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 tough, 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
