Instalment 7: International Trade and Domestic Paranoia

Worldly Philosopher: The Odyssey of Albert O. Hirschman by Jeremy Adelman

Conversation – Instalment 7: International Trade and Domestic Paranoia

Chapter 6. Of Guns and Butter                                                                  




Howard Adelman


I have been calling our protagonist Albert Hirschman all along, but on January 1941 he legitimately changed his name in the American immigration office in Elizabeth, New Jersey, the state where he would spend his final decades. With all his achievements and education, he was still only 25 years old. The question was how would his optimism, possibilism and opportunism, in the best sense of that term as creating new openings, work out on American soil. Given the culture of America, one would speculate that AH and the USA were made for one another.


But not quite!


His first problem was to define what he would seek to accomplish in his two year fellowship at Berkeley, beginning with his core idea of exploring the relationship between international trade and political power. The chapter title, “Of Guns and Butter” is taken from Göring’s famous phrase, “guns will make us powerful; butter will only make us fat.” Hitler had come to recognize the deep relationship between international trade and power.


When he got to Doe Library at Berkeley, I recalled my own discovery of the library stacks when I began university. Unlike AH, I did not have any intellectual background when I went to university. I naively thought the reading room was the whole library. Then I discovered there were stacks. I went on a tour and became depressed for several weeks and was unable to read. I could never read all those books in ten lifetimes never mind one. But it was the discovery of individual volumes that saved me. It would be several years before I came to Adam Smith and Machiavelli and I have never read Werner Sombart’s history of economics and economic development as AH did.


Sombart died just after AH arrived in Berkeley. In fact, the only book of his of which I was aware in my days as an undergraduate and graduate student was his explanation of why America never developed a socialist ideology. Later on I read about his account of the role of Jews in the development of capitalism. In my studies of German philosophy, I became aware of his role as a Fichtean German nationalist, glorifying war and the sacrifice of the individual to the higher Spirit of the state, quite at odds with the real Hegel though thoroughly consistent with the mythological version of that great philosopher. In my studies in the philosophy of history, I also knew of Sombart’s adherence to the “verstehen” school of empathetic re-enactment to understand the actions of agents in history. I wish Jeremy would have expanded on what part of Sombart’s oeuvre intrigued AH.


The story suddenly moved away from the intellectual to the personal, not only because he was uncomfortable telling tales of his experiences, but because he met Sarah Chapiro who became the love of his life. He proposed marriage after they had known each other for only eight weeks.  The wedding ceremony and celebration took place against the backdrop of the sensational news that Germany had invaded Russia. It was June 1941. He shared few of his experiences of his past involvement in the world of deeds, but he more than made up for that by sharing with Sarah his love for writers, especially Flaubert and Goethe. Of the latter, he could recite much of his poetry by heart.


In addition to a love of Goethe, though my intellectual affair had no real comparison with Albert’s, AH and I share another trait. He was a bad driver. I only learned to drive when I was 28 years old and YorkUniversity had moved from the Bayview campus to what was then beyond the ends of the urban world, the main campus at Finch Avenue and Keels Street. Then, there was no convenient way to get there except by car. The difference in this sphere was that AH loved to drive; I disliked the activity even though I could park a car and AH could not. The activity required so little attention that my mind would wander, not a very good omen for other drivers. The pity was that AH seemed to be far dreamier than I ever was.  Further, except for short trips, I had the good sense to give up most driving fifteen years ago.


Like many couples, Albert and Sarah bonded closely with another couple, William and Ann Steinhoff, who introduced them to the local classical concert scene and the richness of classical music on the radio. I do not know what Ann was doing at the time, but if William Steinhoff is the same individual who made his name in literary criticism, he was completing his PhD in English at the time and writing his thesis. Though Jeremy does not mention it, William Steinhoff with his expertise on rhetoric in his work in literary criticism, particularly his work on George Eliot and, later, George Orwell (George Orwell and the Origins of 1984), and AH, with his intrigue with les mots justes, must also have shared a deep love of the use and misuse of language. They would also have shared a love for French literature. So I was surprised to learn that the friendship they developed was not a deep one, especially given the little I know about Steinhoff.


Jeremy gives no indication that AH or his wife, Sarah, read George Simenon, but I believe this was the topic of Steinhoff’s thesis at the University of California for he published, “George Simenon: The Most Popular Novelist in the World” in January of 1944 as part of his examination of romanticism which exalted the individual, particularly the artist, and the value of self-expression in response to a disgust with mass production, a Nietzschean idolization of self-tranformation and a transvaluation of all values, all at the cost of a sense of responsibility to the community. Given the stress on uniformity, not only of the war years but of the fifties in which The Man in the Gray Flannel Suit became the image for an age, the romance with romanticism was the perfect imaginary counterpoint to a conformist age. Further, Steinhoff was one of the pioneers in literary criticism in the use of personal biography and psychology to explicate literature, its intents and its images of self-fulfillment.


An outsider looking in would have typed the two pairs as belonging to a world that would quickly go out of fashion as the University of California became the leading edge institution of the new world of higher education, The Multiversity, and what I would characterize as the pre-eminence of the Social Service Station model of the university directed towards and focused on helping resolve the social problems of society. For one of the contradictions in AH’s life was the focus of his research on precisely such issues while he employed tools brought together from a multitude of disciplines. He was a pioneer in forging an interdisciplinary approach to knowledge and stood staunchly opposed to putting the different intellectual disciplines into silos, yet his old world erudition instilled in him in an education steeped in a very different model of the university, The Sanctuary of Method. (See my Holiversity) where the university as a collection of disciplinary silos became the ideal. Specifically, he deplored the idea of the divorce between economics and politics let alone ethics so that politics became an orphan studying means and mechanisms without the resources for studying ends.


Clark Kerr would publish his highly influential volume, The Uses of the University based on his Godkin Lectures at Harvard in 1963, more than twenty years after these two young couples were enjoying the richness of the University of California at Berkeley.  William Steinhoff would also become very active in the idea of the university when he became a faculty member at the University of Michigan and very active in its Senate and issues of university reform. As we shall see, AH would flee in the opposite direction, away from university academic life, away from teaching, away from academic institutional issues and away from an historicist understanding of how the development of knowledge reflected upon and mirrored the economic and political developments of society. Both men would introduce pauses in their academic careers as each separately enlisted in the American army.


But before they did, Jeremy understandably spent more pages on AH’s friendship with an old friend, Peter Franck, who had been best man at his wedding and whose sister Albert had pursued when he was a teenager. The two played pranks together, but they mostly grew up together as teenage intellectuals and shared the reading group on Hegel. They learned to despise fascism together and went through an initial romance with Marx together. In fact, Albert’s friendship with Peter was possibly the most important reason for his quick exit from Germany when his father died. For when Peter Franck was arrested by the Nazis, AH’s name and contact information were in Peter’s little telephone book. Peter Franck would precede Albert in travelling to America. But the most important reason for spending so much time on a friendship from which Albert would soon distance himself – though insufficiently for they would meet up again when AH went to Washington – is that the two parted ways on Marxism. Peter remained a member of the Communist Party. Albert, who had exposed himself to it and became intimately acquainted with its application in the Spanish Civil War, became increasingly critical and distanced himself from it, his friendship with Peter, and from the larger circle of cocktail Marxists congregated at Berkeley at the time. But not sufficiently or in a timely enough fashion to protect his subsequent career in the OSS and Washington from McCarthyite suspicions.


The problem was not just an old friendship dating back to schooldays when he, Peter Franck, Wolfgang Rosenberg and Helmut Mühsam, the son of the famous German poet and anarchist, Erich Mühsam, were best buddies. (There is a famous picture of the four of them but, to my surprise, I could not find it in Jeremy’s book.) They camped, climbed mountains and studied Hegel together at the gymnasium. Helmut went onto become a famous Israeli demographer. Wolfgang (The Magic Square (1986) and New Zealand Can be Different and Better (1993)) wrote works that became the ideological backbone of the New Zealand Labour Party in their defence of full employment, expansionary fiscal policies and government intervention when he taught at Canterbury University in Christchurch from which base he challenged the neo-conservatives in his adopted land. Peter Franck had immigrated to America where he too was a trade economist, never achieving the status of either Hirschman or Rosenberg. But Peter’s adherence to communism – more significantly, his push to have Albert meet Haakon Chevalier, the ardent communist and charismatic professor of literature at Berkeley – drove a deep schism in their old friendship. Chevalier and Robert Oppenheimer, who met in 1937, had become close friends. Chevalier was suspected of being a recruiter for Soviet intelligence as emerged in the famous 1954 hearings on the U.S. Atomic Energy Commission over Oppenheimer’s security clearance where that clearance was revoked. Jeremy sent me an excellent reference on that issue – Kai Bird and Martin Sherwin, American Prometheus: The Triumph and Tragedy of J Robert Oppenheimer – which I have not read.


When Sarah asked Albert how the meeting with Peter Franck and Haakon Chevalier had gone, Jeremy wrote that his “expression said it all; his face was that of a man forced to smell rancid meat.” (p. 200) Jeremy should enlighten us on the source for this reaction – presumably from an interview with or a note from Sarah – for he repeats the exact same metaphor when he goes into greater detail on whether or not this meeting had been the source of the deep suspicion of Albert Hirschman’s possible communist connections that would haunt his career in the OSS and the American government. When Jeremy inquired into the source of the disinformation in Albert’s security file, he speculated on whether the information came directly from his connection with Peter Franck or from AH’s meeting with Chevalier.


Or was it Frank’s friend, Haakom Chevalier, also a party member, whom Franck had introduced to Hirschman? Chevalier was, by 1943, under FBI surveillance because in the winter of 1942-3 he had asked J. Robert Oppenheimer, the guru of the Manhattan Project, to share scientific findings with an agent of the Soviet consulate in San Francisco. Hirschman certainly knew Chevalier was troubled from the day he met him. When he returned home from the rendezvous, his face had the expression of someone who had just smelled rotten meat. (p. 288)


The smell of rancid meat – this was the sensuous version of communism. Chevalier and Oppenheimer had founded the Berkeley branch of the teachers’ union together and also sponsored many events for leftist causes. Given both the Chevalier and Franck links to the Communist Party, it is no surprise that Peter’s efforts to draw Hirschman in caused a deep break in an old friendship, though not deep enough to prevent Hirschman from giving Peter a credit in his first book or to cut off civil contact altogether.  Jeremy noted that he recorded his severed close friendship in a letter to his sister, Ursula, with whom he had always been blunt. “Peter reveals all too often his fundamentally bad character and is not even (he never was) very intelligent. But as ‘Best Friend’ he has become an institution.” (p. 200) What an acerbic comment written at the time and before that friendship would haunt his career! Even more revealing, and perhaps an insult to both William and Ann Steinhoff, he went on to write, “I still have not found a circle of true friends. In New York I would have some, but not here.” The poignancy of his loneliness and his desire to share all his ideas and concerns with close intimate others is painful to read.

I myself may have had an indirect connection with Peter Franck. In my new left days in the sixties, I met an activist at Berkeley named Peter Franck, I only recalled the connection when I read Jeremy’s book. Since he was just a bit younger than I, he could not have been AH’s adolescent friend. But he could possibly have been AH’s Peter Franck’s son since his father had been German and he himself had been born in Britain when his parents escaped Nazi Germany. The Peter that I knew defended Mario Savio and other leaders of SDS, Students for a Democratic Society. He evidently went on to act on behalf of Cesar Chavez and was active in the anti-Vietnam War movement. I looked him up and learned that Peter Franck Junior, if indeed he was Peter Franck Jr., had gone on to become an important lawyer specializing in intellectual property in entertainment law. It seems obviously the same person because in his Berkeley days, Peter was a democratic activist defending free speech and human rights as a member of the National Lawyer’s Guild’s Committee on Democratic Communications (CDC) and the Pacifica Foundation. But can anyone tell me whether AH’s friend was his father. There is a strong likelihood since we know that political propensities are often transferred to the next generation, though often in a more liberal version.

Going back to AH, it was clear that long before he wrote his famous book, on a personal level, he was torn between his loyalty to an old friend whom he now regarded as a part of a false cause and whom he regarded as deaf to his own voice, and his desire to exit from the relationship. He did exit, retaining only a surface civil relationship. Dissidents not only exit from oppressive dictatorships and failing economic enterprises, but from personal friendships. But those friendships can leave political scars that are even harder to disguise than the physical scars on Albert’s back and neck left from his Spanish Civil War experience.

The connection between the personal and the intellectual meant a focus on economic regions and states, international trade and its affects on states, rather than the class conflict between workers and the owners of capital. If a national state required a regulatory order to ensure relations between workers and bosses remained fair, how much more important was the regulation needed to ensure that free trade and open markets were maintained between and among states. That regulation could enhance trade. Its absence could foster exploitive international relations. In the process he learned enough mathematics and statistics to devise his innovative index of market concentration. It was during that work that he met and worked with Alexander Gerschenkron who would, unbeknownst to Albert, help him several times in his career. It is not clear why the two never became close friends or even intellectual soul mates.

AH managed to finish his first book, National Power and the Structure of Foreign Trade before he returned to armed service, this time for the Americans rather than the French or the Spanish Republicans. He had now set down an original path that showed how strong states manipulated international trade to enhance their own power, now a staple of economic doctrine. However, given the terrible composition of the book and the times, the book quickly reached the remainder able. Yet the implications were profound for establishing a peaceful world. As Jeremy wrote, “A real peaceable order required a drastic overhaul the multilateral system.” (212) Restricting predation was crucial to enhancing the prospects for peace. The weakness of the book emerged as it took flight from that analysis into an anti-sovereign globalist utopia.

AH returned to the world of deeds after his first unsuccessful foray into the world of words. He had yet to establish a place in the sun for his own unique voice. 

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