Malthusian Poverty

In 1798, the Reverend Thomas Malthus published his Essay on the Principle of Population1. In this essay, Malthus made a catastrophic prediction that the world’s population would outgrow the resources needed to support it. Fortunately, after more than 200 years, we know that this prediction turned out to be wrong. Although his work was largely flawed, the lessons we have learned from Malthus’s great miscalculation have been some of the most important ones in modern history. What we have learned over the last 200 years is that human ingenuity has the incredible ability to change the course of history. Despite our understanding of Malthus’s failures, we continue to replicate many of these same mistakes when we think about poverty.

The Malthusian prediction was ultimately wrong, but certainly not absurd. Based largely on the observations of a growing population and increasing poverty in the French countryside, Malthus was simply extending the trends of human history outward. By the 1790’s, human productivity and the standard of living had gone largely unchanged since the beginning of time (see figure 1). Throughout his life, however, Malthus was observing unprecedented population growth. By 1780, France had a population of nearly 30 million, while Great Britain’s population hovered around 8 million.2 Given the trends of human productivity and population growth throughout history, it seemed inevitable that these trends would lead to poverty, famine, and starvation (figure 2).

Figure 1

Figure 1 (GDP per capita 0 - 2000)

Figure 2

Figure 2 (Malthus’s population prediction)

What Malthus failed to account for, and what ultimately saved humanity from the consequences of his prediction, was the explosion of human productivity seen in the second half of figure 1. The growing population and stagnant productivity of resources that Malthus discussed lead to necessity. Out of that necessity came the greatest period of human ingenuity in history. The industrial revolution, the mechanization of labor and agriculture, and the advancements of medicine, education, and safety that transformed the quality of life were beyond the scope of imagination in 1798. Malthus failed to account for human ingenuity because it was all but non-existent at the time of his writing. He observed clear trends in productivity that had gone unchanged throughout all of history. This led him to believe that the course of history would dictate the trends of the future. His failure to understand the intrinsic ability of humans to solve the problems laid before them led him to believe that the future looked grim.

While Malthus is often ridiculed for his failure to see the power of human ingenuity, this outlook is not far from the way we address poverty today. We look to developing countries and see vast population growth, scarce available resources, and a long history of stagnant productivity, and worry that these countries will never truly prosper (figure 3). Much like Malthus, we often fail to realize the power of human ingenuity in developing countries. This failure has led to decades of paternalistic development, to say nothing of the Malthusian predictions for the future of developing countries.

Figure 3

The trends of history are no indication of the future. While most developing countries have failed to see large gains in productivity or the standard of living throughout their long history, we cannot be blinded by these trends. There exists an undeniable ingenuity and entrepreneurial spirit in the developing world. It is not a matter of if these countries will come to prosper, but how. The critical lesson that Malthus taught us is that we can never underestimate the abilities of people. This is as true of the developing world today as it was of Western Europe at the turn of the 19th century. Like the explosion of growth that occurred in the Western world in the 1800’s, it will be the brilliance, inventiveness, and hard work of those living in poverty that will ultimately pull them out of it.

References

1. Malthus, T.R. (1798). Essay on the Principle of Population. London: J. Johnson, in St. Paul's Church-yard.

2. Piketty, T., & Goldhammer, A. (2014). Capital in the twenty-first century. Cambridge Massachusetts: The Belknap Press of Harvard University Press.

3. Kedrosky, P. (2012). The Economic History of the Last 2000 Years. The Atlantic.