One of the themes of Thomas Piketty’s book Capital in the Twenty-First Century (see previous post) is the importance of income from capital for the European upper classes prior to 1914. This was the result of a number of related factors: a high capital/income ratio, low growth and low inflation – so that capital held its value, and the returns from capital outstripped those from the growth of the wider economy, enabling the rich to hang on to their wealth.
Some of the best sections of Prof Piketty’s book are those in which he illustrates this from the novels of Honoré de Balzac and Jane Austen. For a modern reader, one of the striking features of Austen’s novels is people’s openness about one another’s wealth and income (such as Mr Darcy’s “10,000 pounds a year”). Piketty argues that this was largely because the two were interchangeable: for the upper classes, one’s income was almost entirely determined by one’s wealth, in particular one’s holdings of land. As there was no secret about the latter, there could be no secret about the former – and low inflation meant that amounts such as “1,000 pounds a year” (the threshold to a truly comfortable existence) retained a reasonably stable meaning over decades.
It would have been interesting if Piketty had taken some examples from novels later in the 19th century, though, to see what changes had occurred. I’m currently reading Daniel Deronda by George Eliot, a novel set in what is (in many ways) a very similar milieu to that of Jane Austen’s novels, that of the landed upper classes. However, it also has some telling differences, ones that illustrate some of the trends described by Piketty.
One important area of similarity (not least as a driver for the plot of both Austen’s novels and Daniel Deronda) is the impact on women of a system of wealth based on land. In Daniel Deronda, as in Pride and Prejudice or Sense and Sensibility, the “entail” is of central importance. “Entailed interests” meant that ownership of land passed down the male line. If a man had no sons, his nearest male relative would inherit his property – potentially leaving his wife and daughters destitute. This is the fate which looms over Elizabeth Bennet and her sisters in Pride and Prejudice, making Lizzie’s rejection of the marriage proposal from Mr Collins – the heir to Longbourn – a decision which threatens her family with homelessness and poverty. (As my wife pointed out to me today, this indicates the sheer revulsion that Lizzie must feel for Mr Collins: to put it bluntly, that she would prefer to see her mother and her sisters financially ruined than to have sex with Mr Collins.)
In Daniel Deronda, the villainous Henleigh Mallinger Grandcourt is the heir presumptive to Sir Hugo Mallinger, making him an attractive match (it would seem) for Gwendolen Harleth. It also gives him considerable power over the sonless Sir Hugo, since he is all too aware of Sir Hugo’s desire to make provision for his wife and daughters by buying out Grandcourt’s reversionary interest in their home.
However, other threads within the novel show how we have moved away from the early 19th century world of Austen’s novels. In Austen’s novels, individual members of the upper class may be more or less profligate, and incur greater or lesser debts, but in the end their wealth (being based on their land, and protected from dissipation by the fee tail) appears stable and safe. By the 1860s depicted by Eliot, though, things have changed: now we are in a world where a symbiotic relationship is developing between a rising bourgeoisie (for whom a “good marriage” can give them the upper-class respectability that mere “trade” could never provide) and the upper class (for whom marriage to a wealthy bourgeois heiress can provide much-needed capital). Hence the fate of Catherine Arrowpoint, whose family’s fortune leaves her fending off proposals from the likes of Lord Slogan (“an unexceptionable Irish peer, whose estate wanted nothing but drainage and population”) or Mr Bult, a rising MP, with prospects of a peerage, who “had the general solidity and suffusive pinkness of a healthy Briton on the central table-land of life.”
What had led to this change? I think we can find a clue to this by returning to Thomas Piketty. Piketty refers throughout his book to the two principal forms that capital took in the 19th century: agricultural land and government bonds. Both of these assets existed to produce rents, “that is, dependable, regular payments to [their] owners”:
In the classic novels of the nineteenth century, wealth is everywhere, and no matter how large or how small the capital, or who owns it, it generally takes one of two forms: land or government bonds. (Capital, p.113)
Of the two, government bonds were by far the more recent form of wealth, dating only from the previous century. They also (I speculate) provided a means by which the bourgeoisie could now accumulate fortunes to rival those of the landed upper class. After all, accumulating land at the expense of the upper class was far from easy, given the limited ability of landowners to alienate property held under an entail. Bonds, however, could be purchased and accumulated without waiting for existing upper class owners to feel the need to sell them.
One of Piketty’s charts (from p.116) appears to confirm this. Look at how the composition of British national wealth changes over the course of the 19th century, with the dominance of agricultural land being almost completely overhauled by that of “other domestic capital” (such as bonds). This process was about halfway to completion at the time when Daniel Deronda is set (the 1860s):
In short, it would have been interesting had Thomas Piketty looked in more detail at literary examples from later in the 19th century (he tends to jump straight from Austen to the character of Hockley in James Cameron’s Titanic). As we can see, some of the differences in plot dynamic between Jane Austen and George Eliot can be explained in terms of changing patterns of capital ownership during the half century or so between them.