Most of the episodes to which he had to respond in government were not of his own making – the Crimean War, the Arrow incident in Hong Kong (in which it was the British plenipotentiary Sir John Bowring who ordered the bombardment of Canton), the Indian Mutiny, the attempted assassination of Napoleon III, which led indirectly to the first fall of Palmerston’s government on the grounds that he was too soft on foreign sovereigns. Aberdeen could be forgiven for finding it ‘whimsical that the man who for so many years had reproached me for unworthy concessions to foreign powers, should have been overthrown in consequence of a similar accusation.’ In fact, apart from the legendary Don Pacifico Affair, Palmerston despatched remarkably few gunboats in his career (and Aberdeen sent a couple himself).
And where the interests of Britain were not clearly engaged, he moved gingerly. When the American Civil War broke out, he tentatively supported the states-rights case of the South but mostly because he thought the South would win. When it became clear that it was losing, he switched support to the North, claiming that the abolition of slavery was now the crucial issue. He also feared that ‘exiled Irishmen’ might stir up war between Britain and the United States, that his former tenants might take their revenge. He was equally cautious in dealing with Italy. His heart was with the cause of Italian unity and independence and the expulsion of Austria, but to preserve the balance of power in Europe he needed Austria as a counterweight to Russia – ‘I am very Austrian north of the Alps, but very anti-Austrian south of the Alps.’ And so he really did not do much to assist Garibaldi.
The Palmerston that Brown shows us is a more cautious and self-aware operator, both more serious and more devious than the Flash Harry in his tall white hat and white trousers and blue frock coat with gilt buttons charging headlong at every fence. ‘We must deal with things as they are and not as we would have them,’ he said, almost as though reminding himself. Even in that famous five-hour speech defending his record against Anstey’s motion in March 1848, he tempered patriotic fire with realistic calculation and moral judgment. Yes, the interests of England ought to be the shibboleth of every minister’s policy. It was true too that ‘We have no eternal allies and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.’ But later in that same speech, Palmerston went on to explain that the policy of Britain was also ‘to be the champion of justice and right: pursuing that course with moderation and prudence, not becoming the Quixote of the world’.
Brown argues that the wrenching of Palmerston’s more flamboyant phrases out of the context of his overall moral realism has done some enduring harm to the practice of foreign policy. And I think he is right about that too. One still detects faux-Palmerstonian echoes in those calls for Britain to ‘punch above its weight’. I caught a whiff of it in a Times leader when William Hague was foreign secretary:
The real issue for Mr Hague is not what he is saying but what he is doing. There is very little evidence that he is seriously engaged in the global conversations of the moment. On the prospect of peace in the Middle East, on climate change, on a plan for Zimbabwe, Mr Hague has been silent . . . Diplomacy often depends on leaping on to planes and holding face-to-face talks, full of incentives and threats . . . Mr Hague now needs to spend aWALTER BAGEHOT little less time in Great Charles Street and Lincoln’s Inn and define, not least by getting on more planes, the issues that he cares about. He then needs to start using the power that Britain retains in the service of the ethical values that he has articulated.
The Times, 16 September 2010
Lord Palmerston would have agreed with every word. Lord Aberdeen would not.
In this surely definitive biography, David Brown leaves us with a Palmerston who is more admirable, yet he does not make me like him more. Towards the end of his life, Pam basked in his unexpected new role as ‘the People’s Darling’, but he never became truly lovable. There always clung to him some of that detachment which had struck people so unpleasantly when he was young. For all his celebrated love of women and racehorses and boxing, he seemed slightly inhuman. Even his amazing energy had a certain mechanical jack-in-the-box quality. When he died, he was not mourned as Peel and Wellington had been mourned or as Gladstone was to be. I do not think he ever wept much himself. In that, too, he was unlike Lord Aberdeen.
WALTER BAGEHOT: MONEY MATTERS
There used to be a room in the National Portrait Gallery devoted to portraits of late Victorian sages by G. F. Watts. Inspissated in that painter’s incurably muddy tones, they peered out from behind straggly beards and whiskers with sad, rheumy eyes – Matthew Arnold, Carlyle, Swinburne, William Morris, Leslie Stephen, Tennyson – giving off a steamy despair. They had heard the melancholy long withdrawing roar of faith, and they did not like the sound of it. Today relegated to a wall in a side room, these literary men seem to take second billing to the wall where the giants of Victorian science are gathered – Darwin, Huxley and Lyell, each whiskered too but each with an unmistakable half-smile playing about his lips. There’s not much doubt which is the winning side.
Nowhere on either wall is space found for Walter Bagehot (1826–77). Yet G. M. Young, that hallowed chronicler of the Victorian age, came quite firmly to the conclusion that if you were looking for the Greatest Victorian, Bagehot was your man. There was no one else ‘whose influence, passing from one fit mind to another, could transmit, and can still impart, the most precious element in Victorian civilisation, its robust and masculine sanity’.
Bagehot is not entirely forgotten – the NPG has a mezzotint of him somewhere – but exactly who or what he was is now a little fuzzy in our minds. A few stray bons mots about the monarchy, some connection with the Economist (which keeps his memory green in the pseudonym of a regular columnist) – that is as much as most of us can dredge up. What precisely was he great as: essayist, critic, economist, political analyst? Well, not really any of them under a rigorous definition of those trades, but a bit of each in a loose, agreeable way.
The simplest starting point – and also the ultimate answer – is to say what Bagehot undoubtedly was, thoroughly, professionally and ancestrally: a banker. His grandfather Robert Bagehot was a West Country merchant who shipped goods up the River Parrett under the name of the Somerset Trading Company. Robert’s younger son, Thomas, married the niece of Samuel Stuckey, the founder of Stuckey’s Bank, a sizable local house which had already swallowed up several tiddlers. Thomas rose to become vice-chairman, and so in due course did his son Walter, after serving a full apprenticeship in the Bristol counting house.
Even after moving to London with his wife, Eliza Wilson, Walter remained a key figure in Stuckey’s. Eliza was the daughter of James Wilson, the owner-founder of the Economist, who also became Palmerston’s financial secretary to the Treasury. Wilson, a genial, acute, hard-driving Scot, was then picked out to rescue the finances of India after the Mutiny of 1857, which he did with a sure touch by introducing India’s first income tax. So successful was this that when he died of dysentery in August 1860, after only a year out East, all Calcutta turned out to mourn him – surely a unique tribute to a man famous only for inventing a new tax.
Wilson’s death left his widow and daughters joint owners of the Economist, and Bagehot was pressed into service as the paper’s editor and directing genius. But he never stopped being a banker. And his lifelong experience made everything he had to say about finance, in theory and practice, and about the herd instincts of the City of London, as accurate today as when he took over the magazine a century and a half ago.
The Memoirs of Walter Bagehot is an oddity, for Bagehot left behind no memoir when his chronically weak chest finally undid him at the age of fifty-one. Instead, Frank Prochaska has stitched together this self-portrait out of the boxfuls of essays, letters and articles he did leave. These have been republished in multivolume editions three times, by Forrest Morgan in 1889, by one of the Wilson sisters, Emilie Barrington, in 1915, and finally by Norman St John-Ste
vas between 1965 and 1986. Prochaska chose to present Bagehot in the first person ‘because I thought Bagehot could speak more vividly of his life and mind than I could as an intermediary in a conventional biography’.
I rather sympathize with Prochaska’s self-effacement. So many biographies, after all, blur the subject by homogenizing the material; others elbow the subject aside to give the biografiend a bigger shout. As far as I can check, pretty much everything in this little book is direct quotation, with only minimal editorial linking. So you will probably get as good a picture of what Bagehot was like and what he thought from Prochaska’s 200 pages as from St John-Stevas’s fifteen volumes. Prochaska picks out the plums nicely, and the ripest and juiciest are usually Bagehot’s remarks on the world he really knew from the inside, the world of money.
Happily, Bagehot tells us in his brilliant essay Lombard Street, ‘banking is a watchful, but not a laborious trade’. Prochaska’s version has ‘arduous’, which fractionally diminishes Bagehot’s point, that sensible bankers do not need to put in excessive hours, still less to boast of them. They should have plenty of leisure for the library and the hunting field, because ‘the modes in which money can be safely lent are not many, and a clear-headed, quiet, industrious person may soon learn all that is necessary about them’ – advice which might have forestalled half-a-dozen bank crashes. Bagehot goes on elsewhere to give three warnings to investors, which pretty much exhaust the subject: ‘Have nothing to do with anything unless you understand it, divide your investments, and be wary of taking advice from others.’ In a single sentence, he waves away the delusions of derivatives, the folly of putting all your eggs in one basket and the insidious temptations of the financial adviser.
He points out too the most immediate threat which besets us in the low-interest-rate environment of today, which is likely to continue for some years to come: ‘The history of the trade cycle had taught me that a period of a low rate of return on investments inexorably leads towards irresponsible investment . . . People won’t take 2 per cent and cannot bear a loss of income. Instead, they invest their careful savings in something impossible – a canal to Kamchatka, a railway to Watchet, a plan for animating the Dead Sea.’ And how elegantly Bagehot describes the extreme fragility of the financial system in his day and ours, where an inverted mountain of credit teeters on a tiny base of cash. And how he mocks the complacency of the money men:
Again, it may be said that we need not be alarmed at the magnitude of our credit system or at its refinement, for we have learned by experience the way of controlling it, and always manage it with discretion. But we do not always manage it with discretion. There is the astounding instance of Overend, Gurney and Co to the contrary. Ten years ago that house stood next to the Bank of England in the City of London; it was better known abroad than any similar firm, known, perhaps, better than any purely English firm. The partners had great estates, which had mostly been made in the business. They still derived an immense income from it. Yet in six years they lost all their own wealth, sold the business to the company, and then lost a large part of the company’s capital. And these losses were made in a manner so reckless and so foolish, that one would think a child who had lent money in the City of London would surely have lent it better.
For Overend, Gurney, read Barings, Lehman Brothers, RBS, Lloyds, etc. But Bagehot’s fame never rested solely on the undoubted fact that he knew about money, knew so much that Gladstone relied on his advice and described him as for many years ‘a sort of supplementary chancellor of the exchequer’. It was because his mind ranged far beyond the counting house, because he mocked the sluggish minds of City men, that his writings were so exhilarating and so popular. It is not because Bagehot was a brilliant banker that his name still has a quizzical resonance. It is because he was a brilliant journalist.
He was fully aware of what he was, alive to both his talents and his limits. When he was a boy, his parents had ‘gently censured the haste and carelessness in my writing – and my tendency to criticise rather than get to the bottom of a subject’. He admitted that ‘variety is my taste and versatility my weakness.’ He could pick up any subject and give it a high bright gloss, leaving his readers confident that they now knew all they needed to know about it. They had been taken behind the scenes, they knew how much the show cost and what made it tick and how much it was really worth. Every page is full of bounce and sprezzatura, spiced with irony and liable to make you laugh out loud.
Two of his three best-known books, The English Constitution and Physics and Politics, were first published as articles in the Fortnightly Review, and they have all the fizz calculated to make a splash in that sort of journal. His pieces are never weighed down by punctilious analysis, dulling qualification or anxious quotation. Only in Lombard Street are there any statistics to be found, but that is because Lombard Street is about a serious subject, the only really serious subject, money. ‘My great concern,’ Bagehot confesses, ‘was to avoid seeming dull, in the manner of the detached historian imprisoned in his tower, insensitive to the immediacy of the encircling world’ – a confession which might stand as the journo’s credo. And Bagehot is never dull. Prochaska claims that ‘if he is not the “Greatest Victorian”, he is the Victorian with whom you would most want to have dinner.’
Well, perhaps, if you wanted to have an easy clubbable sort of dinner, a dinner you would come away from thinking that the Victorians were really decent chaps, not unlike us. But if you wanted a dinner that you would remember for the rest of your life, would you not prefer to dine with, say, Carlyle, or George Eliot, or Dickens, or Ruskin, or Tennyson, or even Gladstone? There might be torrential monologues, harsh tirades, uncomfortable silences, but at least you would have experienced a force of nature, you would have trod the slopes of the volcano.
Bagehot, by contrast, tells us that ‘a writer of genius, like a great man of the world, is distinguished by what I call “animated moderation”.’ In fact, ‘success in life depends more than anything else on animated moderation.’ Shakespeare, you will be relieved to hear, scores quite high on this: ‘He is often perfect in it for long together, though then, from the defects of a bad education and a vicious age, all at once he loses himself in excesses.’ If only he had been to a decent university, or better still worked in a bank. T. S. Eliot would have got high marks from Bagehot.
At least it looks as if Shakespeare was a healthy outdoor type. ‘The passage in Venus and Adonis which describes a hare running through a flock of sheep to put the hounds off the scent could only have been written by a man who had been hunting.’ The point is that writers must not be too bookish. ‘So many poor books are written because writers have so little knowledge of the world outside their studies . . . the most perfect books have been not by those who thought much of books, but by those who thought little.’
Writers ought to mix socially with the people they write about. Full marks would have gone to Henry James for his heroic dining out, but nul points to Dickens. ‘He knows the dry arches of London Bridge better than Belgravia. He excels in inventories of poor furniture and is learned in pawnbrokers’ tickets.’ But he had never penetrated the haute bourgeoisie. ‘His delineations of middle-class life have in consequence a harshness and meanness which do not belong to that life in reality.’ The Dedlocks and the Veneerings and Sir Mulberry Hawk are simply not like the people one meets. By the same token, Dickens’s pictures of our higher institutions – the Court of Chancery, the Circumlocution Office – are overwrought and tend to excite futile ‘discontent and repining’. Dickens’s inveighing against what are the inevitable evils of life sets a ‘pernicious example’.
The mission of a respectable periodical, as Bagehot sees it, is to make its readers feel at home. At the Economist, he tells us:
Our typical reader is a businessman, banker or trader, who prefers statistics to abstractions and has little patience for padding. He is generally cool, with his own business to attend to, and has a set of ordinary opinions arisin
g from and suited to ordinary life. He does not desire an article that is too profound, but one which he can lay down and say ‘an excellent article, very excellent, exactly my own sentiments’.
On such first-rate principles the Economist has been conducted ever since, although few of Bagehot’s successors as editor have stated them so frankly. Worldly men tend to applaud the judgment of other worldly men, and Bagehot’s judgment has been much prized by his admirers. G. M. Young says in an essay on Robert Peel that ‘Bagehot called him a second-class man, and Bagehot was not often wrong.’ Peel lacked the inspirational qualities of Fox and the Pitts, of Gladstone and Disraeli, ‘which is why no party has taken his memory into its care’. This is surely nonsense. Peel is a far more vibrant presence in Conservative politics today than any of the others, because he engaged with the modern world with a moral and practical seriousness that none of the others quite matched. Which is the reason the working men of London flocked to his house when he was dying.
The truth is that Bagehot was often wrong, and because he was a generous man, he often said so. He admitted that he had underrated Abraham Lincoln and had been wrong to support the right of the Southern states to secede and form a slave-owning republic. By contrast, he thought at first that Louis Napoleon was an ideal leader, because ‘the French just want treading down and nothing else – calm, business-like oppression, to take the dogmatic conceit out of their heads.’ By 1870, however, he was telling the readers of the Economist that ‘Caesarism has utterly failed in France’. He was scornful of twaddle about democracy: ‘Of all the circumstances affecting political problems, by far the most important is national character.’ It was ‘the least changeable thing in this ever-changeful world’. Only a few years later, though, in Physics and Politics, he was declaring, with equal certainty, that ‘a lazy nation may be changed into an industrious, a rich into a poor, a religious into a profane, as if by magic, if any single cause, though slight, or any combination of causes, however subtle, is strong enough to change the favourite and detested types of character.’
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