Liberalism at Large
Page 18
Hirst was one of the most prolific authors ever to become editor, and the most ideologically driven since the first. In contrast to James Wilson, however, that laser focus included a commitment to peace, not just prosperity, with Hirst as adamant about the former as the latter. Hirst has been misjudged on both counts. Characterization of him as having ‘automatically associated finance with speculation, gambling, luxury, and corruption’, and as a pacifist far outside the Liberal mainstream make it hard to explain how he was hired at all, since blanket hostility to finance or force would have ruled him out at the Economist.34 In reality, even Hirst’s fiercest attacks on ‘the gold-reefed City’ were aimed less at the stock market than at its ‘rigging’ by the likes of Rhodes, who ‘duped honest investors’ and used the state to bail himself out. Nor was his antipathy to the Liberal Imperialists based simply on their readiness to intervene abroad: Palmerston and Gladstone had both seen that morality might demand action on behalf of oppressed minorities, in Greece or Armenia; neither, however, would have condoned ‘for one moment a war with two free Republics’. Hirst and his friends, ‘blind neither to the glories nor yet the responsibilities of the British Empire’, found the ‘teachings of modern imperialism’ to be ‘inconsistent with the greatness and safety of the Empire’. The Empire was a liberal achievement, which imperialist schemes for territorial expansion or tariffs actively threatened.35
A Campaigning Economist: Between Cabinet and City
Hirst brought immediate change to the Economist when he took the chair Johnstone had vacated. Gruff consistency gave way to playful sparring, as Hirst added flair to the principal leaders: a stanza of Milton to introduce a budget, Bentham to explain social reform, Mill political economy, or Burke for foreign policy. Headlines often ran as rhetorical questions, as in a debating club – in 1908, ‘What Causes a Revival of Trade?’, or ‘What is Waste?’ The focus shifted from the money market to politics, with the latter set in a wider frame. ‘The Significance of Karl Marx’ was condescending, but curious – only dismissing the man and his ideas after explaining that his proletarian heirs in Germany, France, and England had sensibly replaced revolutionary socialism with evolutionary … liberalism.36
Hirst enlarged the staff, recruiting the sort of young people he liked from Oxford and Cambridge, many of whom stayed on for decades: Walter Layton in 1908 and his brother Gilbert in 1911, for statistical expertise; Leonard Reid, as a leader writer, in 1912; for briefer spells, Dudley Ward, C. K. Hobson and Richard Lambert.37 In 1913, Mary Agnes Hamilton, the first female editor, was a striking choice: a classicist, translator and novelist, she was also a suffragette, who days before the outbreak of the First World War defected to Labour, later representing it as an MP for Blackburn. Her description of Hirst says much about what it was like to work at his Economist, where doctrine and debate somehow coexisted. His ‘heroic pertinacity’, she observed, was the ‘power of seeing what he wishes to see’ – noting how his view of women as ‘in essence irrational’ was unaffected by her, or his sisters, who held university posts. ‘Anyone who has any truck with Socialism must be intellectually flabby’, he remarked to Hammond; ‘it was like him not to notice the imputation also covered me.’ When, arguing with Hirst, she suggested ‘it could be useful to define what one meant by a principle, his reply was “Free Trade is a principle” – more need not be said’.38 ‘A true fanatic’, wrote another intellectual opponent, albeit with affection.39
As dramatic as the rejuvenated staff and style was the sudden shift in editorial line. Hirst did more than shepherd the Economist back into the Liberal fold after two decades; he turned it into one of the party’s most vocal backers, especially in the City of London. This, combined with his own Cobdenite linking of peace and free trade, overturned its line on imperialism. Plans to build more Dreadnoughts, praised as instruments of peace up to 1906, were henceforth decried as wasteful and dangerous; Germanophobia as well as Francophilia – the paper showing signs of both during the Boer War and the Moroccan Crisis in 1905 – were anathema; and it now looked forward, at some unspecified date, to Home Rule for Ireland.40 These changes in position ramified throughout the paper. Reducing armaments was not just a question of foreign policy. For Hirst, it was the crucial step to achieving social reform while maintaining ‘liberal finance’ at home, with more direct but still low levels of taxation.
After 1906, the Economist cheered progress on the social and economic fronts, paying close attention to the fiscal policies outlined in each budget. Liberal achievements piled up after year one: ‘they have re-established the sinking fund’, ‘nearly put an end to borrowing for works’, ‘removed the coal duty, lowered the tea duty’ and ‘reduced the income-tax on earnings by 25 per cent’. Hirst gave much of the credit to Campbell-Bannerman who, along with a ‘genial and imperturbable temper’, possessed ‘an insight into human nature, a sympathy with the anxieties and aspirations of the common people, a good humoured indifference to the opinion of smart society’.41 The paper hailed Asquith for introducing old-age pensions for the poor in 1908, even as he lowered the sugar duty and reduced the debt – and went on to attack ‘Lord Northcliffe and his army of journalists’ for their sudden concern with thrift, in reality sour grapes over Asquith’s triumphant example of ‘free trade finance’.42
Nor did the Economist stop at these early efforts, which struck many party radicals as modest. If Asquith glided into Downing Street almost automatically when Campbell-Bannerman died in 1908, radicals nonetheless believed they had gotten their choice for Treasury.43 Lloyd George’s ‘People’s Budget’ of 1909–10 was ‘bold’, ‘ambitious’ and ‘equitable’ – offsetting spending with indirect taxes on luxuries like motor cars, tobacco and liquor, and direct ones on income, estates and land.44 With health insurance, introduced in 1911, Lloyd George had not only ‘captured the imagination of the man in the street’, but asked him to do his part. Equality of sacrifice was also a feature in Churchill’s unemployment insurance, guaranteeing that ‘millions of the working classes to whom a few weeks sickness or unemployment now mean poverty and distress, will be able to meet such time with comparative fearlessness.’45
Hirst always stressed the fiscal chastity of these social schemes – audacious as well as economical – in ways that point to the unique role the Economist now played in selling New Liberalism to the City.46 Budgets were the paper’s main focus, reflecting the intense polarization these engendered. By 1910, the overwhelmingly Conservative House of Lords – having gutted Liberal education, plural voting, land and licensing bills – rejected outright its latest, People’s Budget, as little better than socialism and plunder. In the ensuing constitutional crisis – which subsided only after two general elections, and a threat to flood the Lords with Liberal peers – the party and paper found new purpose. But the latter walked a tight rope: railing against a ‘hereditary oligarchy of sumptuous and leisured men’ in the upper chamber, it also tried to win over the gentlemanly capitalists who made up its traditional readership.47
The Economist worked to assuage, cajole, even threaten holdouts in the City, hoping in this way to win it back to Liberalism, or at least free trade – even as hostility grew inside the Square Mile to the entire agenda of the Liberal Party. A Budget Protest League formed, drawing up a petition that attacked the use of the sinking fund for social insurance, and the new spate of taxes which threatened ‘the safety of capital’ – signed by thirty-six bankers and presented by Lord Rothschild in parliament.48 Bankers’ Magazine, already fuming at the unabated fall in the price of consols (the main reserve security for the financial system) gave space to an anxious former Economist editor Inglis Palgrave, who warned that excessive taxation could send Britain down the same slope of decline as eighteenth-century Holland.49
‘The bankers and brokers and shippers, merchants and financiers of the City need ever and anon to be reminded’, replied the present editor, ‘that although the increasing burden of direct taxes upon their incomes is naturally exasperating, it
is infinitely preferable to indirect taxes upon their trade and commerce which will take away their business, hand it to foreign centres, and inevitably destroy the supremacy of London.’50 Each fiscal innovation elicited a reassurance that social reform was very far from socialism, indeed as English as warm beer and cricket:
It may be wrong to tax very rich men at a higher rate than men with only moderate incomes, but it is not Socialism. It may be wrong to relieve landlords of income-tax, but it is not Socialism. It may be wrong to tax wind-falls, but it is not Socialism. It may be wrong to tax the still rather than the teapot, but the crime is not Socialism. If this Budget were Socialism, the public may be sure that it would have been welcomed by the Morning Post and torn to pieces by the Economist.51
Hirst was not alone in advocating reform in the face of protests from within the City. In fact, the Economist’s most successful offshoot and competitor, the Statist, also carried the Liberal torch; behind the scenes, its editor, George Paish, became a close advisor to Lloyd George in dealing with the City from 1909 to 1914, and often worked with Hirst.52 The latter arguably had a higher profile – leading the City’s Free Trade Committee, drawing into it eminent bankers such as Lord Avebury, Sir Felix Schuster and Frederick Huth Jackson, even contemplating their idea that he contest a City seat in one of the two general elections of 1910.53
While Hirst declined to run on this occasion, his Economist broadcast the official Liberal line in and outside the City up to 1914, with only two significant divergences along the way: suffrage and military spending. Whereas the bulk of the Cabinet did its best to evade the suffragettes, whose spectacular demonstrations aimed to puncture this studied indifference, Hirst railed against the idea that women had a right to vote. Members of the Women’s Social and Political Union, or WSPU, were ‘educated’ and ‘refined’, he observed in horror: ‘what is it that allows or compels them to lay aside these qualities’ and turn into ‘the shrieking, struggling, fighting viragoes of the Ladies’ Gallery and Albert Hall?’54 Only lower-class men surrendered to passion, he concluded, whereas even well-born females had no ‘safeguard against’ their impulses, displaying an incapacity for political reason. Around the time he began to compare suffragettes to Russian and Turkish marauders – pillaging ‘solemn vows, ties of love and affection, honour, romance’ – his wife, Helena, took up with the WSPU. Not long after admitting to several American dinner guests ‘that she should prefer to avoid burning the house of an anti-suffragette friend, but would do so if necessary’, she was arrested for throwing stones at a minister’s window. The story landed in the press, a row ensued, and she left home.55 In the end, it was Hirst with the passionate feelings that plunged his personal life into crisis: he implored his friend John Simon, the Attorney General, to convince Helena to come back. Earlier, he had shocked J. A. Hobson by arguing that both men should resign from a committee of the New Reform Club if it supported the ‘revolutionary’, ‘unconstitutional’, ‘Anti-Liberal’ cause of ‘women suffrage’.56
If on the issue of suffrage Hirst was far behind his radical friends, on the military budget he was ahead, criticizing Liberals relentlessly for their failure to reverse spending. In 1907, he privately wrote to the prime minister: in his new capacity as editor of the Economist, which ‘compels me to watch trade and finance very closely’ – Hirst was compelled to urge Campbell-Bannerman to back ‘Lord Willy’ (Harcourt) in Cabinet, and ‘make it the policy of the Government to return to the pre-war level … cutting four millions at least off army and navy this year’.57 Behind the scenes, he tried to light a fire under Asquith, who sought in turn to calm Hirst by sketching his fiscal plans from 1906 to 1909.58 Even as the Economist used Liberal budgets to pitch free trade finance to the City, so it criticized party leaders for ‘procrastination in bringing about a return to peace establishments’.59 For Hirst, it was Campbell-Bannerman’s death in 1908 that altered the balance of forces in Cabinet, weakening resistance to the naval panic that crashed over it the next year. Hirst furiously denounced calls for four, let alone eight, new Dreadnoughts, the number exhorted by Balfour, the Sea Lords and ‘Big Navy’ Liberals. He mocked the fantasy of an imminent German invasion by which the Daily Mail, The Times, and even the Clarion and Daily News, sought to justify them.60 And he recalled ‘two or three facts’ to those in the City, including the Rothschilds, ‘who seem almost as much frightened as The Standard, which talks of a hundred million loan’ and ‘82 millions’ for the navy. The spectre of the Boer War loomed, as he and Massingham at the Nation descried the influence of the international armament firms in this latest panic.61
Hirst was no mere commentator. As editor he fought pitched battles on behalf of his allies in the Cabinet, who then included Lloyd George, Churchill and Morley. In 1912, Morley leaked Hirst an account of his rows with the Liberal Imperialists – Haldane, Grey, and the ‘defunct economists’ McKenna and Asquith. ‘You might like to know for your own information how opinion is divided at the moment’, relayed Hirst to the head of the Liberal Federation, Sir John Brunner, asking him to send a ‘firm letter’ to Asquith that if he endorsed the latest ship-building program, ‘you would feel conscientiously bound to summon a meeting of the Federation in the hope of bringing Liberal opinion to bear upon this fatal and provocative policy’.62 Such internal pressure stood a chance, he believed, for outside the Cabinet, ‘old fashioned Liberals and modern radicals’ outnumbered Imperialists.63 His activities continued right up to the war, not only at the Federation, through which he tried to organize the backbench opposition, but also chambers of commerce, reform clubs, ad hoc committees. He at least managed to extend the anti-armaments drive far beyond the pages of the Economist – obtaining funds to send one of its journalists, Dudley Ward, to Berlin in 1911 to ‘act as press-correspondent’ for all the Liberal dailies ‘with the object of promoting friendly relations between Germany and England’.64
And yet despite these efforts, the relationship between Liberalism as a force for social reform and imperialism had turned out to be just the opposite of what he had envisioned in 1907. Lloyd George and Churchill finally won the backing needed in Cabinet to press forward with health and unemployment insurance, land, death and super taxes, not by halting the naval race with Germany, but joining with the Imperialists on its escalation.65 After the People’s Budget, neither they nor the naval budget ever looked back.
Empire of Finance or Financial Imperialism?
As a result of the escalation of the arms race, the Economist was obliged to fight two imperialisms at once – contending that both endangered, instead of strengthened, the Empire. On the one hand, the Chamberlain-Milner-Rhodes variety would lead to wars on the scale of the Boer conflict, not to speak of protection; on the other, Liberal Imperialists, though free traders, seemed ready to commit Britain to France and Russia in a still more foolhardy confrontation with Germany. Grey’s secretive diplomacy as foreign minister caused anxiety on this score. So did his public acts – adding to the Anglo-French Entente of 1904 an agreement with Russia in 1907 fixing up their spheres of influence in Persia and Tibet.
To counter the first threat, of imperial preference – a campaign that Chamberlain had begun in the downturn of 1903, and his sons Austin and Neville carried on – the Economist insisted that free trade had become so fundamental to the imperial order that the two could not be safely disentangled. To abandon ‘our policy of the open door’ and ‘knowledge that wherever British sovereignty is exercised foreign commerce can come and go freely on equal terms’ would invite ‘envy, hatred, and malice’, the ‘hostility of the world’.66 What mattered most were the invisible ties binding the colonies and dominions to England. Above and beyond culture, sentiment and security – if Canada and Australia were ‘left to themselves, how long would the one hold her own against the United States, the other against Japan?’ – there was capital. The question of how freely to invest it abroad now set the Economist on a collision course with tariff reformers inside the City – not just over the
effect of capital exports on Britain’s growing trade imbalance, or the price of consols, but over its power in the broadest sense.67
The opening salvo in this conflict was Lloyd George’s People’s Budget, which elicited hand-wringing over the ‘safety of capital’ from bankers like Lord Rothschild and other members of the Budget Protest League. The notion that ‘socialistic finance’ was ‘driving’ capital abroad furnished another rationale for tariffs, originating in the City but with a potent appeal extending up to the industrial North. Instead of allowing the unrestricted outflow of British savings, which funded – critics argued – the industrial and imperial expansion of rival powers, tariffs and capital controls could direct those savings to the home market, which was starved for investment and in need of modernization. The proof? German, American and even Japanese firms were now outcompeting their British counterparts on everything from pottery to steel, iron to chemicals.68