Review of "Exit, Voice, and Loyalty" by Albert O. Hirschman

I decided to read this book after seeing it recommended by Patri Friedman in this essay.  Frankly, I'll read anything that is recommended along with Unqualified Reservations and Democracy: The God that Failed.

Mr Hirschman has written a very nice little essay.  However, after reading it, I'm not sure if Mr Hirschman really understands exactly what he has written with respect to our current political climate.

The book begins by stating that all organizations decline over time.  Further, there are two methods of policing this decline: exit and voice.  Exit is simply leaving – a customer leaves a firm and buys a substitute good or a person leaves a political party or a country for another.  Voice is protesting – concerns about declining product quality are expressed to management or members try to change the course of a political party.  Mr Hirschman argues that economists have traditionally focused on exit and not voice, while political scientists have traditionally focused on voice and not exit.  Both parties should, he argues, focus on the interaction of both mechanisms.

Mr Hirschman is most interesting when discussing the worst possible scenario of interaction between voice and exit:

The basic point is that competition may result merely in the mutual luring over of each others' customers on the part of a group of competing firms [or political parties]; and that to this extent competition and product diversification especially when, in its absence, customers would either be able to bring more effective pressures upon management toward product improvement or would stop using up their energies in a futile search for the "ideal" product [or political party]. . . . Nevertheless the radical critique is correct in pointing out that competitive political systems have a considerable capacity to divert what might otherwise be a revolutionary ground swell into tame discontent with the governing party.  Although this capacity may normally be an asset, one can surely conceive of circumstances under which it would turn into a liability.

What I believe we see here is something that Mr Moldbug has talked of frequently.  The political system of the US in the late 40s has become the dominant political system in the world.  Its effectiveness is, in no small part, related to striking the right balance between exit and voice.  Our governmental system is just as permanent and detrimental to liberty as any other system (try firing a bureaucrat, for example), yet through the right combination of voice and liberty this permanence has been achieved in such a way that citizens feel that they are able to effect changes in their government.  The political parties, which "disagree" with each other, don't offer meaningfully different directions for the country – and either way, the civil service gets its way in the long run.  Some interesting stuff to think about.

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