Review: Exit, Voice and Loyalty
often, Action > Words
I
From disgruntled employees to national uprisings, Hirschman's Exit, Voice and Loyalty powerful tool for understanding social change.
I was first exposed to the idea in a lecture by Balaji Srinivasan. Where he argues that the incumbent institutions are decaying and that we should exit those systems and build better technologies.
II
In the book, Hirschman, develops a framework synthesizing economics and political science. In response to a deterioting organisation or institution, people exercise Exit and Voice.
Exit means people voting with their feet, leaving the premises or quitting. Voice means to, well, voice out concerns, their opinions.
Exit is largely an economic phenomena. Voice is almost purely political.
I think that Exit, Voice and Loyalty is a useful theory. It can be used to explain a great deal of social phenomena, at various scales of activity.
At the individual level, you can ‘voice’ your concerns to your partner, or break up with them (the exit).
In business, you can lodge a complaint or take your business elsewhere.
At the national level, you can protest and vote or choose to leave the country all together. Though, the latter comes at great cost.
In many cases, exit and voice do go hand-in-hand. The strength of voice is amplified with the threat of exit. Because action speaks louder than words.
III
Exit and Voice do not exist as binary options. There is a third, moderating force — Loyalty.
Loyalty here is not the blind, passive loyalty. It is an active form of loyalty, borne out of vested interests and concern. Loyalty holds exit at bay and activates voice. The more loyal the individual, the greater the likelihood of voice , if they are care deeply enough about the institution or business.
Loyalty can be tricky, it’s a double-edged sword. Those that tend to be the most loyal, in principle, are also those that tend to care about the organisation OR cause the most. They want things to get better. They will be the first to point out the problems, voicing their opinion and finding solution.
But if the situation does not improve, they are also the ones to leave first. Which brings down the quality of constituents, reinforcing the deterioration of the organisation. Their decision to exit incurs a high toll on them too, because they can never recoup those costs.
IV
What I find cool about Exit Voice and Loyalty is its versatility. It can incorporate other theoretical frameworks across the social sciences. For example, Hirschman talked about how Exit + Voice works in a two-party system, which references the classic Hotelling’s Line model. In short, Hotelling’s model explains that products in a (two-firm) market tend to converge, with products becoming similar, in order to capture largest possible market share (a 50/50 share). Another interpretation is that firms will position themselves in similar location.
This is then be extended with the Median Voter Theorem. Where political parties tend to moderate their campaign in order to appeal to the common voter. The motive being to win as many votes as possible. Following from that, Exit, Voice and Loyalty can be used to analyse and make predictions about the behaviours of voters.
V
Hirschman acknowledges his framework does not explain everything. The reality is that exit might not be possible at all. Voice might be suppressed. Voice can also fall on deaf ears. If there are barriers to exit, voice is likewise diminished. Whatever you say falls on deaf ears if you cannot threaten to quit. Sometimes, exercising Exit can come with threats upon your life. Sometimes, voice out too much and exit is forced on you (ie Exile).
Exit, Voice and Loyalty is a pretty fun and useful theory. Personally though, I think some empirical examination on the theory would be useful. When a theory happens to find itself in many places, it’s good to have some skepticism about it.
Read
The Marchetti Constant - physicist Cesare Marchetti identified the average time spent by a person for commuting each day is approximately one hour, or half an hour for a one-way trip. The finding holds up nicely across time (evolving modes of transportation) and space (different geographies and civilizations).
Watch
Justin Murphy says something interesting about the book: “They don’t write social science books like this anymore.”
I watched Season 1 of Warrior. It’s a spaghetti-western style show about the Tong Wars. The show is based on the writings and works of Bruce Lee.
Also caught Dune: Part 2. The film centers on Paul and Chani’s relationship, but streamlines the richer worldbuilding and political intrigue from the Book. That said, the Dune films are great cinematic experiences.