Cairnes, John Elliott
political economy value science mill production wages theory method
CAIRNES, JOHN ELLIOTT, a distinguished political economist, was born at Drogheda in 1824, and died on the 8th July 1875. After leaving school he spent some years in the counting-house of his father, who was an extensive brewer. His tastes, however, lay altogether in the direction of study, and he was permitted to enter Trinity College, Dublin. He took the degree of B.A. in 1848, and six years later commenced as M.A. After passinaa through the curriculum of arts he engaged in the study of law and was called to the Irish bar. But he does not appear to have felt any very strong inclination for the legal profession, and during some years he occupied himself to a large extent with contributions to the daily press, treatinaa of the social and economical questions that affected Ireland. The subject to which at this time he devoted most attention was political economy, which he studied with great thoroughness and care. While residing in Dublin he made the acquaintance of Archbishop Whately, who conceived a very high respect for his character and abilities. In 1856 a vacancy occurred in the chair of Political Economy at Dublin founded by Whately, and Cairnes received the appointment. In accordance with the regulations of the foundation, the lectures of his first year's course were published. The book appeared in 1857, with the title Character and Logical Method of Political Economy, and did not, perhaps, receive so much attention as it deserved. It follows up and expands J. S. Mill's treatment in the Essays on some Unsettled Questions in Political Economy, and forms a most admirable introduction to the study of economics as a science. In it the author's peculiar powers of thought and expression are displayed to the best advantage. Logical exactness, precision of language, and firm grasp of the true nature of economic facts, are the qualities characteristic of this as of all his other works. If the book had done nothing more, it would still have conferred inestimable benefit on political economists by its clear exposition of the true nature and meaning of the ambiguous term law. To the view of the province and method of political economy expounded in this early work the author always remained true, and several of his later essays, such as those on Political Economy and Land, Political Economy and Laisses-Faire, are but reiterat ions of the same doctrine. - His next contribution to economical science was a series of articles on the gold question, published partly in Fraser's Magazine, in which the probable consequences of the in creased supply of gold attendant on the Australian and Californian gold discoveries arc analyzed with great skill and ability. The general conclusions arrived at in these papers with regard to the effects of the depreciation of gold - that finished manufactures would be on the average least altered in price ; that raw produce, particularly the portion derived from the animal kingdom, would be most seriously affected ; and that, on the whole, the section of the population most nearly concerned in the movement would be the class of labourers or artisans - are highly interesting, and have been confirmed to a remarkable extent by recent statistical researches. The further inferences drawn as to the international results likely to follow on the introduction into the several currencies of so large a mass of gold have not been borne out to the same extent. The facts were too complex to admit of accurate prediction. The articles attracted much attention at the time, and were highly commended by the most competent judges. A critical article on M. Chevalier's work On the Probable Fall in the Value of Gold, which appeared in the Edinburgh Review for July 1860, may be regarded as the sequel to these papers.
In 1861 Cairues was appointed to the professorship of political economy and jurisprudence in Queen's College, Galway, and in the following year he published his admirable work The Slave Power, one of the finest specimens of applied economical philosophy. The inherent disadvantages of the employment of slave labour are exposed with great fulness and ability, and the conclusions arrived at have taken their place among the recognized doctrines of political economy. To a very large extent the opinions expressed by Cairnes as to the probable issue of the war in America were verified by the actual course of events.
During the remainder of his residence at Galway Professor Cairnes published nothing beyond some fragments and pamphlets, mainly upon Irish questions in which he was deeply interested. The most valuable of these papers are the series devoted to the consideration of university education in Ireland. His health, at no time very good, was still further weakened in 1865 by a fall from his horse, which inflicted severe injury on one of his legs. He was ever afterwards incapacitated from active exertion, and was constantly liable to have his work interfered with by attacks of illness. In 1866 he was appointed professor of political economy in University College, London. He was compelled to spend the session 1868-69 in Italy, but on his return continued to lecture till 1872. During his last session he conducted a mixed class, ladies being admitted to his lectures. His health soon rendered it impossible for him to discharge his public duties ; he resigned his post in 1872, and retired with the honorary title of Emeritus Professor of Political Economy. In 1873 his own university conferred on him the degree of LL.D.
The last years of his life were spent in the collection and publication of some scattered papers contributed to various reviews and magazines, and in the preparation of his most extensive and important work. The Political Essays, published in 1873, comprise all the papers relating to Ireland and its university system, together with some other articles of a somewhat similar nature. The Essays in Political Economy, Theoretical and Applied, which appeared in the same year, contain the essays towards a solution of the gold question, brought up to date and tested by comparison with statistics of prices. Among the other articles in the volume the more important are the criticisms on Bastiat and Comte, and the Essays on Political Economy and Land, and on Political Economy and Laissez-Faire, which have been referred to above. In 1874 appeared his largest work, Some Leading Principles of Political Economy, newly Expounded, which is beyond doubt a worthy successor to the great treatises of Smith, Malthus, Ricardo, and Mill. It does not expound a completed system of political economy ; many important doctrines are left untouched; and in general the treatment of problems is not such as would be suited for a systematic manual. The work is essentially a commentary on some of the principal doctrines of the English school of economists, such as value, cost of production. wages, labour and capital, and international values, and is replete with keen criticism and lucid illustration. While in fundamental harmony with Mill, especially as regards the general conception of the science, Cairnes differs from him to a greater or less extent on nearly all the cardinal doctrines, subjects his opinions to a searching examination, and generally succeeds in giving to the truth that is common to both a firmer basis and a more precise statement. The last labour to which he devoted himself was a republication of his first work on the Logical Method of Political Economy, which had long been out of print. The second edition appeared in April, a few months before the author's untimely death.
Taken as a whole the works of Cairnes form the most important contribution to economical science made by the English school since the publication of J. S. Mill's Principles. As has been already pointed out, they possess especial value by reason of the writer's firm grasp of the nature, method, and limits of the science he is engaged in expounding It is not possible to indicate more than generally the special advances in economic doctrine effected by him, but the following points may be noted as establishing for him a claim to a place alongside of Ricardo and Mill : - (1.) His exposition of the province and method of political economy. He never suffers it to be forgotten that political economy is a science, and consequently that its results are entirely neutral with respect to social facts or systems. It has simply to trace the necessary connections among the phenomena of wealth, and dictates no rules for practice. Further, he is distinctly opposed both to those who would treat political economy as an integral part of social philosophy, and to those who have attempted to express economic facts in quantitative formulae, and to make economy a branch of applied mathematics. According to him political economy is a mixed science, its field being partly mental, partly physical. It may be called a positive science, because its premises are facts, but it is hypothetical in so far as the laws it lays down are only approximately true, i.e., are only valid in the absence of counteracting agencies. From this view of the nature of the science, it follows at once that the method to be pursued must be that called by Mill the Physical or Concrete Deductive, which starts from certain known causes, investigates their consequences, and verifies or tests the result by comparison with facts of experience. It may, perhaps, be thought that Cairnes gives too little attention to the effects of the organism of society on economic facts, and that he is disposed to overlook what have recently been called by Mr Bagehot the postulates of political economy. (2.) His analysis of cost of production in its relation to value. According to Mill, the universal elements in cost of production are the wages of labour and the profits of capital. To this theory Cairnes objects that wages, being remuneration, can in no sense be considered as cost, and could only have come to be regarded as cost in consequence of the whole problem being treated from the point of view of the capitalist, to whom, no doubt, the wages paid represent cost. The real elements of cost of production he looks upon as labour, abstinence, and risk, the second of these falling mainly, though not necessarily, upon the capitalist. In this analysis he to a considerable extent follows and improves upon Senior, who had previously defined cost of production as the sum of the labour and abstinence neces sary to production. (3.) His exposition of the natural or social limit to free competition, and of its bearing on the theory of value. He points out that in any organized society there can hardly be the ready transference of capital from one employment to another, which is the indispensable condition of free competition ; while class distinctions render it impossible for labour to transfer itself readily to new occupations. Society may thus be regarded as consisting of a series of non-competing industrial groups, with free competition among the members of any one group or class. Now the only condition under which cost of production will regulate value is perfect competition. It follows that the normal value of commodities - the value which gives to the producers the average and usual remuneration - will depend upon cost of production only when the exchange is confined to the members of one class, among whom there is free competition. In exchange between classes, or non-competing industrial groups, the normal value is simply a case of international value, and depends upon reciprocal demand, that is to say, is such as will satisfy the equation of demand. This theory is a substantial contribution to economical science, and throws great light upon the general problem of value. At the same time, it may be thought that Cairnes has overlooked a point brought forward prominently by Senior, who also had called attention to the bearing of competition on the relation between cost of production and value. The cost to the producer fixes the limit below which the price cannot fall without the supply being affected ; but it is the desire of the consumer - i.e., what he is willing to give up rather than be compelled to produce the commodity for himself - that fixes the maximum value of the article. To treat the whole problem of natural or normal value from the point of view of the producer is to give but a one-sided theory of the facts. (4.) His defence of the wages fund doctrine. This doctrine, expounded by Mill in his Principles, has not been universally accepted even by British economists, and has recently been assailed with great vigour by Thornton and F. D. Longe. In consequence of these attacks it has been relinquished by Mill, but Cairnes still undertakes to defend it. He certainly succeeds in removing from the theory much that has tended to obscure its real meaning, and in placing it in its very best aspect. He has also shown the sense in which, when treating the problem of wages, we must refer to some fund devoted to the payment of wages, and has pointed out the conditions under which the wages fund may increase or decrease. But he has not, it seems to us, been successful in showing that the theory is fruitful, or gives any satisfactory explanation of the many complicated questions connected with the varying rates of wages.
These points, of course, do not comprehend all or nearly all that Cairnes has handled in his peculiarly fresh and attractive manner. The Leading Principles, for instance, contain admirable discussions on trades unions and protection, together with a clear analysis of the difficult theory of international trade and value, in which there is much that is both novel and valuable, while numerous minor topics are treated throughout the volume. The Logical Method contains the best exposition and defence known to us of Ricardo's theory of rent ; and the Essays contain what is probably the most complete and successful criticism of Bastiat's economic doctrines. (a. AD.)