'
on the pretext that it is accumulated labour. What, however,
determines the share actually received? After all, as a machine is not
actually a labourer, and its work not a separable product, we cannot
easily see how much wages it is entitled to receive. M'Culloch follows
the accepted argument. 'No proposition,' he says, 'can be better
established than that the market rate of wages ... is exclusively
determined by the proportion between capital and population.'[380] We
have ultimately here, as elsewhere, 'the grand principle to which we
must always come at last,' namely, 'the cost of production.'[381]
Wages must correspond to the cost of raising the labourer. This leads
to a formula, which afterwards became famous. In a pamphlet[382]
devoted to the question, he repeats the statement that wages depend
upon the proportion between population and capital; and then, as if
the phrase were identical, substitutes that portion of capital which
is required for the labourer's consumption. This is generally cited as
the first statement of the 'wage-fund' theory, to which I shall have
to return.

I need not pursue these illustrations of the awkward results of
excessive zeal in a disciple. It is worth noticing, however, that
M'Culloch's practical conclusions are not so rigid as might be
inferred. His abstract doctrines do not give his true theory, so much
as what he erroneously took to be his theory. The rules with which he
works are approximately true under certain conditions, and he
unconsciously assumes the conditions to be negligible, and the rules
therefore absolute. It must be added that he does not apply his
conclusions so rigidly as might be expected. By the help of
'friction,' or the admission that the ride is only true in nineteen
cases out of twenty, he can make allowance for many deviations from
rigid orthodoxy. He holds, for example, that government interference
is often necessary. He wishes in particular for the establishment of a
'good system of public education.'[383] He seems to have become more
sentimental in later years. In the edition of 1843 he approves the
Factory Acts, remarking that the last then passed 'may not, in some
respects, have gone far enough.'[384] He approves a provision for the
'impotent poor,' on the principle of the Elizabethan act, though he
disapproves the centralising tendency of the new poor-law. Though he
is a good Malthusian,[385] and holds the instinct of population to be
a 'constant qu