The Practical Economics of Walter Bagehot

Walter Bagehot is an excellent example of the mid-Victorian polymath. He was a banker, journalist, editor, biographer, literary critic, economist and political analyst. The educated reader of today remembers him as the author of The English Constitution, which, though published in 1867, remains one of the best introductions to the workings of the Westminster political system. Economists, on the other hand, vaguely recall him as the monetary commentator who wrote Lombard Street (1873b) and edited The Economist (1861–1877). Only a few historians of economic thought cite Bagehot for his participation in the English Methodenstreit. He played a significant role in this largely forgotten Victorian debate between the historical and orthodox economists. He was one of the first orthodox economists to respond to the historicist challenge, and, in doing so, he articulated a highly controversial relativist interpretation of the orthodox doctrines. Specifically, in response to the historicist claims that recent evidence gathered from custom-bound societies falsified the orthodox