Assess how capitalism can help a society to escape from the Malthusian trap.

The concept of the Malthusian trap contradicts the foundations of capitalism which therefore
resulted in the collapse of the Malthusian spectre during the early nineteen century.
Essentially, the cyclical Malthusian theory was based on the idea that population and
production of capital goods -predominantly based on crop and vegetation output- has an
inverse relationship due to Malthus’ concept of diminishing average product of labour; the
economist theorized that as population increases exponentially, demand for food will also
rapidly increase however, as a result of diminishing marginal productivity and fixed factors of
production (for example fertile land and capital), there will be a shortage resulting to
economic and population stagnation. This rotation between overpopulation, famine,
decrease in population, increase in living standards and then back to overpopulation was
quintessentially broken by the industrial and capitalist revolution of the 1830s and 1840s.
According to economists, the revolutions were a clear refutation to Malthus’ concerns
regarding “improvements in technology will not lead to an increase in living standards if the
average productivity of work decreases with the increase in the work employed on a fixed
amount of land and if the population grows in response to an increase in income”1.
Furthermore, the capitalist revolution discharged any concerns regarding living standards
decreasing as population and labour force increased and, in contradiction, it depicted the
idea that as population increased, living standards improved and wages increased as
opposed to Malthus’ predictions.

Thomas Malthus’ ‘Principle of Population’ essay was foundationed on the theories of Charles
Darwin and Alfred Russell Wallace -humans having undeniable attraction and an animalistic
desire to procreate- and the concept that humans require sustenance. He theorized that
advancement in technology would result in demographic growth which due to the lack of
competence of agricultural production would consequently lead to inevitable famine, feuds
and abstinence; Malthus’ theory was constructed on his postulates that population expands
geometrically whereas production of food accrues arithmetically which eventually concludes
in a shortage of supply of food. The Malthusian spectre encircles the problem that “men
multiply like mice in a barn if they have unlimited means of subsistence.”2 However, the
reality that the era preceding the capitalist revolution was a period of world-wide stagnation
of income per capita, as suggested by the trap, can't be rebutted.
In counter-argument, following the ‘Malthusian Epoch’ and the capitalist revolution, both of
Malthus’ hypotheses -regarding the consequences of shortage of nourishment and
unconstrained human population expansion- were nullified; Malthus summarized that
humans will be inefficient and incapable of agricultural production for an expanding human
populus however, population has inflated from 800 million in 1800s to over 7.8 billion in 2020
and yet “farm mechanization and better fertilizer usage have increased the output per farmer
on the order of 400x in developed countries.”3 Moreover, he assumed that human
inhabitants would proliferate exponentially as a result of increased income per capita and
living standards however, in contrast, demographers predict that population will experience a
decelerated growth in the 22nd century.

1 https://businessteacher.org/assignments/capitalism-and-the-malthusian-trap.php
2 Cantillon, Richard; ‘An Essay on Economic Theory’ (originally published 1755 in French)
3 https://www.senseandsustainability.net/2016/11/08/escaping-the-malthusian-trap-and-the-
population -bomb/
The capitalist revolution was the materialization of a new and advanced economic system
which was shepherded by private property, markets and firms; the transition from a market
economy with family based production to a capitalist economic system was aided by the
technological augmentation and specialisation which resulted in the industrial revolution: the
industrial revolution was the initial indication that technological advancement could
outcompete human populus extension and therefore obliterate Malthus’ presumptions
regarding diminishing average product of labour and the cyclical theory of inefficient
production. The escape from the Malthusian trap was mainly due to the industrial revolution
elevating the labour force’s capabilities and power as well as increasing productivity and
efficiency in different markets (including agriculture). Industrial revolution fuelled urbanization
and increased income per capita as trade unions formed and firms demanded increased
efficiency and accelerated production. Moreover, Malthus overlooked that extensive
technological improvement would increase agricultural production and therefore elevate the
living standards resulting in growth of the overall labour market. Furthermore, the Malthusian
trap depicts a cycle of fluctuating population and living standards based on production of
capital goods however, the industrial revolution completely eliminated the spectre; during the
revolutionary period, population growth was around double of the previous century4 and yet
living standards excelled as opposed to prior situations where eventually population growth
decelerated due to decreased agricultural production causing external economic problems
like war.

Additionally, the revolution demanded increased supply of labour which terminated the
diminishing average product of labour as the labour market was more productive and
became more specialised -hence benefiting from economies of scale- and was not limited to
the market of agriculture like Malthus insinuated. Specialisation improved productivity of
individual labourers as well as reducing average cost of production and therefore reducing
the price of goods which consequently lead to a greater portion of real disposable income to
be left remaining; the substantial disposable income left denotes that real wages are above
subsistence levels and therefore the economy has exited the Malthusian crisis. In
continuation, the trap can be escaped due to comparative and absolute advantage of a
capitalist economy, as they can benefit from specialization in their most efficient production
sectors, which would end the diminishing average product of labor and allow countries to
exchange capital and also benefit from specialisation; this exchange -also known as
globalisation- would negate the Malthusian theory of scarcity of food and hence break the
cycle. On the other hand, excessive specialisation as a result of uncontrolled application of
labour can create a diseconomies of scale and possibly lead into the Malthusian cycle again
as marginal costs increase and there can be structural unemployment leading to workers
experiencing inadequate living standards.

The Malthusian catastrophe, regardless of most economies having escaped it, is still
prevalent in some less developed countries who still rely on agriculture and are deprived of
the evolution in technology which results in them still being subject to famine, starvation and
crime. In contradiction, the green revolution of the 1950s and 1960s alongside continuous
development in agricultural technology “and migration ensured that the percentage of people
living below the poverty line continues to decline.”5 (The green revolution is an intensive
combination of agricultural technology and techniques applied in order to maximise crop
4 https://ourworldindata.org/world-population-growth
5 https://www.investopedia.com/terms/t/thomas-malthus.asp
output.) As accounted for in countries like India, "gains in productivity remained confined to
select areas which emerged as enclaves of high growth amidst stagnating, backward, and
low-yield unproductive agriculture in the rest of the country." 6 Excessive immigration and
unsustainable levels of consumption can threaten a Malthusian catastrophe to occur in more
developed countries as they reinforce the problem of overpopulation and depleted quantities
of provisions; for example “US's modest population growth rate of 0.7 per cent per year is
too high to maintain the country's current standard of living, notes with alarm that ‘one-
quarter of this rate of increase is due to immigration’.”7 In opposition, immigration in a
capitalist economy can actually diversify the labour force and therefore expand the labour
market as well as diminishing overcrowding in other less economically developed countries.
In addition, immigration is a by-product of globalisation and capitalism and therefore, it
emphasises countries assisting others in escaping the Malthusian crisis through providing
employment and potentially improved living standards.

Despite, the constant explicit invalidation of the theory, it was significantly experienced
following the black death of the 1349 to 1351 where peasants had extensive power and
therefore the ability to demand for increased wages which resulted to living standard
improving however the eventual growth in population expanded the labour market which
concluded in income per capita and living standards to deplete. Malthus continuously argues
that real wages above subsistence levels caused living standards to improve however as the
population increased real wages either were at equilibrium with the subsistence level or
below which was the predicted cause for variation in human populus growth. The capitalist
revolution not only established the power of markets but also introduced firms which were
obliged to help workers maintain a certain living standard as well as provide a real wage
above what Malthus would consider the subsistence level; the industrial revolution gave rise
to a working class who -with the assistance of the empowered trade unions- pressurized
firms to upgrade living and working standards. Establishment of the capitalist economy
resulted in Britain emerging from the cycle of the Malthusian crisis due to the fact that the
UK’s decades of stagnation in income per capita was demolished as income per capita rose
inexplicably.

To conclude, Malthus’ theory in regards to his essay “Principle of Population” was primarily
based on his concerns referring to the sustainability of human population and natural
resources -in respect to ceteris paribus. In retrospect, capitalism and the industrial
revolution, despite eluding the Malthusian trap, were unsustainable and therefore, in
accordance to Malthus’ predictions, could eventually revert the economy into the Malthusian
crisis. However, as a result of unceasing technological development and movement towards
a sustainable future in capitalist economies, capitalism will always escape the Malthusian
trap regardless of human population increase or changes in production of food. Capitalism is
established around the basic economic problem of scarcity and inefficient production hence
it utilises the principle of allocating these scarce goods efficiently in order to gain optimum
value; in this way, capitalism ensures that scarce goods are used rationally and allocated
efficiently in order to avoid shortage of supplies resulting in exogenous shocks as Malthus
theorized.

6 Bhatia, B.M., ‘Indian Agriculture: A Policy Perspective, Sage Publications.’ (published 1988 in New
Delhi)
7 http://www.thecornerhouse.org.uk/resource/malthus-factor
Bibliography

● Core: The Economy; Unit 1- The Capitalist Revolution, Unit 2- Technology,

Population and Growth
● Malthus, Thomas Robert; ‘An Essay on the Principle of Population: A View of its Past
and Present Effects on Human Happiness; with an Inquiry into Our Prospects
Respecting the Future Removal or Mitigation of the Evils which It Occasions.’
(originally published in 1798, England)
● Ashraf, Quamrul and Galor, Oded; ‘Dynamics and Stagnation in the Malthusian
Epoch.’ (published in 2011, USA)
● All Answers Ltd.; ‘Capitalism and the Malthusian Trap’ (published 2018)
● Cantillon, Richard; ‘An Essay on Economic Theory’ (originally published 1755 in
French)
● Ross, Eric B.; ‘The Malthus Factor: Poverty, Politics and Population in Capitalist
Development’ (published 1998, England)
● https://www.senseandsustainability.net/2016/11/08/escaping-the-malthusian-trap-
and-the-population-bomb/
● https://www.investopedia.com/terms/t/thomas-malthus.asp