The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph

There are already several good reviews to this book, so I will only suggest reading the following books in addition to Hirschman's book: : 1) "The mind and the market: capitalism in Western thought" by Jerry Muller; 2) "America's Constitution: A Biography" by Akhil Reed Amar; 3) "Citizens to Lords: A Social History of Western Political Thought from Antiquity to the Middle Ages" by Ellen Meiksins Wood; 4) "The social thought of Bernard Mandeville" by Thomas Horne; and 5) "God Owes Us Nothing: A Brief Remark on Pascal's Religion and on the Spirit of Jansenism" by Leszek Kolakowski.

My first reading of this material occurred in college as a requirement for a European History course in my second year. The 124-page text is readable in large type with wide margins for notations. In the Introduction (not counted in the text total pages) the author writes that his work, "could be considerably expanded, qualified, bent, and adorned." I appreciated that he did not add unnecessary pages.The author's objective in writing was to reconstruct how capitalism went from being the sin of avarice to a counterweight for other, less acceptable sins. The work is an interesting history of an idea that is today accepted as the best alternative available for people. I found it amusing that capitalism actually passed through a phase in history where people had to sell it. How that sales campaign was designed and conducted is interesting reading.The book details some of the advantages of capitalism for workers. While massing people in cities close to factories and raw materials helps owners, it also helps the workers by giving them the opportunity to protest and riot against a government that devalues the currency (apparently a frequent problem in days of yore) or factory owners that otherwise exploit their workers too badly. These advantages are not generally associated with the tenement districts of the late 19th century industrial revolution in America, yet the history of social progress always includes incidents of large-scale violence.One idea that the book stumbles with is the marginal utility of wealth. Since greed seems to never be sated, it is incorrectly assumed that the pursuit of economic gain has no declining marginal utility. In fact, currency and wealth have no marginal utility at all, but can be transformed into any form of consumption as desired by its owner, and those goods and services have declining marginal utility. This is an important point. The early proponents of capitalism argued that greed would "harness" the destructive and diabolical passions of mankind. In fact, it really has had no effect on them at all, as wealth has become just an innocuous tool available for use or misuse as determined by its owner.It was necessary to make capitalism something good in order to squelch early critics who opposed low wages and inhumane working conditions on moral grounds. Before then, the Invisible Hand just couldn't compete.

I much enjoyed reading this book, and can unreservedly recommend it to anyone interested in political economy and the history of economics (which grew out of the original 'political economy' into a separate branch of social science). Prof. Hirschman does a very good job in pulling together the various scattered ideas in modern history (so say from around 17th century onward) on the ideology and basic motivations for capitalism. This is a very interesting study on possible political motivations in a time that economic development through capitalism in Europe slowly started to take hold (large parts of Europe still remained a largely agrarian-based economy until end 19th/early 20th century). Even though this brought enormous political and social upheavals, the ideas on capitalism still largely were of a brave new world variety, and understandingly so. The observation that the desire for wealth does not seem to diminish as levels of wealth increase (an exception to the law of dimishing marginal utility) led a number of political philosophers to the exciting and hopeful idea that capitalism would channel human destructive passion or act as a 'counterweight' to other less socially desirable behaviour (of which the 17/18th centuries in Europe saw its share as well). As it turned out, this basic optimistic idea of course needed some heavy qualifications; e.g. to avoid abuses of power (such as the inevetable necessity for a strong role of government in capitalism, e.g. as enforcer of fair and equitable competition and alleviate market failures; or that economic interests do not necessarily stop any war). Nevertheless, the ideas on positive effects of capitalism on human behavior still stands in contemporary discussions as well, if only often implicitly. I liked his remark on how ironic, in historical context, the argument is that the strong focus on capitalism in modern society has led to impoverishment and alienation in the human experience. The idea in capitalism as described by its early protagonists was precisely to counteract or channel the human 'passions' that so far had not led to much constuctive behavior. As Prof. Hirschmann notes, a historical awarenesss of such arguments may not bring any clearer answers today but will certainly help to lift the level of discussion.

It's a bit of a miscategorization that this book is usually filed under "Economics." It's more about social and intellectual history. Hirschman traces social support for economic individualism as stemming from support for rational, predictable "interest" to counter irrational, unpredictable "passions." It's the old battle of Apollonian versus Dionysian, but it's very novel to see it played out in something as this-worldly as debates about political economy. Hirschman's history of "interest" is similar to Weber's history of "capitalist rationalism," although Hirschman's attributed causal mechanisms are broader than Weber's: Hirschman says general desire to improve upon human nature, rather than specific Protestant religious concerns, was the justification for capitalist rationality. (However, taking Hirschman's tack, we cannot explain why capitalism elicited more support in some countries than in others.)This is an excellent history of the concept of the "invisible hand," the idea that the pursuit of private gain can have socially salubrious effects. If you know about "the fable of the bees," you know a little bit about this concept, but Hirschman chronicles its history at a much deeper level.

In this delicious wafer of a book, Hirschman describes the process by which a Renaissance-era desire to discount the classical "heroic ideal" in order to account for man "as he really is" in formulating an original and, ... "Machiavellian" statecraft (to be promulgated without respect for a new *spiritual* ethic for the individual) gave rise to a re-examination of the role and motive force of the mortal Passions. Considering the works of such as Vico, Mandeville, and Smith, Hirschman excitedly argues the case for this novel "state" project: the idea that the act of "harnessing" the Passions (e.g., avarice and "cupidity") would serve to parlay the sins of envy, resentment, and petty spite into a value-neutral drive (i.e., "interest") to acquire great *personal* material wealth, which (and this is the rub) would serve not only to break the monopoly of the church over the affairs of men, but to bring about a residual and necessary *collective* prosperity. Behold the Invisible Hand! (Then read your Tocqueville and Marx for 19th-century perspectives on the United States and Britain, respectively.)