Isaac Butt and the Early Development of the Marginal Utility Theory of Imputation
Moss, Laurence S., The American Journal of Economics and Sociology
One of the most remarkable and hitherto unnoticed developments in nineteenth-century British thought, was Isaac Butt's (1) attempt to combine Mountifort Longfield's theory of profit (2) with the general utility teachings of Jean Baptiste Say (3) and thereby develop one of the earliest presentations (if not the earliest) of the marginal utility theory of imputation. The idea that the valuation of productive resources is inextricably linked to the value of the commodities they help produce constitutes a theme throughout all of Say's writings on economics. However, the more technical question of exactly how this "value created" is exactly apportioned among the productive factors is one that Say himself did not attempt to answer. The answer to this question depended on (i) finding some method of individually assessing the relative importance of resources that are employed in combination and (ii) demonstrating that the spontaneous forces of the market do in fact reward factors in accordance with their relative importance. Longfield had provided such principles in the course of his own account of how the national product is distributed among the three great classes of society--the landlords, capitalists, and workers. (4) It remained for Longfield's disciple Isaac Butt to combine the technical apparatus provided by his teacher with the general utility orientation of Say and thereby arrive at an early version of what in the latter part of the nineteenth century became a leading doctrine of the utility school--the marginal utility theory of imputation.
During the last quarter of the nineteenth century and thereafter, there sprang up an extensive literature on the historical origins of the doctrines of the marginal utility school of economics. (5) For almost half a century, the search for "precursors," (which uncovered such giants as von Thunen, Gossen, and Cournot) bypassed completely the writings of a small but unquestionably original group of economists who wrote and lectured at Trinity College, Dublin, during the first part of the nineteenth century. The creation of the Whately Chair of Political Economy at that college in 1832 made it financially possible for a variety of talented minds to turn their energies to the subject matter of this nascent science. However, despite the preponderance of original ideas and discoveries in their published lectures, the economic writings of authors such as Longfield and Butt remained obscure and without much influence outside Ireland. (6)
This oversight was largely remedied when in 1903 E. A. G. Seligman published his now famous essay, "On Some Neglected British Economists." (7) Seligman lauded the value and distribution theories of the two earliest Irish professors, Longfield and Butt, and declared that they had made important contributions to the early development of marginalist doctrine. Years later, in 1945, R. D. Collison Black went a step further and established the fact that "something closely approaching a 'subjective value school' existed at Dublin University in the mid-nineteenth century." Black reviewed practically the whole of the published writings of the early line of Whately professors at Trinity College, Dublin, and found them more congenial to the utility theory than the writings of their English contemporaries across the channel. (8) Seligman and Black's complementary interpretations were taken over and reinforced by Schumpeter in his History of Economic Analysis. (9)
When assessing Butt's individual contribution to economics, Black was reluctant to credit him with having advanced the utility doctrine beyond the state in which it was left by his precursor Longfield. Black writes that "there is no considerable development of [utility] ideas in Butt's work, but he uses them as an introduction to a novel theory of original prices, based upon productivity considerations, after the method of Longfield." (10) Neither Black nor any other writer has developed this statement further and the contemporary reader is apt to overlook the fact that by working out a "novel theory of original prices," Butt was actually (with the aid of Longfield's analytic apparatus) presenting an embryonic version of the marginal utility theory of imputation. …