Helen FergusonEconomic Perspectives
1) According to Malthus, economic growth leads directly to population growth, and the latter tends to be more rapid that the former. Malthus' principle appears to have held for the pre-industrial world for millennia. However, the industrialising capitalist countries of Europe experienced low population growth rates during the 20th century, in spite of their high economic growth rates. Why did the principle fail to apply in this case?
Thomas Malthus was a British economist who lived from 1766 to 1834. In 1798 Malthus anonymously published ‘An Essay on the Principle of Population'. Between 1798 and 1826 he published six editions of this paper, each updated with new perspectives and to address criticism. The initial text was written in response to his father's optimism towards the utopia suggested by other economists of his time such asWilliam Godwin (1756-1836), Marquis de Condorcet (1743-1794) and his father's close companion Jean-Jacques Rousseau (1712-1778). They believed that the application of scientific progress to agriculture and industry would inevitably lead humanity forward to a golden age, whereas Malthus thought "the power of population is indefinitely greater than the power in the earth to produce subsistence for man"[1] and therefore 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 inescapable logic of too many mouths chasing too little food.” [2]If couples married late (Malthus did not predict artificial contraception) and waited until they were able to support a family, had fewer children, or even practiced celibacy, population growth could be sufficiently arrested for agriculture to cope. Malthus himself was not confident that enough people would choose restraint and set an example by not getting married until he was thirty-eight and only having three children which was considered to be a very small number at the time.
Malthus believed that population increased geometrically (1, 2, 4, 8, 16, 32 etc), doubling every twenty-five years, whilst cultivable land only increased arithmetically (1, 2, 3, 4, 5, 6 etc) consequently population will eventually outstrip the amount of food. “In two centuries and a quarter the population would be to the means of subsistence as 512 to 10; in three centuries as 4096 to 13, and in two thousand years the difference would be incalculable.” [3]
Many ask why industrialisation occurred in Britain and other European countries earlier than elsewhere in the world. Some argue that throughout the Middle Ages European capitalist economies were slowly acquiring characteristics that made them favourable for rapid economic change. “The rich tended to have more children who survived than their poorer compatriots and this led to a kind of downward mobility as sons of merchants became small traders, sons of traders became craftsmen and so on.”[4] The result was that middle-class qualities such as patience, hard work and education spread through society.
“The industrial revolution began in Britain due to British society producing the preconditions for a growing society. Interest rates fell, the hours worked rose, taxes were low, monetary policy was stable and property rights were secure.”[5] Malthus argued that this was all irrelevant because economic potential would still be limited by food supply however, once agricultural productivity increased, Britain was able to exploit the opportunity of economic growth.
“Specifically for Britain industrialisation began in the 18th century in the form of new technologies in cotton production.” [6] Industrialisation for many countries within Europe shortly followed. Some argue that currently industrialising economies such as China and India did not match European developments due to inefficiency in their use of labour.
The industrial revolution that occurred in many capitalist European countries in the 18th century transformed the long-term outlook on economic growth. It allowed these specific economies to start to expand faster than their populations bringing about a sustained improvement in standards of living and an escape from the Malthusian trap.
Malthus underestimated the human capacity to increase food supply. He believed that food supply would only increase arithmetically (1, 2, 3, 4, 5 and so on) however it increased at a much faster rate with the help of technology and innovation speeded up by the industrial revolution. “Since 1961 food production per head has risen by 20% .”[7] This increase in food production was aided by an “expansion in trade and low-cost agricultural producers like Argentina and Australia joining the world economy.”[8] “Even during Malthus's lifetime, crop land was being expanded rapidly as forests were felled, and innovations such as crop rotation and selective breeding brought large increases in yields.”[9]Developments in agricultural technology arose, “specifically the mix of pesticides, better irrigation and new strains of crops that constitute the so-called ‘Green Revolution' which substantially aided food production. Technology has boosted agricultural productivity hugely, allowing food production to keep pace with the unprecedented global population boom of the 20th century.”[10] The “Green Revolution” resulted in a spreading of technology to developing countries that was previously only seen in those industrialised countries. Although the industrializing capitalist countries of Europe were not directly involved in the ‘Green Revolution' they were able to benefit from increase in production of core foodstuffs such as rice, maize and wheat.
Malthus suggested that ‘positive checks' of higher mortality such as famine would be necessary to prevent population exceeding the amount of food. However, positive checks did not contribute to the reason why industrialised capitalist European countries escaped the Malthusian trap. “By the 19th century the days of famine in Europe were largely over, with the exception of Ireland, where the potato blight of 1846-47 and its side-effects may have killed a sixth of the 8m-odd people.” [11] These eight million-odd people were not a large enough proportion of the population of Europe, which had increased to 400 million by the end of the 19th century, to affect the population-food balance.
Malthus's ideas were ridiculed due to the unfortunate timing of his predictions as something new was just starting to happen. “As industrialisation swept through what is now the developed world, fertility fell sharply, first in France, then in Britain, then throughout Europe and America. When people got richer, families got smaller; and as families got smaller, people got richer.”[12] The link between wealth and fertility can be explained by higher living standards, better communications and more education enable you to rely on markets and public services, not just yourself and your family. This decreased rate of fertility throughout Europe meant that for the first time, Mother's were having the number of children that they wanted, not that they needed for continued subsistence. Therefore there was a shift from child quantity to quality.
As industrialisation occurred, technology and medicine improved. This resulted in a decrease in mortality rates. Higher incomes resulting from economic growth allowed people to afford proper medication which also decrease mortality rates. As people came to expect to live longer and better, they wanted fewer children. They realised they no longer needed several babies to ensure that a couple survived.
Urbanisation played a large part in the decreasing Europe's fertility rate because as people moved from country to town or city, they also found that children were no longer an economic asset that could be set to work at an early age to earn money for the family, but a liability to be fed, housed and educated. Worse, with too many children, a mother would find it hard to take and keep a job, to add to the family income. Children were no longer a guarantee against penniless old age because in the new industrial society they were likelier to go their own way rather than stay to look after their elders. “Thanks to Europe's new-found restraint, in the past 100 years or so its population has risen only 80%, to 730m, and most countries' birth rate is now so low that numbers are static or falling.”[13] China, Africa and Latin America have not been as restrained with their populations having quadrupled, multiplied by five and increased sevenfold respectively also in the past 100 years. Some suggest this difference is due to their attitudes and values that persuade people to having fewer children are taking longer to adjust.
One of the reasons for fertility falling at a higher rate in areas such as Europe than around other parts of the world is the spread of female education. There is a strong correlation between falling fertility rates and literacy programmes. Educated women are more likely to go out to work, more likely to demand contraception and less likely to want large families.
This fall in fertility makes economic growth a possibility. There are several ways that cutting the fertility rate from six to two can help an economy. “First, as fertility falls it changes the structure of the population, increasing the size of the workforce relative to the numbers of children and old people. When fertility is high and a country is young (median age below 20), there are huge numbers of children and the overall dependency ratio is high. When a country is ageing (median age above 40), it again has a high dependency ratio, this time because of old people. But the switch from one to the other produces a Goldilocks generation. Because fertility is falling, there are relatively few children. Because of high mortality earlier, there are relatively few grandparents. Instead, countries have a bulge of working-age adults. This happened to Europe after the baby boom of 1945-65 and produced les trente glorieuses (30 years of growth).”[14]
There are several other benefits of decreasing fertility. By making it easier for women to work it boosts the size of the labour force and because there are fewer dependent children and grandparents it means more money can be saved and possibly used for investment. “So long as the labour market can absorb more workers, production per head will increase. This creates a “demographic dividend” of growth, making possible higher savings and investment. Parents with fewer children can invest more in their health and education, creating a more productive workforce. So the source of population growth and its timing are of the essence: at early and late stages of the demographic transition—when the youngest and oldest age-groups are growing the fastest—growth suffers. The demographic dividend appears only in the middle phase.”[15] Europe is currently experiencing an aging population suggesting that we are at the end of our demographic transition. Therefore in the middle of our demographic transition in the late 19th and early 20th centuries, Europe would have benefited from a demographic dividend of growth. This would have increased economic growth due to the rising share of working-age people in the European population and contributed to escaping the Malthusian trap.
However, some discount the significance of falling fertility suggesting that populations can rise while fertility declines because of inertia. “If, because of high fertility in earlier generations, there is a bulge of women of childbearing years, more children will be born, though each mother is having fewer children. There will be more, smaller families.”[16]
Europe was well on its way through demographic transition from the mid-nineteenth century and reached the replacement level of fertility at the end of the 20th century. The “replacement level of fertility” is the magic number that causes a country's population to slow down and eventually to stabilise. “Europe went from the peak of the baby boom to the depth of the baby bust and its fertility also fell by almost half, from 2.65 to 1.42—but that was a decline of only 1.23 children.”[17]This largely contributed to the industrialising capitalist European countries experiencing low population growth, if any, and high economic growth in the 20th century, rejecting Malthus's prediction.
Malthus's principle did not hold for the industrialising capitalist countries of Europe as he got his demographic prediction wrong. He foresaw that “populations would carry on growing in times of plenty. Starting in Europe, one country after the other went under a ‘demographic transition' as economic development brought greater prosperity. Both birth and death rates dropped and population growth eventually started to slow.”[18] His prediction of populations doubling every twenty-five years was again wrong however, not far off. “In the 200 years since he wrote, the time it takes mankind to double has shrunk from several centuries to 40 years.”[19]
In Malthus's defence, a ‘demographic transition' had never happened before and therefore he was highly unlikely to correctly predict the future. For most of history, people have had lots children with many dying in infancy therefore if there were no wars, epidemics or famines, more would be born, more would survive longer and therefore population would increase. “From about 1000 to 1300, Europe enjoyed a spurt of economic growth. A lot of new land was taken into cultivation, and the number of cities multiplied. The population doubled or trebled.”[20]These trends and statistics were most likely what Malthus based his predictions on.
[21]A demographic transition is the way societies change as they get richer. “First comes a decline in mortality, leading to a short population explosion; then, after an interval of variable length, a steep decline in the birth rate, which slows, halts or may even reverse the rise in numbers.”[22]This is exactly what happened in many European countries in the 20th century and is shown in the graph below where population begins to decrease just before the 21st century. The graph also clearly shows that the populations of other continents have not yet began to decrease. This is because some are currently going through or still awaiting their own industrial revolution.
By the mid-19th century most of Europe was in the first stage of the demographic transition. Mortality had lessened, as wars, famines and epidemics had; local food shortages were rarer, thanks to better transport; public health, medical care and the control of infectious diseases such as cholera and smallpox had improved. The population spurted, as Malthus had predicted. “Between 1800 and 1900 Europe's population doubled, to over 400m, whereas that of Asia, further behind in the demographic transition, increased by less than 50%, to about 950m.”[23]
Europe became very crowded when its population spurted to 400 million between 1800 and 1900 during its demographic transition. “Thanks to a steady trickle of migration over the previous three centuries, North and South America by 1800 each held about 4m people of European extraction. Over the next 100 years or so, some 50m Europeans quit their continent, most going to North America, others to South America. At the peak of this wave of emigration, Europe was exporting about a third of the natural increase in its population.”[24]Without this massive surge of migrating Europeans, who knows whether Europe would have escaped Malthus's trap after all.
To conclude, there are several reasons that Malthus's principle failed to apply in the case of industrialising capitalist countries of Europe in the 20th century. They include a decrease in birth and death rates, urbanisation, a rise in female education and the industrial revolution which resulted in new technology being developed such as that in agriculture. They all collaboratively contributed to the escape of the Malthusian prophecy.
[1] Malthus T.R. (1798).An essay on the principle of population. P13, Chapter 1, in Oxford World's Classics reprint
[2] (May 15th 2008) ‘Malthus, the False Prophet. The Economist' The Economist Newspaper Limited. Downloaded from http://www.economist.com/businessfinance/economicsfocus/displaystory.cfm?story_id=E1_TTPSQGNP as at 10th December 2009.
[3] Robert Heilbroner. (1953) ‘The Gloomy Presentiments' Seventh edition. London. Penguin
[4] (Aug 16th 2007). ‘The Merits of Genteel Poverty'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/books/displaystory.cfm?story_id=E1_JGQQGPG as at 10th December 2009.
[5] (Aug 16th 2007). ‘The Merits of Genteel Poverty'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/books/displaystory.cfm?story_id=E1_JGQQGPG as at 10th December 2009.
[6] (Aug 16th 2007). ‘The Merits of Genteel Poverty'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/books/displaystory.cfm?story_id=E1_JGQQGPG as at 10th December 2009.
[7] (Dec 18th 1997). ‘Plenty of Gloom'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=E1_QVVRVV&source=login_payBarrier as at 10th December 2009.
[8] (Dec 18th 1997). ‘Plenty of Gloom'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=E1_QVVRVV&source=login_payBarrier as at 10th December 2009.
[9] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[10] (June 9th 2008). ‘The Malthus Blues' The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/world/international/displaystory.cfm?story_id=E1_TTVNDGJV as at 10th December 2009.
[11] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[12] (Oct 29th 2009). ‘Falling Fertility'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/opinion/displaystory.cfm?story_id=14744915 as at 10th December 2009.
[13] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[14] (Oct 29th 2009). ‘Go Forth and Multiply A Lot Less'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=14743589 as at 10th December 2009.
[15] (Dec 5th 2002). ‘Does Population Matter? ' The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/businessfinance/economicsfocus/displaystory.cfm?story_id=E1_TQSSGQN as at 10th December 2009.
[16] (Oct 29th 2009). ‘Go Forth and Multiply A Lot Less'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=14743589 as at 10th December 2009.
[17] (Oct 29th 2009). ‘Go Forth and Multiply A Lot Less'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=14743589 as at 10th December 2009.
[18] (May 15th 2008) ‘Malthus, the False Prophet. The Economist' The Economist Newspaper Limited. Downloaded from http://www.economist.com/businessfinance/economicsfocus/displaystory.cfm?story_id=E1_TTPSQGNP as at 10th December 2009.
[19] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[20] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[21] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[22] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[23] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
[24] (Dec 23rd 1999). ‘Like Herrings in a Barrel'. The Economist. The Economist Newspaper Limited. Downloaded from http://www.economist.com/displaystory.cfm?story_id=346605 as at 10th December 2009.
