Sebastian Mallaby
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Which brings one back to the liberal-
ism o the present. Bagehot’s rumina-
tions on the theatrical branch point to
the role o emotion in politics. The
United Kingdom’s largely ornamental
monarchy mattered precisely because it
bypassed reason, making it devilishly
potent. “So long as the human heart is
strong and the human reason weak,”
Bagehot explained, “royalty will be
strong because it appeals to diused
feeling, and republics weak because they
appeal to the understanding.” I that
judgment is accurate, this century’s
largely postmonarchical democracies are
in trouble. Today’s most potent emo-
tional manipulation comes not from
scenic royals but from online provoca-
teurs and conspiracy theorists. Their
eorts serve not to legitimize sages like
Bagehot but to sow skepticism about
the expert establishment.
Grant has written a gem o a book:
entertaining, wry, and gloriously eccen-
tric. Readers learn that the mud in
London was 57 parts horse dung and
that Bagehot played “zestful games o
cup-and-ball” wearing—yes—a mono-
cle. Along the way, they get a nasty
feeling that even the greatest liberals
have feet o clay and that the Victorian
version o the radical center enjoyed a
deference that is inconceivable today.
But there is also a positive lesson to be
drawn, one that is less about policies
than about temperament. Liberals, as
Bagehot himsel put it, should be “heed-
less oÊ large theories and speculations.”
Their duty, above all, is to be right—not
theoretically but practically.∂The stability o the Ãnancial system thus
depended on the actions o a central bank
that formally denied responsibility for it.
It would be better, Bagehot urged, to
recognize reality. Banks would inevitably
need bailing out, so the important
question was how to do it properly. To
this end, Bagehot propounded his famous
formula: central banks should lend
liberally but at high interest rates and
against good collateral. To an extent
that Grant is unwilling to acknowledge,
this formula has worked well. Even the
Fed’s enormously openhanded 2008
bailouts were made on terms that were
suciently Bagehotian to generate a
proÃt for taxpayers.
GRACE NOTES OF DEMOCRACY
Bagehot’s second lasting achievement
was his 1867 book, The English Constitution.
As he had done with central banking, he
took aim at a phenomenon that had
not been codiÃed (the British having
never adopted an ocial constitution)
to explain how it actually functioned.
Bagehot’s central observation was that the
British government consisted o two
parts: the “ecient” and the “digniÃed,”
or “theatrical.” The ecient segment—
the cabinet, administrative departments,
and the committees o Parliament—did
the work. The theatrical segment—the
queen, the nobility, and the decorative
rich—might appear, “according to abstract
theory, a defect in our constitutional
polity,” but these apparently superÁuous
adornments played the vital role o
inspiring deference from the “vacant
many.” The wisdom oÊ learned states-
men—here Bagehot was no doubt think-
ing oÊ himself—could be turned into
government policy thanks to the nar-
cotic properties oÊ bejeweled duchesses.