ANTI ABOLITION ECONOMICS
Origin of ‘Dismal Science’
“The phrase dismal science first occurs in Carlyle‘s 1849 tract called Occasional Discourse on the Negro Question, in which he argued slavery should be restored to reestablish productivity to the West Indies. In the work, Carlyle says, “Not a ‘gay science,’ I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science.”
Carlyle’s phrase, “the dismal science,” was so often quoted that there is a risk of thinking that the opinion behind it solely belonged to him and his followers. However, the opinion was widespread at the time and thought to be a justifiable one by many economists. Carlyle’s article began by espousing the devil’s advocate point-of-view that challenged what Carlyle perceived to be a hypocritical philanthropic movement for the emancipation of West Indian slaves.
Although slavery was abolished in the British colonies by 1807, and in the rest of the British Empire by 1833, Cuba and Brazil continued using slaves until 1838. In his original publication, Carlyle presented the concept of dismal science as a speech “delivered by we know not whom” written down by an unreliable reporter by the name of “Phelin M’Quirk” (the fictitious “Absconded Reporter”). The manuscript was supposedly sold to the publisher by M’Quirk’s landlady in lieu of unpaid rent. She reportedly found it lying in his room after he ran off.”
“The phrase “the dismal science” first occurs in Thomas Carlyle’s 1849 tract called Occasional Discourse on the Negro Question, in which he argued in favor of reintroducing slavery in order to restore productivity to the West Indies. “Not a “gay science”, I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science.
It was “dismal” in “find[ing] the secret of this Universe in ‘supply and demand’, and reducing the duty of human governors to that of letting men alone”. Instead, the “idle Black man in the West Indies” should be “compelled to work as he was fit, and to do the Maker’s will who had constructed him”. Carlyle’s view was attacked by John Stuart Mill as making a virtue of toil itself, stunting the development of the weak, and committing the “vulgar error of imputing every difference which he finds among human beings to an original difference of nature”.
Note that Carlyle did not originally coin the phrase “dismal science” as a response to the economically-influential theories of East India Company College Professor Thomas Malthus, who predicted that starvation would inevitably result as projected population growth exceeded the rate of increase in the food supply. However, Carlyle did earlier use the word “dismal” in relation to Malthus’ theory in Chartism (1839): “The controversies on Malthus and the ‘Population Principle‘, ‘Preventive Check‘ and so forth, with which the public ear has been deafened for a long while, are indeed sufficiently mournful. Dreary, stolid, dismal, without hope for this world or the next, is all that of the preventive check and the denial of the preventive check.”
“How do you write like the Economist?’ a new member of staff asked as he began to compose his first leading article for the paper some years ago. ‘Pretend you are God,’ a senior colleague replied.”
PRETEND YOU ARE GOD
Liberalism, according to the Economist
by Pankaj Mishra / November 4, 2019
“Liberalism made the modern world, but the modern world is turning against it,” an article in The Economist lamented last year, on the occasion of the magazine’s hundred-and-seventy-fifth anniversary. “Europe and America are in the throes of a popular rebellion against liberal élites, who are seen as self-serving and unable, or unwilling, to solve the problems of ordinary people,” even as authoritarian China is poised to become the world’s largest economy. For a publication that was founded “to campaign for liberalism,” all of this was “profoundly worrying.” The crisis in liberalism has become received wisdom across the political spectrum.
Barack Obama included Patrick Deneen’s “Why Liberalism Failed” (2018) in his annual list of recommended books; meanwhile, Vladimir Putin has gleefully pronounced liberalism “obsolete.” The right accuses liberals of promoting selfish individualism and crass materialism at the expense of social cohesion and cultural identity. Centrists claim that liberals’ obsession with political correctness and minority rights drove white voters to Donald Trump. For the newly resurgent left, the rise of demagoguery looks like payback for the small-government doctrines of technocratic neoliberalism — tax cuts, privatization, financial deregulation, antilabor legislation, cuts in Social Security—which have shaped policy in Europe and America since the eighties.
Attacks on liberalism are nothing new. In 1843, the year The Economist was founded, Karl Marx wrote, “The glorious robes of liberalism have fallen away, and the most repulsive despotism stands revealed for all the world to see.” Nietzsche dismissed John Stuart Mill, the author of the canonical liberal text “On Liberty” (1859), as a “numbskull.” In colonized Asia and Africa, critics — such as R. C. Dutt, in India, and Sun Yat-sen, in China — pointed out liberalism’s complicity in Western imperialism.
Muhammad Abduh, the Grand Mufti of Egypt, wrote, “Your liberalness, we see plainly, is only for yourselves.” (Mill, indeed, had justified colonialism on the ground that it would lead to the improvement of “barbarians.”) From a different vantage, critiques came from aspiring imperialist powers, such as Germany (Carl Schmitt), Italy (Gaetano Salvemini), and Japan (Tokutomi Sohō). Since then, Anglo-American thinkers such as Reinhold Niebuhr and John Gray have pointed out liberalism’s troubled relationship with democracy and human rights, and its overly complacent belief in reason and progress.
Yet the sheer variety of criticisms of liberalism makes it hard to know right away what precisely is being criticized. Liberalism’s ancestry has been traced back to John Locke’s writings on individual reason, Adam Smith’s economic theory, and the empiricism of David Hume, but today the doctrine seems to contain potentially contradictory elements. The philosophy of individual liberty connotes both a desire for freedom from state regulation in economic matters (a stance close to libertarianism) and a demand for the state to insure a minimal degree of social and economic justice—the liberalism of the New Deal and of European welfare states.
The iconic figures of liberalism themselves moved between these commitments. Mill, even while supporting British imperialism in India and Ireland, called himself a socialist and outlined the aim of achieving “common ownership in the raw materials of the globe.” The Great Depression forced John Dewey to conclude that “the socialized economy is the means of free individual development.” Isaiah Berlin championed the noninterference of the state in 1958, in his celebrated lecture “Two Concepts of Liberty”; but eleven years later he had come to believe that such “negative liberty” armed “the able and ruthless against the less gifted and less fortunate.”
Because of this conceptual morass, liberalism has, to an unusual degree, been defined by what it wasn’t. For French liberals in the early nineteenth century, it was a defense against the excesses of Jacobins and ultra-monarchists. For the free-trading Manchester Liberals of the mid-nineteenth century, it was anticolonial. Liberals in Germany, on the other hand, were allied with both nationalists and imperialists. In the twentieth century, liberalism became a banner under which to march against Communism and Fascism.
Recent scholars have argued that it wasn’t until liberalism became the default “other” of totalitarian ideologies that inner coherence and intellectual lineage were retrospectively found for it. Locke, a devout Christian, was not regarded as a philosopher of liberalism until the early twentieth century. Nor was the word “liberal” part of U.S. political discourse before that time. When Lionel Trilling claimed, in 1950, that liberalism in America was “not only the dominant but even the sole intellectual tradition,” the term was becoming a catchall signifier of moral prestige, variously synonymous with “democracy,” “capitalism,” and even simply “the West.”
Since 9/11, it has seemed more than ever to define the West against such illiberal enemies as Islamofascism and Chinese authoritarianism. The Economist proudly enlists itself in this combative Anglo-American tradition, having vigorously claimed to be advancing the liberal cause since its founding. In “Liberalism at Large” (Verso), Alexander Zevin, a historian at the City University of New York, takes it at its word, telling the story not only of the magazine itself but also of its impact on world affairs. Using The Economist as a proxy for liberalism enables Zevin to sidestep much conceptual muddle about the doctrine.
"Pretend you are God." Opening to LRB review of Alexander Zevin's book on the Economist. "In recent decades the divine model has served the paper exceptionally well." https://t.co/EwSPwK9k1e pic.twitter.com/cK8VEMMSXY
— Madeleine Davies (@MadsDavies) February 4, 2020
His examination of The Economist’s pronouncements and of the policies of those who heeded them yields, in effect, a study of several liberalisms as they have been widely practiced in the course of a hundred and seventy-five years. The magazine emerges as a force that—thanks to the military, cultural, and economic power of Britain and, later, America—can truly be said to have made the modern world, if not in the way that many liberals would suppose.
“There are days I say I’m just at the mercy of God” https://t.co/oxhHtYbW9f
— Justice Democrats (@justicedems) February 6, 2020
In terms of its influence, The Economist has long been a publication like no other. Within a decade of its founding, Marx was describing it as the organ of “the aristocracy of finance.” In 1895, Woodrow Wilson called it “a sort of financial providence for businessmen on both sides of the Atlantic.” (Wilson, an Anglophile, wooed his evidently forbearing wife with quotations from Walter Bagehot, the most famous of The Economist’s editors.) For years, the magazine was proud of the exclusivity of its readership. Now it has nearly a million subscribers in North America (more than in Britain), and seven hundred thousand in the rest of the world. Since the early nineties, it has served, alongside the Financial Times, as the suavely British-accented voice of globalization (scoring over the too stridently partisan and American Wall Street Journal).
According to its own statistics, its readers are the richest and the most prodigal consumers of all periodical readers; more than twenty per cent once claimed ownership of “a cellar of vintage wines.” Like Aston Martin, Burberry, and other global British brands, The Economist invokes the glamour of élitism. “It’s lonely at the top,” one of its ads says, “but at least there’s something to read.” Its articles, almost all of which are unsigned, were until recently edited from an office in St. James’s, London, a redoubt of posh Englishness, with private clubs, cigar merchants, hatters, and tailors.
The present editor, Zanny Minton Beddoes, is the first woman ever to hold the position. The staff, predominantly white, is recruited overwhelmingly from the universities of Oxford and Cambridge, and a disproportionate number of the most important editors have come from just one Oxford college, Magdalen. “Lack of diversity is a benefit,” Gideon Rachman, a former editor who is now a columnist at the Financial Times, told Zevin, explaining that it produces an assertive and coherent point of view.
Indeed, contributors are not shy about adding prescription (how to fix India’s power problems, say) to their reporting and analysis. The pieces are mostly short, but the coverage is comprehensive; a single issue might cover the insurgency in south Thailand, public transportation in Jakarta, commodities prices, and recent advances in artificial intelligence. This air of crisp editorial omniscience insures that the magazine is as likely to be found on an aspirant think tanker’s iPad in New Delhi as it is on Bill Gates’s private jet. Zevin, having evidently mastered the magazine’s archives, commands a deep knowledge of its inner workings and its historical connection to political and economic power. He shows how its editors and contributors pioneered the revolving doors that link media, politics, business, and finance—alumni have gone on to such jobs as deputy governor of the Bank of England, Prime Minister of Britain, and President of Italy—and how such people have defined, at crucial moments in history, liberalism’s ever-changing relationship with capitalism, imperialism, democracy, and war.
A capsule version of this thesis can be found in the career of James Wilson, The Economist’s founder and first editor. Wilson, who was born in Scotland and became the owner of a struggling hatmaking business, intended his journal to develop and disseminate the doctrine of laissez-faire — “nothing but pure principles,” as he put it. He was particularly vociferous in his opposition to the Corn Laws, agricultural tariffs that were unpopular with merchants. The Corn Laws were repealed in 1846, three years after the magazine first appeared, and Wilson began to proselytize more energetically for free trade and the increasingly prominent discipline of economics. He became a Member of Parliament and held several positions in the British government. He also founded a pan-Asian bank, now known as Standard Chartered, which expanded fast on the back of the opium trade with China. In 1859, Wilson became Chancellor of the Indian Exchequer. He died in India the following year, trying to reconfigure the country’s financial system.
During his short career as a journalist-cum-crusader, Wilson briskly clarified what he meant by “pure principles.” He opposed a ban on trading with slaveholding countries on the ground that it would punish slaves as well as British consumers. In the eighteen-forties, when Ireland was struck with famine, which was largely caused by free trade—the British insisted on exporting Irish food, despite catastrophic crop failure—Wilson called for a homeopathic remedy: more free trade. With Irish intransigence becoming a nuisance, he advised the British to respond with “powerful, resolute, but just repression.” Wilson was equally stern with those suffering from rising inequality at home. In his view, the government was wrong to oblige rail companies to provide better service for working-class passengers, who were hitherto forced to travel in exposed freight cars: “Where the most profit is made, the public is best served. Limit the profit, and you limit the exertion of ingenuity in a thousand ways.”
A factory bill limiting women to a twelve-hour workday was deemed equally pernicious. As for public schooling, common people should be “left to provide education as they provide food for themselves.” The Economist held that, “if the pursuit of self-interest, left equally free for all, does not lead to the general welfare, no system of government can accomplish it.” But this opposition to government intervention, it turned out, did not extend to situations in which liberalism appeared to be under threat. In the eighteen-fifties, Zevin writes, the Crimean War, the Second Opium War, and the Indian Mutiny “rocked British liberalism at home and recast it abroad.” Proponents of free trade had consistently claimed that it was the best hedge against war. However, Britain’s expansion across Asia, in which free trade was often imposed at gunpoint, predictably provoked conflict, and, for The Economist, wherever Britain’s “imperial interests were at stake, war could become an absolute necessity, to be embraced.”
This betrayal of principle alienated, among others, the businessman and statesman Richard Cobden, who had helped Wilson found The Economist, and had shared his early view of free trade as a guarantee of world peace. India, for Cobden, was a “country we do not know how to govern,” and Indians were justified in rebelling against an inept despotism. For Wilson’s Economist, however, Indians, like the Irish, exemplified the “native character . . . half child, half savage, actuated by sudden and unreasoning impulses.” Besides, “commerce with India would be at an end were English power withdrawn.”
The next editor, Wilson’s son-in-law Walter Bagehot, broadened the magazine’s appeal and gave its opinions a more seductive intellectual sheen. But the editorial line remained much the same. During the American Civil War, Bagehot convinced himself that the Confederacy, with which he was personally sympathetic, could not be defeated by the Northern states, whose “other contests have been against naked Indians and degenerate and undisciplined Mexicans.” He also believed that abolition would best be achieved by a Southern victory. More important, trade with the Southern states would be freer.
Discussing these and other editorial misjudgments, Zevin refrains from virtue signalling and applying anachronistic standards. He seems genuinely fascinated by how the liberal vision of individual freedom and international harmony was, as Niebuhr once put it, “transmuted into the sorry realities of an international capitalism which recognized neither moral scruples nor political restraints in expanding its power over the world.” Part of the explanation lies in Zevin’s sociology of élites, in which liberalism emerges as a self-legitimating ideology of a rich, powerful, and networked ruling class. Private ambition played a significant role. Bagehot stood for Parliament four times as a member of Britain’s Liberal Party. Born into a family of bankers, he saw himself and his magazine as offering counsel to a new generation of buccaneering British financiers. His tenure coincided with the age of capital, when British finance transformed the world economy, expanding food cultivation in North America and Eastern Europe, cotton manufacturing in India, mineral extraction in Australia, and rail networks everywhere. According to Zevin, “it fell to Bagehot’s Economist to map this new world, tracing the theoretical insights of political economy to the people and places men of business were sending their money.”
The pressures of capitalist expansion abroad and rising disaffection at home further transformed liberal doctrine. Zevin fruitfully describes how liberals coped with the growing demand for democracy. Bagehot had read and admired John Stuart Mill as a young man, but, as an editor, he agreed with him on little more than the need to civilize the natives of Ireland and India. To Bagehot, Mill’s idea of broadly extending suffrage to women seemed absurd. Nor could he support Mill’s proposal to enfranchise the laboring classes in Britain, reminding his readers that “a political combination of the lower classes, as such and for their own objects, is an evil of the first magnitude.” Not surprisingly, The Economist commended Mussolini (a devoted reader) for sorting out an Italian economy destabilized by labor unrest.
Nonetheless, by the early twentieth century, the magazine was groping toward an awareness that, in an advanced industrial society, classical liberalism had to be moderated, and that progressive taxation and basic social-welfare systems were the price of defusing rising discontent. The magazine has since presented this volte-face as evidence of its pragmatic liberalism. Zevin reveals it as a grudging response to democratic pressures from below. Moreover, there were clear limits to The Economist’s newfound compassionate liberalism. As late as 1914, one editor, Francis Hirst, was still denouncing “the shrieking, struggling, fighting viragoes” who had demanded the right to vote despite having no capacity for reason. His comparison of suffragettes to Russian and Turkish marauders—pillaging “solemn vows, ties of love and affection, honor, romance” — helped drive his own wife to suffragism.
As more people acquired the right to vote, and as market mechanisms failed, empowering autocrats and accelerating international conflicts, The Economist was finally forced to compromise the purity of its principles. In 1943, in a book celebrating the centenary of the magazine, its editor at the time acknowledged that larger electorates saw “inequality and insecurity” as a serious problem. The Economist disagreed with the socialists “not on their objective, but only on the methods they proposed for attaining it.” Such a stance mirrored a widespread acceptance on both sides of the Atlantic that governments should do more to protect citizens from an inherently volatile economic system.
Since the nineteen-sixties, however, The Economist has steadily reinstated its foundational ideals. In the process, it missed an opportunity to reconfigure for the postcolonial age a liberalism forged during the high noon of imperialism. The emergence of new, independent nation-states across Asia and Africa from the late forties onward was arguably the most important development of the twentieth century. Liberalism faced a new test among a great majority of the world’s population: Could newly sovereign peoples, largely poor and illiterate, embrace free markets and minimize government right away?
Would such a policy succeed without prior government-led investment in public health, education, and local manufacturing? Even a Cold War liberal like Raymond Aron questioned the efficacy of Western-style liberalism in Asia and Africa. But The Economist seemed content to see postcolonial nations and their complex challenges through the Cold War’s simple dichotomy of the “free” and the “unfree” world. In any case, by the seventies, the magazine’s editors were increasingly taking their inspiration from economics departments and think tanks, where the pure neoliberal principles of Milton Friedman and Friedrich Hayek were dominant, rather than from such liberal theorists of justice as John Rawls, Ronald Dworkin, and Amartya Sen.
In the nineteen-eighties, The Economist’s cheerleading for Margaret Thatcher and Ronald Reagan’s embrace of neoliberalism led to a dramatic rise in its American circulation. (Reagan personally thanked the magazine’s editor for his support over dinner.) Dean Acheson famously remarked that “Great Britain has lost an empire and has not yet found a role.” No such status anxiety inhibited The Economist as it crossed the Atlantic to make new friends and influence more people. After the Second World War, when the U.S. emerged as the new global hegemon, the magazine—despite some initial resentment, commonplace among British élites at the time—quickly adjusted itself to the Pax Americana. It came to revere the U.S. as, in the words of one editor, “a giant elder brother, a source of reassurance, trust and stability for weaker members of the family, and nervousness and uncertainty for any budding bullies.”
This meant stalwart support for American interventions abroad, starting with Vietnam, where, as the historian and former staff writer Hugh Brogan tells Zevin, the magazine’s coverage was “pure CIA propaganda.” It euphemized the war’s horrors, characterizing the My Lai massacre as “minor variations on the general theme of the fallibility of men at war.” By 1972, following the saturation bombing of North Vietnam, the magazine was complaining that Henry Kissinger was too soft on the North Vietnamese. A policy of fealty to the giant elder brother also made some campaigners for liberalism a bit too prone to skulduggery.
Zevin relates colorful stories about the magazine’s overzealous Cold Warriors, such as Robert Moss, who diligently prepared international opinion for the military coup in Chile in 1973, which brought down its democratically elected leader, Salvador Allende. In Moss’s view, “Chile’s generals reached the conclusion that democracy does not have the right to commit suicide.” (The generals expressed their gratitude by buying and distributing nearly ten thousand copies of the magazine.) Zevin relates that, when news of Allende’s death reached Moss in London, he danced down the corridors of The Economist’s office, chanting, “My enemy is dead!” Moss went on to edit a magazine owned by Anastasio Somoza, Nicaragua’s U.S.-backed dictator.
After the fall of Communist regimes in 1989, The Economist embraced a fervently activist role in Russia and Eastern Europe, armed with the mantras of privatization and deregulation. In its pages, the economist Jeffrey Sachs, who was then working to reshape “transition economies” in the region, coined the term “shock therapy” for these policies. The socioeconomic reëngineering was brutal—salaries and public services collapsed—and, in 1998, Russia’s financial system imploded. Only a few months before this disaster, The Economist was still hailing the “dynamism, guile and vision” of Anatoly Chubais, the politician whose sale of Russia’s assets to oligarchs had by then made him the most despised public figure in the country. In 2009, a study in The Lancet estimated that “shock therapy” had led to the premature deaths of millions of Russians, mostly men of employment age. The Economist was unrepentant, insisting that “Russia’s tragedy was that reform came too slowly, not too fast.”
“Who can trust Trump’s America?” a recent Economist cover story asked, forlornly surveying the ruins of the Pax Americana. The political earthquakes of the past few years perhaps make it lonelier at the top for the magazine than at any other time in its history; the articles celebrating last year’s anniversary were presented as a manifesto for “renewing liberalism.” Ten years before, when the financial crisis erupted, the magazine overcame its primal distrust of government intervention to endorse bank bailouts, arguing that it was “a time to put dogma and politics to one side.” It also continued to defend neoliberal policies, on the basis that “the people running the system, not the system itself, are to blame.” Now, finally chastened, if not by the financial crisis then by its grisly political upshot, the magazine has conceded that “liberals have become too comfortable with power” and “wrapped up in preserving the status quo.” Its anniversary manifesto touted a “liberalism for the people.” But soul-searching has its limits: the manifesto admiringly quoted Milton Friedman on the need to be “radical,” resurrected John McCain’s fantasy of a “league of democracies” as an alternative to the United Nations, and scoffed at millennials who don’t wish to fight for the old “liberal world order.” A more recent cover story warns “American bosses” about Elizabeth Warren’s plans to tackle inequality, and revives Friedmanite verities about how “creative destruction” and “the dynamic power of markets” can best help “middle-class Americans.”
The Economist is no doubt sincere about wanting to be more “woke.” It seeks more female readers, according to a 2016 briefing for advertisers, and is anxious to dispel the idea that the magazine is “an arrogant, dull handbook for outdated men.” Whereas, in 2002, it rushed to defend Bjørn Lomborg, the global-warming skeptic, this fall it dedicated an entire issue to the climate emergency. Still, The Economist may find it more difficult than much of the old Anglo-American establishment to check its privilege. Its limitations arise not only from a defiantly nondiverse and parochial intellectual culture but also from a house style too prone to contrarianism.
A review, in 2014, of a book titled “The Half Has Never Been Told: Slavery and the Making of American Capitalism” accused its author of not being “objective,” complaining that “almost all the blacks in his book are victims, almost all the whites villains.” Following an outcry, the magazine retracted the review. However, a recent assessment of Brazil’s privatization drive — “Jair Bolsonaro is a dangerous populist, with some good ideas” — suggests that it is hard to tone down what the journalist James Fallows has described as the magazine’s “Oxford Union argumentative style,” a stance too “cocksure of its rightness and superiority.”
This insouciance, bred by the certainty of having made the modern world, cannot seem anything but incongruous in the rancorously polarized societies of Britain and the United States. The two blond demagogues currently leading the world’s two oldest “liberal” democracies bespeak a ruling class that—through a global financial crisis, rising inequality, and ill-conceived military interventions in large parts of the Middle East, Central Asia, and North Africa—has squandered its authority and legitimacy. The reputation, central to much Cold War liberalism, of England as a model liberal society also lies shattered amid the calamity of Brexit. For the young, in particular, old frameworks of liberalism seem to be a constraint on the possibilities of politics. It should be remembered, however, that these new critics of liberalism seek not to destroy but to fulfill its promise of individual freedom. They are looking, just as John Dewey was, for suitable modes of politics and economy in a world radically altered by capitalism and technology — a liberalism for the people, not just for their networked rulers. In that sense, it is not so much liberalism that is in crisis as its self-styled campaigners, who are seen, not unreasonably, as complicit in unmaking the modern world.”
“Putting down Mutiny: Hodson’s Horse cavalry regiment, India, 1857”
MUTINY, from PERSPECTIVE of MANAGEMENT
The Imperial Magazine
by Alexander Zevin / 11/19
“When James Wilson launched The Economist, in 1843, he promised ‘original leading articles in which free-trade principles will be most rigidly applied to all the important questions of the day’. His language conjures up images of a crusade more readily than a business journal. Abroad he saw ‘within the range of our commercial intercourse whole continents and islands, on which the light of civilization has scarce yet dawned’; at home, ‘ignorance, depravity, immorality and irreligion, abounding to an extent disgraceful to a civilized country’. In both cases the civilizing medium was free trade, which ‘we seriously believe will do more than any other visible agent to extend civilization and morality — yes, to extinguish slavery itself’.
In its first two years the fledgling paper was true to its word, examining the deleterious effects of tariffs on the supply, quality and cost of sugar, wool, wheat, wine, iron, corn, cochineal, silk, fish, lace, coal, coffee, wages, currency, tailors, slaves and French linen. Information was conveyed in two densely packed columns, beneath the ornate Gothic letterhead, The Economist: or the Political, Commercial, Agricultural, and Free Trade Journal. Editorials often went beyond denouncing particular laws as misguided: they also laid out grand theoretical statements, as in a series of articles asking, ‘Who is to Blame for the Condition of Society?’
After weighing in turn the role of the lower classes, the capitalists, the landowners and the state, The Economist found that the first and last shared responsibility — but unevenly. For in a world in which ‘each man is responsible to nature for his own actions’, and for learning from them, the poor were fully culpable for their misery, wasting wages and free time on sex, drink and gambling instead of practising thrift and self-improvement. ‘Looking to their habits, to their ignorance, to their deference to false friends, to their unshaken confidence in a long succession of charlatan leaders, we cannot exonerate them. Nature makes them responsible for their conduct — why should not we? We find them suffering, and we pronounce them at fault.’
The capitalists and landlords, taken together, were selfish, but so much the better, ‘for the larger their income, the greater is the quantity of net produce provided for the food of the community, and the greater is the quantity of employment and the amount of wages for the labouring classes.’ As for the state, it was simply unable to comprehend this complex social organism, and by attempting to enact laws whose effects no one could predict in advance, undertook a task ‘rather fit for God than man’. The reality was that ‘the desire for happiness, or what is called self-interest is universal. It is not confined to man — it pervades the whole animal kingdom. It is the law of nature, and if the pursuit of self-interest, left equally free for all, does not lead to the general welfare, no system of government can accomplish it.’
A more total and radical justification of individual responsibility in a market society is hard to imagine. In 1847, James Wilson made his entrance in the House of Commons as the Whigs won the election … This change in status was accompanied by a shift in interest from industry, where his father had given him his start, to finance — destined in the framework of the British Empire to benefit from free trade to a greater extent than any other branch of commerce … Now ensconced at the pinnacle of the state, Wilson was in a position to survey the empire it had acquired, and was continuing to expand … Little by little, The Economist revised this earlier vision of laissez-faire. Where imperial interests were at stake, war could become an absolute necessity, to be embraced.
The signal for the Second Opium War was given in October 1856, when Chinese police arrested the Chinese crew of the Arrow, a lorcha (a type of junk) in Canton accused of piracy. The British consul claimed, falsely, that the vessel was flying the Union Jack, that it was registered in Hong Kong, and so based on a treaty signed in 1843 (in the wake of the First Opium War) the Chinese had no right to detain anyone on board. Sir John Bowring, the plenipotentiary, chief superintendent of trade, governor, commander-in-chief and vice-admiral of Hong Kong, then sent a fleet to bomb Canton into submission — despite the fact that its governor had already released the captives and agreed to his terms, refusing only to apologise, since, as Governor Yeh stated, the Arrow was Chinese. For this, three weeks of fire rained down on Canton, followed by a four-year invasion ending in the sacking of Beijing. Thus was China opened to Western trade and culture. France, Russia and the US joined in the attack, but Britain and its special interest in one commodity gave the war its name. British revenue from opium was so vast at the time that it not only kept afloat the state machine in India, where most of the opium was grown, but turned a trade deficit with Asia in silk, tea and ceramics into an overall surplus. Chinese opium addicts were in demand, their supply limited by the ban the Qing dynasty had imposed on this powerful narcotic.
The pretext for invasion, and a widespread suspicion that the drug trade stood to benefit, sparked an uproar when news of the ‘Arrow incident’ reached London in 1857. The Conservative opposition leader Lord Derby brought forward a motion on 24 February condemning British behaviour as ‘the arrogant demands of overweening, self-styled civilization’, which was narrowly rejected in the upper house. The Economist entered the arena: ‘Trade is as much a necessity of society as air or food or clothing or heat.’ Interventions were therefore akin to humanitarian operations: ‘We may regret war … but we cannot deny that great advantages have followed in its wake … Any war with China that results in bringing her people more completely into trade communication with all other nations … relieving them from the temptation to put infants to death, to allow the aged to die for want of food, and to exterminate great numbers from their standing in each other’s way.’ From 1857 The Economist was as fixated as the rest of the press on the horror stories pouring out of British India — where a mutiny of Indian soldiers, or sepoys, against their European officers in Meerut rapidly grew into a full-fledged rebellion against the British East India Company.
By this time the quasi-private company, founded under Elizabeth I, ruled about two-thirds of the Indian subcontinent, in exchange for a £630,000 annuity to London on the revenue the land under its control generated. Three separate armies marched under its banners, one for each of the presidencies into which India was subdivided: Bengal, Bombay and Madras, totalling 232,000 Indians and 45,000 Europeans. The first of these was the largest and most homogeneous, recruited since the mid-seventeenth century from Hindu peasants in Bengal, Oudh, Bihar and Benares. These men mutinied in far greater numbers than anywhere else; a fact contemporaries attributed to an unwitting religious insult, infantry in Meerut — it was said — refusing to bite cartridges greased with cow and pig fat, offensive to Muslims and Hindus alike. In reality, their grievances were structural: both in the army — low pay, poor living conditions, an inability to rise through the ranks, in which the most senior Indian officer was obliged to obey the most junior European — and in the surrounding society, whose once formidable textile economy had collapsed under the onslaught of British manufactured cloth, while being subjected to an East India Company business model based on the predatory chase after new revenues and territories.
The Economist was just as ruthless with Indians as with the … Chinese. As London ordered troops en route to China to double back to Calcutta, the paper looked forward to swift justice being meted out to the mutineers for their treachery in ‘undiscriminating destruction of hospitals and barracks, of helpless women and children’, which it contemptuously attributed to the ‘native character … half child, half savage, actuated by sudden and unreasoning impulses’ more than to any coherent motivation or design. It thought the worst was probably over by mid-July when the fall of Delhi to the rebels failed to ignite a general uprising. ‘Three-fourths of the Bengal army — the whole of the Madras and Bombay — and the entire non-military population from Cape Comorin to the Himalayas, have stayed aloof … could there be stronger evidence that, in spite of numerous errors, British rule is regarded by the natives of India as a blessing rather than a curse?’
Even the ‘barbarous and treacherous massacre of the garrison at Cawnpore’, which, unlike the Times, it declined to describe in detail, scarcely troubled its confidence in the future of empire. In fact, the Mutiny was soon viewed as little less than a blessing in disguise … ‘No event less horrible could have strengthened our hands so powerfully.’ If the sepoys had only committed garden-variety cruelties, ‘the Government would have been assailed at once by a strong party likening the revolt to that of the American colonies, and recommending the nation not to resist a patriotic movement … Eloquent voices would have been raised … to warn the nation that a due retribution had come upon them for a selfish feeling of grasping ambition.’ ‘Yet now all these doubts and fears are absolutely stilled … Every Englishman knows that to abandon India would be to commit a far worse sin against the millions of Hindoos than against our own nation … to the horrors of a military anarchy compared with which the reign of terror in the French revolution was a model of justice and mercy … In Europe too they see how helpless are the Indian races to restrain their own superstitions and their own passions — that no reverence for law, and civil order, and social obligations, adequate for the rudest form of self-government is yet written on their minds … Commerce with India would be at an end were English power withdrawn.’
British forces regained the initiative at the turn of 1858, with the active help or acquiescence of princely states in upper and central India, and the diversion of regiments from Crimea, Persia and China. Imperial troops, reconquering or relieving besieged cities — in Delhi, Cawnpore, Lucknow and elsewhere — exacted terrible revenge on whole populations deemed guilty of aiding rebels. The Economist noted with approval ‘the stern vigour afforded by daily executions of mutineers of every rank’ — some were shot from the mouths of cannons — but wondered whether journalists and officers calling for the head of every sepoy in a mutinous regiment, even those who had committed no violence, had thought through the domestic reaction that might ensue.
‘It is at least worthy of consideration,’ it submitted, ‘whether the deliberate execution of 35,000 men or more is a measure which the people and Government of England are prepared for.’ One reason why The Economist embraced the new model of government for India became clear a month after a state of peace was declared. ‘James Wilson’, the Times announced on 5 August 1859, had consented to become ‘Chancellor of the Indian Exchequer’, tasked with mopping up the cost of the Mutiny.”
“A portrait of the Right Honourable James Wilson by Sir John Wilson Gordon, published in The Pursuit of Reason: The Economist 1843–1993. The portrait was presented to Mrs Wilson in 1859, by the Royal Scottish Academy.”
WHO IMPOSED FIRST INCOME TAX in INDIA
by Amartya Talukdar / January 21, 2019
“Despite his prominent public role, Wilson was buried unknown at the cemetery. His grave was discovered in 2007 by CP Bhatia, a joint commissioner of Income Tax, while researching a book on India’s tax. In 1860, James Wilson (the then finance member in Viceroy Lord Canning’s council in undivided India) prepared India’s first Budget and also created the first income tax act.
Military expenditure had ballooned in the aftermath of the Sepoy Mutiny in 1857. The British revenue system was based on land revenue. However land revenue did not show any scope of meeting the shortfall in revenue. Wilson found the answer to this problem in the income tax. He was sent by Queen Victoria, after the rebellion to India to establish the tax structure, a new paper currency, and remodel India’s finance system.
In 1853 he founded the Chartered Bank of India, Australia and China, which later merged with the Standard Bank to form Standard Chartered Bank in 1969. In 1843 he established The Economist to campaign for free trade and acted as Chief editor and sole proprietor for sixteen years. He died in India, just one year in office, in 1860 after contracting dysentery.”
Why did The Economist favour free trade?
by C.R. / Sep 6th 2013
“A better understanding of economic history might have helped the world avoid the worst of the recent crisis. Free exchange continues its discussion of milestones in economic history, showing how they contributed to the development of economic thought (you can read earlier entries here and here). This post marks the 170th anniversary of the first issue of The Economist on September 2nd 1843 looks at free trade, the economic idea the newspaper was originally founded to campaign for.”
“In nineteenth century Europe and America, debates over whether tariffs or free trade produced the most economic growth dominated the political scene. Up until the early 1840s, protection appeared to be winning the argument. In Britain, high tariffs were imposed on agricultural imports in 1819, by legislation known as the Corn Laws. The ideas of Friedrich List, a German economist who argued that tariffs boosted industrial development through the protection of infant industries, were gaining ground, particularly in the United States. One Pennsylvanian legislator even joked in 1833 that the dictionary definition of man should be changed to “an animal that makes tariff speeches” so frequently were they heard. Against this atmosphere, James Wilson founded The Economist in 1843 to campaign for free trade. His first target was to repeal the Corns Laws in Britain. He argued: “They are, in fact, laws passed by the seller to compel the buyer to give him more for his article than it is worth. They are laws enacted by the noble shopkeepers who rule us, to compel the nation to deal at their shop alone.”
But his ambition was greater than Corn Law repeal. According to Scott Gordon, an economic historian at Indiana University, Wilson and The Economist in the 1840s supported free trade views “with remarkable completeness and consistency” compared to other newspapers of the day. In its prospectus, Wilson announced that The Economist would include “articles in which free-trade principles will be most rigidly applied to all the important issues of the day”. Wilson believed that protectionism caused “war among the material interests of the world”, in other words, war between nations and classes. A high tariff regime was no longer economically “productive”; Britain was stuck in an economic depression in the early 1840s. In contrast, free trade produced “abundance and employment”. It was appropriate for Britain’s economy where “a large proportion of the population and property depended on commerce and industry alone”. On the other hand, List’s ideas about protection were dismissed as unnecessary “swaddling clothes” for a mature economy, such as Britain’s.
The Economist’s early views on free trade were strongly influenced by the classical economists Adam Smith and David Ricardo, as Ruth Dudley Edwards, a historian, has pointed out. Wilson, like Smith, realised that trade was a two way exchange. Countries needed to “increase imports to increase exports” to boost economic growth. Consumers, Smith argued in the Wealth of Nations, should buy products from where they were cheapest. All protection did was create monopolies, which were “a great enemy to good management”. Ricardo took Smith’s ideas further, arguing that all countries benefit from free trade by producing what they were best at relative to other countries. However, some more recent economists have identified situations where the benefits of free trade can be inhibited. Charles Bickerdike and Francis Edgeworth argued in the early 1900s that large countries could benefit from imposing “optimal tariffs” by abusing their monopoly power over global markets.
Similarly, John Maynard Keynes argued in 1931 that the introduction of tariffs in Britain, a big country, could help its economic recovery from the Great Depression. A 1989 paper by Michael Kitson and Solomos Solomou suggests there might be some credit in Keynes’ line of thought. They argue that the imposition of the General Tariff in Britain in 1932 “benefitted the British economy” by boosting new industries and accelerating the trend rate of growth in the 1932-37 period. But economists are quick to admit that these policies only work in specific or temporary circumstances, if ever. Bickerdike and Edgeworth always maintained that free trade was only policy that could boost growth in the long run on a global basis. “Optimal tariffs” as a policy to them were “contrary to the highest morality”. Keynes himself never deviated from view that the free trade was the best policy for growth in the long run. Even Mssrs Kitson and Solomou admit that the lack of competition the General Tariff produced may have damaged “long-term economic growth” in Britain’s “1950-73 boom”. Perhaps the persistence in economic history of the idea that free trade provides the optimal long-run conditions for growth may be a better reason than any other why The Economist still supports free trade today— just as it did 170 years ago.”
Suggested reading list:
– Dudley Edwards, R. (1993). The Pursuit of Reason: The Economist, 1843-1993. Hamish Hamilton.
– Gomes, L. (2003). The Economics and Ideology of Free Trade: An Historical Review. Edward Elgar Publishing.
– Gordon, S. (1955). The London Economist and the High Tide of Laissez Faire. The Journal of Political Economy, 63(6), 461-488.
– Ricardo, D. . On the Principles of Political Economy and Taxation. Cambridge University Press.
– Smith, A.. Inquiry into the Nature and Causes of the Wealth of Nations. Oxford University Press.”
SOFT POWER TRIPS
SLAVE OWNER COMPENSATION PACKAGES
ROBOT CITIZENSHIP RIGHTS
MODERN ART PRICES EXPLAINED