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Beware the Malthus mindset

By Old Grumpy Guy on January 26, 2009 at 3:00 PM in Economic Stimulus, Economy, Emperor's Clothing Syndrome, Energy Policy, OldGrumpyGuy

For those of you who may not be aware of the fact, Thomas Malthus was the Chicken Little of economics and the guy who created the concept of the “Malthusian Catastrophe”, with his predictions that the world would soon run out of food and other resources because of the rapid growth in the world’s population.

That was in 1798 (more than two centuries ago), when he published the first edition of his economic treatise – An Essay on the Principle of Population – pointing out that population growth generally preceded expansion of the population’s resources, in particular the primary resource of food.

In all societies,” he wrote, “even those that are most vicious, the tendency to a virtuous attachment is so strong that there is a constant effort towards an increase of population. This constant effort as constantly tends to subject the lower classes of the society to distress and to prevent any great permanent amelioration of their condition.”

What Malthus didn’t take into account was the fact that his prophecies were self-defeating, because increasing awareness of the problem led to greater efforts to make sure his prophecies were not realized. This was accompanied by great technological progress, which increased exponentially after the industrial revolution in Britain.

Since Malthus there have been many subsequent cries of alarm from others about the earth’s resources being unable to support the population growth, but every time these cries of alarm turned out to be self-defeating prophecies.

We have now entered a period where the Malthus mindset has once again taken root about resources and the prospects for economic growth. While it will almost certainly prove yet again to be a self-defeating prophesy, this phenomenon is unfortunately often accompanied (at least in the short term) by self-fulfilling prophesies of economic doom and gloom.

If enough people think that the economy is going to get worse, it makes it certain that the economy WILL get worse, because the belief itself fans the flames of economic disintegration. People stop spending, so the economy slows down. Because the economy slows down, productivity drops. Thus pessimism becomes a self-fulfilling outlook.

The fact, however, is that technological progress continues to accelerate in leaps and bounds, and many of the problems in terms of availability of resources can be overcome through the application of new technology and new ideas to energy, food, infrastructure and economic activity itself.

There is every reason to be optimistic about the longer term future, provided people are able to see the possibilities ahead of them and not get stuck in the Malthusian mindset that now prevails.

(The accompanying video, below, has nothing to do with Malthus, but is a kind of tribute to industry.)