On Malthusian Theory of Population

This post revisits ‘An Essay on the Principle of Population’ written by Thomas Malthus in 1798. In my last post I briefly touched upon his population theory. Unfortunately, mainstream economics textbooks mention Malthus only for his ‘bad’ population theory. His other significant contributions like Differential Theory of Rent, his theory of money, his questions about the validity of Say’s law, etc are conveniently suppressed.

First, I would like to discuss why his theory is ‘good’ and then I would like to show how Malthus is viewed, interpreted and treated by various economists and students of economics.

Economics as viewed earlier and as viewed now (by a few) was a discipline which tried to understand the society (now known an economy) and also to come up with solutions for the problems that persist. His Essay was the first serious economic study of the welfare of the lower classes‘ during his times. He was also a clergyman who wanted to make the society perfect.

His two postulates were that ‘food is necessary to man’ and that ‘the passion between the sexes is necessary and will remain nearly in its present state’. [Malthus 1798] Now we know that the first is a true premise and the second one is believed to be a law of nature. So, there are no issues with both his postulates. He also refers to these postulates as ‘laws of nature’.

Ceteris paribus, population growth will outstrip food growth. He also gives additional insights as to how population growth will necessarily be checked. His thought experiment based on the ‘true’ premises is therefore valid. At this juncture, one needs to understand the underlying assumption of diminishing returns to agriculture. Once this is understood, there is no reason to call his theory ‘bad’.

How can such a theory be useful to the society’ It brings to the fore the need for improvements in agriculture through technological advances, so that food production can be increased. (Assuming increased food production implies lesser hunger, but Amartya Sen proved otherwise. But it is necessary to have sufficient ‘food’ to feed society) Family planning is undertaken so that no child goes hungry apart from other reasons. Such checks are welcomed by all. Also, they indirectly draw from Malthus- the need for all people to consume food. However, checks like the Chinese one child policy create social problems on a massive scale.

It is amazing that even when his theory is viewed in isolation (from his other works), it still holds good! With progress in education (school children get introduced to a lot of theories and facts at an early age) theories like Malthus’ seem obvious and hence pointless. This also reflects the way theories are taught in schools and colleges. Very often, the context of the theory is left out. Corn Laws, the then predominant Ricardian theories, etc are very often not mentioned or discussed.

Now, I shall put forth two different views on Malthus, the economist.

1)

In this famous work, Malthus posited his hypothesis that (unchecked) population growth always exceeds the growth of means of subsistence. Actual (checked) population growth is kept in line with food supply growth by “positive checks” (starvation, disease and the like, elevating the death rate) and “preventive checks” (i.e. postponement of marriage, etc. that keep down the birth rate), both of which are characterized by “misery and vice”. [Source] (Note the mention of (unchecked))

2)

Malthus believed that population would increase at a geometric rate and the food supply at an arithmetic rate.

Malthusian population theory was eventually dismissed for its pessimism and failure to take into account technological advances in agriculture and food production. [Source]

Conclusion

How should theories be taught’ By this post, I only intend to question the current teaching and understanding of Malthus’ theories. Also, I wish to stress the importance of understanding and studying the ‘context’ (historical, political, social, cultural,etc) of a theory.

Now, economists (positive economics) are busy using scientific methods so as to universalise theories rather than provide solutions to hunger, poverty, unemployment and other socio-economic problems.

To sum up, Malthus stressed on the need to keep population and food production in such a way that everyone would be fed. I believe that this still holds true across the globe as one of the main concerns of economics.

Further Reading

1) 1) 1) Darwin and Malthus

2) 2) 2) Is India falling into the Malthusian trap’, C. J. Punnathara, The Hindu Business Line, April 9, 2008.

3) 3) 3) Malthus, the false prophet, May 15th 2008, The Economist.

4) 4) 4) The International Society of Malthus (further links from the society)

5) On GM Food and GM Mosquitoes

On Neo-classical economics

This post is the first in the series- On Neoclassical Economics. This series attempts to look at the basic concepts of Neoclassicalism or Marginalism. The concepts that this series will cover are that of man being rational, measurement of utility, equilibrium from demand and supply, Micro and Macro economics and notion of perfect competition.

Remind yourself that what we (mostly) see in textbooks is Neoclassical economics (In India). Is there another approach to Economics which these textbooks fail to talk about’ The answer is yes. It is known as ‘Classical Political Economy’.

Classical Political Economy

The concern of the classical economists from Adam Smith to David Ricardo was the laws governing the emerging capitalist economy, characterized by wage labour, an increasingly sophisticated division of labour, the coordination of economic activities via a system of interdependent markets in which transactions are mediated through money, and rapid technical, organizational and institutional change. In short, they were concerned with an economic system in motion. [Kurz and Salvadori 1998]

This approach does not break economics into monetary, fiscal, international trade, microeconomics, macroeconomics etc. Nowadays, economics has got lot many divisions and specialties, that I feel the essence is getting compromised. [Thomas 2006] Classical Political Economy does not make such compartments like the ‘mainstream economics’ and is also dynamic in nature.

Neoclassical economics began as a project to fashion an economic model in the image of Newtonian mechanics, one in which economic agents could be treated as if they were particles obeying mechanical laws, and all of whose behaviour could, in principle, be described simultaneously by a solvable system of equations. [www.paecon.net ]

This post delves into the origin and the importance utility enjoys in Microeconomics aka ‘the pet of Neoclassicalists‘.

Economists are subject to many vices, and one of them has been to talk about ‘utility’, which is a quantitative conception that there is no known way of measuring. [Robinson 1979] Still, hours and hours are dedicated to the task of measuring Utility and ‘Marginal’ Utility in colleges and universities. It forms the basis of Microeconomics and also helps in bringing more mathematics into the realm of economics.

Bernard Guerrien writes in Issue 12 of the Post-Autistic Economics Review that ‘The French students’ movement against autism in economics started with a revolt against the disproportionate importance of microeconomics in economics teaching. The students complained that nobody had really proved to them that microeconomics was of any use; what is the interest of going through ‘micro1’, ‘micro2’, ‘micro3’, etc., using lots of mathematics to speak of fictitious households, fictitious enterprises and fictitious markets”

Can economic policies be made based on such ‘fictitious’ measurements’ Is economics a policy science or an intellectual game’ One becomes a skeptic when wondering about why ‘Microeconomics’ has come to dominate economics learning. Is it to make economics more mathematical’

A digression: Economy

The concept of the ‘economy’ is of utmost importance in this regard. Does the ‘economy’ occupy a separate existence from that of the community and the state’ Very often, the headlines in the media say so, but it is not so. And economics is not tantamount to money.

According to C. T. Kurien, Economy is a structure of relationships among a group of people, in terms of the manner in which they exercise control over resources, use resources and labour in the production of goods, and define and settle the claims of the members over what is produced, emphasising that while the economy is concerned with goods and services, it should be recognised essentially as a set of social relationships.

The economy consists of two realms, namely the community and the market. Community refers to real, on-the-ground associations and to imagined solidarities that people experience. [Gudeman 2001] Gudeman goes on to say that ‘Neoclassical economics focuses on one value domain, the market, which is modified as a separate sphere making up the whole of economy in which all goods are priced and available for exchange.’

On Utilitarianism

Bentham played a crucial role in the development of ‘utility measurement’. He proposed the ‘felicific calculus’, namely the quantitative evaluation and the algebraic summation of pleasures and pains stemming as consequences from any given course of action. ‘Good’ is whatever gives as its result an algebraically positive felicific magnitude, and hence increases the ‘amount of happiness’ within human societies; ‘bad’ is whatever gives as its result a negative quantity, and as a consequence decreases the amount of social happiness. [Roncaglia 1999]

But, Mill in his Utilitarianism (1987) criticizes this notion of measurement of utility by stating that ‘Utility is an uncertain standard, which every different person interprets differently, and even ‘in the mind of one and the same individual, justice is not some one rule, principle, or maxim, but many.’

If there is an intellectual field where the utilitarian attitude-namely, looking at the consequences of human actions-dominates, to the point of being identified with the scientific attitude tout court, this is economics‘ [Roncaglia 1999](Italics added)

Utility, when taught to students, appears very logical and thus is easily comprehended and imbibed. Of course, no individual would do any activity if it didn’t give him or her pleasure or rather, ‘utility’. As a philosophical concept, it does make sense. But when it is introduced into the realm of economics, it fails miserably. The demand function which is built on utility along with the supply is what determines the equilibrium price and quantity in neoclassical economics. But if one stops to think and to try and relate it to the real world, one would fail. Think of how prices are determined; and are prices based on demand and supply functions’

Conclusions

What has neoclassical theory taught us’ That individuals do what they do because they get ‘utility’ out of it’ And that this helps in calculating the demand of an economy which further helps in the determination of prices’ Does it tell us anything about the working of the economy’

References

1) Kurz, H and Salvadori, N (edited), The Elgar companion to classical economics (A-K), 1998.
2) Robinson, Joan, Collected Economic Papers, 1979.
3) Kurien, C T, Rethinking Economics, 1995.
4) Gudeman, Stephen, The anthropology of economy, 2001.
5) Thomas, A M, Undergraduate Economist, The fellowship of economics, 2007.