Read Grand Pursuit: A History of Economic Genius Page 4


  When the new friends parted, Engels went home to Germany to pour out his charges of “murder, robbery and other crimes on a massive scale” against the British business class (and, by implication, Germany’s as well).21 Working in his family’s cotton thread factory had confirmed Engels’s feeling that business was “filthy.”22 He had “never seen a class so deeply demoralized, so incurably debased by selfishness, so corroded within, so incapable of progress, as the English bourgeoisie.” These “bartering Jews,” as he called the businessmen of Manchester, were devotees of “Political Economy, the Science of Wealth,” indifferent to the suffering of their workers as long as they made a profit and, indeed, to all human values except money. “The huckstering spirit” of the English upper classes was as repugnant as the “Pharisaic philanthropy” that they dispensed to the poor after “sucking out their very life-blood.” With English society increasingly “divided into millionaires and paupers,” the imminent “war of the poor against the rich” would be “the bloodiest ever waged.”23 As fast and fluent a writer as he was a talker, Engels finished his manuscript in less than twelve weeks.

  All the while, Engels badgered Marx to “Do try and finish your political economy book . . . It must come out soon.”24 His own book was published in Leipzig in July 1845. The Condition of the Working Class in England drew favorable reviews and sold well even before the economic and political crises that the author correctly forecast for “1846 or 1847” gave it the added cache of successful prophecy. Das Kapital, the grandiose treatise in which Marx promised to reveal the “law of motion of modern society,” took twenty years longer.25

  • • •

  In 1849, when Henry Mayhew, a London Morning Chronicle correspondent, climbed to the Golden Gallery atop St. Paul’s Cathedral to get a bird’s-eye view of his hometown, he found that “it was impossible to tell where the sky ended and the city began.”26 At nearly 20 percent a decade, the city’s growth “seemed to obey no known law.”27 By the middle of the century, the population had swelled to two and one half million. There were more than enough Londoners to populate two Parises, five Viennas, or the eight next-largest English cities combined.28

  London “epitomized the 19th century economic miracle.”29 The pool of London was the world’s biggest and most efficient port. As early as 1833, a partner in the Barings Brothers Bank observed that London had become the “center upon which commerce must turn.” London’s wet docks covered hundreds of acres and had become a prime tourist attraction—not least because of a twelve-acre underground wine cellar that gave visitors a chance to taste the Bordeaux. The smells—pungent tobacco, overpowering rum, sickening hides and horn, fragrant coffee and spices—evoked a vast global trade, an endless stream of migrants, and a far-flung empire.

  “I know nothing more imposing than the view which the Thames offers during the ascent from the sea to London Bridge,” Engels had confessed in 1842 after seeing London for the first time. “The masses of buildings, the wharves on both sides, especially from Woolwich upwards, the countless ships along both shores, crowding ever closer and closer together, until, at last, only a narrow passage remains in the middle of the river, a passage through which hundreds of steamers shoot by one another; all this is so vast, so impressive, that a man cannot collect himself.”30

  London’s railway stations were “vaster than the walls of Babylon . . . vaster than the temple of Ephesus,” John Ruskin, the art historian, claimed. “Night and day the conquering engines rumbled,” wrote Dickens in Dombey and Son. From London, a traveler could go as far north as Scotland, as far east as Moscow, as far south as Baghdad. Meanwhile, the railroad was pushing London’s boundaries ever farther into the surrounding countryside. As Dickens related, “The miserable waste ground, where the refuse-matter had been heaped of yore, was swallowed up and gone, and in its frowsy stead were tiers of warehouses, crammed with rich goods and costly merchandise. Bridges that had led to nothing, led to villas, gardens, churches, healthy public walks. The carcasses of houses, and beginnings of new thoroughfares, had started off upon the line at steam’s own speed, and shot away into the country in a monster train.”31

  The financial heart of world commerce beat in the “City,” London’s financial center. The financier Nathan Mayer Rothschild, not given to exaggeration, called London “the bank of the world.”32 Merchants came there to raise short-term loans to finance their global trade, and governments floated bonds to build roads, canals, and railways. Although the London stock exchange was still in its infancy, the City’s merchants and bill discounters attracted three times the amount of “borrowable money” as New York and ten times as much as Paris.33 Bankers’, investors’, and merchants’ hunger for information helped make London into the world’s media and communications center. “Anyone can get the news,” a Rothschild complained in 1851 when the advent of the telegraph made his carrier pigeon network obsolete.34

  London, not the new industrial towns in the north, boasted the biggest concentration of industry in the world, employing one in six manufacturing workers in England, nearly half a million men and women.35 That was roughly ten times the number of cotton workers in Manchester. The “dark satanic mills” in William Blake’s Jerusalem probably weren’t in the Coketowns of northern England. Like the monster Albion flour mill, which employed five hundred workers and was powered by one of James Watt’s gargantuan steam engines, they were more likely on the Thames in London.36 A popular 1850s travel guide refers to “water works, gas works, shipyards, tanning yards, breweries, distilleries, glass works the extent of which would excite no little surprise in those who for the first time visited them.”37 True, London had no single dominant industry such as textiles, and most of its manufacturing firms employed fewer than ten hands,38 but entire industries—printing in Fleet Street, paint, precision instruments in Camden, and furniture making around Tottenham Road—were concentrated in London. The vast shipyards at Poplar and Millwall employed fifteen thousand men and boys to build the biggest steamships and armor-plated warships afloat. But while factory towns like Leeds and Newcastle supplied the bulk of England’s exports, most of London’s manufacturers catered to the needs of the city itself. Wandsworth had its flour mills, Whitechapel its sugar refiners, Cheapside its breweries, Smithfield its cattle markets, and Bermondsey its tanneries, candle and soap makers. Mayhew called London the world’s “busiest hive.”39

  Above all, London was the world’s biggest market. Here one could get “at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs.”40 In the prosperous West End of London “everything shines more or less, from the window panes to the dog collars” and “the air is colored, almost scented, by the presence of the biggest society on earth.”41 Regent Street displayed the greatest collection of “watchmakers, haberdashers, and photographers; fancy stationer, fancy hosiers, and fancy stay makers; music shops, shawl shops, jewelers, French glove shops, perfumery, and point lace shops, confectioners and milliners” the world had ever seen.42

  Mayhew astutely attributed “the immensity of . . . commerce” in the city to “the unparalleled prevalence of merchant people in London, and the consequent vastness of wealth.”43 The Economist boasted, “The richest persons in the Empire throng to her. Her scale of living is most magnificent; her rents highest; her opportunities of money-making widest.”44 One in six Britons lived in London, but London accounted for an even bigger share of national income. Incomes were, on average, 40 percent higher than in other English cities, not only because London had more wealthy residents but also because London wages were at least one-third higher than elsewhere. Her huge population and vast income made London by far the greatest concentration of consumer demand in the world. The economic historian Harold Perkin argues that “Consumer demand was the ultimate economic key to the Industrial Revolution,” providing a more powerful impetus than the invention of the steam engine or the loom.45 London’s needs, passion for nov
elty, and growing spending power supplied entrepreneurs with compelling incentives to adopt new technologies and create new industries.

  If London attracted some of the richest individuals on earth, it was also a magnet for a large number of the poorest. When Mayhew referred to “the unprecedented multitude of individuals attracted by such wealth to the spot,” he meant not only the shopkeepers, tradesmen, lawyers, and doctors who catered specifically to the rich, but also the legions of unskilled migrants from the surrounding rural counties who came to work as servants, seamstresses, shoemakers, carpenters, dockhands, casual laborers, and messengers, or, failing that, as petty criminals, scavengers, and prostitutes.46 The juxtaposition between rich and poor was rendered more striking by the exodus of the middle classes to the suburbs and, more significant in the minds of observers, by the universal assumption that London presaged the future of society. Poverty was not, of course, new. But in the country, hunger, cold, disease, and ignorance appeared to be the work of nature. In the great capital of the world, misery seemed to be man-made, almost gratuitous. Wasn’t the means to relieve it at hand, actually visible in the form of elegant mansions, elaborate gowns, handsome carriages, and lavish entertainments? Well, no. It only looked that way to unsophisticated observers who had no idea that letting the poor eat cake for a day or two would hardly solve the problem of producing enough bread, clothing, fuel, housing, education, and medical care to raise most Englishmen out of poverty. Mayhew was not alone in naïvely supposing that the rows of brick warehouses, “vast emporia,” contained wealth “enough, one would fancy, to enrich the people of the whole globe.”47

  Journalists, artists, novelists, social reformers, clergymen, and other students of society were drawn to London as “an epitome of the round world” where “there is nothing one cannot study at first hand.”48 They came there to see where society was heading. While eighteenth-century visitors were apt to focus on sin, crime, and filth, those who flocked to Victorian London were more often struck by its extremes of poverty and wealth.

  • • •

  November was the worst month for air quality in the world’s biggest and richest metropolis, observed Charles Dickens in Bleak House.49 On the twenty-ninth of that month in 1847, Friedrich Engels and Karl Marx struggled up Great Windmill Street toward Piccadilly, heads bowed and trying their best to avoid slipping in the ankle-deep mud or being trampled by the human throng. Their extreme myopia and the sulfurous yellow London fog obscured everything more than a foot ahead.

  Engels, still as erect as a cadet, and Marx, still with a jet-black mane and magnificent whiskers, were in London to attend a congress of the Communist League, one of many tiny groups comprised of Central European utopians, Socialists, and anarchists, as well as the odd Chartist and occasional Cockney clerk in favor of male suffrage, that flourished in the relative safety of English civil liberties and lenient immigration law. When the recent collapse of a railroad boom spread financial panic in London and on the Continent, the league had hastily convened a meeting to hammer out its hitherto somewhat nebulous goals. Engels had already convinced the league to drop its insipid slogan, “All Men Are Brothers,” in favor of the more muscular “Proletarians of All Countries Unite!” He had composed two drafts of a manifesto that he and Marx meant for the league to adopt. They had discussed how they could shoulder aside those in the leadership who were convinced that workers’ grievances could be addressed without overthrowing the existing order. “This time we shall have our way,” Engels had sworn in his most recent letter to Marx.50

  They finally found their way to Soho and the Red Lion pub. The headquarters of the German Workers’ Educational Union, a front for the illegal league, was on the second floor. The room had a few wooden tables and chairs and, in one corner, a grand piano meant to make refugees from Berlin and Vienna stranded in “unmusical” London feel at home.51 The air smelled of wet woolens, penny tobacco, and warm beer. For ten days, Engels and Marx dominated the proceedings, navigating the atmosphere of conspiracy and suspicion like fishes in water.

  At one point, Marx read Engels’s draft manifesto out loud. One delegate recalled the philosopher’s relentless logic as well as the “sarcastic curl” of his mouth. Another remembered that Marx spoke with a lisp, which caused some listeners to hear “eight-leaved clovers” when he actually said “workers.”52 Some delegates repudiated Engels and Marx as “bourgeois intellectuals.” At the end of the ten days, however, “all opposition . . . was overcome.”

  The congress voted to adopt their manifesto and agreed to declare itself in favor of “the overthrow of the bourgeoisie, the abolition of private property, and the elimination of inheritance rights.” Marx, who had already burned through several family bequests but was, as usual, broke again, was commissioned to draft the final version of the league’s call to arms.53

  • • •

  Engels had wanted the pamphlet to be a “simple historical narrative” and proposed that it be called The Communist Manifesto. He thought it important to tell the story of modern society’s origins in order to show why it was destined to self-destruct. He envisioned the Manifesto as a sort of Genesis and Revelation rolled into one.54

  Three years after Engels introduced Marx to English political economy, Marx was already calling himself an economist.55 He had also absorbed the evolutionary theories that were beginning to pervade the sciences. Like other left-wing disciples of Hegel, he viewed society as an evolving organism rather than one that merely reproduced itself from one generation to another.56

  He wanted to show that the industrial revolution signified more than the adoption of new technologies and the spectacular leap in production. It had created huge cities, factories, and transport networks. It had launched a vast global trade that made universal interdependence, not national self-sufficiency, the rule. It had imposed new patterns of boom and bust on economic activity. It had torn old social groups from their moorings and created entirely new ones, from millionaire industrialists to poverty-stricken urban laborers.

  For a dozen centuries, as empires rose and fell and the wealth of nations waxed and waned, the earth’s thin and scattered population had grown by tiny increments. What remained essentially unchanged were man’s material circumstances, circumstances that guaranteed that life would remain miserable for the vast majority. Within two or three generations, the industrial revolution demonstrated that the wealth of a nation could grow by multiples rather than percentages. It had challenged the most basic premise of human existence: man’s subservience to nature and its harsh dictates. Prometheus stole fire from the gods, but the industrial revolution encouraged man to seize the controls.

  Engels and Marx perceived more clearly than most of their contemporaries the newness of the society in which they came of age, and tried to work out its implications more obsessively. Modern society was evolving faster than any society in the past, they believed. The consciousness of change and changeability was a breach in the firmament of traditional truths and received wisdom. In Marx’s memorable phrase, “All that is solid melts into air.”57 Surely the vividness of their perceptions owes something to the fact that they came to England as foreign correspondents, so to speak, and that they came from a country that had yet to go through its industrial revolution. The trips from Trier and Barmen in Germany to London were journeys forward in time. Hardly anyone, except perhaps Charles Dickens, was as simultaneously thrilled and revolted by what they witnessed. They professed to despise England’s “philistine” commercial culture while envying her wealth and power. Their observations convinced them that in the modern world, political power grew not from the barrels of guns but out of a nation’s economic superiority and the energy of its business class.

  England was the colossus astride the modern world. “If it is a question of which nation has done most, no one can deny that the English are that nation,” Engels admitted.58 Industry and trade had made her the world’s richest nation. Between 1750 and 1850, the value of goods and services
produced in Britain every year—her gross domestic product—had quadrupled, growing more in a hundred years than in the previous thousand.59 The Manifesto emphasized the unprecedented explosion of productive power that Engels and Marx believed would determine political power in the modern world:

  The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together . . . It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.60

  Marx and Engels had no doubt that England’s capacity to produce would continue to grow by multiples. But they were convinced that the distributive mechanism was fatally flawed and would cause the whole system to collapse. Despite the extraordinary accession of wealth, the abysmally low living standards of the three-fourths of the British people who belonged to the laboring classes had improved only a little. Recent estimates by Gregory Clark and other economic historians suggest that the average wage rose by about one-third between 1750 and 1850 from an extremely low level.61 True, the laboring classes were now far more numerous, the English population having trebled. And they were not as miserable as their German or French counterparts.

  But advances in some areas were balanced by retrogressions elsewhere. For one thing, most of the gain in pay occurred after 1820, and the lion’s share went to skilled craftsmen and factory operatives. Any improvement in the wages of unskilled laborers, including farmworkers, was marginal and was offset, as Malthus had feared, by bigger families. Employment was less secure because manufacturing and construction were subject to booms and busts. Hours were longer, and wives and children were more liable to work as well.