Thomas. R. Malthus; Ideology and Contributions in Economics
Thomas Robert Malthus (1766-1834) was one of the renowned legends in the classical economists’ family. He was born in a high class family and was the smallest child. He got better education of that time. From 1807 onwards, he worked as a lecturer in English based college founded by East India Company. He had a good bond with another legend among classical economists, David Ricardo. Both of them are considering as pessimists while all other classical economists are showed a mind of optimism.
Main contributions of Malthus include the “theory of population” and the “theory of market glut”. Actually, these theories gave him more fame. Through the contributions of Malthus, he predicted some of the basic problems of the future like poverty, business cycle or crisis etc.
Main Ideas of Malthus
Malthus’ idea was purely different from majority of his colleagues of classical economists. He was one of the pessimists like Ricardo. Malthus’ main ideas are found from “An Essay of the Principle of Population” (1798) and “Principles of Political Economy” (1820).
First of all, it is better to analyze the environment from which Malthus developed his ideas. During his period many social changes happened. There witnessed many social challenges like unemployment, poverty, deceases etc. There also witnessed the bad effects from landlords like exploitation. But, due to the influence of mercantilism, industrialists began to get political power.
Mainly, he attacked two great optimist philosophers like Condorcet (1743-94) and William Godwin (1758-1836). Malthus attacked the optimist philosophy and ideology when he was very young. In his thirty second year old, he published “Essay on Population”. Godwin believed in the idea of individual interest, which will automatically bring the social harmony as said by Adam Smith. He believed that human beings will be aware of overpopulation when the limit of population reaches its maximum. Malthus challenged this view. At the same time, Condorcet was another philosopher who believed in the concept of national order, which is also the idea of Adam Smith. Here too Malthus opposed this ideology.
- Malthusian Theory of Population
Malthusian theory of population is one of the famous theories in economics connecting to demography. Both mercantilism and physiocracy were supported increasing of population. Because both the philosophies were argued that, more population will bring more productivity. But, Malthus found some of the problems in the economy from his own analytical observations. He highlighted many social problems of that time such as exploitation of landlords, unemployment, poverty etc. The most important problem that he highlighted was the threat of over population.
Malthus explains the theory of population with the help of comparing population growth with food supply. During that time, the population growth rate was higher than the growth rate of food production. So, that he predicted the chances of overpopulation. Malthus listed two main assumptions for supporting his theory. They are
a) Food is a necessary one for the humanity. And
b) Passion between sexes is natural.
According to him population will increase in the geometric progression (that is in the series of 2, 4, 16…) and food will supply increase in the arithmetic progression (that is in the ratio of 2, 4, 6 …). And in fact he says that, it will lead to over population. He also mentioned some of the after effects of overpopulation such as poverty, unemployment, misery etc. To prevent the challenge of over population, Malthus suggests two types of checks namely
a) Preventive checks. and
b) Positive check.
By preventive checks, Malthus refers to the various kinds of methods to reduce over population. He says that, people must postpone marriage or never marry. Late marriage will naturally reduce the capability of having children. By preventive checks, he is emphasis on the reduction of birth rate and thereby over population.
By positive checks, Malthus refers that; it is a check that will do by the nature itself to reduce over population. This may be in the form of war, natural calamities etc. Here positive check is emphasized on the idea of increasing death rate while preventive checks are focuses decreasing of birth rate. Malthus concludes by saying that, if both the preventive and positive checks are failed in reality, the human being will suffer the problems like poverty, misery, unemployment, diseases etc.
The Optimum Theory of Population
Malthus’ pessimist view on population is challenged one by many philosophers. The theory is not free from criticisms. Now in the modern time optimum theory of population exists. According to the modern view, an ideal or optimum numbers of population are better for the country. So that the people can enjoy maximum benefits through the optimum utilization of resources of the economy. Which means the per capita output of the country will be higher. Here another interesting fact is that, optimum population never be fixed. But it will vary from time to time and circumstances depending on the nature of economy.
2 .Theory of Market Glut
Market Glut theory is another important contribution of Malthus. He highlighted the concept of effective demand. Later this concept gave base for the macroeconomics of Keynesian revolution. So, Malthus is regarded as the forerunner of modern economic thought. Keynes himself mentioned about the influence of Malthus and his theory of market glut in his thinking. According to Malthus, effective demand is an important factor which will increase the desire of producers to produce more and more commodities. But during that time there were two main classes like rich and poor. Rich class consists of capitalists, landlords, and physicians etc who were earning higher amount of income. On the opposite side, poor class consists of mainly workers, who were exploited by the capitalists. So, they earned lower level of income. Here the problem is that, the low income will reduce aggregate demand. In fact, the production will continue and there may happen over production. This is the idea of Malthus on ‘market glut’.
To solve the problem of market glut, Malthus says that, there must be unproductive consumption from the part of rich people. This will help to compensate the lower level consumption of the poor people. Then only the effective demand will work in reality. Further he says that the richer class may have tendency to save or accumulate capital ownership. So, Malthus challenges the argument of Adam Smith and Ricardo. Both of them supported unlimited savings and capital accumulation. But Malthus suggests a balanced rate of savings and investment, which will help the economy to work properly.
To solve the problem of market glut Malthus says that, there must be unproductive consumption from the part of rich people. This will help to sacrifice the lower level consumption of the poor people. Then only the effective demand will work in reality.
By the ‘theory of market glut’, Malthus is also highlighted the importance of business cycle. That is market glut is a condition of an economy in which the supply or production exceeds than the aggregate demand.
Malthus was one of the greatest economists the world ever witnessed. When analyzing his life, it is clear that, his ideas were different in nature from all the economists of his era or the classical family. Both Malthus and Ricardo are considering as the pessimists among classical economists. In short, Malthus developed many revolutionary ideas. Along with that he also popularized other classical theories like rent theory, value theory etc.