Mallaby on Grant's Bagehot
By Alberto Mingardi
I cannot add the second post before this afternoon but it would be this
I’m halfway through James Grant’s Bagehot. The Life and Times of the Greatest Victorian. The book has been widely reviewed and it is, indeed, excellent. Grant writes engagingly and makes the most of Bagehot’s life (by the way, I was saddened by his reference to Thomas Hodgskin as “a kind of anarcho-socialist”, but this is a very minor fault of the book).
Of the reviews I read, I’ve particularly appreciated Sebastian Mallaby’s, published on Foreign Affairs. Mallaby starts his piece by writing:
In James Grant, it sometimes seems, the nineteenth century has been resuscitated. Towering, gaunt, bow-tied, and pinstriped, he writes with a sly wit that recalls the novels of William Thackeray. His signal achievement is a fortnightly cult publication bearing the antique title Grant’s Interest Rate Observer. He is a nostalgic believer in the nineteenth-century gold standard. He eyes modern banking innovations with stern, starch-collared suspicion, as though peering at them through a monocle. Even traditional financial instruments elicit a wry scorn. “To suppose that the value of a common stock is determined purely by a corporation’s earnings,” Grant once wrote, “is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.
Now, Grant has written a delightful biography of Walter Bagehot, the great nineteenth-century Englishman in whom Grant perhaps recognizes a grander version of himself: the would-be Victorian sage is paying tribute to the authentic one.
Whatever Mallaby’s view of Grant’s personality – I suppose that Greenspan’s biographer could easilypaint in a similar fashion many a libertarian – he catches a critical feature of the book: the author’s unabashed enthusiasm for the Victorian era, that is for a time of unprecedented economic progress and relative political liberty. With it, it comes also a particular appreciation for the sort of man Bagehot was (or perhaps better to say, the sort of man he could be in those times): a literary banker, an educated journalist, an economist that read and appreciated poetry.
As other reviewers, Mallaby points out the “imperfections” of Bagehot’s liberalism, which makes him appear so distant from our contemporaries. It is always difficult to deal with ideas on race and gender that belong to a time that now looks far far away: we risk to run into a sort of judgmental anachronism. More generally, Mallaby infers from Bagehot’s views a lesson for contemporary (classical) liberals:
For him, gradualism was a virtue: the iniquities of the status quo had to be balanced against the risks of rapid change, which might outstrip the human capacity for adaptation.
… Herein lies an uncomfortable message for today’s liberals. A policy can be attractive in principle but mistaken in practice. … if Bagehot were alive today, he might favor immigration restrictions in advanced democracies. In principle, liberal immigration policies enhance individual freedom and promote economic growth. In practice, too much of a good thing can sour the public on the project of an open society. Likewise, trade and technological progress are the drivers of prosperity, but their benefits must be weighed against the fact that citizens resent upheaval. A system that permits financiers to price and insure risk should serve economic growth, yet such a system can collapse under its own weight, with society suffering the consequences.
Liberalism, in other words, should not consist only of fealty to liberty, equality, and fraternity, the seductive abstractions of the French Revolution. It should also be about outcomes.
I do not know what Bagehot would make of immigration policies today. I think Mallaby has a point – up to a point. Abstract principles are not necessarily a good compass in practical politics, and whenever one is engaged in such an activity a certain attitude to compromise is badly needed. But which compromises one should make is not a trivial question. “Gradualism” often becomes the search of a middle ground for the sake of it: certainly a more attractive perspective than today’s highly divisive and personalized debate, but is that really a good in itself? Perhaps it is precisely principles which should be used to search for _good_ compromises, that nonetheless can bring, however gradually, policies in a more liberal direction.