Course: ECON 3R03 - The History of Economic Growth
Instructor: J. Leach
Not many people believe in Malthusian Econ as food supply is outstripping
pop growth even today. It made sense in the time of Malthus but with
advances in sciences this is no longer the same world.
A group of people called “Utopians” thought that govt regulation could make
the average guy better oﬀ. Malthus thought this was stupid, ﬁrst thing a
better oﬀ person would do is have more children, that would drive down
wages and therefore the welfare goes back down. Malthus believed it didn’t
make the average guy better oﬀ but made taxpayers worse oﬀ.
This view was shared by David Ricardo who was considered the ﬁrst trade
economist. He also coined the iron law of wages: pop growth diminishes
wages making the working man worse oﬀ.
The inﬂuence of Malthus extended beyond economics even inﬂuencing Darwin
and his theory of natural selection. These views may seem extreme but there
was a time when they were very realistic.
The Malthusian Model
Birth rate rises as income rises, the richer a person is the more they think
they can raise a child better. Health and nutrition positively correlated with
1 Assumption 2
Death rate falls as income rises. Higher income leads to better living conditions
and therefore live longer lives.
This is the key assumption: average income falls as population rises. Malthus
assumed the ﬁxity of output of agricultural land.
Note: You use the 3 assumptions to get the graphs and then you throw them
away. You no longer use them in any further analysis.
Exogenous: An increas