Michael Gecan, of the New York Daily News
These words were displayed above this photos of an headline story: Exit, loyalty and voice: A frame to understand the appeal of Donald Trump, Bernie Sanders and Hillary Clinton by Michael Gecan, of the New York Daily News on Wednesday, June 15, 2016, at 5:01 pm. He starts the article with this statement, “In a turbulent time, I find a measure of calm and clarity in the words of the late economist A. O. Hirschman, whose short book, “Exit, Voice and Loyalty” was published in 1970” (Gecan, 2016, p. 1) He went on to show the candidates in this manner, EXIT: “When Donald Trump speaks, when he rejects both major parties, when he mocks most institutions, he embodies the exit impulse. His message and music resonate with millions of Americans who are fed up with the structures and limits of modern political and economic life, but who have no new country to migrate to and no empty space to fill” (Gecan, 2016, p. 1). VOICE: “Bernie Sanders embodies Hirschman’s second option, voice. He has put into words the concerns of another group of Americans — people who believe that their Democratic Party and their country have been hijacked by Wall Street and other power players” (Gecan, 2016, p. 1). LOYALTY “Clinton embodies loyalty, both in her personal and public lives” (Gecan, 2016, p. 1). When he wrote the story, he said, “Sanders is deciding how to avoid exit, which would be seen as a betrayal of his party and a boon to Trump, and to translate his voice into influence and leverage on the Democratic nominee, Hillary Clinton” (Gecan, 2016, p. 1).
This blog reviews Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, written by Albert Otto Hirschman. Hirschman is an influential liberal economist, who has written many books on economic policy and political ideology. He managed, through defection and speaking, to offer a wealth of original and multidisciplinary analysis in the social and political sciences, to understand the choices made by individuals facing discontent patterns, and to understand more broadly how one can make social change.
The individual acts in various situations (market, family group, union or partisan, etc.), often generating frustration or expressing dissatisfaction in three ways: refusal to participate or defection (exit), fidelity anyway (loyalty), and speech (voice)—that is to say, protest to modify the operation of the organization and social relationships in a desired direction (Cartwright and Holmes 2006).
In his book, Hirschman (1970) seeks to answer the following questions: In what conditions will people lean towards the defection? What is the relative effectiveness of the three channels as tools for recovery? In which situations do the three mechanisms come together in action? What institutions can strengthen the effect of either option? Are strengthening institutions and defection compatible with those that improve the action of speaking?
According to Hirschman (1970), in times of economic decline, no one should linger on surmountable failures of economic agents. The author admits he has no doubt that competition is an important adjustment factor. However, he proposes to consider the consequences of this particular function of competition that have not been adequately analyzed as well as other important means that can also come into play to replace or supplement the actions of competition.
Hirschman is the first to be interested in the ability of competition to bring failing firms to a “normal” level of efficiency, performance, and growth. This is the book’s real originality. The core of the author’s argument is that competition can have no other effect than to bring rival firms to pull together their respective customers; it is nothing more than a waste of energy and a diversionary tactic, preventing consumers from advocating for improved products or causing them to use their strengths in a vain search for the “ideal” product (Ashford et al. 2008).
Hirschman concludes by taking stock of his study’s limitations. The optimal balance between defection and speaking is an unlikely ideal. For the sake of balance, the author also discussed the reverse situation characterized by the total absence of defection. However, as the author takes stock of his study, he lingers a little on his method.
One of Hirschman’s signature approaches is his multidisciplinary nature. In this book, he is fixing on the objective of reconciling economics and political science. Hirschman (1970) does not hesitate to call on either psychology or biology to support his thesis. He also criticizes some of the basic concepts of classical economics, reasoning in terms of organization and not business, recognizing that the monopoly may be an element more energizing than the competition, noting that protest is easier in more atomized structures (Davis-Blake et al. 2003). This method allows him to apply his theory to numerous examples, be they economic, social, or historical. It also verifies his theories by taking into account the diachronic (duration) and synchronous (simultaneous) aspects.
Hirschman’s (1970) Exit, Voice, and Loyalty framework draws attention to both economic and political behavior as instruments for organizational change. The framework is simple but powerful; it has stimulated much cross-disciplinary analysis and debate. The book examines the choice we face as citizens and consumers between giving up on a product or an organization that is failing us (exit) and agitating for improvement (voice). Exit is economics, voice is politics, and Hirschman makes quite clear that there are important phenomena in this world that economics alone just cannot explain. I read this example in Harvard Business Review, “You’re a Republican intellectual—David Frump, say—dismayed by the direction your party has taken over past few years. Do you a) switch over to the Democrats, b) raise hell in the media, or c) try to stay welcome in the party’s corridors of power in order to quietly exercise your influence?” (Fox, 2012, p. 1) This is a perfect example and is given in the proper season. Therefore, what are we the people going to do?
Ashford, Susan J., Elizabeth George, and Ruth Blatt. 2008. “Old Assumptions, New Work. The Opportunities and Challenges of Research on Nonstandard Employment.” The Academy of Management Annals 1: 65–117.
Cartwright, Susan, and Nicola Holmes. 2006. “The Meaning of Work: The Challenge of Regaining Employee Engagement and Reducing Cynicism.” Human Resource Management Review 16, no. 2: 199–208.
Davis-Blake, Alison, Joseph P. Broschak, and Elizabeth George. 2003. “Happy Together? How Using Non-standard Workers Affects Exit, Voice, and Loyalty among Standard Employees.” Academy of Management Journal 46, no. 4: 475–485.
Fox, Justin. 2012. “Exit, Voice, and Albert O. Hirschman.” Harvard Business Review December 12. https://hbr.org/2012/12/exit-voice-and-albert-o-hirsch.html (accessed October 19, 2016).
Gecan, Michael. 2016. “Exit, Loyalty and Voice: A Frame to Understand the Appeal of Donald Trump, Bernie Sanders and Hillary Clinton.” New York Daily News June 15. http://www.nydailynews.com/opinion/michael-gecan-2016-campaign-article-1.2675334 (accessed October 19, 2016).
Hirschman, Albert Otto. 1970. Exit, Voice and Loyalty: Responses to Decline in Firms, Organisms, and States. Cambridge, MA: Harvard University Press.