Macaulay: Defender of Capitalism
MAY 01, 1975 by BRUCE BARTLETT
Mr. Bartlett is a graduate student in history at Georgetown University.
Thomas Babington Macaulay was born in 1800. In 1825 he began his writing career and soon became one of England’s most popular essayists. In 1848 the first volume of his magisterial History of England appeared and became an instant success, rivaling only the works of Byron and Sir Walter Scott in popularity. Owing to its brilliant style and encyclopedic collection of facts, it established Macaulay’s reputation for all time. In 1857 he was raised to the peerage, died in 1859, and was buried in Westminster Abbey.
Like Lord Acton, Lord Macaulay is an outstanding representative of the Whig tradition and true liberalism in the nineteenth century. In his works he constantly stressed the history of liberty as fundamental to human progress. Consequently, he was also a strong supporter of capitalism and laissez-faire, both in his writing and in numerous speeches before Parliament. His most vigorous effort was in a review of Robert Southey’s Colloquies on Society for the Edinburgh Review in January, 1830.
Southey was Poet Laureate of England at the time. In 1829, however, he had temporarily abandoned his poetry to take up social commentary. Ostensibly, his book was only a collection of conversations between himself and the ghost of Sir Thomas More; but this was only a literary device to allow him to present his own opinions about society in general. Macaulay easily saw through this and took Southey firmly to task for this departure from his poetry:
"It would be scarcely possible for a man of Mr. Southey’s talents and acquirements to write two volumes so large as those before us, which should be wholly destitute of information and amusement. Yet we do not remember to have read with so little satisfaction any equal quantity of matter, written by any man of real abilities. We have, for some time past, observed with great regret the strange infatuation which leads the Poet Laureate to abandon those departments of literature in which he might excel, and to lecture the public on sciences of which he still has the very alphabet to learn. He has now, we think, done his worst."
From this opening barrage, Macaulay went on in similar style to review all of Southey’s pronouncements. Today they would be considered left-wing, but in his time Southey was considered the voice of ultra-Toryism. His brand of Tory conservatism taught that all in the past was good, and therefore, he was contemptuous of any change. In a time of rapid social change brought on by the Industrial Revolution, Southey wanted government to control undesirable trends. He was particularly incensed by the growing prosperity of the new capitalist class.
His distaste for the capitalist was a logical consequence of his conservatism. He hated seeing "common" men with wealth which had heretofore been reserved only for the aristocracy. Southey also hated the source of this new wealth, rooted as it was, not in large land holdings, but in factories. To Southey, this new manufacturing system was "a system more tyrannical than that of the feudal ages, a system of actual servitude, a system which destroys the bodies and degrades the minds of those who are engaged in it."
Worse Off Without Factories
Macaulay’s reasoning, rooted much more thoroughly in reality, was that without the factory system there would be mass starvation. "When we compare our own condition with that of our ancestors," he said, "we think it clear that the advantages arising from the progress of civilisation have far more than counter-balanced the disadvantages arising from the progress of population. While our numbers have increased ten-fold, our wealth has increased a hundred-fold." Macaulay went on to remark that it was the very increase in wealth which had brought on the complaints of industrialization. Where wealth is great, he said, suffering is more obvious and thus, more loudly bewailed.
With the wealth of industrialization spreading rapidly to all classes of society, Southey was also concerned that government was not getting its share. Thus his favorite theme is that a people may be too rich, but a government cannot be. "A state," he says, "cannot have more wealth at its command than may be employed for general good, a liberal expenditure in national works being one of the surest means of promoting national prosperity; and the benefit being still more obvious, of an expenditure directed to the purposes of national improvement. But a people may be too rich."
Needless to say, Macaulay has a field day with such absurd logic, in spite of which it has survived to the present day in John Kenneth Galbraith’s The Affluent Society. "What does he mean by national prosperity?" Macaulay asks. "Does he mean the wealth of the state? If so, his reasoning runs thus: The more wealth a state has the better; for the more wealth a state has the more wealth it will have. This is surely something like that fallacy, which is ungallantly termed a lady’s reason. If by national prosperity he means the wealth of the people, of how gross a contradiction is Mr. Southey guilty. A people, he tells us, may be too rich; a government cannot; for a government can employ its riches in making the people richer. The wealth of the people is to be taken from them because they have too much, and laid out in works, which will yield them more."
"We are really at a loss," he concludes, "to determine whether Mr. Southey’s reason for recommending large taxation is that it will make the people rich, or that it will make them poor. But we are sure that, if his object is to make them rich, he takes the wrong course."
No Faith in Public Works
It is clear from this that Macaulay has no belief in the virtues of public works; particularly when government competes with private business. In this respect, he follows closely the reasoning of the classical economists that no one will invest in a free market without the expectation of profit. When government invests tax money, however, there will be no such expectation. Thus, with private investment there is a direct correlation between the motives of the investor and the utility of the work. The government does not invest to fill an economic need, but only a political one. To Macaulay, this results in ostentatious architecture, great roads in small towns, and canals built in some remote province. "The fame of public works," therefore, "is a much less certain test of their utility than the amount of toll collected at them."
Government spending could also be certain to attract a multitude of vultures to prey on the public treasury: "In a corrupt age, there will be direct embezzlement. In the purest age, there will be abundance of jobbing… In a bad age, the fate of the public is to be robbed outright. In a good age, it is merely to have the dearest and the worst of everything." The aim should be to confine government building to legitimate government needs. "Buildings for state purposes the state must erect," Macaulay said. "And there we think that, in general, the state ought to stop. We firmly believe that five hundred thousand pounds subscribed by individuals for railroads or canals would produce more advantage to the public than five millions voted by Parliament for the same purpose."
The King Knows Best
Macaulay finally boiled Southey’s system down to one fundamental principle: "That no man can do anything so well for himself as his rulers, be they who they may, can do it for him, and that a government approaches nearer and nearer to perfection, in proportion as it interferes more and more with the habits and notions of individuals." To Macaulay, such a view was incredibly naive and showed no understanding at all of history, economics, or human nature: "The division of labour would be no blessing, if those by whom a thing is done were to pay no attention to the opinion of those for whom it is done. The shoemaker, in the Relapse, tells Lord Foppington that his lordship is mistaken in supposing that his shoe pinches. ‘It does not pinch; it cannot pinch; I know my business; and I never made a better shoe.’ This is the way in which Mr. Southey would have a government treat a people who usurp the privilege of thinking."
The result of letting the government run everything could only lead to oppression. As Macaulay saw it: "Government, as government, can bring nothing but the influence of hopes and fears to support its doctrines. It carries on controversy, not with reasons, but with threats and bribes. If it employs reason, it does so, not in virtue of any powers which belong to it as a government. Thus, instead of a contest between argument and argument, we have a contest between argument and force. Instead of a contest in which truth, from the natural constitution of the human mind, has a decided advantage over falsehood, we have a contest in which truth can be victorious only by accident."
The answer was laissez-faire. "It is not by the intermeddling of Mr. Southey’s idol, the omniscient and omnipotent State," Macaulay concludes, "but by the prudence and energy of the people, that England has hitherto been carried forward in civilisation; and it is to the same prudence and the same energy that we now look with comfort and good hope. Our rulers will best promote the improvement of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment, by maintaining peace, by defending property, by diminishing the price of law, and observing strict economy in every department of the state. Let the Government do this: the People will assuredly do the rest."