The evolution of financialization -- 1849 edition

On the constitutional and moral right or wrong of our National Debt by Francis William Newman (1849), a Google Book, via Google Ngrams and Search.

I should say first, so far I have only read the Introduction.

Francis William Newman, philosopher, does not argue in the Introduction for or against paying down the national debt. He does not argue for or against expanding that debt. The argument he lays out is in opposition to the unimpeded progress of financialization and, I suggest, to financialization itself.

Those who traffic in the Public Debt of a country have, in one important respect, an interest directly the opposite to the fixed creditor; just as the speculators in Railway Stock have an opposite interest from the shareholders in general.

The next excerpt opens by saying most people who hold government debt think of it as "a permanent investment". This may not be true today; surely it is at least somewhat less true today than it was in 1849. Do not dismiss what Newman says on the grounds that it is no longer valid. Think of it instead as something that became no longer valid through a gradual process that is today called "financialization". If you make it past the first half of the sentence, you will see why I say this:

Now, inasmuch as the great mass of the English funded debt is held either by trustees or by persons who have selected it as a permanent investment, these have nothing to gain, but in prospect something to lose, by concealment and by inflated hopes: while, on the contrary, it is unfortunate that the useful class of men who from month to month buy and sell largely in the Funded Debt, have a direct and powerful temptation to deprecate all inquiry into its history, its theory, and its prospects.

He reminds me of Adam Smith. Maybe it's the "philosopher" thing. Anyway, regarding that "useful class of men":

Now, since it is this very class of persons, the great money-dealers, who most affect the action of the Government, the opinion of the aristocracy and the utterances of journalists ... it is not surprising, that to direct the public mind at all to the subject, is regarded as mischievous, and that whoever ventures to unsettle the prevalent notions concerning it, is called reckless and destructive.

Newman says that these "useful" men, these rentiers, are the influencers of government, of other wealth holders, and of the media, and they don't want anyone to challenge their dominance. Then, clearly arguing against financialization, Newman writes:

To the permanent holders of public guarantees, it is of first importance that doctrines which utterly disavow their rights should not advance, unopposed, because ignored.

To the many (who think of their holdings of government debt as a "permanent" investment) it is highly important, Newman says, that the few with "an opposite interest" do not win the argument by suppressing argument.