Albert O. Hirschman’s The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph is an essay as insightful and thought-provoking as it is elegant. Hirschman’s Passions is a timeless classic that gracefully explores the intersection of economic, social and political thought, and provides a perceptive understanding of the Western world’s intellectual accommodation and acceptance of capitalism.

Hirschman’s central thesis is that, at the dawn of the modern era, there was an emerging belief that the pursuit of economic interests would stimulate the “benign human proclivities at the expense of some malignant ones” (66). Of course, before the dawn of capitalism, the pursuit of economic interests was considered one of the worst passions; avarice was always a foe of the Platonic conception of Reason and the Christian view of the Truth. Nevertheless, with the decline of feudalism and the rise of absolutist monarchies, the great concern of thinkers like Hobbes was the rising power of the state and the passions that led monarchs into ruinous external and civil wars. In this context, the pursuit of wealth was transformed in the seventeenth and eighteenth centuries into the pursuit of material interest. And money-making – now defined as interest – became a sort of mid-way mode of thought and motivation that, since it was “exempt from the destructiveness of passion and the ineffectuality of reason”, provided “a message of hope” (43-44). Positioned half-way between passion and reason, in other words, interest had the politically salutary effect of restraining the more destructive vices of “ambition, lust for power”:

[M]oney-making activities were approved in themselves [because] they kept the men engaged in them “out of mischief,” as it were, and had, more specifically, the virtue of imposing restraints on princely caprice, arbitrary government, and adventurous foreign policies” (130).

Two eighteen century thinkers at the center of this argument were Montesquieu and Sir James Steuart. The former proposed that a laissez-faire economy softened and refined the passionate and violent excesses of man: “It is almost a general rule that wherever the ways of man are gentle (moeurs douces) there is commerce; and whenever there is commerce, there the ways of men are gentle” (60). The pursuit of wealth, Hirschman argues, was thus rehabilitated into a “calm desire” that “acts with calculation and rationality” (65). Steuart built upon Montesquieu’s insights and provided an argument that made the connection between a capitalist economy and a temperate state. “Monied interests” are mobile and less tied to land; as such, rulers who seek to arbitrarily seize the wealth of their lands or debase the currency will find such moves difficult to achieve and self-defeating if they do. As Hirschman summarizes, for “Steuart, it is the overall complexity and vulnerability of the ‘modern oeconomy’ that makes arbitrary decisions and interferences unthinkable – that is, exorbitantly costly and disruptive” (87). Overall, the pursuit of individual interest was therefore assigned the role of a mid-way countervailing force, a force that contained the passions of humanity, and particularly the passions of political leaders.

However, by the end of the eighteenth century, the “Montesquieu-Steuart vision” disappeared, and new lines of thinking emerged. The “idea that men pursuing their interests would be forever harmless” increasingly appeared to have “an air of unreality about it” (126). Adam Smith, at the dawn of industrial capitalism, was disturbed by the psychological implications of the division of labor, in which, according to Smith, “the heroic spirit is almost utterly extinguished” (107). [Thereafter, the Romantics and Marxists of the following century, albeit in different directions, would expand upon the view that the pursuit of material interest was now the primary scourge of human existence.] Adam Smith, as we all know, is still considered a proponent of capitalism, but he turned the “Montesquieu-Steuart vision” on its head. The pursuit of wealth lost its moderating role; it was once again considered a passion – indeed, all passions were collapsed into the “augmentation of fortune” – but now this passion worked like an “invisible hand” to meet the needs of society (108). Put another way, making money was no longer considered a purposeful bulwark against excess, but an ironic and unseen force of social stability and peacefulness.

In the end, Hirschman provides a salutary lesson for the history of ideas: it’s not enough to recognize the unintended consequences of intended outcomes. If we are to better understand our past, and escape Santayana’s warning about repeating history, we must also remember that sometimes the intended consequences succeed, but in ways we don’t appreciate. Thus, Hirschman contends that “capitalism was supposed to accomplish exactly what was soon to be denounced as its worst feature” (132). Let us finish with Hirschman’s own elegant conclusion:

For as soon as capitalism was triumphant and “passion” seemed indeed to be restrained and perhaps even extinguished in the comparatively peaceful, tranquil, and business-minded Europe of the period after the Congress of Vienna, the world suddenly appeared empty, petty, and boring, and the stage was set for the Romantic critique of the bourgeois order as incredibly impoverished in relation to earlier ages – the new world seemed to lack nobility, grandeur, mystery, and, above all, passion. Considerable traces of this nostalgic critique can be found in subsequent social thought from Fourier’s advocacy of passionate attraction to Marx’s theory of alienation as the price of progress to Weber’s concept of Entzauberung (progressive disintegration of the magical vision of the world). In all of these explicit or implicit critiques of capitalism there was little recognition that, to an earlier age, the world of the “full human personality,” replete with diverse passions, appeared as a menace that needed to be exorcized to the greatest possible extent (132-133).

Hirschman, in other words, is a voice for moderation and mindfulness. Instead of simply oscillating between one extreme and the other, we should recognize that our current discontent may in fact be the result of attempts to resolve older problems, and that by abandoning current policies we may unwittingly return to an older but nevertheless still unsatisfactory paradigm. [One wonders, for example, if critics of “New Deal” reform capitalism really understand what existed before.] Hirschman, in the end, reminds us that the continuities from the past still have implications for the future.