William Morris, whose words these are, transformed the look of wealthy English homes. His hand-crafted luxury furnishings were everywhere. The i-mag of 1872 might well have featured him, as a great designer and businessman. But Morris was also a poet with strong views about the economy. He belongs to a long tradition. As an earlier writer, Daniel Defoe, once confessed:
Writing upon trade was the Whore I really doted upon, and designed to have taken up with.
Shortly after Robinson Crusoe, Defoe gave us the ‘Complete English Tradesman’ one of the first manuals for the aspiring businessman. Retail therapy was alive and well in the 1720s. He imagines a customer demanding to inspect bolt after bolt of cloth, spending nothing and leaving without a word:
-Did your Ladyship try him as you said you would?
-Try him! I believe he has tumbled three thousand pounds’ worth of goods for me…
Having endured all this with imperturbable calm (Madam… don’t speak of trouble for that is the duty of our trade…), the merchant goes on to make a big sale and acquire a customer for life.
Defoe understood that credit, even more than money itself, fuelled the economy in peace and armed the nation in war. Though powerful, it was a ‘coy mistress’, to be managed with the utmost care The Bank of England was founded in 1694 as a private venture. Barely three years later, in his Essay on Projects (1697), Defoe proposed doubling the Bank’s capital, changing its remit and obliging its owners to take the public good into equal concern with their private interest.
A century on, Coleridge celebrated the national debt for its role in defeating Napoleon; but warned that financial excess led to slumps, with appalling social consequences. He described the credit cycle (‘Icarian credit’) in terms that foreshadow today’s ‘Minsky moment’. The financial crash would not have surprised him, as it did the experts. At roughly the same time, Shelley warned that allowing private banks to create credit would skew the economy towards the luxuries of the rich and dilute the earnings of the poor. He deplored the national debt, as a device to saddle the poor with the cost of the war, while creating a new class of idle rentiers.
Meanwhile, Walter Scott managed to scupper banking reforms proposed by London that would have undermined fledgling Highland industries. As the saviour of the Scottish pound, his image has adorned it ever since. Jonathan Swift led an equally successful campaign in the 1720s, to save the Irish penny piece. His greatest satire, the ‘Modest Proposal’ – that Irish babies be reared for the rich man’s table – was a protest against trade restrictions then crippling the Irish economy.
Swift and Defoe pre-date the birth of ‘political economy’. By the time of Shelley, Scott and Coleridge it had become society’s unspoken religion. From the beginning, poets took against the new creed which they saw as a crude utilitarian calculus, based on a completely false view of human nature and leading to conclusions both mistaken and cruel. ‘Academic silos’ lay far in the future; literary artists thought they could do better than economists and John Ruskin, for one, was not shy of saying so:
The following pages contain, I believe, the first accurate analysis of the laws of Political Economy which has been published in England.
Bernard Shaw made a study of economics, wrote about it all his life and co-founded the LSE but had no time for the profession:
You will find quite a number of professional economists who know nothing of political economy and never will. They are attracted to it by their natural incapacity for it, just as, on the stage, the man who is naturally a comedian craves the tragedian’s part…
Their critique of economics was often well-founded. Dogmas they attacked were later shown to be nonsense, like the ‘Iron Law of Wages’ (the idea that wages would inevitably revert to a basic subsistence level). But those who gave up on markets altogether went badly astray, looking either backwards to medieval guilds or forward to communism. Ezra Pound (author of ‘The ABC of Economics’) set out to expose an unjust financial system and ended up as a supporter of Mussolini and fascism.
Looking back, what lessons can we take from all this? Poets came in every political flavour but one message was common to all: when profit is society’s only goal, or when most of it comes from financial engineering, the social contract will fray and a backlash will surely follow. Perhaps they are also telling us that economics is too important to leave to economists (as several prominent economists have recently said). Economic ideas are part of the air we breathe: like the poets, we should not be afraid to challenge them if they seem to make no sense.
Former diplomat John Ramsden; his last post was as British Ambassador to Croatia (2004-2008) is the author of forthcoming The Poets’ Guide to Economics, published by Pallas Athene Books on the 16th of June – available from all retailers (bricks & mortar and digital).