"When you pay social security taxes, you are in no way making provision for your own retirement. You are paying the pensions of those who are already retired. Once you understand this, you see that whether you will get the benefits you are counting on when you retire depends on whether Congress will levy enough taxes, borrow enough, or print enough money...." ~ Allen Wallis
Column by Jim Davies.
Exclusive to STR
The Reverend Thomas Malthus was no dummy. He made a colossal and famous error by predicting at the end of the 18th Century that human population would stop growing for want of food to feed any more people, but he was a serious scholar nonetheless. He was a fellow of Jesus College, Cambridge and as well as being an Anglican clergyman was respected as an economist and demographer. That was a time when economics was in its infancy, Adam Smith's seminal An Inquiry into the Wealth of Nations being but a quarter century old, but that's not to belittle Malthus; at that time, all economists were feeling their way with very little foundation on which to build. He did his work 40 years before Carl Menger was even born.
World population today is about seven times what is was when Malthus made his gloomy prediction, and there is still no shortage of food (there is often a severe problem of distribution, due to government distortion, but not of supply). Such a grotesque mistake must be compared to the military blunders of Napoleon and Hitler regarding the resilience of Russians, and to such bizarre commercial predictions as the one attributed to Thomas Watson Sr., in 1943, that "I think there is a world market for about five computers." It's to Watson's credit that when he saw how wrong he'd been, he continued to build the most successful computer company of the 20th Century. There is no corresponding indication that Malthus corrected his outlook.
He pre-dated Darwin by half a century, but perhaps as a gentleman of independent means, he studied the natural world around him; many such people did at that time. I wonder whether he observed that populations are self-limiting; we can today notice easily that in some years there seems to be a plague of some kind of insect, while the next year things are back to normal.
Darwin's "natural selection" theory developed such observations into the idea that when a fresh mutation appeared, it had to compete with others for resources, notably food, and if suited to what was available as well as them or better, it prospered and sometimes replaced the original subspecies, but died out quickly if not. This aspect of nature is part of what Jacques Monod later described as "cruel"; chance, he said, brought a mutant into being, while necessity determined whether it would survive, and neither chance nor necessity are consistent with a benevolent and omnipotent creator. There seems no doubt that if a population of any size cannot replicate, feed and defend itself, it dies out or at least grows no further. Most of our environment is the outcome of this balance of nature. Malthus applied the observations to the human species, and garnished his theory with speculations about morality, as befits a clergyman.
He saw that as fixed food resources had to feed more and more people, the extra demand would raise their prices, so that the poor would begin to starve, having to spend a larger (and eventually, impossible) fraction of their wages on food to survive. As they produced yet more children, they would starve. Naturally, this prospect troubled him; and he could see some of it happening, in the squalid slums of English cities that were already crowded with migrants who had begun the great century-long trek from farm to factory. Agriculture was becoming more efficient thanks to new techniques, so fewer farm workers were needed; canals were providing low-cost transport for goods and people, a generally-rising prosperity brought new demand for factory goods and so the population moved--often faster than city accommodation was built for them, hence the squalor. Like Dickens and Marx some decades later, he disliked what he saw.
Malthus' religion influenced his perception, as appears in this quote from his "essay on the principle of population":
"The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world."
Notice his hint that the poor reproduce like rabbits yet are so wicked as to live unhealthy and even fatal lifestyles. "Success" in limiting population is then completed by famine, as the limited food supply is exhausted. What arrogance!
His attitude was completely elitist. He supposed that he was one of those chosen--by God, presumably--to reshape society, to solve such problems by legislation. To the extent that he influenced legislation, his errors were therefore magnified and perpetuated. Notice what some of them are:
1. He failed to appreciate that long-term poverty always results from the suppression of a free market. There had not been a free market in England for many centuries; rulers (the monarch or his ministers) resorted to price and wage controls whenever they seemed useful. At the time of Malthus' work, they were waging war on France, whose supply of low-price grain was therefore cut off; Parliament's reaction was to fix high prices with its Corn Laws, to stimulate more production. For centuries, guilds and legal limits on the mobility of labor had produced poverty, which was "solved" by instituting tax-funded poor-houses or workhouses and outlawing "vagrancy;" some of the conditions in those establishments were revolting, and that was not accidental, for the ruling élite did not wish them to become too popular. Then as now, government laws produced a problem, provoking new laws to make new problems. Malthus was evidently blind to this fact. So far removed was he from the notion of laissez faire that he was appointed Professor at the East India Company College; that "company" was the mercantilist, government-supported monopoly that dominated the trade with India.
2. Although apparently not unaware of it, he failed completely to understand that the economic principle, under which demand stimulates its own supply, applied to food products as much as any other; he assumed, in the teeth of readily available knowledge, that the supply of those commodities was inelastic or fixed. More than any other error, this lies at the root of his monstrous mistake. One can appreciate that by looking at a map of fields available for farming. One could say at any one time that the country's capacity for production clearly had a limit, but what he did not do was to consider (a) that there might be new techniques being developed (under economic stimulus) to squeeze many more crops out of the same acreage, or that (b) there might exist vast new territories in the world able to produce food which his country could import. That he could fail to see the latter is especially culpable since he lived in a time of enormous worldwide exploration and colonization; he cannot have been unaware of the vast agricultural potential of the American Midwest for example, or of Ontario, or the Antipodes--to say nothing of Argentina and possibly Brazil. It's less easy to see that new agricultural science will develop in response to demand for more food--but by failing to notice abundant virgin land waiting to be plowed or grazed, Malthus was blinkered or blind or both, and that was nobody's fault but his.
3. He failed to differentiate between human beings and "lower" animals, and for a clergyman, that's particularly surprising. He noticed correctly that other species' populations are self-limiting, but not that the human animal had such capacity for rational thought as to adapt himself to such limits and invent ways to overcome them, to change his own environment. Even Henry George grasped that: "Both the jayhawk and the man eat chickens; but the more jayhawks, the fewer chickens, while the more men, the more chickens." That ability is unique as far as I know, but any scholar of Malthus' day could have taken a cursory look at history and notice how effective it had been. The same world had sufficed to feed a population of around 200 million in Roman times--an era with which this theologian would have been quite familiar--and about 980 million in his own day. Since food production had clearly grown by a factor of five in that period, what was to stop it continuing to increase? And had not the 18th Century in particular, in Malthus' own neighborhood, demonstrated spectacular advances in agricultural productivity? He might be excused perhaps for failing to look back in history even further than two millennia, for at that time it was even foggier than today--but possibly, he might have reasoned that such growth must have occurred before Roman times as well as since. Had he taken his Bible literally and held that creation happened in 4,004 BC, his mathematical contemporaries at Jesus College (or if not there, along the road in Trinity) could have helped him calculate the growth rate during those four millennia as the population--and the supply of food it needed--expanded by a factor of 100 million.
In summary, he had no faith in free human nature, and in our own time, probably on this evening's TV News, we can readily see the same Malthusian errors being repeated.
In 1972 the Club of Rome notoriously published The Limits to Growth, which dusted off Malthus' obviously discredited theories and gave them a fresh airing. It's still possible of course that the world's governments will make such a catastrophic mess of things that food production and distribution will cease to function and so famine will arrest or even reverse human population growth, but otherwise there's no sign that its authors could think any more clearly than Malthus.
Al Gore and his eco-Fascist friends gave the alarm a new twist by alleging that the world is warming up, which would significantly shift the regions in which agriculture is feasible; good for Canada, less good for Mexico etc. And the disruption might bring temporary food price rises and population-harming shortages. Stay tuned, but currently it seems that the globe may even be cooling rather than warming, and that in any case there's nothing mankind did to cause it or can do to reverse it, so the only rational action is to prepare for its effect, and that can be done by an unfettered international free market, not by central government planning.
Those aside, the really bad news is that every other threat to human wellbeing is being addressed only by people steeped in Malthus' three errors above. Whatever needs action, government people never allow the free market to provide it; they never trust the unaided ingenuity of profit-seekers to produce more of whatever is short; and they show no faith whatever in mankind's ability to change his environment--unless, of course, the change is managed by government experts. There are dreadful floods currently in Pakistan, with millions homeless and hungry? Then its government must channel all the aid, and the victims agree, even as they blame it for not delivering any. There was a big oil leak in the Gulf? Then government must manage the well capping and cleanup, even though BP had all the expertise. There is a persistent problem of too few jobs and too little credit? Then government must print ever more "money" to "stimulate" action, even though markets are ready and able to purge wasted investments and begin new, healthy growth. There is a current terrorist threat, an "alert"? Then government tells everyone to be worried, though it doesn't know why or how or when, even though travelers, left to our own resources, could readily draw the sting of all such threats. The ruling élite has an absurd, unfounded faith in its own abilities but none at all in those of ordinary people acting in our own self-interest.
Thomas Malthus failed to predict the future, but he didn't fail to leave a following. On the contrary, his errors permeate every power center in the world.