isthemainspringorcausacausansofallimprovement。71Thisis，ofcourse，partofthefamiliarsystem，whichappliesequallyinethicsandpolitics，M’CullochissimplygeneralisingAdamSmith’scongenialdoctrinethatstatesmenareguiltyofabsurdpresumptionwhentheytrytointerferewithaman’smanagementofhisownproperty。72Thistheory，again，isexpressedbythefamiliarmaximpastropgouverner，whichiscommontothewholeschool，andoftenacceptedexplicitly。73
　　Itwillbequiteenoughtonoticeoneortwocharacteristicresults。Themostimportantconcerntherelationbetweenthelabourerandthecapitalist。Malthusgivesthestarting-point。
　　Torrens，forexample，saysthatthe’realwagesoflabourhaveaconstanttendencytosettledown’totheamountrenderednecessaryby’customandclimate’inordertokeepuphisnumbers。74Millobservesinhistersewaythatthecapitalistinthepresentstateofsociety’isasmuchtheownerofthelabour’asthemanufacturerwhooperateswithslaves。
　　Theonly’differenceisinthemodeofpurchasing。’75Onebuysaman’swholelabour；theotherhislabourforaday。Therateofwagescanthereforeberaised，likethepriceofslaves，onlybylimitingthesupply。Hencethe’grandpracticalproblemistofindthemeansoflimitingthenumberofbirths。’76M’Cullochisequallyclear，andinfersthateveryscheme’notbottomedon’theprincipleofproportioninglabourtocapitalmustbe’completelynugatoryandineffectual，’77
　　ThedoctrinecommontothewholeschoolledM’Cullochtoconclusionswhichbecameafterwardsnotoriousenoughtorequireawordofnotice。Torrens，likeRicardo，speaksofcapitalas’accumulatedlabour，’butmakesagreatpointofobservingthat，althoughthisistrue，thecaseisradicallychangedinadevelopedstateofsociety。
　　Thevalueofthingsnolongerdependsuponthelabour，butupontheamountofcapitalemployedintheirproduction。78This，indeed，mayseemtobethemostnaturalwayofstatingtheacceptedprinciple。M’Cullochrepliesthatthechangemakesnodifferenceintheprinciple，79inasmuchascapitalbeing’accumulatedlabour，’valueisstillproportionedtolabour，thoughinatransubstantiatedshape。M’CullochsupposedthatbycarryingoutthisprinciplesystematicallyhewassimplifyingRicardoandbringingthewholescienceintounity。Allquestions，whetherofvalueinexchange，oroftherateofwages，canthenbereducedtocomparingthesimpleunitcalledlabour。BothMillandM’Cullochregardcapitalasakindoflabour，sothatthingsmaybeproducedbycapitalalone，’withouttheco-operationofanyimmediatelabour’80——aresultwhichcanhardlyberealisedwiththediscoveryofaperpetualmotion。So，again，thevalueofajointproductisthe’sum’ofthesetwovalues。81Allvalue，therefore，canberegardedasproportionedtolabourinoneofitstwostates。M’Cullochadvancedtoanunfortunateconclusion，whichexcitedsomeridicule。ThoughRicardoandTorrens82rejectedit，itwasacceptedbyMillinhissecondedition。83Winekeptinacaskmightincreaseinvalue。Couldthatvaluebeascribedto’additionallabouractuallylaidout’?M’Cullochgallantlyassertedthatitcould，though’labour’certainlyhastobeinterpretedinanon-naturalsense。84Notonlyiscapitallabour，butfermentationislabour，orhowcanwesaythatallvalueisproportionedtolabour?Thisisonlyworthnoticeasapatheticillustrationofthemisfortunesofatheoristriddenbyadogmaofhisowncreation。Anotherconclusionismoreimportant。The’realvalue’
　　ofanythingismeasuredbythelabourrequiredtoproduceit。Nothing’againismoreobvious’thanthatequallabourimpliesthe’samesacrifice’inallstatesofsociety。85Itmightseemtofollowthatthevalueofanythingwasmeasuredbythelabourwhichitwouldcommand。Thisdoctrine，however，thoughmaintainedbyMalthus，was，accordingtoM’Culloch，apestilentheresy，firstexplodedbyRicardo’ssagacity。86Thingsexchange，asheexplains，inproportiontothelabourwhichproducesthem，butthesharegiventothelabourermayvarywidely。Thelabourer，hesays，’givesaconstant，butreceivesavariablequantityinitsstead。’Hemakesthesamesacrificewhenheworksforaday，butmaygetforitwhatheproducesintenhours，oronlyinone。Ineverycase，however，hegetslessthanheproduces，fortheexcess’constitutesprofits。’87Thecapitalistmustgethisinterest，thatis，thewagesoftheaccumulatedlabour。HerewecomeagaintotheSocialistposition，onlythattheSocialistinfersthatthelabourerisalwayscheatedbythecapitalist，anddoesnotconsiderthatthemachinecanaskfor’wages’onthepretextthatitisaccumulatedlabour。What，however，determinestheshareactuallyreceived?Afterall，asamachineisnotactuallyalabourer，anditsworknotaseparableproduct，wecannoteasilyseehowmuchwagesitisentitledtoreceive。M’Cullochfollowstheacceptedargument。’Noproposition，’hesays，’canbebetterestablishedthanthatthemarketrateofwages……isexclusivelydeterminedbytheproportionbetweencapitalandpopulation。’88Wehaveultimatelyhere，aselsewhere，’thegrandprincipletowhichwemustalwayscomeatlast，’namely，’thecostofproduction。’89Wagesmustcorrespondtothecostofraisingthelabourer。Thisleadstoaformula，whichafterwardsbecamefamous。Inapamphlet90devotedtothequestion，herepeatsthestatementthatwagesdependupontheproportionbetweenpopulationandcapital；andthen，asifthephrasewereidentical，substitutesthatportionofcapitalwhichisrequiredforthelabourer’sconsumption。Thisisgenerallycitedasthefirststatementofthe’wage-fund’
　　theory，towhichIshallhavetoreturn。
　　Ineednotpursuetheseillustrationsoftheawkwardresultsofexcessivezealinadisciple。Itisworthnoticing，however，thatM’Culloch’spracticalconclusionsarenotsorigidasmightbeinferred。Hisabstractdoctrinesdonotgivehistruetheory，somuchaswhatheerroneouslytooktobehistheory，theruleswithwhichheworksareapproximatelytrueundercertainconditions，andheunconsciouslyassumestheconditionstobenegligible，andtherulesthereforeabsolute。Itmustbeaddedthathedoesnotapplyhisconclusionssorigidlyasmightbeexpected。Bythehelpof’friction，’ortheadmissionthattheruleisonlytrueinnineteencasesoutoftwenty，hecanmakeallowanceformanydeviationsfromrigidorthodoxy。Heholds，forexample，thatgovernmentinterferenceisoftennecessary。Hewishesinparticularfortheestablishmentofa’goodsystemofpubliceducation。’91Heseemstohavebecomemoresentimentalinlateryears。Intheeditionof1843heapprovestheFactoryActs，remarkingthatthelastthenpassedmaynot’insomerespects，havegonefarenough。’92Heapprovesaprovisionforthe’impotentpoor，’ontheprincipleoftheElizabethanact，thoughhedisapprovesthecentralisingtendencyofthenewpoor-law。ThoughheisagoodMalthusian，93andholdstheinstinctofpopulationtobea’constantquantity’94hedoesnotbelieveintheimpossibilityofimprovement。The’necessary’
　　rateofwagesfixesonlyaminimum：anincreaseofpopulationhasbeenaccompaniedbyanincreaseofcomfort。95Wagesriseifthestandardoflifeberaised，andariseofwagestendstoraisethestandard。Hecordiallydenouncesthebenevolentpersonswhoheldthatbetterwagesonlymeantmoredissipation。Betterwagesarereallythegreatspurtoindustryandimprovement。96Extremepovertycausesapathy；andtheworstofevilsisthesluggishnesswhichinducesmentosubmittoreductionsofwages。Asenseofcomfortwillraiseforesight；andthevismedicatrixshouldbeallowedtoactuponeveryrankofsociety。Heisnodoubtanindividualist，aslookingtotheremovalofrestrictions，suchastheConspiracyLaws，97ratherthantoapositiveactionofthegovernment；
　　butitisworthnoticethatthistypicaleconomistisfarfromacceptingsomeofthedoctrinesattributedtotheschoolingeneral。
　　Theclassicalschoolblunderedwhenitsupposedthattheruleswhichitformulatedcouldbemadeabsolute。
　　Togivethemthatcharacter，itwasnecessarytomakefalseassumptionsastotheultimateconstitutionofsociety；andthefallacybecameclearwhentheformulaweresupposedtogivearealhistoryortogivefirstprinciples，fromwhichallindustrialrelationscouldbededuced。Meanwhile，theformula，astheyreallyexpressedconditionaltruths，mightbeveryusefulsolongas，inpointoffact，theconditionsexisted，andwereveryeffectiveindisposingofmanyfallacies。ThebestillustrationwouldprobablybegivenbythewritingsofThomasTooke1774-1858，98oneofthefoundersofthePoliticalEconomyClub。TheHistoryofPricesisanadmirableexplanationofphenomenawhichhadgivenrisetothewildesttheories。Themanyoscillationsoftradeandfinanceduringthegreatstruggle，thedistresswhichhadfollowedthepeace，hadbewilderedhastyreasoners。
　　Somepeople，ofcourse，foundconsolationinattributingeverythingtothemysteriousactionofthecurrency；othersdeclaredthatthewar-expenditurehadsuppliedmanufacturersandagriculturistswithademandfortheirwares，apparentlynotthelessadvantageousbecausethepaymentcameoutoftheirownpockets。99Tookeverypatientlyandthoroughlyexplodestheseexplanations，andtracesthefluctuationsofpricetosuchcausesastheeffectoftheseasonsandthevaryingeventsofthewarwhichopenedorclosedthechannelsofcommerce。Theexplanationingeneralseemstobethoroughlysoundandconclusive，andfallsill，asfarasitgoes，withtheprinciplesofhisallies。Heshows，forexample，veryclearlywhatweretheconditionsunderwhichtheorthodoxtheoryofrentwasreallyapplicable；howbadseasonsbroughtgaininsteadoflosstothe’agriculturalinterest，’thatis，asTookeexplains，tothelandlordandfarmer；howbyariseofpriceoutofproportiontothediminutionofsupply，thefarmermadelargeprofits；howrentsrose，enclosurebillsincreased，andinferiorlandwasbroughtundertheplough。Thelandlord’sinterestwasforthetimeclearlyopposedtothatofallotherclasses，howeverinadequatethedoctrinemightbecomewhenmadeabsolutebyahastygeneralisation。Ineednotdwelluponthefree-tradeargumentwhichmadethepopularreputationoftheeconomists。Itisenoughtonotebrieflythattheerrorastothesphereofapplicabilityofthedoctrinedidnotpreventmanyofthepracticalconclusionsfrombeingofthehighestvalue。
　　NOTES：
　　1。AlifeofRicardobyM’CullochisprefixedtohisWorks。Icitetheeditionof1889。Ricardo’sletterstoMalthuswerepublishedbyMrBonarin1887；hisletterstoM’Culloch，editedbyMrHollanderfortheAmericanEconomicAssociation，in1895；
　　andhisletterstoH。Trower，editedbyMrBonarandMrHollander，havejustappeared1900。
　　2。HeremarksuponthisdifficultyinthecaseofSmith’streatmentofrent，andgivesadefinitiontowhichhescarcelyadheres-Works，p。24’Principles，’ch。ii，1888。
　　3。Works，p。278。
　　Ricardo，itshouldbesaid，complainedwhenMalthusinterpretedhimtomeanthatthisoppositionofinterestswaspermanentandabsolute。
　　4。Malthusadmitsthegeneralprincipleoffreetrade，butsupportssomedegreeofprotectiontocorn，mainlyuponpoliticalgrounds。Heholds，however，withAdamSmith，that’noequalquantityofproductivelabouremployedinmanufacturescouldeveroccasionsogreatareproductionasinagriculture。’GroundsofanOpinion，etc。，p。35-arelicofthe’physiocrat’doctrine。
　　5。Works，p。285。
　　6。Ibid。，p。386。
　　7。SeealsoLetterstoMalthus，p。175。
　　8。’Yourmodernpoliticaleconomistssaythatitisaprincipleintheirsciencethatallthingsfindtheirlevel；whichIdeny，andsay，onthecontrary，thatitisthetrueprinciplethatallthingsarefindingtheirlevel，likewaterinastorm。’-Coleridge’sTable-Talk，17thMay，1833。