Trevelyan was recalled for insubordination, yet the budget was swept further into the political storm. In London, Bright and Sir Charles Wood, secretary of state for India, backed the recalled governor. All three put some blame for the mutiny on an overly centralized bureaucracy and in Wilson’s budget they saw those tendencies exacerbated. Trevelyan had been the official most in charge of ‘relief efforts’ during the Irish famine, and later Wilson’s colleague at the Treasury, where both had preached the purest laissez-faire. Yet personally they did not get along. To Trevelyan, Wilson was an unscrupulous climber whose sole aim in India was to become Chancellor of the Exchequer back in Britain. ‘Ordering a salute and giving him a sort of public reception would be funny’, he wrote to Wood, anticipating Wilson’s arrival in Madras. Wilson saw Trevelyan as impulsive and vain, ‘thinking himself able equally to command a squadron, lead an army, or regenerate the civil government of a country’.161 Obituaries for Wilson strongly implied that this last administrative quarrel, and the advent of the rainy season, caused a fever-gripped Wilson, murmuring to Canning about ‘his income tax’ and in early August arranging his will, to go to ‘bed never to rise from it again’.162
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2
Walter Bagehot’s Dashed Doubts
Founder, owner, editor, political high-flyer – no other leader of the Economist wore as many hats as James Wilson. But the name most associated with the paper he started is not his, which faded after his death in India in 1860. Lasting fame instead awaited his son-in-law and successor, Walter Bagehot, who remains not only the best-known editor of the Economist, but a totemic figure in and beyond its pages. Drawn as much to religion, literature, art, history and political gossip as the effect of tariffs on the price of salt, Bagehot forms a vivid contrast to Wilson, with far broader interests. In addition to money market summaries, Bagehot wrote two and often three or four leading articles a week on current events for sixteen years; in 1861 he wrote at least thirty-one just on the American Civil War. From these anonymous articles, as well as signed essays in the National Review, Fortnightly Review and other journals, Bagehot spun three major works between 1865 and 1873: The English Constitution and Physics and Politics, describing the subtle and secret evolution of government in England, and the world; and Lombard Street, on the causes and management of financial crises. Economic Studies, a guide to political economy and the lives of its most famous theorists, was unfinished at his death in 1877.
This prospectus has landed Bagehot on the reading lists of the Anglo-American ruling class since the late Victorian period. The jurist James Bryce called Bagehot ‘one of the greatest minds of his generation’ and ranked his constitutional insights above those of Tocqueville and on a level with Montesquieu.1 ‘The greatest Victorian’ pronounced the historian G. M. Young, after scanning a list that included Eliot, Tennyson, Arnold, Darwin and Ruskin.2 While John Maynard Keynes had some doubts about his art criticism, he warmly recommended Bagehot’s behavioural studies of the middle-class men who flourished in nineteenth-century Britain. ‘Bagehot’, Keynes noted in 1915, ‘was a psychological analyser, not of the great or of genius, but of those of a middle position, and primarily of business men, financiers, and politicians.’3 More fulsome praise came from across the Atlantic, where Woodrow Wilson was a devoted reader. In 1895 and again in 1898 the future president enthused about Bagehot in the Atlantic as a sheer pleasure to read: witty, prophetic, and the basis for his own analysis of the flawed American Constitution. Wilson kept a portrait of Bagehot on his study wall at Princeton, deriving from it ‘much inspiration’.4
As the twentieth century progressed, so did Bagehot’s reputation. In 1967, Labour prime minister Harold Wilson fondly recalled his student days at Oxford, preparing for a prize essay, reading Economist articles on state regulation of the railways by Bagehot – ‘the most acute observer of the political and economic society in which he lived’.5 In 1978, Harold Macmillan addressed the staff of the Economist on the subject of Bagehot. The former Tory prime minister, now eighty-four, mulled over Bagehot’s virtues: ‘gifted amateur’, ‘solid, sensible, perfectly straightforward’ – ‘because if you want to become the editor of a newspaper what can you do better than marry the daughter of the proprietor’ – who didn’t go in for ‘theories and dreams’ or ‘extraordinary doctrines’. After losing the thread in a long complaint against the BBC, which had falsely reported Macmillan’s death the summer before, prompting a daydream about withdrawing his money from Coutts and disappearing to ‘a nice little estaminet’ in the south of France to play boules, Macmillan concluded: Bagehot was ‘the kind of man we’d awfully like to have known’.6
Today the picture is much as the elderly Macmillan left it. In 1992, the writer Ferdinand Mount still found Bagehot ‘full of manly common sense’ on the English Constitution; ‘often witty, very often charming, he is never silly’.7 A fictional memoir arrived in 2013 that was so true to life, the reviewers had trouble discerning its real author: historian Frank Prochaska, who presented Bagehot as ‘the Victorian with whom you’d most like to have dinner’.8 Bagehot’s biographers have seen him in the same candlelit glow, with one searing exception, and have generally had a personal or professional interest in doing so, usually connected to the Economist.9 That is hardly surprising. The Economist cannot be understood without Bagehot; neither can he, without it. Fifteen volumes of Collected Works make attributing authorship easier than for any other editor, and reveal three broad ways in which he changed the Economist, and through it, liberalism. The first was a sharper focus on the changing facets of finance; second, a comparative approach to political systems and institutions, with the explicit aim of discovering the ones best adapted to sustaining the phenomenal growth of finance – both at home, where the defeat or neutralization of the democratic demands of the working class was his top priority; and, finally, abroad, where he assessed the costs and benefits of empire.
Walter Bagehot: Born Banker
Bagehot was born into a prosperous, well-connected provincial banking family in 1826. Vincent Stuckey, his maternal uncle, ran the bank, and Thomas Bagehot, his father, was a partner whose marriage to the widow Edith Stuckey had merged the leading shipping, mercantile and financial families of Langport in Somerset. Banking formed a backdrop to their lives, but for their son and ‘greatest treasure’ the Bagehots hoped for even wider vistas. His father, a plainspoken Unitarian, assigned history and philosophy in English and French. When Walter turned five, a governess introduced novels and Latin. His Anglican mother took up his moral education, bringing him to church on Sunday afternoons, though she inadvertently taught him about ‘darker realities’ too, during ‘attacks of delirium’.10 Little Walter was unruly, rode a pony named Medora, and climbed trees and would not come down.
His formal schooling built upon this liberal home life. In 1839 he left Langport Grammar School for Bristol College, where he studied classics, math, German and Hebrew. Three years later, at sixteen, he enrolled at University College, London, where nonconformists sent their sons (unlike Oxford or Cambridge it had no doctrinal test). He chased down still more subjects: after history, poetry and math, he took a first in classics, followed by political economy, metaphysics and, two years later, a gold medal in philosophy. He and his friends started a debating society, wrote each other sonnets, and went to meetings of the Anti-Corn Law League.11 At one gathering the biggest stars of the movement spoke. Bagehot was stunned by their oratorical skill. ‘I do not know whether you are much of a free-trader or not’, he told a friend. ‘I am enthusiastic about, am a worshiper of, Richard Cobden.’12
After graduating with his master’s in 1848, he studied law, and was called to the bar in 1852. In between he began to write articles on political economy for the Prospective Review. One of his most audacious assessed the brand-new treatise by John Stuart Mill, The Principles of Political Economy. ‘I am in much trouble about John Mill, who is very t
ough, and rather dreary’, he told his best friend, Richard Hutton. ‘I am trying to discuss his views about the labouring classes.’13 Bagehot’s own opinion of them was not high. He wrote to his mother of his duties as a volunteer constable in London, where a Chartist revolt was expected on 10 April 1848. Though unexcited at ‘muddling about Lincoln’s Inn field with an oak staff’, and by the Chartists, whose ‘very violent language is delivered to the world gratis by men in dirty shirts’, he found the government’s precautions prudent: ‘with the mass of wretchedness in London, the slightest spark is dangerous and must not be neglected.’14
It was a chance encounter in Paris, however, that led him to turn his back on the law, while also reinforcing his distrust of the popular political movements that flowered between 1848 and 1851, when artisans, workers and peasants supplied the thrust for the liberal revolutions that briefly shook the autocratic capitals of Europe.15 Bored in London, Bagehot left for the French capital in the fall of 1851, witnessing a last-ditch effort to defend the republican regime installed three years earlier. What Bagehot saw – uneducated workers building barricades to defend the Second Republic against Louis-Napoléon’s coup d’état, before they were crushed by the army – affected him deeply. He took notes, and seven ‘letters’ from Paris appeared in the Inquirer, a Unitarian journal. Their provocative intent was to justify the coup to liberal opinion in England, as a way to restore confidence among shopkeepers, tradesmen, housewives, ‘stupid people who mind their business, and have a business to mind’, acutely worried that ‘their common comforts were in considerable danger’. ‘Parliament, liberty, leading articles, essays, eloquence’ – he went down the list of liberal virtues – ‘all are good’, but in such a climate, ‘they are secondary’ for ‘the first duty of government is to ensure security of that industry which is the condition of social life’.16
Bagehot’s letters ‘were light and airy, and even flippant on a very grave subject’, Hutton recalled, and ‘took impertinent liberties with all the dearest prepossessions of the readers of the Inquirer’.17 In private, Bagehot was even glibber. ‘I was here during the only day of hard fighting’, he informed one correspondent, ‘and shall be able to give lectures on the construction of a barricade if that noble branch of Political Economy ever became a source of income in England.’18 ‘M. Buonaparte is entitled to great praise’, he told another. ‘He has very good heels to his boots, and the French just want treading down, and nothing else – calm, cruel, business-like oppression to take the dogmatic conceit out of their heads.’19
The stir caused by the letters kindled his ambition, but with no clear path into politics Bagehot heeded his father’s urgings and returned to Langport to work at the family bank in 1852. Luckily, the man who ran it, his uncle Vincent Stuckey, was no ordinary banker: a political career at the Treasury; friendships with two prime ministers, Pitt and Peel; three times mayor of Langport; and as a bonus, a taste for epigrams. ‘Bankers are mortal, but banks should never die.’ Stuckey had converted the bank into one of the first joint-stock operations and made it into a regional force. By 1909, when merged with Parr’s Bank of Lancashire, it had £7 million in deposits, and a note circulation second only to the Bank of England.20 Heartened by the precedent, Bagehot slogged on for seven years in a variety of jobs, including as manager of the Bristol branch.
After years cultivating his mind in London, however, Bagehot found bookkeeping a chore. He complained to a school friend of ‘being rowed ninety-nine times a day for some horrid sin against the conventions of mercantile existence’. ‘My family perhaps you know are merchants, ship-owners, and bankers, etc., etc.’, he continued. How much better if they ‘would admit that sums are a matter of opinion’.21 Among number crunchers, he was a poet. When confronted by intellectuals, however, he played the practical, no-nonsense philistine. On a business trip he was invited to a dinner party, where an aged scholar declared his intention to get at ‘the kernel of all the machinery by which we were governed’. Bagehot piped up after a pause, ‘My impression is that the kernel is the consolidated fund, and I should like to get at that!’ If someone was taking too long constructing an elegant phrase, he would interrupt them, asking, ‘How much?’22
Bagehot’s articles from these years were mainly portraits of English writers: Cowper, Coleridge, Shakespeare, Macaulay, Shelley, Scott, Dickens, Milton and others. Aside from Bagehot’s interpretation of business success as a criterion of literary merit, what is striking is the relation of all these lives to his own. As an historian Scott was preferable to Macaulay, because the former gave the Cavalier his due: ‘a thrill of delight; exaltation in a daily event; zest in the “regular thing”.’ Shakespeare, meanwhile, was made to share in his view of common folk. It was fun to mix with the lowly, ‘the stupid players and the stupid door keepers’. But at the end of the day ‘it was enough if every man hitched well into his own place in life’, as in Much Ado About Nothing. For, ‘if every one were logical and literary, how could there be scavengers, or watchmen or caulkers, or coopers?’23
Essay-writing in his spare hours from the bank was not enough. It was as a banker, though, and not an intimate of artists, that Bagehot freed himself from the daily chores of the counting house. Richard Hutton, now co-editor of the National Review, wrote from London in 1856 to say he had received a tentative offer from William Rathbone Greg to edit the Economist. Hutton was unsure, and thought of visiting the tomb of his wife in the West Indies before deciding: what did Bagehot think? ‘Offers of this kind are not to be picked up in the street every day’, Bagehot replied. ‘You have an opportunity of fixing yourself in a post, likely to be useful and permanent, and give you a fulcrum and position in the world which is what you have always wanted and is quite necessary to comfort in England. I do not think you ought to risk it for the sake of a holiday.’24
Hutton set out for Barbados. Bagehot, however, wrote to their mutual friend James Martineau, who secured him an introduction to Greg, who in turn obtained an invitation to Claverton Manor, James Wilson’s pile in the country. After a visit in January 1857, Bagehot was asked to write a series of letters on banking. He also caught the eyes of the six girls in the house, for making fun of their German governess, ‘an egg’, and for his appearance: black wavy hair, long bushy beard, tall, thin, ‘very fine skin, very white’, a ‘high, hectic colour concentrated on the cheek bones … he would pace a room when talking and throw his head back as some animals do when sniffing air.’25 A year later he was engaged to the eldest daughter, Eliza.
Hutton got to work as editor after his return, but it was Bagehot who quickly imposed himself as the heir apparent. Wilson liked Bagehot, and was so thrilled with an essay of his in the National Review in 1859 – warning of the dangers of any but the most limited extension of the franchise to the top layers of the working class – he threw him a dinner party in April, inviting Lord Grey, Lord Granville, Sir Richard Bethell, Sir George Cornewall Lewis, Edward Cardwell, Thackeray and Gladstone – ‘a very fine collection of political animals’, Bagehot observed contentedly.26 And it was to Bagehot that Wilson turned in 1859 ‘to interpret his great work in India to the public in England through the pages of the Economist’ – even as Hutton remained nominal editor for two more years.27 When Wilson died, Bagehot was offered his job in India. He declined, looking forward to greener and more pleasant political pastures at home. Though he resigned as bank manager, he stayed on as a director, and now oversaw all of Stuckey’s business in London.
Bagehot took after Wilson in another respect, with the clear intention to use the Economist as a springboard into politics. He stood for parliament four times as a Liberal: in Manchester in 1865, Bridgwater in 1866, and twice at London University, his alma mater, in 1860 and 1867. All were unsuccessful, but on his third try he came within a hair’s breadth – just seven votes behind his Tory opponent. Bagehot did not lose the Bridgwater by-election, however, as fable has it, ‘because he refused to bribe the electorate’. An 1869 investigative commissio
n declared him ‘privy and assenting to some of the corrupt practices extensively prevailing’. Nor did he accept this censure with good grace. He blamed the voters, these rustics, and did a droll impersonation of them for the commissioners: ‘I won’t vote for gentlefolks unless they do something for I. Gentlefolks do not come to I unless they want something of I, and I won’t do nothing for gentlefolks, unless they do something for me.’28 After admitting he had paid out £1,533 10s. 2d. via his solicitor to cover ‘retrospective’ campaign expenses, he wrote to Hutton in triumph, with news that his reputation had been ‘much raised’ by his examination. ‘They say, “Ah! Mr. Bagehot was too many for them. They broke Westropp but they could not break him.” They regard it as a kind of skill independent of fact or truth. “You win if you are clever, and lose if you are stupid,” is their idea at bottom.’ It was an idea Bagehot seemed to share.29
While a seat in the Commons eluded him, Bagehot received ample confirmation of his standing outside it – elected to Wyndhams and Brooks’s, the Metaphysical Society, Political Economy Club and finally in 1875 the Athenaeum. As editor he was a trusted advisor to two Chancellors of the Exchequer. These varied and prominent roles in Victorian political, economic and cultural life came to an abrupt close in the spring of 1877. Bagehot, then fifty-one, came down with a cold. It was the last in a chain of respiratory ailments – caught, some believed, in the draughty drawing room at 8 Queens Gate Place in London, awaiting drapes custom-designed by William Morris. Bagehot returned to his family home at Herds Hill, where he died on 23 March, and was buried in the family vault beside his mother at All Saints Church.
Liberal Lines: Bagehot Steers the Economist
Bagehot became director of the Economist the year the Liberal Party emerged from its chrysalis among the Whigs in 1859. He was editor at the zenith of Victorian liberalism, with Liberals in power for thirteen out of seventeen years. At the Treasury, William Gladstone drafted one masterpiece of budgetary discipline after another – winning high praise from Bagehot for his ‘flowing eloquence and lofty heroism’, ‘acute intellect and endless knowledge’.30 In the country at large, trade and employment picked up briskly after the downturn of 1848, while the threat of revolution receded along with it. Liberal rule seemed the benign backdrop to this era, to such an extent that Bagehot was stunned when Conservatives interrupted it in 1874.31 This context helps to explain a marked shift in tone and outlook at the Economist. Bagehot displayed the knowing nonchalance of a young banker, without the solemnity veering into bombast that had characterized Wilson or William Rathbone Greg. As editor, he brought his literary and professional tastes and interests to bear on the look and feel of the Economist, with tangible results.
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