Hope, as always, is the crucial ingredient if we are to get beyond this populist moment in a way which avoids a deepening downward spiral. And to understand hope’s ebbs and flows there’s no better place to begin than with  the great development economist Albert Hirschman.  While Hirschman was writing about the loss of hope and rise of authoritarianism that swept through Latin America from the late 1960s onward, his insights have extraordinary contemporary relevance.

In particular, his notion of a “tunnel effect” is a powerfully evocative way of  understanding how societies’ responses to inequality change over time by focusing on the interaction between economics and psychology —  how economic policy and practice interact with a society’s narratives about itself.  Here’s how he puts it:

“Suppose I run into a serious traffic jam in a two-lane tunnel. After a while the cars in the other lane begin to move. Naturally, my spirits lift considerably…. Even though I still sit still, I feel much better off than before because of the expectation that I shall soon be on the move. But suppose that expectation is disappointed….. This tolerance for inequality is like a credit that falls due at a certain date.  It is extended in the expectation that eventually the disparities will narrow again. If this does not occur, there is bound to be trouble and, perhaps, disaster.  Non-realization of the expectation that my turn will soon come will at some point result in my ‘becoming furious’ that is, in my turning into an enemy of the established order.  No particular outward event sets off this dramatic turnaround.”

The resonance of the above for our present moment is obvious. Superficially, its implications might seem gloomy, but there’s also the possibility of a hopeful interpretation. The ‘tunnel effect’  framework suggests that society’s problems don’t have to be ‘solved’ to provide a platform for progress. Rather, what is needed is a credible narrative that can kindle hope.

This search for silver linings is characteristic of Hirschman’s work.  He knew all-too-well the shock of witnessing how things can fall apart.  His ideas were profoundly shaped by his childhood and adolescence in Germany. A youthful progressive activist, in the fall of 1932 he was an entering student at the University of Berlin; by early 1933, he had gone into exile. Remarkably, his response was to spend a lifetime seeking creative and hopeful ways out of history’s seeming dead-ends. His purpose, as he put it,  was to “set the stage for conceptions of change to which the inventiveness of history and a ‘passion for the possible’ are admitted as vital actors”. 

Anger or hope, which is it to be?  How can a new sense of possibility be rekindled? In his sustained exploration of these questions, Albert Hirschman emerges as a prophet for our times. [See HERE for more detail on his thinking vis-a-vis inequality; and HERE for an application of his approach to the specific example of South Africa. ]