The Ethics of Risk in Elizabeth Gaskell’s North and South: The Role of Capital in an Industrial Romance

The cultural shift in attitudes toward risk in the 1850s—specifically, the emergent need to avoid risk—is marked by the passage of limited-liability legislation such as the Joint Stock Companies Act of 1856 and the continuing rise of the insurance industry.¹ Individual investors were no longer required to bear the losses of corporate failure, while insurance companies relied on the aggregation of both capital and information to calculate and compensate risk for the individual. Risk was to be managed by an impersonal collective in order to protect the individual from bearing any of its damaging consequences. Elizabeth Gaskell’s novel North and South (published serially in Household Words from September 1854 to January 1855) enters the discourse of mid-Victorian risk by articulating a vision of economic activity that takes the acceptance of risk rather than risk management as its central ethical precept. Margaret Hale’s and John Thornton’s decisions regarding whether or not to invest their capital in particular enterprises demonstrate the persistence of an older understanding of ethical financial practice in which individuals must be willing to risk loss and bear the responsibility for such risk rather than asking others to do so for them.

Influential critical readings of North and South from the 1980s and 1990s do not consider Margaret’s and Thornton’s attitudes toward investment capital to be important in understanding how Gaskell presents her social critique. Such readings argue that Gaskell’s critique fails due to her inability to reconcile the private and public spheres of action in both her plot and choice of generic conventions. More recently, readers of the novel (Dredge; Longmuir) have addressed this perceived failure by focusing on women’s potential to traverse the public and private spheres in the novel. However, while critics such as Mary Poovey have begun to draw the scholarly community’s attention to finance in the Victorian novel, there has not yet been an extended examination of finance in North and South. This essay argues that the distinct and competing ethical claims of industry and capital meaningfully structure the ethical system of Gaskell’s novel and thus help to explain and define the generic contours of what I call, following Jerome Meckier’s coinage, the industrial romance.² Such a term replaces the categorization of North and South, and potentially other novels, as social problem novels in order to demonstrate—by looking at questions raised by financial risk—how a realistic depiction of industrial society can be reconciled with a romantic presentation of its impact on domestic, private, and individual concerns. Margaret’s and Thornton’s idiosyncratic choices when deploying financial capital reject the science of probability and its dependence on the aggregate. Whereas political economists in the mid-nineteenth century proposed a model of human behaviour governed by self-interest, Gaskell offers her readers a hero and heroine who embrace the intimate and affective aspects of economic decision-making, and thus asks them to recognize the significance of traditionally feminine sentiments in the pursuit of ethical financial action.

Ethics and finance: from anti-usury tracts to the precepts of political economy

The significance of risk in articulating an ethics of economics has a long and distinguished intellectual genealogy.³ For Martin Luther in 1524, “lending without risk” was one of the “sinful faults of trade” (260). His treatise “Trade and Usury” notes, “it is decreed according to Scripture that no one shall become surety for another, unless he is able and entirely willing to assume the debt and pay it himself” (253). In a later British context, Robert Bolton’s A Short and Private Discourse betweene Mr. Bolton and one M.S. concerning Usury (1637) presents the usurer as unethical because he undertakes a “covenant for certaine gaine, where it is uncertaine, whether the Borrower shall gaine at all or loose” (61). This early Protestant resistance to the economic practice of risk avoidance filters down to the Victorian period through such figures as John Ruskin, who, as Daniel Wong argues, “created a counter-politico...