Exit, voice and loyalty

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We often have a choice: speak up or leave.

In commerce, if we don’t like a brand, we leave. The always-present choice to stay or to go drives bosses, marketers and organizations to continually be focused on earning (and re-earning) the attention and patronage of their constituents.

Sometimes, instead of leaving, people speak up.


For most of my life, the biggest separation between government and economics was this distinction.

In many cases, government has generally taken the idea of exit off the table. If you don’t like your country, you could consider leaving it, but that’s an extraordinarily disruptive act. Not voting may express your apathy or disgust, but you’re still a member of the society.

Capitalism ceases to be an efficient choice when those served have no ability to exit. For-profit prisons, for example, or cable monopolies. If you can’t exit, you’re not really the customer, and you are deprived, as a result, of voice.

In the case of effective government, voice is built in on behalf of those that have no ability to exit. A well-functioning representative democracy opens the door for people to be heard and action to be taken.

Suddenly, it’s easier than ever for rich people to exit instead of speak up. They can wire funds (when wealth was held only in real estate, that wasn’t an option, you can’t take land with you) and they can live an almost post-national existence. As a result, since they’re not tied down and often pay little or nothing in taxes, they’re less inclined to work hard to make their place better for everyone. The same applies to private school (for the few) compared to public school (for the rest).

Voice matters.

Loyalty, then, could be defined as the emotion that sways us to speak up when we’re tempted to walk away instead.

When your loyal customers speak up, how do you respond? When you have a chance to speak up but walk away instead, what does it cost you? What about those groups you used to be part of? I’ve had the experience several times where, when my voice ceased to be heard, I decided it was easier to walk away instead.

Voice is an expression of loyalty. Voice is not merely criticism, it might be the contribution of someone who has the option to walk away but doesn’t.

In Exit, Voice and Loyalty, Albert Hirschman explains how this overlooked mechanism of the world works.

       



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