Memoirs of Walter Bagehot 
by Frank Prochaska.
Yale, 207 pp., £18.99, August 2013, 978 0 300 19554 5
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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 Lyall, 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 sizeable 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 51. 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 multi-volume editions three times, by Forrest Morgan in 1889, by one of the Wilson sisters, Emilie Barrington, in 1915, and finally by Norman St John Stevas 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 sympathise with Prochaska’s self-effacement. So many biographies, after all, blur the subject by homogenising 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 two hundred pages as from St John Stevas’s 15 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 2014, one 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 all 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, who here begins to remind us of those puzzled souls who refuse to believe that a glover’s son from the Midlands could have written all those plays.

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.’ This is reminiscent of Duff Cooper’s little book Sergeant Shakespeare, which tries to prove that Shakespeare must have seen service in the Low Countries because he uses such a lot of military terms (a similar argument has been deployed to show that he was a qualified lawyer). 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 arising 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.’

But surely The English Constitution still has something of value to teach us about the way we are governed. Its brilliance and charm have never ceased to attract later generations, and if Bagehot lives today, this little book is what makes him live. Yet those who have not previously read it or who come back to it after a long gap will, I think, be astonished by its relentless snobbery and its obsessive contempt for and fear of the lower orders. ‘The masses of Englishmen are not yet fit for an elective government,’ we are told. We need a visible symbol of personal authority in the shape of the monarchy, because ‘the fancy of the mass of men is incredibly weak and can see nothing’ without it. ‘The lower orders, the middle orders, are still, when tried by what is that standard of the educated “ten thousand”, narrow-minded, unintelligent, incurious.’ So it is vital to preserve the mystery of monarchy, for fear of undeceiving the mob. ‘We must not let daylight in upon magic’ – itself a magical phrase which, unaccountably, Prochaska omits. Basically, the proles have to be conned into thinking that they are actually governed by the queen herself, or they would not suffer themselves to be governed at all.

Bagehot doesn’t contemplate the possibility that, even among that educated ten thousand, there might be quite a few who would also find in the monarchy a symbol of their shared history and culture and hence see the queen not only as the focus for their allegiance but also as the source of legitimate authority which is entitled to command their obedience. For Bagehot, all this is mere flummery which, by a happy accident of history, enables the middle class to get on with the actual business of ruling – the ‘efficient’ part of the constitution as opposed to the ‘dignified’ part, that distinction which is the book’s most memorable legacy.

Bagehot shows little sense of or interest in constitutional structure. All he is interested in is power, and what he tells us – this is his groundbreaking insight – is that power resides with the majority in the House of Commons and nowhere else, and this is what is so good about the system, for ‘the interlaced character of human affairs requires a single determining energy; a distinct force for each artificial compartment will make but a motley patchwork, if it live long enough to make anything. The excellence of the British constitution is that it has achieved this unity; that in it the sovereign power is single, possible and good.’

Checks and balances are for the birds, or the Americans. Any separation of powers can only be a source of weakness. For Bagehot, writing in 1865, the agonies of the American Civil War had shown that republics were intrinsically weaker than monarchies. The vulgar and benighted Americans had persuaded themselves that their constitution was a work of providential genius, but in truth it was an outdated document which had turned out to be woefully inapplicable to modern conditions.

We don’t have to wait for the 20th century to see how short-sighted Bagehot was. Only two years after The English Constitution began to be serialised in the Fortnightly, Disraeli managed to get the Reform Act of 1867 through, and all Bagehot’s comfortable premises were overturned. He never revised the book, but he did write a preface for the second edition of 1872. And what a remarkable transformation of attitude we find in it. Gone is the cheerful confidence of the high Victorian age, in which science and reason would conquer all, and free trade and Mr Babbage’s calculating machines would bring prosperity and leisure to an ever expanding middle class. All at once we find ourselves lapped in the apprehensive gloom of the later Victorians. Bagehot’s own high colour and high spirits seem to be fading too. His health, never strong though he kept up a hearty front, had been declining for years and he was carried off by pneumonia in the spring of 1877. By the end, he seems to belong with the sad sages in the Watts room. The modern world takes him aback, he had not bargained for it and he doesn’t care for it. That ‘marvel of intelligible government’ which the English had had the luck to stumble on was not turning out to be as robust as he thought. He saw it as futile to imagine that the enlargement of the electorate would improve the system. He didn’t shrink from saying that ‘I am exceedingly afraid of the ignorant multitude of the new constituencies.’

But even these fresh apprehensions do not represent a settled state of mind. He looks around a few years after Disraeli’s thunderbolt and sees, to his relief and surprise, that ‘Thus far, my fears that the working classes would take all the decisions to themselves – would combine as a class and legislate for their class interests – have not been realised … In the main, things go on much as before. The predominance remains as yet where it ought to be: in the hands of leisure, of property and of intelligence.’

So Bagehot ends his sadly shortened life in a mixture of funk and bewilderment. He really has no more idea than anyone else how things are going to pan out. He can offer no rational prognosis for the long or even medium-term future of the British constitution. This mental paralysis surely arises from his failure to examine the structure and history of those arrangements with any sustained seriousness. What he offers us is a charming snapshot, coloured by his own prejudices and fears. The English Constitution is the first selfie.

His confusion is compounded by the fashionable Social Darwinism that slips into his later writings, notably in Physics and Politics. It is surprising to see a man so proud of his cool and sceptical temper swallowing great gulps of Herbert Spencer. The fittest survive, the losers deserve to lose. ‘The majority of the “groups” which win and conquer are better than the majority of those which fail and perish.’ That is the way the world improves. We have to discard ‘the mistaken ideas of unfit men and beaten races’.

Bagehot has few tears to shed for the losers. ‘I confess to having little compassion for the toiling masses of unknown men, whose lives are mired in misery and pain.’ He attributes this to the terrible strains his mother’s long-term insanity had placed on her only son. ‘I sometimes feel that each of us is born with a measure of compassion, which is easily exhausted in this suffering world.’ Bagehot can at least claim to have been a pioneer of compassion fatigue.

This isn’t just an unattractive way to look at the progress of the human race. It was also apparently contradicted by the experience of the 1860s and 1870s, for who were coming out on top but the lower classes, those very people who were ‘clearly wanting in the nicer part of those feelings which, taken together, we call the sense of morality’? The unfittest were not only surviving but triumphing, and of course there were too many of them, for like many such pessimists, Bagehot worried about the overbreeding of the underclass.

It seems something of a mystery that Bagehot should endure as an icon of sagacity. No doubt his role as the founding deity of the Economist must have a good deal to do with it, not simply because of the worldwide success of that journal but because its prosperity enabled it to finance elaborate publication of Bagehot’s work and because his editor St John Stevas and his biographer Alastair Buchan were long associated with the paper. And the cocksure, worldly-wise tone of its columns is a living memorial to Walter Bagehot.

The one exception to the uncritical reception comes from a writer whose only connection with Bagehot was that he happened to live near his home town of Langport, Somerset. Prochaska doesn’t mention C.H. Sisson’s The Case of Walter Bagehot (1972) among the list of books he has consulted, but it is an acerbic and indispensable corrective to the excessive worship of the Greatest Victorian. Nobody could have been less like Bagehot than Charles Sisson, a modest, understated man equally distinguished as a poet and a civil servant. Sisson understood the deep springs of allegiance and the poetry of public service. No other critic has pinpointed the unconscious philistinism, the underlying money worship, the breezy swank which made Bagehot such a legend in his lifetime and such a warning to ours.

When people talk about the toxic influence of journalism, they generally mean the salacious intrusions and excesses of the tabloids. If he had been around today, Bagehot would have subscribed to Hacked Off. In his own time, he was grateful that ‘our newspapers do not lift the veil of private life; they do not tell the inner weakness of public men or the details of their “habit as they live”.’ Thank heavens, for ‘an incessant press dealing with real personalities would sicken its readers and would drive sensitive men from public life.’ Alas, readers’ stomachs and the sensibilities of would-be public men have turned out to be made of tougher stuff.

But the higher journalism that Bagehot did so much to pioneer is not without its downside. For again and again, it has turned out to be the higher journalism, as practised by, say, the Economist, the BBC and the Times, which has been deaf to the deeper passions of men and failed to grasp the enduring force of attachment to nationality and religion and the unquenched thirst for equality. The most potent resentments at work in Europe today are those provoked by inequality, mass immigration and the incursions of the European Union. And they are precisely those with which the elite media are most reluctant to engage. We can be sure, I think, that Bagehot too would have pooh-poohed these concerns as outdated prejudices of the coarse, contracted masses. He tells us, quite early on, that he had resolved as a young man ‘to take this world lightly’. The trouble is that so many people will insist on taking it seriously.

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