Walter Bagehot: Wikis


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Portrait of Walter Bagehot.

Walter Bagehot (pronounced /ˈbædʒət/ BA-jət) (3 February 1826 – 24 March 1877) was a British businessman, essayist, and journalist who wrote extensively about literature, government, and economic affairs.


Early Years

Bagehot was born in Langport, Somerset, England on 3 February 1826. His father, Thomas Walter Bagehot, was managing director and vice-chairman of Stuckey's Banking Company. He attended University College London, where he studied mathematics and in 1848 earned a master's degree in intellectual and moral philosophy.[1] In April 1848, Bagehot was sworn as a Special Constable in anticipation of Chartist riots in London.[2]


Bagehot was called to the bar by Lincoln's Inn, but preferred to join his father in 1852 in his family's shipping and banking business. He wrote for various periodicals, and in 1855 founded the National Review with his friend Richard Holt Hutton.[3][4] Later becoming editor-in-chief of The Economist, which had been founded by his father-in-law, James Wilson, in 1860, Bagehot expanded The Economist's reporting on the United States and on politics and is considered to have increased its influence among policymakers over the seventeen years he served as editor. In honour of his contributions, the paper's weekly commentary on current affairs in the UK is entitled "Bagehot," just as its "Lexington" column addresses the United States, "Charlemagne" addresses Europe, "Banyan" addresses Asia, and "Buttonwood" addresses economic affairs.

In 1867, he wrote a book called The English Constitution that explored the nature of the constitution of the United Kingdom, specifically the functioning of Parliament and the British monarchy and the contrasts between British and American government. The book is considered a classic and has been translated into many languages.

Bagehot also wrote Physics and Politics (1872), in which he coined the still-current expression, "the cake of custom," to describe the tension between social institutions and innovations. Lombard Street (1873), explains the world of finance and banking and focuses particularly on issues in the management of financial crises. In his contributions to sociological theory within historical studies, Bagehot may be compared to his contemporary, Henry James Sumner Maine.

Collections of Bagehot's literary, political, and economic essays were published after his death. Their subjects ranged from Shakespeare and Disraeli to the price of silver.

Every year, the British Political Studies Association awards the Walter Bagehot Prize for the best dissertation in the field of government and public administration.

Recently, Bagehot has come to people's attention in connection with the Federal Reserve's bail out of the financial system in 2008-9. Paul Tucker recently summarized Bagehot's dictum as follows: "[T]o avert panic, central banks should lend early and freely (ie without limit), to solvent firms, against good collateral, and at 'high rates.'* " This was rather different from the Federal Reserve's effort to deal with financial crisis. Bagehot goes on to say (Bagehot, Lombard Street, pp. 51–2), "The way in which the panic of 1825 was stopped by advancing money has been described in so broad and graphic a way that the passage has become classical. 'We lent it,' said Mr. Harman, on behalf of the Bank of England, 'by every possible means and in modes we had never adopted before; we took in stock on security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount[,] in short, by every possible means consistent with the safety of the Bank, and we were not on some occasions over-nice....' After a day or two of this treatment, the entire panic subsided, and the 'City' was quite calm."

  • Paul Tucker (2009), "The Repertoire of Official Sector Interventions in the Financial System: Last Resort Lending, Market-Making, and Capital (90 KB PDF)," remarks at the Bank of Japan 2009 International Conference on the Financial System and Monetary Policy Implementation, Bank of Japan, Tokyo, May 27-28, p. 5.



  1. ^ Richard Holt Hutton, "Memoir" and "Second Memoir" (from Dictionary of National Biography), in Mrs Russell Barrington, ed., The Works and Life of Walter Bagehot, London, Longman, Green (1915)
  2. ^ Hanley, Brian (2004), ""The Greatest Victorian" in the New Century: The Enduring Relevance of Walter Bagehot's Commentary on Literature, Scholarship, and Public Life", Papers on Language & Literature 40  
  3. ^ Walter Bagehot by St. Norman John-Stevas THE BRITISH COUNCIL/NATIONAL BOOK LEAGUE/LONGMANS, GREEN & CO. London. (1963)
  4. ^ Andrew King, John Plunkett (2005). Victorian Print Media: A Reader. Oxford University Press. p. 50. ISBN 0199270376. "National Review (1855-64) was one of the most prestigious quarterlies of mid-century"  


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Up to date as of January 14, 2010

From Wikiquote

One of the greatest pains to human nature is the pain of a new idea.

Walter Bagehot (1826-02-031877-03-24) was a British businessman, essayist and journalist who wrote about literature, government and economics.



The English Constitution (1867)

  • A political country is like an American forest; you have only to cut down the old trees, and immediately new trees come up to replace them.
  • But the mass of the old electors did not analyse very much: they liked to have one of their "betters" to represent them; if he was rich they respected him much; and if he was a lord, they liked him the better. The issue put before these electors was, which of two rich people will you choose? And each of those rich people was put forward by great parties whose notions were the notions of the rich — whose plans were their plans. The electors only selected one or two wealthy men to carry out the schemes of one or two wealthy associations.
  • In excited states of the public mind they have scarcely a discretion at all; the tendency of the public perturbation determines what shall and what shall not be dealt with. But, upon the other hand, in quiet times statesmen have great power; when there is no fire lighted, they can settle what fire shall be lit. And as the new suffrage is happily to be tried in a quiet time, the responsibility of our statesmen is great because their power is great too.
  • Under a cabinet constitution at a sudden emergency this people can choose a ruler for the occasion. It is quite possible and even likely that he would not be ruler before the occasion. The great qualities, the imperious will, the rapid energy, the eager nature fit for a great crisis are not required — are impediments — in common times. A Lord Liverpool is better in everyday politics than a Chatham — a Louis Philippe far better than a Napoleon. By the structure of the world we want, at the sudden occurrence of a grave tempest, to change the helmsman — to replace the pilot of the calm by the pilot of the storm.
  • A cabinet is a combining committee, — a hyphen which joins, a buckle which fastens, the legislative part of the state to the executive part of the state. In its origin it belongs to the one, in its functions it belongs to the other.
  • Whatever expenditure is sanctioned — even when it is sanctioned against the ministry's wish — the ministry must find the money. Accordingly, they have the strongest motive to oppose extra outlay.... The ministry is (so to speak) the breadwinner of the political family, and has to meet the cost of philanthropy and glory; just as the head of a family has to pay for the charities of his wife and the toilette of his daughters.
  • The caucus is a sort of representative meeting which sits voting and voting till they have cut out all the known men against whom much is to be said, and agreed on some unknown man against whom there is nothing known, and therefore nothing to be alleged.

Physics and Politics (1869)

  • The great difficulty which history records is not that of the first step, but that of the second step. What is most evident is not the difficulty of getting a fixed law, but getting out of a fixed law; not of cementing (as upon a former occasion I phrased it) a cake of custom, but of breaking the cake of custom; not of making the first preservative habit, but of breaking through it, and reaching something better.
    • Ch. 2, The Use of Conflict
  • One of the greatest pains to human nature is the pain of a new idea.
    • Ch. 5, The Age of Discussion
  • All the inducements of early society tend to foster immediate action; all its penalties fall on the man who pauses; the traditional wisdom of those times was never weary of inculcating that "delays are dangerous," and that the sluggish man — the man "who roasteth not that which he took in hunting" — will not prosper on the earth, and indeed will very soon perish out of it. And in consequence an inability to stay quiet, an irritable desire to act directly, is one of the most conspicuous failings of mankind.
    • Ch. 5
  • I wish the art of benefiting men had kept pace with the art of destroying them; for though war has become slow, philanthropy has remained hasty. The most melancholy of human reflections, perhaps, is that, on the whole, it is a question whether the, benevolence of mankind does most good or harm. Great good, no doubt, philanthropy does, but then it also does great evil. It augments so much vice, it multiplies so much suffering, it brings to life such great populations to suffer and to be vicious, that it is open to argument whether it be or be not an evil to the world, and this is entirely because excellent people fancy that they can do much by rapid action — that they will most benefit the world when they most relieve their own feelings; that as soon as an evil is seen "something" ought to be done to stay and prevent it.
    • Ch. 5

Lombard Street: A Description of the Money Market (1873)

  • Most men of business think "Anyhow this system will probably last my time. It has gone on a long time, and is likely to go on still."
    • Ch. I, Introductory
  • Credit means that a certain confidence is given, and a certain trust reposed. Is that trust justified? and is that confidence wise? These are the cardinal questions. To put it more simply credit is a set of promises to pay; will those promises be kept?
    • Ch. II, A General View of Lombard Street
  • The less money lying idle the greater is the dividend.
    • Ch. II, A General View of Lombard Street

Literary Studies (1879)

  • To a great experience one thing is essential — an experiencing nature.
  • The purse strings tie us to our kind.
  • The reason why so few good books are written is, that so few people that can write know anything. In general an author has always lived in a room, has read books, has cultivated science, is acquainted with the style and sentiments of the best authors, but he is out of the way of employing his own eyes and ears. He has nothing to hear and nothing to see. His life is a vacuum.
    • Shakespeare
  • A highly developed moral nature joined to an undeveloped intellectual nature, an undeveloped artistic nature, and a very limited religious nature, is of necessity repulsive. It represents a bit of human nature — a good bit, of course, but a bit only — in disproportionate, unnatural and revolting prominence.

Biographical Studies (1907)

  • A constitutional statesman is in general a man of common opinions and uncommon abilities.
  • You may talk of the tyranny of Nero and Tiberius; but the real tyranny is the tyranny of your next-door neighbor... Public opinion is a permeating influence, and it exacts obedience to itself; it requires us to think other men's thoughts, to speak other men's words, to follow other men's habits.
    • Sir Robert Peel
  • [Of Guizot] A Puritan born in France by mistake.


  • "The greatest pleasure in life is doing what other people say you cannot do."
    Walter Bagehot. The Quotations page. Retrieved on 2009-07-04.


  • I started out by believing God for a newer car than the one I was driving. I started out believing God for a nicer apartment than I had. Then I moved up.
    • Jim Bakker, quoted in Redeeming America: Piety and Politics in the New Christian Right by Michael Lienesch (UNC Press, 1993), p. 45

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1911 encyclopedia

Up to date as of January 14, 2010

From LoveToKnow 1911

WALTER BAGEHOT (1826-18 77), English publicist and economist, editor of the Economist newspaper from 1860 to his death, was born at Langport, Somerset, on the 3rd of February 1826, his father being a banker at that place. Bagehot was altogether a remarkable personality, his writings on different subjects exhibiting the same bent of mind and characteristics, - philosophic reflectiveness, practical common-sense, a bright and buoyant humour, brilliant wit and always a calm and tolerant judgment of men and things. Though he belonged to the Liberal party in politics he was essentially of conservative disposition, and often spoke with sarcastic boastfulness to his Liberal friends of the stupidity and tenacity of the English mind in adhering to old ways, as displayed in city and country alike. His life was comparatively uneventful, as he early gave up to literature the energies which might have gained him a large fortune in business or a great position in the political world. He took his degree at the London University in 1848, and was called to the bar in 1852, but from an early date he joined his father in the banking business of Stuckey & Co. in the west of England, and during a great part of his life, while he was editor of the Economist, he managed the London agency of the bank, lending its surplus money in "Lombard Street," and otherwise attending to its London affairs. He became also an underwriter at Lloyd's, taking no part, however, in the active detailed business, which was done for him by proxy.

Bagehot's connexion with the Economist began in 1858, about which time he married a daughter of the first editor, the Right Hon. James Wilson, at that time secretary of the treasury, and afterwards secretary of finance in India. Partly through this connexion he was brought into the inside of the political life of the time. He was an intimate friend of Sir George Cornewall Lewis, and was afterwards in constant communication with many of the political chiefs, especially with Gladstone, Robert Lowe and Grant Duff, and with the permanent heads of the great departments of state. In the city in the same way he was intimate with the governor and directors of the Bank of England, and with leading magnates in the banking and commercial world; while his connexion with the Political Economy Club brought him into contact in another way with both city and politics. His active life in business and politics, however, was not of so absorbing a kind as to prevent his real devotion to literature, but the literature largely grew out of his activities, and of no one can it be said more truly than of Bagehot that the atmosphere in which he lived gave tone and colour and direction to his studies, one thing of course acting and reacting on another. The special note of his books, apart from his remarkable gift of conversational epigrammatic style, which gives a peculiar zest to the writing, is the quality of scientific dispassionate description of matters which were hardly thought of previously as subjects of scientific study. This is specially the case with the two books which perhaps brought him the most reputation, The English Constitution (1867) and Lombard Street (1873). They are both books of observation and description. The English constitution is described, not from law books and as a lawyer would describe it, but from the actual working, as Bagehot himself had witnessed it, in his contact with ministers and the heads of government departments, and with the life of the society in which the politicians moved. The true springs and method of action are consequently described with a vivid freshness which gives the book a wonderful charm, and makes it really a new departure in the study of politics. It is the same with Lombard Street. The money market is there pictured as it really was in 1850-1870, and as Bagehot saw it with philosophic eyes. Beginning with the sentence, "The objects which you see in Lombard Street are the Bank of England, the joint stock banks, the private banks and the discount houses," he describes briefly and clearly the respective functions of these different bodies in the organism of the city, according to his own close observation as a banker himself, knowing the ways and thoughts of the men he describes, and as a man of business likewise in other ways, knowing at first hand the relation of banking to the trade and commerce of the country. Lombard Street is perhaps a riper work than The English Constitution, as its foundation was really laid in 1858 in a series of articles which Bagehot then wrote in the Economist, though it was not published till the early 'seventies, after it had been twice rewritten and revised with infinite labour and care. Lombard Street, like The English Constitution in political studies, is thus a new departure in economic and financial studies, applying the same sort of keen observation which Adam Smith used in the analysis of business generally to the special business of banking and finance in the complex modern world. It is, perhaps, not going too far to say that the whole theory of a one-reserve system of banking and how to work it, and of the practical means of fixing an "apprehension minimum" below which the reserve should not fall, originated in Lombard Street and the articles which were the foundation of it; and the subsequent conduct of banking in England and throughout the world has been infinitely better and safer in consequence. A like note is also struck in Physics and Politics (1869), which is a description of the evolution of communities of men. The materials here are derived mainly from books, the surface to be observed being so extensive, but the attitude is precisely the same, that of a scientific observer. To a certain extent the Physics and Politics had even a more remarkable influence on opinion, at least on foreign opinion, than The English Constitution or Lombard Street. It "caught on" as a development of the theory of evolution in a new direction, and Darwin himself was greatly interested, while one of the pleasures of Bagehot's later years was to receive a translation of the book into the Russian language. In Literary Studies (1879) and Economic Studies (1880), published after his death, there is more scope than in the books already mentioned for other characteristics besides those of the scientific observer, but observation always comes to the front, as in the account of Ricardo, whom Bagehot describes as often, when he is most theoretical, really describing what a first-rate man of business would do and think in actual transactions. The observation, of course, is that of a type of business man in the city to which Ricardo as well as Bagehot belonged, though Ricardo could hardly look at it from the .outside as Bagehot was able to do.

Bagehot had great city, political and literary influence, to which all his activities contributed, and much of his influence was lasting. In politics and economics especially his habit of scientific observation affected the tone of discussion, and both the English constitution and the money market have been better understood generally because he wrote and talked and diffused his ideas in every possible way. He was unsuccessful in two or three attempts to enter parliament, but he had the influence of far more than an ordinary member, as director of the Economist and as the adviser behind the scenes of the ministers and permanent heads of departments who consulted him. His death, on the 24th of March 1877, occurred at Langport very suddenly, when he was in the fullest mental vigour and might have looked forward to the accomplishment of much additional work and the exercise of even wider influence.

It is impossible to give a full idea of the brightness and life of Bagehot's conversation, although the conversational style of his writing may help those who did not know him personally to understand it. With winged words he would transfix a fallacy or stamp a true idea so that it could not be forgotten. He was certainly greater than his books and always full of ideas. The present writer recalls two notions he had, not for writing new books himself, but as something that might be done. One was that there might be a history of recent politics with new lights if some one were to do it who knew the family connexions and history of English politicians. This was apropos of the passage of a certain bill through parliament, when the head of the department in the House of Commons failed and the management of the measure was taken by the chancellor of the exchequer himself, a relative of the permanent head of the department concerned, who was thus able to carry his own ideas in legislation notwithstanding the failure of his political chief. Another book he wished to see written was an account of the differences in the administrative systems of England and Scotland, by which he had been greatly impressed, the differences not being in detail, but in fundamental idea and in form, so that no judicial or other officers in the one were represented in the other by corresponding functionaries. Many other illustrations might be given of his fulness of ideas which helped to make him an ideal editor. Reference must also be made to the assistance which Bagehot gave as a journalist to the study of statistics. From the manipulation of figures he was most averse, and he rather boasted that he was unable to add up. But he was a most excellent mathematician, and no one could be so careful as he was about the logic of the figures got together for his articles, which he always most carefully scrutinized. He would frequently point out that his figures were illustrative merely, and did not by themselves establish an argument. He was always anxious, again, to impress on those about him that a subject could not be studied with the help of figures and accounts alone. Whether it was insurance, or banking, or underwriting, or shipowning, he insisted that some one who knew the business should see the writing before it was published. Knowing so many departments of business from actual experience, he was a host in himself as referee, but when in doubt he would always consult some one who knew the facts; and he used his great influence so well that in subsequent years it inspired indirectly not a few who were hardly aware of his claims to be a statistician at all. (R. GN.)

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