One illustration of the peculiar English synergy between regional and national development appears in the development of local banking. Although capital requirements for manufacture were generally low during the eighteenth century, they began to grow even before the need to invest in machines made its impact, as market opportunities encouraged merchants to expand their reach and their ambitions; in response, the number of banks grew too. In 1750 there seem to have been fewer than a dozen regularly constituted banks outside London; twenty-five years later the number was closer to a hundred, and growing. Many of these new banks developed out of other businesses (a common occurrence in financial history), and they played a large role in underwriting industrial expansion and innovation during the eighteenth and early nineteenth centuries. Although local in their character and scope, a number of them developed connections with London money men, augmenting the resources they could provide in their areas. Self-finance through reinvesting profits (once thought to be the more or less exclusive source of capital in this period) was important too, but the ability of businessmen to use their profits to add to their long-term fixed capital depended on their being able to rely on banks to meet their shifting needs for shorter-term working funds.7 By contrast, there was little reason for French regions to evolve similar structures, and the big Parisian bankers, the so-called Haute Banque, operated largely as organizers of state finance; some, such as the Rothschilds (whose history we will consider later on), had branches in other capitals, but no significant connections in French provincial cities. In contrast to their British counterparts, French banks remained famously reluctant to lend money to new business enterprises until well into the nineteenth century and in some cases even beyond.
After 1870, however, British banks no longer served industrial development in the same way. What made them less favorable partners for industry than they had been in the first phase of innovation was the increasing centralization of banking in London, just at the time when commercial agents there were becoming more involved in the international transactions (bill discounting and payment settlements) that were making the City the world’s financial capital. These operations depended on the maintenance of the gold standard that gave unquestioned stability to the pound sterling, but which also kept interest rates relatively high (by limiting the money supply), to the detriment of industrialists in search of capital. Combined with a fear of industrial investment on the part of some bankers, stemming from business failures in crises of the 1860s and 1870s, and the difficult conditions many faced as competition grew fiercer in the next decades, these changes deprived Britain of the benefits of the nurturing symbiosis between central and regional development that had aided its industrial development before. British industry did not cease to grow, to be sure, but it expanded at a slower pace than its rivals, presaging the post-World War I situation in which the country’s economic weaknesses would be increasingly on display.
Statistical support for this view is provided by the figures Simon Kuznets generated some time ago, indicating that whereas the proportion of British national product devoted to capital formation hovered around 12 percent in the last decades of the nineteenth century, the German figure was well over 20 percent in every decade between 1870 and 1900. As world markets became more closely integrated in the age of the “second industrial revolution” and heightened imperial competition, London was drawn into tighter connections with places outside Britain, at the same time that its financial supremacy over other domestic regions was growing. The city’s changing relations to the rest of the country and the world at once magnified England’s position as a financial center and contributed to the passing of its industrial leadership.8 It should be noted that the British empire in these years entered into a phase of tighter integration that paralleled the transformation of the mother country itself: whereas earlier the various colonial regions had generally been regarded as too separate from each other and from England to be part of an integrated political space, from around 1870 “the profound transformation in political consciousness generated by the revolution in communication technology” led a number of observers to argue “that the colonial empire formed part of a single political field, that it constituted a unified community stretching across the globe.”9 The same transformation was part of what made it possible for other countries to challenge Britain’s imperial supremacy, just as they were overtaking it economically. The evolving relations between banking and manufacture in Britain thus form part of a broader history that testifies to the way the country’s singular rhythm of development gave her advantages in the period before the railroad age that she lost as the more powerful networks that now developed spread through Europe and the world.
Class and middle class
The creation of more fully integrated national spaces that altered the conditions of industrial development had an impact in the political realm too, most visibly in the prominence assumed in the nineteenth century by two phenomena of little moment before: the recognition of class as a social identity and an instrument of action, and the appearance of modern nationally organized political parties. As with industry, these features of modern politics emerged in two distinct phases, with modern political parties taking the stage only from the 1860s, while the class-based feeling and rhetoric whose proper place in their activity was often debated already bulked large in the decades just after 1815, drawing on a vocabulary that had begun to develop during the eighteenth century. But the two phenomena were closely related in that authority relations in a society ordered along a hierarchy of ranks or degrees rested on vertical connections between individuals whose personal status determined their place in both local and national life, whereas class as a category projected a more anonymous and generalized form of identification, appropriate to the more impersonal and more abstractly mediated political space where nationally organized parties would act and compete. We have already considered aspects of the early use of class language in France and Germany, but the English case casts additional light on the whole topic, particularly in showing how both the spread of class as a category and of parties as instruments of action were tied up with the growing weight of abstract relations and the networks that fostered them. In all these respects, the English case will become a point of comparison to the French and German ones in the two chapters that follow.
Although people in the nineteenth century believed that the practice of dividing society into distinct and separate classes was a novelty of their time (and Asa Briggs, in a famous and still valuable article, took them pretty much at their word), Penelope Corfield has shown that the term “class” was regularly used before 1800, first alongside the older vocabulary of “ranks” and “orders,” then in its stead. The earlier vocabulary reflected a notion of society as a stable configuration of parts whose relations to each other were widely presumed to be rooted in some divine or natural principle independent of human will; it made little sense to speak of a struggle between “orders” or “ranks.” Class, by contrast, referred not to an ordained division but either to one in which particular human action played some part, for instance that of officials who put people into some category for administrative purposes, or one marked by an awareness of large and more anonymous changes in people’s conditions, as when economic improvement or decline led people to alter their behavior. Unlike ranks or orders, such classifications allowed for the possibility of change, “whether by cooperation, competition, or conflict,” so that class presupposed more fluidity in social relations; it also encouraged “a much more conscious scrutiny” of social arrangements, including questions about the worldly sources of wealth and poverty.
This focus gave what has been called “the language of class” a certain concreteness, but from the start it also exhibited a tendency to be vague and abstract. The number of classes spoken about varied from one observer to another. Those who counted as many as seven divisions could distinguish (as did Daniel Defoe) between “the great,” “the rich,” and “the m
iddling sort,” adding in townspeople and country folk before arriving at one or more species of laborers (some impoverished, some reasonably well-off), but there was already a tendency to simplify the categories, reducing them to “upper,” “middle,” and “lower” or even to starker oppositions between the few and the many, the useful and the useless, or the rich and the poor. From the start many ways of naming classes involved people’s economic condition, but sometimes this concerned relative wealth and sometimes function or source of income (these latter would be developed by economists), and certain descriptions, such as “industrious” or “respectable” carried moral overtones as well. Some categories cut across others, creating a complex social field in which particular individuals might belong to more than one group at the same time, a situation which some would seek to avoid by employing highly general and inclusive categories. The language of class thus at once fostered a recognition that actual social relations are intricate and unpredictable, and offered opportunities and temptations to reduce them to some simpler state.10
The motives for such simplification might sometimes be disinterestedly analytical, seeking to impose order on an complex and fluid reality, but sometimes they were pointedly rhetorical, giving prominence to class identities in pursuit of particular ends. The latter purpose is particularly evident in the growing prominence of appeals to the middle class, both as an actual group and as a reference point for policy, during the early nineteenth century. The idea of a middle class had been part of the new idiom from the start, but not yet in the way it would appear after around 1815. Some people emphasized the special virtues of middling people, but along lines laid down long before by Aristotle, naming stability, moderation, and relative independence as the qualities of those who were neither powerful enough to oppress others nor needy enough to be easily corrupted by poverty and temptation. In particular there was still no talk of a “rising middle class” whose ascension altered the substance of social relations. This notion, as Dror Wahrman has shown in an exhaustive study, arose in connection with the agitation for suffrage extension that led to the landmark Parliamentary Reform Bill of 1832. The foreign and still unfamiliar term bourgeois was not part of this discussion; for this reason we will mostly employ “middle class” in the rest of this chapter too.
Before the reform campaign got under way English commentators often described the middle class or classes as essential to the country’s well-being, but in terms that equated social health with stability, not change, and identified the middle as a chief guarantor of it. Although it was sometimes associated with commerce and industry, its size or social role were seldom described as expanded by virtue of economic advance. From around 1815, however, the middle section of society came to be seen as dynamic, both a motor and an index of social transformation. As a writer in the Edinburgh Review put it in 1820, comparing the present with the mid eighteenth century: “Villages have since sprung up into immense cities; great manufactures have spread over wastes and mountains; ease, comfort and leisure, have introduced, among the middle classes of society, their natural companions, curiosity, intelligence, boldness, and activity of mind. A greater proportion of the collective knowledge and wealth of the nation has thus fallen to their lot.” What chiefly drew observers to call attention to such developments was the perceived destabilization of the British political system, which had failed to respond to changes in the society around it; thus the need arose to reform Parliament, so as to give middle class people the “political rights” that their “social importance” demanded. Among the events that helped to spread such views was the famous “Peterloo Massacre” of 1819 when eleven people were killed (and many more injured) by troops dispersing a giant demonstration on behalf of reform in Manchester. Middle-class radicals as well as workers were among the organizers of the meeting, and the violence to which it led drove some of the former to more conservative positions, while moving others to insist that reform was all the more necessary in order for stability to return. The moment led to a spreading recognition of the need to satisfy middle-class demands, and encouraged people to emphasize social change as the reason why new political measures were required. Without them the danger remained that a discontented middle class would spread its penchant for disorder downward to more dangerous groups below; given satisfaction, however, they would use their resources and influence to calm society as a whole.11
These discussions, along with the debates about the historical role played by bourgeois or middle-class people in France in the same years, provided much of the vocabulary of class conflict that would be developed in Marxism and used to different effect by others. The English discussions shared much with the French ones, but they had a different inflection, discernible in a famous speech the Whig politician and historian Thomas Babington Macaulay gave in 1831. Marx would later find it easy to acknowledge his debt to such a view as this:
All history is full of revolutions, produced by causes similar to those which are now operating in England. A portion of the community which had been of no account expands and becomes strong. It demands a place in the system, suited, not to its former weakness, but to it present power. If this is granted, all is well. If this is refused, then comes the struggle between the young energy of one class and the ancient privileges of another. Such was the struggle between the Plebeians and the Patricians of Rome. Such was the struggle of the Italian allies for admission to the full rights of Roman citizens. Such was the struggle of our North American colonies against the mother country. Such was the struggle which the Third Estate of France maintained against the aristocracy of birth. Such was the struggle which the Roman Catholics of Ireland maintained against the aristocracy of creed. Such is the struggle which the free people of color in Jamaica are now maintaining against the aristocracy of skin. Such, finally, is the struggle which the middle classes in England are maintaining against an aristocracy of mere locality.12
Here is a whole theory of history as class conflict, but we must not miss the broad and indiscriminate sense Macaulay gives to the term “class,” which simply designates a distinguishable “portion of the community.” (The Communist Manifesto would not abandon this usage altogether, since its authors too invoked a wide variety of class conflicts; their contention was that under modern conditions all were being absorbed into the struggle between bourgeoisie and proletariat.) The only example of an urban middle class cited is the one to which Macaulay himself belonged (the French Third Estate contained far more peasants than bourgeois), but there are several different species of aristocracies (of “creed,” of “color,” “of skin”), of which only one, the French, was defined by birth. That Macaulay did not view the English aristocracy in the same light should not be overemphasized, but it should not go unnoticed either; the Whig circles in which he moved were ones in which the longstanding commercial and political connections between English aristocrats and middle-class people were well represented. This makes Macaulay’s characterization of the English aristocracy as one “of mere locality” all the more worthy of being underlined. The term seems to refer in part to the degree to which the new middle class belonged especially to the north of the country, but also to the historical circumstance that those cities with no representation in Parliament were ones which for whatever reason had not been incorporated as boroughs (each of which had the right to send two representatives to Westminister), so that the “class” opposition that produced the crisis was one rooted at least as much in the happenstance of political history as in the general frame provided by social change. For Macaulay to characterize the English middle class in earlier times as “a portion of the community which had been of no account,” and its right to “a place in the system” as only recently asserted, really applied only to places such as Manchester and Birmingham, rather than to the broader category he invoked, which had long been a recognized part of British society and of Parliament. By giving a general significance to “class” conflicts that made the term refer to a variety of differen
t kinds of exclusions, Macaulay made it easy to apply his words to broader changes than the one about which he was speaking, and taking them in that sense has become a more powerful temptation as the social transformations associated with modernity have proceeded. But the Reform debates of these years, although surely rooted in economic change, had just as much to do with the issue Richard Price locates at the center of British political debate in the whole period from 1688, when Parliamentary supremacy was established, to 1867, when votes were first given to a large number of workers: who would be included in the political nation and who excluded from it? (The same issue was present when suffrage requirements were set in other countries too, but as we shall see it was overshadowed by more basic constitutional questions.) Macaulay’s reference to excluded portions of a national community demanding a place in the political system shows that he understood the situation of 1832 very much in these terms. 13
The connection between the appeals to class in the agitation for the Reform Bill and the changing nature of the political system to which we pointed a moment ago can be seen if we pause to note some things the rightly famous Act did and did not accomplish. The suffrage it established was much broader than the one set up in France by the revolution of July, 1830, but it was far from democratic, leaving out most artisans and workers and making the exclusion of women explicit for the first time. In some ways, recent historians have argued, the new system was less democratic than the old, since the latter’s lack of uniformity left room for arrangements in some districts that gave the vote to modest middle- and even working-class people whom the 1832 settlement excluded. As noted earlier, historians by now largely agree that it did not – as was long asserted – transfer political power from the aristocracy to the middle classes; promoted by Whig magnates such as Earl Grey, it re-established the cross-class alliance that made figures such as Macaulay largely dependent on aristocratic patrons (Gladstone first entered politics on the same basis), helping to preserve its power through most of the century. The Bill went a certain distance toward bringing representation into line with population, depriving some of the hundred or so “pocket” or “rotten” boroughs whose few inhabitants voted in accord with the wishes of some local notable of their seats and assigning them to places recently grown much larger. But it left intact over forty of these tiny jurisdictions, and with them the power of some local bigwig to march voters to the poll, often entertaining them lavishly in the old and typically raucous style. What made it the first step toward a modern form of politics was less these specific provisions than the fact that it replaced a system based on historical precedent and local custom, and that made no provision for adjustments in response to population changes, with a much more uniform and (I need to risk the word) rational electoral system. Qualifications for voting in urban areas were made the same throughout the country, granting the franchise to any male householder who occupied premises worth £10 or more in yearly rent. The requirements in county districts were more diverse, reflecting different modes of landholding in different places, but they too were given greater uniformity.14
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