The Passions and the Interests, by Albert O. Hirschman, Princeton, N.J.: Princeton University Press. 1977. 153 pp. $10/$2.95.
As the cornerstone of social analysis, the term interest has no rival today. Excise it from the vocabulary, and whole cadres of social scientists, policymakers, philosophers of law, critics, and journalistic social analysts would be silenced. But as Will Rogers (or somebody) said about the word heaven, "Everybody talkin' about it ain't goin' there," so it may be doubted that much of the preoccupation with "interest" knows whereof it speaks. Its ubiquity today is the outcome of strategies laid 400 years ago—strategies fraught with philosophical, ethical, social, and economic implications, but essentially political in character. It is these strategies and the long unfolding of their implications that are the subject of The Passions and the Interests.
In 1859, John Stuart Mill lamented that "there is now scarcely any outlet for energy in this country except business," and few would dispute the equal applicability of his observation today. If we have not altogether lost the precious capacity to wonder at ourselves, there is a fascinating question here. How did it come about that the broad term interest has been constricted in its meaning to economic interest, that the broad term enterprise has been narrowed to economic enterprise, that the broad term worth has been foreshortened to economic worth?
Patiently, ingeniously, and illuminatingly, Professor Hirschman of the Princeton Institute for Advanced Study traces the 400-year history of this devolution. The result is history of ideas at its best. The Passions and the Interests neither recuts the cloth of history to fit the body of present program, nor is it one of those insular exercises in scholarship that leave our own lives untouched. It is, as the best history must be, a remarkable contribution to our self-understanding, shedding light on how we have come to be as we are.
The theme of Hirschman's disclosures is that the rise of economics to its position of dominance in modern life is not primarily attributable to the "Protestant ethic," nor to the celebrated "invisible hand," nor yet to intrinsic processes or laws of sociocultural evolution. It arose instead from a fundamentally political incentive—the need for social order in a time whose rampant disorder bespoke the failure, in this respect, of both religion and morality. Such early positivists in political theory as Machiavelli and Hobbes resolved to procure social order, not by calling upon motives that human beings in fact do not possess (religious and moral motivations that must be substituted for actual ones), but by extracting implications for order in existing human motivations, however uncommendable these motivations might be from idealistic viewpoints.
What Hirschman rightly terms the "astonishing transformation" by which economics gained ascendancy has two sides, negative and positive. The negative side consisted in clearing away rival sources of the principles of social order, specifically, religion and morality. The positive work was to substitute new principles by the daring move of elevating what had theretofore been universally condemned as a vice—avarice—to public respectability.
The Church was not so much attacked as circumvented by calling into the open the actual, mundane interests of (in the first instance) the sovereign, as did Machiavelli and the influential Huguenot statesman, the Duke of Rohan. On the other hand, the dominant morality of chivalry and the Graeco-Roman revival were directly attacked. In Hirschman's words,
Writers from a number of Western European countries cooperated in this "demolition of the hero," with those from France—the country that had perhaps gone farthest in the cult of the hero ideal—playing the major part. All the heroic virtues were shown to be forms of mere self-preservation by Hobbes, of self-love by La Rochefoucauld, of vanity and frantic escape from real self-knowledge by Pascal. The heroic passions were portrayed as demeaning by Racine, after having been denounced as foolish, if not demented, by Cervantes.
But it is the positive reconstruction to which Hirschman devotes most of his study, and in order to highlight the ingenuity of both the reconstruction itself and Professor Hirschman's extensive detective work, we will here bypass chronology to display the logic of the ideas at work. When at a later point Adam Smith characterized the acquisitive material interests of individuals as "the most vulgar and the most obvious," he was identifying, not the intrinsic disqualifications, but the superior qualifications of these interests as the basis of social order.
Smith was here encapsulating the growing recognition of a century of previous thought, that the most "vulgar" and "obvious" passions (and "interest" was but the term by which to elevate one "passion" above the others) are the most powerful and universal and thereby best qualified to render human behavior predictable. To teach (or release) persons to pursue their own interests does nothing for social order when those interests may be so diverse as to include interest in salvation by God, interest in moral approval by humankind, interest in craft, interest in sex, interest in material comfort, and so on. But if a person is sure to pursue his material advantage to the exclusion of all else, then be he prince or common man, we can predict with an acceptable probability what he will do.
This is the remarkable coincidence by which social advantage derives from sanctioned selfishness.
On the one hand, therefore, if a man pursues his interest, he himself will do well since, by definition, "interest will not lie to him or deceive him"—that was the very meaning of the proverb. On the other hand, there is an advantage for others in his pursuing his interest, for his course of action becomes thereby transparent and predictable almost as though he were a wholly virtuous person. In this fashion the possibility of a mutual gain emerged from the unexpected working of interest in politics, quite some time before it became a matter of doctrine in economics.
Working with care, and often from widely distributed sources, Professor Hirschman uncovers this development step by step. The starting point is the resolve, by Machiavelli, Hobbes, and Spinoza (among others) to "take men as they are." The emerging strategy works its way downward from preoccupation with the sovereign, to interests of various groups among the ruled, to interests of individuals, and thereafter upward again (by the "invisible hand") to the "interest of the nation." It successively rejects the program of repressing the passions (the State as agency of coercion, a repressive bulwark) and the program of harnessing the passions through the civilizing, transforming medium of the State, in favor of "fighting fire with fire"—using one passion to countervail other passions.
Hirschman's researches disclose that Helvetius was the first to apply the term interest to the ruling passion. The gradual constriction of "interest" to self-interest, and thereafter to economic self-interest, is traced by Hirschman in Rohan, Shaftesbury, David Hume, Sir James Steuart, John Millar, Montesquieu, the Physiocrats, and Adam Smith.
One of a number of fascinating sub-theses uncovered by Hirschman is the early touting of economic self-interest for its "innocence" and "gentleness," for example, by Shaftesbury, Hutcheson, and Hume, and across the channel by Montesquieu, who wrote, "it is almost a general rule that wherever the ways of man are gentle (moeurs douces) there is commerce; and wherever there is commerce, there the ways of men are gentle." If this argument strikes us as improbable today, Hirschman reminds us that commerce and its associated desires for gain were here being paid tribute against the backdrop of the tempestuous passions endorsed by the long-dominant aristocratic ideal.
In Part 3, "Reflections on an Episode," Hirschman directs attention to certain thinkers—notable among them Adam Ferguson and Alexis de Tocqueville—who expressed grave doubts about the purported beneficent social consequences of sanctioned self-interest in individuals. Thus Tocqueville observes, "These people think they follow the doctrine of interest, but they have only a crude idea of what it is, and, to watch the better over what they call their business, they neglect the principal part of it which is to remain their own masters." And he warns that preoccupation with private interests is the invitation for a "clever and ambitious man to seize power."
Professor Hirschman offers brief but provocative concluding remarks on a number of related themes. He compares his thesis to Max Weber's claim that capitalistic behavior was the indirect result of a desperate search for individual salvation, pointing out that the two theses are not incompatible but noting that "Weber's thesis has attracted so much attention that the latter topic [the theme disclosed by Hirschman] has been totally overlooked."
He comments directly on the "invisible hand" as an explanatory device in social science, suggesting that it needs to be supplemented by its obverse. "On the one hand, there is no doubt that human actions and social decisions tend to have consequences that were entirely unintended at the outset. But, on the other hand, these actions and decisions are often taken because they are earnestly and fully expected to have certain effects that then wholly fail to materialize."
And he calls attention to important political arguments for capitalism other than the one he has uncovered. "A currently much more familiar argument," he notes, "states that the existence of private property, and in particular of private property in the means of production, is essential to provide people with a material basis for dissent from and opposition to the authorities of the day."
This relatively brief and completely accessible study can be read in an evening or two but will in many cases produce reverberations for weeks, months, or even years in the mind of the reader. In my own case, at any rate, The Passions and the Interests served as a powerful reminder that we human beings are products of collective self-manufacture. The situation lamented by Mill in our citation at the outset, and lamented lately by F.A. Hayek as "the ubiquity of the pecuniary standard," is of our own making.
In any case, The Passions and the Interests highlights what Hirschman identifies as two kinds of naïveté in current sociopolitical theory. Those who today criticize capitalism in behalf of an ideal of "the whole man" or "full human personality" need to be aware that it was the unruliness of "the whole man," and consequent social disorder, which supplied the original (and political) incentive to capitalism. On the other hand, Hirschman cites Santayana's maxim, "Those who do not remember the past are doomed to repeat it," against apologists for capitalism who propose simply to scrub up and readopt its original principles. Such widespread distresses of our time as are identified by alienation, anomie, ressentiment, and class struggle require response from defenders of capitalism in terms of a reformulation of its principles.
Those of us among Hirschman's readers who are unregenerate moralists will gravitate to the very beginning of the 400-year history he traces. Here it is possible to give full weight to the political requirement for order that generated the subsequent historical development, while resisting the strategy by which economics achieved ascendancy over morality in the regulation of human affairs. Surely in their historical setting such innovators as Montaigne, Machiavelli, and Hobbes were right to dismiss idealizations and resolve to begin with unvarnished facts. Accordingly, they identified man as a rather nasty brute. With this, we resolute moralists may agree. But we shall contend that the replacement of moral incentives by economic incentives serves to insure that the rather nasty brute shall remain ever such.
In short, what was ignored, if not by the original resolve to begin with the facts, then by the history of this resolve, was human potentiality—specifically, the potentiality to outgrow and overlay purely economic incentives. As an unreconstructed moralist myself, I continue to believe that economic interests are not insatiable in themselves but only are made to appear so by our self-induced blindness to interests of any other sort.
David Norton, the author of Personal Destinies: A Philosophy of Ethical Individualism, is currently filling a one-year post as visiting professor of philosophy at the University of Hull, England.
This article originally appeared in print under the headline "The Genesis of "The Invisible Hand"".