WHATEVER HAPPENED TO RICARDO'S THEORY OF VALUE? MILL, MCCULLOCH, AND THE CASE OF ‘OAK-TREES’ AND ‘WINE’

This paper deals with the fate of Ricardo's theory of value after Ricardo's death in 1823. We will show how Mill and McCulloch, the self-appointed ‘two and only genuine disciples’ of Ricardo, starting from being in a sense more Ricardian than Ricardo, really in the end gave up Ricardo's theory. The important and difficult question was of course that of the ‘modifications’ to the ‘general rule’ that the relative values of commodities are determined by the amounts of labour necessary to produce them. James Mill and McCulloch tried to answer the objections against Ricardo's theory ‘by a verbal fiction, by changing the correct name of things’, and they thus ‘did more to undermine the foundation of the Ricardian theory than all the attacks of the opponents’ (Marx). It is here shown that these ‘verbal fictions’ were accompanied by gradual, but substantial, changes in the theory itself, which de facto amounted to abandoning it. The theoretical situation to which this gave rise was aptly described by A.C. Whitaker, the historian of the labour theory of value, as one of complete chaos.