Bagehot on “the comparative torpor of the Latin races”

Walter Bagehot seemed to  anticipate all our our modern policy dilemmas.  Here he provides the optimal solution for the euromess:

Besides, it must not be forgotten that Germany will have a currency to choose: none of her many currencies are suitable to modern commerce;  and she ought to have—and will have, we may be sure, ere long—one uniform coinage and one single money of account.  It is very likely, considering her great intercourse with American and England, that she might choose to select the money which we put forward rather than that which France puts forward. In that case there would be one Teutonic money and one Latin money; the latter mostly confined to the West of Europe, and the former circulating through the world.  Such a monetary state would be an immense improvement on the present.  Yearly one nation after another would drop into the union which best suited it; and looking to the commercial activity of the Teutonic races, and the comparative torpor of the Latin races, no doubt the Teutonic money would be most frequently preferred.  In this case as in most, the stronger would daily come to be stronger, and the weaker daily be—in comparison if not absolutely—weaker.

HT:  Harold James

Update: Great comment left by “otto” below:

I can’t help but wonder about the opinion of U.S fruit and vegetable farmers on this point and whether, particularly if you asked them around harvesting time, they consider Latinos burdened with more torpor than Anglosaxons.


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16 Responses to “Bagehot on “the comparative torpor of the Latin races””

  1. Gravatar of otto otto
    12. December 2011 at 07:27

    Mr. Sumner,

    I can’t help but wonder about the opinion of U.S fruit and vegetable farmers on this point and whether, particularly if you asked them around harvesting time, they consider Latinos burdened with more torpor than Anglosaxons.

  2. Gravatar of johnleemk johnleemk
    12. December 2011 at 10:18

    otto,

    Brings to mind a link someone posted in the comments a week or two ago, to a paper arguing that the Japanese and Germans used to be perceived as lazy and individualist. Someone posted an interesting rebuttal to that, but I think it’s definitely plausible that cultural stereotypes do change over time.

  3. Gravatar of W. Peden W. Peden
    12. December 2011 at 10:31

    Johnleemk,

    You don’t even have to go as far back as the Germans and Japanese. The (non-emigrant) Indians used to be regarded as astoundingly hopeless, fatalist, unenterprising and the paradigmatic example of “Hindu growth”. People came up with all kinds of explanations for the failure of India to grow, many of them highly spurious.

    Does anyone today think that India is culturally predetermined to be a static and unenterprising nation?

  4. Gravatar of Becky Hargrove Becky Hargrove
    12. December 2011 at 11:02

    The current productive / less productive cultural issue is not unlike the debate in higher education where wide swathes of potential studies are deemed either appropriate or ‘worthless’.

  5. Gravatar of Steve Steve
    12. December 2011 at 11:07

    Third variable problem

    It’s not the Latin, it’s the geography

  6. Gravatar of genauer genauer
    12. December 2011 at 11:39

    otto,

    being a real teutonic myself, and when you use the word “eurobonds” I will show you my furor, I remember similar comments about the slavs (Poland, etc.) who work the fields in Germany, save their money, and now, like Sikorski, tell the world a few things about Kant’s categorical imperative.

  7. Gravatar of anon anon
    12. December 2011 at 13:05

    Did William Bagehot understand monetary theory? The issue is not differing productivity in the long run, since the price level can adjust to equalize this; the problem is with out-of-sync business cycles. (Even these could be solved with countercyclical fiscal policy, or capital controls, or by using taxes/subsdies on investments. As it turns out, having multiple currencies is more efficient than any of those proposals.)

  8. Gravatar of Bogdan Bogdan
    12. December 2011 at 14:11

    This post should have contained a footnote explaining, particularly for the present American readers, that the word race used here is not a biological concept, invariably related to skin color, but an ethno-cultural concept as conceived by the post-Kantian philosophy of Johann Friedrich Herbart and further specified later on, around the time Bagehot writes, by Moriz Lazarius in his Volkerpsichologie. It related the common origins of different populations that sprang out from the mytical Adam, as done in historical research, with certain cultural and civilisational characteristics. Herbart was much responsible for the German national awakening, and the Volkerpsichologie fueled nationalism all over Europe and, much later, the chauvinism of different nationalities, especially when it was mixed with Darwinism and other ideas, but it was initially just a reaction against a sort of French Enlightment-inspired rationalistic imperialism which held that cultural differences had absolutely no importance and that more developed peoples had the mission and even the right to civilise the less developed peoples, which were destined to disappear – as in fact Napoleon saw his campaigns and his empire.

    P.S. David Hume also noted in his journal, during a trip there in the 18th century, the commercial acumen and hard working culture of the Germans and predicted that, if the German lands were to unite, they would dominate Europe…

  9. Gravatar of otto otto
    12. December 2011 at 15:57

    Quite the honour to see my words polluting your post up there, Mr Sumner. Interesting comments thread as well. It all brings to my mind’s eye that B&W photo of the man wearing the sandwich board in the 1930′s that said “Will Work For Food”.

    Or conversely, once you got the food somebody else can do the work for you.

  10. Gravatar of Morgan Warstler Morgan Warstler
    12. December 2011 at 16:08

    Why exactly do the lazy need inflation?

  11. Gravatar of ssumner ssumner
    12. December 2011 at 18:23

    Everyone, I agree with pretty much all the comments, so I won’t respond individually.

  12. Gravatar of ssumner ssumner
    12. December 2011 at 18:23

    I should add this this was of course meant as a joke.

  13. Gravatar of Mike Sax Mike Sax
    13. December 2011 at 08:38

    “the data in the article makes a mockery of all the claims that Britain is trying to engage in “expansionary austerity.” Since when is a budget deficit of 8.4% of GDP three years after a recession “austerity?” Because the deficit used to be 11.2% of GDP a few years back? Yes, and the term “sobriety” describes a drunk who throws back 8 whiskey sours on Saturday night, because on Friday night he had 11 drinks. So I have no complaints about the fiscal “austerity,” but I’m still trying to figure out what’s wrong with Britain?”

    So you have no complaints about fiscal austerity, so this means Cheney was wrong when he said, “Reagan proved deficits don’t matter.” Please note if you say yes you are disagreeing not only with Cheney but with Reagan.

    Your problem is that like all deficit hawks you make a fetish out of a balanced budget because you really believe that the bond vigilantes are just around the corner.

    If so why have they not touched U.S. treauries? After S&P made a big to do out of cutting our rating in the Summner yields went further down. How do you explain this if deficits do in fact matter as much as you hawks say it does?

    Britain too, despite its deficit has been spared the harsh discipline of the vigilantes who have only picked on the euro countries. A hint: sometimes causation and correlation do go together.

    On the subject of defcitis, high borrowing costs don’t even correlate with the deficits so we need not ask about causation.

    As you think deficits do matter you either don’t support Gingrich’s nex tax plan which plans to add close to $1 trillion a year to the deficit-currently the entire deficit is about $1 trillion-or you do which means either you don’t think deficits matter as much as you say or you plan to cut about $1 trillion more in government spending a year to make up for it. I wonder which it is?

    One more point that all the deficit hawks seem not to understand is that the recession itself is what makes defcits so deep, between the loss in tax revenues and the kick in of various “economic stabilizers.”

    If you notice the more they impose austerity in the periphery in the EU the worse it gets. If you realy are worried about defcits-there is no reason to be so preoccupied-you wouldn’t call for deep spending cuts.

    In truth the countries that are in trouble don’t share the common trait of all being “fiscally irresponsbile’ but of being in teh EU strait jacket with no national currency and lender of last resort.

    While I agree with your criticism of the Econmist article and your ideas of boosting AD by monetary policy to the extent that you buy into the fetish over defcits-in the US deficits only matter when a Democrat is President, Gingrich already has told us they wont if he’s elected-this is the whole reason the EU is broken and wont fix itself. It thinks that the solution is balanced budgets, as if all these countries can really have both fiscal and trade surpluses at the same time.

    Last week the EU’s new agreement was about nothing but further trying to implement austerity measures-it increased the actual bailout fund by peanuts and this it wants the IMF to do.

    As self-righteous as Germany is you would never remember that they were the first country that could only gain admittance to the euro after making an exception on the rules for deficit as % of GDP. Now the sick man of Europe is well and conveniently forgets that.

  14. Gravatar of grcridlan grcridlan
    13. December 2011 at 09:42

    Language problem. Bagehot does not by any stretch of the imagination mean to refer to Mexico as “Latin”. He means those lazy Greeks and Italians.

  15. Gravatar of gnikivar gnikivar
    13. December 2011 at 10:17

    @ W Peden – Also keep in mind that culture changes. The servants that clean our house in India are saving to send their daughters to private school. Thousands of people are starting new businesses every year. Dozens of students from rural areas, most of castes that would have been once considered shudra – servant, looking to further their education. Over the last couple of decades, peoples perceptions of what they can and cannot do have transformed.

  16. Gravatar of ssumner ssumner
    13. December 2011 at 14:32

    Mike Sax, You said;

    “Your problem is that like all deficit hawks you make a fetish out of a balanced budget because you really believe that the bond vigilantes are just around the corner.”

    I said I have no problem with the British government running a deficit of 8.4% of GDP 3 years after a recession, and you claim I make a “fetish about balanced budgets?”

    None of the other comments you attribute to me are even close to being accurate. Since I don’t believe any of the things you falsely claim I believe, there is no point in me even responding to your silly but very long post.

    grcridlan, He would certainly include Spaniards, as well as other countries that are ethnically Spanish.

    gnikivar, Good point.

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