John Craig

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John Craig, ? -?

Scottish author, about whom virtually nothing is known. All that is know of his background is that John Craig was from Glasgow, where he had studied under John Millar, and was elected a fellow of the Royal Society of Edinburgh in 1818 and resigned in 1840.

John Craig was the author of two works somewhat critical of the Classical school. Most interestingly, Craig disputed the classical distinction between value-in-use and value-in-exchange. In particular, he argued that a fall in the exchange price of a good calls forth a new set of purchasers effectively bringing value-in-exchange down to the lower value-in-use of the new purchasers. In this manner, Craig makes the link between an extensive form of marginal utility and value. Furthermore, he noted, a rise in supply of a good may decrease the exchange-value of that good, but it will also (by an income effect) increase the demand and thus the exchange value of other goods. He consequently concludes that "value in use ... must be very accurately measured by value in exchange."

Craig also erased Adam Smith's distinction between productive and unproductive labor, calling all labor "productive" if it, directly or indirectly, satisfies human wants. As he puts it, "wealth may consist in whatever is the object of man's desire, and every employment that multiplies those objects of desire, or which adds to their property of yielding enjoyment is productive." (Craig, 1814, II: 96).

Craig also denied the "subsistence wage" theory, arguing that it was not "standards of living" (or the price of necessities) that governs the setting of wages. Rather, wages are determined by the demand for labor, which in turn is determined by the "capital from which wages are advanced [or] the demand for the produce of labor" (1821: 37). Thus, he holds a combination of both the Classical wages-fund doctrine and the Neoclassical theory of imputation.

Craig also disputed the Ricardian theory about the inverse relationship between wages and profits, noting that when profits are high, they call forth the application of more capital and that, by competition, raises wages. When profits are depressed, wages are low. He regarded the theory of rent as a bit of a truism when the supply of land exactly matches demand, but if demand exceeds supply, then there is always a rent, even on the marginal land (Lands not brought for cultivation usually have some yield, like from the sale of its timber or renting out "for sport".)

John Craig is often regarded as one of the first British proto-marginalists. Although he does align himself with J.B. Say, Craig makes note that he came across Say's works only after he had completed his own..

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Major Works of John Craig

"Account of the Life and Writings of John Millar, Esq." 1806, in John Millar Observations concerning the Distinction of Ranks in Society, p.i-x,
Elements of Political Science, 3 vols, 1814, v.1, v.2, v.3
Remarks on Some Fundamental Doctrines of Political Economy, illustrated by a brief inquiry into the commercial state of Britain, since the year 1818, 1821. [bk]

HET

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Resources on John Craig

"Craig, John" by F.Y. Edgeworth, in Palgrave's Dictionary of Political Economy, 1894.

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