John Ramsey McCulloch a Scottish economist, author and editor, is widely regarded as the leader of the Ricardian

Ricardian

Ricardian may refer to:* A follower of Ricardian economics, namesake of economist David Ricardo * Ricardian , a supporter of the thesis that Richard III of England was a "good king"...

 school of economists after the death of David Ricardo

David Ricardo

David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

 in 1823. He was appointed the first professor of political economy

Political economy

Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

 at University College London

University College London

University College London is a public research university located in London, United Kingdom and the oldest and largest constituent college of the federal University of London...

 in 1828. He wrote extensively on economic policy

Economic policy

Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy.Such policies are often...

, and was a pioneer in the collection, statistical analysis and publication of economic data

Economic data

Economic data or economic statistics may refer to data describing an actual economy, past or present. These are typically found in time-series form, that is, covering more than one time period or in cross-sectional data in one time period Economic data or economic statistics may refer to data...

.

McCulloch was a co-founder, and one of the first editors, of The Scotsman

The Scotsman

The Scotsman is a British newspaper, published in Edinburgh.As of August 2011 it had an audited circulation of 38,423, down from about 100,000 in the 1980s....

newspaper, and worked on the Edinburgh Review

Edinburgh Review

The Edinburgh Review, founded in 1802, was one of the most influential British magazines of the 19th century. It ceased publication in 1929. The magazine took its Latin motto judex damnatur ubi nocens absolvitur from Publilius Syrus.In 1984, the Scottish cultural magazine New Edinburgh Review,...

. He edited the 1828 edition of The Wealth of Nations

The Wealth of Nations

An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...

.

Career

McCulloch attended the University of Edinburgh

University of Edinburgh

The University of Edinburgh, founded in 1583, is a public research university located in Edinburgh, the capital of Scotland, and a UNESCO World Heritage Site. The university is deeply embedded in the fabric of the city, with many of the buildings in the historic Old Town belonging to the university...

, but did not graduate.

McCulloch collected the early literature of political economy

Political economy

Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

, and wrote on the scope and method of economics

Economic methodology

Economic methodology is the study of methods, especially the scientific method, in relation to economics, including principles underlying economic reasoning...

 and the history of economic thought

History of economic thought

The history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...

. After his death his library was purchased by Lord Overstone

Samuel Jones-Loyd, 1st Baron Overstone

Samuel Jones-Loyd, 1st Baron Overstone was a British banker and politician.-Background and education:Loyd was the only son of Reverend Lewis Loyd and Sarah, daughter of John Jones, a Manchester banker...

 and eventually presented to the University of Reading

University of Reading

The University of Reading is a university in the English town of Reading, Berkshire. The University was established in 1892 as University College, Reading and received its Royal Charter in 1926. It is based on several campuses in, and around, the town of Reading.The University has a long tradition...

. He was a participant in the Political Economy Club

Political Economy Club

The Political Economy Club was 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...

, London, founded by James Mill

James Mill

James Mill was a Scottish historian, economist, political theorist, and philosopher. He was a founder of classical economics, together with David Ricardo, and the father of influential philosopher of classical liberalism, John Stuart Mill.-Life:Mill was born at Northwater Bridge, in the parish of...

 and a circle of friends in 1821 for an ongoing discussion of the fundamental principles of political economy

Political economy

Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

.

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

Profit (economics)

In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...

 or interest

Interest

Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....

 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 labor theory of value

Labor theory of value

The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...

 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

Political Economy Club

The Political Economy Club was 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...

, Ricardo had privately expressed his famous opinion about the "non-existence of any measure of absolute value."

McCulloch died in 1864, and is buried in Brompton Cemetery

Brompton Cemetery

Brompton Cemetery is located near Earl's Court in South West London, England . It is managed by The Royal Parks and is one of the Magnificent Seven...

, London.

Criticism

McCulloch's theoretical work received harsh criticism from Eugen von Böhm-Bawerk

Eugen von Böhm-Bawerk

Eugen Ritter von Böhm-Bawerk was an Austrian economist who made important contributions to the development of the Austrian School of economics.-Biography:...

 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 labor 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 labor theory of value. The physical changes in the wine are produced by the microbes involved in the fermentation

Fermentation (food)

Fermentation in food processing typically is the conversion of carbohydrates to alcohols and carbon dioxide or organic acids using yeasts, bacteria, or a combination thereof, under anaerobic conditions. Fermentation in simple terms is the chemical conversion of sugars into ethanol...

 process, and the change in exchange value

Exchange value

In political economy and especially Marxian economics, exchange value refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market...

 involves the public's subjective preference for wine

Wine

Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...

over grape juice, and old wine over new.

Works

• An Essay on a Reduction of the Interest of the National Debt, 1816.
• "On Ricardo's Principles of Political Economy and Taxation", 1818, Edinburgh Review
• "Taxation and the Corn Laws", 1820, Edinburgh Review
• "The Opinions of Messrs. Say, Sismondi and Malthus, on Effects of Machinery and Accumulation", 1821, Edinburgh Review
• "On Combination Laws, Restraints on Emigration, &c.", 1824, Edinburgh Review
• "Political Economy", 1824, Encyclopaedia Britannica.
• "French Law of Succession", 1824, Edinburgh Review.
• A Discourse on the Rise, Progress, Peculiar Objects and Importance of Political Economy, 1824.
• The Principles of Political Economy, with a sketch of the rise and progress of the science. 1825. Chapter links
• An Essay on the Circumstances which Determine the Rate of Wages and the Condition of the Working Classes, 1826.
• "On Commercial Revulsions", 1826, Edinburgh Review
• "Abolition of the Corn Laws", 1826, Edinburgh Review
• "On Poor Laws", 1828, Edinburgh Review
• "Rise, Progress, Present State, and Prospects of the British Cotton Manufacture", 1827, Edinburgh Review.
• "Introduction" to An Inquiry Into the Nature and Causes of the Wealth of Nations by Adam Smith, (ed. J.R. McCulloch), 1828.
• "Jones on the Theory of Rent", Edinburgh Review, 1831.
• Principles, Practice and History of Commerce, 1831.
• "Chalmers on Political Economy", 1832, Edinburgh Review.
• A Dictionary, Practical, Theoretical and Historical of Commerce and Commercial Navigation, 1832.
• A Descriptive and Statistical Account of the British Empire, exhibiting its extent, physical capacities, population, industry, and civil and religious institutions. 2 volumes, 1837
• Statements Illustrative of the Policy and Probable Consequence of the Proposed Repeal of the Existing Corn Law, 1841.
• The Literature of Political Economy, 1845.
• The Works of David Ricardo, Esq. with a notice of the life and writings of the author (ed. J.R. McCulloch), 1846.
• A Treatise on the Succession to Property Vacant by Death, 1848.
• A Treatise on Metallic and Paper Money and Banks, 1858
• Treatises and Essays, 1859.
• A Treatise on the Principles and Practical Influence of Taxation and the Funding System, 1863.

Sources

• Denis P. O'Brien, J. R. McCulloch, A Study in Classical Economics, George Allen & Unwin (1970). ISBN: 0043301584.
• Collected works of J R McCulloch, with introductions by Denis O'Brien. 8 volumes. Routledge/Thoemmes Press (1995).