Monday, March 24, 2008

Thoughts on Thomas Malthus

I actually wasn't going to blog about this topic until next week, but I'm going with a teachable moment, something we all do and try to take advantage of whenever we can.

I was reading through today's issue of The Wall Street Journal (WSJ), and I ran across an interesting article on the front page of the first section. The article talks about economic growth and relates them to the ideas of Thomas Malthus. Readers of this blog know I really enjoy the history of economic ideas, and it's not often that interest gets whetted by a front page article in a major newspaper. Malthus was a contemporary of both Adam Smith and David Ricardo. He became famous in political economy circles for authoring An Essay on the Principle of Population. In that work, Malthus talked about the connection between population and economic well-being, positing that population was its own regulator. Because population tended to grow more quickly than resources could accommodate, rising population would cause a reduction in the availability of resources, which would check population growth. As the population fell, eventually a point was reached when resources were relatively more abundant. This would, in turn, encourage population growth again.

The authors of the WSJ article come at Malthus in a slightly different way. They point out that, at the time he wrote, Malthus's predictions would prove to be happily wrong. Because it was the beginning of the Industrial Revolution, technology was about to take a hand and increase the availability of resources. This was done by applying capital to land and labor in ways not previously done. This raised the output of land and labor and moved the upper limit to resource use that had previously limited population and living standards.

The writers point out that, while it is not that current world population has reached a limit, as much as there is an increase in the living standards of much of the population. This is putting a strain on the world's resources as an ever increasing share of the global population becomes able to afford a life-style that was, for the most part, previously seen only in many Western economies.

The article continues, not with dire predictions, but to point out that solutions may lie in new applications of technology, as well as better allocation of resources, much in the way it developed after Malthus's book. The problem
lies in how governments react to the constraints, and how citizens of various nations deal with the changing rules of the game, as they manifest themselves through price signals and other avenues.

The topic of economic growth and development and the impact on commodity and other prices is one that can generate a lot of discussion in the classroom. You may want to use the WSJ article in the class. You may also want to check out this WSJ video (link no longer operative) that relates to the topic.

Finally, if you're interested in how Malthus viewed the world and how it changed so dramatically I would recommend Gregory Clark's A Farewell to Alms. I am almost finished with the book and will post my review some time in the next week or so. If you've read the book already, or are just interested in the book, there was a book discussion on the Marginal Revolution blog. You can find the discussion and comments in four parts here, here, here and here. (I've not read them because I don't want them coloring my view of the book. However, I will read them and link to them again when I post my review.)

I'm interested in whether or not you feel this is an appropriate discussion topic, especially in light of current events, or whether you feel this too time-consuming or just unnecessary. I look forward to hearing from you.


Gabriel said...

I, for one, would be very excited to read more about it!

Mike Fladlien said...

Thomas Malthus failed to see the impact of innovation. Now, 2% of Americans work on a farm and yet they feed the world...Malthus also couldn't see the effects of birth control so there's little reason to believe that a burgeoning population will doom mankind...My opinion is that the same Malthus model is being applied to energy...