ABSTRACT
The development of McCulloch's theory of value has been obscured by his retention of a popular theory of value which made no concessions to analytical refinement, while his 'scientific' theory developed continuously. The simple popular theory was a straightforward labour quantity theory of value. But alongside this McCulloch developed a cost of production theory of value in which he recognized and was at pains to solve the problem of capital. The contrast between the two theories is shown in the following exchange between McCulloch and Ricardo. After reading some of the lectures which McCulloch had prepared Ricardo wrote: 'You go a little farther than I go in estimating the value of commodities by the quantity of labour required to produce them: you appear to admit of no exception or qualification whatever, whereas I am always willing to allow that some of the variations in the relative value of commodities may be referred to causes distinct from the quantity of labour necessary to produce them.'i To this McCulloch replied: Tn order to give any chance of making the subject popular I must pass slightly over some of the more difficult parts.'2 McCulloch is clear that he is simplifying, and his reason for doing so is most instructive. As a pioneer of popular exposition, he wanted a simplified version of the theory . By assuming away the problem of capital he was able to provide a simplified version. This version3 he tended to retain while his scientific theory developed. The main concern of this chapter is to trace the development of the 'scientific' theory; but it should constantly be borne in mind that McCulloch continued to point to the
» Letter of March 19, 1822, Works, Vol. IX, pp. 177-9, letter 491, p. 178. 2 Letter of April 17, 1822, ibid., pp. 184-8, letter 495, p. 185. 3 It seems fair to date the appearance of this version from McCulloch's Scotsman
review of Ricardo (May 3, 1817). See below.
