John Ramsay McCulloch

Last updated

John Ramsay McCulloch
John Ramsay McCulloch by Sir Daniel Macnee detail.jpg
John Ramsay McCulloch by Daniel Macnee
Born(1789-03-01)1 March 1789
Whithorn, Wigtownshire, Scotland, Kingdom of Great Britain
Died11 November 1864(1864-11-11) (aged 75)
Academic career
Field Political economy
School or
Classical economics
Influences Adam Smith, David Ricardo

John Ramsay McCulloch (1 March 1789 – 11 November 1864) was a Scottish economist, author and editor, widely regarded as the leader of the Ricardian school of economists after the death of David Ricardo in 1823. He was appointed the first professor of political economy at University College London in 1828. He wrote extensively on economic policy, and was a pioneer in the collection, statistical analysis and publication of economic data.


McCulloch was a co-founder, and one of the first editors, of The Scotsman newspaper, and worked on the Edinburgh Review . He edited the 1828 edition of The Wealth of Nations . [1]


McCulloch attended the University of Edinburgh, but did not graduate. [2]

McCulloch collected the early literature of political economy, and wrote on the scope and method of economics and the history of economic thought. [3] [4] After his death his library was purchased by Lord Overstone and eventually presented to the University of Reading. He was a participant in the Political Economy Club, London, founded by James Mill [5] and a circle of friends in 1821 for an ongoing discussion of the fundamental principles of political economy.

McCulloch's works include a textbook, Principles of Political Economy (Edinburgh 1825). He worked on subsequent editions until his death. This book contains a memorable discussion of the origins of profit or interest in the case of a cask of new wine.

"Suppose that a cask of new wine, which cost £50, is put into a cellar, and that, at the end of twelve months, it is worth £55, the question is: Should the £5 of additional value, given to the wine, be considered as a compensation for the time the £50 worth of capital has been locked up, or should it be considered as the value of additional labour actually laid out in the wine?"

This question is still used in discussions of the labour theory of value and related issues. McCulloch used it to illustrate that "time cannot of itself produce effect; it merely affords space for really efficient causes to operate, and it is therefore clear it can have nothing to do with value." Reflecting on discussions in the Political Economy Club, Ricardo had privately expressed his famous opinion about the "non-existence of any measure of absolute value." [6]

McCulloch was an opponent of Robert Malthus, in response to Malthus's Definitions in Political Economy (1827) wherein Malthus criticized several contemporary economists, including Jean-Baptiste Say, James Mill, and McCulloch, for what he considered sloppiness in selection of, attachment of meaning to, and usage of their technical terms. [7] In March 1827 McCulloch made a cutting reply on the front page of his Edinburgh newspaper, The Scotsman, [8] implying that Malthus wanted to dictate terms and theories to other economists. McCulloch clearly felt his ox gored, and his review of Definitions is largely a bitter defence of his own Principles of Political Economy, [9] and his counter-attack "does little credit to his reputation", being largely "personal derogation" of Malthus. [10] The purpose of Malthus's Definitions was terminological clarity, and Malthus discussed appropriate terms, their definitions, and their use by himself and his contemporaries. This motivation of Malthus's work was disregarded by McCulloch, who responded that there was nothing to be gained "by carping at definitions, and quibbling about the meaning to be attached to" words. Given that statement, it is not surprising that McCulloch's review failed to address the rules of chapter 1 and did not discuss the definitions of chapter 10; he also barely mentioned Malthus's critiques of other writers. [7]

McCulloch died in 1864, and is buried in Brompton Cemetery, London.


McCulloch's theoretical work received harsh criticism from Eugen von Böhm-Bawerk in the latter's History and Critique of Interest Theories (1884).

"But probably no member of the English school has been so unhappy in his treatment of the subject or done the theory of interest such a disservice as McCulloch,"

wrote Böhm-Bawerk.

"He hovers about the fringes of a number of divergent opinions. He penetrates just far enough into each to become involved in glaring self-contradictions, but he does not expand any one of them sufficiently to form a theory that even approaches consistency."

The labour theory of value is an exception, in that McCulloch seems more insistent about it than about any of the contradictory hypotheses he entertained, Böhm-Bawerk conceded, but the form of that theory McCulloch endorsed was "the most absurd that could possibly occur to a serious thinker."

On the subject of the wine cask, Böhm-Bawerk wrote that there was an "enormous difference between what he was supposed to prove and what he did prove." Although such examples may prove that the mere passage of time is not enough of a change to produce an increase of value, that hardly helps the labour theory of value. The physical changes in the wine are produced by the microbes involved in the fermentation process, and the change in exchange value involves the public's subjective preference for wine over grape juice, and old wine over new.


Early English Tracts on Commerce, edited by McCulloch, 1856 (1954 ed.) McCulloch - Early english tracts on commerce, 1954 - 5889040.tif
Early English Tracts on Commerce, edited by McCulloch, 1856 (1954 ed.)

Related Research Articles

<span class="mw-page-title-main">David Ricardo</span> British economist and politician (1772–1823)

David Ricardo was a British political economist, politician, and member of the Parliament of Great Britain and Ireland. He is recognized as one of the most influential classical economists, alongside figures such as Thomas Malthus, Adam Smith and James Mill.

<span class="mw-page-title-main">Thomas Robert Malthus</span> British political economist (1766–1834)

Thomas Robert Malthus was an English economist, cleric, and scholar influential in the fields of political economy and demography.

<span class="mw-page-title-main">Eugen von Böhm-Bawerk</span> Austrian economist (1851–1914)

Eugen Ritter von Böhm-Bawerk was an economist from Austria-Hungary who made important contributions to the development of the macroeconomics. He served intermittently as the Austrian Minister of Finance between 1895 and 1904. He also wrote extensive criticisms of Marxism.

Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. It states that the reason why the price of diamonds is higher than that of water, for example, owes to the greater additional satisfaction of the diamonds over the water. Thus, while the water has greater total utility, the diamond has greater marginal utility.

In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can comprise any of the factors of production and taxation.

Capital and Interest is a three-volume work on finance published by Austrian economist Eugen Böhm von Bawerk (1851–1914).

The dismal science is a derogatory term for the discipline of economics. Thomas Carlyle used the phrase in his 1849 essay "Occasional Discourse on the Negro Question" in contrast with the then-familiar phrase "gay science" used to refer to the art of troubadours.

<span class="mw-page-title-main">Francis Ysidro Edgeworth</span> Irish economist (1845–1926)

Francis Ysidro Edgeworth was an Anglo-Irish philosopher and political economist who made significant contributions to the methods of statistics during the 1880s. From 1891 onward, he was appointed the founding editor of The Economic Journal.

<i>On the Principles of Political Economy and Taxation</i>

On the Principles of Political Economy and Taxation is a book by David Ricardo on economics. The book concludes that land rent grows as population increases. It also presents the theory of comparative advantage, the theory that free trade between two or more countries can be mutually beneficial, even when one country has an absolute advantage over the other countries in all areas of production.

<span class="mw-page-title-main">John Elliott Cairnes</span> 19th century classical economist

John Elliott Cairnes was an Irish political economist. He has been described as the "last of the classical economists".

<span class="mw-page-title-main">Frank Fetter</span> American economist (1863–1949)

Frank Albert Fetter was an American economist of the Austrian School. Fetter's treatise, The Principles of Economics, contributed to an increased American interest in the Austrian School, including the theories of Eugen von Böhm-Bawerk, Friedrich von Wieser, and Ludwig von Mises.

The Political Economy Club is the world's oldest economics association founded by James Mill and a circle of friends in 1821 in London, for the purpose of coming to an agreement on the fundamental principles of political economy. David Ricardo, James Mill, Thomas Malthus, and Robert Torrens were among the original luminaries.

James Bonar was a Scottish civil servant, political economist and historian of economic thought.

In economics, marginal utility describes the change in utility of one unit of a good or service. Marginal utility can be positive, negative, or zero.

Criticisms of the labor theory of value affect the historical concept of labor theory of value (LTV) which spans classical economics, liberal economics, Marxian economics, neo-Marxian economics, and anarchist economics. As an economic theory of value, LTV is widely attributed to Marx and Marxian economics despite Marx himself pointing out the contradictions of the theory, because Marx drew ideas from LTV and related them to the concepts of labour exploitation and surplus value; the theory itself was developed by Adam Smith and David Ricardo. LTV criticisms therefore often appear in the context of economic criticism, not only for the microeconomic theory of Marx but also for Marxism, according to which the working class is exploited under capitalism, while little to no focus is placed on those responsible for developing the theory.

William Stevenson (1772–1829) was a Scottish nonconformist preacher, tutor and official, now known as a writer and father of Elizabeth Gaskell.

William Blake was an English classical economist who contributed to the early theory of purchasing power parity.

John Cazenove (1788–1879) was an English businessman and political economist.

<i>Principles of Political Economy</i> (Malthus book)

Principles of Political Economy Considered with a View to their Applications, simply referred to as Principles of Political Economy, was written by the nineteenth-century British political economist Thomas Malthus in 1820. Malthus wrote Principles of Political Economy as a rebuttal to David Ricardo's On the Principles of Political Economy and Taxation. While the main focus of their work is to explain economic depressions in Europe and the reasons why they occur, Malthus uses his scholarship to explore price determination and the value of goods.

A history of economic thought is a book by the Russian economist Isaak Illich Rubin (1886–1937). A second revised edition published in Russian in 1929 was first translated into English by Donald Filtzer and published in 1979. The book covers the period from mercantilism in the 16th century to the decline of the classical school of political economy with writers like John Stuart Mill in the mid-19th century. It critically appraises the theories of major writers, and places their thought in the context of the economic and social changes of their day. It adopts a Marxist standpoint in making critiques, but Marx's work is not itself discussed at any length. The book ends with the state of economics as Marx found it when he first turned to it in the mid-19th century. Rubin's other major work, Essays on Marx's theory of value, takes up Marx's own contributions.



  1. "John Ramsay McCulloch". Gazetteer for Scotland . Retrieved 13 May 2010.
  2. Goring, Rosemary, ed. (1992). Chambers Scottish Biographical Dictionary. Edinburgh: Chambers.
  3. McCulloch1824.
  4. J. R. McCulloch, Early English Tracts on Commerce. London: Political Economy Club (1856); Cambridge [Eng.] University Press, 1954.
  5. ""James Mill, 1773–1836", New School". Archived from the original on 3 April 2008. Retrieved 4 April 2009.
  6. Ricardo to Malthus, 15 August 1823. Quoted by Halevy, The Growth of Philosophic Radicalism, Beacon Press, (1955) p. 352.
  7. 1 2 Malthus, Thomas Robert (2016). Definitions in Political Economy. McLean: Berkeley Bridge Press. ISBN   978-1-945208-01-0.
  8. McCulloch, John Ramsay (10 March 1827). "A Review of Definitions in Political Economy by the Rev. T. R. Malthus". The Scotsman: 1.
  9. McCulloch, John Ramsay (1825). The Principles of Political Economy. Edinburgh: William & Charles Tait.
  10. Morton Paglin's "Introduction" to: Malthus, Thomas Robert (1986). Definitions in Political Economy. Fairfield, New Jersey: Augustus M. Kelley. p. xiii.
  11. Discourse 1824: pdf at McMaster
  12. Discourse 1824 at the Internet Archive
  13. Discourse 2nd. ed. 1825 at the Internet Archive ; id. at the Internet Archive
  14. The Principles of Political Economy (1825) in Google books