ABSTRACT
The invariable measure was central to Ricardo's system. It never interested McCulloch at all: it was to him a mere chimera and he wrote of the search for it as had Torrens and Lauderdale2 as 'entitled to no more respect, and, we believe, will be crowned with no better success, than the search after the philosopher's stone'.3 Like Torrens he had a deep respect for the great minds of economics; and there was no denying the quality of Ricardo's mind. But although Ricardo greatly influenced McCulloch's tone and phraseology, he never even succeeded in interesting the latter in the same problem of value. Though McCulloch paid a great deal of lip-service to Ricardo, he never accepted his position; hence his acknowledgment of Bailey's comments on the invariable measure.4 Moreover, as we have seen, there is evidence that McCulloch was perfectly aware that he was adopting a different position from Ricardo; the suggestion by Dr Blaug5 that McCulloch misunderstood Ricardo may perhaps be a little misleading. McCulloch in fact attempted to produce a real cost theory of value, and, having no satisfactory micro-economic theory of wages, he failed; but produced a cost of production theory of value which was far more complete than he has generally been given credit for. The course by which he arrived at his final theory of value owes almost as much to Smith and Locke as to Ricardo. Although at times incomplete and unsatisfactory, and although suffering during much of the course of its development from a confusion (of which Ricardo was also guilty though in a different way) between necessary and sufficient conditions, it was not an absurd theory although it was misunderstood by his contemporaries and has been much misunderstood since. For this McCulloch was, however, largely to blame because of his retention of a popular approach to the problem of value while he continued to wrestle with the problem of capital.
