McCulloch attended the
University of Edinburgh, but did not graduate. McCulloch collected the early literature of
political economy, and wrote on the
scope and method of economics and the
history of economic thought. After his death his library was purchased by
Lord Overstone and eventually presented to the
University of Reading. He was a participant in the
Political Economy Club, London, founded by
James Mill and a circle of friends in 1821 for an ongoing discussion of the fundamental principles of political economy. McCulloch's works include a textbook,
Principles of Political Economy (Edinburgh 1825). He worked on subsequent editions until his death. This book contains a memorable discussion of the origins of
profit or
interest in the case of a cask of new wine. :"Suppose that a cask of new wine, which cost £50, is put into a cellar, and that, at the end of twelve months, it is worth £55, the question is: Should the £5 of additional value, given to the wine, be considered as a compensation for the time the £50 worth of capital has been locked up, or should it be considered as the value of additional labour actually laid out in the wine?" This question is still used in discussions of the
labour theory of value and related issues. McCulloch used it to illustrate that "time cannot of itself produce effect; it merely affords space for really efficient causes to operate, and it is therefore clear it can have nothing to do with value." Reflecting on discussions in the Political Economy Club, Ricardo had privately expressed his famous opinion about the "non-existence of any measure of absolute value." McCulloch was an opponent of
Robert Malthus, in response to Malthus's
Definitions in Political Economy (1827) wherein Malthus criticized several contemporary economists, including
Jean-Baptiste Say,
James Mill, and McCulloch, for what he considered sloppiness in selection of, attachment of meaning to, and usage of their technical terms. In March 1827 McCulloch made a cutting reply on the front page of his Edinburgh newspaper,
The Scotsman, implying that Malthus wanted to dictate terms and theories to other economists. McCulloch clearly
felt his ox gored, and his review of
Definitions is largely a bitter defence of his own
Principles of Political Economy, and his counter-attack "does little credit to his reputation", being largely "personal derogation" of Malthus. The purpose of Malthus's
Definitions was terminological clarity, and Malthus discussed appropriate terms, their definitions, and their use by himself and his contemporaries. This motivation of Malthus's work was disregarded by McCulloch, who responded that there was nothing to be gained "by carping at definitions, and quibbling about the meaning to be attached to" words. Given that statement, it is not surprising that McCulloch's review failed to address the rules of chapter 1 and did not discuss the definitions of chapter 10; he also barely mentioned Malthus's critiques of other writers. McCulloch died in 1864, and is buried in
Brompton Cemetery, London. == Criticism ==