on--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 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_, had been relinquished by him, but Cairnes
still undertook to defend it. He certainly succeeded in removing from the
theory much that had tended to obscure its real meaning and in placing it
in its very best aspect. He also showed the sense in which, when treating
the problem of wages, we must refer to some fund devoted to the payment of
wages, and pointed out the conditions under which the wages fund may
increase or decrease. It may be added that his _Leading Principles_ contain
admirable discussions on trade 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. The _Logical Method_
contains about the best exposition and defence of Ricardo's theory of rent;
and the _Essays_ contain a very clear and formidable criticism of Bastiat's
economic doctrines.

Professor Cairnes's son, CAPTAIN W.E. CAIRNES (1862-1906), was an able
writer on military subjects, being author of _An Absent-minded War_ (1900),
_The Coming Waterloo_ (1905), &c.

[v.04 p.0952]

CAIRNGORM, a yellow or brown variety of quartz, named from Cairngorm or
Cairngorum, one of the peaks of the Grampian Mountains in Banffshire,
Scotla