The freedom to exit is important in politics, in markets, and at the dinner table.
The freedom to exit is important in politics, in markets, and at the dinner table.
A ll holidays have a patron social scientist. The patron social scientist of Thanksgiving is Albert Hirschman.
In a compelling volume published way back in 1970, Hirschman posited that there are only two ways man can communicate his needs to the group: “voice” and “exit.” A third function, “loyalty,” tempers the other two.
The political ramifications of Exit, Voice, and Loyalty, Hirschman’s book, were instantly evident. The unexpected May 1970 announcement of House Speaker John W. McCormack’s plan to resign was depicted by columnist David Broder as a Hirschmanian example of how the paranoid style of the Nixon White House was driving lawmakers ordinarily inclined to stick around into desperate “exits.”
In commerce, the Hirschman dynamic is obvious: Consumers shift away from products they don’t like. Half a century on, Hirschman is still useful in illuminating mystifying boardroom behavior.
The decision of a highly regarded auto executive, Carlos Ghosn of Nissan, to turn forever fugitive and be spirited out of Japan in a musical-equipment box is such an example. Ghosn’s exit was to save himself, but it was also a usefully prominent comment on the prospects of a fair trial under the Japanese system of justice.
But for us less adventuresome types, it is Thanksgiving that brings Hirschman to mind. The triad of “voice,” “exit,” and “loyalty” capture what happens at this holiday table nearly perfectly.
A guest may voice his requests and views in relation to, say, tax increases, crime in the cities, universal basic income, masking, teacher unions, or federalism. The guest hopes only for debate. But no one wants to hear him. What’s more, the other guests join the host in shaming the rebel. He is a poor community member, a would-be “free rider.” The resistance the lonely guest encounters is as tough as overbaked turkey.
Frustrated, the guest performs a classic Hirschman “exit.” But only to the powder room, and only temporarily. He doesn’t want to embarrass his host with a scene — that’s the “loyalty” part kicking in.
This Thanksgiving, a few of us therefore can mutter a private prayer of thanks not only to Hirschman, the great explainer, but also to a newer author, Ilya Somin. Thanksgiving “debates” are lamer now than they were in 1970, when Hirschman published. The shaming these days, is, if anything, worse.
All the more convenient then is Somin’s 2020 Free to Move: Foot Voting, Migration, and Political Freedom, an update so polished that at least one person at the Thanksgiving table, the miserable guest, will draw consolation from it. And maybe a few good rebuttals.
As for the shaming part, Somin comes at it with the policy equivalent of a shining pair of poultry shears.
The ballot box, Somin notes, is the place where we voice our political views. It is treated as “the essence of political freedom.” Yet the ballot box has obvious limits. The more voters in a democracy, the more muffled the individual’s utterance. After the pie, you may switch on the TV and see your president, but “the chance that you can actually influence the selection of that person is utterly insignificant.”
Somin points out that the ballot box is not the only form of political expression. The other option, which he rates superior, is Hirschman’s “exit,” which Somin edits to geographical or jurisdictional “foot voting.” If you were not happy with the fatal “ventilators for all” policy of Governor Andrew Cuomo, and had the resources, you could flee New York State — and plenty did. If you find public school underserves your child, you can try parochial schools or move to a different school district.
Of course, the cost of “foot voting,” migration from one jurisdiction in the United States to another, is currently prohibitive for many. Somin’s service is to point out that this fact ought not shame us. Foot voting is as legitimate as ballot voting, and a precious signal to the political market. The problem with foot voting is not that some cannot afford to undertake it. It is that we need to make foot voting available to more Americans.
The first step, Somin shows, is to cease treating decisions to move or switch schools as an embarrassment and start treating them as a respectable form of expression, like the decision of “which TV or smartphone to buy.” The physical movement of voters is an important market signal. That signal can benefit even those who do not change schools or vote with their feet. “Peer reviewed studies of the effects of vouchers,” as he reports, “generally find that they actually improve the quality of public schools left behind by those who exit.”
Taxes, of course, drive migration as well. Pointing this out 30 Novembers ago would elicit long, absurd lectures about “snowbirds” and the draw of, say, Florida’s climate. Rebuttal became easier in the 1990s, when the Internal Revenue Service teamed up with the Census Bureau, and, perhaps inadvertently, infused some reality into the discussion.
Together, the IRS and Census began to publish, state-to-state, and even county-to-county migration patterns. What emerged were correlations so tight that the role of tax in American migration became harder to deny. Even for the most sanctimonious of shamers.
As Somin points out, the results recorded by freer states such as Florida gave rise to models of town governance that no one before had rated possible: Celebration, Florida, a private city built by Disney, being one example.
Charter schools, another form of “exit,” have become so numerous that most of us know a charter student, a charter teacher, or even a charter founder. Homeschooling, once regarded with suspicion even by self-styled rebels, has expanded from the tens of thousands to the millions, with a healthy bump upward from disgusted parents of the Covid period. The thought is not to claim that all such alternatives are perfect, but rather that they widen both individual choice and our policy horizon.
Somin notes that he is himself an immigrant. Born in the Soviet Union in 1973, he observed firsthand what it means to be locked into a regime that bars foot voting. Thanks to a now-forgotten law that made immigration from Russia easier, the 1974 Jackson-Vanik Amendment, thousands of other families also were able to depart the Soviet cage.
It’s surely no accident that Hirschman himself was also an immigrant. Born in Berlin, raised in the city’s luxurious Tiergarten quarter, Hirschman chose to exit and headed to France and London to study; Hitler then rendered that educational exit exile. Along with many others, Hirschman became one of those refugees scrambling around Europe as they sought, mostly vainly, to elude Hitler’s grasp. (For a not entirely realistic but charming portrait of this young Hirschman, see the new Netflix series Transatlantic, in which the young Albert is played by Lucas Englander.) In short, this scholar also understood all too viscerally what it meant to be deprived of the exit option.
Hirschman’s Exit, Voice, and Loyalty remains the place to start on this topic. Also useful, especially if your town is debating a bond issue to fund the schools, is Charles Tiebout, who laid out the beauty of fiscal federalism even before Hirschman, in his Pure Theory of Local Expenditures. A personal favorite is William Fischel, whose Homevoter Hypothesis looks at housing from the same clean and unapologetic perspective.
Some may disagree with Somin’s emphasis on international foot voting, though his very work reminds us what benefits immigrants have brought to the provincial feast that is the American academy. In any case: It is because of the expanding tyrannies of our own government here at home that we need Hirschman and Somin most. By replacing that contempt for various kinds of domestic “exit” with respect, Somin renders a remarkable service. He reminds us that investing in foreign currencies and cryptocurrencies can be suspicious, but investors who chose to do so are also revealing flaws of our currency.
Somin, Hirschman, and Tiebout ought to be available to every college student and every would-be internationalist. Any of these books or texts will make a fine Christmas gift for the prosecutor you may encounter at Thanksgiving. Post-Bankman-Fried, prosecutors are sharpening their own carvers in preparation for assaults on alternative currencies. These works may likewise aid those who oppose a municipal tax increase but have trouble explaining to neighbors precisely why.
After all, as Somin notes, “foot voting cannot protect us from a government from which there is no escape.”
Try voicing that truth this Thursday — and then pass the turkey.