One common argument for economic
pessimism stems from the fear of
increasing population. Let's take a look
at this argument and see if it's
true. The Reverend Thomas Robert Maltus
published his famous book, An Essay on
the Principle of Population, First
Edition
1798. This book remains extremely
influential today. In the basic
argument, Mela suggests that there are
diminishing returns to land. That is if
we add more workers to the land, the
land produces smaller and smaller
amounts of additional value. This means
for instance that if population doubles
and we imagine twice the number of
people working on the land, we don't
produce twice as much food. So a
doubling of the population would mean
that each person actually has less food
than before compared to the lower
population. Now imagine that a
technological improvement comes along
and people are somewhat wealthier. In
this situation, there will be, according
to Mthus, a greater number of people.
People will live longer and they also
will have more resources to support a
greater number of children. Fewer
children, for instance, will die in
infancy. That means a growing
population. But if you accept Mthus'
assumption of diminishing returns to
land and the notion of a fixed supply of
land, not all is well. The growing
population means less food for each
person. Over time, the population will
shrink again because there will be less
food to support children, less food to
support people in their old age, and
living standards will eventually fall.
The basic point is that at first
something good happens. Then population
goes up because of the good news, but in
the longer run, that new and larger
population brings you back down to a
lower standard of living. Those are the
basic mechanics of the Malthusian model.
Just to review those assumptions written
down, there's a fixed and vital factor
of production, land. There are
diminishing returns on that factor.
Income determines population growth.
Rising wages mean higher survival rates,
but higher survival rates eventually
push wages back
down. In the Malthusian model, a lot of
policies which might appear to help the
poor actually don't help the poor at
all. For instance, imagine a vaccination
program which limits some kind of
disease. In the short run, of course,
this will make the poor people
healthier. But in the Malthusian model,
in the longer run, you end up with a
greater number of poor people because
fewer of them are dying and living
standards collapse. Once again, this
seems counterintuitive, and indeed, as
we'll see, it's probably false. But
nonetheless, this anecdote is one way of
thinking through what the Malthusian
model would actually mean in practice.
There is some evidence that a version of
the Malthusian model may help us explain
earlier periods in world history. For
instance, if we take a typical European
living standard during the time of the
Roman Empire and compare it to a typical
European living standard in say the year
1700, it's not clear that there was much
progress, if indeed any progress at all.
Net sustainable economic growth was slow
during virtually all of this period and
many regions of the world retrogressed.
We don't have the data to say for sure
that Mus was right about this period.
But at the very least, the sense we have
from the data we do have is consistent
with a Malthusian
model. Since the industrial revolutions
of the 19th century, the Malthusian
model seems to be mostly or even
completely false. For instance, take the
country of Japan. It really does have a
fixed supply of land. Improvements in
technology have kept the Japanese
standard of living very high, well above
subsistence. And rather than just
multiplying numbers endlessly, in fact,
the birth rate in Japan has fallen
dramatically. The population of Japan
actually is shrinking and living
standards remain high. Even though at
the moment the rate of economic growth
is fairly low, it's interesting, but in
1800 Mus himself wrote about China in
Japan. and he wrote, I quote, "From the
accounts we have in China and Japan, it
may be fairly doubted whether the best
directed efforts of human industry could
double the produce of these countries
even once in any number of years." Of
course, what we saw in the late 20th
century is that the economic produce of
Japan could double in about 10 years
time and the economic produce of China
could double in about seven years time
and stay there. On these issues, Mouthys
was quite simply wrong.
What about Africa? Might the Malthusian
model be true for Africa today?
Development economist Charles Kenny set
out to study exactly this question. And
he looked at data from 46 different
African countries. Keep in mind the
Malthusian predictions. The first is
that rising GDP per capita should lead
to a rising population. The second is
that a rising population should lead to
falling GDP per capita. But of the 46
African countries Kenny looked at, those
Malthusian correlations were found in
only 13 of them and only in four of
those 13 cases were the correlations
even marginally strong defined by Kenny
as greater than 0.3. That suggests that
for the most part, even for Africa, the
Malthusian model today is false. The
Malthusian model is perhaps best thought
of as a kind of challenge which the
world must must face, but not as a good
description of how the world actually
works, at least not
today. For further readings on this
topic, you can Google Thomas Robert
Mthus. You can even read Mthus' essay
online if you want. And for the more
modern take using data, please Google
Charles Kenny Malthusian trap.