Hamilton - Daniel Defoe and the Bank of England

In weakness we create distinctions, then
Believe that all our puny boundaries are things
Which we perceive and not which we have made.

(William Wordsworth, c.1799)

A novel and an organization would generally be regarded as unrelated things, members of different categories. One deals in airy matters of fiction, the other in brute economic realities. This book explores the proposition that the novel and the organization share fundamental characteristics of form, function and technique. That is to say, they work in the same way. We explore this idea by comparing the emergence of an early English novel by Daniel Defoe, Moll Flanders (1722), and an early English corporation, the Bank of England (1694). It seems to us that the period from which they emerged, sometimes called the Age of Projects (16801720), is inherent in, and inherited by, the form of the novel and the corporation respectively. They are projects of a projecting age. The metaphor of the project, the risky adventure, is taken from Defoes Essay upon Projects (1697) and is used as a lens through which to reveal the entangled relationship between the novel and the corporation. The eighteenth-century projector would now be called an entrepreneur; but in the eighteenth century the figure had not yet gained the mythological proportions which it attains in the late twentieth century. The darker side of the projector was well recognized. This was someone who was admired and feared. A schemer who engaged in fantastic speculation in order to convince others to invest in their imaginings, to give them credit and therefore substance. Fiction and fact relied on each other then, and it seems to us that the lesson of this book is that they still do.

Now we arent the first people to enter this territory. There is a respected body of literary criticism and cultural history that establishes connections between the eighteenth-century novel, finance, and capitalism

This relationship is belied by the gulfs of incomprehension that currently divide university Literature departments from Business schools. We want our readers to think about and challenge this division that assumes a matter-of-fact solidity to organizations whilst approaching novels as if they were mere commentary. This is an interdisciplinary book, in the sense that it lies between categories that are normally assumed to be discreet, comprehensible and solid. We want to show that they are actually rather dubious, puny boundaries that we have made, not things that are there in the world. Most importantly, this is a good story. A tale of risk, danger, pirates, treasure, deceit and daring-do. Its a tale we want people to read, enjoy and marvel at. The discerning reader, and of course thats you, might want to repeat parts of this tale to friends and colleagues, and the uncanny elements of our story will doubtless stir a sense of there being strange, accidental inevitabilities in all our lives.

Most of our tale is set at the close of the seventeenth century and the beginning of the eighteenth: a period of extreme inventiveness. The figure of Daniel Defoe, inventor, businessman, writer, politician and secret agent, characterizes the age. His first published work, An Essay upon Projects (1697), bottles this energy. It is a series of proposals for the social and economic improvement of the nation on banks, lotteries, seamen, womens education and many other topics. Defoe explains that the richness of ideas at this time was generated from the humour of invention, which produced new contrivances, engines, and projects to get money. One of the keenest and most thriving areas of invention was the emerging joint-stock companies. Colin Nicholson in Writing and Finance observes that there was a veritable rash of projects in the early 1690s and that in the period preceding the collapse of the South Sea Company in 1720, 200 insurance companies were floated in London alone.

Defoe seems to have coined the term The Projecting Age. He is characteristically astute in his attempt to define a project as understood at this time:

The building of Babel was a right project; for indeed the true definition of a project, according to modern acceptation, is, as is said before, a vast undertaking, too big to be managed, and therefore likely to come to nothing.

The essential ends of a project, he declares, in anticipation of Adam Smiths economic philosophy some seventy years later, are that it should attempt to fulfil public and private want. A project requires good providence, he argues, for some projects, although wildly unlikely, do succeed. He gives the example of William Phips project to search for sunken Spanish treasure, a project that, we reveal later, proves central to the story of the Bank of England.

Witness Sir William Phips voyage to the wreck; it was a mere project; a lottery of a hundred thousand to one odds; a hazard which, had it failed, everybody would have been ashamed to have owned themselves concerned in; a voyage that would have been as much ridiculed as Don Quixotes adventure upon the windmill. Bless us! That folks should go three thousand miles to angle in the open sea for pieces of eight! Why, they should have made ballads of it, and the merchants would have said of every unlikely adventure, It was like Phipss wreck-voyage. But it had success and who reflects upon the project?