Hirschman wrote Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States in order to investigate the means by which people can address problems that inevitably arise in the associations to which they belong. Although he discusses issues related to businesses, it is clear that the greater interest and relevance lies in the applications to social organizations and political parties.
It is convenient to think of a perceived dysfunction of a company or organization as a decline in "quality." One response to a decline in quality is to leave and move to another company or organization. That is the "exit" option. A second response would be to speak up and campaign for a change in performance on the part of the company or organization. That is the "voice" option. The decision to utilize the exit or the voice response can be modified by the presence of loyalty, which can be considered an emotional attachment.
How these factors interplay in various situations is discussed in some detail. The case of a two-party political system will serve as a relevant example.
Consider a liberal party with a center-left distribution of political leanings, and a conservative party with a center-right distribution. There will be some overlap at the center and people who are in that region would find it relatively easy to switch allegiance if they became unhappy with their current party. Exit would be the most likely response to dissatisfaction. On the extremes are people for whom the gap with the other party is too great to bridge. The only response available to them, lacking a third party, is to stay and express themselves within their current party—the voice option. It will be the extremes of either party that will be the most vocal and the most demanding of change.
Economic analyses tended, at the time, to predict that political parties would tend to move to the center—to maximize the number of potential members. This simple analysis by Hirschman makes it clear that the opposite effect is more likely. Given the current state of our politics, Hirschman certainly nailed it.
There are a number of observations that can be made about the dynamics of groups and their members using similar reasoning. Here we will consider Hirschman’s claim that the United States has a society in which the exit option is too readily chosen. In discussing the role of exit and voice in American society and in its history he makes this statement:
He suggests, as a way of explanation, that the country was founded and peopled by individuals who had chosen exit over voice.
The country people had fled to was so huge that the option to re-exit was available to them and to their children.
The notion of escape from unpleasant circumstances by packing up and leaving is firmly ingrained in the national psyche.
Hirschman injects this quote from Louis Hartz:
He also suggests that this habit of exiting has continued long after the entire country was settled.
Hirschman refers to examples that would have been familiar to one who had just lived through the 1960s. It would be too early to be aware of the phenomenon Bill Bishop refers to in his book The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart. Bishop has documented the gradual aggregation of people into almost "tribal" enclaves of residents who tend to have the same values and, in particular, vote in the same way. Hirschman may have been unaware of this trend, but he would not have been surprised.
The habit of resorting to exit rather than face the trials of voice even plays a role in propagating income inequality.
The meritocratic system of which we are so proud is an effective way of extracting those who might have been successful at exercising voice in support of their cohorts and rendering them socially ineffective.
Hirschman also leaves us with a warning that the exit tendency endangers our system of public education. He discusses Milton Friedman’s injection of market mechanisms into education. The choice of exit makes sense when dealing with commodities for which there are numerous venders. If a consumer is unhappy with a company’s product, he will likely move on to another company looking for a better result. Is this the kind of thinking that solves problems in school systems?
Hirschman has a problem with Friedman’s description of exit as a "direct" expression of displeasure.
He is also upset with Friedman for suggesting avoidance of the normal democratic process and the responsibilities of citizenship.
Adherents to Friedman’s logic are pushing for state-supported alternatives to public education. The inevitable result of such policies would be to render our current public schools as little more than warehouses for the children of the poor and unfortunate.
Thanks to Albert O. Hirschman! His simple analysis has provided numerous insights.
He provides a new perspective on one of our favorite phrases: