugees worldwide from persecution and obscene neglect.
Another option was voice: expressing anger in a letter to the editor or making a complaint to the sales rep or, as many of the students at Stanford were doing the year Hirschman was in residence, protesting the Vietnam War. When demonstrators clashed in the streets of Paris and outside the Democratic Party convention in Chicago in 1968, or marched on Washington in the summer of 1963 to push for equal rights for African Americans, they exercised what Hirschman called voice: proclaiming one’s discontent loudly and publicly, in the hope that rulers got the message and changed their ways. In our day, we see voice when citizens hang a banner over a police station in Seattle declaring, “This Space Is Now Property of the Seattle People,” or pressure the governor of New York to make public the records of abusive police officers, or take to the streets of Beirut to denounce a corrupt and kleptocratic regime.
There was a third option: stay loyal. Hirschman didn’t think too much about loyalty. It wasn’t really an active option, more like a default setting. To this day, it remains the weakest conceptual leg of his famous tripod.
In the five decades since its publication, Exit, Voice, and Loyalty has been viewed as a guide to understanding how and why people squared up to the disappointments in their ruling institutions. It’s how I read it as a graduate student observing the explosion of voice in a democratizing Latin America in the 1980s. Indeed, it was how Hirschman himself read his own book amid the stream of essays that reprised its concepts to explain the fall of East Germany or the jostling between private and public medical systems. It was a book that helped us think about how to force institutions to change. We did not read it for insights about institutions themselves.
Nowadays, it’s our institutions that are in deep, deep trouble. Too often their leaders resist change, waiting for the outcry of the moment to blow over. Big organizations go through the motions of listening, make the right noises, but usually do nothing.
How can we get the ossified organizations of modern life to respond? Doing so requires a different reading of Exit, Voice, and Loyalty. Sure, we remember the famous trifecta of concepts mentioned in the title. But there are other recurring words all through the text that are equally important: “recuperating,” “recovery,” and “renewal.” They are the counterpoints to the decay and decline that figure in the book’s subtitle.
Whether organizations can swing from decline to recuperation depends on their incentive and capacity to listen to their consumer citizenry. For institutions to recover, they need to acknowledge the people’s voice. One might shout and exclaim all one wants, but if no one is listening, diminishing returns will inevitably kick in and people will get fed up and check out.
“Exit, Voice, and Loyalty” can be read as a case against monopoly, with the goal of not only protecting consumers—as Nader proclaimed—but keeping ruling institutions responsive.
Under what conditions do organizations listen? This question led Hirschman to dig into the origins of capitalist life, when voice-induced change first surfaced. Early in his CASBS sojourn, Hirschman happened upon Sir James Steuart’s An Inquiry into the Principles of Political Economy (1767), a study of the rise of English commerce in the 18th century. Steuart is important to the story because the forgotten Scottish economist cast light on how the use of voice broke the abusive habits of rulers and paved the way to the modern state. What Steuart noted was that in the 18th century, as bankers started to be able to move money, they changed the foundation of civic life. The advent of mobile capital tamed predatory European rulers: all of a sudden, capitalists could explain to predatory governments that if they failed to honor their debts, the capitalists would take their fortunes elsewhere. If the capitalists left with their money, the rulers would wind up bankrupt. The capitalists’ voices, raised in combination with the threat of exit, resulted in a virtuous cycle in which monarchs learned to listen to monied men and monied men learned the craft of voicing their concerns. Steuart’s example shows how some monarchs learned to behave because they had to hear.
As Hirschman explained in example after example, listening to voice and heeding the threat of exit could make institutions more responsive to social claims. For decades, the takeaway was that we needed effective voice. But over time, market solutions to common problems became the policy orthodoxy. We let rulers extol the virtue of exit options: if you don’t like your school, start a charter; if you don’t like public health systems, enjoy the manifold benefits of private insurance; and if you don’t like your state, leave (though good luck getting a visa). So we watched as institutions developed artful ways to dodge their civic and public commitments.
There was an additional step in Hirschman’s argument. Not only did institutions and their leaders have to be able to listen and heed, they had to see that it was in their interests for voice and exit to be active options for consumer citizens. If there was a key to warding off institutional sclerosis, it was this: exit and voice had “to be maintained in good health,” to send signals of decline to employers, vendors, and governments. To achieve recuperation, voices needed to be able to band together, to form larger units of buyer-voters—to compel firms and states to meet their needs. Exit and voice keep institutions in shape, and adaptive institutions should know that they need regular workouts.
Hirschman also noted that deaf and overgrown institutions were vulnerable to “laziness, flabbiness, and decay.” He contended that small and medium-size countries were more inclined to adapt and reform to keep exit-tempted citizens at home. The Dutch Republic had to pay attention to its citizens in early modern Europe or risk losing its painters and patricians. Bigger powers with more resources could afford to tune out for longer, but the consequences were never too far behind. Just look to France, where pent-up grievances eventually exploded in revolution.
People with choices can wield stronger voices. What prevents institutions from going the French route is their ability to listen, their tolerance or support for voice, and, ultimately, the fact that they cannot close off the exits. Exit, Voice, and Loyalty can be read as a case against monopoly, with the goal of not only protecting consumers—as Nader proclaimed—but keeping ruling institutions responsive.
It is easy to pick on Amazon and Google for their predation and manipulation, or to zoom in on the astonishing spree of corporate mergers since 2008; it’s been harder to make the case against these companies’ market power in their own self-interest. Exit, Voice, and Loyalty offers one such weapon. As we lean in to the challenge of recovery, we are going to need strong, persuasive arguments against market concentration.
The same goes for public institutions. This is why the pushback against police violence is so neuralgic. After all, isn’t a defining characteristic of the modern state the ability to monopolize the legal use of violence? The quid pro quo had always been that the police would look out for the public interest. When they don’t—as was made terribly clear in the killing of George Floyd—a premise of the social contract gets snuffed out.
The time for recuperation is long, long overdue.
This article was commissioned by Caitlin Zaloom.