Thomas Robert Malthus and David Ricardo

Introduction

During the 18th and 19th centuries, Thomas Malthus and David Ricardo made significant contributions to the economy. They developed many theories that were intended to be implemented in markets in order to produce better communities. For example, Ricardo's ways of evaluating market dynamics using mathematics and deductions have influenced the economy to this day. Malthus recognized an economic imbalance based on the fact that as food supply rose, people's living standards improved, but this was short-lived because it was followed by population expansion which lead to a subsequent decline in the living standards.

The Population Theory by Robert Malthus

The first part of this article talks about the population theory by Robert Malthus. Malthus based his theory on two propositions which state that when the population remains unchecked, it increases in a geometric progression hence doubling itself within 25 years. As much as the available data provided little to support his postulate, Malthus acknowledged that the population growth rate for every twenty-five years was not the actual rate but still the population advanced geometrically. The second postulate by Malthus stated that even under the most favorable conditions, means of subsistence such as food supply, cannot keep up with the pace at which the population increased. However, this theory is faced with several limitations. Malthus lacked substantial evidence to back up his theory, much of it was in his head without any evidence to support it. Important aspects such as technological improvements which could have significant effects in improving food production were not considered. Introducing the element of technology in his theory could probably rule out the validity of his theory.

Bringing Balance Between Population Growth and Food Production

Malthus came up with specific ways to bring balance between population growth and food production. First, there is the use of positive and preventive checks which include factors such as war, famine, moral restraint and the use of contraceptives. Malthus failed to point out that the majority of the families may choose to limit the number of offspring based on other factors other than financial ones. Such factors include the desire to have personal time and the existence of careers that demand high-level mobility. This factors can aid in reducing the disparity between the rapidly growing population and food supply.

Relationship between Income, Wealth, and Population Growth

In this article, it is evident that in the developed economies, income and wealth had a direct relationship with population growth. Poor countries are characterized by the tendency of viewing children as investment goods or as consumption goods. This is due to the fact that such countries have limited ways of accumulating their wealth which drives them to use the children as a cheaper means of wealth accumulation by providing more labor. In the rich countries, individuals are characterized by habits of substituting the relatively cheaper consumption goods which implies that rich people buy more materials things in exchange for fewer children. This illustration explains the idea behind the reduced population in the developed countries such as Europe and North America compared to the high populations in the poorer countries.

Works of David Ricardo

The second part of the article talks about the works done by David Ricardo. Ricardo was among the many economists who were inspired by Adam Smith's The Wealth of Nations content and later on he began writing his economic arguments. Ricardo's works were based on three critical propositions which include classical rent theory, Malthus's population principle, and the wages fund doctrine. Based on the three principles, I will focus on the classical rent theory. This theory was developed from the impelling force of the controversy facing the Corn Laws which came into existence during the Napoleon wars. Napoleons passed an official ban on the British ports which ensured that the foreign grain was kept out of England. The British farmers had to multiply the production of the domestic grain for them to feed their local population. High costs of production in England compared to abroad lead to an increase in the British grain price. The increase in grain price led to a subsequent increase in the land rents to a point where the landlords decided to take advantage of the situation by restricting grain imports.

Ricardo's Theory on Rent

Ricardo made use of this situation as the foundation of his theory on rent. According to Ricardo, rent is defined as a payment made for the original land and any unbreakable powers of the soil. He points out that rent is used when land is taken into cultivation, and it arises as a result of diminishing returns on land which is of the same quality. He extensively explains that the diminishing returns existed at both the intensive and extensive margins which implies that raising rent is necessary for agricultural protectionism. This theory falls short in several ways. First, the theory talks about agricultural rent only, in this case, land does not have any alternative uses other than agriculture. It is either used in the production of corn or left to lay idle. The theory has ignored the manufacturing sector where the rents are assumed to be negligible.

Conclusion

Ricardo has been regarded as having brought forth a greater impact based on the future direction of the economy compared to Malthus. The two economists tend to differ greatly in their theories but they have played significant roles in promoting each other's analytical system. In the theory on rent, there exist conflicting ideas from the economists. Malthus identified a close and direct link between the wages and the price of corn which drove him to argue in favor of the Corn Laws while Ricardo saw a close and inverse link between wages and profits which lead to his argument against the Corn Laws (Lambin 85).

Work cited

Lambin, Eric F. "Global land availability: Malthus versus Ricardo." Global Food Security 1.2 (2012): 83-87.