Albert Hirschman, Creativity and Dissatisfaction

“Since we necessarily underestimate our creativity it is desirable that we underestimate to a roughly similar extent the difficulties of the tasks we face, so as to be tricked by these two offsetting underestimates into undertaking tasks which we can, but otherwise would not dare, tackle.

The principle is important enough to deserve a name: since we are apparently on the trail here of some sort of Invisible or Hidden Hand that beneficially hides difficulties from us, I propose “The Hiding Hand.”

–  Albert Hirschman


Albert Otto Hirschman was economist who made significant contribution to developmental economics.


He did lot of research on concept of dissatisfaction. He came to conclusion that members of an organization (be it business organisation or nation) have essentially two possible responses when they perceive that the organization is demonstrating a decrease in quality or benefit to the member- they can exit (withdraw from the relationship) or they can voice (through complaint, grievance or proposal for change).

'...then I said, 'give me a raise, or I quit'.'

For example, the citizens of a country may respond to increasing political repression in two ways- emigrate or protest. Employees can choose to quit their unpleasant job, or express their concerns in an effort to improve the situation. Disgruntled customers ask for the manager, or they choose to shop elsewhere.


He felt that quitting was not always the answer. By quitting the employee/citizens/customers are depriving organisation of their opinion or suggestions for improvement. Here he came with third concept – loyalty ex. if employees instead of quitting, stay loyal to organisation, then they can improve situation by voicing their concerns.  It is beneficial for organisation to listen to voice of dissatisfied customers/employees than allowing them to quit.

voice loyaty

He was also interested in field of creativity and came up hiding hand principle. The hiding hand principle states that when a person decides to take on a project, the ignorance of future obstacles allows the person to rationally choose to undertake the project, and once it is underway the person will utilize his creativity to overcome the obstacles he encounters because it is too late to abandon the project.

He gives example of paper mill in Bangladesh. The mill always used bamboo in surrounding area as raw material for making paper, but sudden flowering of bamboo (which happens once in 50-60 years) resulted in death of bamboo making them useless for paper making. Since survival was at stake the owner used waterways to get bamboo from other parts of Bangladesh and also started experimenting on use of other raw materials, all this resulted in better quality of paper.

'Once you get the hang of it, crisis management is fairly straightforward.'

The hidden hand had made owner blind to flowering of bamboo. Had bamboo not flowered, owner would have continued with inferior quality of paper. Crisis forced creativity.



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