Bagehot, crippling commercial uncertainty awaited societies unable to contain the democratic elements in their constitutions. Tocqueville, more concerned with moral and religious liberties and whether these could survive in democracies, was less intransigent. The spread of democracy to the ‘Christian nations of our day’ might be cause for anxiety, but for the author of Democracy in America it was also inevitable, an edict of providence that might even – provided it did not put equality above liberty, as he accused socialists in France of doing – be beneficent.170 Bagehot read and admired Tocqueville, and met him at least once in 1857. Yet he could not help suspecting that a man who took such a dim view of ‘money-making’, even criticizing the individualism it bred as a threat to the preservation of liberty, ‘might be thought to be the expression, if not of a disappointed man, then of a disappointed literary class’.171 Where was liberalism headed? Tocqueville was an aristocrat with a manor in Normandy, Bagehot a banker, whose favourite pastime was riding to hounds. The coup d’état of 1851 obliged the former to retire from politics, and set the latter on his path to the Economist.
Edward Johnstone and theAristocracy of Finance
Karl Marx read the Economist, starting at least as early as the summer of 1850, when he acquired a pass to the reading room of the British Museum.1 The revolutionary surge of two years earlier, the ‘springtime of the peoples’, had fizzled, and to the author of the Communist Manifesto the back issues of the fiercely free trade Economist suggested why: after two years in which poor harvests and high grain prices, a downturn in trade and a credit crisis had fuelled popular and middle class discontent, the business climate began to improve in mid-1848, strengthening conservatism and dampening protests against it all over Europe. Yet Marx took more than raw economic data from the Economist. In it he identified a sector of liberal opinion with a distinct worldview and cosmopolitan wealth, so fearful of further popular upheaval that by 1851 it was ready to welcome an illiberal but orderly dictatorship in the revolutionary capital of the nineteenth century, France.
‘The position of the aristocracy of finance is most strikingly depicted in a passage from its European organ, the London Economist’, Marx wrote of events leading up to the coup d’état in the Eighteenth Brumaire of Louis Bonaparte in 1852. On 1 February 1851, the paper’s Paris correspondent had noted ‘the sensitiveness of the public funds at the least prospect of disturbance, and their firmness the instant the executive is victorious’. ‘In its issue of 29 November’, he continued, ‘The Economist declares in its own name: “The President is the guardian of order, and is now recognized as such on every Stock Exchange of Europe”.’2 If its perspective – that of ‘the loan promoters and the speculators in public funds’ and ‘the whole of the banking business’ – was far from new, the scale of the invested capital was: ‘If in every epoch the stability of the state power signified Moses and the prophets to the entire money market, why not all the more so today, when every deluge threatens to sweep away the old states, and the old state debts with them?’3
Marx was, in short, in perfect agreement with Bagehot, the future editor then writing his letters from Paris, in claiming that market uncertainty was leading ‘even the most ordinary liberalism’ to be denounced as socialism by middle-class Frenchmen.4 In another sense, Marx was ahead of the curve, for it was not until Bagehot took the helm that the Economist truly articulated the political wisdom of the ‘financial aristocracy’ as such. The turbulent years that followed Bagehot’s death in 1877 saw an amplification of the dynamic that Marx had registered. Indeed, the advice Bagehot left behind, scrupulously adhered to by trustees and editors alike, was to focus on the frothy money markets of the City of London – and what seemed their most important new lines: settling ‘international bargains’ and floating foreign loans, with Britain (‘the country of banks’) pressing the latter upon ‘civilised’ and ‘half-finished’ nations much like ‘London money dealers’ on ‘students at Oxford and Cambridge’.5
The next two editors built on this blueprint. But their joint appointment, which was intended to re-create the twin talents of Bagehot, was troubled and brief. Daniel Conner Lathbury, graduate of Brasenose, Oxford, a trained barrister turned journalist, was tasked with writing political leaders. His liberalism pivoted on the politics of the Anglican High Church, however – and in contrast to Bagehot, who took an impish, intellectual interest in religious subjects, Lathbury was drawn deep into earnest debates on the Catholic revivalism of the Oxford movement.6 He was dismissed in 1881. Robert Harry Inglis Palgrave handled the money market and trade statistics, staying on two years after his ex-co-editor. Palgrave seemed exactly what Bagehot had in mind: his family were bankers from Great Yarmouth, who financed their four sons’ forays into poetry, history, imperial diplomacy, economics, and politics.7 The only son to go into the family business instead of to university after Charterhouse, a minor public school, Palgrave even sounded like Bagehot – at least when contemplating ‘the union of pecuniary sagacity and educated refinement’ that fell to the country banker, whose work left him free to contemplate Elizabethan sonnets on ‘the long winter evenings, the half hour in the shady garden in summer, the quiet times on the deck of the yacht’, or on the way to the office.8
The New Financial Press
Neither Lathbury nor Palgrave, alone or together, could achieve the lively synthesis of politics and finance the trustees wanted. There was a profit to be made reporting on the money market, and the paper was now attracting stiff competition. In 1859 a weekly Money Market Review began to appear; ten years on, in response to a rush of listings fuelled by the Companies Act, its owners started the daily Financier, and a monthly Bondholders Register. The rival Bullionist launched in 1866. The Daily News and the Times devoted increasing if not always disinterested space to the City of London.9 But the fiercest challenger arose from within: Robert Giffen, Bagehot’s assistant from 1868 to 1876, declined to succeed him, and instead founded the Statist, which fought the Economist for writers, advertisers, and statistical scoops until 1967.10 One difference between the Economist and these newcomers is hinted at by its address for most of this period: not Fleet Street, the traditional home of London’s newspapers, nor the bankers’ Square Mile, but the Strand, sandwiched between a cigar importer and a wine merchant, near music halls and literary magazines, in the bustling heart of London.
It took six years for the Economist trustees to agree on a new model, during which time Wilson’s brother George, sons-in-law Greg, Shipley and Barrington, and daughter Eliza played leading roles. At various points they consulted the economist Stanley Jevons, and contemplated offering the post to John Morley, then editor of the Pall Mall Gazette.11 But in 1883 it was Edward Johnstone, veteran City hand for the Scotsman, and financial stringer for Bagehot, Palgrave, and Morley, who got the job – at first with the future Liberal prime minister Herbert Henry Asquith as his political editor – and held it, for a record twenty-four years.
Johnstone came to London in 1874. His university studies in Edinburgh had focused on political economy, and though he also qualified as an actuary, he seems not to have practised this trade.12 At thirty, he was a ‘comely, fresh-faced young Southern Scot’, according to a Times editor who read his letter of introduction and sent him along to the manager of the Economist. There are few other remembrances. John St Loe Strachey – a cousin of the Bloosmbury biographer Lytton Strachey – described Johnstone as an editor ‘who told you exactly what he wanted’ and ‘made it so very clear that one was expressing not one’s own views, but the views of the Economist’ and that ‘whether they were in fact right or wrong they certainly
