Markets, Productivity, and Happiness in a Historical Perspective

The Marshall Plan as a gift – an application of Hirschman’s methods of inquiry

Kesting Stefan Arne, Leeds University Business School

How can the history of ideas be used as a method of inquiry in economics broadly defined? And what is the purpose of this method to develop economics as a social science? This paper addresses these two questions based on a review of the later works of Albert O. Hirschman. Hirschman applied the method of “a history of the history of ideas” (in: Crossing Boundaries, 2001, p. 95) to develop new categories in his later oeuvre. This method of inquiry has also been explicitly applied by Karl Polanyi and Amartya Sen. Hirschman employs the method of scrutinizing the history of ideas in philosophy and the social sciences for theory development mainly at the example of three of his books: The Passions and the Interests (1977), Shifting Involvements (1982) and The Rhetoric of Reaction (1991) and a few relevant articles. The main objective pursued explicitly by Hirschman in all these contributions is the development of a more complex model of economic behaviour than the neoclassical one. Whilst Hirschman uses mostly participant as well as historical observation of reality to try out his concepts and to examine their explanatory value; the source for his dynamic, open systems and dialectical theories is the history of ideas. Though he started out to develop this method independently, there is a recognizable influence of the Cambridge School of Political Ideas in his work. I will demonstrate Hirschman’s method in applying it to the historical example of the Marshall Plan. This second section of the paper is a combination of a re-interpretation of the history of the institutional thought on the gift based on the economics of Boulding’s Grant’s Economics (of love and fear, 1981) and Perroux’s Économie et Société: Contrainte, Échange, Don (1960), sociology like Gouldner’s (1996[1960]) which differ from the reciprocity based approach to gift relationships in economic anthropology (e. g. Mauss; Polanyi and Sahlins). This comparative theoretical exercise allows me to see gifts and grants as characterised by three principles of interaction (institutions): sacrifice, reciprocity and utilitarian calculation. Borrowing from Zygmunt Bauman’s idea of fluidity (2013) these institutions are not seen as contradictory or exclusive, but as working in parallel or sequence to motivate and regulate gift giving interaction and behaviour. The application of this theoretical framework demonstrates its fruitfulness for an institutionalist analysis of the Marshall Plan as a historical case study of a grant/gift. This is a surprising result because the potential of the gift to establish and sustain peace is much more likely in small groups than on a geopolitical scale. Most of the empirical evidence is based on Benn Steil’s book The Marshall Plan – Dawn of the Cold War (2018), which as the title suggests, sees the Plan in the light of geostrategic motives. However, a critical reading uncovers the other two non-utilitarian motivations at work.

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Keywords: Marshall Plan, Hirschman, Anthropology, Perroux, Boulding