BOOK REVIEW / Paper profits and high passions: 'The Pursuit of Reason: The Economist 1843-1993' - Ruth Dudley Edwards: Hamish Hamilton, 30 pounds

JAMES WILSON, the founder of the Economist, wanted to be a lawyer. His Quaker father disapproved, so he became a businessman instead - an experience of huge significance to his journalism, if not to his bank balance. Ruth Dudley Edwards has made a lengthy assessment of his creation, which she sums up with admirable clarity: 'The Economist was founded in 1843 to campaign for free trade, laissez-faire and individual responsibility through the medium of rational analysis applied to facts: its good fortune is that both its principles and its methods remain relevant 150 years later.'

The author manages to transmit Wilson's zest and zeal in the cause of free trade: it is good to be reminded of the passion of the debate at a time when free trade again hangs in the balance. She is perhaps less successful in articulating the other great raison d'etre of the Economist's life: interpreting America to the British, and (increasingly important) the world to America. For that you must turn to A1astair Burnet's The Economist on America (Hamish Hamilton pounds 20), which displays an acute understanding of the paper's long and successful involvement in the United States.

Even its earliest editors understood, and more remarkably did not resent, the growing US weight on the Anglo- American see-saw. They held that free trade between Britain and America would be the mechanism for spreading benefits worldwide - a good, powerful and necessary faith, now as then.

The Pursuit of Reason does not, of course, ignore the Economist's special relationship with America. But it is a book of people as much as ideas. It gives an excellent account of the years of the six Wilson daughters, in whose hands the Economist remained right up until the 1920s. Not that this petticoat government of the paper ensured its consistency on female emancipation; and perhaps the Economist's early promotion of women journalists (a noted feature of the paper in the 1940s and 1950s) can be ascribed more to a ruthless pursuit of cost-effectiveness than to any fading echoes of the Misses Wilson's influence. Geoffrey Crowther, who is said to be the paper's greatest 20th-century editor, argued with unattractive frankness that you could get a first-class woman for the price of a second-class man.

At least Eliza Wilson got herself, and the paper, a first-class male celebrity: her husband was the Economist's most famous editor, Walter Bagehot. Ruth Dudley Edwards does well by Bagehot - if anything perhaps a little too well. Ferdinand Mount, whose recent book on the British constitution contains a devastating indictment of Bagehot's 'quick, bright, coarse mind', deserves more of a response than he receives in The Pursuit of Reason.

But Ruth Dudley Edwards does tell a good story: the narrative flows easily, and well, along the channels of the Economist's history. If it gets a bit lost in the delta of modern times, that is perhaps the inevitable fate of the contemporary biographer.

The Economist is a tremendous postwar success story. Between 1963 and last year, its circulation rose from less than 70,000 to more than half a million. The success has been achieved largely overseas: like so many British achievements, the Economist has greater recognition abroad than at home. With its British circulation now barely a fifth of the total, its rootlessness may yet cause it problems. Nevertheless, it has a worldwide reputation second to no other publication of its kind; there is, in fact, no other publication quite like the Economist. Few can look back, as its three great editors of modern times (Alastair Burnet, Andrew Knight and Rupert Pennant- Rea) are able to, on such unbroken success in raising circulation without sacrificing quality.

They all became editor well before their 40th birthday, just as the magazine's newest editor, Bill Emmott, has also done: not the least of the Economist's successful peculiarities has been the magisterial tone sounded by generations of thirtysomethings. But behind them one should give credit - as they would - to the Economist's enduring old guard. And most of all to its former deputy editor, Norman Macrae, now 70, with a mind as fresh and handwriting as awful as ever, who made the outstanding contribution to the Economist's anniversary issue.

Ruth Dudley Edwards gives due weight to Norman Macrae's influence and prescience: on Japan, against the Club of Rome, about the impact of technological change. Sometimes, however, things went splendidly wrong. In 1970, the study of local election results, and their national election implications, was in its infancy. But with the aid of one of the few real experts, Norman and I (at that time still very much a newcomer to the Economist, number-crunching for him with enthusiasm) worked through three nights to achieve the most comprehensive analysis ever made, matching opinion polls to votes, council to constituency, ward by ward. The conclusion was a leader and that week's cover of the Economist, which proclaimed 'Wilson by 50'. When Edward Heath duly won the general election which Harold Wilson was emboldened to call, it was all considered a wicked Economist plot.

Which taught me, early in my working life, two lessons: that only the real poll really matters, and that cock-up rather than conspiracy explains most of what goes wrong on most newspapers most of the time.