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Malthus: The Scope of Political Economy

Posted by Alex M Thomas on 1st April 2012

In these difficult times we live in, what economics needs is perhaps, depth and not breadth. Unemployment, poverty, inflation, food insecurity, financial fragility, debt crisis, etc can be better understood and tackled by diverting increased resources (time and financial) in understanding the production, distribution, exchange and consumption of wealth. This blog post very briefly examines Thomas Malthus’s (1766-1834) view of political economy – its method, scope, uses and limitations.  For this purpose, I have used John Pullen’s definitive variorum edition of Malthus’s Principles of Political Economy published as 2 volumes by Cambridge University Press in 1990.

According to the Cambridge Advanced Learners Dictionary, ‘scope’ is defined as the ‘range of subjects covered’. In the context of political economy, scope refers to the range of subjects it covers. That is, the scope of political economy informs us about the sphere of analysis, the boundaries or limits, the kind of situations it describes and its applicability in the real world or, its relevance. Keeping in mind that mathematics played only a small role in political economy during Malthus’s time, let us see what his view of political economy is: ‘the science of political economy bears a nearer resemblance to the science of morals and politics that to that of mathematics’ (p. 2). Undoubtedly, morals played and still play an important role for interventions in the economy based on what we consider to be a ‘good society or economy’. And politics, distributional conflicts over income, land, natural resources and employment are integral part of any economy. Thus, it is important that political economy (and economics) takes into account these distributional conflicts when theorising or modelling an economy. However, for purposes of theory, these conflicts can be taken as given from outside economics (exogenous) or can be determined within economics, in the manner of behavioural economics.

It would not have mattered if political economy was/is not a very important branch of knowledge. Reminiscent of Keynes’s words, Malthus writes: ‘The science of political economy is essentially practical and applicable to the common business of human life. There are few branches of human knowledge where false views may do more harm, or just views more good’ (p. 12). But, Malthus wrote it more than a century earlier. (See also Sismondi’s words of a similar nature). Since Malthus viewed political economy to have significant practical applications, the complete title of his book reads ‘Principles of Political Economy Considered with a View to their Practical Application’. The editor, Pullen, gives us a bit more information on this matter. ‘This was apparently a lifelong concern. As a student at Cambridge in 1786 Malthus wrote to his father: ‘I am by no means, however, inclined to get forward without wishing to see the use and application of what I read. On the contrary I am rather remarked in college for talking of what actually exists in nature, or may be put to real practical use’’ (p. 291, Vol II; all other page numbers excepting this refer to Vol I).

Malthus understands that ‘To trace distinctly the operations of that circle of causes and effects in political economy which are acting and re-acting on each other, so as to foresee their results, and lay down general rules accordingly, is, in many cases, a task of very great difficulty’ (p. 12). Economic processes are caused by a multiplicity of causes and often not by a single one. Owing to this and because of his view of economics as a practical science, he maintained that ‘[t]o know what can be done, and how to do it, is, beyond a doubt, the most valuable species of information. The next to it is, to know what cannot be done, and why we cannot do it’ (p. 17). In other words, we must be very aware of the ‘scope’ of our knowledge.

Furthermore, if our objective is to understand the problems of unemployment and poverty, we must perhaps, as mentioned in the introduction, study in-depth the process of generation and distribution of wealth. I conclude with a statement by Malthus: ‘If we wish to attain anything like precision in our inquiries, when we treat of wealth, we must narrow the field of inquiry, and draw some line, which will leave us only those objects, the increase or decrease of which is capable of being estimated with more accuracy’ (pp. 27-8).

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Posted in Behavioral Economics, Classical Economics, Classical Political Economy, Economic Thought, Economics, History of Economic Thought, Keynes, Malthus, Thomas Malthus | 4 Comments »

Foucault and Economics

Posted by Alex M Thomas on 23rd December 2008

This post is more of a suggestion than an explanation. There has been hardly any scholarly work done with respect to applying Michel Foucault’s ideas and approaches to political economy or economics. On searching the internet, all I could find was a conference conducted in 2005 titled ‘Rethinking Foucault, Rethinking Political Economy’ at University of Leicester, UK and a PhD thesis submitted by Iara Vigo de Lima at the University of Stirling in 2006. This post is a result of my reading of certain sections of Dr. Lima’s thesis and the sadness associated with the knowledge that economists have not studied/read/understood Foucault.

I find it difficult to believe that nobody has tried to think/rethink the methodology and historiography of Economics by applying Foucauldian themes. To do justice to this area of research, it is necessary that I quote certain sentences from Dr. Lima’s thesis, as my knowledge of Foucault is limited.

“Foucault followed Nietzsche’s genealogical approach aiming not ‘simply to gain access to the unfamiliar past’, but mainly ‘to articulate and illuminate the familiar present’, and ‘the past, then, becomes a means to access the present’.” [p. 16]

“For Foucault, concepts, notions, theoretical frameworks, methods, etc., are bounded by time and culture.” [p. 21]

“Michel Foucault’s particular insight, especially his way of thinking about history – which he preferred to call ‘history of systems of thought’ – does offer elements that let us think about this question, and specifically in economics (given that he applied it to the history of economic thought). According to him, every age has its way of producing ‘the truth’, which can be uncovered as we think about history.” [p. 24]

“… one of his objectives in OT: to find out how political economy established itself as a discipline (discourse) at the end of the 18th century.” [p. 29]

Very often economics is taught (in India) as if the present day economics is what has evolved out of the previous economic theories. Therefore, the multiple paradigms that prevail in economics are seldom expressed clearly. It is not uncommon to learn the theories of Adam Smith, David Ricardo, Thomas Malthus, etc under Classical theories. Then, they are forgotten. They are mentioned as the initial thinkers. No more are they mentioned nor their relevance. For, neo-Smithians, neo-Rocardians, neo-Malthusians, etc are very much present. And, they do come out with better theories than the neoclassical economists.

This post suggests that one ought to know that there are ‘other’ truths (heterodox economic theories) apart from the truth that we are taught – neoclassical economics. And in this aspect, a reading of Foucault will prove to be immensely insightful.

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Posted in Adam Smith, Classical Political Economy, Economic Thought, Economics Education/Teaching, Malthus, Michel Foucault, Neoclassical Economics, Thomas Malthus | 4 Comments »

On Malthusian Theory of Population

Posted by Alex M Thomas on 23rd May 2008

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

Posted in Classical Political Economy, Economic history, Economic Thought, Economics, Economics Education/Teaching, Education, Political Economy, Thomas Malthus | 7 Comments »

Economics Education: The Indian Context

Posted by Alex M Thomas on 8th May 2008

Economics is viewed in most schools, colleges (Management institutes as well) and universities as a monolithic enterprise. It comprises mainly Microeconomics and Macroeconomics and uses Econometrics and Mathematical Economics as tools to understand the economy. Interestingly, tools like philosophy, history, sociology, anthropology lie forgotten. Or probably they are not viewed as tools anymore. Or they are not scientific enough!

This post deals with the dominant perception of Economics within India and how these perceptions adversely affect the spirit of economics in particular and of scientific inquiry in general.

Courses like History of Economic Thought are extended to include Classical Political Economy, Marxian Economics, etc. They are taught as outdated ideas and not as relevant approaches in understanding the economy. This is visible from the responses of students when works of Adam Smith, David Ricardo, Karl Marx etc are mentioned. I shall discuss Malthus in this post and in the next post, I shall discuss some of the theories of Marx.

Unfortunately, Malthus is known only for his ‘bad’ population theory. Interestingly enough, all that Malthus [1798] said was “that population, when unchecked, increased in a geometrical ratio, and subsistence for man in an arithmetical ratio.

Let us examine whether this position be just. I think it will be allowed, that no state has hitherto existed (at least that we have any account of) where the manners were so pure and simple, and the means of subsistence so abundant, that no check whatever has existed to early marriages, among the lower classes, from a fear of not providing well for their families, or among the higher classes, from a fear of lowering their condition in life. Consequently in no state that we have yet known has the power of population been left to exert itself with perfect freedom.” (Italics added)

Such an argument is what philosophers of science classify as a ‘thought experiment’. But mainstream economists classify this as a theory which has provided wrong predictions.

Thought experiments are devices of the imagination used to investigate the nature of things. And in our own time, the creation of quantum mechanics and relativity are almost unthinkable without the crucial role played by thought experiments. [Brown 2007] If one were to discredit and disregard Malthus’ theory, then there is no reason why the theory of perfect competition should be considered in Economics at all. The issue is that, there is hardly any work being done in methodological issues pertaining to economics and on the structure of a good economic theory, therefore one definitely needs to consider each and every theory in its own context. By context I refer to the historical background and the general argument that is being put forth.

Philosophical debates within Economics are very essential for the growth of both the disciplines, but more significant for economics. Methodological and epistemological issues are not commonly discussed in economics. This is very necessary because economics, economists and economies are ever growing in importance. Their policies have far reaching effects. And if they are not constructed in the right spirit, the objectives of the policy might not be fulfilled at all. The Indian budget 2008-09 is one such example. None of the Indian universities have a course pertaining to the Philosophy of Economics in its Masters’ courses. This shows the importance it has received vis-a-vis econometrics and game theory.

Also, economics claims to be a science and Professor Peter Englund, Secretary of the Economics (Nobel) Prize Committee thinks so as well when he says “In all relevant respects the committee understands and treats economics as a field of science.” I see it as a shirking away of economics from questioning itself- its methodology and its knowledge.

It is primarily this attainment of a scientific nature by mainstream neoclassical economics that is bringing doom to the people constituting the economy. The present analysis in mainstream economics is not only ahistorical but also asocial. Economics needs to understand its origins and its epistemology. It ought to be a pluralistic enterprise. And let theoretical anarchism prevail because “it is more humanitarian and more likely to encourage progress.” [Feyerabend 1975]

Posted in Economic history, Economic Philosophy, Economics, Economics Education/Teaching, India, Paul Feyerabend, Thomas Malthus, Thought Experiment | 9 Comments »