Happy birthday Malthus: 247 years old and still wrong

Doomsdayers will point to finite resources and say that man's lifestyle is unsustainable. But the only resource that counts is the human mind - and we have seven billion of them

Happy Birthday, Old Chap
Guy Bentley
On 15 February 2013 12:04

Yesterday marked the 247th birthday of the English economist and demographer Thomas Malthus. Whilst Malthus was a leading intellectual of his day in many fields he is most popularly remembered for An Essay on the Principle of Population. In this essay, Malthus advanced the idea that when populations rapidly grow the demand for food will tend to push up against the limits of production which would lead to rising prices, poverty and ultimately famine.

Malthus wrote:

''The power of population is indefinitely greater than the power in the earth to produce subsistence for man.''

Most people do have an instinctive fear of large and rapid population growth and will say, perhaps impulsively, that the world contains too many people. When people make this claim they usually advance it on the basis that more people means more resources consumed and that means less for the people already on the planet.

There are a number of problems with this assumption; not least that resource consumption is not a zero sum game. If I am eating food that I have produced, that food is not being taken from anyone who otherwise would have eaten it; there is no external cost to my consumption. Similarly if I engage in a trade I have produced a good or service and exchange it for something someone else has produced; again there is no external cost. 

Others argue that the world is becoming crowded with seven billion human beings on the planet. That is to say, we’re running out of space. But this is an equally groundless fear. As the American economist Thomas Sowell points out, if you divide the state of Texas into plots the size of the average American house and place four human beings in each one, you could accommodate the entire world’s population into the state of Texas.

The reality is that our living standards have increased dramatically over the past one hundred years over a wide variety of indicators; at the same time we have experienced massive population growth.

To gain a sense of the magnitude of the advance in our standards of living, the economist Steven Landsburg provides us with some startling figures from the United States. In 1910 the average US industrial work week was 65 hours; in 2010 it was 33. In 1910 only 26 percent of men aged 65 were in retirement; in 2010 the figure was up to 90 percent. In 1910 the average homemaker worked 12 hours a day on laundry, cooking etc.; in 2010 that figure is now 1.5 hours.

Although the 19th and early 20th centuries provided ample evidence to disprove Malthus’s theory, his ideas have remained popular with doomsayers particularly of the environmental stripe. In 1968 the biologist Paul Ehrlich published The Population Bomb which warned of disastrous famines in the 1970s and 80s. In the 1970s, the Club of Rome predicted that the world would run out of the most vital resources by the year 2000.

But what does reality tell us? What I mean to say is, in spite of the environmental extremists’ doomsday mongering, what are the facts on the ground, here in 2013?

Well let’s see. A good starting point is to look at poverty which has fallen dramatically. Energy, another key indicator, is now more abundant than ever before. And of course we have benefited from advances in technology, which now provide the prospect of using just a small amount of cell tissue to grow large quantities of meat rather than using vast amounts of agricultural land for meat production.

Yet we are continually told by charities such as Oxfam that food prices have been rising over the past few years, and that this is a sign of our unsustainable consumption. It is true; food prices have risen significantly over the past few years. But wouldn’t it be more informative if the likes of Oxfam told the whole story? Specifically, that grain prices are half the level they were in the 1940s and 25 percent less than the 1960s.

In terms of population growth, the International Institute for Applied System Analysis has found that world birth rates are in free fall and that the world’s population will actually start to shrink by the 2060s.

The mistake that is perpetually made by today’s Malthusians, embodied by organisations like the Optimum Population Trust and the New Economics Foundation, is that they underestimate the ability of the price mechanism to allocate scarce resources efficiently.

Those who wish to see drastic reductions in consumption complain that resources are finite and that this means government must intervene to limit consumption or even population. The problem of scarcity, however, is exactly why markets and prices exist. If we all had everything we needed and wanted all of the time, there would be no need for prices to indicate which resources are more abundant, and which are scarcer.

Prices act as signals for both consumers and producers; they use the widely dispersed knowledge that no one individual or government could possibly possess. For instance, when making a consumption decision about, say, pasta, I do not need to know the intricacies of the pasta market and supply chain; all I need to know is the price. If the price is low I will consume more pasta; if the price significantly rises I will reduce or stop my consumption of pasta.

When the price of a particular resource increases, entrepreneurs will look for new sources from which to extract this resource or will find completely new resources or methods to deliver the same service.

Proponents of Malthusian theory reply to the evidence of history with the simple assertion that the crisis has not yet come, but soon will. Well, it has been over two centuries and we're still waiting. (And that’s just since Malthus put two and two together.)

I expect that those who wish to halt economic growth and put plants above people will continue to cling to this outdated theory. But one would be best advised to ignore their end-of-the-world fantasies, because the only real resource that counts for anything is the human mind. And now we are fortunate enough to have seven billion of them.

Guy Bentley is a Libertarian blogger and a former editorial assistant at the Commentator

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