I confess, I do like a contrarian and apparently they do not come much more contrarian than the late Albert O. Hirschman - and no, me neither! In a fascinating book review by Michael Gladwell in The New Yorker, he tells the story of the successful folly - the oxymoron is deliberate - that was the Greenfield, Massachusetts, to Troy, New York branch of the railway destined to join Boston to the Hudson river. It was necessary to drill a tunnel through the Hoosac mountain which was a 5-mile deep obstacle to progress. 'Easy-peasy', said the railway engineer, a mere $2 mill should do the trick. 'No probs', added the president of Amherst College, a distinguished geologist, it's made of candy floss. 'Roll up, roll up', cried the project promoter, Mr. Alvah Crocker. Oh dear, Big Mistake, it cost ten times the projected amount, in other words, it was a crock!
So where, you ask, does the late Mr. Hirschman come into this story? Well, according to his biographer, Princeton historian Jeremy Adelman, Hirschman, a renowned economist with a subversive love of paradox, looked back on this episode from the 20th century and drew an entirely different conclusion. In Gladwell's words:
Everyone was wrong. Digging through the Hoosac turned out to be a nightmare.
The project cost more than ten times the budgeted estimate. If the people
involved had known the true nature of the challenges they faced, they would
never have funded the Troy-Greenfield railroad. But, had they not, the factories
of northwestern Massachusetts wouldn’t have been able to ship their goods so
easily to the expanding West, the cost of freight would have remained stubbornly
high, and the state of Massachusetts would have been immeasurably poorer. So is
ignorance an impediment to progress or a precondition for it?
The economist Albert O. Hirschman, who died last December, loved paradoxes
like this. He was a “planner,” the kind of economist who conceives of grand
infrastructure projects and bold schemes. But his eye was drawn to the many ways
in which plans did not turn out the way they were supposed to—to unintended
consequences and perverse outcomes and the puzzling fact that the shortest line
between two points is often a dead end.
Hirschman's early personal life sounds like one of Alan Furst's (superb) espionage novels set in the late '30s, early '40s. After fighting in the Spanish civil war, Hirschman ended up in Marseille with several different aliases where he helped others to obtain false documents and escape to Spain. After the war he went into various international aid projects in his capacity as an economist but always with a beady, sceptical, open eye:
People don’t seek out challenges, he went on. They are “apt to take on and
plunge into new tasks because of the erroneously presumed absence of a
challenge—because the task looks easier and more manageable than it will turn
out to be.” This was the Hiding Hand principle—a play on Adam Smith’s Invisible
Hand. The entrepreneur takes risks but does not see himself as a risk-taker,
because he operates under the useful delusion that what he’s attempting is not
risky. Then, trapped in mid-mountain, people discover the truth—and, because it
is too late to turn back, they’re forced to finish the job.
A fascinating man even if there are a couple of points over which I could give him an argument - but then, with two contrarians what else would you expect?
"Worldly Philosopher: The Odyssey of Albert O. Hirschman” (Princeton) by Jeremy Adelman
