Cairnes John Elliot

Cairnes John Elliot

Cairnes, John Elliot (1823-75), Irish-born economist educated at Trinity College, Dublin. He began his career as a journalist but later became Whately Professor of Political Economy at Dublin in 1856, at Galway in 1859 and at London in 1867. Cairnes was one of the last 'classicists'; his main works, Character and Logical Method of Political Economy (1857) and Some Leading Principles of Political Economy (1874), gave an orthodox account of the essentials of the classical system. The first was part of a long controversy with Mill and Senior over the scope and method of economics. (z)

Calculation, Economic. (a) Generally, the consideration by a consumer (or a producer) of the alternatives open to him in spending and saving a personal income (or running a business). A consumer must decide how much of his income to spend on alternative or complementary commodities and how much to save. A business man must decide what products to make, what size of output to aim at, and what methods to use. To provide a starting-point in framing theories in economics, these calculations are assumed to be consistent. Thus the consumer may be thought of as mentally balancing the utility of minutely differing combinations of goods and services until the combination that gives the largest total utility for a given expenditure is reached.

(b) Specifically, a method of determining values not in markets by competition but by a process of calculation by a centrally directing authority using techniques of mathematical economics. The idea was stated in general terms by the early socialists, who wished to find an alternative to the method of determining value by markets in which there was competition between sellers who offered goods and services produced by privately owned resources. In the English-speaking world the American economists F. M. Taylor and W. C. Roper and H. D. Dickinson in England attempted to show that, if there were perfect knowledge of all the relevant information, the economic theory which explains the formation of prices and the distribution of productive resources between different goods and sources in a competitive system could also be used in a centrally directed socialist society without a free pricing system to decide the values and the quantities of the different commodities to be produced. The debate has continued for over thirty years with B. E. Lippincott (U.S.A.), Oskar Lange (Poland), A. P. Lerner (U.S.A.), the late E. F. it Durbin (Britain) and others claiming that 'socialist calculation' was possible and preferable to capitalistic competition', and Max Weber (Germany), N. G. Pierson (Holland), B. Brutzlms (Russia), L. von Mises (U.S.A.), F. A. Hayek (Britain) and others arguing that it was impracticable or inefficient. X

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