Phantom Gold

John Pemble

  • Forging Capitalism: Rogues, Swindlers, Frauds and the Rise of Modern Finance by Ian Klaus
    Yale, 287 pp, £18.99, January 2015, ISBN 978 0 300 18194 4

An MP and financier dead from poison on Hampstead Heath; the secretary of a life insurance company in his office with his brains blown out; a stockbroker with his throat cut in a railway carriage in Grosvenor Road Station; a diamond magnate jumping overboard from a passenger liner in the mid-Atlantic: lurid with suicide, Victorian capitalism got a very bad press. In 1776 Adam Smith had argued in The Wealth of Nations that free-market capitalism was a force for material and moral progress. Capitalism left to itself, he insisted, must produce the best of all possible worlds, since a capitalist pursuing self-interest makes life better for everyone. ‘The study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society.’ He is ‘led by an invisible hand to promote an end which was no part of his intention.’ Independently of Karl Marx – little known and never influential among Victorian intellectuals – a great many critics fustigated this way of thinking. Fire and brimstone evangelists like Carlyle, agonised agnostics like Matthew Arnold, Arts and Crafts socialists like Ruskin and Morris, and vegetarian Fabians like Shaw and the Webbs accused capitalism of betraying what was best for all by bringing out the worst in each. In Victorian fiction its heroes are few, and overshadowed by its villains. Disraeli’s novels glorified Nathan and Lionel de Rothschild as the Sidonias, father and son – the one a great Jewish financier who rescues kings and princes and saves civilisation, the other a paladin who combines the wealth of Croesus, the wisdom of Solomon and the beauty of Byron. But their glamour is pallid beside the turpitude of Dickens’s Nickleby, Dombey and Merdle, or Trollope’s Melmotte. Even Disraeli reckoned that capitalism of the sort that came to Britain with William of Orange (‘Dutch finance’) was detestable: it had resulted in ‘the degradation of a fettered and burthened multitude … made debt a national habit … credit the ruling power … introduced a loose, inexact, haphazard and dishonest spirit in the conduct of both public and private life; a spirit dazzling and yet dastardly, reckless of consequences and yet shrinking from responsibility’.

Even allowing for sensationalism, dottiness and theatricality, it’s still possible to read the history of the Victorian age as the story of a society blighted by capitalism at every level, not just in those lower reaches where men, women and children were dehumanised by wage slavery in mines and mills. Virginia Woolf described a typically bourgeois sense of insecurity when she recalled the attitude of her father, Leslie Stephen, to money: ‘Not all his mathematics together with a bank balance which he insisted must be ample in the extreme, could persuade him, when it came to writing a cheque, that the whole family was not “shooting Niagara to ruin”.’ The ruling elite was fearful of the social unrest and threat of political revolution that accompanied the growth of capitalism, and racked by the headache of what Burke had described as ‘one of the finest problems in legislation … what the state ought to take upon itself to direct by the public wisdom and what it ought to leave, with as little interference as possible, to individual discretion’.

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[*] The first two volumes of Kynaston’s history of the City were reviewed in the LRB by James Buchan and Jonathan Parry respectively, in the issues of 28 April 1994 and 21 September 1995.