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Malthus, the false prophet
The pessimistic parson and early political economist remains as wrong as ever
From The Economist May 15th 2008
AMID an astonishing surge in food prices, which has sparked riots and unrest in many countries and is making even the relatively affluent citizens of America and Europe feel the pinch, faith in the ability of global markets to fill nearly 7 billion bellies is dwindling. Given the fear that a new era of chronic shortages may have begun, it is perhaps understandable that the name of Thomas Malthus is in the air. Yet if his views were indeed now correct, that would defy the experience of the past two centuries.
Malthus first set out his ideas in 1798 in “An Essay on the Principle of Population”. This expounded a tragic twin trajectory for the growth of human populations and the increase of food supply. Whereas the natural tendency was for populations to grow without end, food supply would run up against the limit of finite land. As a result, the “positive checks” of higher mortality caused by famine, disease and war were necessary to bring the number of people back in line with the capacity to feed them.
In a second edition published in 1803, Malthus softened his original harsh message by introducing the idea of moral restraint. Such a “preventive check”, operating through the birth rather than the death rate, could provide a way to counter the otherwise inexorable logic of too many mouths chasing too little food. If couples married late and had fewer children, population growth could be sufficiently arrested for agriculture to cope.
It was the misfortune of Malthus—but the good luck of generations born after him—that he wrote at an historical turning point. His ideas, especially his later ones, were arguably an accurate description of pre-industrial societies, which teetered on a precarious balance between empty and full stomachs. But the industrial revolution, which had already begun in Britain, was transforming the long-term outlook for economic growth. Economies were starting to expand faster than their populations, bringing about a sustained improvement in living standards.
Far from food running out, as Malthus had feared, it became abundant as trade expanded and low-cost agricultural producers like Argentina and Australia joined the world economy. Reforms based on sound political economy played a vital role, too. In particular, the abolition of the Corn Laws in 1846 paved the way for British workers to gain from cheap food imports.
Malthus got his demographic as well as his economic predictions wrong. His assumption that populations would carry on growing in times of plenty turned out to be false. Starting in Europe, one country after another underwent a “demographic transformation” as economic development brought greater prosperity. Both birth and death rates dropped and population growth eventually started to slow.
The Malthusian heresy re-emerged in the early 1970s, the last time food prices shot up. Then, at least, there appeared to be some cause for demographic alarm. Global-population growth had picked up sharply after the second world war because it took time for high birth rates in developing countries to follow down the plunge in infant-mortality rates brought about by modern medicine. But once again the worries about overpopulation proved mistaken as the “green revolution” and further advances in agricultural efficiency boosted food supply.
If the world’s population growth was a false concern four decades ago, when it peaked at 2% a year, it is even less so now that it has slowed to 1.2%. But even though crude demography is not to blame, changing lifestyles arising from rapid economic growth especially in Asia are a new worry. As the Chinese have become more affluent, they have started to consume more meat, raising the underlying demand for basic food since cattle need more grain to feed than humans. Neo-Malthusians question whether the world can provide 6.7 billion people (rising to 9.2 billion by 2050) with a Western-style diet.
Once again the gloom is overdone. There may no longer be virgin lands to be settled and cultivated, as in the 19th century, but there is no reason to believe that agricultural productivity has hit a buffer. Indeed, one of the main barriers to another “green revolution” is unwarranted popular worries about genetically modified foods, which is holding back farm output not just in Europe, but in the developing countries that could use them to boost their exports.

Political folly increases in a geometrical ratio
As so often, governments are making matters worse. Food-export bans are proliferating. Although these may produce temporary relief for any one country, the more they spread the tighter global markets become. Another wrongheaded policy has been America’s subsidy to domestic ethanol production in a bid to reduce dependence on imported oil. This misconceived attempt to grow more fuel rather than to curb demand is expected to gobble up a third of this year’s maize (corn) crop.
Although neo-Malthusianism naturally has much to say about food scarcity, the doctrine emerges more generally as the idea of absolute limits on resources and energy, such as the notion of “peak oil”. Following the earlier scares of the 1970s, oil companies defied the pessimists by finding extra fields, not least since higher prices had spurred new exploration. But even if oil wells were to run dry, economies can still adapt by finding and exploiting other energy sources.
A new form of Malthusian limit has more recently emerged through the need to constrain greenhouse-gas emissions in order to tackle global warming. But this too can be overcome by shifting to a low-carbon economy. As with agriculture, the main difficulty in making the necessary adjustment comes from poor policies, such as governments’ reluctance to impose a carbon tax. There may be curbs on traditional forms of growth, but there is no limit to human ingenuity. That is why Malthus remains as wrong today as he was two centuries ago.

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Are Malthus’s Predicted 1798 Food Shortages Coming True?
It remains to be seen whether his famously gloomy prediction is truly wrong or merely postponed
By Jeffrey D. Sachs

Scientific American 25 August 2008
In 1798 Thomas Robert Malthus famously predicted that short-term gains in living standards would inevitably be undermined as human population growth outstripped food production, and thereby drive living standards back toward subsistence. We were, he argued, condemned by the tendency of population to grow geometrically while food production would increase only arithmetically.

For 200 years, economists have contended that Malthus overlooked technological advancement, which would allow human beings to keep ahead of the population curve. The argument is that food production can indeed grow geometrically because production depends not only on land but also on know-how. With advances in seed breeding, soil nutrient replenishment (such as chemical fertilizers), irrigation, mechanization and more, the food supply can stay well ahead of the population curve. More generally, advances in technology in all its aspects—agriculture, energy, water use, manufacturing, disease control, information management, transport, communications—can keep production rising ahead of population.

Another factor undermining Malthus’s argument, it would seem, is the demographic transition, according to which societies move from conditions of high fertility rates roughly offset by high mortality rates to conditions of low fertility rates together with low mortality rates. Malthus did not reckon with the advance of public health, family planning, and modern contraception, which together with urbanization and other trends, would result in a dramatic decline in fertility rates to low levels, even below the “replacement rate” of 2.1 children per household. Perhaps the human population would avoid the tendency towards geometric growth altogether.

These critiques of Malthusian pessimism have long seemed irresistible. Indeed, when I trained in economics, Malthusian reasoning was a target of mockery, held up by my professors as an example of a naïve forecast gone wildly wrong. After all, since Malthus’s time, incomes per person averaged around the world have increased at least an order of magnitude according to economic historians, despite a population increase from around 800 million in 1798 to 6.7 billion today. Some economists have gone so far as to argue that high and rising populations have been a major cause of increased living standards, rather than an impediment. In that interpretation, the eightfold increase in population since 1798 has also raised the number of geniuses in similar proportion, and it is genius above all that propels global human advance. A large human population, so it is argued, is just what is needed to propel progress.

Yet the Malthusian specter is not truly banished—indeed far from it. Our increase in know-how has not only been about getting more outputs for the same inputs, but also about our ability to mine the Earth for more inputs. The first Industrial Revolution began with the use of fossil fuel, specifically coal, through Watt’s steam engine. Humanity harnessed geological deposits of ancient solar energy, stored as coal, oil, and gas, to do our modern bidding. We learned to dig deeper for minerals, fish the oceans with larger nets, divert rivers with greater dams and canals, appropriate more habitats of other species and cut down forests with more powerful land-clearing equipment. In countless ways, we have not gotten more for less but rather more for more, as we’ve converted rich stores of natural capital into high flows of current consumption. Much of what we call “income,” in the true sense of adding value from economic activity, is actually depletion instead, or the running down of natural capital.

And although family planning and contraception have indeed secured a low fertility rate in most parts of the world, the overall fertility rate remains at 2.6, far above replacement. Sub-Saharan Africa, the poorest region of the world, still has a total fertility rate of 5.1 children per woman, and the global population continues to rise by about 79 million per year, with much of the increase in the world’s poorest places. According to the medium-fertility forecast of the United Nations Population Division we are on course for 9.2 billion people by mid-century.

If we indeed run out of inexpensive oil and fall short of food, deplete our fossil groundwater and destroy remaining rainforests, and gut the oceans and fill the atmosphere with greenhouse gases that tip the earth’s climate into a runaway hothouse with rising ocean levels, we might yet confirm the Malthusian curse. Yet none of this is inevitable. The idea that improved know-how and voluntary fertility reduction can sustain a high, indeed rising, level of incomes for the world remains correct, but only if future technology enables us to economize on natural capital rather than finding ever more clever ways to deplete it more cheaply and rapidly.

In the coming decades we will have to convert to solar power and safe nuclear power, both of which offer essentially unbounded energy supplies (compared with current energy use) if harnessed properly and with improved technologies and social controls. Know-how will have to be applied to long-mileage automobiles, water-efficient farming, and green buildings that cut down sharply on energy use. We will need to re-think modern diets and urban design to achieve healthier lifestyles that also cut down on energy-intensive consumption patterns. And we will have to help Africa and other regions to speed the demographic transition to replacement fertility levels, in order to stabilize the global population at around 8 billion.

There is nothing in such a sustainable scenario that violates the Earth’s resource constraints or energy availability. Yet we are definitely not yet on such a sustainable trajectory, and our current market signals do not lead us to such a path. We will need new policies to push markets in a sustainable manner (for example, taxes on carbon to reduce greenhouse gas emissions) and to promote technological advances in resource saving rather than resource mining. We will need a new politics to recognize the importance of a sustainable growth strategy and global cooperation to achieve it.

Have we beaten Malthus? After two centuries, we still do not really know.