Thomas Robert Malthus

(1766-1834) – an Essay on the

Principle of Population, 1798 &
1803
Classical:
• Favored free, unregulated markets and
maximum individual freedom.
• Economic freedom provided a means by which
the economy could function most efficiently.
• Individuals and businesses should be free to
trade without government interference.
• Classicals perceived that political and economic
freedom to be inseparably bound.
THOMAS ROBERT MALTHUS (1766-1834)

• The Malthusian Population Doctorine:

population increases faster than the
food supply.
• Not original with him – Adam Smith &
Benjamin Franklin.

• It was Malthus’s presentation of the population

problem that significantly influenced existing
subsequent economic thinking.
The theory was formulated based on
three factors:
Population pressure on England’s food supply.
Until 1790, England – largely self-sufficient began to
import food & prices rose noticeably.
The increasing poverty of the lower-income classes.
England was becoming urbanized. Factory production
replaced home production. The growth of the town
increased the misery/suffering/poverty of the lower-
income class.
An argument between Malthus & Daniel (father) - the first
edition of his essay on population (1798). Poverty
and misery were not the result of social and
political institutions. Changes in these
institutions would not remove the ills of the
society.
 Population Theory – poverty & misery.
 Pop when unchecks increases geometrically & food
increases arithmetically.
 Poverty and misery are the natural punishment for the
failure of the lower classes to restrain their reproduction.
 2 types of checks to population growth: preventive checks &
positive checks
 Preventive check - moral restraint (postponing marriage or
never marry – reduce birth rate)
 Positive checks – famine, misery, plague & war (increase
death rate) – limit pop. – natural phenomena –
punishments for not practiced moral restraint.
 If positive checks were overcome – starvation.
 Checks will develop (pop=food).
No G relief for the poor.
Rejected the Poor Laws - more children survive
worsening the problem of hunger.
Poor Law Amendment of 1834 (Malthus’s).
There was an inherent tendency
in the aggregate economy toward
under-consumption.

Too much saving & invest will

cause difficulties (oth function of
$???)

S-I cannot go indefinitely without

leading to long-run stagnation.
The Theory of Market Gluts.
Potential insufficient of effective demand.
spending by landlords is essential to
avoid a glut of goods on the market, which in
turn produce economic stagnation.
Rent – a surplus; the difference price of agr &
cost of prod (wages, interest & profits).
Rent – adds to effective demand without adding
to the cost of production.
Wages, interest & profit – increasing purchasing
power but also raise prod costs.
Costs must be kept down if to maintain
competitiveness in world market.
Therefore corn laws must be retained.
Tariffs on the imported grains enrich the landlords
& consequently promote unproductive
consumption.
This is necessary to avoid economic stagn.
Consumption by landlords (hiring large number s of
menial servants) keep increase the value of the
produce & enable the increase in qtty more than to
counterbalance the fall of its price.
Opposed excessive unproductive C by the G –
officials, soldiers, sailors – national debt;
necessitates higher taxes & inflation; impede the
increase of wealth.
Assessment of Maltus Contributions
Population Theory
• free the wealthy from responsibility of poverty.
• The poor had only themselves to blame.
• Poor laws if abolished reduced taxes on
property.
• Defense of corn laws – serves the interest of
landlords.
• Overrate the significance of rents & spending by
l/lords.
• Distinction between productive * unproductive
consumption is inaccurate.
• The theory of gluts show an awareness of the
potential problem of u from a lack of agg
demand.
• It was a significant insight – the prob of a
capitalistic economy – expanded by Keynes
1930s.
• Overrated the rate of population growth relative to
that of subsistence.
• Plausible theory but not supported by evidence.
• Pop has increased a far lower than 25yr
geometric progression.
• World’s output has increased even faster, hence
the growth of per capita world output & income.
• Diminishing returns in agr – underestimated the
possibilities of enlarging agr prod from technological
innovation, capital accumulation & fewer workers.
• Pop growth – failed to recognize birth control via
contraceptive method. Increases in output may reduce
birth rate in those societies.
• Opp costs of having children rise when real hourly
wages increase & many people respond by limiting the
size of family.
• still relevant – 70% world’s pop live in developing
nations. 20% lives on < than $1 per day. For some of
the poor countries Malthusian prediction of famine, war,
malnutrition & disease are all too real. These are the
prob of dis & prod, demanding solution rather than as
inevitable & largely unavoidable results of natural laws.
• Pop theory & market gluts – noteworthy.
The Population Thesis:

• Population grows at a faster rate than the

food supply. Population increases
geometrically (1,2,4,8,16,….) but the
food supply increase arithmetically
(1,2,3,4,5,….). This is the cause of
poverty and suffering.

• Justify – diminishing returns in agriculture

• Checks will developed to keep pop growth in line
with growth of food supply.
• The rate of population will be in line with the rate of
growth of the food supply if :
Increases in death rate (positive)- wars, famines (food
shortage), disease and similar disasters.
Preventive check - lowering of the birth rate,
accomplished by postponing marriage. But,
postponement of marriage resulted misery & vice due
from the premarital sexual relations.

• Changing the institutional structure would not

removed misery as long as humans required
food and sexual drives were strong.
Controversy:

• Dissatisfied with his initial ideas in his first essay,

published 2nd edition of his essay (1803).

• The argument was supported by statistical data.

It was scientific in method as well as purpose.

• Most importantly, the argument & conclusions

were changed.

• A new check - Moral restraint (control) or the

postponement marriage without premarital
sexual activities.
Several Flaws of the Theory:

• Never discussed the feasibility of controlling population

via contraceptive measure (neo-Malthusians).
• Confused the instinctive desire for the sexual
relationships with the desire to have children. Although
sexual drive is strong among people, increasing level of
affluence and education tend to introduce a
distinction between sexual desires and the decision to
have children.
• Failed to consider the possibility of development in
agricultural technology might permit sufficient
increases in food supply to support an increased
population.
• However, economists have never developed
a theory explaining the rate of technological
development.

Application in Classical Theory & Policy:

• an increase in the real wage of labor
increases population, which, eventually
bring the wage back to its former level. Any
attempt to improve the economic
welfare of lower-income groups would be
frustrated by the increase in the population.
Debate on Corn Laws

Poor Laws

Market Gluts

Opposed Say’s Law

Spending by landlords is
essential to avoid a glut of
goods on the market that in
turn would produce
economic stagnation.
Corn Laws
• Protection of British agriculture from
foreign competition caused grain imports to
decline & output of grain in England to
increase.

• Corn Laws accelerate the process

of redistribution of income toward
the landlord, slowing down
economic growth & hastening the
stationary state.
The Corn Laws imposed a floor on the price of
grain – 50 shilings per quarter.
Landlords demanded a floor of 80 shilings per
quarter – prompted an extensive controversy.
Ricardo - higher tariffs resulted in higher
grain prices.
Higher tariff encourage greater Inv in
agriculture, increased output supply & P
fall.
Higher P of grain was the results of higher
rents. Rents were price-determined
Diminishing returns  L fixed, land farmed
more intensively, marginal physical product
decreases, equivalent to say marginal cost
increases  grain prices rises.
Increase in the cost of producing
grains  Higher grain prices.
Higher grain prices  demand more real
wages  for workers to maintain a subsistence
std of living  higher grain P & cost of grain was
a major part of L food budget.
W↑  Pop ↑  demand for more food 
increase grain prod  demand for more Land
diminishing marginal return rents ↑ & MC ↑
THE END